Industry sector: Retail and wholesale

Butcher: Cash from debtors


You may have some account customers who you invoice at regular intervals. These may be local retailers that sell cuts of meat that you butcher (and possibly package) or businesses such as hotels and restaurants that use your products in their menus. After account customers 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

You will have agreed with your customers your payment terms. It is normal to offer trade customers weekly or fortnightly payment terms.

Make an estimate of the income you might receive from account customers and enter that amount in the month in which the money will be received.

Early settlement discounts

If you have a lot of account customers you might decide to offer them a small discount for early payment. This can help to bring the money in more quickly.

Consider what steps you will take to recover any overdue amounts and whether you will charge interest on these. Don't go on supplying customers who do not pay their bills.

Your business stationery

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

Checkpoints