The float that only works while bookings rise

Customer deposits can make a business look liquid for years, until the diary stops filling and the money turns out to have a job attached.

By Steve 5 min read
Abstract bridge artwork for The float that only works while bookings rise

A business takes 40% on booking. It has done so for years. The bank balance is comfortable, the profit and loss statement is healthy, and no one has had a difficult conversation with a supplier in living memory. Then bookings go flat, not down, flat, and within a quarter the same business is watching the balance daily and asking the bookkeeper whether something has gone wrong with collections. Nothing has gone wrong with collections. What has gone wrong is that the business has been running on a float, and a…

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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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