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Managing Customer Credit (Udhaar / Khata) in a Medical Shop

Updated 5 July 2026 · 6 min read

Credit is how a neighbourhood chemist keeps its regulars. The elderly customer on monthly medication, the clinic next door, the family that settles up on salary day — you give them stock now and collect later. It builds loyalty, but every rupee of udhaar is your cash sitting in someone else's pocket. Run the khata loosely and it quietly becomes the biggest hole in your working capital.

Why the paper khata stops working

A diary or a register works right up until it doesn't. The trouble isn't the writing — it's everything that has to happen after:

• You can't total it quickly. "How much is outstanding across all customers?" should be a one-second answer, not an evening with a calculator.
• Entries go missing. A busy counter, a rushed sale, a page not turned — and a credit sale never makes it into the book.
• No one remembers the ageing. A balance from last week and one from eight months ago look identical in a register. The old one is the one you'll lose.
• Disputes have no record. "I already paid that" is hard to argue with when your only proof is your own handwriting.

Treat every credit sale as two events

The single idea that keeps a khata clean: a sale and a payment are separate things. When a customer takes goods on credit, you record a sale — the full bill — and the balance goes up. When they pay, later and often in parts, you record a receipt against their account, and the balance comes down. Never overwrite the bill to "mark it paid." Keeping the two apart is what lets you answer, at any moment, exactly what each customer owes and how they got there.

It also handles the messy real cases naturally: a part payment, one payment settling three old bills, or a customer paying on account before their next purchase. Bills go up, receipts bring it down, and the running balance is always right.

A simple recovery routine

You don't need a collections department. You need a habit:

1. Set a credit limit per customer. Decide who gets udhaar and how much. A regular on monthly medicines is not the same as a walk-in.
2. See the balance before you bill. The moment to notice someone is three months behind is before you hand over more stock, not after.
3. Run an outstanding report weekly. Sort by who owes the most and who has owed the longest. Those two lists are where your money is.
4. Nudge early, nudge politely. A reminder at 30 days recovers far more than a demand at 180. Ageing balances only get harder to collect.
5. Record every rupee received on the spot. The payment you don't enter is the payment you'll ask for twice — and lose the customer over.

Know who owes what — and for how long

The number that matters isn't the total udhaar on your books. It's the ageing: how much is 0–30 days old, 30–60, 60–90, and beyond. Fresh credit is normal and healthy. Balances sliding past 90 days are the ones turning into bad debt. Once you can see that split, collection stops being a vague worry and becomes a short, sorted to-do list.

What good software gives you

Once credit sales and receipts are tracked properly, the useful things become automatic:

• Every customer has a running balance that's always current — no tallying.
• Their full history — every bill and every payment — is one lookup at the counter.
• Part payments and payments against multiple bills just work.
• One report shows total outstanding, per customer, oldest first.
• A settled account is a matter of record, so "I already paid" is easy to check.

How DravyaOS handles it

DravyaOS keeps customers, their bills, and their payments as separate, linked records — so a credit sale raises the balance and a recorded receipt lowers it, cleanly. While you're billing, the customer's history and outstanding balance are right there on screen, so you know where they stand before you ring up more udhaar. Payments can be partial or against several bills, and the outstanding view tells you who owes what — all offline, all free.

Related reading: how to build a GST-compliant medical bill, and managing medicine batch numbers & expiry dates.