Stock, sales and cash: the distributor's nightly reconciliation
Every distributor closes the day by agreeing three things: what left the godown, what was billed, and what came back as cash or credit. When the three agree, the day is done. When they do not, somebody stays late — and the search almost always ends in one of four places.
2 min readOadbox
The four usual gaps
- Goods loaded on a van but not yet billed, sitting in nobody's stock.
- Returns accepted at the door and recorded the next morning, or not at all.
- Damages and expiry taken out of stock with no corresponding write-off entry.
- Cash collected against an old invoice, applied to the wrong one.
None of these are exotic. All four are the consequence of an event happening physically before it happens in the system.
Van stock is a location, not a state of mind
The moment goods leave the godown they are still your inventory, just somewhere else. Modelling the van as a stock location — with a loading document, a day's sales issued from it, and an unload at return — closes the largest of the four gaps outright.
It also makes the salesman's day auditable without accusation: loaded minus sold minus returned should equal unloaded, and the arithmetic settles it.
Credit is a decision, and it should be made before the van leaves
Outlet credit limits enforced at billing time, on the van, prevent the conversation where a route sells to a defaulter and collections finds out a month later.
The rule needs an override with an approver, because business is business — but an override that is recorded is a completely different thing from a rule that was never checked.
Close the day at the end of the day
The discipline that separates distributors who reconcile in ten minutes from those who reconcile in two hours is that the first group closes daily and the second closes monthly.
A daily close with a signed cash sheet, an unload confirmation and a variance note takes minutes when the day is fresh and is nearly impossible three weeks later, when nobody remembers which of the four gaps it was.
Written by the Oadbox team. Something here not match how it works in your business? We would genuinely like to hear it — connect@oadbox.com.