The important word here is : liability. Once you take the customers money up front you better deliver them the service. If you take 12 months worth of money,

The important word here is : liability. Once you take the customers money up front you better deliver them the service. If you take 12 months worth of money, you need to be around for 12 months at least. If you stop delivering the service 6 months in, the customer may pursue the unused money. This is an interesting specific example but the broader message is to concentrate on your cashflow conversion. Bad businesses are ones where you hold a lot of inventory for a long time, either paid up front or using borrowed money, and then try to sell at a profit. Good businesses are ones where you take the cash, then deliver the product. Dell was so successful principally because they built on demand, using the customers money to purchase the parts, and needed little working capital.