A procurement capital forecast estimates when planned inventory buying may require cash. It is useful when supplier commitments, seasonal purchases and customer collections occur at different times.
Keep three dates distinct: the purchase commitment, physical receipt and cash payment. Separately, finance determines when inventory cost becomes an expense. A purchase forecast is one input to a cash plan; it is not the bank balance or a complete financial statement.
Begin with the commitments already made
List open orders and invoices before estimating future replenishment. For each, record the supplier, amount, currency, delivery expectation, deposits, unpaid balance and agreed payment-date basis. Mark estimates and unresolved changes clearly.
Avoid counting an open PO again when its invoice enters the model. Likewise, do not add the same planned buy through both an item simulation and a historical-spend estimate. Compare the two views or explicitly choose how they are combined.
Payment terms need a starting event
“Net 30” is incomplete without the agreed starting event. The terms may run from invoice date, receipt or another contractual event; payment on order and deposits behave differently.
For an illustrative $6,000 order placed October 1:
| Event | Example timing | Cash effect |
|---|---|---|
| PO approved | October 1 | Commitment recorded; no payment assumed |
| Goods and invoice received |