For: Equipment dealer owners, credit managers and sales leaders.
The decision: How much open-account exposure to accept and when a shipment needs further approval.
60-second answer: Approve terms against the customer’s total exposure and the job’s payment milestones. Confirm invoice requirements before shipping. Use deposits, limits and escalation rules suited to the account; a guarantee or filing does not make a debt automatically collectible.
An order is only part of the account balance
Pull the legal customer identity, signing authority, approved terms, receivables aging, unapplied credits, open orders, deposits and payment history. Confirm the correct purchase-order number and invoice destination. A trading name alone may not identify the entity that owes the money. Keep sensitive credit information within the authorized credit process.
Build a proposed-shipment view: existing unpaid invoices plus the amount that becomes receivable on this release, less payments or credits actually available to that obligation. Show remaining unshipped commitments separately. Do not subtract a deposit twice because it appears in both the order system and the ledger.
| Question | Evidence | Decision owner |
|---|---|---|
| Is this customer within its limit? | Reconciled account exposure and the proposed release | Credit or finance |
| Can the invoice be submitted correctly? | PO, acceptance evidence, billing contact and agreed trigger | Order administration |
| Are there unresolved disputes? | Amount, reason, owner and promised resolution | Finance with sales and service |
| Does an exception make business sense? | Margin, cash requirement, alternatives and proposed protection | Named exception approver |
Make payment milestones operational
State what triggers an invoice and what evidence confirms the event. Delivery, installation and final acceptance are different milestones. Agree how a genuine punch-list issue affects the disputed amount and the remaining balance. A payment event that depends on another contractor can leave the dealer financing a delay it cannot resolve.
A deposit reduces some exposure but creates refund and performance obligations. A personal guarantee depends on valid terms, enforceability and the guarantor’s capacity. A financing statement alone is not a substitute for a valid security arrangement or an assessment of priority. Obtain qualified advice on security, late charges and collection rights rather than treating paperwork as guaranteed recovery.
Escalate by facts and agreed policy
Confirm invoice receipt before the due date where practical. After a missed payment, identify whether the obstacle is administration, disputed performance or inability to pay. Record a promised action and date. Apply new-order holds through an approved policy and the applicable agreement, with a named authority for exceptions. Avoid a universal day-count sequence that ignores contract obligations or an active dispute.
Ask: Which invoice is blocking payment? Who can approve it? Is the requested extension a one-time timing issue or part of a wider change? What additional exposure will the next release create? Do not infer financial strength from willingness to sign a guarantee or from a national small-business survey.
Watch for sales-only credit approval, limits that exclude open releases, and credit notes waiting unposted while collections pursues the gross invoice. Those are internal controls the dealer can improve immediately.
Review the next shipments before release
- Reconcile exposure for accounts with overdue or unusually large orders.
- Resolve missing PO, acceptance or credit documents and record the agreed payment milestone.
- Approve, restructure or hold the release through the named credit authority, documenting any exception.
Continue with FEX
- Align customer and supplier deposit milestones
- Close return credits before they become collection disputes
FEX editorial guidance: the decision tools and operating recommendations in this guide are FEX analysis. They are not manufacturer specifications, contractual entitlements or industry benchmarks.
Editorial update, October 7, 2026: Removed unsupported standard deposit grids, payment-behavior generalizations and guaranteed-collection claims about personal guarantees and UCC filings. Replaced rigid escalation dates with documented account-specific policy.
