Import Working Capital: How to Plan Cash Flow for China Orders in Bangladesh

Most first-time importers plan an order around one number: the price the supplier quotes. It is a natural place to start and a dangerous place to stop. The real question is not whether you can afford the invoice but whether you can afford to have money tied up in that order for as long as it takes to convert into customer payments. Many profitable importers run short of cash not because their margins are thin but because their money is waiting in a container.

This article builds a practical way to see that gap, using the stages of a China to Bangladesh order, and shows how to plan around it without inventing figures. You will need to insert your own quotes and dates; the structure is what matters.

The import cash cycle, stage by stage

Trace one order from the first payment to the last collection and mark where money leaves and where it returns:

• Deposit to the supplier. Cash leaves as soon as the order is confirmed. Terms differ by supplier; see deposit versus full payment.
• Production period. Nothing arrives and nothing can be sold. This is pure waiting time set by the factory’s lead time.
• Balance payment before shipment. A second outflow, usually before or against documents.
• Freight and insurance. Booking and origin costs come out around dispatch.
• Duties, VAT and advance tax at clearance. These must be paid before the goods are released. See paying import duty by A-Chalan and advance income tax on imports.
• Port, CFS, transport and clearing agent fees. Smaller amounts, but they arrive together with the biggest outflow.
• Selling period. Stock sits until it sells; slow sellers extend the whole cycle.
• Customer collection. If you sell on credit, cash returns even later.

The point of listing them is that only the last two stages bring money in. Everything before them is funded from your pocket, your partners or a bank.

The cash gap formula

A useful way to summarise the exposure is to count days. Add the production days, the transit days, the customs clearance days, the days your stock sits before it sells, and the days your customers take to pay. Subtract any days of credit your supplier gives you. The result is the number of days your capital is locked between paying the supplier and receiving customer cash. It is only an approximation, and you must use your own timings, not a generic estimate. The import timeline from order to delivery shows the stages, and the customs timeline explains the clearance component.

Why it matters: if your gap is long, you cannot run overlapping orders with the same capital. A second purchase placed before the first one sells requires either fresh funds or a smaller order. If you ignore the gap, the order that looked comfortable on paper starves the business a month later.

Build a simple 13-week cash sheet

You do not need accounting software. A spreadsheet with weeks across the top and three rows — opening cash, cash out, cash in — is enough. List each known payment in the week it will actually leave: deposit, balance, freight, duty on the estimated arrival week, clearing agent fees, local delivery. Then enter customer receipts in the week you realistically expect them, not the week you hope for. Review the sheet weekly and correct it with real dates. The moment the closing balance goes negative in a future week, you know how much extra funding or how many days of delay you must plan for.

Use quotes and receipts, not memory. Our total cost guide and hidden charges article show which line items importers most often forget, and each forgotten line is a hole in the sheet.

Currency and payment method change the picture

Most Chinese suppliers price in US dollars or RMB, while your customers pay in taka. The exchange rate at the time you remit determines how many taka the deposit costs, and a later balance payment may cost more or less. If you buy in two instalments, treat the second as uncertain and keep a buffer. Read how the dollar rate affects import cost for the mechanism. Payment instrument also matters: an LC ties up bank margin and adds bank charges before shipment (see sight LC versus usance LC), while a TT payment moves cash sooner but with less bank involvement. Whichever route you use, ask the bank for the current margin and charge schedule instead of guessing.

Reserve for the things that go wrong

A cash plan with no slack is a plan for the first delay. Carriers roll bookings, ports congest, documents are queried, and any of these can lengthen the gap or add storage and detention costs. Our articles on vessel rollover and demurrage and detention describe how delays turn into invoices. Decide in advance how much of your capital you are willing to leave unallocated as a buffer, and refuse to spend it on a bigger order. What size of buffer is right depends on your product, your route and your margin; there is no universal percentage, and anyone quoting one is guessing.

Ways to shorten the cycle without cutting quality

• Order smaller, more often. Where the supplier’s minimum order allows it, two smaller orders can use the same money twice within the same season. The trade-off is freight cost per unit.
• Start selling before arrival. Pre-orders or advance payments from firm customers cut the days between outflow and inflow.
• Clear fast. Accurate documents and a prepared agent reduce clearance days; see pre-arrival processing.
• Negotiate part-payment terms. Some suppliers will accept a smaller deposit for repeat customers. Ask, but do not count on it.
• Avoid slow lines. If one product takes far longer to sell, reduce its share of each order.

Putting it together before you place an order

Before you send a deposit, write down your own answers to five questions: how many days of production, how many days of shipping and clearing, how many days of selling, how many days of customer credit, and how many days of supplier credit. Turn them into weeks, fill in the cash sheet, and see whether the closing balance stays positive with a buffer. If it does not, shrink the order or raise funding first. If you would like a second opinion on the timeline for your product, our team can walk through the stages with you and help you estimate the duties, freight and clearance costs that fall into each week.

Turning the sheet into a habit

The value of a cash plan comes from updating it, not from building it once. Every time a payment date moves, change it. Every time a customer pays late, push the receipt back a week and see what happens to the balance. After two or three orders you will have real data on your own production days, your own clearance days and your own selling speed, and those replace every estimate in this article. Importers who keep that record can also answer a bank’s or investor’s question about working capital with facts. If you are considering financing for a larger order, remember that lenders will ask for exactly these numbers, so preparing them early makes any conversation easier. And if a product turns out to sell slowly, the sheet will show it in the cash column well before the warehouse shelves make it obvious.

Need help with your own shipment? Explore our sourcing and logistics services, contact the DE International team for a quote built around your cargo, look at our China sourcing and buying agent service, or browse the catalogue.