Reading the due ledger before you ring anybody

The due screen does the one thing a paper khata never could: it shows you how old the money is. That is the number that matters. A hundred thousand outstanding sounds terrifying, but if ninety thousand of it is from this week, that is trade. The ten thousand that has been sitting there seven months is your actual problem.

What to look at before you call

1. Open the ageing view. It sits under People. Everything owed to you is split by age — under 30 days, 30 to 60, 60 to 90, and over 90.

2. Read the over-90 column first. A large share of what sits there never comes back. The longer it waits the less likely it is to arrive, and that is true in every shop.

3. Open the customer. Before you dial, read their khata. Every purchase and every payment is there, with dates. That list is the whole leverage. "You owe 8,500" and "3,200 from the 12th and 5,300 from the 27th, which is 8,500" are completely different conversations. Nobody argues with the second one.

When the money comes in

Enter the payment on the customer, not against a particular bill. It comes off the oldest bill first, which is the ordinary accounting convention and the one your customer expects.

Part payments are fine. If somebody pays 3,000 of the 8,500, enter 3,000 — the remaining 5,500 stays on the khata and keeps ageing.

Reminders in one go

You do not have to ring everybody individually. From the due list you can select people and send a text message to all of them at once, with each person's own amount filled into their own message.

Two things to keep in mind:

• No more than once a week. Too many messages and people stop reading them, and then the one that actually mattered gets lost too.
• A soft message collects more than a hard one. A threatening message moves the customer to another shop; a reminder moves the money.

Setting a limit

You can put a credit limit on each customer. Once they are past it, whoever is on the counter sees a warning.

The real value of this is not for the owner — it is for the staff. "No more credit for you" is a hard sentence for an employee to say. On the screen, it stops being their personal decision and becomes the shop's rule. That saves the relationship as well as the money.

The one figure to check monthly

Is the total outstanding going up or down? Look at that once a month. Credit rising alongside sales is normal. Credit rising while sales sit flat means you are lending, not selling.