Quick answer
Event businesses are paid in lumps and pay suppliers in lumps, rarely at the same time. A client deposit lands months before the event, but venue, hire and crew bills fall due close to it, and the final balance can arrive after. Treat deposits as held money, forecast week by week around event dates, and fund the gap deliberately.
Key points
- A deposit is a promise of work still to be done, and the GST on it is reportable when you receive it
- Supplier costs bunch in the four weeks before an event, while the client's final payment may trail it
- Cancellations and date changes move cash months at a time, so contract wording is a cash flow tool
- One big wedding or festival can make a quiet quarter look healthy until the bills fall due
- Short, event-linked funding suits this industry better than a long loan sized to the peak
An events diary can look wonderful and still run you out of cash. Three weddings in March, a conference in April and a festival in May all read as revenue. But the money that matters is what is in the account on the Thursday the staging company wants paying, and that has little to do with how full the calendar is.
This guide is for planners, hire companies, caterers, AV crews and venue operators who carry big commitments around a few fixed dates.
Why is cash flow harder in events than in most businesses?
Most businesses earn as they go. Events do not. The money arrives in stages, the costs arrive in a different set of stages, and everything is anchored to one day that cannot move.
A typical corporate event looks like this:
- Booking: the client pays a deposit, often 25% to 50%.
- Eight to twelve weeks out: you pay supplier deposits to the venue, the caterer, the AV hire company.
- Two to four weeks out: the client pays a second instalment, and your crew costs and final supplier balances fall due.
- Event day: wages, fuel, freight, consumables.
- Two to six weeks after: the final balance is invoiced and paid, if the client pays on terms.
If your supplier payments run ahead of your client instalments, you are funding the event out of your own pocket for a month or more. If a few events overlap, the pocket gets deep very fast.
What actually happens to a deposit?
A deposit is cash, but it is not income you have earned. Two things follow.
First, it should not pay your rent. Keep it in a separate account and release it as the matching supplier costs fall due. A booking that sits eight months away should not be funding this month’s overheads.
Second, it carries GST. The ATO’s guidance says that on a cash basis a payment is reported in the period you receive it, and on a non-cash basis in the earlier period in which you are paid or invoice. Either way, a deposit received in one quarter can bring GST into that quarter’s BAS even though the event is months later. Small businesses with less than $10 million in aggregated turnover can generally choose cash accounting, but the right choice depends on your books. Ask your accountant before the next BAS, not after. Our GST cash flow tips show a simple way to set aside the GST share as it arrives.
Where do event businesses get squeezed?
Four pinch points come up again and again.
The pre-event bunch. Venue balances, hire company invoices, travel, and casual crew wages all land in the final month. This is the point of greatest cash outflow and the point at which clients are least inclined to pay early.
Late-paying corporate clients. A marketing team may sign off an event quickly but the invoice then sits in accounts payable for 45 or 60 days. Written payment terms and a clear purchase order process help. So does asking for the final instalment before the day, not after. For the longer-tail issue see getting customers to pay faster.
Cancellations and reschedules. A postponed wedding can leave your supplier deposits stranded for a year. A cancelled launch can leave you with non-refundable bills and no client money. Your terms should spell out who carries committed costs.
Seasonality. Many event businesses are busy in spring and the lead-up to Christmas, and quiet in mid-winter and January. The cash from the busy months has to cover the quiet ones. See planning for a quiet month and funding seasonal swings for how to size that buffer.
How do you forecast cash around event dates?
Calendar-month budgeting hides the problem. Instead, forecast by week, and tie every line to an event.
- List each confirmed event with its date, contract value and payment schedule.
- For each, list every supplier and crew cost with its due date.
- Plot receipts and payments on a weekly grid for the next 13 weeks.
- Add the fixed costs: rent, insurance, vehicles, owner’s drawings, super.
- Look for the week where the running balance goes lowest.
That lowest point is the amount you need to have available, in cash or credit, to run the plan safely. The 13-week forecast guide goes through the build in detail, and the cash runway calculator gives a quick check on how many weeks you can cover.
What does lender-friendly look like for an event business?
Lenders see the industry as lumpy and discretionary, so they want evidence the lumps are reliable. Things that help:
- written contracts with deposit and instalment schedules;
- a track record of repeat clients and corporate accounts;
- a reserve policy for deposits;
- bank statements showing deposits going into one account and supplier payments coming out in a pattern;
- up-to-date BAS and super.
Banks are generally the cheapest source of funds and are worth a proper conversation if you have a few years of steady trading. If yours has said no, or the limit does not match your peak, options include working capital loans for the pre-event bunch, equipment finance for staging, lighting and furniture that you will reuse for years, and invoice finance where you bill corporate clients after events.
A worked example
This is an illustration only. A boutique events company runs a $90k conference for a corporate client in late November.
| Date | Money in | Money out |
|---|---|---|
| August, booking | $27,000 deposit | |
| September | $18,000 venue and AV deposits | |
| Early November | $27,000 second instalment | $22,000 supplier balances, $9,000 crew and freight |
| Event day | $6,000 catering extras and sundries | |
| Late December | $36,000 final balance |
By the event day, the company has been paid $54k and spent $55k. The profit in the contract is real, about $35k less overheads, but it is locked in the $36k that arrives after Christmas. If a second event has the same shape in December, the company is out of pocket for several weeks.
A short working capital facility for $30k would cover the gap, repaid from the final balance. The cost is modest next to the margin on the contract. Without it, the owner would be shopping for money in the week that matters most. If you are staring at a table like this one, a one-minute enquiry will tell you what suits.
What should be in your contracts to protect cash?
Contracts are a cash flow tool. A few clauses make a big difference:
- a deposit on booking, and a second instalment well before the event;
- a cancellation schedule that rises as the date approaches;
- a clause that the client carries committed supplier costs;
- payment of the balance on the day or within seven days, not 30;
- a clause on postponement fees, so dates are not moved for free.
None of that is legal complexity. It is arithmetic on the timing of money.
When is it time to talk about funding?
If your forecast shows a low point you cannot cover, or the diary is filling faster than your reserves, the sensible moment to ask is early. A short facility arranged ahead of time is far cheaper than a rushed one.
We speak with event businesses regularly and can tell you quickly what is realistic. The enquiry takes about a minute, and enquiring does not appear on your credit file. We do not scatter your details among lenders, so there will not be a pile of calls. A real person reads your details and rings you. Tell us the event dates, contract values and payment schedule as accurately as you can, so we can point you to the right option the first time.
Frequently asked questions
Is an event deposit income I can spend?
Not safely. It pays for work and supplier commitments that have not happened yet, and if the event is cancelled you may owe part of it back. Many planners keep deposits in a separate account and draw against costs as they are paid. Spending it on overheads early is how a booked-out diary ends up with an empty bank account.
When do I pay GST on an event deposit?
Under the ATO's rules for reporting GST, a payment you receive is generally counted in the period you receive it on a cash basis. On a non-cash basis it goes in the earlier of the period you are paid or invoice. In both cases a deposit can create a GST liability months before the event. Confirm your basis with your accountant.
How much cash should an event business hold in reserve?
A common test is to total the supplier and wage commitments due in the next eight weeks and compare them with cash on hand plus payments due in that window. If the first is bigger, you have a gap. Many owners also hold a buffer for one cancelled or postponed event.
Can an event business get finance against its bookings?
Some lenders look at signed contracts and deposits as evidence of future income, though most still judge you on trading history and bank statements. Invoice finance can work where you invoice corporate clients for completed events. Strong, documented bookings from reliable clients help any application.
What is the safest way to fund equipment for events?
Match the funding to the life of the asset. Staging, lighting, furniture and marquees can be financed over their useful life through equipment finance. Wages, venue holds and supplier deposits are working capital, and are better covered by a facility you can repay when the client pays.
What if a client cancels close to the event?
Your contract decides who bears the cost. Include a cancellation schedule that rises as the date approaches, and a clause covering supplier costs already committed. Cash flow then absorbs the hit instead of the owner. If a cancellation leaves you short, ask about funding early, before bills overtake you.