The problem · The debtors book
How to get paid by customers who buy on credit
A contractor takes three bags of cement and says he will pay on Friday. A regular takes shopping and pays at month end. A restaurant down the road runs a tab.
You say yes, because saying no loses the customer and because you know these people. The amounts are written in a book, or in a phone, or in your head.
Then Friday comes, nobody reminds anybody, and six weeks later you are short of cash to restock while a notebook says you are owed more than your stock is worth.
Why credit kills profitable shops
A shop can be profitable on paper and still die, and the usual mechanism is this one. Profit is recorded when the goods leave. Cash is what buys the next delivery. Credit puts weeks between the two, and the gap is funded entirely out of your working capital.
Work it through. A hardware shop with a 20 percent margin lets out KES 300,000 on credit. The margin on that is 60,000, but the 240,000 of stock cost is gone from the business until the money comes back. Meanwhile the supplier wants paying. So the shop either borrows, or under-orders, and under-ordering loses cash sales — which means the credit customer has quietly consumed the sales of the customers who pay immediately.
Then the debt ages. Money owed for 30 days is nearly always collectable. At 90 it is a negotiation. Past six months much of it is gone, and the relationship it was supposed to protect has usually gone with it, because nothing damages a long customer relationship like the conversation that happens after a year of silence.
- Credit is funded from your working capital, not from your margin
- Under-ordering because cash is tied up costs you sales you never see
- Debt collectability falls sharply with age — 30 days is a reminder, 180 is a loss
- The longer you wait, the worse the eventual conversation and the relationship
Why the debtors book never works
Not because owners are careless. Because the book is separated from the sale, and anything separated from the sale depends on somebody remembering to do a second thing.
A credit sale is recorded in the book by whoever is at the counter, if they are not busy. A partial payment arrives by M-Pesa three weeks later with no reference, and is applied to whichever balance the person checking the phone assumes it belongs to. A customer buys at two branches and has two balances nobody has added together. Another has been over an informal limit for months, and the only person who knows is the cashier who likes them.
The result is a figure that is always slightly wrong in the direction that favours lending more, and no moment at which anybody is forced to look at it.
- The credit sale is a second action, taken by a busy person
- Wallet payments arrive unlabelled and get applied by guesswork
- Balances split across branches, staff and notebooks
- No limit, no terms, and no agreed date — so nothing is ever late
- Nobody owns the chasing, so it happens only when cash gets tight
Step by step
How to lend without bleeding
Make the credit sale a sale, not a note
It goes through the till like everything else — items, prices, stock moving — and closes against the customer's account rather than against cash. That one change makes the amount owed a consequence of trading instead of a parallel record somebody maintains.
Set a limit and terms per customer, in advance
An amount and a number of days, agreed when they are happy rather than when they are late. Without a limit there is no such thing as over-extended, and without terms there is no such thing as overdue — which is exactly why nobody chases.
Age the debt and look at it weekly
Group what you are owed by how old it is: current, 30, 60, 90 days and beyond. Five minutes a week on that one report is the single highest-return habit in this entire list, because it catches a slide while it is still a reminder rather than a negotiation.
Chase at 30 days, politely and by default
A short, friendly message at thirty days, sent to everyone over it, every week, as routine. It works because it is not personal and nobody has to decide to send it. Most of what shops write off was collectable at the point where nobody wanted to be the one to ask.
Apply payments to specific invoices
When money arrives, record which sale it settles. A customer with four invoices and three part-payments is unresolvable otherwise, and that ambiguity is where disputes live — usually in favour of whoever has the better memory.
Say no on the number, not on the person
A limit enforced at the counter is far easier than a judgement call. 'The system will not let me go past your limit until the last one clears' is a sentence that keeps a customer; 'I don't think you'll pay' is not. This is the reason to have the limit at all.
What you get
What sell.ke does about it
Credit sales close against a customer
The sale goes through the till, moves stock and lands in that customer's balance. No second book and nothing to remember after the fact.
Limits and terms, enforced at the counter
A credit limit and payment terms per customer, applied when the sale is rung up rather than recalled afterwards by whoever is serving.
An ageing report that is one click
What you are owed, grouped by how overdue it is, across every branch. The report that makes the weekly five-minute habit possible.
Payments applied to invoices
A part-payment is recorded against the specific sale it settles, so a customer with several open invoices has a balance both sides can agree on.
One balance across every branch
A customer who buys in two locations has one account, not two. The oldest trick in credit retail stops working.
Statements you can send
A customer statement showing what was bought, what was paid and what is outstanding — which turns an awkward conversation into a document.
Questions
Customers who buy on credit — questions
Should I give credit at all?
In most East African trade you do not really get to choose — contractors, resellers, institutions and long-standing regulars expect it, and a hardware shop or wholesaler that refuses outright loses the business. The choice is not whether, it is to whom, how much and for how long. Credit with a limit, a term and a weekly review is a commercial tool; credit in a notebook is a slow donation.
How do I chase without losing the customer?
Make it routine and impersonal. Everyone over thirty days gets the same short message, every week, from the system rather than from you — so being chased is not a judgement about them. The relationships that break are the ones where nothing is said for months and then everything is said at once.
A customer paid by M-Pesa but I do not know what it was for. What now?
This is why payments should be applied to specific invoices as they arrive. Going forward, record which sale each payment settles, and send statements so the customer is working from the same list you are. Most historic disputes are not dishonesty — they are two people with two different half-records.
Can I see what I am owed across two shops?
Yes. A customer has one account regardless of which branch served them, so balances and limits apply across the business. Buying at a second branch to get around a limit at the first is the most common version of this problem, and one account closes it.
What about customers who pay in instalments every month?
Keep the schedule on the account and let the ageing report do the watching. What matters is that each instalment is applied to the invoices it settles — otherwise a regular payer and a slow payer look identical in a single running balance.
Can I use it for more than one shop?
Yes. Branches share one product catalogue but hold their own stock, so a transfer between them is a recorded movement rather than a re-count. Reports run per branch or across all of them, and staff permissions are set per branch — a Kisumu supervisor does not need to see Nairobi's margins.
Will it show me my profit?
Yes, and from a real ledger rather than a sales total. Every sale posts to a double-entry chart of accounts, so you get a trial balance, profit and loss, balance sheet and cash flow — not a CSV to hand your accountant. Margin is visible per product, per branch and per channel, because cost is tracked on the way in through purchase orders and goods-received notes.
What does it cost?
Plans run from USD 12/month for a single-location till to USD 115/month for unlimited scale, with the online store on your own domain included from USD 23/month. In Kenya the same plans are KES 1,499 to KES 14,999/month, billed in shillings. Every plan starts with a 14-day trial and no card, and there is no per-terminal licence and no commission on your sales. There is no hardware to buy either — sell.ke runs on a phone, tablet or laptop you already own.
The problems that travel with this one
These rarely arrive alone. Fixing one usually exposes the next.
Not knowing your profit
Takings are not profit. The gap between them is where most small shops quietly fail.
Supplier prices keep moving
When cost moves every delivery, a shelf price set once is a margin you are losing on purpose.
The second shop
The second branch is where most retail businesses discover their systems were held together by the owner.
The features that do the work
Customers and loyalty
Credit accounts that do not go missing, loyalty that returns, and a debtor list you can actually chase.
Reports and real accounting
Double-entry books — trial balance, P&L, balance sheet — not a CSV export to somebody else's software.
Selling at the counter
Split payments, held orders, manager-gated discounts and a drawer count that reconciles.
Branches, staff and control
Shared catalogue, separate stock, transfers that are movements, and permissions per branch.
See it for your trade
If you are outside Kenya
The same problem, under the rails and the revenue authority you actually deal with.
Fix it on your own numbers
Fourteen days, no card. Import your product list or let Amina build it from a photo of your price list, and see what the reports say about your own shop.