When your biggest client collapses, cash has to come first

The shock is the cash gap

Your biggest client has collapsed, and the invoice is only part of the problem. The real risk is the hole it leaves in payroll, supplier cover and your next progress payments. A business can survive one bad debt. It struggles when a major customer disappears and the calendar still expects wages, hire charges and GST to be paid. ([business.gov.au](https://business.gov.au/guide/guide-to-managing-cash-flow?utm_source=openai))

Start by treating the gap as a cash flow problem, not a waiting game. business.gov.au describes cash flow as money coming in and out of the business, and says a forecast estimates future sales and costs. That matters because your forecast now needs to assume the lost revenue is gone and the bills are still due. ([business.gov.au](https://business.gov.au/finance/cash-flow/set-up-a-cash-flow-statement?utm_source=openai))

Build the next 13 weeks

Build a 13-week cash forecast today, even if it is rough. List the cash you expect in each week, then strip out the collapsed client entirely. Put wages, tax, rent, plant hire, insurance and loan repayments into the out column. You are looking for the first week the account goes negative, because that is the week you must act on. ([business.gov.au](https://business.gov.au/finance/cash-flow/set-up-a-cash-flow-statement?utm_source=openai))

Once you can see the pinch point, cut anything that does not keep the job moving or protect the team. Delay discretionary spending, pause new orders that are not tied to live work, and review overtime and subcontractor use. The aim is not to look tidy on paper. It is to keep enough cash in the account to trade tomorrow. ([business.gov.au](https://business.gov.au/guide/guide-to-managing-cash-flow?utm_source=openai))

Source: Official guidance

Pull in every other dollar

Then chase every other debtor this week, not next month. Pull out overdue invoices, call the people who can authorise payment and follow each call with a short email. Ask for a firm payment date or a part payment now. If cash comes in from elsewhere, it buys time while you sort the bigger hole left by the collapsed client. ([business.gov.au](https://business.gov.au/guide/guide-to-managing-cash-flow?utm_source=openai))

Keep a simple chasing log with invoice number, amount, date promised and who you spoke to. That record helps you separate real delay from empty talk and shows where the quickest cash sits. The point is not to win every argument today. It is to bring in enough money to cover the next fortnight while the liquidation unfolds. ([asic.gov.au](https://www.asic.gov.au/regulatory-resources/insolvency/insolvency-for-creditors/liquidation-a-guide-for-creditors?utm_source=openai))

Warn your own creditors early

Call your key suppliers and lender before they hear the news elsewhere. Explain that a major customer has failed and give them the new reality in plain numbers, not drama. If they already see missed payments coming, they will assume the worst. Early contact gives you a better chance of keeping supply moving and avoiding an unnecessary freeze. ([business.gov.au](https://business.gov.au/guide/guide-to-managing-cash-flow?utm_source=openai))

Be ready to explain how you will protect them from further damage. That may mean shorter terms, a temporary reduction in orders, or a paused draw on facilities until the forecast improves. ASIC says creditors in liquidation usually need to lodge a proof of debt with supporting documents, so your own file should already be clean and current. ([asic.gov.au](https://www.asic.gov.au/regulatory-resources/insolvency/insolvency-for-creditors/liquidation-a-guide-for-creditors?utm_source=openai))

Lodge the claim and protect the business

Lodge your claim in the liquidation as soon as the liquidator asks for it. ASIC says creditors usually need a proof of debt form supported by invoices or other documents, and liquidators must give at least 14 days’ notice of the deadline when they call for proofs. Keep everything in one folder so nothing goes missing. ([asic.gov.au](https://www.asic.gov.au/regulatory-resources/insolvency/insolvency-for-creditors/liquidation-a-guide-for-creditors?utm_source=openai))

Then keep trading decisions separate from recovery decisions. Your job is to preserve the business while the claim runs in the background. If the gap is too large to bridge on your own, CRP can help coordinate independent qualified professionals to review cash pressure, creditor contact and next steps. CRP is not a law firm and does not promise outcomes. Call CRP today about turnaround support. ([asic.gov.au](https://www.asic.gov.au/regulatory-resources/insolvency/insolvency-for-creditors/liquidation-a-guide-for-creditors?utm_source=openai))