Every SME has a story about the customer who seemed fine at first, and then turned into months of chasing for payment. The good news is that slow payers usually give off warning signs well before the first invoice goes out. Here is what to look out for.
1. They avoid talking about payment terms
A reasonable customer expects to discuss payment terms as part of agreeing the work. If a prospective customer brushes past the conversation, delays confirming terms in writing, or seems reluctant to commit to a payment date, treat that as a signal worth noting.
2. Their online presence tells a story
A quick look at Companies House can show you whether a business has filed accounts late, has outstanding charges against it, or has had recent changes in directors. None of these are automatic red flags on their own, but a pattern of several together is worth factoring into your decision.
3. They push for extended terms from day one
Asking for 60 or 90 day terms before you have even completed the first job is a common early sign of cash flow pressure on their end. It does not mean you should refuse the work, but it does mean you should build in stronger safeguards, such as deposits or milestone payments.
4. Word of mouth in your industry
In sectors like construction, trades and recruitment, reputations travel fast. A quick call to another supplier or a look at industry forums can reveal whether a business is known for paying promptly or for being chased repeatedly.
5. They negotiate hard on price but not on terms
Some customers will fight over every pound of the quote but accept whatever payment terms you propose without question. This can actually be a good sign, it often means cash flow is not their main concern. The opposite pattern, easy on price but resistant on terms, deserves more scrutiny.
What to do if you spot the signs
Spotting a risk does not mean turning away the work. It means putting the right structure in place from the start, clear written payment terms, a deposit or staged payments for larger jobs, and a proactive follow up process so invoices never sit unchased. This is exactly the kind of groundwork we help clients put in place before problems start.