Getting paid on time by bars and restaurants
A brewery pays for malt, hops and staff on fixed dates. A bar pays when it feels like it. The gap is your working capital. Here is how to close it without losing the account.
Start with how beer is sold in your state
Alcohol is a state subject. The sales route differs. In some states a brewery sells only through a state agency or approved distributors, so the payment chain is set by the system. In others a brewery may sell direct to bars and restaurants. Read your state's current rules before you design payment terms. Ask a licensing adviser if the route is unclear. Some states restrict credit on alcohol sales. Where credit is not allowed, there is no late payment to chase because you do not extend credit.
Where you may sell direct, the terms are yours to set. Our guide on selling craft beer to hotels with listings and payment terms covers the commercial side.
Write the terms before the first delivery
Late payment usually starts as vague payment. Put the terms on the first order and the first invoice: when payment is due, how it is paid, what happens after the due date and who in the business approves it. A one page terms sheet signed by the bar owner or manager is enough. The terms should state the credit period in days, a limit on how much can be outstanding and a note that supply may pause when the limit or the date is passed.
If you are a registered micro or small enterprise, the MSME payment rules may give you statutory protection on payment time and interest. Check the current rules with an accountant.
Invoice on the day and invoice cleanly
A bar cannot pay an invoice it has not seen. Send the tax invoice on delivery day, with the bar's correct name, GST details, quantities, rates and the delivery note signed by whoever received the kegs or cases. Disputes about "we never received that" disappear when the signed delivery note sits in a shared folder.
Pay attention to small mismatches. A wrong billing name or a missing purchase order number is a common reason an accounts team parks an invoice for a month. Ask each customer on day one what their accounts team needs on an invoice, then do exactly that.
Credit limits and a weekly statement
Set a credit limit per account in rupees and in days. A small bar that orders 10 kegs a month should not be allowed to owe you three months of kegs. Record the limit in your accounts system and look at it before accepting each new order.
Every Monday, send each customer a one page statement: open invoices, due dates and amounts overdue. Weekly statements keep the debt visible and give the bar's accountant something to tick. Our guide on working capital in a brewery shows how much stock, kegs and receivables a small brewery really funds at once.
Make paying easy
Offer bank transfer and UPI. Put the account details and a QR code on every invoice. A bar manager who can pay in ten seconds after the delivery is more likely to pay the same week. Cash on delivery for new or risky accounts is a fair rule. Cheques invite delay, so if you accept them, track their dates.
Use deposits for kegs. A keg deposit protects an asset that is expensive to replace. Our guide on setting keg deposits and chasing keg returns from bars covers the numbers.
A follow-up routine that keeps the relationship
Chase on a schedule that you decide once:
- A friendly reminder two days before the due date.
- A call on the day after the due date, to the person who approves payments.
- A written follow-up with the statement a week later.
- A pause on new orders when the overdue amount passes your limit, with a polite explanation.
- A senior conversation with the owner after two weeks of silence.
Keep each step polite and factual. Most late payment is slow admin rather than bad faith. The owner of a good bar will respond to a clear, calm statement faster than to an angry message.
When to stop supplying
Stopping supply feels like losing a customer. A weak account that takes 90 days to pay and drains your cash costs more than it earns. Our guide on deciding when a brewery should stop serving a weak account sets out how to judge it. Put the rule in the terms sheet so stopping is the agreed outcome rather than a surprise.
For your next step, pull your last three months of invoices and list the days each customer actually took to pay. The two or three slowest names are where the terms sheet should start.
Common questions
Can I sell beer to bars on credit in India?
It depends on the state. Some states restrict or regulate credit on alcohol sales. Check your state's current rules or ask a licensing adviser.
What should payment terms for a bar include?
The credit period in days, a credit limit, the payment method, what happens after the due date and a note that supply can pause. Put them in writing before the first delivery.
How do I chase a bar without losing the account?
Follow a schedule: a reminder before the due date, a call the day after, a written statement within a week and a pause on new orders at the limit. Stay polite and factual.
Should I take cash for kegs?
Take a deposit for the keg itself and collect cash or an instant transfer on delivery from new or risky accounts. It protects both the beer and the asset.
