In most hardware stores a large share of sales goes out on credit. Contractors, plumbers, electricians and painters buy material for a site and pay when their own client pays them. You cannot run a hardware business without giving credit, but you can stop credit from quietly eating the profit.

1. Know how old your credit is, not just how much

₹2 lakh outstanding for a week is healthy business. ₹2 lakh outstanding for three months is a cash-flow problem, and part of it may never come back. Group every customer's balance by the age of their oldest unpaid bill:

Age What to do
0–7 days Normal
8–15 days Friendly reminder
16–30 days Phone call; no new large credit
More than 30 days Personal attention from the owner

2. Set a credit limit for every customer

  • New customers: cash for the first few purchases, or a small limit.
  • Regular contractors: a limit close to what they buy in two to three weeks.
  • Long-standing, reliable customers: a higher limit, reviewed every few months.

Write the limits down and tell your staff. When a customer is over the limit, the next bill is part-paid before more credit is given.

3. Make every credit sale a proper bill

Credit written only in a notebook is easy to dispute and easy to forget. A dated bill with items and amount, signed by the customer or their worker, settles arguments months later.

4. Record part payments against bills

Contractors often pay in parts. Always note which bills a payment clears, oldest first. A balance nobody can explain is where disputes and losses begin.

5. Follow up by age, every week

Many owners chase only when they need cash, or only the customers they feel comfortable calling. Follow the age buckets instead, every week, with every customer. A short, polite, regular reminder works better than an angry call after three months.

6. The rule that prevents most bad debt

Stop new credit once a customer's oldest bill crosses 30–60 days. Offer to continue on cash, or once the old balance is cleared. It is hard to say no to a regular, but a customer who has not paid a two-month-old bill and wants more on credit is asking you to fund their business.

A 15-minute weekly routine

  1. List everyone with a balance and the age of their oldest bill.
  2. Call everyone in the 16–30 and 30+ day groups.
  3. Mark anyone past your limit as cash-only until they clear.
  4. Review limits for customers who have grown or slowed down.

NANDIX OS keeps each customer's balance and its age automatically, straight from the bills, which turns this routine into a few minutes.