Updated 26 Sept 2026 6 min read
Distributor relationships generate some of the largest and most complex commercial balances in Kenya. Running accounts, rebates, returns and marketing contributions mean that the amount owed is rarely a single invoice. Recovery starts with an agreed or well-evidenced account.
Reconcile the account first
Prepare a statement of account showing every invoice, credit note, payment and adjustment over the life of the relationship. Distributors commonly respond to a demand by alleging unapplied credits, so a clean reconciliation, ideally one the distributor has previously confirmed, removes the most frequent ground for delay.
Anticipate set-off and counterclaims
Distributors often raise counter-arguments. Review the distribution agreement for provisions on:
- Volume rebates and incentive payments.
- Returns of damaged, slow-moving or expired stock.
- Marketing and promotional contributions.
- Exclusivity, and any claim that the supplier breached it.
- Notice periods and compensation on termination.
Stock and security
Where the agreement contains a retention of title clause, unsold stock may still belong to the supplier. Where the distributor gave a guarantee, a bank guarantee or other security, that security may provide a faster route to payment than a claim against the distributor itself. Both points should be checked early.
Structuring recovery
Many distributor debts resolve through a documented settlement: an agreed balance, a payment schedule and, where appropriate, a return of stock. A signed settlement agreement also serves as a written acknowledgment of the debt for limitation purposes.
Frequently asked questions
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This article is general information for commercial creditors and is not legal advice on any particular matter. Submitting a claim does not create an advocate-client relationship.