The month-end check every shop khata needs

Looking at your khata every day is not the same as reviewing it. Once every thirty days, after closing, sit with the whole book instead of one page. Seven checks, in the same order every time, each one telling you something a daily glance cannot: what grew, what stopped moving, and who went quiet.

Daily looking is not reviewing

Half past nine, the shutter down to your knees, and you open the khata to see whether Bashir paid. He did, Rs 1,200. You close the book and go home. That is how a khata gets read on an ordinary day.

But notice what you did. One question, one name, one answer. That is a lookup, and no number of lookups adds up to a review.

Every problem worth catching is made of comparison, and comparison needs two points. One point is a dot. Two make a line, and a line has a direction. So a daily view cannot show you four things.

Direction. Your total money out on udhaar, the credit you have given, may be climbing steadily. Every single day looks normal. You never see the climb because you never see the total.

Stillness. A balance untouched for forty days looks exactly like a balance paid down and rebuilt yesterday. Both are just a number on a page.

Shrinkage. A customer who stops coming becomes obvious. One who halves never does. He still walks in, still greets you, still buys. The day he takes Rs 400 instead of Rs 900 sets off no alarm.

Drift. The delivery charge that went from Rs 900 to Rs 1,400 was paid on ordinary afternoons, by you, without a thought. Each payment looked normal. Only the twelve stacked together look wrong.

Counting the galla at closing is a separate job, worth doing daily; why your cash box never matches your khata is that job, not this one.

The sitting: a fixed day, after closing, one hour

Pick a day and do not move it. The last working day of the period, or the first, as long as it is always the same. A review you do when you feel like it happens when trade is good, which is when it teaches you nothing.

Do it after the shutter is down. Not between customers, not with a boy waiting for change. Half of this is arithmetic and half is honesty, and neither survives being interrupted.

Give it one hour. If it takes three, you are writing up records that were never kept, which is a different problem. Tea, the register or the phone, a blank sheet and a pen.

And now the part that decides whether this works: the same questions, in the same order, every time. Not the ones worrying you tonight. If the questions change, the answers cannot be compared, and then you are not reviewing your shop, you are worrying about it in a chair.

How to set the sitting up so it survives

1. 1A fixed day, never a moodThe same day of every thirty, chosen once. A review you do when you feel like it only happens when trade is good.
2. 2After the shutter, not between customersHalf of this is arithmetic and half is honesty. Neither one survives a boy waiting at the counter for change.
3. 3One hour, one blank sheet, one penIf it runs to three hours you are writing up records that were never kept, which is a different job.
4. 4The same questions, in the same orderNot the ones worrying you tonight. Questions that change give answers you cannot compare, and comparison is the whole point.
5. 5End on paper, with a dateTwo or three decisions, each with a name and a day, kept with the khata so the next sitting can mark them done.

The seven checks, in this order, every sitting

• Total owed to you, against the same number from the previous sitting
• How much of that total did not move at all, and whose names those are
• Regulars whose buying has dropped by half or more
• Money in against money out, and whether the difference is in the galla
• The expense that grew, and the one you forgot you were paying
• Goods that sold nothing at all, and goods you hold too much of
• Real profit on what you actually sold, not the margin you assume

Checks one and two: what is out, and what has stopped

Check one is the total. Everything owed to you by everybody, in one number, as it stands the moment you sit down. Write it at the top of the sheet, and write the same number from the previous sitting beside it.

A bad answer: the total rose while your sales did not. A growing shop carries more credit than it used to, so a rise is not automatically bad. A rise you cannot explain in one sentence is.

The first action is narrow and boring. For the period ahead, nobody already above your own ceiling gets anything new until he brings his balance down. Not a speech. Three or four names on your sheet.

Check two is the age of that money. Of the total you just wrote, how much has not moved at all across the thirty days, meaning no payment in and no goods out. And, more useful, which names those are.

A bad answer is a large share of your money sitting in names that did nothing. That money is not slow, it is stopped, and money stopped after two periods is usually stopped after six. Every argument about udhaar that has been sitting for a year begins with one period nobody looked at.

The first action is a list of five, biggest first, each getting a visit or a call in the days ahead. Five, not fifteen. You will do five.

On a paper register this is easy. As you write through the period, put a pencil tick in the margin of every page you touch. At the sitting, flip through: the pages with no tick are your stopped money, found in ten minutes.

Checks three and four: who shrank, and where the money went

Check three is the quiet ones. Four in the afternoon, Rafiq comes in for a soap and a packet of tea, pays cash, says "See you tomorrow" and walks out. Pleasant, regular, no trouble. What you missed is that he once took Rs 3,000 of goods in a week and now takes Rs 900.

A regular whose buying has halved is already half gone. He has found somebody else for the rest of his list and has not told you, because there is nothing to tell. Winning him back costs one honest question. Replacing him costs far more.

A bad answer is three or four regulars sitting at half of what they were. The first action is one of them, in person, within a few days, and one question: "You used to take the big pack. What changed?" Then stop talking. The rest is in winning back a customer who left.

Check four is money in against money out. Total what came in over the period, cash and transfers together. Total what went out: goods bought, expenses paid, and what you took home. The difference is what should be sitting in the galla and the bank now.

Say a small general store adds up its thirty days

Owed to you at the previous sittingRs 142,000

New udhaar given over the periodRs 96,000

Recovered over the periodRs 88,000

Owed to you at this sittingRs 150,000

Of that, sitting untouched all period across nine namesRs 41,000

You handed out Rs 8,000 more than you took backRs 8,000 out

An example, not a real shop. Put your own two totals in and the shape of the answer stays the same.

When it does not match, do not search the whole period. The gap is nearly always a sale never written, money taken from the box and never noted, or one payment recorded twice. Re-walk the three busiest days only. Most gaps are born on busy days.

A bad answer is a gap that is neither small nor explainable, and the first action is to fix the writing habit that made it. The rupees are gone; the habit will make the same gap again.

Checks five, six and seven: costs, shelf and profit

Check five is expenses, and it is two questions, not a march through every receipt. Which cost grew, and which cost are you still paying for something you no longer use?

The first hides because it grew slowly, the second because it is small and automatic. Say a delivery arrangement was Rs 900 when you agreed it and is Rs 1,400 now. Nobody lied to you. It moved with the fuel.

A bad answer is a line up by a third with no reason attached. The first action is one phone call before the period ahead starts: "This was Rs 900 when we agreed it. What is it now, and why?"

Check six is the shelf. Two lists, neither of them long if the stock record exists. What sold nothing at all across the thirty days, and what you hold far more of than sales justify.

A bad answer is a line that has sold nothing in two periods running. That is not slow stock, it is your money lying on a shelf in a shape you cannot spend. Take the three worst by value, mark them down enough to move them, and drop them from the order list. The argument about stock that never sells is worth reading first.

Check seven is your real profit on what you actually sold, not the margin you believe you work on. The value of the goods sold, minus what those exact goods cost you, minus the expenses of the period.

A bad answer is a number well under the margin you have quoted yourself for years, and the gap is rarely mysterious: discounts you forgot, buy rates that rose while your selling rate stood still, goods that left on udhaar and never returned as cash. Working out your shop's real profit once turns this check into a number.

What you write down before you get up

A sitting that ends in a feeling changes nothing. You worry for two days, a busy week erases it, and thirty days later you meet the same seven answers, slightly worse.

So the sitting ends in writing, and what you write is decisions. Two or three, not nine.

Each one needs a name or a number in it, and a day. "Be stricter about udhaar" is not a decision. "No new udhaar to Rafiq, Sattar and the tailor until they clear" is one. "Chase these five, biggest first, before Friday" is one.

Two or three, because you will actually do two or three. Nine is the same as none. Then the sheet goes with the khata, not into your head, because it has one more job thirty days from now.

The second sitting is where it starts paying

Be honest about the first one. It gives seven numbers with nothing to compare them against: nearly useless as judgement, essential as a starting line.

The second is where the shop finally speaks. Your outstanding is up Rs 8,000 against the previous sitting. Three of the five names you meant to chase still have not moved. The charge you called about is down. The stock you marked down has cleared and the rest has not.

One sitting alone, and the same sitting done twice

The first sittingThe one after it

Total owed to youThe first sittingRs 150,000, and you have no idea whether that is highThe one after itRs 158,000, so it climbed Rs 8,000 while sales stood still

The still moneyThe first sittingNine names, Rs 41,000, all of it new informationThe one after itSix of those nine still have not moved, which is the real answer

The decisions you wroteThe first sittingThree, and nothing to compare them against yetThe one after itTwo done, one never started, and you now know which kind you are

What the hour was worthThe first sittingA starting line, honestly not much moreThe one after itDirection on every one of the seven checks

Two rules make the comparison worth anything. Keep the same definitions: if you valued unsold goods at cost the first time, value them at cost forever, because a number that changes meaning is worse than none. And keep the sheets in order, on a nail or in a folder. By the fourth sitting you will know which two checks your shop is weak at, and those get the hour.

The record that makes the hour possible

Every one of the seven checks is a report, and a report can only be read if the writing was done all through the period. That is the link between the boring daily work and the useful hour at the end.

On paper it means a few habits. Date every line. One customer to a page, with a running total at the bottom so you never add a column twice. A summary page at the front, one row per sitting, holding the seven numbers. And expenses in the same book, because an expense in a separate notebook is one you will not find.

If the writing was not done, the sitting becomes three hours of adding up, you will hate it, and there will be no second one.

This is where the app earns its keep. In Wasoolo the total owed to you sits on the front screen without you adding anything, each customer's page carries what he took and what he paid with dates attached, and the expense, stock and profit views answer checks five, six and seven directly. You can print a statement for any name before you go and stand in front of him. The sitting becomes reading instead of arithmetic.

Your shop tells you what is wrong every thirty days, in plain language, for free. It just will not say a word until you sit down and ask it the same questions.

How long does the first sitting take?

Longer than the ones after it, so protect two hours the first time. Most of that is finding numbers rather than judging them. By the third sitting an hour is comfortable.

I only keep a paper register. Can I still do this?

Yes. Date every line, keep one customer per page with a running total, and add a summary page at the front for the seven numbers. Everything here works on paper.

My totals never match exactly. How close is close enough?

A gap you can explain in one sentence is fine. One you cannot explain is the finding, whatever its size, because the same hole makes a bigger one over the next thirty days.

Should I show these numbers to my helper or my partner?

Show a partner everything, since it is his money too. With a helper, share the checks that touch his work, such as stock and the daily writing.

What if the review says my profit is much smaller than I thought?

That is the review working, and better learnt in an hour than over a year. Take one cause at a time: buy rates first, then discounts, then goods sitting on udhaar.

Is thirty days the right gap, or should I do it weekly?

Weekly is too short for most of these checks to change, so it turns into a chore. Thirty days is long enough for a real trend and short enough to still fix it.