MoneyStock
When you cannot pay a supplier bill on time
The bill is due Thursday and your money is in customers' pockets. What to work out first, what to say on the call, and which supplier to pay before the rest.
Call the supplier before the due date, never on it. Work out three numbers first: what you can pay on the day, how much is short, and when the rest arrives. Then offer the largest honest part payment with one dated promise you can keep. Silence costs far more than the shortfall.
Why saying nothing is the expensive choice
It is Tuesday, close to ten at night. The shutter is half down. You have counted the galla twice and it says Rs 21,000. Being honest about what the counter will take on Wednesday and Thursday, that is another Rs 17,000. So by Thursday you can put Rs 38,000 on the table. The bill from your wholesaler is Rs 60,000.
You are short Rs 22,000, and you know where it is. It is in eleven customers' pockets: sugar, oil, tea and washing powder that walked out of your shop, every rupee real, none of it in your hand tonight.
The common move now is to do nothing and hope Wednesday is a big day. Thursday at nine the motorcycle stops outside, the man asks for Rs 60,000, and you explain at your own counter in front of a customer buying bread, with no plan and no date. You sound like a man who did not know his bill was due.
That is the real loss. Not the Rs 22,000, which was always going to be short. What you spent that morning was your standing, and standing sets your rate, your limit and how much stock a wholesaler hands you on trust for years. It is the quiet cost under buying stock on credit.
Stand on his side. He supplies forty shops and all forty are short at some point, so that is not what he is judging. He is judging one thing: does this man know his own position. Somebody who calls and says "Thursday's bill is Rs 60,000, I can hand you Rs 47,000 on the day and Rs 13,000 by Tuesday" counted, and is not hiding. Somebody who says nothing until the collector is standing there looks like a shopkeeper whose books are a mess.
A wholesaler does not just note that and move on. He prices it. Slower credit, a shorter limit, less patience on the next order, and a rate that quietly stops being the best one he gives. Nobody tells you. You notice, a long way down, that the shop on the next street buys cheaper. People forgive a shortfall. They remember an ambush.
Three numbers and one date, before you touch the phone
Never call with a feeling. "I am a bit tight" is not information, and it invites the reply that you should manage it somehow.
The first number is exactly what you can pay on the due date. Count the galla and the mobile account, add a sober guess at two days of sales, then subtract the rent, salary and light bill falling in the same days.
The second is exactly how much is short. Bill minus the first number. One line of arithmetic that most shopkeepers never write down, which is why they enter the call unable to say it aloud.
The third is what you can add before the promised date. Go through your open udhaar balances and mark the names you can genuinely collect from inside the week, not the ones you wish would pay up.
The date is last and matters most. Pick one you can hold even if the week goes badly. If you think Monday, say Tuesday.
Say the bill is Rs 60,000 and Thursday is the date
See what that arithmetic did. It turned "I am Rs 22,000 short" into "Rs 47,000 on Thursday, Rs 13,000 on Tuesday". A problem handed over became a plan handed over.
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The call itself, and what you must not say
Make the call yourself, early enough in the day that the man has room to think.
Open with the bill, because it proves you know it. Not an apology, not your troubles. "Thursday's bill is Rs 60,000." Say the amount before he does.
Second, what you will pay on the day. "I can hand over Rs 47,000 on Thursday." A part payment on the due date is what keeps a supply line open. It proves the shop is working, which is nothing like zero.
Third, the balance and the date together. "The remaining Rs 13,000 by Tuesday." Never leave that as "in a few days".
Fourth, where it is coming from. "Two customers pay me on their salary day, which is Monday." Suppliers relax when they can see the source. Then stop talking and let him answer.
The call, in the order that works
Say this
- "Thursday's bill is Rs 60,000." The amount, before he says it.
- "I can hand over Rs 47,000 on Thursday."
- "The remaining Rs 13,000 by Tuesday."
- "Two customers pay me on their salary day."
Never this
- "I will try to arrange something."
- "Give me a few days." No date is not a plan.
- A long complaint about how bad business is.
- A date you picked only to end the call.
The sentence that costs more than the whole shortfall is a date you cannot hold. Promise Saturday to end an awkward call, then miss it, and you were not short of money, you were unreliable. Those are two different files in a wholesaler's head. A man who is short but exact stays a good customer. One who promises and slips gets his limit cut.
When you cannot pay all of them
Sometimes two bills land in the same week and there is enough for one and a half. That choice deserves ten minutes of thought, not whoever shouts.
Pay first the one who supplies what you cannot sell without. If your shop stops working when his goods stop coming, he is not a supplier, he is the shop. The flour man, the milk man, the item everybody walks in for. Three closed days of that cost more than the bill.
Pay second the one whose credit you will need for the next order. Ask which line you cannot afford to have closed when it is time to buy.
Pay third the one whose relationship took years to build. Some suppliers you can annoy and recover. With one or two, once trust goes it does not come back.
The loudest is almost never the right first answer. Pressure is a habit some men have, not a measure of how much you need them. Call all of them anyway: the ones getting nothing still get a figure and a date, and that call keeps them available later. It is also the argument against living at the mercy of a single line, weighed up in one supplier or several.
The money is sitting in your customers' pockets
A supplier problem is nearly always an udhaar problem wearing different clothes. You did not spend the Rs 22,000. You lent it out in twenty and fifty rupee pieces to people who walk past your shop daily. So a shortfall should set off two things, not one call.
The first is a collection plan with names on it. Open your khata and pull the balances that are both large and reachable. Say four names: the one on salary, the one whose son buys cigarettes every evening, the steady payer who is simply slow, and the one whose balance grew past anything you meant to allow. Go to those four today, not on Thursday, and ask each for a specific amount rather than "whatever you can". Most people pay something when a clear figure is put to them politely, which is the method behind recovering udhaar.
The four days that decide it
- Tuesday nightCount the galla and work out the exact gapRs 22,000 shortDue
- Wednesday morningCall the supplier with three numbers and one dateNo money movesDue
- Wednesday, all dayCollect from the four names you markedRs 9,000Paid
- Thursday, the due datePart payment handed over, in personRs 47,000Paid
- The following TuesdayThe promised balance, on the promised dayRs 13,000Paid
The second is a limit review. If Rs 74,000 of your working money is out on udhaar while a Rs 60,000 bill falls due, one slow week tips the shop over. That is a limit nobody ever decided.
A shop that counts its cash every evening sees Thursday's problem coming on Friday, which is the real payoff in why your cash box never matches your khata.
The three ways out that make it worse
The first is borrowing at a bad rate to cover a bill you could have talked about. Somebody in the market will always lend you Rs 22,000 fast and on terrible terms, and you hand back far more than you took to avoid a five minute conversation that would have cost nothing.
The second is selling stock below your own cost for quick cash. The money appears the same day. You lose the margin, you lose the item off the shelf, and you must buy it again at the price you just sold it under. The hole is now bigger.
The third is the most common and the most dangerous: paying one supplier with the money that belongs to another supplier's goods. It works once. It hides the cause and pushes the shortfall into a later week where it will be larger. Shops rarely fail from one bad month. They fail from three years of moving the same hole forward. The test is simple: if the way out makes the coming weeks harder, it is not a way out.
After it is settled, and how you get your standing back
The same Thursday returns unless something changes. Match your buying cycle to the money that actually comes back. If your customers mostly pay around the tenth and the end of the month, taking a large delivery on the first is a decision to be short every time. Move the order, or split it. Two smaller deliveries that land where the money lands hold a shop up better than one big cheap one, the trade weighed in bulk or little and often.
Keep a small cushion and treat it as untouchable. Even Rs 10,000 that may not be spent turns a crisis into an inconvenience. And know your due dates a week ahead: write every supplier bill with its date somewhere you look each evening. The Tuesday panic exists only because the bill was a surprise. That is where how much your shop must sell before you earn becomes a working number.
Keeping udhaar and supplier balances in one place makes this a few minutes instead of an evening. Wasoolo shows what customers owe you and what you owe suppliers on the same screen, so on Tuesday night the bill, the balances and the names worth calling are in front of you.
As for a supplier you have already disappointed: it is recoverable, and slower than people expect. One clean payment does not fix it. Three or four cycles of paying exactly on the date you named, with no drama and no reminders, is what it takes for the caution to leave his voice. Then let the payments say it.
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Common questions
How many days before the due date should I call?
Two or three days is the useful window. Earlier than a week and your figures are still guesses, so you risk promising off a number that moves. On the day itself is too late, because he has already counted your payment into his plans. Counting Tuesday night for a Thursday bill leaves room for both of you.
The supplier says he wants the full amount or nothing. What now?
Pay the part anyway, on the date, and tell him it is against that bill. Refusing a part payment is usually a negotiating position rather than a real one, and money in hand changes the tone. Then hold your promised date exactly. If he still hardens, that itself is useful information.
Should I explain that my customers have not paid me?
Say it in one short line, then move straight to your numbers. A brief reason is human and fine. A long story about which customer let you down makes the shortfall sound out of your control, and control is the thing you are trying to show him.
Is it better to skip a small supplier and pay the big one in full?
Only if the small one genuinely does not matter to you, and that is rarer than it looks. A supplier ignored without a phone call remembers it, and small suppliers are often the flexible ones you need when things get tight. Pay something to each, and call everybody.
Should I take a delivery I cannot pay for while the old bill is open?
Not on the same terms. Adding a second bill on top of an unsettled one turns a manageable gap into a permanent one. Take a smaller quantity, or the fast moving items only, and clear the old bill first. Ask plainly for a lighter order until it closes.
How do I stop the same week repeating every month?
Attack it from both sides. Tighten the udhaar limits on the two or three balances that keep growing, and move your buying so the delivery lands after your collection, not before it. Then hold a fixed cushion you never touch. Any one helps; all three end it.