What is a credit limit for a trade account?

The maximum balance a customer can owe at any time. Setting and reviewing limits controls how much you are exposed to any single customer.

What does putting an account on stop mean?

Holding new orders until the customer brings the account back within terms or under its limit.

Does retention of title really work?

It can, if the clause is part of your contract and the goods are identifiable and unsold. It is most useful when a customer becomes insolvent.

How should I handle short payments?

Log them, investigate quickly, and either issue a credit note or chase the balance. Unresolved deductions are a common source of bad debt.

Can I charge interest to trade customers?

Yes, under the Late Payment Act, unless your terms of sale provide a substantial alternative remedy.

Can AutoSettle handle hundreds of trade accounts?

Yes. AutoSettle monitors every account in Xero, QuickBooks or Sage and chases overdue invoices automatically at scale.

How often should I review trade credit limits?

Review your largest and fastest-growing accounts at least once a year, and immediately if a customer starts paying late, asks for a higher limit or shows warning signs such as late filing at Companies House.

Should I ask for personal guarantees on trade accounts?

For new or higher-risk limited companies, a director's personal guarantee can reduce your risk. It must be properly signed and witnessed to be enforceable, so use a clear standard form.

Credit control for wholesale and distribution businesses

Credit control for wholesale and distribution means opening trade accounts with credit checks and limits, using retention of title terms, resolving short payments quickly, and putting accounts on stop when they go overdue. With high volumes and thin margins, automated reminders and a clear stop policy keep bad debt low without slowing down sales.

Wholesalers and distributors sell on credit to hundreds or thousands of trade customers. Margins are thin, volumes are high and a single bad debt can wipe out the profit on many good orders.

At the same time, sales teams want to keep goods moving and customers happy. Good credit control balances the two: fast decisions on new accounts, clear limits, and firm but fair enforcement. This guide explains how UK wholesale and distribution businesses can do that.

Open every trade account with a credit check, limit and signed terms.

Include retention of title in your terms of sale.

Resolve short payments quickly before they become write-offs.

Use an automatic stop list linked to limits and days overdue.

Trade customers can be charged statutory interest and fixed compensation.