In almost every neighbourhood shop in Sri Lanka there is a credit book. Regular customers take goods today and pay at the end of the week or when the salary comes. Giving naya builds loyalty and keeps customers coming back to you instead of the supermarket. But it also has a cost that many owners only notice when they cannot pay their own supplier.
This guide explains why customer credit hurts cash flow, and seven simple rules to keep it under control without upsetting good customers.
A credit sale is still a sale, and the profit on it is real. But you have not been paid yet. Until the customer pays, your money is sitting in their house, not in your drawer.
Here is an illustrative example. Replace the figures with your own.
| Item | Amount |
|---|---|
| Monthly sales | Rs. 1,500,000 |
| Share sold on credit | 10% |
| Credit sales per month | Rs. 150,000 |
| Average time customers take to pay | 1 month |
| Money owed to you at any time | About Rs. 150,000 |
That Rs. 150,000 is stock you could have bought, a supplier discount you could have taken for paying early, or a month of a staff salary. If customers take two months to pay instead of one, it doubles to around Rs. 300,000. If just 5% of it is never collected, that is Rs. 7,500 lost every month.
Not every customer needs credit. Offer it to regular customers you know, who live or work nearby, and who have paid reliably before. For new customers, start with cash only and offer credit after a few months.
Agree a maximum amount each customer can owe, for example Rs. 5,000 or Rs. 10,000, based on how much they usually buy in a week. When they reach the limit, they pay something before taking more. A clear limit protects both of you.
Ask each customer when they will pay: every Saturday, on the 25th, or when the salary comes. Write it down next to their name. Customers are far more likely to pay on time when there is a fixed day they agreed to.
Each credit sale should have the customer’s name, the date, the amount and, ideally, the items. Give the customer a bill or send it to them, so there is no argument later. Record every payment received in the same place, with the date.
Golden rule: no record, no credit. If staff or family give goods on credit, it must be recorded exactly as you would record it yourself.
Once a week, list every customer who owes you money, how much, and how long it has been outstanding. Group the amounts by age:
| How long owed | What to do |
|---|---|
| Up to 30 days | Normal. Remind them on their payment day. |
| 31–60 days | Send a polite reminder and pause new credit until they pay something. |
| Over 60 days | Speak to the customer directly and agree a repayment plan. Stop new credit. |
The longer a debt is left, the less likely it is to be paid. A short weekly review catches problems while they are still small.
Most customers do not avoid paying on purpose; they simply forget. A friendly WhatsApp message on their payment day works better than an awkward conversation at the counter. For example:
Hello Mr. Perera, a friendly reminder from [Shop name]. Your balance with us is Rs. 4,350 as of today. You can settle it at the shop anytime this week. Thank you for being a regular customer!
At closing, your cash drawer should match cash sales only. Credit sales belong in your sales total and your profit, but not in the cash you expect to see. Mixing the two is one of the most common reasons owners cannot match the drawer to the day’s bills. Our guide to calculating daily profit shows how credit sales fit into the full picture.
A credit notebook works when you have a handful of customers and you are the only person at the counter. It becomes hard to manage when you have dozens of credit customers, staff serving them, and no quick way to see the total owed. A POS app that records credit sales at the counter, alongside cash and card, keeps credit in your sales records from the moment it happens. See bill book, Excel or POS app for a full comparison.
Credit is a service your regular customers value, and it can be a real advantage over larger stores. Run it like a business: limits, payment days, a record for every sale, and a weekly review. VeeraOne lets you record a sale as cash, card or on-credit at the counter, with a separate login for each staff member, so credit given by anyone in the shop is recorded.
It can be worthwhile for regular, trusted customers, because it builds loyalty. Keep it limited: set a credit limit and a payment day for each customer, and record every credit sale.
A practical starting point is about one week of that customer’s usual purchases. Increase it only for customers who pay reliably on their agreed day.
Stop new credit, speak to the customer politely, and agree a small repayment amount each week. Debts older than 60 days are the hardest to collect, so act early.
Yes. The profit on a credit sale is earned when you make the sale, but you only receive the cash when the customer pays. That is why profit and cash in the drawer can be different.
Sales, stock, staff logins and daily profit & loss in one simple app. Free plan, no card required.
Get started free