One changed receipt date can alter the funding cost twice
The estimate uses one daily interest figure
Imagine a customer asks for another month before paying a future job. Your estimate adds thirty days of interest and assumes that captures the entire financing effect. The facility also has a fee linked to extending its term.
The calculation may miss a cost that does not accrue day by day. Review the actual funding arrangement before deciding that a simple interest allowance covers the proposed delay.
Identify the facility being assumed
Record which existing or proposed funding source the calculation relies on. Check its available amount, relevant dates and conditions with the lender or adviser. Do not cost an unapproved facility as though it is already available.
Keep the customer's proposed payment terms separate from the lender's commitments. Agreement with one does not establish agreement with the other.
Classify the charges by their trigger
Separate charges that depend on time or the amount drawn from charges triggered by establishment, renewal, extension or another event. Use the actual documents and ask for clarification of unfamiliar terms.
Do not assume a particular fee exists on every facility. This is a method for reading the arrangement being considered, not a list of universal lending charges or a recommendation to borrow.
Avoid charging an existing cost twice
Distinguish costs already incurred from additional costs caused by the proposed change. For example, an establishment fee already included in the original job comparison should not automatically be added again simply because the expected receipt moves.
Ask your accountant to review the comparison where the treatment is uncertain. Keep the calculation consistent so a proposed price adjustment is based on the additional effect rather than a mixture of total and incremental costs.
Put each cash payment on its date
Show when the identified charges would actually be paid, alongside the job's other outgoings and expected receipt. business.gov.au's cash flow statement method tracks incoming and outgoing cash to calculate closing balances.
A fee payable before the customer pays can increase the funding need at that point. A cost summary without dates may miss that practical effect even when its total is correct.
Check one proposal with the documents open
Before accepting extended terms, reconcile the financing allowance to the relevant agreement or quote. Label estimates, identify unresolved conditions and test a later customer receipt as well.
Use the result as part of the commercial decision with your adviser. A more accurate finance allowance helps assess the proposal, but does not by itself prove the business can afford the work or that borrowing will be approved.