Your shop shows a profit but the galla is empty

Your profit is real. It is just not money yet. Every rupee you earned and cannot see is sitting in one of four places: udhaar you gave out, stock on your shelves, supplier dues you paid down, and cash you carried to the house. Find which one, and the mystery ends tonight.

The Friday morning that does not add up

Rizwan runs a kiryana shop on a main road. It is twenty to ten on a Friday. The supplier's man comes at noon with a bill of Rs 47,000, and Rizwan has just opened the galla: Rs 4,300 and a handful of coins.

His register says the month's sales were Rs 386,000. Take off the buy rate of everything that left the shelves, take off rent and electricity and the helper, and he earned about Rs 61,000.

So he does what almost every shopkeeper does. He looks at the boy who works the counter and wonders. He counts the register again, and a third time. Then he decides the arithmetic was never right and stops trusting his own numbers.

Both conclusions are wrong. Nobody took anything, and the Rs 61,000 is correct. Rizwan earned it and then handed most of it back out in ways that never once felt like spending.

Profit and cash are counting two different things

Profit answers one question. On the goods that left your shop, did the selling price beat the buy rate and the running costs? A sale counts the moment the goods cross the counter, whether the customer paid cash or wrote his name in the khata.

Cash answers a completely different question. How many rupees are in the galla and the account right now? Cash does not care whether a sale earned anything. It only counts what came in and what went out.

The two numbers pull apart for four reasons, and all four are ordinary shop life, not accidents. You sell on udhaar, so the profit is earned and the money is on somebody else's page. You buy stock, so cash leaves today for goods that sell over the next six weeks. You pay off an old supplier bill, so cash leaves for a sale you made long ago. And you take money for the house, which is neither a cost nor a mistake, but it is definitely cash walking out of the door.

This is why a shop can earn well for six straight months and still be short every Friday. Nothing is broken. The earnings keep converting into things that are not money. If you have never separated the two, start with how to work out your shop's real profit, because you cannot chase a number you have not yet worked out properly.

Where a month's profit actually went

Look at Rizwan's month laid out in full. The top half is the arithmetic he already trusts. The bottom half is the part nobody writes down.

Say a shop sold Rs 386,000 in one month

Sales for the month, cash and udhaar togetherRs 386,000

Buy rate of everything that left the shelvesRs 305,000

Rent, electricity, helper, small daily costsRs 20,000

So the profit the arithmetic gives youRs 61,000

Udhaar on customer pages grew byRs 24,000

Stock standing on the shelves grew byRs 19,000

Old supplier dues paid downRs 10,000

Carried to the house in eight or nine handfulsRs 14,000

Galla at the end, against Rs 10,300 at the startRs 4,300

Read the bottom half slowly, because it is the whole article. He gave out Rs 24,000 more udhaar than he collected back. He put Rs 19,000 more into stock than he sold off the shelves. He cleared Rs 10,000 of an old supplier bill. And across the month he took Rs 14,000 to the house, in eight or nine handfuls, none of which felt like a withdrawal at the time.

That is Rs 67,000 against a profit of Rs 61,000. So the galla did not just fail to grow. It went backwards by Rs 6,000, from Rs 10,300 at the start to Rs 4,300 on Friday morning.

Notice that none of those four lines is a loss. The udhaar is money owed to him. The stock is goods he will sell. The supplier payment cleared a real debt. The Rs 14,000 fed his family. He is richer than he was a month ago. He simply cannot pay a bill with any of it.

The four places your profit is sitting

Which of the four is holding your money

• Udhaar grew: the total owed to you is up and the galla is flat
• Stock grew: fuller shelves than a month ago, same daily selling
• Supplier dues fell: you cleared old bills, so cash left for old sales
• House withdrawals: handfuls taken across the month, none written down
• None of the four moved, and cash is still short

Udhaar that grew. This is the biggest one in most shops that give credit. Profit that is now written on somebody else's page. The tell is simple: the total owed to you keeps climbing while the galla stays flat. You are not selling less, you are collecting less than you hand out, and the gap is exactly the profit you cannot find.

Stock that grew. Every carton on the shelf is money lying down. Buying is the easiest way in the world to spend a good month, because it feels like building the business rather than emptying the galla. Some of it is, and some of it turns into the stock that never sells and quietly holds your cash for a year.

Supplier dues timed badly. If you owed Rs 60,000 at the start and Rs 50,000 at the end, you did not spend Rs 10,000 on anything. You returned money you had already been using. This is the place where a shop with a healthy year still panics on one particular Friday, purely because two bills landed in the same week. Timing, not earning. There is more on carrying it safely in buying stock on credit without choking your cash.

Money taken to the house. A shopkeeper takes money the way he takes air, without noticing he did it. Rs 500 for school, Rs 2,000 for a doctor, Rs 3,000 because a relative is visiting. Nobody writes any of it down, so at the end of the month it does not exist in any number you own, and it is often the largest single hole.

Four numbers, taken twice

You do not need an audit. You need four numbers on the first day of a cycle and the same four on the last day, written on the same page so you can look at both.

The evening count: four numbers, taken twice

1. 1Total owed to you by customersAdd up every khata page. One number, not a list of names.
2. 2Stock on the shelves at buy rateCount your ten biggest lines only and hold the rest at a fixed figure.
3. 3Total you owe your suppliersEvery unpaid bill, including the one due later this week.
4. 4Cash you hold right nowThe galla plus the bank and the mobile account, added together.
5. 5Take the same four on the last day of the cycleSame page, same handwriting, so the movement is easy to see.
6. 6Whatever your profit does not cover went to the houseRise in udhaar, plus rise in stock, minus rise in dues, plus the change in cash.

The four are: the total owed to you by customers, the value of your stock at buy rate, the total you owe suppliers, and your cash, meaning the galla plus whatever sits in the bank or mobile account.

The stock number frightens people, so do it the rough way. Count only your ten biggest lines at buy rate and treat the small stuff as a fixed figure that does not change much. You want the movement, not perfection. A number that is honestly Rs 5,000 out is still enough to show you a Rs 19,000 swing.

Then the arithmetic. Add the rise in udhaar, add the rise in stock, subtract any rise in what you owe suppliers, add the change in cash. Whatever is left over between that answer and your profit is what went to the house. You do not have to remember the handfuls. The count finds them for you.

Naeem sells hardware and does this at nine at night with the shutter half down. The first time he ran it, he found the total owed to him had gone from Rs 148,000 to Rs 186,000 in one cycle while his galla had not moved at all. He had assumed his slow patch was weak sales. It was not. His sales were fine and his collecting had stopped.

What to do about each one

Each of the four has its own fix, and the fixes do not swap.

The fix that matches the cause

✓Do this

• Chase the ten oldest customer pages, and ask for a part payment on each
• Skip one buying cycle on your slow lines and let the shelf turn into cash
• Ring the supplier on Wednesday and ask to move a Friday bill to Tuesday
• Pay yourself one fixed amount on one fixed date, like a wage

✕Not this

• Start with the largest balance because the number looks worst
• Cut buying on the fast lines, which only starves your best sales
• Say nothing and let the bill fall due unpaid on Friday
• Take Rs 500 and Rs 2,000 out of the galla as they are needed

For udhaar, run a collection push on the oldest pages first, not the biggest. Old balances harden. Take the ten longest-standing names, ask for a part payment against each rather than the whole sum, and put the rest on a fixed day. The methods in recovering udhaar without losing the customer are the ones that keep the customer while the money comes back.

For stock, stop fresh buying for one full cycle on your slow lines only. Not on the fast ones, never on those. Sell down what is standing, and let the shelf turn back into cash on its own. One skipped order on the wrong item can be worth more than a week of good sales.

For supplier dues, pick up the phone. Ask for the bill to move by a week, before it falls due, not after. A supplier who is told on Wednesday that Friday is tight and Tuesday is comfortable will usually say yes, and he will remember that you rang. The same supplier discovers it on Friday through silence and remembers that instead.

For the house, pay yourself properly. One fixed amount, on one fixed date, treated exactly like the helper's wage. It can be Rs 25,000 or Rs 40,000, whatever your shop truly carries. What kills the galla is not the amount, it is the handfuls, and the cure is the discipline in keeping shop money and house money apart.

How much should be locked up, and when it has tipped

Here is the honest part. Some of your profit is supposed to be sitting in udhaar and stock. A shop with nothing on its shelves and no customer pages is a shop with no future. The goal was never zero.

A comfortable picture looks roughly like this. Your stock is about one selling cycle deep, so the shelf empties and refills rather than ageing. What customers owe you is no more than your normal collecting can clear inside a cycle. And your cash covers the next supplier bill plus a couple of weeks of running costs, so a bad week is an inconvenience rather than a phone call to a relative.

The warning sign is not a level, it is a direction. If the total owed to you rises for three cycles in a row while the galla stays flat, your shop is lending faster than it is collecting, and the profit statement will keep looking excellent right up to the day you cannot pay a bill. Direction beats level every time.

You can run all of this on paper. The reason most shopkeepers do not is that four numbers, taken twice, means opening the register and adding up every customer page by hand. Wasoolo keeps the total owed to you on one screen, so that number takes one second instead of an evening. Its cash and bank accounts and its expenses hold the other side, and the profit view shows what you earned beside what you actually hold. Shop money and house money stay in separate places, which is what makes the fourth number visible at all.

Common questions

My profit says Rs 61,000 and I have Rs 4,300. Is my accounting simply wrong?

Almost certainly not. Profit counts sales and costs; cash counts rupees moving. Both can be right at once. Do the four-number count before you suspect your arithmetic or your helper, because in most shops the whole gap turns up in udhaar and stock within twenty minutes.

Which of the four is usually the biggest?

In a shop that gives credit it is normally growing udhaar, followed by household withdrawals that nobody recorded. In a shop that sells mostly for cash it is nearly always stock. The count tells you which is yours, and shops differ enough that guessing wastes a cycle.

How often should I take these four numbers?

Once a cycle is enough to see the direction, and the same date each time matters more than the date you pick. If you are already short, take them fortnightly for a while. Once the galla is steady again, monthly is plenty.

Is it wrong to take money from the shop for the house?

Not at all, it is why you have a shop. What causes the damage is taking it in handfuls nobody counts. Fix an amount and a date, pay yourself like an employee, and the shop can plan around it instead of being surprised by it.

I have a bill on Friday and no cash. What do I do first?

Two calls, in this order. Ring your three oldest udhaar names and ask for a part payment today, even half. Then ring the supplier before the due date and ask for a few days. Doing both early works far better than doing either after the bill has already gone unpaid.

Should I stop giving udhaar completely until the cash recovers?

Stopping outright usually costs you the customers who keep the shop alive. Cap it instead. Freeze new credit for the names already sitting on old balances, keep it running for the ones who clear their page, and let the udhaar total fall back to something your collecting can carry.