Government Tender Cash Flow Calculator
One of the most common reasons businesses struggle on government contracts is inadequate cash flow planning. This tool models your monthly cash position based on contract value, payment lag, retention amounts, and project expenses — helping you identify financing needs before you start.
Maximum Financing Gap: R 216 667
You will need working capital or a facility of at least this amount to cover cash flow shortfalls.
| Period | Billings | Receipts | Expenses | Net | Cumulative |
|---|---|---|---|---|---|
| Month 1 | R 166 667 | - | R 166 667 | -R 166 667 | -R 216 667 |
| Month 2 | R 166 667 | R 150 000 | R 116 667 | R 33 333 | -R 183 333 |
| Month 3 | R 166 667 | R 150 000 | R 116 667 | R 33 333 | -R 150 000 |
| Month 4 | R 166 667 | R 150 000 | R 116 667 | R 33 333 | -R 116 667 |
| Month 5 | R 166 667 | R 150 000 | R 116 667 | R 33 333 | -R 83 333 |
| Month 6 | R 166 667 | R 150 000 | R 116 667 | R 33 333 | -R 50 000 |
| Month 7 | - | R 150 000 | - | R 150 000 | R 100 000 |
| Month 8 | - | R 100 000 | - | R 100 000 | R 200 000 |
| TOTAL | R 1 000 000 | R 1 000 000 | R 750 000 | R 250 000 | R 200 000 |
Red rows indicate negative cumulative cash flow — financing required. Government payment terms per PFMA Section 38(1)(f) and Treasury Regulations require payment within 30 days of a valid invoice.
30-Day Payment Rule
National Treasury regulations require government departments to pay valid invoices within 30 days. However, in practice payment delays of 45-90 days are common, especially at provincial and municipal level.
Retention Explained
Government contracts typically retain 5-12.5% of each payment as a performance guarantee. Retention is usually released 50% at practical completion and 50% at the end of the defects liability period (typically 12 months).
Financing Options
If this tool shows a cash gap, consider invoice financing, contract financing from SEFA or IDC, a bank overdraft facility, or negotiating a mobilisation advance from the client (common on large infrastructure contracts).
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