A customer who pays late and a customer who is most of your revenue are different problems with the same underlying fix: reduce how much any single relationship can hurt you. Both risks are manageable with ordinary discipline, and both are consistently underestimated until they cost real money.
Handle them separately, because the warning signs differ.
Screen before you extend credit
Confirm a new customer is registered and in good standing through the Companies and Intellectual Property Commission, and ask for trade references for anything meaningful. A business with a reputation for paying late usually earned it.
Warning signs worth acting on: pressure to start before terms are agreed, reluctance to sign anything, and asking for credit on a first engagement. A client disputing your price before any work has happened will dispute your invoice after it.
Structure terms to protect you
Deposits filter out customers who never intended to pay and fund materials so you are not lending your own working capital. Staged payments on longer work limit exposure at every point.
Put payment terms in writing including the due date and what happens if it is late, and invoice the day work is done rather than waiting.
Watch for concentration building up quietly
A single customer becoming a large share of revenue happens gradually, and it feels like success while it is happening. The risk only becomes visible when that customer’s decision to leave removes most of the business overnight.
Review your revenue by customer periodically, not only your total revenue. If one relationship is approaching a large share, that is the moment to actively pursue others, not after they have already left.
Use a large customer’s credibility to win others
A strong relationship with one recognisable customer is a reference that helps win the next one. Ask for a written reference or a case study while the relationship is strong, and use it deliberately in approaching others.
Never let a large customer discourage pursuing smaller ones on the basis that you are already busy. Busy with one customer is not the same as secure.
Frequently asked questions
How do I avoid bad payers?
Check registration and standing before extending credit, ask for trade references, and take a deposit on meaningful work.
What warning signs should I act on?
Pressure to start before terms are agreed, reluctance to sign anything, and requests for credit on a first job.
Why is customer concentration dangerous?
Because one customer leaving removes most of the revenue at once, and that decision belongs to them, not you.
How do I know if I am too concentrated?
Review revenue by customer periodically. If one is approaching a large share of the total, actively pursue others before they leave.
How can a large customer help win others?
Ask for a written reference or case study while the relationship is strong, and use it to approach new customers.
Further reading
Originally published in September 2018. Updated September 2026 into guidance on avoiding bad payers and reducing dependence on a single customer.
