Start before Diwali, not after: confirm the balance with each dealer in October, agree a payment date in writing and send the statement again in the first week after the festival. Follow up weekly, take part payments with a written acknowledgement, and treat any invoice more than 45 days past acceptance as overdue under the MSMED Act if you are a registered micro or small manufacturer. If a dealer stops responding by mid-December, send a legal notice before the year-end rush.
Why festive dues go bad
Festive credit is concentrated: a few weeks of large orders, often on longer terms than usual, to dealers who are themselves waiting to be paid by retailers. After Diwali three things happen at once. Unsold stock becomes an argument ("take it back or wait"), the dealer's cash is tied up in its own receivables, and the supplier's sales team is reluctant to push hard during the season of goodwill. Dues that slip past December often become the old payment pending of next year.
A collection plan, October to January
| When | Action |
|---|---|
| Mid-October | Send each dealer a statement and ask for a signed balance confirmation. Agree the payment date for festive invoices in writing. |
| Week after Diwali | Resend the statement with the invoices falling due this month. Ask for the unsold stock list now if returns are allowed. |
| Weeks 2 to 4 after Diwali | Weekly call and WhatsApp follow-up; record every promise with a date. Accept part payments and confirm the balance in reply. |
| Early December | Settle returns by credit note. Stop fresh credit to dealers more than 30 days overdue. |
| Mid-December | Final demand letter; then a legal notice for anyone still silent. |
| January | File on the MSME ODR portal or start a civil recovery for unresolved accounts. |
The WhatsApp message that works is short and specific: invoice number, amount, due date, and a direct question about the payment date. A WhatsApp payment reminder format is ready to copy.
Worked example (hypothetical)
A small Udyam-registered appliance manufacturer in Noida supplies festive stock of ₹4,50,000 to a Lucknow distributor, accepted on 20 September 2026 on a 45-day term. The due date is 4 November 2026. The distributor pays ₹1,50,000 on 25 November and says the rest will follow "after the season".
- The manufacturer replies the same day confirming receipt of ₹1,50,000 and a balance of ₹3,00,000, and asks for a written payment date.
- Interest runs from 5 November on the unpaid amount. Assuming a bank rate of 6.5% (1.625% a month compounded), interest on the full ₹4,50,000 for the first month is about ₹7,300; on ₹3,00,000 for the next two months about another ₹9,800.
- The distributor sends a list of unsold stock worth ₹60,000; the manufacturer accepts the return and issues a credit note, leaving ₹2,40,000.
- With no payment by 15 December, an advocate's notice claims ₹2,40,000 plus interest. The distributor pays ₹2,40,000 in January in two instalments, and the interest is waived as part of the settlement.
Check your own numbers with the MSME interest calculator, or the late payment interest calculator if you are not a registered MSE.
Edge cases
- Sale-or-return terms: if the dealer has a written right to return unsold stock, the dues are only what sold; agree the return date.
- Dealer says "my retailers have not paid": that is not a defence. See buyer says their customer has not paid.
- Post-dated cheques for festive dues: if one bounces, the cheque bounce clock starts with the return memo.
- Trader suppliers: the MSMED Act interest does not help; rely on the agreed interest clause and limitation.
If dealers are slow every year, check them before the next season on FundRaksha Trust. For dues already stuck, FundRaksha sends notice within 24 hours and charges 30% only on what is recovered.
Sources
Last reviewed: 2026-10-21. Information for Indian businesses; not legal advice.