Model Brazil working capital as timing, not a percentage of annual revenue. Build a rolling cash view of customer terms, tax and payroll dates, rent, inventory/import cycles, supplier terms, setup spend, FX and the delay between local commitments and collectible revenue.
Build a 13-week cash model
Start weekly. Separate committed, probable and optional outflows, and do not count unsigned pipeline as cash.
Model collection reality
Brazil customer procurement, onboarding, invoice acceptance and payment terms can push cash receipt well beyond the commercial close. Use actual contract terms and customer process.
Add statutory timing
Payroll, taxes, FGTS, rent and recurring providers have fixed or semi-fixed dates. Working capital must survive these dates even when sales collection slips.
Set a funding trigger before the cash low
Define the minimum cash buffer and the date when HQ must approve equity, intercompany funding or spend reduction. Treasury decisions made after the account is low are already late.
E2M operating frameworks are planning tools, not legal, tax, accounting, labor or regulatory advice. Validate tax positions, registrations, filings, withholding, transfer pricing and transaction structures with qualified Brazilian advisers for the specific facts.
Sources & further reading
- Banco Central do Brasil — Contas em moeda estrangeira no Brasil
- Banco Central do Brasil — taxas de câmbio / PTAX
E2M operating frameworks are planning tools, not legal, tax, accounting, labor or regulatory advice. Validate tax positions, registrations, filings, withholding, transfer pricing and transaction structures with qualified Brazilian advisers for the specific facts.