How to give credit to customers: 6 rules that protect your shop

Whether a customer is a long-time regular or a new face, the moment they say "add it to my tab" is a moment of risk for your shop. Extended credit is a relationship tool — done right it builds loyalty; done carelessly it becomes the main reason small shops struggle with cash flow.

These six rules will help you extend credit confidently without putting your business at risk.

Rule 1: Know the customer before the first credit

The first credit you give someone is an investment. Like any investment, it deserves due diligence.

For a new customer, start small — offer a maximum covering one or two weeks of average purchases. Watch how quickly they settle. A customer who pays promptly has earned a higher limit. A customer who avoids eye contact when you mention the balance has already told you everything you need to know.

For regulars you know well, you already have the data. Use it.

Rule 2: Set a credit limit for every account — and enforce it

The most common reason a credit becomes unrecoverable is that it grew slowly without anyone noticing. Five dirhams becomes fifty, fifty becomes five hundred, and eventually nobody wants to say the number out loud.

Set a written credit limit for every customer. When a balance approaches the limit, ask for a partial payment before adding more. No exceptions. "You're close to your limit — can we clear part of it?" costs nothing and saves everything.

In Konnach, use the notes field on each client to record their personal limit. You see it every time you open their account.

Rule 3: Record every transaction the moment it happens

Memory is the most expensive storage system a shop owner can use. The moment a customer takes goods on credit, log it — before serving the next person, before the phone rings, before anything else.

This is not about distrust. It is about respect for both parties. A written record prevents the embarrassment of a disputed balance months later, when neither of you can be entirely sure of the number.

Rule 4: Agree on a repayment date

"Soon" and "next week" are not dates. When you extend credit, agree on a specific day — this Friday, end of the month, after salary — and note it in the transaction description.

When the date passes without payment, you have a factual, non-confrontational way to follow up: "Your balance of X was due last Friday — when can you come by?" There is no accusation in a question like that. It is simply a reference to a shared agreement.

Rule 5: Send a reminder before the debt gets old

The older a debt, the harder it is to collect. A balance that is two weeks old has a very high recovery rate. One that is six months old often never returns.

Send a polite message at the two-week and one-month marks. Most customers simply forget, and a friendly reminder is genuinely appreciated. Konnach's one-tap WhatsApp reminder generates a professional message with the balance pre-filled — you review and send in five seconds.

Rule 6: Review your total credit exposure monthly

Once a month, open your ledger and look at the total amount outstanding. Ask yourself three questions:

• Which accounts are over 30 days old?
• Is any single balance growing faster than I expected?
• Is my total exposure more than one month's revenue?

If the answer to the last question is yes, you are carrying too much risk. Pause new credit for the oldest accounts until they make a payment.

The golden rule

Credit is a service you offer — not a right customers are owed. You are allowed to say no, politely and without detailed explanation, to any account that is overdue or whose payment pattern gives you concern. A good customer will understand. A difficult one will show you exactly why the answer should have been no all along.