Credit Control for Food Wholesale: Getting Paid on Time

Late payment from wholesale accounts is the most common cash flow problem for food producers. When a buyer with 30-day terms pays at 60 or 90 days, you carry the cost of financing their business. A structured credit control process dramatically reduces the problem.

Before You Open an Account

For any account above £500 total exposure, do a basic credit check. A Companies House search (free) shows whether the buyer is active, their filed accounts, and any recent issues. For larger accounts, a formal credit check service (e.g. Creditsafe) provides a credit limit recommendation.

Invoice Immediately

Send invoices on the day of delivery. A delayed invoice is a delayed payment. Use accounting software (Xero, QuickBooks) that sends invoices automatically and tracks due dates.

Reminder Schedule

A standard credit control sequence:

• Day 25 (5 days before due): Friendly payment reminder — "Your invoice is due on [date]."
• Day 32 (2 days overdue): Polite chase — "Invoice [number] was due on [date] and has not been received. Please advise."
• Day 40: Firm letter — reference the invoice, the amount, the due date, and state you will apply late payment interest if not settled within 7 days.
• Day 50+: Consider halting supply to the account until payment is received.

Charging Late Payment Interest

Under the Late Payment of Commercial Debts (Interest) Act 1998, you are entitled to charge 8% above base rate on overdue invoices. Many businesses do not enforce this — but having it in your terms signals that you take payment seriously.

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Setting Credit Limits That Reflect Real Risk

A credit limit is not simply a number you assign when an account opens and forget about permanently. It should reflect the buyer's demonstrated payment behaviour, their order frequency, and the financial exposure you are comfortable carrying at any given moment. Start new accounts conservatively — a limit of one or two times their expected monthly order value is a reasonable baseline — and review upward only after three to six months of on-time payment. Treating the limit as a living figure protects your cash flow without blocking growth.

When a buyer repeatedly pushes against their credit limit, it is worth asking why before simply raising it. Do they order frequently in small batches, or are they placing large orders they struggle to fund? A buyer who places a £2,000 order every four weeks and pays promptly is a very different risk profile from one who places a single £2,000 order every three months and pays late. Understanding the pattern behind the numbers helps you make smarter decisions about who deserves extended terms and who needs tighter controls applied before the next order is fulfilled.

Documenting your credit limits in writing — and sharing them with the buyer at account opening — removes ambiguity later. A short trade account agreement that states the credit limit, payment terms, and the consequences of exceeding either gives you a clear contractual basis if you ever need to withhold supply or pursue a debt. It also signals professionalism, which tends to attract the kind of buyer who actually reads and respects the terms they sign up to. Most payment disputes begin not with bad faith but with mismatched expectations that were never written down.

Building Payment Terms Into Your Onboarding Process

The moment a new wholesale buyer expresses interest is the best time to establish payment norms — not after the first invoice goes unpaid. Your onboarding process should include a trade account application form that asks for company registration details, bank references, and the name of their accounts payable contact. This information does three things: it filters out buyers who are not serious, it gives you the data you need to follow up, and it starts the commercial relationship with a clear understanding that credit is a privilege, not a default.

When you approve the account, send a welcome document alongside the credit limit and terms confirmation. Include your bank details for BACS payments, your preferred invoice format, and the specific day or week of the month that your payment reminders go out. Many late payments happen simply because the buyer's accounts team did not receive the invoice in the right format or to the right email address. Removing those friction points in advance significantly reduces the number of chases you will need to make later in the relationship.

Consider asking new accounts for a proforma payment on their first one or two orders before extending credit. This is standard practice in food wholesale and carries no negative signal to a professional buyer. It gives you a track record of actual payment behaviour before you commit to carrying their debt, and it means your first experience with that account is a positive one — goods delivered, payment received — rather than an anxious wait to see whether the invoice gets settled on time. QuoteFlow can help you manage the transition from proforma to credit terms smoothly within your Shopify storefront.

Handling Disputes Without Losing the Account

A buyer who disputes an invoice is not automatically a bad debtor, but disputes are frequently used — consciously or otherwise — to delay payment beyond the due date. Your process should distinguish clearly between a genuine dispute and a payment delay dressed up as one. When a dispute is raised, acknowledge it within 24 hours, investigate quickly, and resolve it in writing. If part of the invoice is undisputed, request payment of that portion immediately while the remainder is resolved. This keeps cash moving and avoids the entire invoice sitting unpaid for weeks over a minor discrepancy.

Keep a log of every dispute, including the date it was raised, the nature of the claim, and how it was resolved. Over time, patterns emerge. If a particular buyer raises a dispute on nearly every invoice, that is not a quality control problem — it is a credit control problem. Buyers who dispute habitually are often managing their own cash flow at your expense, raising objections they know are weak simply to buy extra time. Once you recognise the pattern, you can address it directly: a conversation with the buyer's finance director, tighter credit terms, or a requirement for shorter payment windows on future orders.

Document your dispute resolution process and include a clause in your trade account terms that states disputes must be raised within five working days of delivery. After that window, the invoice is deemed accepted. This is both legally sensible and practically useful — it prevents a buyer from sitting on an invoice for 28 days and then raising a dispute on day 29 to reset the clock entirely. A short, clear clause like this is easy to include at onboarding and saves a significant amount of frustration later when you are trying to close out an aged debt.

Knowing When to Escalate and How

Most overdue accounts can be resolved through persistent, professional communication. But some cannot, and knowing when to escalate — and how to do it efficiently — prevents small debts from becoming large ones. The decision point is usually around 60 days overdue. At that stage, if the buyer has not engaged meaningfully with your chasers, it is time to move from polite reminders to a formal letter before action. This letter should state the outstanding amount, the original due date, the statutory interest accrued, and a firm deadline — typically 14 days — for payment before legal proceedings are initiated.

Before instructing a solicitor or debt recovery agency, consider whether a phone call directly to the buyer's managing director or owner would resolve the matter faster. Accounts payable teams can be slow or disorganised, but business owners generally care about their supplier relationships and their credit reputation. A calm, direct conversation at director level often unlocks a payment that has been stuck in someone's inbox for weeks. Make the call professional, not confrontational — you want the money, not a dispute — and follow it up immediately with an email summarising what was agreed, including any payment plan if that was the outcome.

If escalation to a third party becomes necessary, the UK has a straightforward small claims process for debts under £10,000, and there are specialist food and trade debt recovery firms who work on a commission basis, meaning no upfront cost to you. Filing a county court claim is often enough to prompt payment from a buyer who has been stalling. For larger or more complex debts, a solicitor's letter carries significant weight and is frequently all that is required to convert a long-overdue invoice into a cleared bank transaction within days.

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