MoneyInstallments
Working out how many qist plans your shop can carry
Every running qist plan holds a slice of your working money. Here is how to add up what is locked, work out your own ceiling, and still be able to buy stock.
Add up what every running qist plan still owes you. That one total is the share of your own working money sitting in other people's houses. Your ceiling is the point where handing more of it out stops you restocking. Work that figure out from your own buying and your own fixed costs before you sign the next plan.
The deal you had to walk away from
It is a Tuesday morning and the supplier's man is in your doorway with an offer. Thirty ceiling fans at Rs 2,100 each instead of the Rs 2,600 you normally pay. Cash today, delivery tomorrow, and he goes to the next street after you.
Rs 63,000 buys stock that would otherwise cost Rs 78,000. The cleanest Rs 15,000 of your season.
Then you open the drawer. Rs 19,000, and Rs 12,000 of it belongs to the electricity bill and the rent going out on Friday. You tell him you will call, and both of you know you will not.
What stings is that your book has never looked healthier. Customers owe you Rs 335,000. You are richer on paper than ever, and you could not put together Rs 63,000 for a deal that pays for itself in a fortnight.
Nobody has cheated you. The money is spread across eleven qist plans, coming back in slices of Rs 1,500 and Rs 2,000 a month. It will all arrive. It just will not arrive by Tuesday afternoon.
The number nobody works out
Every shopkeeper knows his plans one by one. Rashid owes eight more payments on the motorcycle. The tailor has four left on the machine. Almost nobody adds them together, and that sum is the most useful figure in an installment business. It is the exact amount of your own working money you have handed out and cannot touch.
It takes five minutes. List every plan still running, write against each only the balance still to come in, never the original price, and add the column.
Say you count your working money on a quiet Sunday
Put it beside two other numbers and it speaks. Count the stock on your shelves at what you paid, not your selling rate. Count the cash in the galla and your account. Those three are your working money, and the plan column shows what share is out of reach.
Write the total on the inside cover of your register with the date beside it. A month later, write another under it.
What that money has to share the shop with
Locked money is not wrong. A qist plan is how a small shop sells a Rs 30,000 item to somebody who could never hand over Rs 30,000, and the one-time profit you added when you built the plan is genuine earning. The trouble is that plans compete with three other calls on the same rupees, and they always shout loudest, because a customer is standing there wanting one.
The first call is restocking. Sell Rs 200,000 of goods in a month at a buying cost of three quarters, and Rs 150,000 must leave your hands every month just to keep the shelves as full as they were.
The second is fixed costs. Rent, electricity, the helper's salary, transport, small repairs. That figure barely moves whether trade is good or bad. If you have never separated it out, how much your shop must sell before you earn is where to start.
The third is a cushion, and everybody skips it. Collections are not level. Four customers come short in one week, a season empties the street, a supplier wants his old balance cleared. A shop without one turns a slow fortnight into a crisis.
Your ceiling is whatever is left once those three are honestly funded. That is the whole calculation, and nobody can hand it to you: your rent, your buying and your collection habits are not those of the shop across the road.
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The better test: what comes back every month
The locked total is blunt on its own. Two shops can each hold Rs 200,000 in plans and be in completely different positions.
Say one shop's eight plans return Rs 3,000 a month each. That is Rs 24,000 in the drawer every month. The other has twenty small plans returning Rs 800 each. Same Rs 200,000 outstanding, but Rs 16,000 a month coming back, spread across twenty people who can each fall short.
So the better test compares two monthly numbers, not two totals. What comes back from your plans in a normal month, against what you must spend that month on stock and fixed costs. Rs 24,000 returning against a Rs 170,000 outgoing carries real weight. Rs 6,000 against the same outgoing is a slow drip, and you are financing it out of everything else.
Work the inflow out the same way. List every plan, write only what it pays you in a month, add the column. Now two figures describe your whole installment book: what is locked, and what comes back.
One warning about the inflow. If collection is patchy, it is a promise rather than a fact, which is why the habits in when a qist is missed, what should you do matter more as your book grows.
Plan length is the real lever
The size of the item is not what decides how many plans you can carry. The length of the plan is.
Say a customer takes a fridge priced at Rs 24,000. On twelve months with Rs 4,000 down, Rs 20,000 leaves your working money and returns at about Rs 1,667 a month. Four months in, Rs 13,332 of your money is still sitting in his kitchen.
Give the same fridge on six months with Rs 6,000 down and the shape changes. Rs 18,000 goes out and returns at Rs 3,000 a month. Four months in, only Rs 6,000 is still out. Same item, same shop, less than half the money tied up at the point where it hurts.
Say the same shop shortens its plans from twelve months to six
A longer plan feels kinder and sells more easily, which is why shopkeepers drift towards it. Nobody says out loud that it holds your money twice as long. Two customers on six months use the money one uses on twelve, and you earn from both.
The down payment works from the other end. It never leaves your hands at all. Lifting a Rs 4,000 down payment to Rs 6,000 across ten plans keeps Rs 20,000 in your drawer, most of that Tuesday fan deal. Ways to ask are in take an advance before you order it, and the same words work for a qist plan.
Down payment and length are the two dials you actually control. The customer negotiates on the monthly figure and rarely minds which dial you turn to reach it.
Making room without turning anybody away
Once you know your ceiling, the question stops being whether to give plans and becomes how to keep space free for the next good customer.
Close the old ones first. Every book has two or three plans nearly finished for months, with Rs 2,500 left on them. Spend a week on exactly those. A closed plan frees its slot, and the customer who clears one is the likeliest to start another.
Stagger the start dates. Sign four plans in one good fortnight and all four end together, with a long stretch between where the locked total is heavy and there is no room. A plan should finish most months, not four at once twice a year.
Ask for a bigger down payment as you near your ceiling instead of refusing. This move saves the most customers, because it turns yes-or-no into how-much. Well inside your ceiling you take Rs 4,000 down. Close to it, the answer is Rs 8,000, and half the customers simply find it.
Shorten before you refuse. If he cannot manage more down, offer six months instead of twelve at the monthly figure he was already ready to pay. Many say yes at once, because the monthly number is the one they check.
When you genuinely have no room, give a date rather than a refusal. Two plans finish in six weeks. Tell him that: the item is his, his name is down, you will call the day space opens. A customer given a date comes back. One given a flat no goes to the shop that said yes and stays there. For a smaller item, udhaar or qist on a big item may serve him without a plan at all.
The monthly look at your whole book
Once a month, on a quiet morning, put the whole plan book in front of you and look at three things. Twenty minutes, and it decides whether you run your installments or they run you.
The twenty minutes you give your plan book once a month
- Add up the balance left on every running plan and write it under the previous total.
- Add up what those plans pay you in a normal month.
- Put that monthly figure against your buying plus rent, salary and bills.
- Count how many plans sit on one street, one trade or one kind of item.
- Mark the two plans closest to finishing and chase only those this fortnight.
- Decide before anybody walks in whether you have room for a new plan.
First, the locked total beside the one you wrote before. Rising is not automatically bad, since a growing shop keeps more money working. Rising while the shelves empty is the warning, and it shows here months before anywhere else.
Second, the monthly inflow against your monthly outgoing. If what your plans return has stopped covering a meaningful part of what you spend, you have been signing longer plans without noticing.
Third, concentration, and this one catches people. Count how many plans sit on one street, in one trade, or on one kind of item. Twelve plans spread across a bazaar is a book. Twelve given to men who all drive rickshaws is a single bet. When that trade has a bad stretch every one of them slows in the same week, and no ceiling arithmetic protects you.
The fix is slow and simple. Cancel nothing. Stop adding to the crowded group and put the next few plans elsewhere. The same care applies to supplier credit stacked on top of it, as in how to buy stock on credit without choking cash.
If your khatas live in Wasoolo, the plan balances and the month's expected collections are already added for you, so the review takes two minutes instead of an evening with a calculator. The tool is not the point. A pencil and the inside cover of your register do the same job.
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Common questions
What share of my working money is safe to keep inside qist plans?
No single figure fits every shop, and a number copied from elsewhere will be wrong for yours. Fund your monthly restocking first, then your fixed costs, then a cushion of two or three slow weeks. Whatever remains is your ceiling. A shop that restocks heavily carries far less than one selling slow goods.
I already have more locked up than I am comfortable with. What now?
Cancel nothing, because a running plan is money on its way back to you. Stop opening new plans for a few weeks, chase the two or three almost finished, and raise the down payment on anything you sign. The total falls on its own as payments arrive, and the drawer loosens in two or three months.
Should I count plans that are running late in the same total?
Count them in the locked total, since the money is genuinely out. Keep them out of your expected monthly inflow until they pay properly again, because a payment that has not arrived for two months should not sit in a figure you buy stock against. Two columns stop a hopeful number becoming a purchase.
A very good old customer asks for a plan when I am at my ceiling. Do I refuse?
Refusing outright is the expensive answer. Offer a shorter plan at the same monthly figure, or the same plan with a larger down payment, and say plainly that two plans finish in a few weeks and his name is first. Old customers accept a date. They do not accept a flat no with no reason.
Does asking for a bigger down payment drive customers away?
A few walk, and they are usually the ones whose payments would have been hardest to collect. Most stay, because the down payment is money they were going to spend on the item anyway. Ask plainly at the counter, before any numbers are written, and treat it as a normal part of the plan.
How often should I add up my locked total?
Once a month is enough, on the same date each time so the numbers stay comparable, plus one count before any large stock purchase. The value sits in the comparison, not in one figure. Three totals written under each other tell you whether your book is growing at a pace your shelves can bear.