How to spot the warning signs before your cash flow takes a hit.
When it comes to getting paid on time, most businesses focus on what happens after the invoice is sent. But the real damage is usually done well before that point — in the early red flags you either miss or choose to ignore.
If you're offering goods or services on credit, you're essentially giving out an interest-free loan. That makes your ability to assess risk just as important as your ability to sell.
Here are five warning signs that a customer might be a payment problem waiting to happen — and what you can do about it.
1. Vague or Incomplete Credit Applications
If a new customer can’t be bothered to fill in all their details — including ABN, directors, trade references and physical business addresses — that’s not a good sign. You’re looking for transparency and accountability. Vague answers or resistance to providing details might mean they’ve got something to hide… or they don’t take their obligations seriously.
What to do:
Have a clear credit application process and don’t skip it — even for customers who “seem legit” or name-drop big brands they’ve worked with. No info, no terms.
2. Shifting Staff in Accounts Payable
A customer’s back office can reveal a lot about their financial health. If you notice their accounts payable contact is constantly changing, hard to get hold of, or just keeps giving you the runaround — take it as a sign something’s off. High turnover or poor handover in their finance team often means invoices slip through the cracks — or worse, there's internal disorganisation that reflects cash flow stress.
What to do:
Track your communications. If you find yourself re-explaining invoice terms to new people every month, escalate the issue. Try to deal directly with decision-makers and document all payment arrangements in writing.
3. Disputing Invoices Without Cause
Every business makes mistakes from time to time, but if a customer routinely disputes invoices — or delays payment by raising vague objections — they could be stalling for time. This is a classic tactic used by businesses who are tight on cash or juggling suppliers.
What to do:
Stick to a paper trail. Clearly document the work or goods delivered, the agreed terms, and the timeline. If disputes become a pattern, consider suspending credit terms until they’re resolved.
4. Long Payment Histories — But Never Early
Some clients always pay — just never on time. They might have a long-standing history with you, but if they consistently pay late, it’s a signal they’re managing cash flow at your expense. Don’t mistake repeat business for financial reliability.
What to do:
Review your ageing report regularly. Set internal flags for habitual late payers and adjust terms accordingly. Incentivise early payment if it suits your margins — or introduce stricter terms (like upfront deposits) for slow accounts.
5. They're Growing Too Fast (On the Surface)
Rapid growth is usually seen as a good thing — but not always. If a customer is expanding aggressively, taking on huge jobs, or suddenly increasing their order volume without clear communication or increased financial transparency, proceed with caution. Growth without the infrastructure to support it often leads to cash flow issues.
What to do:
Don't scale credit terms just because order volumes increase. Monitor payment behaviour, request updated financials if necessary, and avoid overextending your own business just to service theirs.
Final Thought: Prevention is Better Than Collection
Credit control isn’t just about chasing late payments. It’s about identifying risk early and having systems in place to protect your cash flow. Red flags are only useful if you act on them.
At Brunswick Invoice Finance, we work with businesses across Australia to turn unpaid invoices into working capital — fast. We also help you spot the early warning signs so you can avoid cash flow stress in the first place.
Ready to tighten your credit control?