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Trade on credit often motivates customers to pace up and increase the amount of their spending that otherwise may not be possible. Some businesses choose to offer credit and gain a competitive advantage in the industry. Maintaining a balance between increased sales and the risk of reduced cash flow is a significant part of risk management in your business.

Considering the nature of your business and number of transactions, you may choose not to offer credit to new customers. Before offering a credit facility, understand the following.

 

What sort of risk comes along with offering credit

 

• Reduction in cash flow

Waiting for customers to pay reduces your ability to order new sets of inventory from suppliers. Many businesses also consider debt financing to reduce this risk.

 

• Reduction in profit margin 

Providing credit sales often reduces your profit margin and the worst part is, the cost of this only appears in your financial statement. So, you better study the pricing of your products and services before they backfire.

 

• Large debts

Several outstanding debts can pose a risk to your business. This particularly happens if you are exposed to various single transactions.

 

Perform A Credit Check

A credit check is one of the strategies you can use to fix the risk of bad debt. Before you sell goods on credit, have them complete some sort of contract and sign a credit application form to denote consensus.

 

What to collect from individuals:

• a confirmation that they have read and understood the terms and conditions and have agreed to abide by them
• Identification of customers and their contact details
• Permission to conduct a credit check when necessary

 

What to collect from corporate clients:

• comprehensive information of all owners, directors or partners
• 3 trade credit references, at least
• Confirmation of the applicant to ensure they have read and understood the terms and conditions and have agreed to abide by them.

 

Another way to perform a credit check easily is to automate the process. Preferably for small businesses that sell to individual customers every minute. 

A credit management application to note down every transaction as soon as it takes place and sends a message to the customer mentioning the details of the transaction and the deadline to pay their dues.

Udhaar App is a simple, easy, and reliable business application for personal and commercial use that manages your daily business khata efficiently and offers features such as free SMS reminders, daily, weekly, and monthly account statements, notes, and whatnot.

 

Keep a track of debtors

You can either use Udhaar App if you want to be things as simple or you can use a good filing system to keep track of customers. This will assist you to follow up outstanding payments and keep balanced cash flow.

This article will cover some of the best ideas for you to steal and implement in your business for faster growth. They are all practical ideas from the most successful businesses along with some action steps you can imitate and run with right away, without any research, test, or otherwise delay implementing. Moreover, there’s no need to spend money to see them into action.

 Pick the easy ones that are most effective for your business, and don’t hesitate to contact us if you face any problem or have difficulty implementing them because this is the time when we all have to work together.

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To ask for payment professionally, businesses, whether small or large, should always forward their payment requests using polite tone but in a straightforward language. Give the client the benefit of doubt and make sure they received the invoice in question. Small businesses should follow up periodically by email to ask for payment and if the client still does not clear the outstanding dues, the next step should be to speak to the customer by phone before considering cutting off future relations with the client or filing a lawsuit.

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A while ago, two budding developers designed an exceptional problem solver for the age-old hassle and named it Udhaar app. To date, Udhaar app has acquired thousands of daily users and monetary transactions are recorded in millions of rupees. 

The store owners turned down the old and traditional paper clutters, and handwritten records because certainly, the loss was insufferable for the ones counting on the funds from several unknown customers who bought goods on credit along with a promise to pay the outstanding amount in a couple of days. Unfortunately, those customers didn’t show up only until the store owner himself suffered the debt. 

This unforeseen situation has put the small business owners out on the frontline thinking about a way out. This is when businesses realize that they need a digital solution. Paper registers and journals are the sorts of notes that you prepare and never look back to them. However, records on your mobile phone will be much more accessible and secure. 

The problem at hand marked the day for the Udhaar app. And since day one of the app launch, the popularity never stopped growing. People believed that they can trust Udhaar app with all their valuable information because the return had been improved dramatically. The security they found was mind-blowing and reliability spoke for itself. 

 

The Turning Point

Udhaar app is certainly not only for the forgetfulness of the people but it’s much more than that. Udhaar app gained popularity all because of the underlying features. Let’s go through them and understand the functionality.

 

Top-Class Management

Regular audits regarding the debts of your business are mandatory, but doing it manually is stressful and time-consuming without the use of technology. Your business could face trouble if payments are delayed or customers have defaulted and you could eventually go bankrupt. Oscar Udhaar, helps you keep track of your customers’ payment schedules and receive payment on time.   

 

The Invincible Errors

Without an advanced credit management app, your business has to manually review data and identify errors. In addition to this taking an unnecessary amount of time and energy, the risks associated with human error and data theft are significant. Thanks to Oscar Udhaar, hiring additional employees to analyze data is no longer needed and the risk of human error also diminishes. When you upgrade to an automated application, you are ensured that all data is entered into the system accurately and can be extracted on demand within minutes.

 

Safety and Security 

Protecting your customer’s data is a serious concern that requires your full attention. Your customers trust you with their phone numbers, business records, and other important information. Any mishap with this data and your customers get affected by identity theft or financial fraud. Moreover, the organization may have to face a public relations controversy and be exposed to lawsuits. Fortunately, Oscar Udhaar keeps all your customer information in the high-security cloud base and saves the information as soon as entries are made. It is a paperless process that can save your business good amounts of money otherwise spent on consultation.

 

The moment you start selling on credit, your sales become a mix of cash and credit. Some customers would prefer to pay cash while others would like to buy on credit. Selling on credit is a significant yet unavoidable part of every business. whether it be a small or large business, some factors will always push you into selling on credit/Udhaar. 

There could be multiple reasons why it becomes necessary to sell on credit. For instance, you may want to build a relationship with the customers, you may want to work on customer loyalty or retention or it may be a result of a competitive environment.

When you see your competitors offering credit purchase, it becomes even more difficult to decide whether to offer credit or not. Well, certainly you are left with no choice because of the possible threat of losing customers to rivals. 

Selling on credit is a habit – good or bad, that’s for you to decide – you get stuck with the moment you make the first credit transaction. Therefore, before you finalize your decision to sell on credit, you must dig deep into your decision and your future outcomes. 

 

You may have to check loyalty or trustworthiness of the customers you are dealing with and for that the basic requirement is the background check on their credit history. It’s easier for big brands since they already have the data required. On the other hand, small businesses may rely on their gut feeling or past experiences. 

 

Are Credit Purchases Right for Your Business?

Here are some pros and cons to help you decide.

 

Pros of Offering Udhaar

Gain More Customers

With more than one payment option, more customers will be able to buy from you. And, many customers prefer credit. You invite a whole new market of customers by allowing Udhaar. Offering an easy payment solution encourages customers to return to your business.

 

Get People Talking

Introducing something that benefits customers will always spread a positive word. If you decide to accept credit payments, spread the word and don’t be shy. Let your current and prospective customers know about your new plans.

 

Encourage Bulk Purchases

You are more likely to sell expensive products if you accept credit purchases. Selling large items becomes much easier if you allow customers to pay you later. 

 

Portrays Business Stability

Providing convenient payment options to customers makes your business appear more legitimate and established. Unlike a new, unproven business that is not financially stable to offer credit. 

 

Stand Up Against Competition

Selling on credit to customers gives you the competitive edge you need, not all businesses are capable to do that. Offer credit to give your customers and give a signal to your competitors that you’re growing.

 

Cons of Offering Udhaar

Missing Payments

The biggest risk  comes from giving credit to people who don’t return the favor. There are many customers who will pay on time, but there are also some who will always be late. 

 

Diligent With Records

Your accounting will play a significant role when offering credit to customers. You’ll need to create seperate accounts for each customer who buys from you. And, you need to track the numbers well, how long each customer takes to repay, how often they purchase on credit, and more.

 

Slow cash flow

You don’t have quick access to cash when you sell on credit. Instead, you have more products going out than money coming in. A stagnant cash flow will impact your ability to pay bills, especially when customers repay late.

 

A Simple Solution

All the cons you studied can be overcome and tamed with the help of a simple mobile application for credit management. For example, Udhaar App.

Udhaar app is a simple, free, and reliable platform to manage all your credit problems. Nothing to worry about if you have already started selling on credit. It’s very easy to use. Once you create a customer account and add an entry, Udhaar app will send an automated text to your customer informing them of outstanding balance. You can use it in different languages, prepare customer reports for week, day or months, send them reminders and what not.

 

Should you offer credit to customers?

Overall, the final decision about offering credit to customers should be yours. Remember, you don’t have to sell on credit to everyone. Many stores keep credit checks using the Udhaar/Khata app and only offer credit to customers who have proven they can make payments on time.

  

Purchase on credit is a common practice in Pakistan. No matter the size of your business, people always have that bunch of clients who are used to paying late. Whether it’s a customer who constantly crosses the deadline or that one-timer who completely gets away with it, dealing with these customers can be pretty stressful.

Though it’s not a recommended practice for any business to sell goods on credit, however, sometimes owners get lucky and those one-timers become life-timers. Moreover, there are several examples of businesses that solely run from trade on credit. 

 

Reasons Why Customers Pay Late

 

Low Priority

• You probably won’t like it, but you may not be your customers’ first priority. Same as you do with your business, your customers value their debts according to how significant they are to their work. If your product/service ranks low, you’ll get paid last.

 

• Sometimes there’s a simple explanation for pushing deadlines – like a dysfunctional finance department. Despite your repeated reminders to collect payments, they simply don’t have any knowledge, when it’s due, or where it’s supposed to go.

 

Lack of Urgency

• Extreme leniency with a customer can drive a lack of urgency. Sometimes, they might take you for granted and feel like they can get away with it. They know that the consequences are minor and would rather settle other debts that have negative outcomes.

 

 Tough Times

• This is one of the troublesome moments when you realize you can’t do a lot to force them into paying. Your customer is going through a difficult time where sales have reached the bottom and they don’t have resources to pay you. 

 

Here’s How You Deal With It

Understanding the reason behind late payments is only the first step towards achieving a resolution. Once you recognize where customers are coming from, you’ll be able to make better choices for your business.

 

State Your Terms Up Front

Consistent on-time payments start with setting clear conditions on the front end. Before you start any project, the client should exactly know the cost, when the payment is due, and what happens in case of a breach.

By clearly mentioning the terms and getting the customers to agree to them, you minimize the chances of excuses. After all, it’s much difficult for a client to feign ignorance when there was a clear conversation about the issue.

 

Personalize the Follow Up

 Any type of follow up is better than no follow-up, but be careful when sending automated emails or phone calls to clients. While they prove to be a decent reminder to the customers, they don’t do much in terms of provoking urgency. By personalizing the follow-ups, you make sure they know that there’s a face behind the late invoice and encourage them to step up and make the run for it.

 

A Little Help From Technology

You can go take the harder way or you can think about it and work smart. There is a possibility that you keep on sending automated emails and phone calls to your customers and they still don’t respond. Maybe these emails are the reason this matter loses its urgency or becomes less important to clients. 

The easiest solution for me is a mobile application that keeps records of all your transactions and sends auto-reminders to customers to pay their debts. These aren’t just auto-reminders, you can customize your message with a little bit of love and simplicity and send it to your clients without any hassle. You won’t even know it and would get your payback even before the deadline. One such app is the Udhaar app.

Udhaar app is an online ledger (like an online khata or journal) to record your outstanding debt, and send auto-reminders to customers to fasten Udhaar collection. It’s your business’ personal Khatabook that holds every little information about your transactions. Udhaar is an easy, safe, and reliable app with amazing features like reporting, multi-language support, data backup, offline mode, and many, many more. 

 

  

 

There are a lot of troubles that come with being a business owner or running an organization. Managing and organizing business paperwork – seemingly easy tasks –  shouldn’t be one one of them or shouldn’t be there at all.

Several entrepreneurs find themselves shackled with documents. These can be contracts, financial statements, spreadsheets, reports, employment applications and records, insurance policies, invoices – you name it. From the important to the minuscule, the paperwork clutter seems never-ending.

Bringing some management to your important documents can give you increased clarity about what’s in the drawer, what’s in the trash (and what’s missing) and a greater supervision over the administration of your business. Moreover, you can stress less when you are actually looking to find something.

Let’s establish a system that you can work with. Here are some of the very common yet important steps to enhance your paperwork management from messy to meticulous. 

 

Get the Equipment You Need

Out of the chaos, the last thing you want is to scatter all your documents across the desk just to realize you can’t find what you need to get the work done. So, before you get on to work, ensure you have access to all the requirements. The items include:

• Shredder
• File folders
• Filing cabinet
• Label maker or labels
• Safe for important documents

What you require is dependent upon your existing system, organization, and goals. The point is to ensure you’re all set for the task before diving right into it.

 

Create Viability

Consider this your rule of thumb of organizing paper clutter: The lesser you touch a piece of paper, the better. That means you have to come up with a system to file those documents before you start sorting them out.

There are numerous different options  to categorize them:

• By client or customer
• By year or specific time frames
• By category (finances, hiring, legal)
• By type of document (contracts, invoices, financial statements)

A good filing system should be intuitive. So, if you’re struggling to figure out the approach to tackle this, ask yourself: What would I first search if I were looking for this item in the future?

Whatever system you create for your documents, use the same one for your soft copies (computer files). You will eventually identify the most suitable approach to managing and separating those documents. Your future self will thank you.

 

Begin With One Area at a Time

You probably have documents scattered at a lot of different places. Perhaps there’s your filing cabinet, the growing pile on your desk, your tangled web of computer files, plus all of the important paperwork that’s hanging out in your email inbox.

This can feel overwhelming, so make the process more manageable by starting with one area at a time.

Tackle that filing cabinet first before moving onto the loose papers scattered around your office. Doing so means you’ll conquer this project methodically, avoid missing anything important, and maintain a cohesive system as you move through each of these storage locations.

 

Easy Way Around

If you can’t do it the harder way then do it smartly. Leave everything aside and trust the technology. When I say the word “technology”, I certainly don’t mean software, programs, coding, design, and, etc. 

What I simply trying to say is, look around there are easy things available everywhere like simple mobile apps. For instance, Udhaar app.

 

About Udhaar App?

Udhaar, a simple tool for personal and commercial use. Udhaar app manages credit (Udhaar) with customers and suppliers.

Udhaar app is an online ledger (like an online khata or journal) to note your outstanding debt, and send reminders to customers to improve collection and cash flow. It’s an easy, safe, and reliable app with outstanding features like reporting, multi-language support, data backup, offline mode, and many, many more. 

 

Steve Jobs wanted to start a little computer company in his garage and was dropped out of college to do so. Mark Zuckerberg, a student of Harvard, launched the first iteration of Facebook from his dorm room. 

The fact that every successful entrepreneur’s route to destination looks a bit different, there are universal tactics that can help drive everyone with small ventures on the right track. Here are some of the significant ways to follow when you start your own small business.

 

The Big Idea

It doesn’t matter how small or big your imagination is, the idea must be a game-changer. The ugly truth is, overnight ideas never work. You have to give it some time, some thinking, and some planning. Look at it for a long run, you can’t just push everything you thought last night lying on your bed.

So, have a pretty good idea of what you’re getting into before you implement it. Keeping in mind that it is not a 9-to-5 occupation. You have to work both hard and smart. Keep on learning new things. Nearly half of new businesses liquidate during the first five years, often because the owners don’t focus much on time, expense, and uncertainty involved. 

 

Going Step-by-Step

Your first day should not be the day you inaugurated. Sometimes starting small is part of a bigger plan – you can be a home chef before you become a caterer, or a food truck seller before becoming a restaurateur. It’s better to line up customers before you open doors for them. Personally, I would recommend that if you can work on your business while you still have your job, that’s the best way to go. 

 

This One Should be on Top

Different plans require different investments. Some may require millions while others may not require even a penny. The important thing here is, You must have an accurate idea of what you are doing and what it takes. 

The more the better, line up as many funds as you can. “Things take longer and cost more than anticipated.” is one of Rhonda’s Rules. The first few years of business are usually challenging, you’ll likely face low revenue and high outlays. Cleaning up your credit before you launch can help when in need so you’ll have some credit capacity available on time.

 

Customer Loyalty

Small businesses pay a lot of attention to increasing the customer base and not think about retaining them. The firm advice here is, keep your customers. You will get increasing footfall eventually when the word goes out. Do not cut off with your current clients; stay connected with them by communicating issues, offering discounts, loyalty cards, and so on. Keep your bread and butter fresh and retain your customers if you want to hold on to your business. 

 

Be Friends With Technology

Usually, small businesses try to make their work harder themselves. They always go for the longer route knowing it can waste their time. They run away from technology as if it were a poisonous snake. But, why?

You should know that the same Whatsapp once used to be very difficult for everyone, but now it’s part of our lives. Similarly, we need to make use of friendly technology around us. Once you get a hold of it, technology can do wonders for your business. Just give it a try because there’s a lot to explore. 

Let’s take an example of the Udhaar app for small businesses. Udhaar is an application for both personal and commercial use and helps you manage credit (Udhaar) with customers and suppliers. 

Udhaar app is an online ledger (like an online khata or journal) to record your outstanding debt, and send auto-reminders to customers to fasten Udhaar collection. It’s an easy, safe, and reliable app with amazing features like reporting, multi-language support, data backup, offline mode, and many, many more. 

 

Personal finance, credit management, inventory management, and your little partner – Udhaar app – has been doing wonders for all types of businesses for a long time now. Shopkeepers, owners, and staff/employees have been taking advantage of this user-friendly and simple app.

We know it’s a difficult time for your business especially when Corona hits you mighty hard. All the customers are gone, no response from the suppliers, and obviously the outstanding payment stays due even after the deadline.

This is something you’ve worked out in years along with the hard work of days and nights. Do not lose it just like this. We have got here something of your interest that will help you get back on track. Not only you can recover your outstanding payments but also make some money out of it.

 

What is Udhaar App?

Udhaar is a FREE application for personal and commercial use. Udhaar app helps you manage credit (Udhaar) with customers and suppliers.

Udhaar app is an online ledger (like an online khata or journal) to record your outstanding debt, and send auto-reminders to customers to increase collection and cash flow. It’s an easy, safe, and reliable app with amazing features like reporting, multi-language support, data backup, offline mode, and many, many more.

It sends a reminder message to all your customers who have their payment outstanding and may have unintentionally forgotten to clear the dues.

Udhaar app also provides you reports of all or individual customers. The reports will be available in PDF format and can be extracted daily, weekly or monthly to suit your needs.

 

What is Meant by Digital Transformation?

Udhaar is a business-utility mobile-app that helps you in your day-to-day cash and credit transaction.

 

What makes it unique?

• It transforms the work mobile phone of a business owner into a smart computer
• Improves cash-flow with both online and offline transactions
• Provides business-related information just as you need it in the form of daily, weekly, monthly reports
• The reports are in PDF format that you can easily download and share with your customers
• It is simple with a user-friendly UI for financial accounting and inventory management on mobile phone

 

The functionality

It does wonders for a business similar to that of a complex software only simpler

Udhaar app provides accuracy, efficiency and customer delight. As soon as you add a new transaction against any customer account, the customer gets notified of the particular transaction, the amount of goods purchased and the number and names of items bought

Papers and diaries have a high chance of getting lost or damaged. But with the Udhaar app, your important data will always be safe in the cloud backup. You only need to turn on your internet connection for seconds to transfer information to the cloud. The data you just saved can be retrieved anywhere, anytime, and with any device with your individual username and password.

So far business-related vital MIS (Management Information System) reports were available only to corporate companies and firms as they used ERP (Enterprise Resource Planning) applications. Udhaar app made it possible for micro and small businesses which use the manual form of business processes and were devoid of such significant MIS reports.

Udhaar app is your digital business partner in your pocket and on the move. It is a simple, easy, free, and reliable opportunity that you wouldn’t want to miss.

Since most of the businesses are shut down or restricted to operate in the instructed hours, the majority of the owners are not making enough. There are plenty of examples of businesses that you can’t – even if you try – run from home.

You definitely don’t want your customers to reach in these tight situations but if they don’t get to you, you can’t sell them. No sales, no income generation, no rolling of commodities; well, this is what Coronavirus is.

The good news is, if your business is in Pakistan and you were using the Udhaar app before the pandemic, you still have a chance to recover most of your debt. Not only the outstanding Udhaar but also the lost customers.

 

The Udhaar Recovery

People outside the boundaries of Pakistan may not understand this, but if you are living in Pakistan, you have to sell goods on credit. This is the norm here, people will purchase goods from you for as low as five rupees and would pay you later.

It might sound weird but to be very honest, this is a good thing. In Pakistan, you never run out of supplies. You go to the store, buy whatever you want and request owners to pay them later. They are good with it unless customers consistently keep forgetting it.

 

Udhaar App at Home

While you are at home doing nothing but worrying about business. Here’s what you can do. You have got all your contacts from your customers. With the Udhaar app, you can send them free reminder messages or customized messages to remind them of their outstanding Udhaar.

You may have Udhaar amounting to as low as a hundred rupees or as high as hundreds of thousands. You can simply send them a kind reminder with their names on the header and ask them to pay off their debts as soon as the conditions get better.

 

Customer Retention

As I said above, You have got a long list of your customers’ information. You can use that information to keep up with them. Ask them if everything is going fine with them. If there’s anything you can do to help them.

You see people really need help in this upheaval. Just like you, your customers are also suffering since all the businesses are shut down. People are short of money and looking for some relief, and I think you can be the savior. Even if you can not help with a single penny, calling your customers just to ask how they are doing is sufficient enough to make them feel good. I promise you that your little help will always be remembered and you will never lose those customers.

 

Little Bit About Udhaar App

Udhaar is a FREE application for personal and commercial use. Udhaar app helps you manage credit (Udhaar) with customers and suppliers.

Udhaar app is an online ledger (like an online khata or journal) to record your outstanding debt, and send auto-reminders to customers to increase collection and cash flow. It’s an easy, safe, and reliable app with amazing features like reporting, multi-language support, data backup, offline mode, and many, many more.

It sends a reminder message to all your customers who have their payment outstanding and may have unintentionally forgotten to clear the dues.