08/04/2026
I’ve rarely seen a customer default that truly came as a surprise.
When you look back at an account that has gone bad, the warning signs are usually there much earlier. A customer who has always paid within 30 days starts taking 45 days, then 60 days. Payment patterns become less predictable, order volumes start to reduce, or the customer begins asking for more flexibility around terms.
At the time, each situation can appear reasonable. The customer may be waiting for their own customers to pay, dealing with a difficult period, or managing changes in their market. The challenge is recognising when these individual events start becoming a pattern.
Too often, businesses only react once the account is already seriously overdue. By then, the balance has grown, recovery becomes more difficult, and the focus shifts from managing risk to trying to recover cash.
This is where having better visibility into customer behaviour becomes important.
Data and analytics can help credit teams identify changes earlier and highlight accounts that may need closer attention. It does not replace experience or judgement, but it gives teams more information when making decisions.
Good credit management is not about expecting every customer issue before it happens.
It is about recognising changes early enough to have the right conversations, take action, and protect the business before a manageable issue becomes a much bigger one.
What early warning signs have you found most useful when assessing customer credit risk?
