While a strong export deal can create immediate opportunity, it can also add working capital pressure if payment delays outpace supplier or payroll obligations.
Why working capital management matters
One of the biggest challenges comes when payment delays stretch well beyond shipment – sometimes weeks or months later.
“When you’re a growing exporter, the bigger your orders, the bigger your outlay – and the bigger your waiting period is before you see cash coming back,” says CCIWA Senior Trade Consultant & Austrade TradeStart Advisor Darren Levy.
“If you don’t plan for working capital, even a thriving business can stall.”
Levy says that working capital risk is particularly potent for WA-based SMEs.
“They often have extended supply chains – sourcing from one continent, shipping to another – and face rising interest costs that bump up the price of short-term borrowing,” he says.
Common triggers for capital shortfalls
For many WA businesses, working capital tightens when:
- Payment terms stretch: overseas buyers might request 60 or 90+-day terms.
- Production or inventory costs balloon: a volatile currency or commodity market can inflate costs overnight.
- Bank credit tightens following higher interest rates, banks may become more selective in extending short-term loans.
Together, these factors can create significant financial strain for businesses without a structured working capital plan.
Trade finance solutions for healthy capital
These three strategies can help ensure working capital stays healthy for your business:
- Trade loans or advances: provide short-term financing for big purchase orders or pre-shipment expenses, so you’re not constantly dipping into your core cash reserves.
- Supply chain finance: allows you to improve payment terms on either side of the transaction. You might offer suppliers prompt payment (through the bank’s financing) at a discount, while you gain a bit more breathing room before your final settlement.
- Invoice financing: turn your unpaid invoices into immediate cash, minimising the period you’re left in limbo.
Levy says working capital is as much about relationships as it is about spreadsheets.
Related reading: trade finance risks
- How to manage credit risk in international trade
- Managing currency risk: how to protect your profit margins
- Protecting you cash flow from global trade risks
More resources
“If your operations manager is left in the dark about payment cycles, they might order more inventory than your business can handle financially,” he says.
“Open communication across all teams ensures working capital decisions aren’t made in isolation.”
Planning ahead: how to protect liquidity
CCIWA recommends seeking professional advice from your banker and accountant to create a formal working capital plan that tracks anticipated payments, outflows and potential financing needs.
Setting trigger points – for instance, when accounts receivable surpass a certain threshold – can prompt an automatic review of financing options or payment terms.
Just like credit and currency risk, working capital challenges link directly to cash flow.
Struggling with one element often has a domino effect on the others. If your inventory is stuck in transit or your buyers aren’t paying on time, your entire cash cycle can get jammed.
To protect your business from cash flow gaps and delayed payments in global trade, consider the following working capital strategies:
- Review your payment terms regularly and adjust based on market conditions
- Use trade finance tools like invoice financing or supply chain finance to unlock liquidity
- Track accounts receivable closely, setting review triggers (e.g. 60+ days overdue)
- Coordinate across teams so inventory, sales and payments align with financial capacity
- Build a working capital forecast to plan for gaps before they impact operations
If you are looking for support or advice in business, investment or trade, contact our experienced International Trade Services team at [email protected].
