Deciding when a brewery should stop serving a weak account

A weak account costs more than its invoice shows

On the sales report every account looks like revenue. The costs that matter sit elsewhere: the delivery van that drives 25 km for two kegs, the salesperson chasing a cheque for the third time, the 50 litre keg that has not come back in four months.

Add those up and some accounts turn out to lose money. Worse, an account that serves your beer badly damages the brand in front of drinkers who will never visit your taproom. We would rather a brewery had 20 good accounts than 35 where ten quietly drain cash and reputation.

Build a cost-to-serve sheet for each account

Pull six months of data and put one account per row. You need:

• Litres sold and gross margin per litre.
• Number of deliveries and the cost per delivery (fuel, driver time, vehicle).
• Average days to pay against your agreed terms.
• Kegs outstanding and kegs lost.
• Sales visits and complaints handled.

Here is a worked example with illustrative numbers. An account takes 100 litres a month at a gross margin of ₹90 a litre: ₹9,000. It needs four deliveries at ₹600 each, so ₹2,400. It pays at 75 days instead of 30, which on ₹20,000 of monthly invoices at a 12% annual cost of money is about ₹300 a month. It has lost one keg in six months, which at ₹8,000 a keg is ₹1,333 a month. Add two hours of sales time at ₹500 an hour. The account contributes about ₹4,000, not ₹9,000. Your numbers will differ. The point is to see them.

Quality at the tap is a deal breaker

Money is one test. The other is what the drinker tastes. Draught lines should be cleaned every two weeks as a minimum, more often in warm conditions. A bar that cleans every two months will serve your pale ale with a buttery diacetyl note from bacteria in the line, a sour edge and flat foam.

The drinker does not blame the bar. They blame your beer. If you have offered to clean lines or train staff and the account still refuses, you are paying to damage your name. That is often reason enough to stop, even if the margin is fine. Our guide to beer off flavours helps you name what you are tasting when you visit.

Try to fix it before you walk away

Dropping an account should be the last step, not the first. Before deciding, try the cheaper remedies:

• Move them to fewer, larger deliveries or a minimum order.
• Change payment terms to cash on delivery or a deposit on kegs. Our guide to keg deposits and returns covers the mechanics.
• Raise the price to reflect the cost to serve.
• Agree a line cleaning schedule in writing.

Give the account a clear period, say 60 days, to meet the new terms. Many will. The ones that do not have made the decision for you.

Leave cleanly and recover your assets

When you do stop, do it properly. Tell the owner face to face or by phone, then confirm in writing. Give a final delivery date. Collect every keg and any dispense equipment you own before that date, not after. Settle the last invoice before releasing the final delivery if payment history is poor.

Check the keg register against your own records as you collect. A bar that has had your beer for two years may hold kegs from three different fills, some with sediment drying inside. Clean and pressure test every returned keg before it goes back into the fill line. A keg returned with a damaged spear or seal can leak or spoil the beer filled into it.

Stay courteous. Bar owners talk to each other. An account that was difficult for you may be run by someone who opens a better venue next year.

Set rules so you do not have to decide twice

The best fix is upstream. Write simple account standards before you take on new venues: minimum monthly volume, payment terms, keg deposit and line cleaning frequency. Review every account against them each quarter.

Few founders do this because the sales team wants volume and nobody owns the cost side. Deciding which accounts to grow, fix or drop is a margin question. It sits right at the centre of running a brewery as a business rather than a production line.

It also needs someone to own it. In a small brewery that is usually the founder, with the sales lead bringing the volume case and whoever runs the books bringing the cost case. Put both in the same room once a quarter with the sheet on the screen. Arguments about a favourite account end quickly when the cost to serve is sitting there in rupees.

Your first step: list your accounts by days to pay. Look at the bottom five and count their kegs outstanding. That short list is where you start.

Common questions

How do I know if a bar account is unprofitable?

Work out its gross margin per month, then subtract delivery costs, the cost of late payment, lost kegs and sales time. If little or nothing is left, the account is not paying its way.

How often should bars clean beer lines?

Every two weeks is the common minimum, more often in hot conditions. Lines cleaned less often give sour, buttery or flat beer.

Should I raise prices or drop a weak account?

Try raising the price, changing terms or setting a minimum order first. Drop the account only if it will not accept terms that cover its cost to serve.