TentSaathi
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Advance, balance and breakage — keeping the money straight

In this trade money arrives in three parts, and the profit usually drowns in the third. How to keep hold of all three.

By TentSaathiPublished 9 Sep2 min read

In rental work the money for one booking arrives three times: an advance at booking, something around the event, and the rest after the goods come back. The profit usually drowns in that third payment, because that is when breakage and shortages get added and when the customer is in the least hurry.

Keep the three apart

Remembering a total achieves nothing. Every booking needs four separate figures:

  1. Total hire
  2. Advance received
  3. Received later
  4. Breakage and shortage charges

Balance = (1 + 4) − (2 + 3). That is the only number that matters, and it is the one a register never actually contains.

Quote breakage rates in advance

This is where the arguments are. After the function you say twelve chairs came back broken; the customer says they were broken when they arrived.

The cure is to fix it beforehand. At booking, state what a broken chair costs, what a torn mattress costs, what a missing vessel costs. When the rate is already known, the return is a count, not a negotiation.

Count at return, not the next morning

Counting while goods are being unloaded is inconvenient, it is late, it is dark. Count anyway.

A count done the next morning has no witness, and no customer can reasonably accept that the shortage happened at their end.

Look at dues by age

Not all dues are alike. Ten days old is collection; six months old is close to a loss.

Once a month, sort your outstanding list by age and start at the top. Oldest first, not largest first.

Give a receipt every time

Whenever money comes in — including the advance — give a slip showing the date, the amount and what remains. It does two things: it gives the customer confidence, and six months later when they say "but I paid that", you have an answer.

What not to do

Do not carry the credit ledger in your head. In this trade twenty or thirty parties owe you money at once, and memory cannot hold that honestly. What memory keeps is the large amounts — and the losses always come from the small forgotten ones.

Common questions

How do I set breakage rates?

Close to what a replacement actually costs, not far above it. The point is to cover the loss, not to fine the customer — and an inflated rate costs you the repeat booking.

When should I write off an old due?

Your call, but fix a cut-off — a year, say. After that, write it off and clear the books, otherwise your outstanding list slowly becomes fiction.

Put your tent house on your phone

Date-wise stock, no double bookings, advances and dues, invoices — all in one place.

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