"How much credit can I give him?" It is the question you ask yourself at the counter, with the customer in front of you, in three seconds. And because you have no ready answer, you say yes. Then you say yes again. Then one day the customer owes 40,000 FCFA and you no longer know how you got there.
The answer must not be decided at the counter. It is decided beforehand, once, with a simple rule.
The three-figure rule
A fair credit ceiling depends on three things you already know.
1. What the customer buys per week. A customer who spends 6,000 FCFA a week with you and another who spends 1,500 do not get the same ceiling. A starting rule that works: the ceiling is one week of purchases. She can take on credit what she normally buys in seven days, no more. If she pays every week, she never goes over.
2. What the shop can afford to have out there, in total. Add up every ceiling you have granted. That total is the money the shop agrees to leave sleeping at customers' homes. It should not exceed what you set aside to restock in a week. If the total of ceilings is bigger than your weekly order, one bad month of payments stops you buying stock. And a shop without stock sells nothing, on credit or otherwise.
3. The customer's behaviour. A ceiling is not carved in stone. It goes up for those who pay on the agreed date, and down for those who needed two reminders. See how to chase without losing the customer.
A starting ceiling for every new customer
For someone you do not know yet, a week of purchases means nothing. Set an entry ceiling, the same for everyone, small: the price of an ordinary basket at your shop. In many neighbourhood shops, that is between 2,000 and 5,000 FCFA.
Announce it as a house rule, not as suspicion: "Here we give credit up to 5,000, then we settle and start again." Nobody is offended by a rule that applies to everyone.
After three on-time payments, the ceiling moves to a week of purchases. You do not need to say so: the customer notices when you say yes to a bigger basket.
What should lower the ceiling
Three signals, easy to see on the customer's page if the book is kept per customer:
- two reminders for a single payment: the ceiling drops back to the entry level until the next full payment;
- a partial payment that never clears: the customer pays 2,000 every month on an account that stays at 15,000. No new credit until the account has been cleared once;
- the customer you only see on credit: if they never buy cash, the shop has become their bank. The ceiling becomes zero until they regularise.
None of these signals requires an argument. It is the book speaking, not you.
The ceiling protects the customer too
People think the ceiling works against the customer. It is the opposite. A customer who has gone past 30,000 FCFA of debt with you stops coming: they are embarrassed, they do not have the sum, they go and buy from the competition, paying cash with the money they owe you. You have lost the debt and the customer.
A ceiling of one week of purchases keeps the debt at a size the customer can settle in one go, without shame. They keep coming, they keep paying, the relationship lasts for years. Well-capped credit is what makes it possible to keep giving it.
In Remora Sales: the ceiling is on the account, not in your head
Every credit customer has an account with their ceiling. At the till, if a credit take goes past the ceiling, the seller sees it before confirming. They do not say no on their own and they do not say yes on their own either: they call you, or apply the rule on display. The ceiling becomes a rule of the shop, not a negotiation between the customer and the seller while you are away.
And because the account carries the date of the last payment and the number of reminders, on Saturday you see, in one list, who deserves a higher ceiling and who should come down.
If you have never managed to hold a ceiling because everything was decided at the counter, request a setup. We set the ceilings with you, customer by customer, while loading your book.