The warning is usually already in your ledger

When a customer stops paying, it does not always happen overnight. Weeks before the payment that never arrives, there is often a pattern sitting in your own invoice history. They were a 30 day payer, then 38, then 52, and they carried on ordering the whole time.

Almost nobody looks, because nothing in a standard accounting package shouts about it. An invoice is either paid or it is not. By the time a name reaches your aged debtors report, the money is already late and your options have narrowed.

These are the signals that come earlier, and how to check for them without any special software.

Signal one: days to pay is stretching

The single most useful number in credit control is not whether a customer pays late. It is whether they are paying later than they used to.

Take one customer and work out, for every invoice they have settled, the number of days between the due date and the date the money actually landed. A negative number means they paid early. Then average that figure over the last three complete months and compare it with the three months before that.

Say an illustrative client, Harbour Interiors, averaged four days past due from January to March and 21 days past due from April to June. Nothing has been written off. No invoice is dramatically overdue. But they have quietly taken an extra 17 days of your cash, and the direction of travel is the point.

One caution that stops this list becoming noise: a customer who used to pay 20 days early and now pays on the day has drifted 20 days and owes you nothing. Only treat a drift as a problem when the recent average is genuinely past due.

Signal two: they stopped paying altogether while still owing you money

This is the loudest signal and the easiest to miss, because a customer who has paid nothing recently has no recent average to compare. Anything that looks for a change goes quiet on exactly the customer you should ring first.

Check it separately. List every customer who paid you something in the previous quarter, paid nothing at all in the most recent one, and still has an overdue balance. That is a short list, and every name on it deserves a phone call this week rather than another email next month.

Signal three: they pay the small invoices and leave the big one

A customer under pressure often keeps the relationship warm by settling whatever is cheap and easy. The £400 invoices clear on time. The £9,000 one for the main project sits there collecting excuses.

Look at whether a customer's unpaid balance is concentrated in one or two large documents while smaller ones keep clearing. That is a business choosing what to pay, which means they are short of cash, which means you are competing with their other suppliers.

Signal four: the balance keeps growing while they keep ordering

Rising orders feel like good news. Combined with slowing payment, they are the opposite: your exposure to one customer is growing at the exact moment their ability to pay is falling.

Look at what a customer owes you today against what they owed three months ago. If the balance has grown faster than your work for them has, you are financing them.

Signal five: friction appears late in the process

Queries that arrive after the due date rather than the week the invoice was raised. Invoices that "never came through". A purchase order number that becomes essential for the first time in two years. None of these prove anything on its own, but they usually appear alongside the numbers above, not instead of them.

How to check this yourself in an hour

Export every paid sales invoice from the last six months with its due date and the date it was paid. Add a column for days past due, which is paid date minus due date. Pivot by customer and by quarter, and sort by the change between the two quarters. Then list the customers who appear in the older quarter and not the newer one, and check what each of them still owes.

One thing to look at before you pick up the phone: check whether the whole book has slowed by a similar amount. If every customer has drifted by 15 days, that is not five bad debtors. That is your market, a change in your terms, or a collections routine that quietly stopped after somebody left.

What to do when a name stands out

Ring rather than email, and ask for a specific date rather than an update. Tighten terms on new work instead of relitigating old invoices. Ask for a deposit or stage payments on the next project. And decide in advance what balance you are willing to let build before you stop taking new orders, because that decision is far easier to make now than in the week you need the cash.

How CFO Pal helps

CFO Pal reads your invoice ledger from Xero and does this arithmetic for you. It compares each customer's average days past due over the last three complete months against the three before, tells you whether the slowdown is that customer or the whole book, and keeps a separate list of customers who paid before, have paid nothing since, and still owe overdue money. You can ask about it in the chat, and it can reach you as an alert rather than waiting for you to look.

Related reading

• debtor days
• debtor book
• late payment tracking
• customer concentration: how many customers is too few