2. The Jewellery business has many small and complex transactions. Apart from this, the price of gold also varies constantly. That makes it very difficult to determine the profitability of the business. What can be done for this?

It’s true that, due to small and complicated transactions in the jewellery business, it is difficult to determine the profits in this business! But by paying attention to some reports or statements and accordinly implementing them practically, it will not only make you understand the business profits but also surely will help in raising it. That is why you should keep checking different reports regularly.

  1. Time to time checking of Gross Profit from Trading Account.
  • Due to complexity of Jewellery business, preparing it’s trading is difficult. So prepare it as simple as pssible.
  • Create different trading accounts according to the percentage of gross profit.
  • By taking the above small steps, the profitability of the jewellery business is understood in
    a better and easier way.
  1. As the inventory is too costlier in jewellery, monitoring the Cash Flow also continuously.
  1. 3. Developing a facility to check gross profit in every bill.
  • Once the jewellery is purchased till it gets sold out, keep all the in between works well
    connected through a oraganised chain.
  • Understand how much profit has been made in which item? E.g, Find, for what cost the
    ornament came in and for what price it is sold out.
  1. Considering Inventory Caring Days while calculating the Profitability.
  • Check the inventory carrying cost of any inventory on the micro level, that means how
    long the repective ornament was in the shop.
  • Keep an eye on how often the inventory rotates in the business or what is the inventory
    turn over ratio of the jewellery. It informs about how much inventory loss or opportunity loss has happened due to this.

Overall, to check the profitability of jewellery business, keeping accurate records of complex
transactions, checking gross profits from traditional books of accounts, paying attention to statements like cash flow in advance accounting, in addition, checking reports like how much gross profit has happened in each ornament along with it’s inventory carrying cost and how many turns have taken place of inventory, is compulsory.

To handle all this properly, facility of maintaining in-detail records of small yet complex transactions of jewellery business, have been provided in Acme Infinity Software, which also does proper and accurate accounting of the same. And most importantly, it posts or converts all these records in such reports which make you understand the profitability easily. And those are as follows.

  1. To do time to time checking of Gross Profit from Trading Account…
  • Acme Infinity generates easy to undersatnd Trading Account of Jewellery Business, systematically.
  • Different trading accounts can be created in Infinity. For example, Standard Bar, 22 Carat Ornament, 18 Carat Ornament, Diamond Jewelery, MRP Item or Gift Article, Loose Diamond, Old Gold or Old Silver etc. With this, profitability of each department can be estimated independently
  • In concern of goldsmith or manufacturing process, Infinity Software’s trading account covers all related things like, 24 carat issue gold, goldsmith issue receipt, work in progress, in addition the other materials provided to goldsmith or subcontractor etc.
  • In the trading account, the profit-loss and breakage-wastage in the manufacturing process are also taken care of.
  • In the trading account, the records of conversion are also reflected properly. Like taking some items from old gold into new gold or converting some items from new gold into old gold etc.
  • Trading account is available not only in amount but also in weight. Two methods of trading account are available for valuation. 1) Weighted average method and 2) Valuation with current rate.
  • Along with company’s trading account, separate yet complete trading accounts of each branch are also available. This facility is suitable for branch accounting.
  • The reconciliation statement of stock in books of accounts and the actual physical stock available in store is also available in Infinity. This Trading Account is very easy to understand for anyone, even if the person is not from the jewellery industry! Such as, bank officials etc.
  • In order to know the net profit, profit and loss statement has also been provided in Infinity Software.
  • Both the statements, trading account and profit and loss are always available in the updated format in software.
  • Overall, the most comprehensive and extensive trading account is available in Acme Infinity. Which brings forth the profitability of the jewellery business with great accuracy.
  1. To Monitor the Cash Flow for Profitability…
  • The Independent Cash Flow Statement is available in Infinity Software.
  • In this, the cash used for operational purpose, investment purposes or financial transactions, is represented in different formats.
  • Due to this reason, going beyond the gross profit and net profit, the advance accounting user can understand the business profitability through cash flow also.
  1. To check gross profit in every bill…
  • While purchasing the jewellery or doing goldsmith receipts, the facility of systematic feeding of labor charges, making charges and other purchase cost, is provided in Infinity Software. So, while barcoding, all these purchase costs are carry forwarded automatically and are stored securely. Thus, after selling any ornament, the details like what was the purchase cost of that ornament, how much gross profit has been made in it etc. can easily be understood through a simple report.
  • The gross profit Report related to jewellery is also available item category wise.
  1.  To Consider Inventory Caring Days while calculating the Profitability…
  • In the Gross Profit Reports of ornaments, interest on the inventory during inventory carrying days, is also calculated. Therefore, the actual gross profit of each ornament can be understood accurately.
  • To check the impact of the jewelry movement on profitability, item category wise or day wise closing stock vs sales report is also available in Infinity Software. Through which, the details like how many time the inventory is rotated or Inventory Turn Over Ratio are easily brought in forth.

All these details also play an important role in good and proper management of inventory.

Thus, through Acme Infinity’s ERP software, the profitability and profit or loss of the complex transactions in the jewellery business are understood very easily. In which good consideration is also given on accounting, inventory and branches.