Supplier lead times and deposits: why ordering early is a funding decision

A supplier quotes 14 weeks from order to delivery, with 30% deposit now and the balance before shipment. Many owners look at that and think “I’ll order closer to the date when I’ve got the cash”. That instinct is understandable — and it’s how stock arrives after the season, or equipment is installed a month too late for the deduction you were counting on.

Why do long lead times change the funding question?

Because they separate when you pay from when you earn. On a typical imported order, the cash goes out in stages:

Stage	Typical timing	Cash
Order and deposit	Week 0	Out
Production	Weeks 1–8	—
Balance before shipment	Around week 8	Out
Sea freight	Weeks 9–13	—
Customs clearance: duty, GST, charges	Arrival	Out
Local freight and storage	Arrival	Out
Sales or installation	After arrival	In

For custom-built equipment, the pattern is similar: deposit at order, progress payments during manufacture, balance before delivery, installation costs after. The longer the lead time, the longer your cash is committed before anything comes back.

What does ordering late really cost?

Waiting to order until cash is available feels prudent, but it has costs of its own:

• Missed season. Stock that arrives after the peak sells at a discount — or not at all.
• Expedited freight. Air freight to recover lost time can wipe out the margin.
• Lost allocation. Suppliers fill early orders first; late orders get what’s left.
• Missed deduction timing. Equipment installed after 30 June is claimed in the following year; see installed ready for use by 30 June.
• Price changes. Quotes that expire, and supplier or freight price moves while you wait.

Each of these is a cost of waiting you can estimate. Add them into the cost-of-waiting calculator and compare them with the total dollar cost of funding the order on time.

How should I plan an order with a long lead time?

1. Get dates in writing. Production, dispatch, estimated arrival.
2. Map every payment. Deposit, balance, freight, duty, GST at the border, local delivery.
3. Add buffers. Shipping delays happen; plan for a few extra weeks.
4. Arrange funding before the deposit. Not when the balance is due.
5. Plan the GST. If you’re registered, import GST is usually claimable as a credit on your BAS; timing matters for cash flow. See GST credits on a big purchase.

Illustrative example: the furniture importer

Illustrative only — invented figures.

A furniture retailer wants to import $120,000 of outdoor furniture for spring and summer. The factory needs 30% at order in May, the balance in July before shipping, and the goods land in late August. Duty, GST and local freight add further costs on arrival. Sales run from September to January.

If the owner waits until July to order, the stock lands in October, missing the start of the season and the early-spring promotions. By ordering in May with a facility drawn at each payment stage and repaid from spring and summer sales, the stock is on the floor for the first warm weekend.

Planning an order where the supplier needs money months before you’ll see sales? Find out what’s possible.

Is there a way to reduce the funding need?

Sometimes. Worth asking suppliers about:

• smaller deposits for repeat customers;
• split shipments, so part of the order arrives earlier;
• consignment or sale-or-return arrangements on some lines;
• payment on arrival instead of before shipment.

business.gov.au also suggests keeping stock levels from running too high as a way to protect cash flow — so order what you’ll sell, not what fills the container. For Christmas-specific timing, see Christmas stock timing; for bulk deals, see bulk-buy discount.

How do I build a lead-time calendar?

For any business that imports or orders custom goods, a simple calendar prevents most late orders:

1. List your key products or equipment and their suppliers.
2. For each, note production time, shipping time and a buffer.
3. Work back from the date you need them on the floor or installed.
4. Mark the order date and each payment date.
5. Mark when funding needs to be in place — before the first deposit.

Review it each quarter. Lead times change with factory schedules, shipping conditions and demand, and a supplier who took eight weeks last year may take twelve this year. For equipment with a 30 June target, see EOFY equipment finance.

Does currency movement matter for imported orders?

It can. If your supplier invoices in a foreign currency, the price in dollars moves between the order date and each payment date. Some importers pay deposits and balances promptly to reduce that exposure; others use their bank’s foreign exchange tools. Whichever approach you take, build a margin for movement into the budget so a shift between deposit and balance doesn’t catch you short. It’s one more reason to have funding ready from the first payment rather than scrambling at the last.

Order on time, not when the cash turns up

If a supplier’s lead time means paying months before you sell, it’s worth lining up funding before the first deposit. Our 60-second enquiry doesn’t include a credit check. We keep your details with one team — no blasting them to every lender we know — and a specialist calls to map the facility to your payment stages. Please be accurate about the order value, payment dates and when the goods will sell, so the structure fits the supply chain.