Hardware and sanitaryware: thousands of SKUs and plumber credit

Who buys and who supplies

Sanitaryware (closets, basins, cisterns), faucets and showers, bath fittings, door and furniture hardware, locks, hinges, tools and fasteners all come from different manufacturers and their distributors. Branded sanitaryware and faucets are usually bought from authorised distributors with a credit period and quarterly or annual target schemes. Fasteners, tools and generic hardware come from wholesale markets, often in cash or short credit.

The buyers are a mix: homeowners building or renovating, plumbers and carpenters who bring customers or buy on their own account, contractors and builders who place project orders, and smaller retailers from surrounding towns. Plumbers and contractors often get a trade discount and a monthly running account, and in many markets they also expect a commission on customers they bring.

The SKU problem

A mid-sized shop may carry thousands of items: the same faucet in chrome, matt black and rose gold, hinges in four sizes, screws in dozens of lengths. Units vary too, from pieces and sets to boxes and kilograms. In Tally, sensible stock groups (by product family) and categories (by brand or finish), plus alternate units such as box and piece, keep the list usable. See alternate units in Tally and stock groups and categories for a setup that works.

Without that structure, the counter staff bill a similar item at the wrong rate, stock goes negative and the physical count never agrees.

Showroom selling and project orders

Premium bathrooms are sold in a display showroom. A family visits, shortlists a WC, basin, faucets and a shower panel, then goes away to discuss with the architect. Two weeks later they may come back or buy elsewhere. Writing the shortlist down with model numbers and quoting quickly is what wins the sale.

Project orders from builders work differently: a quotation for a full set of bathrooms, a purchase order, part deliveries over months against delivery challans, and running bills. The risk is that deliveries go out but billing lags, or that rates agreed in the quotation are not applied on later bills.

Credit, commissions and where cash gets stuck

Money in this trade gets stuck in three places: contractors' running accounts, retention on project bills, and stock of slow finishes. A simple discipline helps:

• Fix a credit limit and a credit period for each plumber and contractor, and review ageing every week.
• Get every site delivery acknowledged on a delivery challan and convert challans into invoices the same week.
• Record plumber commissions as a separate expense, not as a hidden discount on the customer's bill.
• Check slow-moving stock each quarter and push it through offers before it becomes obsolete.

GST and documents

Sanitaryware, faucets, hardware and tools come under different HSN codes, and the rate depends on the product, so a single bathroom order can carry several rates. Check the current rate per HSN on the GST portal when you set up item masters. Bills to registered contractors and builders should carry their GSTIN so they can claim input credit. This is general information, not tax advice.

Typical documents are quotations, purchase orders from builders, delivery challans, tax invoices, credit notes for returns and scheme credit notes from brands.

Setting rates for retail, trade and projects

The same faucet may be sold at the printed price to a walk-in homeowner, at a trade discount to a plumber, at a deeper rate to a builder on a project quote, and at a dealer rate to a smaller shop in the next town. When those rates live only in the owner's head, the counter staff either give away margin or lose the sale while waiting for approval.

Write the rules down: for example, retail at MRP less a small festive discount, plumbers at a fixed percentage off list, projects quoted individually and approved by the owner, sub-dealers on a separate rate sheet by brand. Then apply them in the billing system so every salesperson charges the same rate for the same customer type. Review the rules each time a brand revises its price list, which in this trade can happen more than once a year.

Using Tally and Cashflow OS in a hardware business

Cashflow OS syncs your TallyPrime data so you can see each contractor's outstanding and ageing on the phone and share a party statement on WhatsApp when they ask for their balance. For showroom visitors, wishlists record model, quantity, notes and interest level, and can be shared as a list. Quotations and delivery challans carry your logo and bank details and can be converted to a sales order or Tally invoice. Barcodes help the counter pick the right SKU. See quotations for the flow.