The old customer wants credit again.

An old account returns with a new order

A plumbing supplier finally recovers an overdue balance after months of chasing. The same customer now offers a large order and asks for its previous credit limit back. Sales wants the work, but accounts remembers the unpaid promises. The useful question is whether this new transaction can be supplied on terms the business can support.

Separate the old settlement from the new request

Check whether the earlier account is fully resolved and whether any settlement conditions remain. Keep the old file intact. Do not treat a new purchase order as cancelling an outstanding obligation or silently reopening a settled account.

Confirm which entity is ordering now. A familiar trading name or contact person does not establish that the legal customer is unchanged.

Assess credit using current information

Business.gov.au recommends credit checks and limits when offering payment terms. Review the customer’s recent performance, the size of the order and information obtained through legitimate checks. A past payment is relevant evidence, but not a guarantee about future capacity.

Record why the proposed exposure is acceptable. Make the decision visible to the people who release goods and approve further orders.

Source: Business.gov.au — Payment terms

Offer a structure the business can fund

Consider payment before dispatch, staged supply or a smaller initial order, subject to a properly agreed contract. Calculate the cash needed to source the goods and what happens if the customer delays the balance.

Avoid collecting a deposit without allowing for the cost of fulfilling the order. New cash from the customer comes with new delivery obligations; it is not automatically available for unrelated bills.

Make the limit work in practice

Confirm the accepted terms in writing and set a clear internal release process. Tell sales and the warehouse who may approve an exception. A formal limit achieves little if several staff can each release another order outside it.

Set a review after actual payment performance, not just after a period of friendly contact. Keep current service and contractual obligations in mind before changing supply.

Decide before accepting the order

Confirm the customer’s identity and any unresolved old obligations.

Approve a funded order structure, record its terms and assign authority for exceptions.

Contact CRP about managing renewed customer exposure after a debt recovery.