Your biggest customer owes more than the overdue report shows

The overdue figure is only part of the relationship

Imagine your largest customer has an unpaid invoice, another job awaiting its first claim and a new materials order you are about to place. The overdue report shows only the invoice. It does not explain everything the business has already funded for that customer.

Build a working exposure view before approving further discretionary credit. Keep current contractual obligations separate from work you have not yet agreed to take on.

Separate the components

List invoiced balances, work performed but not billed, and commitments made for future work. Identify deposits or other receipts already held and explain what they cover. Make clear whether figures are sale values, cost estimates or cash commitments.

Do not add an entire contract value to the invoices already issued under that contract. The categories should explain the position without counting the same work at different stages twice.

Put the proposed order alongside the existing position

Calculate what accepting the next order would add before another reliable receipt. Check whether materials can be used elsewhere or are specific to this customer. Note assumptions about completion, claim approval and payment.

business.gov.au recommends setting credit limits when offering credit. Your combined working view helps assess whether an existing limit captures the exposure the business is actually taking.

Source: business.gov.au: Payment terms

Distinguish future credit from existing duties

Review the agreement before changing supply or work already committed. A management credit limit does not automatically provide a right to stop an existing job. Obtain advice where payment problems affect contractual performance or solvency.

For genuinely new work, discuss lawful and workable terms before acceptance. Record who can authorise an exception and the evidence required, rather than letting the importance of the customer bypass every check.

Discuss the account using specific figures

Explain which invoices are outstanding and which new commitment is under consideration. Ask for a supported payment proposal rather than a general assurance that the relationship is valuable.

Keep a disputed item visible separately. A promise about one invoice should not be treated as confirmation that all unbilled work and future purchases can safely be funded from the same expected receipt.

Review exposure when money or work moves

Update the view as claims are issued, payments arrive and commitments change. Close the loop with the person approving orders so the working limit does not remain based on last month's position.

Use Report a Debt below if the overdue account needs CRP's attention. Bring the exposure breakdown as well as the invoices. It helps explain why a slow payment from a valued customer can affect more than the balance shown in the debtor ageing report.