The deposit-timing rule that stops you floating supplier costs

Your client signed the proposal for a €32,000 group tour of the Amalfi Coast. The hotels want deposits by Friday. Your client's 30% deposit, €9,600, is due "upon confirmation" — a phrase that, in practice, means whenever they get around to it. You pay the suppliers Thursday. The client pays you ten days later. Congratulations: you just extended an interest-free loan.

This is not a cash-flow problem. It is a timing problem, and it has a precise solution.

The seven-day float rule: what it is and why it works

The rule is simple: your client's deposit must clear your account at least seven days before your earliest supplier payment for that booking is due.

Not seven days before the trip. Seven days before the first outgoing wire.

That single shift in reference point changes everything. Instead of anchoring deposit timing to the booking confirmation date (which you control) or the travel date (which feels far away), you anchor it to your actual cash obligation. Suppliers become the clock, not the calendar.

Why seven days specifically?

Seven days gives you enough buffer to:

• Chase a slow bank transfer before the supplier deadline hits
• Issue a formal reminder without it feeling aggressive
• Absorb a weekend or a local public holiday on either side of the wire

Five days is not enough if the transfer is international and hits a Friday. Ten days is fine but harder to justify to clients who are used to "pay on confirmation" language.

How to build the rule into your booking process

The rule only works if it is embedded in your process, not handled case-by-case.

Step 1: Pull your supplier payment schedule first. Before you send any deposit invoice, open your supplier confirmations and find the earliest deposit or pre-payment deadline. Write that date down. Subtract seven days. That is your client deposit due date.

Step 2: Put that date on the invoice, explicitly. Do not write "upon confirmation" or "within 14 days of signing." Write the actual calendar date. "Deposit of €9,600 due by 14 March 2025." A specific date removes the client's ability to interpret the terms loosely.

Step 3: Match your payment terms to that date. If your deposit due date is March 14 and today is March 1, that is Net 13 -- or simply a fixed date. Use whichever communicates most clearly. The goal is that the client sees a date, not a concept.

Step 4: Automate the reminder, not just the invoice. Sending the invoice is not enough. Most delays happen because the client filed the invoice and forgot. A reminder that fires three days before the due date, in your name, with clear payment instructions, is what actually moves money.

The FX wrinkle: when your deposit and supplier currencies differ

If you bill your client in GBP and pay your Amalfi hotel in EUR, the seven-day rule has an extra layer. The GBP deposit needs to clear with enough time for you to convert and wire EUR before the hotel's deadline.

Add two extra days to your buffer if you are crossing currencies. Nine days, not seven. The conversion itself is usually instant, but you want the funds settled in your account before you initiate the outgoing payment.

This is also where multi-currency wallets matter. If your GBP client payment and your EUR supplier obligation live in separate tracked buckets, you can see in one glance whether the deposit has actually covered the cost at today's rate, or whether FX movement has opened a gap since you quoted.

What to say when a client pushes back on the earlier due date

Some clients will notice that your deposit deadline moved earlier than they expected. The explanation is short:

"Our supplier holds are confirmed against received funds, not invoice dates. To guarantee your dates, we need the deposit cleared before we can lock in the reservation."

This is factual, not apologetic. It also shifts the frame: paying early protects the client's booking, it does not just protect your cash flow. Most clients accept this immediately because losing a hotel hold is a concrete risk they understand.

If a client genuinely cannot pay within the window, that is useful information to have before you commit supplier deposits, not after.

The compound effect across a busy season

A boutique DMC running fifteen group bookings between April and September might have forty or fifty individual supplier payment deadlines across that stretch. Without the seven-day rule, each one is a judgment call. With it, each deposit invoice is generated from the same formula, and the reminders fire automatically.

The float problem does not disappear entirely: FX still moves, clients still run late occasionally, and suppliers still have rigid deadlines. But you stop treating it as a cash-flow emergency and start treating it as a timing system. Systems are fixable. Emergencies are exhausting.

The rule is not clever. It is just consistent. Consistent beats clever every season.