Selling Gold on Credit: Record the Debt in Grams or Cash?

In a gold shop, selling gold on credit means handing a customer a piece today and collecting all or part of its value later. In a gold shop the first decision is not the credit limit or the instalment date. It is what the debt is denominated in: a fixed amount of money, or a weight of gold at a stated karat. Everything else — limits, payments, collection — is built on that choice, and a notebook that does not record it is where most credit losses start.

TL;DR. Decide per sale whether the customer owes money or grams, and write it on the invoice. A cash debt protects the customer from price rises and exposes you; a gram debt keeps your stock whole and moves the price risk to the customer. Set a written limit per customer, take a down payment, give a receipt for every payment, convert gram payments at the day's rate on the receipt, review balances by age every week, and keep an escalation path that ends in a signed settlement rather than a forgotten line.

Grams or cash: the decision that decides everything

When a piece leaves on credit, your shelf loses grams. If the debt is written in money and the gold price rises before the customer pays, the money you collect buys back fewer grams than you sold. If the debt is written in grams, the customer pays whatever those grams are worth on the day they pay.

	Debt in cash (pounds)	Debt in grams (karat stated)
What the customer owes	A fixed amount	A fixed weight at a stated karat
If gold rises before payment	You absorb the rise	The customer pays more money
If gold falls before payment	You keep the higher amount	The customer pays less money
Your stock position	Can fall behind what you sold	Stays matched to what you sold
Easier for	The customer to understand	You to keep stock whole
Must be written	Amount and due dates	Weight, karat, rate basis, due dates

Neither choice is wrong. Many shops use cash debt for small balances and short terms, and gram debt for larger pieces and longer terms. What is wrong is not deciding, and discovering at collection that the customer and the shop each assumed something different.

If the debt is in grams, write the karat as well. A gram of 21 karat and a gram of 18 karat are not the same gold; the World Gold Council expresses purity in parts per thousand, which is the basis for converting between them if a customer later pays in a different karat.

A credit policy that fits on one page

A credit policy is not bureaucracy. It is the list of answers you would otherwise improvise at the counter while a customer waits.

1. Who can get credit. Known customers with a purchase history, a phone number and an ID copy on file — whatever your shop decides, written down.
2. A limit per customer. In money or grams, matching how you record the debt. A new customer starts low.
3. A down payment. Agreed as a share of the invoice, collected before the piece leaves.
4. Term and schedule. Number of payments and dates, printed on the invoice.
5. Who approves. Only the owner or a named manager. A cashier extending credit alone is how limits stop meaning anything.
6. What happens on a missed payment. A call within a set number of days, then a visit or a stop on further credit.
7. Whether the piece leaves before full payment. Some shops hand over at the down payment; others hold the piece until the balance is paid. Decide per value band.

If you are considering formal instalment plans as a regular line of business, Egypt's Financial Regulatory Authority publishes rules governing consumer finance companies. Whether an arrangement in your shop falls under them is a question for your lawyer, not for a blog post.

Recording each credit sale

Every credit sale should leave a trail that anyone could reconstruct a year later:

• The invoice, marked as credit, with metal value and making charge on separate lines.
• The debt basis: money, or grams with the karat and the rate basis for later payments.
• The customer record: name, phone number, and the running balance.
• The schedule: each due date and amount, or each due date and weight.
• The approver's name.
• The customer's signature on the statement of what they owe.

Keep credit sales inside the same daily close as cash sales. A credit sale reduces stock and creates a receivable on the same day; if it only appears in a separate notebook, your gram ledger and your cash drawer will never reconcile. The daily close itself is set out in gold shop accounting.

Partial payments, scrap as payment, and the daily rate

Cash payment against a cash debt. Simple: subtract the amount and issue a receipt with the new balance.

Cash payment against a gram debt. Convert at the rate on the day of payment: grams settled = amount paid ÷ that day's price per gram for the stated karat. Print the rate used on the receipt. Without it, the customer remembers one rate and you remember another.

Scrap as payment. A customer may settle part of a balance with old gold. Weigh it, confirm the karat from the hallmark, and convert it to the debt's karat on fineness before crediting it. Scrap of unknown karat is not credited until it is verified; the inspection and weighing routine is the same one we describe for an old gold trade-in.

Split payments. Cash, card and instant transfer may arrive on the same day. Record each method separately, so the cash drawer matches the cash received and nothing else.

Ageing, follow-up and collection

A balance is only as good as its age. Review open balances weekly, sorted by how long since the last payment, not by how much is owed. A small balance with no payment in months is a bigger warning than a large balance paid on schedule.

Age since last payment	What it usually means	Action
Within schedule	Normal	None beyond a reminder before the due date
Slightly late	Forgotten or short of cash	A polite call, note the new promised date
Clearly late	Payment trouble	Owner calls; stop further credit
Long overdue	At risk	Meet in person; agree a signed settlement plan

Write every promise down with its date. A collection history of "called, promised Thursday" is what lets you decide, months later, whether a balance is slow or lost. And when a balance is finally settled or written off, record it as a visible entry with its reason, never by quietly deleting the line.

Common credit mistakes in gold shops

1. No basis on the invoice. "Owes for the bracelet" is not a debt; it is a memory.
2. Credit extended by whoever is at the counter. Approval has to sit with named people.
3. Credit sales outside the daily close. Stock falls and nothing explains why at the next count, as the gold shop inventory count guide warns.
4. Gram payments without a printed rate. The single most common source of argument.
5. Reviewing by amount, not by age. The quiet old balance is the one that disappears.
6. Deleting settled lines. The history is your evidence if anything is ever disputed.

How Tibr handles this

According to the Tibr product page, Tibr keeps customer accounts for credit: who owes money by name and phone number, a full statement, and collection where the credit settles automatically. Payments can be split across cash, card and InstaPay, customer scrap trade-in is part of the invoice, and the financial reports show assets, liabilities, profit and customer credit with one tap. Entries are append-only, so corrections are visible rather than erased.

If you are still deciding between a general tool and one built for gold, compare them in accounting software for small shops and the gold shop management software guide, or try Tibr on sample data from the signup page.

FAQ

Should a gold shop record customer debt in grams or in cash?

Either works if it is written on the invoice. Cash debt is easier for the customer but leaves you exposed if the gold price rises before payment. Gram debt, with the karat stated, keeps your stock matched to what you sold and moves the price risk to the customer.

How do I convert a cash payment against a debt in grams?

Divide the amount paid by that day's price per gram for the karat on the invoice. The result is the weight settled. Print the rate and the date on the receipt so both sides can check the arithmetic later.

Can a customer pay off a gold debt with scrap gold?

Yes, if you weigh it, confirm the karat from the hallmark, and convert it to the debt's karat on fineness before crediting it. Do not credit scrap with no legible stamp until its karat has been verified.

How often should I review customer credit balances?

Weekly is a sensible rhythm, sorted by time since the last payment rather than by amount. That ordering surfaces the quiet old balances that are most likely to be lost.

Do I need a licence to sell gold in instalments in Egypt?

Egypt's Financial Regulatory Authority publishes rules for consumer finance companies. Whether a credit arrangement in your own shop falls under them depends on how it is structured, so ask a lawyer before offering formal instalment plans as a regular service.

Written by the Mindshift Team, Tibr product team.

Want customer credit, payments and scrap trade-ins on one statement? See how Tibr works on its official page.