When a supplier places a customer “on stop”, they suspend all future deliveries of goods or services until the customer resolves their outstanding payment issues. This is usually the result of missed or overdue invoice payments.
It is a very common credit control measure that protects businesses from bad debt and cash flow disruptions. But what does this mean for both the supplier and the customer?
And what steps can be taken to resolve or prevent this situation?
Why Would a Supplier Put a Customer on Stop?
Suppliers use stop policies as a safeguard. When customers miss payment deadlines repeatedly, it puts a strain on the supplier’s ability to run their own operations smoothly. Businesses depend on predictable income to pay their own bills, staff and vendors.
Putting a non-paying customer on stop sets a clear boundary. It sends a strong message that continued service relies on prompt payment. It also encourages the customer to settle their debt quickly.
Consistently enforcing stop policies promotes fairness. If you allow one customer to pay late without consequences, others may expect the same treatment, undermining your credit policy.
How Being on Stop Can Affect a Customer
Being on stop can be highly disruptive, especially for businesses that rely on a steady flow of goods and services. If supplies are cut off, production can grind to a halt, customer orders can be delayed and business relationships may suffer.
The longer the disruption continues, the harder it becomes to recover. Cash flow may worsen and the debt may become even harder to repay.
What to Do When You’re on Stop
1. Pay the Account in Full
The most direct solution is to pay the outstanding balance immediately. If cash is tight, prioritise chasing your own overdue invoices. Strengthening your internal credit control can help free up funds and prevent future issues.
2. Negotiate with Your Supplier
If full payment isn’t possible, contact your supplier and explain your situation. Many suppliers are open to solutions such as part payments or repayment plans. Open communication and honesty can go a long way in maintaining the relationship.
3. Raise Finance to Pay Off the Debt
Short-term financing such as invoice factoring can help release cash tied up in unpaid invoices. You can use this funding to clear your account and continue trading. In some cases, quicker payment may also qualify you for supplier discounts.
4. Look for Alternative Suppliers
If you cannot resolve the issue quickly, sourcing another supplier may be necessary. This can help keep your business running. However, be careful as new suppliers may offer different terms or higher prices, and taking on more credit could worsen your position.
How to Use a Stop List Effectively
If you provide goods or services, a well-managed stop policy can protect your cash flow and ensure you don’t overextend with unreliable payers.
To set expectations from the start, include a stop policy in your Terms and Conditions. Once the agreements are signed, conduct weekly or monthly reviews of customers accounts.
When customers are at risk of nearing their limit, you should warn them.
If the customer fails to make payment, send a formal seven-day notice before applying a stop. A reminder call on day six can prompt payment. If the deadline passes, apply the stop and notify all relevant teams to halt further work or deliveries.
However, some customers may just need support to get back on track. If they reach out, work with them to find a reasonable solution. But if payment isn’t received and no arrangement is made, proceed with a final demand and consider legal action.
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This article is for general informational purposes only and does not constitute legal or financial advice. While we aim to keep our content up to date and accurate, UK laws and regulations are subject to change. Please speak to a professional for advice tailored to your individual circumstances. Pi Credit Management accepts no responsibility for any issues arising from reliance on the information provided.