Should a cracker shop give credit at all?

Yes, because the trade runs on it: sub-dealers and regular families settle after Diwali, and refusing credit pushes your best volume customers to competitors. The goal is not to avoid credit but to record it party by party and collect it on a rhythm.

What is a receivables ageing report?

It is a report that splits every unpaid balance by age, typically 0-30, 31-60 and 60+ days. It tells you which parties to remind gently, which to call and which to visit, so your collection effort goes where the risk is.

How do I decide a customer’s credit limit?

Use last season’s payment behaviour. A party who cleared dues by mid-November earns a higher limit; one who dragged into the new year gets smaller lots and part-payment on delivery. This needs last season’s ledger to be readable, so keep records that survive the season.

When should I stop supplying a customer on credit?

When a balance crosses 60 days with no part-payment, when two agreed payment dates are broken in a row, or when the party wants new stock to clear the old balance. Offer a clear path back: part-pay the old dues and supply resumes.

What is the best time to collect dues after Diwali?

The first four to six weeks after the festival, while your parties’ own counters have taken cash. Send statements in week one, call in weeks two and three, and visit large balances in person by week four. Balances left to December harden quickly.

Giving credit without losing money after the season

Pricing, Credit & Profit · 15 August 2026

Nobody in the cracker trade sells strictly for cash. Sub-dealers lift stock in October and settle in November. The big family down the road takes ₹15,000 of crackers on your word and pays “after Diwali”. Commission agents collect from their circles and settle with you once the season closes. Credit is not a favour you grant, it is the operating system of the trade, and refusing it outright means losing your best volume customers to the shop that says yes.

The problem is not credit. The problem is credit you cannot see. The shops that get hurt every year are the ones where the owed amounts live in a notebook, in WhatsApp chats and in the owner’s head, and by December nobody is sure who owes what.

The working-capital squeeze

Understand the shape of your cash flow first. You paid Sivakasi an advance months before Diwali to book stock and lock rates, and the balance at or near dispatch. Your money went out in June, July, September. Your credit customers pay you in November and December. For that whole stretch, you are the bank: you have financed the manufacturer on one side and your customers on the other. Every week a payment slips is a week your own money sits in someone else’s pocket while next season’s booking advance comes due.

One ledger per party, no exceptions

The foundation is a party ledger: one running account per customer showing every bill, every payment, every credit note, and the live balance. Not a page of loose entries, an account. When Murugan Stores calls to dispute an amount, you read the ledger down the phone: bill 214 on 18 October ₹42,000, paid ₹20,000 on 2 November, breakage credit ₹1,500, balance ₹20,500. The argument ends because the record is complete. Keep the same discipline for advances received, so a party’s balance always nets off what he paid early.

Ageing: the report that tells you who to call first

A receivables ageing report splits every outstanding balance by how old it is. This is the single most useful money report a seasonal business can run, because after Diwali you have limited calling energy and it tells you exactly where to spend it.

Bucket	What it means	What you do
0-30 days	Normal trade credit, season just closed	Polite reminder, nothing more
31-60 days	Sliding past the trade’s settling window	Call personally, agree a date, note it
60+ days	At risk of becoming next year’s bad debt	Visit, insist on part-payment, stop fresh supply

Run it weekly through November and December. A balance that ages from the first bucket into the second without a part-payment is telling you something; listen early, while the season’s goodwill is still warm.

A collection rhythm for the weeks after Diwali

Week 1 after Diwali: send every credit party a statement of account. No demand, just the statement. Honest parties pay off the back of this alone.
Weeks 2-3: call everyone above a threshold you set, say ₹5,000. Ask each party for a payment date and write it down.
Week 4: visit the big balances in person. In this trade a visit collects what ten calls cannot.
December: close the season’s book. Whatever is still open goes on next season’s credit decision for that party.

Set credit limits from last season’s behaviour

The best predictor of how a party pays this year is how he paid last year. A sub-dealer who cleared his balance by mid-November earns a higher limit. One who dragged into January starts this season on a shorter leash: smaller lots, part-payment on delivery, no fresh stock until the old balance moves. This is only possible if last season’s ledger still exists in a form you can read, which is the quiet argument for keeping party ledgers somewhere better than a notebook that gets thrown out with the stall. A ledger with per-party balances and ageing built in turns last season’s history into this season’s credit decisions in one glance.

Small practices that quietly save you money

Part-payment on delivery. Even 30-50% down changes the psychology; the party has skin in the season.
Written acknowledgement. A signed delivery challan or bill copy with “balance ₹20,500” noted beats any verbal promise.
Festival-time follow-up. Collect while the party’s own counter is taking cash, not in the dry weeks of December.
Receipts for every payment, always. Cash received without a receipt is the seed of next month’s dispute.
Round amounts, agreed dates. “Pay me something when you can” collects nothing; “₹10,000 on the 15th” collects.

When to stop supplying a slow payer

There is a point where more supply is just more loss. Stop fresh stock when a party crosses your 60-day bucket with no part-payment, breaks two agreed dates in a row, or asks for new stock specifically to “sell and clear the old balance”, a line every experienced wholesaler has heard and regretted trusting. Stopping supply is not ending the relationship. Say it straight: clear half the old balance and the lorry moves again. Parties who intend to pay accept this; parties who protest loudest were not going to.

Credit given without a ledger is a gift. Before you extend a single rupee this season, make sure every bill and payment lands in a per-party account you can total in seconds, because the ageing report you run in November is only as good as the entries you make in October.

Frequently asked questions

Should a cracker shop give credit at all?: Yes, because the trade runs on it: sub-dealers and regular families settle after Diwali, and refusing credit pushes your best volume customers to competitors. The goal is not to avoid credit but to record it party by party and collect it on a rhythm.
What is a receivables ageing report?: It is a report that splits every unpaid balance by age, typically 0-30, 31-60 and 60+ days. It tells you which parties to remind gently, which to call and which to visit, so your collection effort goes where the risk is.
How do I decide a customer’s credit limit?: Use last season’s payment behaviour. A party who cleared dues by mid-November earns a higher limit; one who dragged into the new year gets smaller lots and part-payment on delivery. This needs last season’s ledger to be readable, so keep records that survive the season.
When should I stop supplying a customer on credit?: When a balance crosses 60 days with no part-payment, when two agreed payment dates are broken in a row, or when the party wants new stock to clear the old balance. Offer a clear path back: part-pay the old dues and supply resumes.
What is the best time to collect dues after Diwali?: The first four to six weeks after the festival, while your parties’ own counters have taken cash. Send statements in week one, call in weeks two and three, and visit large balances in person by week four. Balances left to December harden quickly.

Sources

This guide is general information for the crackers trade, not legal, tax or safety advice. Rules change by state and by year; confirm the current position with your licensing authority or accountant.