How much working capital does a China order need?
A China order needs enough available cash to cover its largest cumulative cash shortfall, plus a reserve for delays. Date every payment and customer receipt, including stockholding and the next order's deposit. Plan against money reaching your bank. Discuss the order schedule with Cambridge China Bridge.
Find the largest cash gap
There is no fixed working-capital percentage that suits every order. Build a dated cash forecast from sample payments until customer receipts cover the order's outgoings. At each date, subtract cumulative receipts from cumulative payments. The largest shortfall is the order's funding need before your chosen reserve.
Use the landed price guide to identify costs, then put their full payments on the calendar. Tooling may be spread across future production for unit costing, but the cash forecast needs the amount actually payable now. Compare the funding need with cash available after existing business commitments.
Map payment triggers before paying the deposit
Ask each supplier and service provider for the amount, currency, payment trigger and expected bank payment date. Record what is included, what is excluded and whether a date is confirmed or estimated. Do not assume every charge becomes payable when the goods arrive.
Agree what evidence releases the balance and allow time to review it. Use the balance payment checklist for those checks. Build expected dates from the whole shipping schedule, then use the payment calendar below.
| Cash item | Date to record | What to confirm |
|---|---|---|
| Samples, tooling and checks | Agreed advance or milestone payment | Full cash payable, including separately invoiced work |
| Factory deposit | Agreed deposit payment date | Amount, currency and production-start trigger |
| Factory balance | Agreed release milestone | Inspection review, documents and payment approval |
| Freight, insurance and handling | Each provider's payment date | Quote inclusions and charges billed separately |
| Duty and import VAT | Confirmed payment or accounting date | Tax treatment with accountant and customs agent |
| Delivery and stockholding | Delivery payment and recurring invoice dates | Storage, fulfilment, insurance and handling |
| Customer receipts | Expected date funds reach the bank | Acceptance, invoice terms, deductions and settlement delays |
| Replacement order | Next deposit and balance dates | Overlap with unsold stock and unpaid customer invoices |
Separate tax cost from tax cash timing
Duty belongs in landed cost. Recoverable import VAT may instead create a temporary cash requirement if paid upfront. For eligible imports, postponed VAT accounting allows import VAT to be declared and recovered on the same VAT return. Ask your accountant whether this treatment fits your business and shipment.
For upfront VAT, show the payment as an outgoing and any expected recovery separately at a date your accountant considers realistic. Do not treat recoverable VAT as cash already available. Confirm the intended treatment with whoever handles the import, and use the import VAT guide for the wider tax explanation.
Follow stock through to customer cash
Warehouse arrival does not end the funding gap. Forecast how stock becomes available for sale, how it sells and when each customer or sales platform pays you. Include acceptance checks, invoice approval, payment terms and settlement timing. Use expected bank receipts after deductions, rather than gross sales or invoices raised.
Continue storage, fulfilment and other order-related cash outgoings while stock remains. Allow for returns, damaged stock and slower sales using your own records or explicit assumptions. Add the next order's payments before judging affordability: a replenishment deposit can fall due while the current batch is still funding customer credit.
Stress-test the calendar before committing
Keep a base forecast and a stressed forecast. In the stressed version, move production, delivery, sales and customer receipts later where plausible; add the related storage or handling costs. Move supplier payments only if the agreed terms support that change. Record the revised largest shortfall and the date it occurs.
If available cash cannot cover that gap and your reserve, change the order before paying: reduce quantity, negotiate payment milestones, agree customer deposits or arrange funding that is available when needed. Avoid funding a committed balance with hoped-for sales. Update the calendar as milestones are confirmed and compare actual payments and receipts with the forecast.
Frequently asked questions
How much cash do I need to import from China?
Find the largest cumulative gap between dated payments and customer bank receipts, then add a reserve. Include stockholding and any replacement-order payments that overlap.
Is the factory deposit enough to budget for?
No. Map the balance, freight, handling, tax, delivery and stockholding payments through to customer cash. Include samples, tooling and checks paid before production.
Do I need to fund import VAT upfront?
Confirm the treatment with your accountant. Eligible imports can use postponed VAT accounting to declare and recover import VAT on the same VAT return. Otherwise, map the actual payment and any later recovery separately.
When does an imported order pay for itself?
When cumulative customer cash receipts cover the order's cumulative cash outgoings. Stock arrival, a sale and an issued invoice are different milestones from money reaching your bank.