Managing the customs duty disbursement float

If you are a freight forwarder or customs broker, you will often pay money you do not owe. To get a client's cargo released, you front the import duty, taxes and port or terminal charges to the authorities, then re-bill the client afterwards. Between paying out and being paid back, that money sits on your books, not the client's. That gap is the disbursement float, and for a busy forwarder it can tie up serious working capital.

This guide is about the money side of that arrangement, the cash you finance and the risk that you do not get it back, rather than the mechanics of filing a declaration or holding an EORI. It explains where the float comes from, why disbursements need to be kept apart from your own fees, and how to stop a client's duty bill quietly becoming your financing problem. It is general information, not advice, so confirm your own position before acting on it.

Where the float comes from

When goods arrive, the customs authority generally wants duty and import taxes settled before the cargo is released. The importer may not be set up to pay the authority directly, or may simply rely on you to handle clearance end to end, so you pay on their behalf as their agent and recover it later.

The amounts are not trivial. Duty and import VAT on a single consignment can run well into four or five figures, and port or terminal charges stack on top. You may be settling several clients' liabilities in the same week, all before any of them have reimbursed you. The float is simply the total of everything you have fronted and not yet recovered, and it grows with your volume.

It helps to be clear that this is different from the declaration itself. Filing the paperwork is a service you perform; fronting the duty is cash you lend, even if only for a few days. The two often travel together, but the risk in the float is purely about money and time, not about getting the customs entry right.

Keep disbursements separate from your fees

A disbursement is money you pay to a third party as the client's agent and re-bill to the client at cost. That is a different thing from a charge for your own services, and it is worth keeping the two clearly apart in your records.

• Disbursements, the duty, the import taxes, the port charges, pass straight through. You are recovering exactly what you paid out on the client's behalf.
• Your service fees, clearance, handling, admin, are your own income for work you have done.

The distinction is not just tidiness. The VAT treatment of a genuine disbursement differs from the treatment of a charge for your services, and blurring the two can create problems at reconciliation and beyond. The specifics depend on your jurisdiction and on whether a payment truly meets the test for a disbursement, so treat this as a prompt to confirm your own position rather than a ruling. The safe habit is to record duty and charges you front separately from what you invoice for your work, so each is easy to see and to reconcile.

The risk if a client is slow to pay

The float is only comfortable while clients reimburse promptly. The moment one is slow, or fails to pay at all, you have financed someone else's duty bill with your own cash, and you cannot easily claw it back from the authority, which was paid in full and on time.

That exposure scales quietly. A single late payer on a modest consignment is an annoyance; several large duty outlays outstanding at once can squeeze your own ability to fund the next release. The two defences are straightforward: set the money aside rather than treating fronted-then-recovered cash as available working capital, and bill promptly and clearly so reimbursement is not held up by a vague or late invoice. Knowing, at any moment, exactly how much you have fronted and from whom it is owed is what keeps the float from turning into an unplanned loan book.

How Altery fits

Altery does not pay duty for you, advise on VAT or decide what counts as a disbursement; those are your decisions and your customs authority's rules. What Altery is built for is the cash handling that keeps the float under control.

You can hold client disbursement money in ring-fenced pots, separate from operating cash, so the funds you have set aside to pay an authority, or are holding pending reimbursement, are not mixed up with your own income. That separation also mirrors the disbursement-versus-fees distinction your records need. When duty and port charges fall due in the destination currency, a multi-currency account lets you hold USD, EUR and GBP and pay in the right currency, converting on your own timeline. And real-time balances with clean, categorised transaction records let you see at a glance what you have fronted against what has been reimbursed, so the outstanding float is always a known number rather than a surprise.

Altery is not a bank, and this guide is general information, not advice. Use it to tighten how you handle the float, then confirm the duty, VAT and disbursement specifics that apply to your own business with a qualified adviser.

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