Float

The float is the cash a business carries between the moment it pays for the work and the moment the customer pays for it. Payroll, fuel, materials and rent go out on their own schedule; the invoice is paid on the customer's schedule, days or months later. Everything in between is funded by the owner.

The float is normal for any business that invoices after delivery. It becomes a problem when it grows faster than the cash on hand, which usually happens during growth: a new truck, a bigger job or a new contract adds costs on day one and payments weeks later. A rough measure is weekly cost of the work multiplied by the weeks you wait to be paid, plus anything held back as retainage.