Can You Fund a Large Contract Before It Pays?

Build the cash schedule from the scope

List mobilisation, materials, subcontractors, project wages, travel and other delivery payments. Allocate realistic dates from quotes and work schedules. Include supervision time and existing overheads in the profitability review, even where the short-term cash schedule only shows incremental payments.

Then read what triggers each customer payment. Completion, acceptance, invoicing and receipt may occur on four different dates. Retentions, disputed variations and customer processing cycles can extend the gap. Use the contractual amount and timing only after checking those conditions.

Calculate the deficit before adding opening cash

Assumptions: AUD total cash amounts; project-only schedule starts at zero to reveal funding needs. No tax refunds or finance receipts assumed. Costs total $28,000. The first receipt is $20,000 in week 3 and the final $20,000 in week 5.

Week	Project payments	Customer receipts	Cumulative project cash
1: mobilisation	$8,000	$0	−$8,000
2: materials and labour	$10,000	$0	−$18,000
3: milestone paid	$6,000	$20,000	−$4,000
4: completion work	$4,000	$0	−$8,000
5: final payment	$0	$20,000	$12,000

Original ASBG worked example. All businesses, amounts and scenarios are fictional. The table contains the same figures as the visual.

The largest cumulative deficit is $18,000. That is the project's base funding requirement before any chosen operating floor or contingency. Check accounting profit separately from the final $12,000 cash surplus: the schedule omits tax settlements and any overheads already being paid by the wider business.

Add the job to the rest of the business

Suppose the business holds $25,000, but $10,000 is needed for existing commitments and its chosen cash floor. Only $15,000 is available for this project under those assumptions, leaving a $3,000 gap against the $18,000 base requirement.

Don't count the same $10,000 twice. In a combined forecast, include all cash and every scheduled payment once. Use the reserve-only calculation above as a cross-check, not an extra deduction from that full forecast.

Delay the first milestone

If the week-3 receipt moves to week 4, the cumulative position falls to −$24,000 at the end of week 3. It reaches −$28,000 if the week-4 $4,000 payment also leaves before the delayed $20,000 arrives. This is why the sequence within a week matters.

Check the daily cash requirement around that milestone before committing. Extend the schedule beyond completion to include final settlement, retention release, outstanding suppliers and support costs.

Change terms, scope or timing using real proposals

Discuss a deposit, different milestones, staged delivery or a smaller initial scope where commercially appropriate. Price the consequences. A deposit might reduce the gap, but it creates delivery responsibilities and isn't free surplus to spend elsewhere.

Business.gov.au's supplier guidance stresses recording price, payment and delivery terms. Have unfamiliar contract conditions reviewed by a lawyer and the funding assumptions checked by your accountant. This worksheet doesn't establish an entitlement to a deposit or approve a borrowing product.

Key takeaways

• Find the deepest project deficit before counting the eventual surplus.
• Combine project timing with existing business obligations.
• Test delayed acceptance and the order of payments within each week.

Where to get help

Build the dates into your 13-week forecast. Use the supplier-terms worksheet for a concrete proposal. If funding is still needed, prepare these figures before comparing business borrowing options with an adviser.