I'm sorry this happened to you, and I too am happy you have clients that can take your surplus cakes at short order. It is amazing how much stress some clients can cause. A lot of the time it is because that is just how they live and run their lives; just 100% scatty, lots of talk and no action.
I think the more queries and meetings you have with people like this, the more cautious and firm footed you get in general. I believe you did more than enough to accommodate her, and ultimately made the right decision to end it. If it does happen again, previous posters have given you enough ideas on how to enact the principle of no money = no cake.
I remember the *one* time I allowed somebody to collect a cake without paying me the final $130 owing on it. The reason? We had just spent over $12000 buying custom-made furniture from her business, and I still had to pay the final payment of $2000 upon delivery of the last piece. I was operating on a mutual respect basis. I paid my balance, and she then ignored every email I sent her about her (cake ) balance still owing. My lesson learned: make your water-tight policies and stick to them
It cost me $130 but I will never make her another cake or recommend anyone to her furniture business. (She has already asked me to make her a cake for a family member, actually. Ha!). Nor will I let a cake leave my possession without having all monies paid.
All the best to you and the business
Hope you have a nice calm and relaxing weekend!