A fictional trading business accepts more orders and appears to be growing well. The owner is nevertheless postponing supplier payments. The team assumes the business needs a bigger loan. This scenario is constructed for teaching. It is not a report of a client engagement, and no outcome described here is a verified commercial result.
The situation
Each illustrative order sells for ₦1,000,000 and requires ₦600,000 of direct cash spending before delivery. Customers pay later. The order can have positive contribution while creating a cash requirement. Several overlapping orders make that requirement larger.
The figures are deliberately simple. They exclude overhead, tax and other obligations so the timing relationship can be seen. A real assessment would need the actual accounts, terms and records.
What everybody thought the problem was
The team describes the problem as not enough funding. That may be part of the answer, but the phrase does not reveal how much money is required, when it is needed or why the gap keeps recurring.
Another suggestion is to push sales harder. Without changing the delivery and payment cycle, that could increase the immediate cash requirement. The scenario asks the reader to separate a demand problem from a financing timing problem.
What the investigation would examine
A responsible review would trace ordinary orders from purchase to collection. It would compare promised and actual payment dates, invoice delays, disputes, stock holding and supplier terms. It would also inspect owner withdrawals, fixed commitments and existing repayments.
A weekly forecast would then make the lowest projected cash point visible. A second scenario could delay a large receipt so the owner sees how dependent the plan is on that payment.
What could be tested
Possible actions include issuing invoices promptly, resolving missing documents, agreeing an appropriate deposit or changing purchase timing. Each has commercial consequences and should be considered with the relevant customer or supplier relationship.
The model could show a smaller cash gap after a selected change. That would be an illustrative calculation, not evidence that the action has happened or will succeed in a real business.
What might not work
Demand may fall under different payment terms. A supplier may refuse a smaller order. A customer dispute may need substantive resolution rather than another reminder. Those possibilities belong in the decision.
The pattern
Positive contribution and available cash answer different questions. A useful next step is to trace one real order's payment cycle and compare it with the assumption in the cash forecast.
The person behind the thinking
Ayodeji Peter Falope
Business diagnosis, practical decisions and stronger operating systems for Nigerian and African SMEs.