Every distributor knows the feeling: the business is 'profitable' on paper, but the bank balance is thin because lakhs are stuck across a hundred shops. The goods left the godown; the money never came back. Fixing this is less about being strict and more about being organised.
1. Know the number, per shop, in real time
You cannot collect what you cannot see. The first win is a live, per-shop ledger: every invoice and every payment, always current. When a salesman walks into a shop, he should already know the exact balance before he asks.
2. Use aging buckets, not gut feel
Group what is owed into 0-30, 31-60, 61-90 and 90+ day buckets. The 90+ column is your warning light — it is where money turns into a bad debt. Chase those first, every single week.
3. Set credit limits and let the system enforce them
A credit limit only works if it blocks the next order automatically when crossed. A polite 'this shop is over limit' on the salesman's screen prevents the awkward conversation later — and stops good money chasing bad.
4. Make paying easy
Record cash, UPI, cheque or bank against the exact invoice, and send a receipt on WhatsApp. The faster a shopkeeper sees his balance update, the more willing he is to clear it.
