The deposit is 50%. The float has been paying the wages.

Customer prepayments feel like cash strength right up to the point the order book flattens, when the same mechanism unwinds faster than any trading loss.

By Steve 5 min read
Abstract bridge artwork for The deposit is 50%. The float has been paying the wages.

A business that takes money before it does the work has a bank balance that behaves strangely. It rises when orders come in, not when jobs are finished. It rises when lead times stretch. It falls in a good delivery month. Owners of installers, fit-out firms, bespoke manufacturers, event businesses, agencies on retainer and anyone selling annual subscriptions will recognise the pattern: cash and profit move to different rhythms, and cash is usually the more flattering of the two. The awkward question is what that balance actually represents. Some of…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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