Most jar businesses sell on credit. A driver drops jars today and the customer pays at the end of the week or the month. That is normal and it works. The problem is that credit is also where money quietly disappears. Nobody steals it. It just slips through gaps in the process.
This guide shows where those gaps are, how to close them with a weekly routine, and how to put a number on the loss using your own figures.
Where credit leaks
Leakage has three main sources. Check each one in your own business.
1. Payments taken at the door and never written
The driver collects ₹300 in cash at a stop. He writes it on his own slip, or remembers it, or hands it over late. By the time the office updates the register, the amount is hazy. Sometimes the money reaches the office but the customer’s balance is never reduced. The customer then gets a bill for money already paid, and a dispute starts.
The opposite also happens. The customer says “I paid the driver” and nothing in your records shows it. You cannot prove it either way, so you usually drop the claim.
2. Deliveries that never get billed
A jar goes out on an extra order. A driver covers another driver’s route. A customer asks for two more cans on the day. Each of these is a delivery that was not on the standing order, so it is easy to miss when invoices are prepared. If the invoice is built from the standing order and not from what actually happened, extras never reach the bill.
3. Old balances nobody chases
A balance of ₹800 from three months ago feels awkward to raise. Each week it gets older and harder to ask for. Customers also notice which dues you chase and which you ignore. A balance that sits for 60 days has a much lower chance of being paid than one chased in week two.
A simple weekly routine
Pick one day, ideally the same day each week, and give it one hour. Do these steps in order.
- Close the books on collections. Match the cash and UPI the drivers handed in against the payments written down. Fix any gap today, not next week.
- List deliveries not yet billed. Anything delivered that has no invoice should be on a short list with a reason.
- Sort dues by age. Use three buckets: 0 to 30 days, 31 to 60 days, and over 60 days. See how to read a dues ageing report for what each bucket tells you.
- Pick the top five. Take the five customers owing the most, plus anyone moving into a higher age bucket this week.
- Make the calls. One person calls them. Write down what each customer promised and by which date.
- Check last week’s promises. Anyone who promised a date that has passed goes to the top of next week’s list.
One hour a week is enough if the records are clean. If the hour turns into three, the problem is upstream, in what gets recorded at the door.
Credit rules an owner can set
Rules save you from deciding case by case, and case-by-case decisions are where favouritism and forgetfulness creep in. Choose rules you can actually enforce, write them down, and tell customers in advance.
- A credit limit per customer. Set it as a rupee amount or as a number of days of supply. A household taking one can a day might get a limit of about a week of deliveries. A shop taking twenty cans a day needs a different one. These are your numbers to choose.
- A payment day. Decide whether the customer settles weekly, fortnightly or monthly, and keep it fixed.
- A hold rule. For example, when dues cross the limit or pass 45 days, the next delivery needs a payment first. Decide this in advance so the driver is not arguing at the door.
- A new customer rule. New customers start with a lower limit, or pay for the first week up front. Raise it after a few clean payment cycles.
- A clear owner for exceptions. Drivers should not grant credit beyond the limit. One person in the office should approve exceptions.
A limit only works if someone looks at it. Check the customers over their limit during the weekly hour.
How to talk to a slow customer
Most slow payers are not refusing. They forgot, they are short of cash, or they think the amount is different. Start from that assumption.
- Call early. A call in week two is a reminder. A call in month three is a confrontation.
- State the facts. “Your balance is ₹1,200 for deliveries from 3 to 28 September. Can you pay by Saturday?” Give the amount, the period and a specific date.
- Offer the invoice. If they dispute the amount, send the list of deliveries and ask them to point out the ones they disagree with. Usually it is one or two.
- Agree a part payment. If they cannot pay in full, take part now and agree a date for the rest. A part payment keeps the relationship alive.
- Write down the promise. Date, amount, who spoke to whom.
- Use the hold rule calmly. “We will continue deliveries once the ₹500 is settled” is a business decision, not a threat. Say it once, kindly.
Do not discuss dues in front of other customers, and do not send the driver to argue. The driver’s job is to deliver and record.
What to record so credit stays clean
Every delivery and every payment needs a record made at the time, not later. At minimum:
- Customer, date and route.
- Jars delivered and empties taken back.
- Price used, especially when it differs from the usual.
- Reason, for any skipped stop.
- Any extra jars, noted as extra.
- Payment amount, method (cash or UPI) and date, whenever money changes hands.
The record should be made by the person who was there. If it is made later by someone else, errors rise quickly. For more on the full list, read what to record on every jar delivery.
Measure leakage with your own numbers
You do not need a benchmark. You need three figures from your own last month.
Leakage = (A + B + C) divided by D, shown as a percentage
- A is the value of deliveries you made and never invoiced.
- B is the value of payments you believe were collected but never recorded, plus amounts you wrote off.
- C is the dues older than 60 days that you do not expect to recover.
- D is the total value of jars you delivered in the month.
Example (illustrative numbers only, not a result or an average): in a month you deliver ₹2,00,000 worth of jars. You find ₹4,000 of extras that were never invoiced (A), ₹2,000 of cash the office cannot trace (B), and ₹6,000 of dues over 60 days that you doubt you will collect (C). Leakage is ₹12,000 divided by ₹2,00,000, which is 6%. Your own figure will differ. What matters is whether it falls over the next three months.
Track it monthly on the same basis. If you want a quicker way to run this, use the credit leakage calculator and enter your own figures.
How Pyaau helps
Pyaau is an Android app for jar delivery businesses. For credit, it does these things today:
- Every customer has a balance that rises with each delivery and falls when a payment is recorded. The balance is marked “Owes you” or “Credit”.
- Each customer pays monthly on an invoice by default, or can be set to pay daily. A new customer has to be given one or the other. A daily payer is not invoiced, and their deliveries and payments stay in their own ledger.
- Every customer page shows one timeline of deliveries and payments together, newest first, with the balance after each row, for the last 30 days. Daily payers open on it.
- The ledger separates invoiced-unpaid from delivered-not-yet-invoiced, so unbilled deliveries are visible. Invoices and payments sit in one list, with a “Collect payment” button.
- Payments are applied to the oldest invoice first. Invoices show Paid, Part paid or Unpaid.
- A dues report shows ageing buckets (0 to 30, 31 to 60, 60+ days) and the customers owing the most.
Payments are recorded in the app against the customer, so the credit rules above are easy to check against one ledger. The routine in this guide works with a paper register or a spreadsheet too, just with more manual checking.