Late payment in trading: client credit and deliveries

Where the money gets stuck

• Credit granted with no limit. Yesterday’s good client becomes today’s largest debtor, without anyone deciding it.
• Goods delivered without a signed note. When payment falls due, quantities are disputed.
• A client who reorders while already owing. Each new delivery increases the risk instead of reducing it.

The clauses that matter

• A credit limit per client, written down and checked every week in the unpaid-invoices tracker.
• Retention of title in the contract and a signed delivery note for every delivery.
• Deliveries paused above the limit, no exceptions, announced in your terms of sale so the rule surprises no one.
• Payment terms in days and the late-payment penalty, written on the purchase order and on the invoice.

Worked example

Fictional example. A building-materials trader invoices 15,000,000 FCFA a month. One large client has built up 7,500,000 FCFA of unpaid invoices, the equivalent of 15 days of the whole company’s revenue. With a limit set at 3,000,000 FCFA, deliveries would have been paused much earlier, and the exposure limited to 3,000,000 FCFA instead of 7,500,000 FCFA.