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A distributor can have a strong sales week and still feel short of cash when the next supplier bill comes due. Goods may have been delivered, invoices sent, and customer payments promised, while the money has not yet cleared. If sales totals and settled cash are treated as the same thing, the next stock order can be planned against money the business does not yet have.
For a small distributor serving retailers in Accra, Kumasi or Tema, the useful question before committing cash is not only, “How much did we sell?” It is also: “What has actually settled, what is expected before the supplier deadline, and what must this cash cover first?”
Cash flow is about timing, not just sales
Working capital is tied up in more than unpaid invoices. Cash may be sitting in stock, on the road in goods that have not arrived, or in customer balances that are not due yet. A supplier payment decision should take those clocks into account together.
A September 2024 policy brief from the International Growth Centre reports on a randomised controlled trial involving 288 SMEs in Greater Accra. The training group received a two-day working-capital management course and follow-up consultations. The researchers reported improved working-capital practices, improved sales, a shorter cash conversion cycle and higher profit in the treatment group compared with the control group. The brief estimates the profit increase at about 26%.[1] That result belongs to a bundled training programme, not to a single checklist or software tool. The study was conducted in Greater Accra, so it should not be presented as evidence about distributors in Kumasi or Tema. It does show why inventory, receivables, payables and cash are worth reviewing as one operating system.
A five-step check before the next supplier payment
1. Separate settled money from promised money
Check the actual bank and mobile-money balances, then match receipts to the right customer and invoice. A message saying “sent” or a payment screenshot is a useful signal to check, not a reason to mark an invoice paid before the money is visible and allocated. If the customer paid in parts, record the amount received and the remaining balance separately.
Keep three labels distinct: paid and reconciled, expected on a stated date, and still unconfirmed. Only the first is cash on hand. The other two belong in a forecast, not in the bank balance.
2. Give each customer balance a date and a next step
For every open invoice, keep the customer, invoice reference, amount, due date, amount received, remaining balance and any delivery or approval issue together. Mark what is not yet due separately from what has passed its agreed due date. A missing delivery note or disputed quantity may need resolving before another reminder helps.
Then give the follow-up an owner and a date. Record what that person will confirm and when, rather than leaving an open note like “Check with the customer.” If the customer gives a new payment date, record it as a promise, not as money received.
3. List what is already committed to suppliers and stock
Write down supplier invoices and their due dates, confirmed purchase orders, stock already in transit and goods that are needed to meet customer orders already accepted. A large order can look attractive while still tying up cash needed for payroll, transport or another supplier bill.
Do not treat every possible replenishment as urgent, and do not assume that every delayed purchase is harmless. Check what is on hand, what has been promised to customers and when replacement stock is actually required. The goal is to see the commitments clearly before choosing what to pay or reorder.
4. Build a short, dated cash view
Choose a date that matters, such as the next supplier deadline or the next major operating bill. A simple planning line is:
Cleared bank and mobile-money balance today
+ named customer receipts expected by that date, labelled as forecast
- essential bills due before that date
- supplier balances and confirmed stock commitments due before that date
= projected headroom, not cash on hand
Keep the forecast separate from today’s reconciled balance. Do not count an unconfirmed order, an overdue invoice with no payment date, or an unverified transfer as certain cash. If a customer receipt slips, update the forecast rather than leaving the old date in place. This is a working view for operating decisions, not a substitute for accounting or tax advice.
5. Talk early when the dates do not line up
If the forecast shows a shortfall, deal with it while options remain. Check whether a customer is waiting on a corrected invoice or proof of delivery. Ask for a realistic payment date and record the agreed next step. Contact the supplier before the due date if you need to discuss timing or a revised order. If reducing or splitting a stock order would affect a customer delivery you have already promised, check that commitment before changing it.
Keep the conversation professional and within the terms both sides agreed. Do not add a fee, change a payment term or promise a date the business cannot support just because cash is tight. A clear early conversation is usually more useful than silence followed by a missed commitment.
A routine that fits a small team
Review the same four things at the start of each week and before any unusually large purchase: reconciled cash, customer balances by due date, supplier commitments, and stock needed for orders already accepted. The review can be a spreadsheet or a system the team already uses. What matters is that each figure has a source, a date and a person responsible for the next action.
This also helps owners spot the difference between a collection problem and a stock-planning problem. If the same balances remain open, review who is being offered credit and whether the terms are clear. If cash is mostly sitting in slow-moving stock, another round of customer reminders will not fix the underlying decision. Look at both sides before deciding what to change.
Keep invoicing records separate from cash collection
For VAT-registered businesses, the Ghana Revenue Authority describes E-VAT as an electronic system for issuing VAT receipts and says it is not a new tax. GRA also lists improved bookkeeping among its intended benefits.[2] Keep that compliance record distinct from the question of whether a customer payment has actually cleared. An invoice or receipt documents a transaction; it does not, by itself, confirm that the money is in the business account. Check GRA’s current guidance for the requirements that apply to your business.
Lynka Agreements can keep an invoice connected to its recorded payments and remaining balance, including when a customer pays in parts.[3] That makes it easier to see what is still due, but recording a balance does not collect it. A person still needs to own the follow-up, agree the next step and update the record when payment arrives.
Pay suppliers from a clearer picture
The aim is not to delay every supplier payment or to chase every customer harder. It is to know the difference between money sold, money settled and money promised, then make the next purchase against dates the business can verify. That is a calmer basis for protecting stock, supplier relationships and the cash needed to keep serving customers.
If you want quotes, invoices and recorded payments to stay connected, see how Lynka Agreements works.
References
[1] International Growth Centre, “Improving SME financial performance in Ghana: A randomised controlled trial”, policy brief, September 2024. The trial covered 288 SMEs in Greater Accra and evaluated a working-capital training package with follow-up support.
[2] Ghana Revenue Authority, E-VAT.
[3] Lynka, Agreements: quotes, invoices and payments.
