Taking payment on delivery: cash, transfers and credit accounts
On a delivery round, payment collection is the part that quietly falls apart. The order is taken properly, the delivery is made, and the money sits in the driver's memory until they get back. With a handful of customers that works. With forty drops a day and three different payment methods it stops working, but the problem does not show up the same day. It shows up at the end of the month.
Cash
Still the most common method in home delivery, and the one that creates the most operational friction.
The main problem is not collecting, it is giving change. A driver who leaves without enough change loses time at every stop, and sometimes ends up rounding the difference away or leaving the balance noted down, which is worse.
The second difficulty is control. At the end of the shift the driver hands over an amount, and that amount has to match what was due. If the only reference is what they remember, reconciliation becomes a conversation rather than a verification.
What makes cash manageable is knowing in advance how much each driver should collect and at which stops, and being able to compare against that on return.
Bank transfers
Solves the change problem and the cash-in-circulation problem, but introduces another: reconciliation.
The customer transfers, shows the receipt at the door, and the driver marks it as paid. Somebody then has to verify that the transfer actually arrived. When there are five a day they get checked by hand. When there are thirty they do not, and that is where receipts that never cleared slip through.
Two practices that help:
- Keep the receipt attached to the order, not loose in a chat. A receipt with no order attached is impossible to audit later.
- Reconcile daily, not monthly. Yesterday's shortfall can be chased; one from three weeks ago is gone.
Credit accounts
The usual arrangement with shops that resell and with high volume customers. Payment is not taken at each delivery: it accumulates and is settled per period.
Run well, it is a genuine competitive advantage: it suits the shop and builds loyalty. Run badly, it is the fastest way to run out of working capital.
The minimum it needs:
- An up to date balance per customer, visible before the round goes out.
- A credit limit per customer, and a clear rule for what happens when it is exceeded.
- A record of partial payments. The full round figure almost never gets paid.
- Debt ageing. Owing 50,000 from last week is not the same as owing 50,000 from four months ago. The second one is already a problem.
The most frequent mistake is treating the credit account as a list of what is outstanding, with no dates. Without ageing, a customer who stopped paying three months ago looks identical to one who pays punctually every 30 days.
All three coexist
In practice almost no delivery operation uses a single method. The usual mix is cash with households, transfers for those who prefer not to handle change, and credit accounts with shops.
The problem is not that they coexist, it is that they often coexist in separate records: cash in a notebook, transfers in the chat, credit accounts in a spreadsheet. With three separate records, no useful question has a quick answer. How much am I owed in total, who is overdue, how much did I actually collect this week.
What to watch every week
With collection organised, three figures are worth reviewing regularly:
Total outstanding. If it grows month on month while sales stay flat, you are financing your customers without having decided to.
Average age of debt. This is the early signal. It deteriorates before the first bad debt appears.
Reconciliation discrepancies. Small and occasional ones are normal. Systematic ones, always in the same direction, are not.
Where the order comes from
None of this requires sophisticated software, but it does require every delivery to have a record of what was collected, how and when, in the same place the order lives. When that happens, reconciliation stops being an argument and each customer's balance stops being a reconstruction.
When it does not, collection carries on working for a while. The cost shows up later, and it tends to show up all at once.
Frequently asked questions
How do I check what each driver collected?
By comparing what the system says they were due to collect against what they hand in on return, delivery by delivery rather than as a single total. One global figure is impossible to audit: if money is missing you will not know which stop it went missing at. With the detail per drop, the discrepancy is located in minutes.
Is it worth offering credit accounts to household customers?
Generally no, unless they are long-standing customers with known volume. Credit accounts make sense with shops that resell, where the payment cycle is part of how they operate. With household customers they add bad debt risk and admin work that rarely justifies the volume they bring.
What do I do about the customer who always pays with a large note?
Record it and plan ahead. If you know that customer pays with a large note, the driver can leave with change prepared for that stop. The change problem is not solved by carrying more cash generally, but by knowing where it is going to be needed.
Questions about applying this to your delivery route?
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