When you offer payment terms, you finance the buyer until the money arrives. Alongside price and order volume, define how much your company can afford to leave outstanding with one customer.
The management question is straightforward: could the business absorb a payment delay while continuing to meet payroll, supplier and tax commitments?
Monitor exposure before invoices become overdue
Case: a buyer places another order before paying for the first delivery. If the invoice is still within its agreed payment term, no breach has occurred.
The next shipment nevertheless increases the amount financed by the supplier. Approving orders individually can allow the combined balance to exceed the business’s capacity.
For each customer, review together:
- all unpaid deliveries, including invoices not yet due;
- orders scheduled to ship before the next receipt;
- advances actually received;
- security, its limitations and the conditions for obtaining payment.
A promise to pay does not reduce the outstanding balance. Cleared funds do.
Set a customer limit
The limit defines the maximum unpaid delivery balance your company is willing to accept for a buyer.
Consider payment history, margin, available working capital and the ability to resell the goods. Recovering the investment may be harder for products made specifically for one customer.
Define in advance:
- who approves the limit and payment term;
- when the terms must be reviewed;
- who can authorise an exception;
- when further shipments should be paused.
Without an owner for exceptions, a limit can become ineffective. Each additional order may look manageable while the combined exposure goes unexamined.
Match protection to the transaction
An advance reduces the amount financed by the supplier. Staged deliveries can limit the goods released before the next payment.
A guarantee or insurance policy needs a separate assessment of coverage, exclusions, costs, documentation and payment conditions. Having an instrument does not establish that it covers the relevant risk.
There is no universally safe advance-payment percentage. Terms should reflect the transaction’s economics and both parties’ capacity.
Test the consequences of a delay
Prepare a weekly forecast of receipts and mandatory payments. Then move expected receipts from your largest buyers to later dates.
This stress scenario reveals which commitments could become difficult to meet and the reserve required. It is not a prediction of customer behaviour.
If one delayed receipt would disrupt payroll or supplier payments, review the concentration before approving the next shipment.
Start with one customer table
For your largest buyers, record:
Outstanding balance → next payment date → actual delays → pending orders → approved limit.
Decide how to handle each excess: collect part-payment, split the next delivery, revise terms for a new order or obtain an exception from the responsible manager.
Assess any change to existing commitments against the contract.
Businesses entering Türkiye should establish trade-credit rules alongside their commercial offer. Each sale can then be assessed against the working capital it requires and the exposure the company accepts.