An extra thousand dollars can still leave a longer funding gap
Put numbers beside the proposed extension
Consider a deliberately simplified example. A job requires $20,000 of costs paid upfront and pays $25,000 on day sixty. The customer offers $26,000 instead, payable on day ninety. All figures exclude GST, and no other cash movements are included.
The extra $1,000 looks attractive. But the business must assess what changes before receipt as well as what changes in the final return. This example is a working illustration, not a recommended price or lending assumption.
Compare the funding duration first
Ignoring finance costs for this first step, both versions require the same $20,000 upfront. The proposed version leaves that amount outstanding for thirty additional days. The higher final invoice does not provide money during those days.
If several jobs overlap, the combined cash requirement could be different again. Do not apply this single-job result to the whole business without adding its other receipts and commitments.
Keep additional finance costs separate
Now assume, only for illustration, that the extra thirty days adds $500 of financing costs. The additional price is $1,000 and the additional financing cost is $500, leaving $500 of extra return before other changed costs or risks.
That $500 is not the total job profit. It is the incremental difference between the two versions under the stated assumptions. Do not subtract a finance charge twice if it is already included elsewhere in the estimate.
Build the actual cash schedule
Replace the simplified upfront cost with the real dates for materials, labour and other payments. Include finance charges when payable and use a consistent tax basis. business.gov.au's cash flow statement method records incoming and outgoing money to calculate closing cash balances.
Check the lowest cash position and how long the funding is needed. The timing of fees can change the amount required before the customer pays.
Test whether the funding exists
Ask whether available cash or confirmed facilities can support the proposed schedule, including relevant limits and conditions. A forecast return of an additional $500 does not establish access to the money needed for delivery.
Run a delayed-payment version too. Use actual finance terms where available, clearly labelled estimates where not, and obtain advice before relying on an uncertain borrowing assumption.
Present both answers to the decision-maker
Show the expected extra return and the additional funding duration side by side. Explain the simplified assumptions that were replaced with actual job information and those still unresolved.
The commercial decision should consider both affordability and return. A larger invoice may compensate for some extra cost while still leaving the business unable to fund the wait; the calculation helps reveal that distinction before terms are accepted.