The recent events involving Bathla Group and ACFS Port Logistics have put a familiar risk back in the spotlight for Australian SMEs. What happens when one of your biggest customers suddenly cannot pay?

When Major Insolvencies Hit the Supply Chain

According to reports on the administrations, Bathla’s administrators are dealing with around $3.4 billion in known consolidated creditor claims, including more than $100 million in unsecured claims. Preliminary figures reported from ACFS Port Logistics’ first creditors’ meeting included about $112 million in trade creditor claims.

Bathla Group entered voluntary administration in August 2026 following a period of financial pressure driven by softer sales, rising construction costs and tighter lending conditions. Around the same time, ACFS Port Logistics Australia entered administration, with receivers also appointed. The national logistics business, which employs approximately 1,600 people, has continued trading while a recapitalisation is pursued. However, the appointment has left many suppliers and other creditors assessing their exposure and working through claims for amounts owed before the administration commenced.

For smaller businesses further down the supply chain, those numbers are more than headline figures. They can represent invoices that may not be paid when expected – or may never be recovered in full.

Subcontractors, suppliers and trade creditors can all be affected when a major customer experiences financial distress. The work may already be complete or materials may have been purchased. Staff still need to be paid. Suppliers still expect payment. GST, PAYG, super and other obligations continue to fall due.

For businesses caught in that position, understanding the financial impact early can make a significant difference. EKC Advisory works with Australian businesses facing insolvency, restructuring and financial distress, including situations where cash flow has been disrupted by circumstances outside their control.

The cash-flow pressure moves down the chain

Say your business is owed $200,000 by a major customer, but you have $100,000 of wages, supplier bills, tax and other costs due over the next four weeks. On paper, the business may still be profitable. In practice, there is suddenly a substantial cash-flow gap.

An invoice that looked like money coming in may become uncertain, delayed or only partly recoverable, while your own creditors are still expecting to be paid. If cash-flow pressure begins affecting the company’s ability to meet its debts as and when they fall due, directors should seek advice promptly to understand their obligations and whether Safe Harbour protections or other options may be available.

Your biggest customer may also be your biggest risk

A large customer can feel like one of the safest parts of the business. The risk appears when one customer becomes disproportionately important to revenue or accounts receivable. Business owners should know:

  • How much each major customer owes;
  • How long those invoices have been outstanding; and
  • What percentage of monthly revenue depends on the largest accounts.

Credit limits, deposits, progress payments and shorter payment terms can help reduce this exposure, particularly where a job requires significant upfront labour or materials.

What should you do if a major customer enters administration?

Rather than wait for the situation to resolve itself, start by confirming exactly what is owed and gathering contracts, purchase orders, invoices, delivery records and correspondence. If the customer is in voluntary administration, you may be asked to lodge a proof of debt or other claim documentation. There are also restrictions on some creditor enforcement action during the administration, so obtain advice before taking recovery action.

Review whether you should continue supplying on credit and confirm the terms of any post-appointment work directly with the administrator or receiver. Then prepare a realistic cash-flow forecast.

Model what happens if the debt is paid late, only partly recovered or not recovered at all. A properly prepared cash-flow forecast can identify funding shortfalls before they occur, allowing management time to negotiate with creditors, adjust trading terms or explore restructuring options before liquidity pressures become critical.

Act before someone else’s insolvency becomes yours

A business does not need to be badly run to experience financial distress. Losing access to a large receivable can be enough to put an otherwise healthy SME under serious pressure. The warning sign is when another business’s failure to pay begins affecting your ability to pay employees, suppliers, the ATO or other creditors on time. That is the point to assess the problem, rather than funding the gap with mounting tax debt, credit cards or overdue supplier accounts.

Concerned About a Major Unpaid Debt? Speak With EKC Advisory

EKC Advisory helps Australian business owners assess cash-flow pressure, creditor exposure and financial distress. Depending on the company’s circumstances, potential options include informal restructuring, Safe Harbour, Small Business Restructuring or voluntary administration. If a major customer has entered voluntary administration or owes your business a significant debt, early advice can be critical, speak with EKC Advisory before a cash-flow gap becomes an insolvency problem.

FAQs

Q: What happens if a customer who owes my business money enters administration?

A: You will generally become a creditor for the outstanding amount. The administrator will provide information about lodging your claim and the process for determining the company’s future.

Q: Can one unpaid customer make a profitable business insolvent?

A: A business can be profitable on paper but still struggle to pay debts when a large receivable is delayed or lost.

Q: When should I seek restructuring advice?

A: Seek advice when an unpaid debt is affecting wages, supplier payments, tax obligations or your ability to meet debts when they fall due. Earlier advice generally leaves more options available.