ProblemShop money
How to keep shop money and house money apart
The milk, the rickshaw fare, the Rs 500 from the box. Pay yourself a salary on a date instead, and your shop's profit becomes a number you can trust.
Pay yourself a fixed salary on a fixed date, and take nothing else out of the galla. Every rupee that leaves the shop for the house is written down as a payment to you, never as a shop expense. Do that for three months and your profit figure turns into a number you can trust.
The Rs 500 that was never an expense
Nobody steals from a shop as quietly as its owner does.
Not stealing in any real sense. A packet of milk on the way home. Two hundred rupees from the galla for a rickshaw. Bread, eggs, a bar of soap, a phone card for your daughter. Every single one of those is normal, and every single one of them leaves the shop without a line anywhere.
By the end of the month the goods are gone from the shelf and the money is gone from the box, and the shop's own record shows neither. So the stock count comes up short and the cash comes up short, and you look for a mistake in the khata, or you start wondering about the boy who works the counter.
There is nothing wrong with the boy. There is a hole in the shop, and it is exactly the shape of your own hand.
The fix is not to stop taking things. It is your shop and your money. The fix is that the shop has to see it happen.
Why "it is all my money anyway" stops being true
For the first year of a small shop, the two pockets are genuinely one pocket. The shop is you. It works, because everything is small and you remember all of it.
Then three things arrive.
A supplier who wants paying on a date. Now the shop needs money to exist in the box on the fifth, whatever happened at home on the third.
Stock that has to be replaced. The Rs 3,000 in the galla this evening is not profit. Most of it is next week's goods wearing the clothes of cash. Spend it on a wedding present and the shelf gets thinner without anybody deciding that it should.
A helper, a son, a brother behind the counter. The moment somebody else can open the box, "I take what I need" stops being a rule anybody can follow. He sees you take Rs 500 without writing it, and the habit you taught him is the one you will complain about later.
That is the point where mixed money stops being simple and starts being the reason you cannot answer one basic question: did this shop earn anything this month, or did it just move money around?
Pay yourself a salary, on a date
This is the whole method and it costs nothing to start.
Pick an amount you can genuinely live on, pick a date, and take that amount out of the shop on that date, exactly as if you were an employee. Write it in as a payment to the owner. Nothing else comes out on any other day.
Say: one month, paid properly instead of taken quietly
Example numbers, not a survey. The point is the last line: it only exists once your own withdrawals are on the list.
Make the salary a little lower than you think, not higher. A salary that is too small can be topped up in a month that went well, and topping it up is a decision you will make deliberately, in daylight, with the month's figures in front of you. A salary that is too large gets quietly borrowed back out of next week's stock money, and nobody ever notices until the shelf is empty.
Then hold one rule above all others: on any other day, the galla is not yours. If you need Rs 2,000 on the eleventh for a school fee, that is fine, but it goes in as a second payment to you with its own line, not as a hand in the box.
The line is the entire point. You are not restricting yourself. You are making yourself visible to your own shop.
Start your digital khata today
Free to start. Works offline. English, Roman Urdu & Hinglish. Your customers get their app free, forever.
Goods off your own shelf count too
Money is the easy half. The harder half is the packet of milk.
Anything that leaves the shelf for your house is a sale. Not at your selling rate, unless you want to, but at what it cost you, so the stock count stays honest and the goods do not turn into an unexplained shortage at the end of the month.
Keep a small pad by the counter or a note on your phone. Milk 60. Soap 45. Rice one kilo 210. Total it once a week and put the total in as one line, either taken out of your salary or added to the amount you have drawn. It takes about four minutes a week and it removes the single most common reason a stock count refuses to match.
Which side does this rupee belong to
The shop pays for this
- Goods bought for the shelf
- Shop rent, shop electricity, shop repairs
- The helper's salary and his tea
- Delivery charges and the loader
- A new fridge for the shop, spread over its life
You pay for this
- School fees, doctor bills, wedding gifts
- Milk, bread and soap off your own shelf
- The house electricity, even on a shared meter
- A family trip, however well the month went
- Cash handed to a relative at the counter
The test for anything in the middle is simple. Ask whether the shop would have spent this rupee if you personally did not exist. Electricity for the shop lights: yes. Electricity for the room upstairs where your family sleeps: no, or half if the meter is shared and you split it the same way every month. The exact split matters less than picking one and never changing it, because a rule that moves gives you a different answer every month and none of them can be compared.
Two minutes at closing time
You do not need an accountant and you do not need a system. You need two minutes when the shutter comes down.
The two minutes before the shutter comes down
- 1Count what is in the gallaNotes first, then coins. Same order every night, so it takes under a minute.
- 2Read what the day says it should beOpening cash, plus cash sales and recoveries, minus what was paid out.
- 3If it is short, say the reason out loudTonight you still remember the rickshaw and the milk. Tomorrow you will not.
- 4Write the house withdrawal as its own lineAgainst your own name, never mixed into the shop's expenses.
- 5Leave tomorrow's opening cash in the boxThe same amount every night, so a shortage shows itself immediately.
Count the cash. Compare it against what the day says it should be. If the two do not match, the difference is almost always something that walked out for the house, and today you can still remember what it was. Tomorrow you cannot.
That habit alone is what makes the daily cash check work at all, and it is why shopkeepers who do it stop believing they have a theft problem within about two weeks.
If your khata is on paper, one line at the bottom of the page is enough: taken for house, Rs 340. If it is on a phone, put it in as an expense against your own name so that at the end of the month you can see the whole year of it in one list. Wasoolo is free to download and keeps house withdrawals separate from shop expenses for exactly this reason.
What three months of this actually changes
The first month is uncomfortable. The number you take home looks smaller than what you used to take home, because what you used to take home was never counted.
The second month, something better happens. You start being able to answer the question. What the shop earned is now a real figure instead of a feeling, because the money you removed is on the list instead of missing from it.
By the third month the useful arguments begin. Is my salary too high for what this shop makes? Should I take less this month and clear the supplier balance instead? Can I afford a second helper? None of those questions can even be asked while shop money and house money are the same pile, because every answer depends on knowing what the shop actually produced.
There is one more thing, and shopkeepers only mention it after the fact. Family arguments about money get shorter. Not because there is more money, but because "the shop pays me Rs 40,000 on the first" is a sentence everybody at home understands, and "sometimes I take some from the box" is a sentence nobody can plan a household around.
Common questions
My shop is small. Do I really need to separate house money from shop money?
The smaller the shop, the more it matters, because in a small shop the house withdrawals are a big share of the total. A shop turning over Rs 60,000 a month can lose its entire visible profit into untracked house spending and the owner will genuinely believe the business is failing. Separating them costs nothing and usually reveals the shop was fine.
How do I decide my own salary?
Start with what your household actually needs each month, then check it against a slow month rather than a good one. If the shop cannot pay it in a slow month, the salary is too high and no amount of hoping will change that. Review it once every six months, not every time a good week happens.
What if I need money in the middle of the month?
Take it, and write it as a second payment to yourself on that date. The rule is not that you cannot take money out of your own shop. The rule is that the shop must be able to see every rupee that left it. An extra withdrawal that is written down does no harm at all; an unwritten one destroys the month's figures.
How should I record goods I take from my own shelf?
At cost, once a week, as one line. Write each item on a pad as it leaves, then enter the weekly total against your own name. At cost rather than at your selling rate because you are not making profit off yourself, and the reason for doing it is to keep the stock count truthful rather than to charge yourself money.
Should the shop have its own bank account?
If you can open one, yes, and it does more for this problem than any rule you will ever write. Shop money in one account and household money in another turns a discipline into a wall. If that is not practical, one lockable box that only the shop uses works better than most people expect.
My son takes money from the counter without telling me. How do I stop that?
Not with a lecture, because he learned it from watching. Announce a rule that applies to you first, out loud: every rupee out of the box gets a line, including mine. Then let him see you write yours for two weeks. A rule the owner follows is the only kind anybody else in a family shop will ever follow.