Managing udhaar in a pharmacy without losing money or customers

Udhaar is part of life at a neighbourhood medical store. A family buys BP and sugar medicines every month and pays when the salary comes. A regular customer rushes in at night without his wallet. Good udhaar management means you keep those customers and still get paid. It is mostly about clear rules and clean records, and a little about how you ask for the money.

Udhaar is your money on someone else's shelf

The medicine you give on credit has already been paid for, or will be when the distributor's bill falls due. Until the customer pays, you are funding their purchase out of your own cash. Spread across many customers, a few thousand rupees each can be the money you needed for this week's distributor payments.

None of the rules below are about distrust. They keep the amount you lend at a level the pharmacy can carry.

Who to give credit to

Keep udhaar for people who have a real, repeating relationship with the shop:

• families who buy long-term medicines every month, such as diabetes, BP or thyroid medicines;
• neighbours and local shopkeepers you know by name and address;
• staff of nearby offices or factories who are paid on a known date.

Be careful with first-time customers, large one-off bills, and anyone who asks for more credit while they still owe from last time. A polite "we give udhaar to our regular customers" is easier to say at the start than to take back later. Always take a name and mobile number first.

Set a limit for each customer

A credit limit is the most a customer may owe at one time. Without one, a balance creeps up on each visit until it is too large to ask for comfortably.

Base it on what the customer buys in a normal month and how they pay. Say someone buys around Rs 6,000 of medicines a month and clears the account every salary day. A limit a little above that, such as Rs 8,000, covers a normal month with room to spare. Someone who pays irregularly gets a lower limit, or none. Review limits every few months, raising them for people who pay on time.

Agree a payment habit as well, for example "by the 10th of each month". Later you are only reminding them of what was agreed.

Record every udhaar sale against a named customer

This rule matters more than any other. Every rupee of udhaar should be on a bill with the customer's name on it. Chits in the drawer, notes on a prescription and "I'll remember" all fail sooner or later.

Two habits help:

• Part payments are still udhaar. If the bill is Rs 2,450 and the customer pays Rs 1,000, the remaining Rs 1,450 goes on their account on that same bill.
• Udhaar is never rung up as cash. If a credit sale is billed as cash, the drawer comes out short at closing and the debt is missing from the customer's account. You lose the same money twice.

If you are moving from a paper khata, start each customer with their current balance on day one, and then stop writing in the register.

Advances are credit in the other direction

Some customers leave money ahead, for example Rs 5,000 for a parent's monthly insulin. Record it like any payment. Each purchase then comes out of the advance until it runs out. It saves the awkward "did he already pay for this?" moment at the counter.

Share statements and collect politely

Regular statements stop disputes before they start. Once a month, share each customer's balance with them, with the dates of the bills behind it. When customers can see their own purchases, an argument about the total is much less likely.

When you ask for payment:

• Time it well. Just after their usual pay day works best.
• Speak privately. Mention the balance quietly at the counter or on the phone, never in front of a queue.
• State the figure, not a judgement. "Your account is Rs 7,300 as of today" is enough.
• Make paying easy. Accept part payments, and take cash, bank transfer, EasyPaisa or JazzCash.
• Close the loop. Thank them, and let them see the balance go down.

Aging, or who owes and for how long

The total udhaar figure tells you how much is out. Aging tells you where the risk is. It splits each customer's balance by how long the bills have been due: not yet due, 1 to 30 days, 31 to 60, 61 to 90, and over 90 days.

A customer with Rs 12,000 all in "not due yet" is simply a good regular. A customer with Rs 3,000 sitting over 90 days needs a conversation this week. Work down the list from the oldest balances, not the largest.

What to do about old balances

Old udhaar gets harder to collect every month it waits. For a balance that has gone stale:

1. Stop adding to it. Move the customer to cash only until the old amount is cleared. Serve them as usual, just not on credit.
2. Agree a plan. A fixed amount every week or every pay day is easier for many families than one large payment.
3. Keep it friendly. An old balance can come from a hard month rather than bad intent, and a customer who clears it slowly and keeps buying from you is worth keeping.
4. Decide, don't drift. If a balance truly will not be paid, make a clear decision and ask your accountant how to treat it, instead of carrying it for years.

How MediPOS handles udhaar

A paper khata records credit after it is given. It cannot stop a bill that goes over the limit, and it cannot tell you who is 60 days late without an evening with a calculator. MediPOS does both, as part of its pharmacy management system.

Each regular customer has a record with a mobile number, a Credit limit (Rs.) and Pays within (days). A limit of 0 means no udhaar. Your paper khata balance goes in as an opening balance when you add the customer, or a whole register can be brought in with Import data.

At the POS, the cashier presses F4 and picks the customer. The panel shows what they owe and their Udhaar room: the limit minus the balance, plus any advance. Whatever the customer does not pay goes on their account and prints on the receipt as On account (udhaar). If a bill would take them over the limit, the POS refuses it. Only staff with the Exceed customer credit limit permission, the Manager role by default, can complete it anyway. Without a named customer, an unpaid amount stops the sale, so udhaar cannot slip through as a walk-in bill.

Payments go in with Receive payment on the customer's page, by cash, bank transfer, EasyPaisa, JazzCash or card, with the transaction ID for bank and wallet payments. Each is matched to the oldest unpaid bills first. Anything beyond the balance is kept as Advance held and used on the next bill.

The customer's khata lists every udhaar sale, payment, return and opening balance with a running balance, and each sale links to its invoice. The Udhaar — who owes you report splits every balance into the aging columns above and can be printed or downloaded for Excel. MediPOS does not send SMS reminders, so use the report to see who is late and call them on the number saved with the customer. Customers and udhaar is a module; see which plans include it on the pricing page.

Common questions

How much udhaar should a small pharmacy give in total?

There is no single right figure. A useful test is whether you could still pay this week's distributor bills if nobody paid their udhaar for a month. If the answer is no, tighten limits before taking on new credit customers.

A customer disputes their balance. What should I do?

Go through the statement with them bill by bill, with dates. Look for one forgotten bill, or a payment handed to someone who did not record it. In MediPOS each udhaar sale in the khata opens its invoice, and a duplicate receipt can be reprinted.

Should counter staff be allowed to give udhaar?

Yes, within each customer's limit. Going over the limit should need the owner or a manager. That keeps the counter quick without letting the total grow unnoticed.

Can a customer pay part by JazzCash and part in cash?

A MediPOS bill takes one payment method. Take the cash on the bill, let the rest go on the customer's account, then record the JazzCash amount straight away with Receive payment.

Related reading

• Customers and udhaar (credit sales)
• Reports: sales, stock and aging
• Daily cash closing at a medical store
• Distributor bonus schemes and your real profit