The obligation that defines the business.
WHY IT IS THE CENTRAL ISSUE
You hold money for services not yet delivered, sometimes for months.
WHAT THAT MEANS
The money is not yours until the service is delivered or the supplier is paid.
WHAT TO ESTABLISH
Separation of client money from operating funds.
WHY SEPARATION
Using client deposits for operating costs is how travel businesses collapse and clients lose money.
WHAT THAT PRACTICE PRODUCES
Dependence on new bookings to fund old ones, and eventual failure.
WHAT TO NEVER DO
Fund operating costs from deposits held for future travel.
WHAT TO ESTABLISH
That supplier payments are made when due, not deferred.
WHY
Deferred supplier payment means the booking is not actually secured.
WHAT TO VERIFY
That every booking taken is actually confirmed with the supplier.
WHY THAT NEEDS SAYING
Clients arriving to find no reservation is the most damaging failure in this business.
WHAT TO KEEP
Confirmation for every element of every booking.
WHAT TO PROVIDE CLIENTS
Confirmation showing what is booked and under what reference.
WHAT TO ESTABLISH ABOUT PAYMENT TIMING
When deposits are due When the balance is due What happens if the balance is late
WHAT TO STATE CLEARLY
What the deposit secures and whether it is refundable.
WHAT TO RECORD
Every payment received, and what it relates to.
WHAT TO RECONCILE
Money held against bookings not yet travelled.
WHY
It is the figure that tells you whether the business is solvent.
