Your Customer’s on Vacation. Your Payment’s on Hold.

Written by James Sanders

Nothing tests a business relationship quite like seeing a customer’s vacation photos while your third payment reminder sits unanswered. Apparently, the money reached the Caribbean before it reached your account. Last week, we discussed keeping extra work from becoming free work. This week: keeping slow-paying customers from turning your business into an interest-free bank.

A late payment does not always mean a bad customer. But continuing to extend credit without asking questions is a decision—even when nobody formally makes it.  The key is consistency. Your response should follow a process, not depend on how uncomfortable someone feels making the call.  A few practical habits can help:  

• Watch payment patterns, not just balances. A customer who moves from paying in 30 days to 45, then 60, deserves attention before the next large order. 
• Follow up promptly and specifically. Confirm receipt of the invoice, ask whether anything is disputed, and request a definite payment date. “We’re working on it” is an update, not a commitment. 
• Set limits on additional exposure. Establish who can approve more work or another shipment when an account is overdue. Your sales team should not unknowingly expand a problem accounting is trying to contain. 
• Reconsider future terms. Deposits, advance payment, shorter payment periods, or smaller credit limits may make sense for future business. Review existing commitments before changing terms or withholding performance. 
• Escalate deliberately. Before suspending work, stopping deliveries, or terminating a relationship, review the agreement and applicable requirements, including any notice and cure provisions.

You can be professional without being apologetic:

“Your account has an overdue balance of $. Please confirm when payment will be made. We also need to resolve the balance and agree on payment arrangements before accepting additional work.”

The goal is not to punish a customer having a difficult month. It is to decide deliberately how much credit your business can afford to extend.