Who Floats the Event?

Clients pay on 60 or 90 days while suppliers want paying before the doors open, and the gap between them decides whether a small event company survives.

Large clients pay 60 or 90 days after the invoice, while venues and suppliers want to be paid before the doors open. This guide shows how producers close that gap with deposit schedules, milestone bills, supplier deposits passed through and credit. It ends with a cash calendar that maps every payment in and out of one event.

Event business cash flow comes down to one gap. Large clients pay 60 or 90 days after the invoice. Venues and suppliers want deposits months ahead and the rest before the doors open. Someone floats the money in between.

This guide shows how producers close that gap with deposits, milestone bills, supplier costs passed through and credit. It ends with a cash calendar for one event.

Paid in 90 days, paying before the doors open

Large companies set their own payment terms, and small suppliers rarely move them. Net 60 and net 90 are common. Venues, caterers and AV firms work the other way, and most want their money before the event starts.

Net 60 means the client pays 60 days after the date on the invoice. That is why profit and cash are different things. An event can make a healthy margin and still empty the bank account for months. For a small company, the timing can matter more than the price.

Map the gap on one event

Take a made-up $100,000 corporate event with $75,000 of supplier costs. The venue wants half at booking and half four weeks out. The caterer and the AV company want half four weeks out and the rest one week out.

On the left, the client pays the full fee on net 60 after the event. On the right, the same client pays on a deposit schedule.

• Booking, 20 weeks out. Paid out: $12,500. Client pays, no deposit: $0. Balance: −$12,500. Client pays, with schedule: $50,000. Balance: $37,500.
• 4 weeks out. Paid out: $37,500. Client pays, no deposit: $0. Balance: −$50,000. Client pays, with schedule: $40,000. Balance: $40,000.
• 1 week out. Paid out: $25,000. Client pays, no deposit: $0. Balance: −$75,000. Client pays, with schedule: $0. Balance: $15,000.
• 4 weeks after. Paid out: $0. Client pays, no deposit: $0. Balance: −$75,000. Client pays, with schedule: $10,000. Balance: $25,000.
• 9 weeks after. Paid out: $0. Client pays, no deposit: $100,000. Balance: $25,000. Client pays, with schedule: $0. Balance: $25,000.

Same event, same profit. In the first case the company carries $75,000 for more than two months. In the second it never drops below zero.

Put the deposit schedule in the contract

Ask for the schedule before the contract is signed, while the client still wants your date. Tie it to their own interest. You are booking a venue and suppliers in their name, and those suppliers want money now.

Large clients pay through purchase orders and supplier setup forms. These can take weeks. Start the paperwork the day you win the work, and send the first invoice the same day.

Date each invoice by the milestone, not by the end of the job. An invoice sent on the event day starts a 60 day clock. That clock ends two months after you paid everyone.

Bill by milestone, a week before you pay

Milestones split the fee into payments tied to stages. How to price event design work sets those stages for a design fee. The cash rule here is about timing.

Set each client payment a week or two before the supplier payments it covers. Then the client's money arrives before yours leaves. Check the dates against every supplier contract before you send the proposal.

Pass supplier deposits through

Supplier costs do not have to sit in your account. There are three ways to keep them from draining it.

1. The client pays the largest suppliers direct, such as the venue, under contracts in the client's name.
2. You bill each supplier deposit to the client at cost, on the day the supplier bills you, due before the supplier's date.
3. You ask suppliers for terms closer to the client's, such as a smaller deposit or payment after the event.

The first removes the risk, but also any margin on those costs. The second keeps both, if the client pays on time. The third works best with suppliers who know you and trust you.

Credit and other bridges

Some gap will remain. Plan the bridge before you need it.

A bank credit line or overdraft is often the cheapest bridge. Set it up while trade is good, because banks lend more freely to a firm that is not yet short.

Invoice finance, also called factoring, means a lender pays you most of an unpaid invoice now and takes a fee. It costs more, but it grows with your sales. Personal credit cards cost the most and put your own money at risk.

The law can help with late payers. In the UK, a business can claim statutory interest on a late business invoice. The rate is 8% plus the Bank of England base rate, unless the contract sets another rate.

In the EU, a 2011 directive limits business payment terms to 60 days. Longer terms are allowed only if both sides expressly agree and they are not grossly unfair.

The event cash calendar

Fill one row per payment, in date order. Then look for the lowest point of the balance. That number is what you must borrow or bargain away before you sign. The example rows use the figures from the table above.

• Signing. Item: Client deposit. Money in: $50,000. Running balance: $50,000. Who chases it: Producer.
• Signing. Item: Venue deposit. Money out: $12,500. Running balance: $37,500. Who chases it: Producer.
• 4 weeks out. Item: Client milestone. Money in: $40,000. Running balance: $77,500. Who chases it: Finance.
• 4 weeks out. Item: Venue, caterer and AV payments. Money out: $37,500. Running balance: $40,000. Who chases it: Finance.
• 1 week out. Item: Caterer and AV balances. Money out: $25,000. Running balance: $15,000. Who chases it: Finance.
• 4 weeks after. Item: Client final payment. Money in: $10,000. Running balance: $25,000. Who chases it: Finance.

Price the float

Floating an event is a loan to your client, and loans have a cost. If a client insists on net 90 with no deposit, put the cost of the money into the price, or walk away.

Frequently asked questions

What does net 60 mean on an invoice?

It means the client has 60 days from the invoice date to pay. If you send the invoice on the event day, you will wait two months after the event for your money. Send invoices at milestones before the event to shorten the wait.

How much deposit should an event company take?

Take enough to cover what you must pay suppliers before the next client payment. Map every payment on a cash calendar first. The lowest point of the balance tells you how large the deposit, or the credit line, needs to be.

Can I charge interest on a late invoice?

In the UK, a business can claim statutory interest of 8% plus the Bank of England base rate on late business payments, unless the contract sets another rate. Elsewhere, write a late payment rate into your contract and check the local law.

What is invoice factoring?

A lender pays you most of an unpaid invoice now and collects the full amount from the client later, keeping a fee. It turns slow invoices into cash quickly, but it usually costs more than a bank credit line or overdraft.

Milestone payments follow sign-offs, and sign-offs follow what the client can see. Monet makes a to-scale layout, 3D renders and production-ready drawings from a venue plan and a brief in minutes, so the first approval, and the invoice after it, can come sooner.