The feasible stock plan is bounded by cash, not just by statistical service

A foreign-currency purchase creates a dated translation exposure as well as a material commitment. The order record should preserve the invoice currency, invoice amount, payment dates, reporting currency and the source and date of every conversion rate. Reporting in CFA franc (XAF) does not turn a dollar or euro obligation into a fixed XAF cash requirement before the applicable settlement terms are known. Bank charges, intermediary fees, settlement delays and any difference between a reference rate and the rate actually available also belong in the cash scenario.

The inherited evidence register records source-annex context that the CFA franc is pegged to the euro at 655.957 XAF per euro.[R32] That entry is not a current US dollar conversion and does not establish the rate, spread or fee a factory can obtain from its bank. GFT would not reuse it to price a dollar payable. An operational plan needs dated supplier terms and banking inputs. Where those inputs are absent, the analysis should present explicitly labelled scenarios rather than a precise but unsupported landed-cost figure.

For an illustrative sensitivity only, suppose a supplier invoice is USD 25,000 and management tests invented settlement rates of XAF 550 and XAF 605 per US dollar. The corresponding XAF equivalents are USD 25,000 × 550 = XAF 13,750,000 and USD 25,000 × 605 = XAF 15,125,000, a difference of XAF 1,375,000 before any bank charges. These rates are teaching assumptions, not observed prices, forecasts or a recommended hedge. The inherited euro-peg context does not support either dollar scenario.[R32]

That difference can change the order rather than merely the reported cost. If the illustrative foreign-currency scenario adds XAF 1,375,000 to a plan whose remaining approved headroom is XAF 1,000,000, the plan exceeds its limit by XAF 375,000 before fees. The response must be a new feasible decision: approve more cash, change the quantity or payment schedule, renegotiate the commercial terms or decline the commitment. Presenting the higher scenario as an explanatory note beneath an unchanged purchase order would hide the breach.

Contractual delivery terms do not settle this currency question. Incoterms guidance separates delivery, risk and cost responsibilities between buyer and seller, but the sales contract and banking records still need to establish invoice currency, payment schedule and settlement mechanics.[S1101] GFT would link each rate scenario to the relevant payment event rather than translate the entire order once at an arbitrary review-date rate. Deposits and balances paid on different dates can face different available rates and fees.

This chapter makes no investment or hedging recommendation. Its narrower requirement is an inspectable cash record: original currency and amount, scenario or confirmed rate, rate source and date, charges, XAF equivalent, payment date and approver. A treasury specialist should assess any actual currency-risk instrument, its accounting treatment and its suitability. Operations needs the resulting payment-dated cash constraint before it can certify that the stock plan is feasible.

The timing of a finance product determines which cash gap it can address. IFC's Global Trade Supplier Finance description states that the programme provides post-shipment finance to suppliers based on acceptance of receivables by select buyers approved by IFC. It also describes purchasing and discounting invoices accepted for payment by pre-approved participating buyers.[S18] The described triggering events are therefore shipment and buyer acceptance of the receivable. They occur after the supplier has acquired inputs and performed the work needed to reach shipment.

That structure cannot be cited as automatic funding for the initial fabric deposit. A supplier deposit finances a commitment before production. Pre-shipment working capital finances materials, freight and conversion before a receivable exists. Supplier credit defers a payment to the input provider. Post-shipment receivables discounting addresses an accepted invoice after shipment. These mechanisms can complement one another, but they have different counterparties, evidence requirements, risks and dates. Treating them as interchangeable leaves the earliest part of the cash cycle unfunded.

Exhibit 48 maps the opened programme description to the illustrative cash events used in this chapter. The mapping is derived from the post-shipment and accepted-receivable language in the source. It does not say that IFC offers no other product, and it does not establish eligibility for GFT or any proposed venture.[S18]

The illustrative timeline makes the sequence concrete. By the assumed invoice-acceptance event on day 65, the business has already paid XAF 21 million of deposits, logistics and conversion costs. Even if accepted-receivable finance became available at that point, it would replenish cash after those outflows rather than explain how the initial XAF 6 million deposit was funded. Collection remains a separate event on the illustrative day 95. The fees, recourse, advance proportion, eligibility and settlement mechanics of any real facility would need dated documentary evidence.[S18]

GFT would therefore divide the funding plan at the first shipment event. Before shipment, the plan should identify own cash, supplier credit, any confirmed pre-shipment facility and the reserve that cannot be spent. After shipment, it can separately assess whether an accepted receivable qualifies for discounting under actual terms. An expression of interest, a generic programme webpage or an expected customer relationship is not a confirmed funding input. The stock plan should use only the cash and credit whose status the decision record discloses.

Cash exposure does not end when material reaches the warehouse. Every lot that remains unused continues to connect invested cash to a narrowing set of recovery options. The useful ageing record therefore combines lot age, current stock state, remaining selling window, specification version, customer restrictions and estimated recovery cost. A single days-on-hand average can conceal a small group of shade lots, logos or size variants whose practical recovery is falling even while aggregate stock appears healthy.

The trigger for action should be an event that changes recoverability, not merely an arbitrary birthday. Relevant events include a cancelled order, a design revision, a failed quality release, the last feasible production date, the end of a selling window, a customer return and a missed recovery review. Each event should assign an accountable role and a deadline for deciding between rework, approved substitution, return, resale, donation, reuse, recycling or write-down. The legal and accounting treatment of the selected route requires professional review.

IAS 2 defines net realisable value as estimated selling price in the ordinary course of business less estimated completion costs and costs necessary to make the sale.[S09] GFT would make that calculation lot-specific where the route to recovery differs. Expected proceeds should not be confused with cash already recovered. Sorting, repair, repacking, freight, commissions and disposal can reduce the amount available, while an uncertain outlet price should remain a scenario rather than a confirmed receipt.

Returns add time and cost to this boundary. The European Environment Agency reports that returned and unsold textiles are expensive to handle and explains that complex return processes can reduce resale potential, particularly for seasonal products.[S26] This is European evidence, not a Cameroon return rate or a recovery-cost parameter. Its operational lesson is to measure inspection delay, handling, resale eligibility and realised proceeds rather than recording every returned garment at its original expected value.

For an EU-facing scenario, the recovery route may also carry regulatory conditions. The European Commission states that from 19 July 2026 large companies across the EU are prohibited from destroying unsold clothes, clothing accessories and footwear, with medium-sized companies subject to the same rules from 2030. The announcement describes exemptions and conditions that require legal interpretation.[S21] It is not a blanket obligation on a Cameroon manufacturer. It is a reason to establish the customer, entity, product scope and applicable recovery duties before choosing disposal.