In this guide 6 sections
Set credit at three levels. The buyer account, each site the buyer is building and the salesman who sells on it each carry their own limit, reviewed weekly. Age every open bill into buckets, hold new invoices when a bucket breaches its rule, and let one named person release the hold. Counter tabs get a small limit.
One debtor list hides where the risk sits
One contractor can mean six jobs at six stages, one waiting on rebar at plinth level, another casting a lintel, each foreman phoning in orders on his name. One limit cannot show the stalled job.
The plumber who collects stopcocks and couplers every morning on a running tab never gets a proper review, and his balance creeps up until the notebook page is full. Split the list and follow the money.
- Buyer account with an overall ceiling
- Site or job under that buyer, each with a sub-limit
- Salesman who booked the orders
- Counter tab customers, kept apart from contract buyers
Set limits at buyer, site and salesman level
Give the buyer a ceiling first, then divide it across his sites, so one slow site cannot eat the room the other five need. Review the split when a site opens.
Without an exposure cap, a salesman chasing a monthly target will push armoured cable, contactors and dimmers onto his weakest accounts, because those buyers never say no. The cap covers all his buyers together.
An order that breaches a limit stops and waits for approval, because a quiet override at the counter is how a limit turns into decoration.
Age bills into buckets that trigger action
Run the ageing by invoice, not ledger balance, because a part payment posted to the newest bill can hide a ninety day item behind a healthy looking total. Attach a consequence to every bucket. Thirty days earns a call to the site contact, and sixty days holds new delivery notes until a payment date is promised, with a dishonoured cheque jumping the queue.
Ninety days goes to the owner. He decides whether material keeps moving. Print the buckets on one page.
Short rules get followed.
- Current: no action
- Past due: salesman calls the site contact
- Second bucket: new bills held for review
- Final bucket: owner decides and material stops
Put bill holds where the dispatch happens
A hold means nothing when the loading bay clerk can still print a delivery note, so it sits at order entry and again at the gate pass. Stock leaves through the second door.
Name one person to release holds. Make the reason a required field.
Notes such as postdated cheque due Friday or site handover pending become real evidence when you review credit decisions at the end of the quarter. Part supplies need a rule too, because half the pipe on site is still exposure and the unbilled balance counts towards the limit before the second delivery leaves.
Review the numbers every week
Credit control is a weekly habit. Pull the same four figures on the same weekday and compare them with last week, buyer by buyer and salesman by salesman.
Watch accounts where limit use keeps rising while receipts stay flat, because that pattern shows trouble long before any aged bucket turns red. It is the earliest warning.
This week, list your ten largest buyers. Count their open sites, write a limit against each one, and share the sheet with the accounts head, the salesmen and the gate pass clerk.
Credit limit and bill hold sheet
One page in four parts: the top holds buyer, overall ceiling and payment terms, and next come the sites, each with its sub-limit and foreman contact. The ageing buckets follow with the action attached to each, and the last part logs every hold with its reason, releaser and date.
Open a blank worksheet to printQuestions owners ask
Should credit limits sit on the buyer or the site?
Both. The buyer carries an overall ceiling and each site takes a share of it, so one stalled site cannot use up the room meant for the others. Review the split when a site opens.
How do we control counter customers on a running tab?
Give each a small fixed limit and a weekly settle day, and stop the tab when either is missed, keeping them off the contract buyer list.
Who should be allowed to release a bill hold?
Only the owner or accounts head. Every release records a reason and a promised payment date, so the hold can be reviewed at quarter end, when the owner compares promises with receipts.
Does billing software handle site level limits?
Many packages hold one limit per account. Site limits, salesman exposure and holds at the gate pass usually need extra setup or a custom module, so ask for a demonstration first.