Selling on credit to stores and customers: how to extend credit without getting burned

To sell on credit to stores without getting burned you need three things: a credit limit per customer, a balance that the office and the driver both see the same way, and a fixed collection routine that checks how many days old each debt is. In water delivery, credit (what Mexican businesses call fiado) does not go away. You manage it: you decide how much you lend, to whom and when you stop.

Why credit is unavoidable with stores and canteens

Corner stores, small restaurants, company canteens and offices pay when they get paid. You drop off ten garrafones at a store on Monday (a garrafón is the 20-liter returnable water jug) and the owner pays you on Saturday, once they have sold them. If you insist on cash, the water plant down the street will happily give them credit.

That is why credit is part of the price of doing business with certain customers, especially the ones who buy volume. Lending is not the problem. Lending without a record is.

When the balance lives in the owner's memory, in the driver's notebook and on loose receipts, everyone has a different number. And the same stories keep coming back:

• The customer says they already paid the other driver.
• A cash payment never makes it to the office.
• The balance grows for months and nobody notices until the store closes or changes hands.

One balance per customer, visible to office and driver

Everything rests on a single number per customer. Every credit sale raises it, every payment lowers it, and any adjustment, such as forgiving a debt or fixing a typo, carries a written reason. If that number changes without an explanation, your control is already broken.

The driver needs to see that balance before selling, not after. If they arrive at the stop without knowing what is owed, they can neither collect nor decide whether to leave more product. In Repartamos, for example, each customer's balance shows up at the stop in the driver's app, even without signal, and every payment is applied first to the oldest credit sales.

What the account statement should show

When a customer disputes something, the conversation is settled with their account statement, not with anyone's memory. It should include:

• Every credit sale with date, receipt number and what was delivered.
• Every payment with date, payment method and who collected it.
• Adjustments with their reason.
• The current balance and the garrafones the customer has on loan.

Payments at the stop and the balance on the receipt

Most credit gets collected at the same stop where it was created. The driver records the payment in cash, by bank transfer with its reference, or by card if they carry a terminal and there is signal.

What matters is that the customer keeps proof. A receipt that shows how much they paid and their new balance prevents almost every "but I already paid you" argument. If you send it by WhatsApp, the store owner has their own history on their phone.

Transfers that land directly in the business bank account are recorded by the office with the bank reference. That way nobody gets charged twice and nothing gets lost between the bank statement and the notebook.

Cash from payments goes into the driver's cash box just like sales cash, and it gets reconciled the same day in the driver's daily settlement.

Credit limits: how much to lend and what happens when a sale goes over

A credit limit is not distrust. It is a clear rule that protects both sides. The simplest way to set it is to look at how much the customer buys in one or two weeks.

Suppose a store buys 15 garrafones a week at $30 MXN each. That is $450 a week, so a $900 limit covers two weeks of purchases. If the store pays every Saturday, it should never get close to that ceiling.

A few rules that work well:

1. Every new customer starts with a zero limit, meaning cash only, for the first month.
2. The limit goes up when the customer proves they pay on time, not when they ask for it.
3. Only the owner or the office changes a limit, never the driver.

What if a sale goes over the limit? The healthy setup is that the driver cannot put it on credit on their own. The customer pays part in cash and the rest uses whatever credit is left, or the office or the owner authorizes the exception and it gets recorded. This also protects the driver, who no longer carries the decision or the blame if that money never comes back.

A weekly collection routine and debt ageing

Credit gets out of hand when nobody reviews it on a fixed day. A half-hour routine each week is usually enough for a business with two or three routes:

1. On Monday, the office reviews debt ageing and builds the list of customers to collect from that week.
2. Before heading out, each driver knows which stops have a pending collection and how much to ask for.
3. Each store has an agreed payment day, and collection happens that day, during the visit.
4. On Saturday, compare two weekly numbers: new credit against payments collected.
5. Customers who did not pay go on the owner's list for a phone call.

That fourth step is the most ignored and the most useful. If new credit beats payments week after week, your receivables are growing even while sales look fine.

Debt ageing: 7, 15 and 30 days

Not all debts weigh the same. Grouping balances by days since the sale tells you where to act:

• 0 to 7 days: normal operation. This is a store's weekly payment cycle.
• 8 to 15 days: a friendly reminder at the stop and a payment agreed for the next visit.
• 16 to 30 days: no more credit until a payment arrives; the owner or the office calls.
• Over 30 days: credit is cut and a written payment plan is agreed.

Also check how many garrafones that customer has on loan. An old balance almost always comes with jugs that never come back, which is more money sitting on the street. We cover that in tracking loaned garrafones.

Example: a route with 20% of sales on credit

Suppose a route sells $6,000 MXN a day, six days a week. That is $36,000 a week. If 20% goes on credit, you are extending $7,200 in new credit every week.

In the best case, everyone pays every week. Your receivables hover around $7,200. That is not a loss, but it is money you lend your customers permanently and do not have for gasoline, supplies or wages.

Now suppose payments cover only 90% of new credit. Each week, $720 goes uncollected. Over six months, about 26 weeks, that adds up to roughly $18,700 on top, and much of it is already more than 30 days old. At that age, part of it will probably never come back.

Nobody notices because each week looks normal. That is why you should watch the total balance together with new credit and payments. In Repartamos, the collections report shows the day's payments, new credit and the total balance owed, and the office sees debt ageing per customer.

When to cut credit and how to say it

There are clear signs that a credit line no longer makes sense:

• A balance older than 30 days.
• Payments that keep getting smaller or further apart.
• The customer only pays after being told deliveries will stop.
• The store changed owner or manager.
• They ask for more product while still owing jugs.

Cutting credit does not mean losing the customer. The usual path is to keep supplying them on a cash basis while the old balance is paid off. How you say it matters as much as the decision:

• The owner or the office says it, not the driver.
• In private, never in front of the store's customers.
• With the account statement in hand and exact figures.
• With a concrete way out: a fixed weekly payment.

For example: "Don Ramiro, your balance has been $2,350 for five weeks. Starting today we will keep supplying you on a cash basis, and I suggest paying $400 every Saturday. Once it is back to zero, we will extend credit again."

Quick checklist

• Zero limit for new customers during their first month.
• A limit based on one or two weeks of purchases, changed only by the owner or the office.
• Balance visible to the driver before selling, even without signal.
• Every payment comes with a receipt showing the new balance.
• Monday: debt ageing. Saturday: new credit against payments.
• From 16 to 30 days, no more credit; after 30, cut and set a payment plan.
• Exceptions to the limit are authorized by someone in the office and recorded.