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Sandwich bar: Cash from debtors

If you make any trade sales - for example wholesale sandwiches sold to other retailers, or if you offer catering services to regular business clients - then you may have a number of account customers.

Account customers are usually invoiced at the end of the month, and after they have been sent an invoice but before they pay, they are your debtors. When they pay you, the payment is referred to as 'Cash from debtors'.

Payment terms

If you have any account customers, make sure that you agree payment terms with them. You might, for example, decide that payment is due within 30 days of the date of the invoice.

If you offer prepared sandwiches for wholesale to other retailers, bear in mind that it's usual to offer your wholesale customers a limited or full sale or return option.

Make an estimate of the amount of income you might receive from account customers each month, including VAT if applicable. Enter the amount in the month in which you are due to receive the money.

Consider what steps you will take to recover any overdue amounts and whether you'll charge interest on these.

Early settlement discounts

To bring in the money more quickly you might decide to offer your account customers a small discount of, say, 2% if they pay within a week of the invoice date. Don't go on supplying account customers who do not pay their bills.

Your business stationery

Ask your printer to produce some invoices for you for your business customers. They will be able to advise you on layout and style. You must have your VAT registration number on your invoices if you are registered for VAT.