Originally Posted by nav3
If the Finance director has not got the funds within 72 hours then he should not be doing the job in the first place.
I think Captain Caveman has a point (and you are being rather harsh on FDs as a species, and no, I'm not one!). Especially in the case of a startup business, the merchant acquirer (the intermediary between Visa/Mastercard and the seller, in this case the airline) doesn't want to be left with a liability if the business fails (i.e. if it's already handed over the money to the airline but also has to pay out to angry credit-card holders entitled to a refund). So the acquirer will typically delay the release of funds to the airline to ensure that enough is held back to more or less cover forward liabilities. Thus if on average passengers are booking (e.g.) a week ahead of travel, the acquirer is likely to hold payments back a week. And if the business is growing fast (typical of a startup), there are more passengers booking all the time, so the acquirer delays payment for longer in order to cover its growing liability. Unless things have changed radically in the last couple of years, this
is a cash flow issue, especially for small and startup airlines.
But now back to our regularly scheduled programming...
Brgds
C.