Selling on installments (qist) opens your business to customers who cannot pay the full price at once: appliances, phones, motorcycles, furniture and solar systems. It can grow sales quickly, but only if recovery is disciplined. This guide covers the basics of running an installment business safely.
Design clear plans
Every plan should state the product, total price, advance, monthly amount, number of months and due day. Print it and get it signed by the customer and guarantor. Clear terms prevent disputes later.
Check customers before selling
- Verify CNIC and current address.
- Take references and a working phone number.
- Understand the customer's income and job stability.
- Start with smaller plans for new customers.
Always take guarantors
A guarantor is your safety net if the customer stops paying. Record the guarantor's CNIC, address and phone, and inform them of their responsibility in writing.
Link each plan to the exact product
Record the serial or IMEI of the product sold on each plan. This helps with warranty claims and, if needed, recovery of the product.
Make recovery a daily routine
- Start each day with the list of payments due today and overdue accounts.
- Assign recovery officers by area.
- Record every collection with a receipt.
- Match officers' cash with receipts every evening.
- Follow up overdue accounts within days, not weeks.
Use reminders
A polite SMS or WhatsApp message before the due date prevents many late payments. Confirmation messages after payment build trust and reduce disputes.
Know your real profit
Track markup earned versus markup still pending, and the ageing of overdue accounts. A business can look profitable on paper while cash is stuck with late payers.
SoftBar's installment management software handles plans, guarantors, dues, recovery officers and reminders.
Pricing your installment plans
Installment pricing must cover the product cost, your profit, the cost of money tied up for months and the risk of default. Many businesses add a fixed markup per month or a percentage on the total. Whatever method you use, apply it consistently and show the total payable clearly on the agreement.
Early settlement and late fees
Decide in advance what happens if a customer wants to pay early: will you reduce the markup? And what happens if they pay late: is there a late fee? Write these rules into the agreement so both sides know them from the start.
Managing recovery officers
- Give each officer a clear list of customers by area.
- Require a receipt for every collection.
- Match cash with receipts every evening.
- Rotate areas occasionally to reduce collusion risk.
- Reward officers on recovery rate, not just collections.
When customers stop paying
- Call the customer and understand the reason.
- Offer a short revised plan if the problem is temporary.
- Inform the guarantor if payments remain overdue.
- Follow lawful recovery processes; avoid harassment.
- Record every step for future reference.
Reports every owner should check
Each week, review payments due, overdue accounts by age, recovery by officer and new plans sold. Each month, compare markup earned with markup pending and look at default rates by product and area. These numbers show whether the business is growing safely.
- Write clear, signed installment plans.
- Verify customers and always take guarantors.
- Make recovery a daily routine with receipts.
- Use reminders to prevent late payments.
Frequently asked questions
What is an installment business?
Selling products on monthly payment plans instead of full payment.
Do I need guarantors?
Yes, they reduce risk if a customer stops paying.
How do I reduce defaults?
Verify customers, send reminders and follow up quickly.
Should I record product serial numbers?
Yes, link each plan to the exact unit sold.
How do recovery officers report?
With receipts for each collection, matched to cash daily.
Is there software for this?
Yes, SoftBar installment management software.
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