GlossaryCash & funding
What is the working capital requirement (BFR)?
The working capital requirement (BFR) measures the cash tied up by the operating cycle: what the business has paid or advanced before it is paid itself. It equals inventory plus customer receivables, minus supplier payables.
In practice, in France
The BFR explains the most common paradox among profitable SMEs: making money while running out of cash. A fast-growing business buys, stocks, and invoices before it collects — its growth consumes cash before it produces any.
It is managed through three levers, and only one is truly under immediate control. Cutting inventory takes months. Stretching supplier terms is negotiable and bumps against the statutory cap on payment terms. Shortening customer collection is the fastest lever — which is why chasing payment is worth more than a dashboard.
The warning sign to watch for is a BFR that grows faster than revenue. It means each euro of growth costs more and more to finance.
In Odoo
The three components come straight out of standard reports: inventory valuation, customer aged balance, supplier aged balance.
Their reliability rests on work done earlier: an unmatched third-party account or an un-counted stock distorts the calculation, sometimes considerably.
Common mistakes
- Looking at it once a year, when it is a figure that moves every week.
- Financing a structural BFR with an overdraft, the most expensive way to fund it.
- Treating customer collection as an administrative task rather than the first lever of cash management.
These definitions are for guidance and do not replace professional advice. Each entry carries its last-updated date. Filing deadlines are not listed here: they change every year and live in the tax calendar.