1. A separate ledger for every customer
The first rule: give each customer or contractor their own page. One line per invoice, one line per receipt, and a running balance. If everything is jumbled into a single register the account will never reconcile. In software, the ledger is created the moment you add the customer.
2. Start from an opening balance
Work out the total credit outstanding today as one figure and enter it as the opening balance. From then on every invoice and receipt is added to it. There is no need to key in years of old entries line by line — the closing total is enough.
3. Show the balance on every bill
When you hand over a bill it should say, on the bill itself, something like "Received ₹5,000, Balance Due ₹12,400". The customer is reminded every time, and the excuse that they did not know disappears. Every MaterialBill invoice prints this automatically.
4. WhatsApp reminders leave written proof
Once a month, send each customer their ledger on WhatsApp with the invoices, payments and closing balance. It is a reminder and a record at once: the customer cannot later dispute it, because it is sitting on their phone. It also tends to bring the money in far faster than a phone call.
5. Knowing when to stop giving credit
Set a credit limit for every customer, say ₹50,000. Once the limit is crossed, no fresh material goes out until the old money comes in. Set the limit in the software and you get a warning while raising the bill. Relaxing the limit out of sentiment is how most bad debt starts.
6. Allocate payments to bills, not to a balance
The single change that transforms credit recovery is small: when a payment comes in, record which invoices it settles rather than simply reducing a total. Contractor payments almost never arrive neatly — a part settlement against three old bills with something on account is the normal shape. If it is recorded as one figure against a running balance, nobody can afterwards say which bills are open, and every recovery conversation becomes an argument about a total rather than a question about one specific unpaid invoice. Allocated properly, the statement answers it for both sides.
7. Knowing when to stop supplying
The hardest decision in a credit trade is refusing a regular customer, and most shops make it far too late — after the exposure has grown past what they can afford to lose. Three signals appear in the figures before instinct catches them. A balance that keeps growing while payments stay flat. An ageing profile getting older month on month rather than turning over. And a party who has started paying only part of the oldest bills. Any one is a reason to set a credit limit rather than to stop entirely. Handled early it is a conversation about terms; handled late it is a recovery problem.