How to track shop credit without a notebook

Most distributors do not lose money on price. They lose it on credit: the shop that paid half last Tuesday, the balance nobody wrote down because the salesman was in a hurry, the ₹3,000 that turned out to be ₹4,200 when the owner finally sat down with the book.

The notebook is not the problem. The method is. Below is a way to run shop credit that works in a notebook, in Excel, or in any software, followed by what it looks like in ours.

1. One number per shop, built from bills

A running balance in pencil — add today’s bill, subtract today’s cash — is where errors live, because one missed line breaks every figure after it and nobody can say which one. Keep the unpaid bills instead. What a shop owes is simply the total of its bills that are not yet fully paid.

That one change settles most arguments. When the owner says “I paid you”, you are no longer comparing two memories; you are looking at which bill the money went against.

2. Age it, don’t just total it

₹20,000 owed by a shop is either fine or alarming, depending on how old it is. Split every shop’s balance into four columns:

• 0–7 days — normal trade credit.
• 8–15 days — mention it on the next visit.
• 16–30 days — the owner phones, not the salesman.
• Over 30 days — no new credit until this comes down.

The four columns turn one frightening total into a short list of who to ring this week. The shops in the last column are usually fewer than you feared, and they are where almost all the risk is.

3. Decide the limit before the day you need it

Give each shop a credit limit in rupees, and decide in advance what happens when a bill would cross it: the salesman takes cash for the difference, or he calls you for a yes. What you are avoiding is the salesman deciding alone, at the counter, with the shop owner watching — he will say yes every time, because that is the only answer that gets him to the next shop.

A limit of zero should mean “no limit set”, not “cash only”. Start with limits only on the shops you worry about; set the rest once you have a month of numbers.

4. Have a “hold”, and make it narrow

Sometimes a shop has to stop getting goods. When that happens, stop new bills — and keep collecting. A hold that also blocks the salesman from taking a payment has stopped the one thing you wanted to happen. Write down why the shop is on hold, so the salesman can say it without making it personal.

5. Collect against a bill, at the door, with a receipt

Money taken on the route should be written against a particular bill at the moment it is taken — including part payments — and the shop should get something back: a slip, or a WhatsApp message with the amount and the balance left. Money that goes into a pocket “to be entered later” is money that will be argued about.

6. Close the day on cash, and keep UPI apart

At night, each salesman’s cash should match what he recorded as cash collected, and UPI payments should be counted separately, because they are already in the bank. Mixing the two is the most common reason the day’s cash “doesn’t tally” when nothing is actually missing.

7. Ten minutes a week

Once a week, read the over-30 column top to bottom and make the calls. That is the whole review. Distributors who do this rarely write off a large balance; the ones who don’t usually find out in March.

Moving off the notebook without losing what is in it

You do not need to type in years of old bills. For each shop, carry today’s balance across as a single opening amount, dated the day you switch, and start recording bills properly from there. Old dues then age from the switch date, which is conservative, and correct within a month or two as they are paid.

How Mulberry Sales does it

We built our credit screens around the method above. Every bill the salesman raises lands in the shop’s balance as he raises it; the Credit Record shows each shop’s balance in the same four age columns; a bill that would cross a shop’s limit is refused on the phone and on the server alike (on Business you can let one bill through with an approval code); a shop can be put on hold for new bills while payments are still collected; and old dues come in from your notebook or Excel as opening balances. See collection and credit control, or put your own numbers into the leakage calculator first.