top of page
Business Conference
crypto15

Should I stop supplying my business customer with goods and services due to late Invoice payments?

Many businesses have at least once been on the receiving end of a B2B customer using delay tactics or deliberately avoiding communicating. All too often this usually happens when a business has supplied goods and services to a longstanding business customer which has then accrued these goods and services for months at a time without any deposit, payment milestone or structure leaving the business supplier high and dry. This commonly happens and is one of the main reasons business unfortunately meet their end by simply having too much invested in one particular business customer who lets them down.


Don’t ever be in a position where the business customer becomes too important to fail. If your eggs are all in-one-basket and you solely rely on one or two businesses to supply then you should look at potentially diversifying your customer base or setting reasonable credit limit thresholds so that you are paid more regularly and it limits your exposure to risk.


However, if your business is in a position where a large business customer is not paying you reliably or withholding payment without good reason and that makes up more than 40% of your total yearly revenue then you should perhaps consider stopping supplying and more goods and services until all outstanding balances are paid.


This often feels incredibly akward on behalf of the business supplier, especially if the their customer is a large national or international company. The prestige of supplying a world renown or household brand business name can often be too alluring for smaller businesses resulting in them never questioning ever increasing invoice payment dates strangling their cashflow and sending them deeper into the red zone.


We have other articles which advise businesses how to approach invoicing businesses however for this article we will stick to the premise of stopping supplying of goods and services in the event of a late invoice payments.


In the end it’s not about whether you can afford to stop supplying goods and services but whether or not you can afford not to. The longer you leave addressing the issue the more indebted you inevitably become to your business customer, especially if they are aware how heavily reliant you are on them.


This gives them incredible leverage and many larger businesses can simply bully smaller businesses by constantly extending the carrot only to “reward” them with an invoice payment they should have rightfully received weeks/months ago regardless. This ceases to become a business – customer relationship and instead becomes a liability issue on your behalf. Never let your business find itself in a position where your customer feels like they are too big to fail.

12 views0 comments

Comments


bottom of page