Your credit account has been cancelled.

Credit terms disappear overnight

A hardware supplier cancels a contractor’s credit account and requires payment before collection. The contractor can still buy the same goods, but the old payment cycle no longer funds the gap until customer receipts arrive. Several active jobs depend on that arrangement. The owner needs to understand the new terms and the cash required before assuming operations can continue unchanged.

Confirm what has actually changed

Ask whether the account is permanently closed, temporarily suspended or reduced to a smaller limit. Obtain the effective date and the treatment of accepted orders and existing balances.

Check the contract and correspondence for relevant rights and notice provisions. If the decision is disputed, seek advice without assuming the old credit remains available. Planning should reflect the supply terms currently confirmed while the disagreement is addressed.

Calculate the immediate funding gap

List purchases needed to complete active jobs and place them on the new payment dates. Compare those dates with realistic customer receipts. Include freight and any lost discounts.

The cash cost may be larger than the account balance itself because several future orders now need upfront funding. Identify the first date on which the business cannot meet both supply and other commitments. That is the point requiring a concrete response.

Offer evidence if seeking reinstatement

Ask what the supplier would need to consider a smaller limit or staged return to credit. Provide accurate payment history, resolved disputes and a credible proposal for outstanding amounts.

Do not promise new security or a personal guarantee without independent advice. Understand the conditions of any reinstated account. A limited facility the business can maintain may be more useful than regaining a large limit that quickly produces another arrears problem.

Reassess future work under the new terms

For new jobs, calculate the supplier cash required before quoting or confirming a start. Consider alternative supply arrangements based on quality, reliability and total cost as well as credit availability.

Business.gov.au treats payment and delivery terms as important parts of supplier selection. Avoid moving to a new supplier simply to rebuild unpaid debt elsewhere. The revised work plan should fit the cash the business can actually access.

Source: business.gov.au — Suppliers

Replan purchases using the new terms

Obtain written confirmation of the account decision and existing-order treatment.

Recalculate funding for active jobs using the new upfront payment dates.

Seek a documented, affordable reinstatement proposal or adjust future work to the confirmed supply terms.

Call CRP today about supplier credit loss and business debt pressure.