A bank sweep can change the cash available for a supplier promise
Check contractual bank sweep and linked-account timing before allocating an expected customer receipt to a trade-creditor payment.
Corporate Recovery Partners
01 / 06
The receipt may not remain available
You expect a large customer payment and plan to use it for overdue suppliers. The business also has a facility that may move money from the receiving account under an agreed sweep arrangement. Before promising the whole receipt, confirm how that arrangement works. A deposit and the balance available afterwards can be different figures.
Collect the facility documents and recent account records. Ask the bank contact to explain the applicable sweep trigger, timing and amount in your circumstances. Record the answer and refer uncertain terms to your adviser. Do not infer the mechanism from one earlier transaction or assume a transfer that happened last month will operate identically this time.
Business.gov.au's record-keeping guidance includes payments and banking information. Use those records to distinguish the incoming receipt, any linked transfer and the resulting balances. Keep the underlying debt and facility entries clear. An internal transfer should not be counted as a second receipt or treated as supplier payment simply because cash left the first account.
Imagine a customer receipt arrives and part is then applied under the facility arrangement. Compare the remaining usable amount with the supplier payment being discussed. Label any uncertainty about access or timing. Do not promise money on the assumption that a sweep can be cancelled or reversed without checking the actual terms and obtaining the necessary agreement.
If the mechanics leave a shortfall, discuss options with the bank, accountant and relevant adviser before changing payment instructions. Keep the supplier informed through an authorised and accurate proposal. Do not divert funds or conceal receipts to avoid an obligation. The purpose of the review is to understand and coordinate commitments, not improvise around financing conditions.
Show the expected receipt and related account movements at the appropriate times, with confirmed and uncertain items distinguished. Update the supplier proposal accordingly. Understanding the sequence allows the business to assess what it can actually pay, instead of treating a customer remittance as freely available cash before the bank account mechanics have been checked.
