Managing debtors: automated reminders, blocking shipments, and writing off bad debts

In retail and wholesale trade, selling goods with deferred payment (on credit) is a common business practice that helps attract B2B customers, retain regular buyers, and increase sales volumes. However, without strict accounts receivable management, businesses risk cash flow shortages, tied-up working capital, and bad debts.

This raises several practical questions:

• «How can I allow a specific customer to purchase goods on credit and set a maximum outstanding debt limit?»

• «Why does the software block sales to customers with outstanding debts, and how can I configure automatic shipment restrictions when a credit limit is exceeded?»

• «How can I set up automatic SMS or Viber reminders about the due date and amount of the next payment?»

• «Where can I view a complete settlement history and generate a reconciliation statement for any period?»

• «How can I properly write off a bad debt if a customer cannot repay it, and why does the software prevent me from deleting the debtor's customer record?»

Let's examine step by step how debtor management works in Torgsoft, which settings a business manager needs to configure, and how to automate payment collection monitoring.

In Torgsoft, customers who are allowed to take goods without immediate payment or with a partial prepayment are called VIP customers.

Feature Availability by License

• Torgsoft Start: credit sales are not available.

• Torgsoft Ultra and Terminal: VIP customer management, credit limits, and detailed debt analysis are included in the standard functionality.

Three Modes for Tracking VIP Customer Debts

Depending on your business needs, you can choose one of three accounting modes in the system settings (Settings → Parameters → VIP Customers):

1. Maintain Goods and Cash Balance : the software calculates the customer's total outstanding monetary balance without breaking it down by individual products.

2. Link Payments to Sales: outstanding debts are linked to specific shipment documents (invoices).

3. Partial Payment with Product-Level Breakdown: the software tracks which specific products on an invoice have been paid for and which remain unpaid. This is particularly important for stores selling expensive products or maintaining warranty records.

To prevent the accumulation of uncontrolled debts, Torgsoft provides a credit limit restriction mechanism.

Step-by-Step Credit Limit Configuration

1. Go to Marketing → Customers (or Settings → Business Partners).

2. Select the required customer and open their profile for editing.

3. Select the «VIP Customer» checkbox.

4. On the Additional tab, enter the maximum outstanding balance in hryvnias (for example, 5000) in the «Max. Debt Amount (VIP)» field.

5. Save the changes and restart the software to apply the updated settings.

How Automatic Sales Blocking Works

When a cashier or manager adds a VIP customer in the Sale (F6) window and attempts to sell goods on credit, the software automatically calculates the customer's current outstanding balance.

• If the current debt + the value of the new purchase exceeds the «Max. Debt Amount (VIP)», the software blocks the transaction and displays a warning.

• The credit sale cannot be completed until the customer pays enough to bring the outstanding balance back within the permitted limit.

Consider a typical retail scenario: a customer arrives to purchase another batch of goods worth UAH 2,000. Their outstanding balance from the previous week is UAH 4,000, while the maximum credit limit is UAH 5,000. The total (UAH 6,000) exceeds the limit. The cashier cannot complete the credit sale until the customer repays at least UAH 1,000 of the existing debt.

You can also enable the «Block» option in the customer's profile. When this checkbox is selected, sales to that business partner are restricted.

Checking Outstanding Balances at the Checkout

In the Sale window, after selecting a customer, the «Debt» field appears in the information panel. To obtain the current balance, the cashier simply clicks «Calculate».

Accepting Debt Repayments from Customers

Customers can repay outstanding debts in two ways:

1. Directly in the «Sale» window: by clicking «Pay» (or Deposit Money into Cash Register), the cashier selects the option to accept payment from the customer. The outstanding amount is entered automatically and can then be paid in full or in part.

2. Through a cash receipt voucher or bank statement: record the receipt of funds via Payment → Financial Document (incoming cash receipt voucher or bank account deposit).

Reconciliation Statement and the «Balance with Partners» Window

For a detailed analysis of settlements, use the «Balance with Partners» window (Payment → Balance with Partners).

• Settlement Card (Reconciliation Statement): displays a chronological list of all warehouse documents (outgoing invoices, returns) and financial transactions (payments, advances), including opening and closing balances for the selected period.

• Filtering by Currency and Accounting Center: if your business operates in multiple currencies or across several retail locations, balances are calculated separately for each currency and accounting center.

• Opening Debts: when adding a new business partner, you can use the Opening Debts tab to record an existing balance (I Owe or Owed to Me) as of the date you start using Torgsoft.

To manage overdue payments systematically without requiring managers to send reminders manually, use the additional «Bulk Customer Messaging» option.

Configuring the Messaging Service

1. Go to Marketing → Bulk Messaging → SMS and Viber Services tab and add an SMS provider account (for example, TurboSMS, BSG, etc.), specifying the username and API key.

2. Messages are sent through the provider's service, and the cost is deducted from the user's account with the respective gateway according to its rates.

Creating a Reminder Template

Go to Marketing → Bulk Messaging → Template Settings to create a message template. Add dynamic variables to the text:

Automatic Calculation and Scheduled Messaging

• Using Settings → Scheduled Tasks, you can configure automatic generation and delivery of reminders to customers whose payment deadlines are approaching or have already passed.

• For internal employee task management, use the «Reminders» module: when a manager launches the software at the beginning of the workday, a pop-up window displays a list of outstanding tasks (for example, «call the customer back about invoice payment»).

How to Write Off a Bad Debt Correctly

If a debt cannot be collected (for example, because the business partner has ceased operations), it must be closed in the system without distorting financial analytics or the calculation of actual profit.

For this purpose, Torgsoft provides a dedicated «Cancel Debt» feature:

• What the software does: creates a balancing payment from the customer using personal funds and, at the same time, a non-balancing expense linked to the invoice.

• Accounting result: the business partner's outstanding balance is reduced to zero, while the calculated product profitability for the invoice and the actual cash balance remain accurate.

The balance can also be adjusted by creating a financial document under the relevant financial analysis category (for example, «Bad Debt Write-Off»).

Why Won't the Software Let Me Delete a Customer Record?

Business owners often contact support with the question: «The customer hasn't purchased anything since 2021, but when I try to delete their record, a debt warning appears. Where can I find this debt and how can I clear it?».

Explanation and recommended steps:

1. Torgsoft protects database integrity and prevents the deletion of business partners with recorded product or financial transactions.

2. To locate the debt, open Payment → Balance with Partners, select the customer, and click Settlement Card.

3. If an outstanding balance remains (for example, a few kopecks or an unpaid invoice), you must perform the debt cancellation procedure or record an adjusting financial transaction.

4. After the balance reaches zero, the customer record can be marked inactive or deleted if there are no product transactions associated with it in open accounting periods.

Summary for Business Managers

Configuring debtor management in Torgsoft helps establish a transparent system for controlling accounts receivable:

1. Setting the «Max. Debt Amount (VIP)» ensures that a cashier or manager cannot release goods to a customer who has exceeded their credit limit.

2. The bulk messaging module automates payment reminders via Viber and SMS, helping reduce overdue payments.

3. The «Balance with Partners» window provides a complete reconciliation statement to help resolve discrepancies in settlements.

4. The «Cancel Debt» tool allows you to write off uncollectible debts without compromising the accuracy of company profit calculations.