We had a similar problem a few years ago.  I can't recall who the client was, but I remember thinking that it was refreshing to hear the truth when they told me that they were having cashflow problems.  I was so impressed that I didn't get the usual excuses (the check is in the mail, we never received that invoice, the guy who signs the checks is on vacation, etc.) that we did continue to complete work for them. 

We were both in a tough position - if we stopped completing their work they would lose more business and never be able to pay.  That would not have been good for either of us.  I was a little nervous about it, but they did eventually catch up their account and we continued to get work.

It is a very difficult thing to guage - there is always a chance that they may not be able to make it work, regardless of their intentions.  Should that happen, will you still be OK?  Sometimes we have to trust our clients, help them out and hope for the best.  But if you continue to complete their orders and the worst should happen, will your business be able to survive the loss?  If not then you have to make the tough decidion to cut them off.  Otherwise, you have to decide if you are willing to let them rack up a larger bill with you.  Are they that good of a client?  Do you trust them? 

I don't envy your position, but I wish you the best of luck... and your client, too.

Regards,
Robert A. Franco
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