Customer credit (a running tab for regulars) keeps customers loyal, but it is also where many shops quietly lose money. Good credit management is not about refusing credit. It is about knowing exactly who owes what, since when, and when they promised to pay, and then following up every week.
Here is a simple system that works with a paper register or with software.
Why do shops lose money on customer credit?
Most losses do not come from customers who refuse to pay. They come from small, everyday gaps:
- A sale is not written down. Rush hour, a busy cashier, “I’ll write it later”.
- A payment is not written down. The customer paid, but the register still shows the old balance, and an argument follows.
- Nobody follows up. Small balances grow for months until they are too big to collect.
- No date was agreed. “I’ll pay you soon” is not a date.
- Too much credit to one person. One customer owing a large amount can hurt your stock purchases.
- The register is lost or damaged. One spilled drink, one fire or one missing page.
Each of these can be fixed with a habit.
Who should get credit, and how much?
Decide before the customer asks, not at the counter.
- Regulars only. Give credit to people you know: neighbours, long-standing customers, local businesses.
- A limit per customer. For example, a new customer might start with a small limit. Raise it only after they pay on time a few times.
- A default rule for everyone else. “No credit on the first visit” is a fair rule most customers accept.
- Tell your staff the rule. A cashier should never have to decide alone whether to give credit.
Write the limits down. If you use software, set the credit limit on the customer’s account so the counter knows.
How should you record each credit sale?
Every credit sale needs these five things:
- The customer’s name and phone number. Phone numbers are how you find people later.
- The bill, with items and total, not just an amount.
- How much was paid now and how much went on account.
- A promised date. Ask “Which date will you clear this?” and write that date.
- A slip for the customer showing today’s bill and their balance now.
The slip matters. When the customer sees their running balance every time, there are fewer surprises and fewer arguments later.
How should you record payments?
Treat a payment as carefully as a sale.
- Write it against the customer’s name the moment it is received.
- Note how it was paid: cash, card, mobile wallet, bank transfer or cheque. For wallets and banks, write the transaction ID.
- Give a receipt that shows the new balance.
- Never “adjust” a balance by crossing out a number. If something was wrong, add a correction entry with a reason.
What is a promised date, and why does it work?
A promised date turns a vague “later” into a commitment the customer made themselves. When the date comes, you are not chasing; you are reminding them of their own word.
Keep a list of promised payments that are due today and this week. Look at it every morning before the shop gets busy.
How do you follow up without losing the customer?
Make follow-up a fixed weekly routine, not an emotional event.
- Pick one day a week (many shops choose a quiet morning) to go through everyone who owes money.
- Start with the oldest dues, not the biggest. Old balances are the hardest to recover.
- Call or message politely. Mention the amount and the date they promised.
- Ask for a part payment if the full amount is hard for them right now. A part payment keeps the account alive.
- Write down what happened: called, promised a new date, no answer.
- Stop new credit for anyone past their limit or more than a set number of days late, until they pay something.
What is receivables ageing, and how do you use it?
Ageing simply sorts what customers owe by how old it is, for example 0–30 days, 31–60 days, 61–90 days and over 90 days.
| Age of the due | What to do |
|---|---|
| 0–30 days | Normal. Remind at the promised date. |
| 31–60 days | Call this week. Ask for a part payment. |
| 61–90 days | Stop new credit. The owner calls personally. |
| Over 90 days | Agree a written plan of small fixed payments. |
Once a month, look at the total in each column. If the “over 90 days” column is growing, your credit rules are too loose.
What should you do when a customer disputes the balance?
It will happen: “I paid you last month” or “I never took that”. Stay calm and go to the record.
- Show the customer their full statement: every bill, payment and correction with dates.
- Check the original bill for the disputed entry and who made it.
- Ask the customer for their receipt or the card, wallet or bank transaction ID of the payment they remember.
- If you find a mistake, correct it with a reason, and apologise.
- If you cannot agree, settle the undisputed part now and the rest later.
Disputes are rare when the customer received a slip showing their balance every time.
How do you move an old paper credit book into software?
You do not need to type years of history. Only the balances matter.
- Pick a date to switch, ideally the first day of a month.
- Add each customer with their phone number.
- Enter what each customer owes on that date as an opening balance.
- From that day, record every new sale and payment only in the new system.
- Keep the old register safely for reference.
Paper register, credit app or POS: which should you use?
| Option | Good at | Watch out for |
|---|---|---|
| Paper register | Free, familiar, no power needed | No totals, easy to lose, no ageing |
| Phone credit-tracking app | Free or cheap, records credit well | Separate from your bills and stock, so entries can be missed |
| POS with customer accounts | Credit is written by the bill itself, with stock and reports | Costs money, needs a computer |
If you already bill on a computer, keeping customer credit in the same software removes the biggest gap: the credit sale that never gets written down. There is a fuller comparison in credit app vs POS.
How does RMS handle customer credit?
In RMS, a credit sale is part of the bill: On account puts the unpaid part on the customer’s balance with an optional promised date. Each customer has a statement with every bill, payment, return and correction and a running balance, and the payment receipt prints the balance now. Payments can be taken in cash, card or any payment type you add in Settings, such as a mobile wallet or bank transfer; RMS records the payment but does not connect to the wallet or bank. Opening balances can be entered from your old register, and on RMS Pro the receivables show how old the dues are (0–30, 31–60, 61–90 and 90+ days). The Due list shows customers whose promised date has come. RMS does not send SMS or WhatsApp messages; it gives you a calling list. More on the customer credit page and for a general store.
Your customer credit checklist
- Credit rules and limits written down and known to staff
- Every credit sale recorded with a promised date
- Every payment recorded with a receipt showing the balance
- Weekly follow-up, oldest dues first
- Monthly look at ageing
- A backup of your credit records, on paper or digital
Try RMS free for 14 days
Every installation of RMS starts with a free 14-day trial with all Pro features. No card is needed. Download RMS, enter your opening balances, and see every customer’s balance in one statement.