Early warning signs a customer is going to pay late, or not at all

Updated 12 July 2026 · 7 min read · Kestrel Alert

Customers rarely default without warning. The signs show up in two places: their behaviour (payments stretching, round-sum part payments, disputes invented at day 60, unreachable accounts staff) and the public record (overdue accounts, new charges, director resignations, county court judgments, Gazette notices). Suppliers who watch both and act early collect; suppliers who wait for the bounced payment join the queue of unsecured creditors.

What behavioural signs predict non-payment?

Payment creep: 30 days becomes 45, becomes 60. Gradual stretching is a policy, not an accident.
Round-sum part payments: £5,000 against a £13,741 invoice means they're rationing cash across suppliers.
Late-breaking disputes: a quality complaint that surfaces only when the invoice is due is usually a delay tactic.
The accounts contact goes quiet: unreturned calls, a new person every month, "the director has to approve it now".
Unusually large or urgent orders: distressed companies sometimes binge on credit from suppliers who haven't noticed yet. Growth is great; growth in your receivable while their record deteriorates is not.

What public-record signs should I watch?

Overdue accounts or confirmation statement at Companies House, cheap filings that distressed companies stop making.
New charges, especially to invoice financiers or short-term lenders, the company is borrowing against its book debts to make payroll.
Director changes: a finance director resigning, or several departures in quick succession.
County court judgments (CCJs): searchable via the official judgment register (see our guide on checking a company for CCJs). Another supplier already sued and won.
Gazette notices: winding-up petitions, strike-off proposals, or an insolvency appointment. By this stage you're late; act the same day.

What can I actually do about it?

Set credit limits and honour your own stop-list. Most bad debts are over-concentration on one customer that "was always fine before".
Invoice immediately and chase on day one overdue. Slow invoicers get paid last; distressed customers pay whoever shouts first and politest.
Use your statutory rights. The Late Payment of Commercial Debts (Interest) Act 1998 gives you interest at 8% above the Bank of England base rate plus fixed compensation (£40 to £100 per invoice) on late B2B payments, even if your contract says nothing.
Change terms while you still have leverage: deposits, cash on delivery, shorter terms, or a retention of title clause in your standard terms (agreed before supply, not after).
Escalate deliberately: a letter before action often unlocks payment; a winding-up petition is a powerful but serious step that needs advice.

How do I watch all of this without a credit team?

The behavioural signs you'll see yourself; they're in your ledger and your inbox. The public-record signs are the ones that slip past, because nobody has time to re-check Companies House and three Gazette editions for every customer every week. That's the part Kestrel Alert automates: add the companies you extend credit to, and get a plain-English email (with a link to the official filing) the day something significant appears on their record.