How do I decide when to stop extending credit for overdue accounts receivable?

[Nicholas.H]

I’m facing a serious cash crunch right now because I let my accounts receivable get completely out of hand. I have several clients who are 90+ days late, and now I’m struggling to cover my own bills. How do you decide when to stop extending credit to a long-term customer who just keeps paying slower and slower?

[ThomasR]

Had a client sitting at 90 plus days for ages. After the fourth late month I cut them off for new work and froze their invoices until the past due was cleared. It shifted cash flow a bit, but I felt bad about ending the relationship. A couple weeks looked better, then it slipped again.

[Frank.T]

Maybe the real issue isn’t late payments at all but pricing or scope. If you’re underbilling or overcommitting, you can end up chasing cash. Are your terms clear and do you bill on time and consistently every month?

[Avery64]

I tried a hard rule after two failed promises to pay no more work without upfront money. It felt cold but the pace changed enough to not sink the business. Still, I worry I overcorrected.

[Mia32]

I am honestly tired and unsure. I kept talking to the client, offered a payment plan but the plan got ignored. I am thinking about hiring a bookkeeper or turning on automation so I do not live in daily debt anxiety, but I am not confident that fixes the root.