Stress-test cash if a received payment is later challenged

A payment can return as a cash question

Your customer paid an overdue account, then a liquidator queries the receipt. While the lawyer assesses the issue, management still needs to understand the possible effect on its own cash. Ask the accountant to model a clearly labelled scenario. Do not treat a question or demand as a final liability, but do not hide a potentially significant exposure from the planning process.

Start with the actual receipt

Imagine a supplier receiving sixty thousand dollars and using the funds in ordinary operations before a later enquiry arrives. Record what was received, when and how it was applied. Give the lawyer the claim and supporting documents. The forecast should start from the current bank position rather than pretend the original payment is still sitting untouched in the account.

Label the alternative clearly

business.gov.au says estimated cash-flow figures should be identified and explained. Keep a base forecast separate from a scenario showing the amount and timing specified for modelling. Record that these are planning assumptions subject to advice, not an admission or a prediction of the legal outcome. Ask the adviser which uncertainties should be reflected in the scenario.

Source: business.gov.au: Set up a cash flow statement

Find the practical pressure points

Show which future commitments would be affected if a payment were required on the assumed date. In the supplier's example, the impact might occur after a large materials order rather than immediately. Avoid counting an unapproved loan or hoped-for customer payment as certain funding. The useful result is a visible gap that management can discuss with its advisers before making further commitments.

Keep the legal and cash work connected

Update the accountant when the lawyer clarifies the position or a proposal changes the possible amount or timing. Do not negotiate a repayment arrangement simply because a spreadsheet can accommodate it; the legal basis and available responses require separate assessment. Equally, do not promise funding in correspondence before checking what the business could actually perform.

Remove uncertainty only when justified

When the matter is resolved, record the confirmed outcome and update the forecast and accounting treatment with advice. Retain the earlier scenario as a dated planning record. Conditional cash planning gives management a way to prepare responsibly while the claim is assessed, without declaring the receipt either completely safe or automatically repayable before the facts and law have been reviewed.