GUIDE · UDHAAR & CASH FLOW
Udhaar keeps regular customers loyal, but unmanaged credit is the most common reason a busy shop still runs short of cash. This guide sets out a simple system any shop can follow — on paper or in an app.
Credit itself is not the problem. Most neighbourhood shops in Pakistan have customers who pay at the end of the month, when salaries arrive, and that relationship is part of the business. The damage comes from credit that is not written down clearly, not reviewed, and not collected on a fixed rhythm.
When a shop gives Rs 300 here and Rs 500 there, the total grows faster than anyone notices. By the time the owner adds it up, a large share of the month’s profit is sitting in other people’s pockets — and the shop is borrowing from its supplier to restock. The goal is not to stop udhaar. It is to make every rupee of it visible.
Decisions made at the counter, with a customer waiting, are usually generous. Make the rule in advance and the staff can apply it without awkwardness.
The single most important habit is to record the credit while the customer is still standing there: date, items or amount, and the new balance. Entries written "later" are the ones that go missing.
Each customer should have one running account — a khata page or a ledger in an app — showing every sale on credit, every payment, and the balance after each line. When a customer asks "how much do I owe?", the answer should take seconds, and it should be the same answer every time.
If you use software, choose one where a credit sale automatically adds to the customer’s balance and a payment automatically reduces it. Double entry by hand is where mistakes creep in.
A limit turns a vague promise into a clear rule. A sensible starting point is roughly what the customer spends with you in two weeks. A household that buys Rs 10,000 of groceries a month might start at Rs 5,000.
When a customer reaches the limit, the next purchase is cash only until a payment comes in. Most customers accept a clear, polite rule far better than a sudden refusal from a tired shopkeeper.
Disputes usually start when a customer has not seen their balance for weeks. Sharing it regularly prevents surprises and quietly reminds people to pay.
Once a week — the same day each week — sort credit customers by how long their oldest unpaid amount has been waiting. Balances under 30 days are normal. Between 30 and 60 days, send a reminder. Over 60 days, stop further credit and call the customer personally.
Accept partial payments happily and record them immediately. A customer who pays Rs 1,000 of a Rs 5,000 balance is still engaged; one who is pressured for the full amount may simply stop coming.
Udhaar runs in both directions. Most shops also buy on credit from wholesalers and distributors. Tracking what the shop owes alongside what it is owed shows the real cash position: if customers owe Rs 80,000 and the shop owes suppliers Rs 120,000, the business is financing its customers with borrowed money.
Seeing both numbers together, every week, is the clearest signal of when to slow down credit and push collections.
Ten minutes a week is enough to keep udhaar under control: