Float: Your most underrated growth tool

We partnered with Faheem Siddiqi, Founder & CEO of FinanceWithin, to dive into a topic every brand should be thinking about: using float as a growth lever. This guest blog, co-authored by FinanceWithin and the Highbeam team, is written from Faheem’s perspective.

Margins are great. Cash is better. Float is king.

My team at FinanceWithin will tell you I obsess over the concept of “float.” Whether we’re reviewing debt docs or digging into cash conversion cycles, float is always on my mind. Why? Because float is the hidden lever that often makes the difference between a brand that scales smoothly and one that’s constantly starved for cash.

Why float matters

Strong margins are necessary, but they’re not enough. I’ve seen brands with 70%+ gross margins still run into cash crunches. Why? Because margins don’t pay payroll, cover supplier invoices, or fund growth. Cash does.

And not all revenue produces cash at the same speed. That timing gap (the period between when you get paid and when you have to pay others) is called float.

Float is cash you don’t technically own yet, but you can use. Done right, it’s free working capital. Done poorly, it’s a silent drag on operations and stalls growth.

The cash conversion cycle: Where float lives

To manage float, you have to understand your cash conversion cycle (CCC):

CCC = DIO + DSO – DPO

• DIO (Days Inventory Outstanding): How long your inventory sits before selling. Lower is better.
• DSO (Days Sales Outstanding): How quickly you collect after a sale. DTC is close to zero. Wholesale can be 30–90+ days.
• DPO (Days Payables Outstanding): How long you have before paying vendors. Higher is better.

Example:

• A DTC brand with 0 DSO, 60 DIO, and 30 DPO → CCC of 30 days.
• A wholesale brand with 30 DSO, 60 DIO, and 30 DPO → CCC of 60 days.

Two brands growing at the same pace: one turns cash over 12 times a year, the other just 6. That’s the power of float.

How to improve float

Float is tactical. Here are the levers you can pull:

1. Negotiate better vendor terms (DPO). Push for net 30, 45, 60. When you commit to the term, pay on time. Never be late. Reliability (and volume) creates relationship leverage.
   
   
2. Turn inventory faster (DIO). Smarter buying, better merchandising, tighter demand planning. Idle product kills float.
   
   
3. Collect faster (DSO). For wholesale, explore factoring or AR financing. For DTC, keep your checkout/payment rails tight.
   
   
4. Use credit cards strategically. 30–60 days of ad spend, freight, or packaging float. Free if you pay balances on time.

Build the right infrastructure

Float optimization requires solid financial infrastructure:

• Treasury management. Don’t let cash sit idle. Use high-yield accounts, set cash policies, earn yield on reserves. This is where Highbeam is fantastic. It minimizes cognitive load and makes it simple.
• Banking & credit relationships. Treat banks like partners. Build credit capacity before you need it. Explore flexible credit lines tied to AR/inventory. 

Infrastructure should also be tied into your working capital strategy. Here’s a great tool to model your working capital: link.

Why float is a competitive advantage

Brands that master float:

• Grow faster without being dilutive
• Survive economic cycles (ups and downs) with less stress
• Negotiate stronger terms with suppliers, retailers, and acquirers
• Command a premium during M&A

Everyone loves cash-efficient companies that operate with good discipline and have inherent durability.

Ultimately, float isn’t just a finance function. It’s a company-wide discipline… from how you plan inventory to how you negotiate contracts.

Margins measure profitability. Cash measures survival. Float measures power. And the companies that master float are the ones that endure and compound.