Quick answer
Supplying cafes wholesale on 30-day terms means you pay for ingredients, packaging and wages now and get paid weeks later. Multiply your weekly cash cost per account by the days you actually wait, divided by seven. That is the cash each account ties up, and it grows with every café you add. Set account limits, a stop-supply rule and a deposit for new accounts before you say yes.
Key points
- Cash tied up per account is your weekly cash cost multiplied by the days to get paid, divided by seven.
- Terms are 30 days on paper; the days you actually wait are what count, so measure them from your own invoices.
- Set an account limit, a written stop-supply rule and a deposit or card on file for new cafes before the first delivery.
- The regulator's latest Payment Times data shows even large businesses paying their slowest invoices later, not sooner.
- Funding makes sense as a bridge sized to unpaid invoices, once the terms and limits are in place.
Selling over the counter is cash today. Selling to cafes is an invoice that arrives in your customer’s inbox and gets paid sometime later. Same loaf, very different cash cycle.
Supplying cafes wholesale on 30-day terms means you buy flour, butter and packaging, pay your bakers and fuel the van now, then wait for the money. The cash that waits is easy to estimate, and it is bigger than most first-time wholesalers expect. This guide shows the sum, the terms that keep it under control and the point where funding helps.
How much cash does one wholesale account tie up?
Use this formula for each account:
Weekly cash cost to supply the account ÷ 7 × days you actually wait to be paid.
The “cash cost” is what leaves your bank for that account: ingredients, packaging, the labour to make and pack the order, delivery. It is not the invoice value. You do not need to count your own wage or profit.
Here is an illustration, not a real business. A small bakery signs six cafes. Each orders about $1,200 of product a week, and the cash cost of making and delivering it is roughly $720 a week.
- The invoice says 30 days, but the cafes really pay in about 40.
- $720 ÷ 7 × 40 is about $4,100 tied up per account.
- Six accounts tie up about $24,700.
Nothing in that example has gone wrong. Nobody has defaulted. The cash simply sits in unpaid invoices while the ovens keep running. The bakery needed roughly $24,700 of working capital that its counter trade never asked for.
Our Dough gap calculator runs the same sum with your numbers, and the working capital gap guide explains the thinking behind it.
Why do the days you wait matter more than the terms?
Terms are what you hope for. Days to get paid is what happens. If you have been trading with cafes for a while, take your last ten paid invoices and count the days from invoice date to money in the bank. Our guide on days to get paid shows how to track it.
Slow payment is not a small-café quirk. The Payment Times Reporting Regulator’s January 2026 update reported that, for the six months to 30 June 2025, the average number of days large businesses took to pay 95% of their small business invoices rose from 58 to 64 days. That is the slowest end of the invoices, but it tells you that the 30 days on your invoice is not a guarantee of anything.
Cafes also run on thin buffers. Their cash comes in daily and their bills (rent, wages, suppliers) go out in lumps. Many pay suppliers in the same week they feel flush, which can be the week after a good weekend rather than the due date.
What terms protect a small supplier?
Set these up before the first delivery, not after the first overdue invoice.
- A credit application. Trading name, ABN, owner details, a trade reference and the person who approves invoices. It takes ten minutes and tells you who you are dealing with.
- A starter arrangement. Card on file, a deposit, or payment on delivery for the first few orders. Offer 14 days, then 30 once the account has paid on time for a few months.
- An account limit. A maximum unpaid balance per café, such as two weeks of orders. When they hit it, deliveries pause until they pay down.
- A stop-supply rule in writing. “If an invoice is more than seven days overdue, we may pause deliveries until it is paid.” Without it, pausing can start a fight.
- A clear due date on every invoice, and the order number or approver’s name the café needs to pay it. Missing purchase order numbers hold up more payments than bad intent does.
- Payment methods that are easy. Bank details and a card or direct debit option remove excuses.
Are my terms fair under the unfair contract terms rules?
If you use one standard set of terms for every café, the ACCC’s unfair contract terms regime can apply. Since 9 November 2023 it covers standard form contracts made, renewed or varied from that date with small businesses (fewer than 100 employees or turnover under $10 million), and penalties apply for using unfair terms. A term that lets you change prices, suspend supply or add fees with no equivalent right for the café can be a problem. Keep your terms balanced and plain. If you sign a larger café group’s standard contract instead, the same protections may work for you. See the ACCC’s guidance.
How do I chase a late café without losing the account?
Cafes are customers you want to keep, so the routine is polite and fast.
- Day after the due date: a friendly email. “Just checking this one landed with your accounts person.”
- Day seven: a phone call. Ask what is holding it up. Often it is a missing order number.
- Day fourteen: a written reminder that the stop-supply rule applies from the next order.
- Later: a letter of demand if it is still unpaid. Business.gov.au has a guide that suggests trying friendlier steps first.
The cost of consistency is low. The cost of letting one account drift to 60 days is the cash for another new account you could not take on. Our page on funding when customers pay late covers the routine in more depth.
What does a good wholesale account limit look like?
Work it backwards from the cash you can afford to have tied up. Say the bakery in our illustration has $15,000 it can comfortably leave in invoices without missing wages or its own supplier bills. Using the same maths, each account ties up about $4,100, so the bakery can hold three to four accounts before it needs outside cash. A fifth café is a decision, not an accident.
A few ground rules help:
- Cap any single café at a fixed share of your unpaid invoices, so one slow payer cannot swallow the pool.
- Raise a limit only after several on-time payments, not on a promise.
- Review the list monthly: unpaid invoices, age, who is over limit.
What should I check before saying yes to the first big café?
Run through this short list the day before you agree to supply a new account:
- Can I cover the first 60 days? Work out the cash cost of the first two months of orders and check your buffer holds it without touching wages, rent or tax money.
- What is the worst month? If the café pays at 60 days and orders double, does the business still make payroll? Use the worst-month test, not the average.
- Who else is waiting on cash? Your own flour and dairy suppliers may want payment in 7 to 14 days. Wholesale only works when your supplier terms and customer terms are in the same league.
- Can I deliver reliably? A late or short delivery gives a café a reason to hold payment. Check van, staff and oven capacity first.
- Is there a second account behind it? One big café is a bet. Three smaller ones are a base.
If the answers are close to a no, a small facility arranged early, while your statements are healthy, gives you room. If you would like to see what is possible, check your options here before the first order lands.
When does funding wholesale accounts make sense?
Funding makes sense when your cafes are good for the money, the wait has a visible end and the repayments fit your quietest week. The usual shapes are:
- A business line of credit that you draw on when invoices go out and pay down as they are paid.
- A short-term loan sized to the unpaid invoices while a new account matures.
- Funding for a large first order when one café or group wants a step change in volume.
For trading businesses, unsecured funding is typically $5,000 to $500,000, sized on turnover and bank statements. Same-day funding is possible for smaller unsecured amounts, which can help when a new order is waiting on ingredients. Lenders read your bank statements, so a clear pattern of cafe deposits and a short aged-debtors list make the conversation easier. Our guide on what lenders see in your bank statements explains how to get ready.
Funding does not fix slow payers. It only funds the wait. If you borrow to bridge a 45-day wait, work on getting it to 30 at the same time. Our bakeries and food producers page covers how this fits the way a bakery earns.
Where to go next
Going wholesale is a good problem: it means cafes want what you make. The risk is saying yes before the cash is ready to carry it. If you have run the sum and the gap is bigger than your buffer, tell us about it. Enquiring takes about 60 seconds and there is no credit check when you first enquire, so asking will not touch your credit score. Your details are not sprayed around a heap of lenders, so your phone will not light up with strangers. A real person reads your situation and calls you. Please fill the form in accurately, with true turnover and invoice figures, so we can point you to the right option first time.
Frequently asked questions
What payment terms should a small food producer offer cafes?
Many suppliers start with 7 to 14 days for a new account and move to 30 days once the café has paid on time for a few months. Whatever you pick, write it on every quote and invoice so there is no argument about the due date.
How do I work out how much cash wholesale will tie up?
Take what it costs you in cash each week to supply the account (ingredients, packaging, labour, delivery), divide by seven, then multiply by the days it really takes the café to pay. Add the figures for every account. Our Dough gap calculator does the same sum with your own numbers.
Should I take a deposit from a new café?
For a brand new account it is reasonable to ask for a card on file, a deposit or payment on delivery for the first few orders. Once the café has a clean record you can move to terms. The aim is to limit your exposure while you learn how they pay.
When can I stop supplying a café that has not paid?
Only if your written terms say so. Include a clause that lets you pause deliveries when an invoice is overdue by a set number of days, and apply it the same way every time. A calm reminder on day one overdue, then a phone call, usually fixes more than a threat.
Do the unfair contract terms rules affect my supplier terms?
They can. Since 9 November 2023 the ACCC's unfair contract terms regime covers standard form contracts with small businesses (fewer than 100 employees or turnover under $10 million), with penalties for using unfair terms. If you use a standard set of terms, keep them balanced: the same notice and rights in both directions.
Can a business loan fund wholesale accounts?
It can, when the customers are good for it and the wait has an end. A short-term loan or a line of credit sized to your unpaid invoices bridges the gap while the accounts mature. It does not fix slow payers, so tighten terms at the same time.
What if one café becomes most of my wholesale sales?
That concentration is a risk, because one late payment can leave a hole you cannot cover. Set a credit limit for each account and keep working on a second and third account so that no single café can sink the month.