Tracking customer credit

Serving a regular who will pay tomorrow is good practice. The problem is not credit, it is credit that nobody remembers. With no written record, memory sorts on its own, and it remembers what you are owed better than what you owe.

A customer record with the amount and the date is enough. The rest is discipline.

The name and phone number, so you can call. The exact amount. The date of the credit. The date the customer committed to pay. And, if the credit is for products, what was taken.

A note in a notebook works, but it gets lost and does not cross-check with sales. The same information entered on the customer's record stays attached to their history.

A useful record fits in six lines. If a field is missing, it is often the one that will be needed on the day of the reminder.

• • Name and a marker (“Marie, the shop next door”).
• • Phone, to call without travelling.
• • Amount of the credit, exact.
• • Date of the credit.
• • Promised due date (“Friday”).
• • Products taken, if the credit is not in cash.

A credit with no date is not a credit, it is a gift you ignore. Announce the date when you serve: “you'll come by Friday”. A short date kept beats a long, vague one.

Also set a limit per customer, for example the amount they usually spend in a week. Beyond that, you take payment first and credit again afterwards. The limit protects you from a customer who builds up a debt before you see it coming.

The reminder happens the day before or the morning of the agreed day, not two days after the default. A short, neutral message is enough: the amount, the date, and a closed question. The customer who forgot pays, and the one who has no money tells you before you have to insist.

The tone stays neutral: you ask for a confirmation, you accuse no one. A reminder that puts the customer in the wrong is paid for later in lost sales.

Once a week, take ten minutes: who owes what, who has missed their due date, who is nearing their limit. This is the moment to decide, calmly, what you do about late payments. Deciding during a sale, under pressure from the customer, rarely ends well.

A customer who has already missed their due date without mentioning it moves to cash payment until they settle up. It is not a punishment, it is a simple rule, announced in advance and applied to everyone. A known rule is argued over far less than a case-by-case decision.

The customer module of MerchantHQ keeps this record attached to the purchase history, and if you also work on product costs, see calculating your margin and selling price.