Running a small business, especially a food truck, comes with many challenges—one of them being customers who buy on credit. While it’s understandable that some people might be financially tough, a business cannot survive on unpaid debts. If not handled carefully, credit sales can hurt cash flow, create unnecessary losses, and even lead to business failure.
From my experience, I’ve found that the best way to deal with credit customers is to set clear rules, communicate them well, and enforce them firmly. Here’s how:
1. Set a Clear Credit Limit for Customers Who Buy on Credit
Allowing customers who buy on credit unlimited credit is a fast way to lose money. To protect my business, I set a fixed credit limit—for example, $4 per customer.
This helped me in two ways:
- Maintaining cash flow – The debt remained small and manageable.
- Keeping loyal customers happy – Those in genuine need could still get help without risking my business.
Example:
A regular customer, James, once forgot his wallet but needed lunch. Because I had a credit limit in place, I let him take a meal on credit, knowing he’d pay it back the next day. This small act of trust strengthened our relationship, and he even referred more customers to my food truck.
2. Set Clear Payment Terms for Customers who buy on credit.
A business cannot survive if debts are repaid too late. I found that one week was the best timeframe—long enough for customers who buy on credit to settle their debts but short enough to keep cash flowing.
If a customer failed to pay within a week, I had to explain why I couldn’t extend more credit. Saying “no” to a loyal customer can feel bad, but if the business fails, no one gets served—credit or not.
Example:
A frequent customer who buy on credit kept delaying payment. After two weeks, I had to refuse more credit and remind him of the policy politely. It wasn’t easy, but putting the business first ensured I could continue serving all my customers.
3. Keep a Written Record
At first, I relied on memory to track customers who buy on credit, but that quickly became a problem. Some customers would forget their debts, and I would too. To avoid confusion, I started writing down:
- The customer’s name
- What they bought
- The date and time
- The due date
Example:
One day, a customer insisted he had already paid. But when I checked my records, I showed him the exact amount and date still owed. He quickly apologized and paid up. Without a record, I might have lost that money.
Keeping a written record isn’t about distrust—it’s about clarity and accountability for both sides.
4. Communicate the Policy Clearly
The best way to reduce credit requests is to make your policy visible. I placed a sign on my food truck that read:
“No Credit “
This simple sign worked wonders—it discouraged casual credit requests while making it easier to say “no” when needed.
Example:
Before I put up the sign, many people would ask for credit just because they didn’t feel like paying that day. After the sign, only those with genuine needs approached me, and managing credit became easier.
5. Follow Up on Payments Politely
Some customers who buy on credit can be difficult to locate when it’s time to pay. To prevent this, I began collecting phone numbers to send a reminder as the one-week deadline approaches.
Example:
One customer kept delaying payment, saying he would “pass by tomorrow.” After waiting too long, I sent him a polite reminder via SMS. Within an hour, he sent the money via mobile payment. If I hadn’t followed up, I might have never received that payment.
The key is to be firm but respectful—people respond better to reminders when they don’t feel pressured.
6. Enforce the Policy Firmly
This part is tough but necessary. Whether it’s friends, family, or loyal customers, if someone hasn’t cleared their old debt, they cannot take more credit.
Example:
A loyal customers who buy on credit once owed money past the due date, but wanted more credit. I politely told him, “I can’t extend more credit until the first one is cleared. It’s nothing personal—it’s just how I keep my business running.” He understood and eventually paid. If I had allowed it, the debt would have kept growing, putting my business at risk.
Being firm isn’t about being harsh—it’s about keeping your business alive.
Final Thoughts
Allowing credit can help build customer loyalty, but only if managed properly. Set limits, track debts, and enforce rules without exceptions—because if your business runs out of cash, no one benefits.
Have you ever faced challenges with customers buying on credit? Share your experience in the comments!
Book recommendation
The Credit Controller’s Desktop Guide” by Roger Mason is a practical resource for small businesses dealing with customers who buy on credit. It covers essential strategies like setting clear credit terms, assessing creditworthiness, keeping proper records, and enforcing timely payments. The book provides actionable steps to protect cash flow while maintaining good customer relationships.
As an Amazon Associate, I earn from qualifying purchases. This helps support the content we create for Growprofitly at no extra cost to you—thank you for your support!
