# Kinds of Float in Cash Management
Float is the time lag between a sale and the moment the seller has spendable cash in its bank account. Reducing float is a key objective of cash management.
## The Four Kinds of Float
| # | Float | Time Period It Covers |
|---|---|---|
| 1 | Billing float | Between the sale and the mailing of the invoice |
| 2 | Mail float | While the cheque is in transit (post office, messenger, etc.) |
| 3 | Cheque processing float | Time the seller takes to sort, record and deposit the cheque after receipt |
| 4 | Bank processing float | From cheque deposit to credit of funds in the seller's account |
### Detailed definitions
- Billing Float — An invoice is the formal payment request the seller sends to the purchaser. The time between the sale and the mailing of the invoice is the billing float.
- Mail Float — The time during which a cheque is being processed by the post office, messenger service or other means of delivery.
- Cheque Processing Float — The internal time required by the seller's accounting/cash team to sort, record and deposit the cheque after receiving it.
- Bank Processing Float — From the moment the cheque is deposited until the funds are credited in the seller's account (clearing time).
## Why it matters
Each day of float represents foregone interest. Techniques like concentration banking and lock-box systems are designed specifically to reduce mail float and cheque processing float.