Now I do get customers who can't afford to buy expensive products from brands like Lakme. If a customer comes to my shop to buy an aloe-vera gel and they have only 150 rupees in their pocket, I can't make them buy the Lakme aloe-vera gel. I can't sell the Lakme aloe-vera gel to them on a credit basis because I don't know when they are going to pay me back. So, instead of the Lakme aloe-vera gel, I can sell the Astaberry aloe-vera gel to the customer as they can afford to buy this product. In this way, I will be able to satisfy the customer and earn income, which is good for my business. So, this is how I run my business. I don't sell products to the customers on a credit basis. If I do that, I know that they will pay for the products after 2-3 months. I can't wait for 2-3 months to get paid. I have to sell the products in stock, get the money, and buy new products. It's not like the customers will buy products from one brand only. They will buy products from other brands as well. So, I have to buy and keep products from various brands at my shop.
There are a few customers to whom I sell products on a credit basis. These customers have been buying products from shops for a long time. So, I have to allow them to buy products from me on credit. However, I make a deal with the customers. I tell them that they can buy their products from me on credit, but they have to pay 30 percent of the amount upfront and clear the remaining amount within two months. Most of my customers pay for the products within one month, but there are some customers who take four months to pay. All the customers pay me back at the end of the day. They trust me, and that’s why they buy products from me. So, this is how I run my business.
There are times when I ask my customers to share the screenshot of the payment that they are making through an app like PhonePe or GPay with me on WhatsApp. So, this is how I deal with the customers. However, there are customers who don't use any payment apps like GPay or PhonePe. Those customers buy the products from my shop and assure me that they will pay for those products the next day. Now, if I have trust in a customer, I will allow them to buy products from me and pay for them by the next day. I have to conduct my business in this way. If I don't get any customers at my shop throughout the day and a customer comes to my shop when I am about to close it, I will sell products to them on a credit basis and take assurance from them that they will pay for those products the next day. So, trust plays a big factor in any business. I note down the money customers owe me in my diary.
No, I don't offer any credit to customers. If someone I know well doesn't have enough money, they can pay me back within 1-2 days. Otherwise, no. Most customers don't ask for loans. Everyone seems to have a lot of money now as the real estate industry has flourished. 25 years ago, there was a loan system. I had to go to them every Sunday to borrow money. I had to go for collections. Now, no one asks for a loan and I don't trust anyone enough either. If they want to buy, they can buy with full payment. Otherwise, they can leave. It's better to have money in my cash box than to give away items for free.
No, customers used to take loans and then pay later. We have not given anything on credit so far. Initially, I did it. I made a note of it in the notebook and many told me that they will come and give it and but later they did not. I didn't find it right.
Yes, sir. There are a few customers who have been with me for 5-6 years. I have a diary. I write in it. I don't remember it and I forget it sometimes. So there are a few customers who give me half payment. They are very nice. I don't have to call them for the payment. They come and give me the money. Then I cut their names once the payment is done. They come to buy one item but they take 4 of them from my shop. They bring the money for just one item so they take that but they also don’t leave the rest of them because they think what if they don’t get it afterwards. So I ask them to take the rest of them and do the payment afterwards. I know most of them and that’s how you build your customers. Loan is a must in any business. And there are a lot of ladies. They get pocket money. So they give according to that. So they get a lot of benefit in my shop. If they want to wear a necklace for a function then they take it and do the payment afterwards. Their work is also done. And I have to go every two months. My money comes before two months. So work is also done. Sometimes they give in installments. Some customers give in installments. Sometimes they give the whole amount together.
If I have a regular customer, then their payment is between 30 to 60 days. And if someone is an exceptional customer and knows me, then they get a little credit. The rest is done on a cash or advance basis. Yes, it's on a cash basis, based on the material and payment. It is completely on my tally. If the rough estimate is normal, then it is made on this. The rest is done on the tally. Because my maximum is fixed. Like GST will be charged. Because whatever material I am getting is coming with the bill. So, the material I am going to get is also on the bill.
Lend to the customer. I do maximum business by loaning the materials. As I told you, DM. Like now, he is making the DM. Okay, that DM will be made. And whatever material has come will go. The DM is the Delivery Memo. I will show you. Material goes on the Delivery Memo. And then I will make the bill later. And then the bill goes. The bill is made in this way. This bill is made. Like Anurag tiles. Its bill has been made. This is the Delivery Memo. And this is the memo. It has a triplicate copy. One copy goes to me. One copy goes when the material goes. And this original copy goes with the bill. So, like this. It has been delivered once on 30th August. So, the bill becomes like this, and then the bill goes to him.
How to determine if this is a loan is also in the system. For example, I will tell you about it. Let me give you an example. This is a letter from the Anurag Tiles party. I will open the ledger for this. These are bills from Anurag Tiles and he has made the payment. So, there is a feature in Tally, F5. If I press F5, then it shows how many days have passed for the bill on that particular day. Yes, it has been entered in it. Once the entire system is set up, Tally automatically provides all the data continuously. I check if the money has been received or not through net banking. So, my first task is to check the entry of the payment that was received yesterday. And on the same day, the same entry is in Tally. Once it is confirmed, then it is the same.
I extend credit to my customers because they wont be able provide with immediate payment. This is a long-term engagement. Electrical work cannot be completed in a single day. An electrician will not list all the requirements at once. They will write an estimate for 50000rs, purchase the necessary items, and then return for additional purchases. They will request that I continue to supply them with materials while they make payments. To keep track of these transactions, I maintain a ledger.
I used the Khatabook app to keep track of credits. I give products on credit. For example, Atul Shukla took products on credit from me for 78000/-. Yesterday, he took products worth 750/-. We will upload this information, and when he needs it, I will give it to him with just one click. He frequently takes products from me, so if I check the report, he has taken wiring products worth 126316rs. He has paid me 48000, and he still owes me 78000rs. Here are the times he took products: yesterday for 750/, on 18th August for 4000, on 16th August for 6000/, and on 14th August for 16000/. I will maintain their credit on this app, so I won't need to use a diary. Local customers can come in, get the stuff, and pay later. I will make the entry on this app. This app will benefit me by sending reminders to the person whose number I have saved for the payment. The app will also send a PDF report to that person.
The children wait for me to open the shop and they don't go anywhere else because they get it at the right price here. Our price is correct. Everyone gets it at the same price. It's not like if someone comes, we give it to them separately. Here, people know that this book is only available with me. No one else has it. Within the maximum retail price (MRP), we will increase it. We will do it within the MRP. But we will only give them that much. For example, if we offer a 25% discount if it's above Rs.250, then there is no problem. We will do it. But what do other people do? They might or might not give a 10% discount. We have a fixed rate that we will only do this much. It's a one-time thing. We don't do it for free. We have written it down. Fixed rate. If you don't have it, you can give it later. If it's a large amount, we will write it down. We will give it to you. You can give us the number.
We record the credit given to customers in our diary. We simply write down their name, mobile number, and the amount they need to repay. It's a small amount. I can see that I'm not losing anything. It's a 50% discount, so I'm not losing anything even if they run away. In the past, some people have run away and caused losses, but it's not like that anymore. When I was new, one of my staff members, Suraj, quit his job. He was new and so was I. There are two rates for Kiran books, the SSC ones. There's a rate for the top and a rate for the bottom. The original rate for the top was Rs. 500 and for the bottom, it was Rs. 300. Suraj sold the book for Rs. 300 without checking the actual price. I asked him why he sold the Kiran book for such a cheap price, and he said he didn't know the correct price. He thought they were regular customers. He also mentioned that two girls would come, but they never did. It's alright though, as it only cost us Rs. 200-300 each. This kind of thing happens in schools too. There was a Muslim guardian during the school season who needed to pay around Rs. 8000 for three children's books. He told me that he only had Rs. 4000 and that he wouldn't lie and give me the rest because he was fasting. Fasting is very important for Muslims, and they don't lie during this time. So, we sold him the books, but he never came back. I don't know if he was actually fasting or not, but he did confirm that he was Muslim and fasting. There are people like this, and we have to consider both honest and dishonest individuals. Yesterday, a girl got her form filled and paid Rs. 750. She gave me Rs. 400 initially, and today she sent me the remaining amount. In return, I gave her the printout of the online form.
And we mostly deal in cash. We don't offer credit that often. If it is a regular customer, then only they get some credit. No, I don't give them a credit period because I don't get a credit period from the market.
Yes, I give credit. There are some people whom I trust. If I feel that this person will really pay me later, I only offer it to them. I know that. I get that from their nature. Yes, that is true. Farmers would pay after a long time. The thing is, if they are not getting good rates for their crops, if they have invested their money in paddy or something, now they don't have any money. Now they will get money when they harvest the paddy, and they pay you then. I also know that they don't have money right now, but if they don't pay me even when they get money, then I know that this person is not good.
No, I didn't write anything about giving credit to customers. The thing is, I can see it when he buys stuff and pays for it. No, we don't make them write anything. Sometimes I lose money in this as well, it's not like that. Some people don't want to pay; these things happen in business, with losses and profits. The thing is, in the beginning, I wasn't that wise, so I gave credit to a lot of people, but I don't do that now.
I don’t give credit to customers. If I give credit, the customers don't come back next time. I would suffer a loss. If there is an expense for them again they would think to come back. So it is fully cash and carry
I have maintained a register for noting the credit given to customers.
If we have given credit to someone, then we will have to forget about it. If the money is gone, then it is gone. There are no businesses where the loan hasn't been made. If it is a money credit, then you will have to forget about it. If it is there, then it is there; otherwise, it is not. If there are honest people, then they will come and give the money to you. They will say your money is pending, please take it. Even if I have maintained a register for it and then when he comes the next time, I tell him that the money was pending the last time, he denies it and says it was already paid. What will you do about it?
Yes, I wrote the credit list in the register. Now it has been significantly reduced, as we no longer give credit to the same people repeatedly. We incur losses as some people repay the money while others do not. For instance, I once gave some medicines worth 1200 rupees to this uncle, and he promised to pay the money the next morning. However, he has not returned to this day. I then ask the doctors about this patient with the illness and then tell them that when the patient visits next, make sure you tell him to clear the dues with the medical store. So, the doctor informs them about it.
I have some customers like that to whom I offer goods on credit. I maintain a diary to keep a track of receivables. When I sell the stuff then I pay the vendors accordingly.
I give credit to customers whom I know and are close to me. The Xerox print cannot be done on credit, as it has very little profit. Then, there are also customers who would do the work and say that they will pay later. They eventually come and pay. There is a place called Mana where many poor kids used to come to us. They would come for one form fill-up and end up doing 2-3 forms. The rate used to be higher and then they wouldn't get the money, so I used to give them credit. I would ask them to pay me later, and they would come and pay later. I used to write the amount and the phone number. I still write that also. I have all hard copy.
Customers can also purchase products on credit. For example, if a customer wants to buy an earring but doesn't have money at the moment, they can leave their phone number and come back after 2 days to make the payment. In this case, I provide a credit option. I write this in a notebook and I keep the record in mobile also.
Then I also use Okay Credit, and the customer receives a message from the Okay Credit app. The customer's phone number is added to it. I can see how much dues I have given to that customer through this application, and she also receives a message. I also have the data. They come to the shop and give me money. Some customers pay monthly, and some customers say they will make the payment within 10 days. It depends on the customer's loyalty. The reminder setting option is also available. The people who pay monthly receive a message on the due date automatically. Someone added me to the group, and that's how I got to know about Okay Credit. I can also see ads on social media. I got to know about it through the Wholesaler group.
That also happens, and sometimes the customer forgets to bring money, so they give me something in advance, and then they come back and give me the whole amount. I will not give this facility to everybody, and not everybody in our distributor market gets this facility from wholesalers and distributors. But if a customer has been coming to me for the last four or five years, then I have to trust them. No, we cannot give this flexibility to a lot of customers because the position of the market does not allow this kind of facility, as our business has suffered due to online shopping, especially impacting small shopkeepers like me.
I have provided loans to customers. There are ₹400, ₹500, and ₹600 amounts given to around 70-80 people. They haven't returned the money to me. If I have sold something for ₹1000 and the customer has only paid ₹800, they might say that they will give the remaining amount after a couple of days, and that is usually fine with me. I write that down in my notebook. I simply note down the amount they owe me for the goods. I record the credit amount.
I don't call customers to repay credit. They usually come to my shop or pass by. I remind them when I see them. They do come here for vegetable shopping, so I might remind them. If I call them and they don't answer, then I tell them in person.
I have also significantly reduced the loans I give. There have been around 80 to 85 people who haven't paid me back. They owe around ₹400 or ₹500... even ₹600 or ₹800... so I have given around ₹60,000 to ₹70,000 just as credit. I am not getting the money back. That is why I have stopped making sales on credit. I have reduced it.
I give credit to people whom I know would pay me back. They would deliver. You can always recognize them. I have stopped giving credit to new customers.
I don't refuse returns. If I did that, then they wouldn't come to me. I am the neighborhood shop. I have only a couple of customers all day. I don't get a thousand. If I refuse them, they wouldn't come to me. If they have used the goods, then I call them and tell them. She had ₹600 due, and she returned it to me. I deducted the amount from what was due from her.
If someone wants to buy on credit, I assess their capacity to determine whether I can afford it or not, and whether I have sufficient capital. I offer credit amounts of 400, 200, or 100 rupees, but no more than that. The maximum credit limit is 500 rupees. The bill size could be 400, 500, or even 600 for some people... and some might pay 200 rupees and keep 200 rupees as pending payment. Some might not even give 200 rupees. We provide credit entirely, and they pay the next day. We note down the amount on some paper. There will be copy with the customer. Then we tear the paper off.
I thought of using UPI because of the customers' demand. Maybe they didn't have cash and wanted to make UPI payments. That's why. After this is installed, we have solved the problem of small currency changes. If the bill is 220 or 210 rupees and the customer does not have 10 rupees change, then they can use Phone Pe or Google Pay. This advantage exists. We used to tell them to pay later because he did not have change of 10 rupees in his pocket. I also do not have small change. This is useful to avoid the problem of small currency changes. Suppose the bill was 210 rupees, and the customer had 300 rupees... we did not have change for 90 rupees. At that time, we asked customers to pay 10 rupees, and the customer paid that through UPI or in cash if they had it. Previously, this used to cause a little problem. If they did not have change, they would come after some time and give that amount. Or they used to keep 300 rupees with us and later gave 10 rupees and took their 100 rupees back.
We didn't used to write the credit amount down. We did not do that for 10-20 rupees. All are local people. We do not need to write down.
The payment options that I offer to customers are limited to cash and Google Pay. I do not provide credit to anyone. Occasionally, if there is a small amount left, like Rs 100 or so, they can pay it the next time. However, if I were to extend credit for larger amounts such as Rs 300, Rs 500, or Rs 1000, and note it down, we would not receive the payment later. It is possible that the same person may visit another shop the following month. Therefore, we have made the decision not to offer credit. Mostly when the customer says that the Google Pay isn’t working, then for that I have the card machine here.
We used to offer credit to customers in the past, but not anymore. There's no longer a market for it. Traditional ways of payment have diminished, making it less relevant.
Customer credit: Yes, many did not repay yet we are still following that. Once we give them they don’t repay. Sometimes, we offer the option of paying in EMI. However, once my mother considered and as a result there have been cases where customers are yet to complete their payments and are not responding to our calls. This situation results in losses for us.
Everything is trust. We have lost money as well. We ask customers to return our money, and if they don't, then we let it go. People who trust us don't question us. Some of them continue to make purchases, but our money remains with them. During the corona time, we provided a lot of things, thinking that they would be in need. They still keep buying things but have not repaid the money. It is more for Hindi-speaking people. We give them things on trust. They settle our accounts properly every week.
Our sales go up on Sundays, once a week. We do business on credit, and when we receive the money, the business goes well. The rest of the time, we keep waiting. In the morning, we have good sales from vegetables. Some people receive weekly wages, so they repay our credit and then purchase items. The business is good on that day. However, on the other days, the sales are very low. We receive back whatever loans we have given. They repay on Sundays. They keep buying things daily. We maintain accounts on a card. They give us money on Sundays or Saturday night. Then the next week, we start a fresh account.At least 25 of them take loans. Both of us maintain accounts. Some of them trust us, so we maintain their accounts. Some of them, whom we trust, ask to maintain their own accounts. The rest of them are people who pass by the shop.
We can give credit to those who have been our regular customers. We don't know who the person is when they come for the first time. When they start buying things and promise to pay the money weekly, then we can trust them. We also give them card, which they keep with them.I write the names in the card. Like in this card, the person has to pay 1674 rupees.
We cannot run our business without credit. Not everybody will have money, so when customers request it, we have to help them out.
I and my husband manage the sales on Sundays as well. They patiently buy from us because we offer them credit. We ask the customers who want to buy in bulk to wait for a while and finish with the customers who have come to purchase 1 or 2 items.Our business is not so great that we can hire people. If we are unable to do so, then we can keep somebody. Initially, I was new to business, so we had people. Kids were also young. They did not stay for long and started fiddling with money. When I learned the business, we did not keep anybody for help.
We don't save customers' phone numbers. They generally don't cheat us. If we force them too much to pay the money, then they stop coming to our shop. So, we feel it's okay; we will not pester them for money. At least they will come to our shop. They will definitely give us the money, even if it is late. We have to be patient.
I give credit/loan to good customers. We give them credit. Some return the money, and some don't return the money.
I give credit to customers because we have to trust or else we cannot do business. I am getting stock from Pali. I am in Tamil Nadu and he is from Rajasthan. On which basis does he send? I am living in Tiruppur and give credit to Tiruppur people, then how cannot I trust? He is sending from state to state because he believes in me, right? So I should trust. Only if we trust we can do the business. Without trust we cannot do business.
I stopped giving credit to customers. I have supplied to small shops. I have supplied like this to many customers. Actually one customer cheated me. She is a lady who owned a small textile shop. When she came here for the first time, I said to pay cash for some time and then change to credit. She came and took cash 2 to 3 times. She asked for credit and I gave. It nearly came to 30,000 rupees. When I go to ask for payment she will ask me to come tomorrow and I will return. I went 3 or 4 times and she didn’t pay. Many of them pay cash and take the stock. Those who are regular customers for many years will take it as credit. Some customers will pay correctly to the shop. Some customers will ask to come to the shop every week.