Gold Shop Accounting: Two Ledgers and a Daily Close

Gold shop accounting runs on two ledgers at once: one for gold, counted in grams for each karat, and one for money, counted in Egyptian pounds. Every movement in the shop touches one or both of them, and the day is only closed when both ledgers agree with the scale and the cash count. This guide covers the two ledgers, converting between karats, the daily close step by step, trader and workshop accounts, scrap, customer credit, cash custody and the month-end reconciliation, with a full day worked through in hypothetical numbers.

If you are still choosing a system for the whole shop, start with our buyer's guide to gold shop management software, then come back here for the books.

TL;DR. Record gold in grams per karat and money in pounds, and only convert one into the other when you value the stock. Keep finished pieces and scrap apart. Convert different karats to fine gold before adding them up. Hold trader and workshop balances in grams, with workmanship as a separate cash line. Hand the cash drawer from one named person to the next every shift, and never count card or InstaPay receipts as drawer cash. At month end, weigh everything and match it to the books.

Why gold shop accounting needs two ledgers

In most retail, stock has a cost in money and one money ledger is enough. In a gold shop the gram behaves like a currency. A wholesale trader hands you finished pieces and expects grams back. The workshop takes grams and returns grams. A bride pays part of her invoice in old gold. If you translate all of that into pounds at today's rate, tomorrow's rate scrambles the picture, and you can no longer tell a price gain from metal that is genuinely missing.

So the ground rule is simple. The gold ledger tells you how many grams of each karat you hold and where they sit: in the showcase, in the scrap tray, at the workshop, and how many grams you owe traders. The cash ledger tells you how money came in and went out: cash, card, InstaPay, credit. The table shows which ledger each everyday movement touches.

Movement	Gold ledger (grams)	Cash ledger (EGP)
Sell a piece	Finished stock falls by its weight	Cash, card or InstaPay rises
Scrap trade-in on an invoice	Scrap rises by its weight	Scrap value is deducted from the amount due
Buy scrap for cash	Scrap rises	Cash falls
Issue gold to the workshop	Moves from the shop to the workshop balance	No change
Receive from the workshop	Finished and scrap return; the gap is loss	Workshop labour, if paid
Stock from a trader on account	Finished stock rises; you owe the trader grams	Trader's workmanship, if paid
Credit sale	Finished stock falls	Receivables rise instead of cash
Collect credit	No change	Cash rises, receivables fall

Converting between karats: fine gold and 21k equivalent

You cannot add a gram of 18k to a gram of 21k and call it two grams of gold. Each karat holds a different share of pure metal. The World Gold Council explains that fineness is written in parts per thousand: 18k is 750 and 24k is 999. By the same arithmetic, 21k is 21 of 24 parts, or 875.

Karat	Fineness (per 1,000)	Fine gold in 10 g
24k	999	9.99 g
21k	875	8.75 g
18k	750	7.5 g

The formula is fine gold = weight × fineness ÷ 1,000. Many Egyptian shops keep everything on a 21k basis instead, so 21k equivalent = fine gold ÷ 0.875.

Example: you hold 140 g of 18k finished pieces. Fine gold = 140 × 750 ÷ 1,000 = 105 g. In 21k equivalent that is 105 ÷ 0.875 = 120 g. Pick one basis, fine gold or 21k equivalent, and agree it in writing with every trader and workshop, so that your statement and theirs speak the same language.

The daily close, step by step

1. Start from yesterday's closing. Last night's balances are this morning's opening: grams per karat, finished and scrap; each workshop's balance; drawer cash.
2. Count the drawer into the cashier's custody. The cashier counts in front of whoever hands over and signs for that amount in their own name.
3. Record every movement as it happens. Sales, scrap, workshop, trader, expenses: each one at the moment, not from memory at closing time.
4. Keep payment methods apart. Cash goes in the drawer; card and InstaPay go to the bank. Each has its own line.
5. Weigh and count at closing. At minimum the trays you sell from and all scrap; a full count of every karat on a regular schedule.
6. Compare the drawer with what it should hold. Expected cash = opening + cash in − cash out. Any difference is recorded against the custodian.
7. Sign the handover. The counted balance becomes tomorrow's opening.

A worked day in hypothetical numbers

These figures are illustrative round numbers, not market prices. Assume a selling rate of 1,000 EGP per gram for 21k and a scrap buying rate of 960 EGP per gram for 21k.

Opening balances: 21k finished 500 g; 21k scrap 40 g; 18k finished 140 g; an older batch of 50 g of 21k at the workshop; 50,000 EGP in the drawer. The trader account is at zero.

#	Movement	21k finished	21k scrap	Drawer cash	Other accounts
1	10 g chain, workmanship 50/g = 10,500 cash	−10		+10,500
2	30 g set, workmanship 80/g = 32,400; bride trades in 12 g scrap × 960 = 11,520; balance 20,880 paid 10,000 cash + 10,880 InstaPay	−30	+12	+10,000	InstaPay +10,880
3	Buy 8 g scrap from a walk-in × 960		+8	−7,680
4	5 g ring, workmanship 60/g = 5,300: 2,000 cash, rest on credit	−5		+2,000	Credit +3,300
5	Issue 40 g scrap to the workshop		−40		Workshop +40
6	Older batch returns: 48.5 g finished + 1 g scrap; workshop labour 20 × 48.5	+48.5	+1	−970	Workshop −50, loss 0.5
7	100 g finished from a trader, on a gram account; his workmanship 30 × 100 in cash	+100		−3,000	Owed to trader 100 g 21k
8	Petty expense			−500

Closing balances:

• 21k finished = 500 − 10 − 30 − 5 + 48.5 + 100 = 603.5 g.
• 21k scrap = 40 + 12 + 8 − 40 + 1 = 21 g.
• At the workshop: 40 g. Today's loss: 0.5 g on a 50 g batch, or 1%.
• Expected drawer = 50,000 + 10,500 + 10,000 − 7,680 + 2,000 − 970 − 3,000 − 500 = 60,350 EGP.

Cross-check. Sales invoices total 10,500 + 32,400 + 5,300 = 48,200 EGP, of which 45,000 is gold value and 3,200 is workmanship. They were settled by 22,500 cash + 10,880 InstaPay + 11,520 scrap + 3,300 credit = 48,200. The two sides agree.

Gold you own in 21k = 603.5 + 21 + 40 at the workshop = 664.5 g. Of that, 100 g is owed to the trader, so your free position is 564.5 g against 590 g this morning. The 25.5 g gap is fully explained: 45 g sold, 20 g of scrap taken back in, 0.5 g lost at the workshop. That figure tells you how much metal you need to buy to return to this morning's level. The 18k stock did not move: 140 g, which is 105 g fine or 120 g in 21k equivalent.

If the cashier counts the drawer and finds 60,250, there is a 100 EGP shortage. It goes on that cashier's custody today, not at month end.

The trader account in grams

A trader who supplies stock "on account" usually wants gold back, not money. So his balance sits in grams, with the karat or basis you agreed, and workmanship goes on a separate cash line. In the worked day you owe the trader 100 g of 21k, which is 87.5 g fine.

You can settle in two ways. In gold: hand over 28 g of 18k scrap. Its fine content is 28 × 0.75 = 21 g, or 24 g in 21k equivalent, which leaves 76 g owed. In cash: you agree a rate per gram at the moment of payment. Pay 30,000 EGP at a hypothetical 1,000 EGP per 21k gram, and 30 g comes off the balance. Write the agreed rate next to the entry. When you match your statement against the trader's own notebook at month end, both should show the same figure.

Workshop issue, return and loss

The workshop works exactly like a trader account: a balance in grams. Every gram issued is charged to it, everything returned is credited, and the difference on a closed batch is loss. Loss rate = loss ÷ weight issued. In the worked day that is 0.5 ÷ 50 = 1%. Agree the acceptable rate with each workshop in writing, then compare every batch against it.

When the karat coming back differs from the karat sent out, compare fine gold. Example: you issue 20 g of 24k, which is 19.98 g fine. You receive 26 g of 18k pieces, which is 19.5 g fine. The loss is 0.48 g of fine gold, even though the weight went up because alloy was added to make 18k. Anyone comparing raw weights would think the workshop gave back more than it took.

The workshop account in full — the job order, loss and how to derive your own accepted range, and the making charge as both a cost and a price — is in workshop and making charge accounts. When you come to reconcile the ledger against the scale, the gold shop inventory count sets out the procedure.

Scrap: trade-in and buy-back

Scrap enters the shop through two doors, and each needs a different entry. A trade-in is part of a sales invoice: scrap reduces what the customer owes, and no cash leaves. A buy-back stands alone: scrap comes in and cash leaves the drawer. In both cases record the weight from the scale in front of the customer, the karat from the hallmark, and the rate per gram you used.

In Egypt, hallmarking and karat assay fall to the Precious Metals and Weights Authority under the Ministry of Supply and Internal Trade. That is reason enough to take the karat from the stamp rather than from a guess. Keep scrap in its own balance, separate from finished pieces, because one is sold at one price and the other is valued at another. Inspection, weighing without stones and the two-line invoice are covered step by step in old gold trade-in.

Customer credit and cash custody

Credit is recorded against the customer's name, phone number, invoice number and date. Review the aging every week: under a month, one to three months, and older. Decide up front whether a credit balance is held in pounds or in grams. In pounds, a rising gold price is your loss. In grams, the customer settles at the rate on the day they pay. Both are workable, as long as it is written down.

Cash custody means the cashier receives the drawer by count at the start of every shift and hands it over by count at the end. With a morning and an evening cashier, each has an opening and a closing figure, and any gap is recorded against whoever held the drawer. Never count card or InstaPay receipts with drawer cash, and never pay a petty expense without a receipt. The full closing routine, from expected balance to booking a shortage, is in our guide to jewelry store cash reconciliation.

Month-end reconciliation

1. Full stock count: weigh every karat, finished and scrap separately, and compare with the books.
2. Each workshop: closing balance, loss for the month and its rate against gold issued.
3. Each trader: match the gram balance and workmanship owed against the trader's own records.
4. Customer credit: who is late, by how much, and since when.
5. Bank: match InstaPay and card settlements to the month's invoices.
6. Drawer differences: total per cashier.
7. Profit: separate workmanship income from gold price movement, so you know whether the shop earned from its work or from the market.

Tax and invoicing rules depend on your activity and size. The Egyptian Tax Authority runs the e-invoice and e-receipt systems; ask your chartered accountant which obligations apply to your shop.

Notebook vs Excel vs gold-aware software

	Paper notebook	Excel	Gold-aware accounting software
Two ledgers (grams and pounds)	Two books, kept by hand	Two sheets if someone maintains them	One entry updates both
Karat conversion	Calculator	A formula, if written correctly	Calculated from fineness
Daily close	Manual addition	Depends on who typed	Expected balance ready
Trader account in grams	Your book and his book	A sheet per trader	Statement of in, out and balance
Workshop loss	Worked out when someone remembers	Possible	Calculated on each receipt
Credit aging	Flipping pages	Filter by date	A standard report
Cash custody	A signature on paper	None	Per cashier, per shift
Who changed what	Handwriting	None	A log per user

Common gold shop accounting mistakes

• Adding different karats. "We have 700 g" without saying which karat is a number with no meaning.
• Mixing scrap with finished stock. They carry different prices; mixing them distorts stock value.
• Keeping the trader in pounds. If he expects grams and you track money, the two statements drift apart the moment the rate moves.
• Workshop gold with no entry. That metal is still yours. If it is not recorded, it shows up as a shortage at the count.
• Counting InstaPay as drawer cash. The drawer looks over, while the money is actually in the bank.
• Deleting instead of correcting. A wrong entry is cancelled with a visible reversing entry, not crossed out or overwritten.
• Closing the month without the scale. The books show what was written; the scale shows what is there.

How Tibr handles this

Tibr is gold and jewellery shop management software from Mindshift. According to the Tibr product page, it keeps cash and gold under double entry, with stock by karat (18, 21 and 24), finished pieces and scrap separately, and a barcode carrying the weight of every piece. The gold price is updated per karat, workmanship is calculated automatically, payment can be split across cash, card and InstaPay, and a customer's scrap trade-in is part of the invoice.

The drawer is received into a named cashier's custody, and the shift closes with a handover. Workshops have issue and receipt with loss calculation and transfers between workshops. Each trader has a statement in money and gold, and customer credit is tracked by name and phone. Reports cover assets, liabilities and profit, credit aging and stock value per karat. Entries are append-only, and any correction is a visible reversing entry. You can start free with no card from the sign-up page, and the Pro plan is 499 EGP a month. More on running a gold shop is on the Tibr blog.

FAQ

What matters most in gold shop accounting?

Keeping two ledgers: gold in grams per karat, and money in pounds. Keep finished pieces apart from scrap, and hold every workshop and trader balance in grams. Without that, your books tell you what you earned but not where the gold went.

How do I convert 18k to 21k?

Multiply the weight by 0.75 to get fine gold, then divide by 0.875. Illustrative example: 140 g of 18k is 105 g fine, which is 120 g in 21k equivalent. Agree the conversion basis in writing with your traders and workshops.

Should a trader account be kept in grams or in pounds?

If the trader expects gold back, keep his balance in grams with the karat stated, and workmanship on a separate cash line. If you settle in cash instead of gold, write the agreed rate per gram next to the payment.

How do I know whether workshop loss is normal?

Work out the loss rate on every batch, loss divided by weight issued, and compare it with the rate you agreed with that workshop. If the karat returned differs from the karat issued, compare fine gold rather than raw weight.

Is Excel enough for jewelry store accounting?

For a small shop where the owner writes every line, it can be. With several cashiers, a workshop, traders and credit, a spreadsheet cannot tell you who changed what, and it does not link a single sale to both ledgers. That is where purpose-built gold shop accounting software earns its place.

Written by the Mindshift Team, Tibr product team.

Want to see your own day close on both ledgers? Try Tibr free from its official page.