The short version
- Record the credit at the moment of the sale, with a due date. A sale without a date is a sale without a follow-up.
- Give terms in days, not in “jaldi”: 7, 15 or 30 days, and the same terms for the same class of customer.
- Read the ageing, not the total. ₹2 lakh outstanding is fine at 15 days and serious at 90.
- Follow up on a schedule rather than on a mood, and follow up with the record open in front of you.
- A balance nobody has paid for a year is not an asset, and pretending otherwise flatters your profit.
Record it at the moment
The gap between the sale and the entry is where udhaar goes missing. Not because anyone is dishonest, but because a busy counter has a shorter memory than it thinks. Three things go in at the moment of the sale:
- Who. The actual party, not "woh sardarji". Names merge in a khata and balances get argued over.
- How much, and against which goods or invoice.
- By when. A date, not a feeling.
Saying "Rahul ko 500 ka udhaar diya, 30 din mein wapas" gives you all three in one sentence.
Set terms people accept
Credit terms that are never stated get interpreted generously. A few rules that hold up in a real trade:
- Pick a standard. 7 days for retail regulars, 15 or 30 for trade customers. Write it on the bill.
- Same class, same terms. Discretion invites negotiation on every order.
- New customer, smaller first order. The cheapest credit check you will ever run.
- Set a ceiling per party and say it out loud when they reach it. This is a conversation, not a system feature.
- Part payment before new goods when a balance is ageing. Easier to hold than a total stop.
Read the ageing, not the total
The total tells you nothing. The shape tells you everything.
| Age | Amount | What it means |
|---|---|---|
| 0 to 15 days | ₹1,20,000 | Normal trade credit |
| 16 to 30 days | ₹48,000 | Watch, follow up this week |
| 31 to 60 days | ₹22,000 | Slipping, call the party |
| Over 60 days | ₹35,000 | Treat as at risk until proven otherwise |
The over-60 column is the one that tells you whether you have a collection problem or a cash-timing problem, and those need different responses.
A follow-up routine
Collection is a habit, not a confrontation. What works:
- Day of due date: a polite message with the amount and the bill number.
- Day 3: a call. Ask for a date, not for the money. A date creates a commitment you can refer to.
- Day 10: send the party statement showing every bill and payment. Most disputes end here, because the record answers them.
- Day 30: a decision, not another reminder. New terms, a payment plan, or goods on cash only.
Two things make this easier: sending the statement rather than a number, and always knowing the balance before you pick up the phone.
When the customer disputes
Almost every dispute is one of four things: a payment they made and you did not record, a return that was never credited, a rate that was agreed differently, or a bill they never received. Each is settled by the ledger, which is why the party khata matters more than the running total. Open it, walk through it together, correct what is genuinely wrong with a credit note, and move on.
When it is a loss
A receivable everyone has stopped chasing is not an asset, and carrying it makes your profit look better than your bank balance ever will. At some point, write it off, keep the party marked, and stop supplying on credit. Getting this decision made rather than deferred is what separates a clean set of books from an optimistic one. Talk to your CA about the treatment, because bad debts have tax consequences and there are GST implications if you are adjusting the value of a supply.
Udhaar in AawazAI
Say "Rahul ko 500 ka udhaar diya, 30 din mein wapas" and the app proposes the entry with the party, the amount and the due date, and writes it to the khata on your confirmation. The Paisa screen shows milega and dena by party, sortable by amount or age, with every entry behind each balance. Each customer and supplier has a khata you can open and share, which is the document that ends most disputes, and a repayment is recorded as its own entry against the same party rather than by editing the original.
Know the balance before you make the call
AawazAI keeps udhaar by party with due dates and every entry behind the balance, so you send a statement instead of arguing over a number.
Frequently asked questions
How should a small shop track udhaar?
By party, with a due date on every credit sale, and with the entry made at the moment of the sale rather than at the end of the day. A running total per customer is not enough: you need the entries behind the total to settle disputes.
What credit period should I give customers?
Pick a standard for each class of customer, commonly 7 days for retail regulars and 15 or 30 days for trade, and put it on the bill. Consistency matters more than the exact number, because discretion invites negotiation on every order.
What is receivables ageing?
A split of what you are owed by how long it has been outstanding, usually 0-15, 16-30, 31-60 and over 60 days. The shape of the ageing tells you whether you have a timing problem or a collection problem.
How do I handle a customer who disputes the balance?
Send the party statement showing every bill, payment and return rather than just the figure. Most disputes are an unrecorded payment, an uncredited return, a rate disagreement or a missing bill, and the ledger settles all four.
When should I write off a bad debt?
When collection has genuinely stopped rather than slowed. Carrying a dead balance overstates your profit. Take your CA's advice on the accounting and tax treatment, and on any GST adjustment if the value of the supply is being changed.