Quick answer
When a major customer pays late, act in order: confirm the payment date in writing, protect wages and tax, ask suppliers for short extensions, then bridge any remaining shortfall with a short-term loan or cash line that you repay the day the customer settles. Smaller unsecured amounts can sometimes be funded on the same day.
Key points
- Get a firm payment date, in writing.
- Protect wages, PAYE and key suppliers first.
- Bridge only the shortfall, and for a defined period.
- After this, tighten terms for the next job.
- First move
- Get a date in writing
- Unsecured
- Typically $5k – $500k
- Speed
- Same day possible, smaller sums
- Repay from
- The late payment itself
The email says “it’s in the system”. The invoice was due last Friday. You have a pay run on Thursday and a supplier statement landing on the 20th. A single late payment from a single customer can knock a healthy month sideways.
Here is a sequence that works, from the first phone call to the last dollar repaid.
Step 1: pin down the date
Vague reassurance is worthless. Ring the person who actually releases payments, not just your usual contact, and ask:
- Has the invoice been approved?
- When is the next payment run?
- Is anything missing, such as a purchase order number?
- Can you confirm the date by email?
A written date turns a worry into a plan. If it slips again, you have something concrete to refer to.
Step 2: see the hole in numbers
Compare your next four weeks of bills with the cash you hold, excluding the late payment. Add each bill on its true due date. The cash gap calculator shows how deep the dip goes and for how many days.
Often the gap is smaller than first feared, perhaps a few days of one particular week.
Late payment squeezing your week? Start the 60-second enquiry.
Step 3: protect what can’t wait
Set priorities:
| Priority | Item | Why |
|---|---|---|
| 1 | Wages | Legal duty and staff trust |
| 2 | PAYE, KiwiSaver, GST | Penalties start quickly |
| 3 | Key suppliers | You need them next week |
| 4 | Rent and finance | Contact before due dates |
| 5 | Everything else | Usually flexible |
Ring suppliers whose bills are due before the customer’s date, explain briefly and offer a specific date. Most will agree to a short wait for a customer who calls first.
Step 4: bridge what remains
If a gap remains after moving what you can, finance bridges it.
- A short-term loan sized to the shortfall, repaid when the customer pays. Smaller unsecured amounts can sometimes be funded the same day. See quick business cash.
- A cash line, if late payments are a recurring theme. See business cash line.
- For wages specifically, read cash for wages.
Borrow only the shortfall, and for the time you need it. When the customer pays, repay.
Step 5: judge the customer
Is this a one-off or a pattern?
- One-off, reliable customer: bridge it and carry on.
- Habitual slow payer: shorten their terms, ask for deposits or fund the delay as a known cost. Our guide to getting invoices paid faster covers the tactics.
- Customer in trouble: stop supplying on credit, get what you can and take advice early.
What to say to the customer
Illustrative only.
“Hi Karen, invoice 2210 for $19,400 was due on the 12th and hasn’t reached us. Could you confirm whether it has been approved and the date it will be paid? We have staff wages going out Thursday, so a firm date would really help.”
Polite, specific, and honest about why it matters.
Prevent the next one
- State terms on every quote and invoice.
- Take deposits on large jobs.
- Check a new customer’s payment history before extending credit.
- Invoice the day work is done.
- Keep a standby facility so a late payment is an inconvenience, not a crisis.
Keeping the relationship intact
A late payment is awkward, but it is rarely a reason to burn a good customer. Keep your tone factual and friendly, assume an administrative cause until shown otherwise, and make payment as easy as possible by resending the invoice with bank details. Offer a direct contact in your own business for queries. If the delay continues, escalate calmly, first to the accounts manager and then to the person who signed the order. Clear, polite persistence gets paid more often than anger, and it keeps the door open for the next job.
An illustrative example
Illustrative only. A Whangārei printing company is owed $41,000 by a retail chain, due on the 14th but now confirmed for the 29th. Wages of $17,500 are due on the 19th, and an ink supplier wants $9,200 by the 20th. The owner moves the supplier to the 30th, then borrows $18,000 short-term for the pay run, repaying it on the 29th when the chain’s money lands.
Reach out
If a customer’s delay is putting your week at risk, say so. The enquiry takes about a minute, asking involves no credit check, and your details remain with one team. A real person calls, often the same day.
Quick, accurate details on the late amount, the date promised and your bills let us suggest a bridge that repays itself.
Frequently asked questions
How soon should I chase a late payment?
The day after it falls due. Early, friendly contact gets paid fastest and keeps the relationship intact.
Can I charge interest or fees on late invoices?
Only if your terms of trade, accepted by the customer in advance, allow it. Add a late payment clause to your terms for next time.
What if the customer is in financial trouble?
Act quickly: stop further work on credit, get any payment you can and seek advice. If a customer enters liquidation, you may become an unsecured creditor.
Is borrowing to bridge a late payment sensible?
When the customer is reliable and the delay is temporary, yes. A short facility repaid by their payment is a clean fit.