How cash-constrained buying works
A demand plan tells you what you need. Cash-constrained buying tells you what you can afford, and in what order. It turns your cash, your credit and the bills you already owe into a weekly figure you can spend. It then ranks every reorder line across all your suppliers and marks where the money runs out. Nothing is ordered for you: SKU.io recommends and explains, and you create the purchase orders.
You see it on Inventory → Demand Planning, in the Buying capacity strip above a plan's results and in the Ranked by cash view of the results.
Buying capacity: the money you start with
Buying capacity is a single figure:
Buying capacity = cash on hand + credit available − reserve
| Part | Where it comes from |
|---|---|
| Cash on hand | A figure you type, or the book balance of the bank accounts you pick, read from QuickBooks Online or Xero. A balance read from your books is used only after you confirm it, and it is never refreshed in the middle of a plan. |
| Credit available | Your credit line limit minus what is already drawn, never below zero. What's drawn is typed, or read from the liability account that holds the credit line. |
| Reserve | The bank balance you never plan below. A base reserve applies to every week, and seasonal overrides raise it for the weeks they cover, for example a higher floor through your peak season. Where two overrides overlap, the higher amount applies. |
You set all of this in the Buying capacity dialog. See Set your buying capacity.
Spendable by week: what's left after the bills
Buying capacity is what you could spend before anything you already owe. SKU.io then takes away your scheduled payables, week by week, across the planning horizon (12 weeks unless you change it). Payables come from:
- purchase order deposits and balances, timed by each order's payment terms,
- supplier invoice instalments and bills,
- vendor deposits.
What remains each week is spendable cash. The week with the least left is the tightest week, and the strip names it. Payables with no due date yet are counted in week 1 by default, which is the cautious choice. You can leave them out instead.
The strip shows spendable cash as weekly bars, with a dashed line for your capacity that steps up and down as seasonal reserve overrides start and end. A week that would drop below the reserve shows as Under reserve.
Expected sales payouts aren't counted unless you turn on Count expected sales payouts as cash coming in. It's off by default because planning on money that arrives late is how a reserve gets breached. When it's on, only a share of each expected payout is counted (the haircut), a set number of days after the sale (the payout lag).
Headroom: cash you can commit this week
Money you spend this week is gone for every later week too. So the amount you can safely commit in a week is the lowest spendable figure from that week onward. This is the week's headroom. A line fits in a week only if every week it pays in still has room for it.
Ranking: which lines get the cash first
Every reorder line in the plan is ranked across all suppliers by one score:
Score = margin protected ÷ cash required
- Margin protected is the profit you'd lose to a stockout if you didn't order: the units you'd run short before your next chance to buy, times the profit per unit, times a stockout weight.
- Profit per unit is the selling price minus the landed unit cost. When a product has no selling price, SKU.io uses the landed cost times a default markup, and flags the line No selling price: the default markup was used.
- The stockout weight comes from the line's stockout risk (high, medium, low, none or unknown). A low-confidence forecast is weighted down, so a guess doesn't outrank a known stockout.
- Cash required is the landed cost of the units, placed in the weeks the supplier's payment terms say you'll pay. The deposit falls in the order week and the balance in the week it is due.
The $/ $1 column shows the score: how many dollars of margin each dollar of cash protects. You can change the risk weights, the low-confidence multiplier and the default markup on the Ranking tab of the Buying capacity dialog. Each plan keeps the weights it was ranked with, so a plan you reopen later still explains itself.
Big lines are split into chunks: the quantity needed to reach the supplier's minimum, then case-pack steps. Each chunk is scored on its own, so part of a large line can fit while the rest waits. A partial fit shows as fitted / total in the Qty column.
When two lines score the same, the one that runs out sooner goes first. After that, the one with the better return on inventory goes first. Then the one from a supplier already on the list, so you place fewer purchase orders.
The cut line: where the money runs out
SKU.io takes the chunks in score order and fits each one into the headroom of the weeks it pays in. A chunk that fits uses up that headroom. A chunk that doesn't fit waits, and the scan carries on, so a smaller line further down can still fit. The Cut line — budget runs out here row marks the boundary in the ranked table.
Each line ends with a status:
| Status | Meaning |
|---|---|
| Fits | Inside the weekly headroom. |
| Waits | No week has room for it yet. The status shows the first week it would fit if everything above it stays in. |
| Excluded | Can't be ranked, for example because it has no cost. |
Supplier minimums are respected. If a supplier's fitting lines add up to less than its minimum order value or quantity, SKU.io tops the order up from that supplier's waiting lines when there's room. If there isn't room, it moves that supplier's lines to waiting and gives the cash to the next lines in the list. The line says why: Topped up to reach the supplier's minimum or Below the supplier's minimum order.
You can overrule the ranking. Pin a line to Fits (Keep in) or to Waits (Push out), and the headroom and cut line recalculate. Pins are logged on the plan. See Rank the plan by cash.
From the cut line to purchase orders
Generate orders turns the ranked plan into draft purchase orders. Lines that fit and are due now are ticked for you. Lines due later are listed under Order later, and lines that wait are listed but unticked. Before creating anything, SKU.io checks the headroom again, in case a bill was added or a cost changed since the plan was built. See Generate orders within your cash.
Who can see the numbers
Cash figures are sensitive, so cash buying has its own permissions, separate from purchase orders. See Cash buying reference.