SEED, FERTILISER AND AGRI-INPUT DEALERS
How an Agri-Input Dealer Can Recover Farmer Credit After Harvest
A farmer you have known for twenty years takes the season's requirement on credit. The stock leaves the shelf in a morning, and the amount sits on a ledger page until the crop is sold. Some pay in the first month after harvest. Some pay a year later, in instalments, when the next season's credit is already out.
Our work is the business of the shop. How much credit is out and to whom, what stock is ageing, what the supplier scheme really returns, and how cash is recovered after harvest. Product choice, licences and what a farmer should apply stay with your supplier, the authority and the extension office.
Book a first callCOMMON CHALLENGES
What goes wrong in
seed, fertiliser and agri-input dealers.
- 01Credit given to farmers is recorded in individual ledgers, and nobody can say how much is due, how much is overdue and how much of it is more than a season old.
- 02Stock bought ahead of the season is left over when it ends. Items with a limited shelf life become dead stock before anyone notices.
- 03Most of the year's sales land in a few weeks, so the shop is short of cash for the supplier in the peak and sits on dues in the quiet months.
- 04Trade schemes from the company you buy from, such as slab discounts, push the dealer to buy more than the shelf can sell. The benefit is counted at purchase without testing it against stock left and farmer credit given.
- 05Recovery after harvest depends on the owner visiting, and the dealer never measures how much was recovered in the first month against how much was due.
NUMBERS TO TRACK
Count these
every week.
Farmer credit overdue
Credit sitting beyond its promised date, as a share of all credit out in the farmer ledgers.
Recovered in the first month after harvest
Amount received in that month divided by the amount due for the season.
Leftover stock at season end
Cost value of stock still on the shelf after the season divided by the cost value of stock bought for it.
Cash needed in the peak
Purchases due to suppliers in the peak weeks less the collections expected in the same weeks.
Timing and seasons: Sales follow the sowing seasons, kharif with the monsoon and rabi in the cooler months, and recovery follows harvest. Plan stock and credit from monthly sales and receipts of the previous two seasons.
WORKED SAMPLE (ILLUSTRATIVE, NOT CLIENT DATA)
Farmer credit ageing at the end of the month after harvest (illustrative, not client data)
| Band | Accounts | Amount |
|---|---|---|
| Not yet due | 40 | ₹3,20,000 |
| Past due, under a month | 18 | ₹1,50,000 |
| Past due, over a month | 12 | ₹1,30,000 |
| Subtotal past due | 30 | ₹2,80,000 |
| All credit out | 70 | ₹6,00,000 |
Made-up figures. ₹2,80,000 past due out of ₹6,00,000 is 46.7 percent of credit out, spread over 30 of 70 accounts, so the first calls go to the largest few.
COMMON MISTAKES
What owners often
get wrong first.
- 01Giving credit by the length of the friendship. A limit written from the farmer's past recovery in the first month after harvest is a number you can defend.
- 02Judging a supplier scheme by its benefit alone. Leftover stock at season end is the cost the scheme leaves out.
- 03Planning the peak by sales and not by cash. The cash needed in the peak is what decides whether you can buy what the farmers ask for.
OUR FOCUS AREAS
Where the work
usually starts.
- 01Farmer credit by account, with amount, date given and the harvest the farmer expects to pay from
- 02Credit ageing in bands, with the share overdue and a list of the largest accounts
- 03Stock by item and by how long it has sat, with the items that cannot be returned flagged
- 04Season calendar of purchases, receipts and credit, so peak cash need is planned before the peak
- 05Supplier scheme test: what the scheme earns against what the extra stock costs to hold and to credit
- 06A recovery routine after harvest: who visits, on what day, and what is asked
- 07A credit limit per farmer written from past payment, not from friendship
START THIS WEEK
Things you can do
before you call anyone.
- Add up the credit in all farmer ledgers and split it into not yet due, due within the month, and overdue past a month. The overdue figure is the one to call about first.
- Hypothetical example: if ₹2,00,000 was given on credit and ₹1,40,000 has come in by the end of the month after harvest, ₹60,000 is outstanding, which is 30 percent. Work out the same for last season.
- List the stock you could not sell last season and what it cost. Before the next season's order, decide how much of that you will not buy again.
- Hypothetical example: a slab discount of 2 percent on a ₹5,00,000 purchase earns ₹10,000. If ₹1,20,000 of that stock is left on the shelf, 24 percent of the purchase is still cash on the shelf, twelve times the discount. Write your next supplier scheme as the same sum.
WHAT YOU GET
Start with the priorities
that matter most.
Your first sheet: a farmer credit ageing sheet showing amount due by account, how much is overdue, and the stock bought for the season that is still unsold
- A farmer credit ageing sheet with overdue shares and the top accounts by amount
- A stock and ageing sheet by item, with a season-end rule for what is cleared and how
- A scheme test sheet the owner fills before agreeing to a supplier's slab
- A post-harvest recovery plan with a visit list, a named collector and a weekly tally of recovered amounts
Not the right fit when: Which product suits which crop, safe use, licences and any dispute with an authority are matters for your supplier, the extension office or a lawyer. We stay on credit, stock, cash and records. A dealer who sells tractors and machines is closer to /industries/other-industries/farm-equipment-and-tractor-dealers.
HOW THE WORK RUNS
What happens after
you book.
- First call: you describe the business and the numbers you already track.
- Your first sheet: the one described under What you get, built from your own books.
- The rhythm: a regular review of farmer credit overdue, recovered in the first month after harvest, leftover stock at season end, cash needed in the peak.
- What you hold at the end: a written sheet and a named owner for each number.
WHICH SERVICE FITS
Where we usually start
for this trade.
Financial Health Audit
A management-level review of margin by product, the cash cycle, receivables and costs, ending in indicators you track monthly. Not a statutory audit.
Business Audit
Financial Health Audit is part of Business Audit. See the full service if the problem is wider than one piece.
PROBLEMS THIS SHOWS UP AS
How owners in this trade
describe it.
Cash is always tight, even when sales look good
Full order book but an empty account? See how collections, stock, credit terms and timing gaps drain cash, and how a 13-week forecast eases the squeeze.
I cannot see how my business is really performing
If you steer by bank balance and gut feel, you are driving blind. See how a few trusted numbers, a monthly report and a review meeting fix that.
COMMON QUESTIONS
Before you
get in touch.
HOW THIS DIFFERS
Close trades,
different work.
How this differs from Farm equipment and tractor dealers
A machinery dealer sells high-value items on finance and service, while an input dealer sells small repeat purchases on seasonal credit and lives on recovery after harvest.
How this differs from Grocery stores and supermarkets
A grocery store turns stock daily and sells for cash, whereas an input dealer sells in a few weeks on credit and waits for the harvest to be paid.
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