Credit Limits, Cheques and Dealer Ledgers in Nepal

In Nepali wholesale, credit is the default and cash is the exception. That makes dealer ledgers, credit limits and cheque handling the heart of the business. A distributor with excellent sales and poor credit control can still run out of cash. This article explains how to set sensible limits, track cheques and keep ledgers that both sides trust. It is about record keeping, not legal or financial advice.

Set a limit for each dealer, not a general rule

A credit limit is the maximum balance you will carry for a dealer. Credit days are how long they have to pay. Set both for each dealer based on:

• Their purchase volume over the last year.
• Their payment history, including late payments and bounced cheques.
• The size and stability of their shop and their local reputation.
• Your own cash position and what you owe your principals.

Start new dealers with a low limit and raise it as they prove reliable. Write down who agreed each limit and when it was last reviewed.

Ageing: the report that matters most

An ageing report groups what each dealer owes by how old the bills are, for example current, up to thirty days past, thirty to sixty and beyond. It shows where the real risk is. A dealer who owes a large amount that is current is a customer. A dealer who owes a smaller amount that is ninety days old is a problem. Review ageing weekly, and assign a person to each overdue dealer.

Handling post-dated cheques

Post-dated cheques are common in Nepali trade. Treat them as a register, not a drawer. For each cheque record the dealer, bank, cheque number, amount, date on the cheque and date received. Then:

1. List cheques falling due in the coming week and plan the deposit.
2. Deposit on the date, not days after, because a delay can create a gap in your protection.
3. Mark the result: cleared or bounced.
4. For a bounced cheque, reverse the payment in the dealer ledger, note the reason and decide what happens to new orders.

Check the rules on cheque bounce with a lawyer or your bank, because they are set by law and may change. The software job is to make sure you never forget the date or lose track of what bounced.

A dealer ledger both sides can read

A dealer ledger is a running statement: opening balance, invoices, returns, payments and closing balance, in date order, with BS and AD dates. Send it to the dealer every month, or more often for large accounts, and ask for confirmation. Differences caught early are small. Differences found at year end can take weeks to settle. Each entry should refer to an invoice or receipt number so any question can be traced to a document.

Ledger entry	Reference to keep
Sales invoice	Invoice number, date, items and scheme applied
Return or credit note	Original invoice, reason, who approved
Cash or bank payment	Receipt number, mode, collector
Cheque	Cheque number, bank, date, status
Discount or write-off	Reason and the manager who signed off

VAT and PAN points to confirm

Invoices to registered dealers usually carry their PAN, and VAT at 13% is charged where you are VAT registered and the goods are taxable. Credit notes for returns are part of the same trail. The exact requirements, time limits and formats are decided by the IRD, so confirm with your accountant. Software can hold the fields and print the invoice format you need, but it cannot replace advice on what applies to you.

Handling the difficult dealer

When a dealer stops paying, act early and consistently. Stop new credit orders until an agreed payment is made. Send a statement. Visit in person. Agree a written payment plan if the dealer is in genuine trouble. Keep every promise and date in the ledger notes. If legal steps are needed, your records are your evidence, so make sure they are clear.

Dealer communication that keeps the relationship

Credit control does not have to feel hostile. Dealers respond better to clear, regular and polite communication than to a sudden demand. Send the monthly statement with a short friendly note in Nepali. Thank dealers who pay on time. When a payment is late, ask whether there is a problem with goods or billing before assuming unwillingness. Often a dispute over a return or a scheme is the real reason, and clearing it releases the payment.

WhatsApp is now the normal channel for this, with SMS as a fallback for dealers without it. Keep a record of what you sent and when. A message that says the bills open on the statement are due on a given BS date, with the amount, is clear and creates a record if a dispute arises later. Remember that dealers may prefer a call for large amounts, so use judgement.

How software helps

The WebsNP wholesale software is designed to hold limits, ageing, a cheque register and dealer ledgers in one place, with statements you can share by WhatsApp or SMS depending on your sender setup. It can also feed an accounts system, so read about accounting software for Nepal if your accountant uses a separate package.

Your next step

This week, run an ageing list of your top twenty dealers and mark those over their limit or beyond credit days. Decide on an action for each. When you want this to be automatic, message us on WhatsApp and we will show a demo using your dealer data.

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