Customer Not Paying but Still Placing Orders? Here’s What to Do

Your customer is behind on payments but needs another order, urgently. They promise to catch up once you ship. Sales wants to say yes. Accounting is looking at the unpaid invoices.

Before accepting more work on credit, decide what must be paid toward the overdue balance, how the new order will be funded, and who can approve an exception. Put that agreement in writing.

Continuing the relationship may make sense. The numbers need to support the decision.

Set the payment condition for the next order

First, reconcile the account: apply received payments and valid credits, confirm the legal entity that owes you, and identify any actual billing dispute. Include unbilled work and accepted orders when reviewing your exposure.

Then choose an arrangement your business can accept:

• Past-due balance paid in full: review whether normal credit terms should resume.

• Payment toward the arrears, with the new order prepaid: agree on specific amounts and dates for the remaining old balance.

• A limited credit exception: have an authorized manager approve the additional amount and a firm review date.

Review credit before the next commitment when a customer repeatedly breaks payment promises, exceeds an agreed limit, or keeps adding orders while arrears grow. The next urgent order should not automatically override that review.

Check your rights before stopping an accepted order or ongoing service. Your agreement, required notices, and applicable law matter. For goods, New York’s adequate-assurance provision, for example, sets conditions for demanding assurance and suspending performance.

Check whether the payment actually reduces the balance

Suppose the customer owes $48,000 and wants another $12,000 order.

Payment and new-order arrangement	Total unpaid invoices after the new order
$12,000 paid toward old invoices; the new $12,000 order supplied on credit.	$48,000
$12,000 paid in advance for the new order; nothing paid toward old invoices.	$48,000
$12,000 paid toward old invoices, plus a separate $12,000 prepayment for the new order.	$36,000

Illustration only; assumes no other charges, payments, or credits.

That first $12,000 payment can feel like progress. But after extending another $12,000 in credit, your unpaid balance is back where it started.

Prepayment for the new order funds that sale. A separate payment toward the arrears reduces what is already overdue. If the customer cannot fund the full order, consider a smaller prepaid order alongside the agreed arrears payment, where your terms allow.

Confirm the allocation before taking payment. Identify the old invoices being paid and the amount reserved for the new order. Follow agreed instructions and applicable requirements; do not quietly apply a new-order prepayment to old debt.

Send a credit-hold email that gives a clear next step

After checking your rights and approving the terms, adapt this:

Subject: Payment arrangement for Order [number] Hi [Name], The attached statement shows [amount] past due. Before we approve Order [number], we need [amount] paid toward invoices [numbers], plus [amount] as prepayment for the new order. Please confirm by [date] whether you can meet these terms and who will arrange payment. We will confirm the order’s release after verifying receipt of the agreed payments. If the statement is incorrect, please identify the invoice, amount, and reason so we can review it.

Make the hold visible to sales and operations

A credit hold makes specified orders subject to credit approval. Put it where your staff approves orders, schedules work, or releases shipments. Name one finance contact who can approve release.

For an exception, record the order number, maximum additional credit, required payment, approver, and expiration date. Approval for one order should not reopen the customer’s entire credit line.

Have finance verify receipt before releasing an order. A payment screenshot or another promise should not automatically clear the hold. Include these rules in your collections policy.

Resolve specific disputes without losing track of everything else

If one invoice is disputed, assign someone to investigate it and give the customer a response date. Ask whether the undisputed balance can be paid now. Our invoice dispute guide explains what to request.

Record the disputed amount, the accepted balance, and the terms for any new order separately. This gives sales and accounting the same facts to work from.

Keep the overdue balance moving toward collection

A new-order decision still leaves someone responsible for the old invoices. Track agreed payment dates and review missed commitments promptly.

If internal follow-up stops producing payment or a workable resolution, consider a commercial debt collection review. Supply the statement, transaction records, dispute correspondence, and payment history. Explain any continuing orders or payment arrangements so collection efforts reflect the full situation.

For overdue accounts across multiple customers, Fair Capital supports bulk account placements. Request a quote with your account count, total balance, and aging breakdown.