The complete guide to customer credit management for small shop owners

Credit is the oldest form of trust between a shopkeeper and a customer. Done well, it builds loyalty for life. Done poorly, it kills shops. This complete guide walks you through every aspect of customer credit management, from the moment you decide to extend credit to the moment you collect or write it off.

Whether you run a corner shop in Casablanca, a wholesale yard in Lyon, or a market stall in Tunis, the principles are the same.

1. Why merchants extend credit at all

Before the rules, the philosophy. You don't extend credit because you have to. You extend it because:

• It builds long-term customer loyalty.
• It allows working-class neighbours to manage their cash flow.
• It signals trust, which translates into repeat business.

If credit isn't doing one of these for you, stop extending it.

2. Who deserves credit (and who doesn't)

Not everyone should get credit. Use these three filters:

• Tenure. They have been a regular customer for at least 3 months.
• Reliability. They pay back previous small credits within 14 days.
• Visibility. You know their family, their workplace or their neighbourhood.

A new face on day one should pay cash. Always.

3. Setting credit limits

A credit limit prevents balances from snowballing. Use a simple formula:

Credit limit = 2 weeks of typical purchase

For a customer who spends 100 MAD a week, the limit is 200 MAD. Above that, ask for a partial payment first. Communicate the limit calmly: “Whenever you reach 200, we settle, then we restart.” Most customers respect this.

4. Logging credit correctly

Three fields are non-negotiable when you log a credit:

• Customer name. Use the same spelling every time.
• Amount. Exact, including small change.
• Description. What was bought + agreed payback date if any.

Konnach takes about three seconds for this. Make it a habit.

5. Reading body language at credit time

This is an art. Some signals to watch:

• A customer avoids eye contact when asking for credit.
• They ask for a higher amount than usual.
• They say “I'll pay you the day after tomorrow”, then change to “next week”.
• They are nervous and rush you.

None of these alone are red flags, but two or three together are. Trust your instinct.

6. The repayment cadence

The pattern of repayment tells you everything. Track it.

• Within 7 days: A-tier customer. Reward with small discounts occasionally.
• 8–30 days: B-tier. Normal. Send a polite reminder around day 14.
• 31–60 days: C-tier. Slowing down. Don't add more credit until paid.
• 61–90 days: D-tier. Frozen. Send a PDF summary, schedule a calm conversation.
• Over 90 days: Bad debt. Decide to recover, settle or write off.

7. The art of the reminder

Reminders should be frequent, friendly and predictable. Once a week is the sweet spot. Konnach pre-fills a polite WhatsApp message with the current balance — use it.

Never send reminders late at night, never in capital letters, and never in a group chat.

8. When to negotiate a settlement

If a customer cannot pay the full balance, negotiate. Don't insist on 100% if 70% closes the case cleanly. The 30% you give up is the price of getting your mental space back and freeing the customer from shame.

A classic settlement: “Pay 60% this week, I'll close the rest.”

9. When to refuse new credit

The most polite refusal is the truth: “I can't open new credit until we close the old one. Let's settle, then we restart fresh.”

Follow this with a smile. Most customers will pay. Some will leave. Both are good outcomes.

10. Handling disputes

Disputes always come down to one question: who has the cleaner record? Konnach gives you a timestamped, exportable PDF. The paper notebook gives you a smudged scribble.

When a dispute arises, share the PDF. Stay calm. The clean record almost always wins.

11. The end-of-month review

Once a month, open the Statistics screen and ask:

• How much credit did I extend this month?
• How much was paid back?
• What's my net credit position?
• Who is in C-tier or worse?
• What lesson can I take into next month?

Thirty minutes that decide whether your shop grows or stagnates.

12. Credit policy posted on the wall

The simplest trick: write your credit policy on a small sign next to the till.

Credit available for regulars · Maximum {{limit}} per customer · Settlement every 14 days · Thank you for your understanding

Seeing it written removes 80% of the awkwardness.

Final principles

• Credit is trust, not charity.
• A clean ledger protects everyone.
• A polite reminder is a sign of respect.
• Bad debt is hygiene, not failure.

Follow these and your shop will be one of the small percentage that survive the first ten years — and thrive.