Factory demands early payment: what should I do?
Pause the requested early payment, verify it through an established contact, and compare it with the agreed payment trigger. Reply with the original schedule and state explicitly that you have not approved a change. Ask for evidence and a production update. For help checking the factory's explanation, contact Cambridge China Bridge.
Verify the request before discussing payment
Save the message and attachments. Contact the factory through details already held in your supplier records. Confirm who authorised the request, which order it concerns, why payment is being brought forward, and whether the beneficiary has changed. A genuine request still needs a separate commercial decision.
If bank details have changed, confirm both the old and proposed details using a known telephone number, rather than a number supplied in the message. Keep account verification separate from payment approval. Our supplier payment guide covers payment methods and account checks.
Reconstruct the agreed payment trigger
Gather the accepted quotation, purchase order, contract, proforma invoice and any approved amendments. Copy the payment wording into a decision note, including the amount, currency, trigger and supporting documents. Identify conflicting versions before instructing finance. Use our proforma invoice guide to check the invoice wording.
Compare the request with that wording. Has the milestone been met, is its evidence missing, or is the factory asking to replace it? If payment depends on inspection, a production photograph or invoice alone is not the agreed inspection evidence. Our balance payment checklist covers the checks before release.
Ask what has changed at the factory
Ask for the reason in writing and evidence relevant to it: material purchasing status, work completed, unfinished goods and the current production plan. Ask what happens if you keep the agreed schedule, including whether production or shipment would stop. Request a dated update that can be checked against the order.
Where practical, arrange a check of the actual goods and production status through your China staff or an agreed inspector. Do not treat a claimed cash shortage as proof of progress. Assess the extra money exposed if you pay earlier, alongside the delivery consequences of declining.
Send a response that separates receipt from approval
Adapt this reply using the exact order details: “We acknowledge receipt of your request for earlier payment. Our agreed payment schedule remains as recorded in the accepted order documents. We have not approved earlier payment or revised terms. Please provide the reason, supporting evidence and production impact for review. We will communicate any authorised decision separately in writing.”
Avoid replies such as “agreed”, “go ahead” or “we will arrange payment” while reviewing the request. Tell finance that the proposed change is awaiting a decision, and prevent it entering the payment run. Record any call in a written follow-up. This wording records your position; it does not settle a contractual dispute.
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Record the decision and control any exception
If declining, restate the existing trigger and request confirmation of the production plan. If considering an exception, prepare a separate amendment showing the revised payment, the remaining balance and its trigger, and any effect on delivery or inspection. Identify who may approve it and obtain written confirmation from authorised contacts before instructing payment. For what to send after paying, see our supplier payment proof guide.
Keep the request, verification notes, original schedule, evidence, response and final decision together. State separately whether inspection, packing, shipment and payment are approved; see our approval boundaries guide. If the factory threatens to stop work or the documents conflict, seek advice on the actual contract before promising payment or cancellation.
Frequently asked questions
Should I pay a factory earlier than agreed?
Verify the request and check the agreed trigger first. Consider any exception separately, with evidence of progress and a written decision showing how the remaining payment schedule changes.
Does a new invoice mean I should pay early?
Compare it with the accepted order documents. Ask the factory to explain the changed payment wording. Do not approve or enter the revised invoice for payment while that change is unresolved.
What should I say when a factory asks for early payment?
Acknowledge receipt, restate the agreed schedule, and say you have not approved earlier payment or revised terms. Ask for the reason, evidence and production impact, then issue any authorised decision separately.
What if the factory threatens to stop production?
Ask for the threat and its production impact in writing. Check actual progress and the contract, record your response, and seek advice before promising extra payment or cancelling the order.