# Udhaar

**Udhaar is goods or services given to a buyer now with payment promised later, the everyday Indian name for trade credit between businesses.**

## What it means

Udhaar is credit. When a distributor sends stock to a retailer and the retailer says "payment next month", that unpaid amount is udhaar. In B2B trade it is usually backed by an invoice, and sometimes by nothing more than a phone call and an entry in the [khata](/en/glossary/khata).

Udhaar keeps Indian trade moving. Most buyers expect some [credit period](/en/glossary/credit-period), and suppliers who refuse it often lose orders.

## Why it matters for getting paid

Every rupee of udhaar is your working capital sitting in someone else's shop. The longer it stays out, the more you need to borrow to buy the next lot of stock.

A few habits make udhaar easier to recover:

- Write down the due date on every invoice, not just the amount.
- Send a polite reminder before the due date, not only after.
- When a buyer cannot pay, ask for a dated [promise to pay](/en/glossary/promise-to-pay) instead of "soon".
- Review your [overdue ageing](/en/glossary/overdue-ageing) every week.

**Example:** You supply ₹2,40,000 of goods with 30 days' credit. If the buyer pays on day 75 instead, that money was out for 45 extra days, money you may have had to borrow at interest.

Read the [B2B udhaar and cash flow guide](/hi/blog/b2b-udhaar-cash-flow-guide) or see [how Udhaar Wapas works](/en/how-it-works).

Source: https://udhaar-wapas.com/en/glossary/udhaar