Steel and iron traders: weight, daily rates and large credit

What steel traders deal in

Steel traders handle TMT bars, structural sections (angles, channels, beams), plates and sheets, coils, pipes and tubes, wire, and in some markets scrap. Primary producers sell through authorised distributors and stockyards; secondary producers sell directly or through brokers. Traders buy in truckloads or directly from a stockyard and sell to builders, fabricators, contractors, small manufacturers and retailers.

Prices move with raw material costs, demand and producer announcements, and may change every day. Many deals are struck on the phone at the day's rate, with the bill made later, which is why rate disputes are common.

Selling by weight

Most steel is sold per tonne or per kilogram, even when the customer orders pieces. TMT bars may be sold on theoretical weight (standard weight per metre) or actual weight from the weighbridge, and the two can differ. Agree up front which applies and write it on the quotation.

The rate shown is only an example; prices change constantly. In Tally, set the item with tonnes or kilograms as the main unit and pieces or bundles as an alternate unit where needed. See alternate units in Tally.

Weighbridge, cutting and scrap

Keep the weighbridge slip with every inward and outward load. Small weight differences across many loads add up to real money. If you cut sheets or bars to size, record the cutting charge on the bill and book offcuts and scrap separately, otherwise your stock in Tally will slowly show more steel than you actually have. A monthly stock audit by weight keeps this honest.

Credit and risk

Steel bills are large. A single fabricator may take ₹10 lakh of material in a month and pay over 60 to 90 days. Because margins are thin, one bad debt can wipe out the profit from dozens of good customers. Practical steps:

• Set limits per customer and check them before confirming an order.
• Charge interest on overdue amounts only if agreed in writing; otherwise use it as a negotiation point.
• Collect post-dated cheques or written payment schedules for large orders, as your policy allows.
• Watch the ageing of every large account weekly.

If you buy from registered MSME suppliers, note that payments to micro and small enterprises have time limits under law, which also affects the tax deduction of the expense; see the MSME payment rule.

Movement of goods and GST

Steel moves by truck almost every day, so e-way bills are routine for loads above the threshold. Different steel products can fall under different HSN codes; check the current GST rate for each on the GST portal. Ensure the GSTIN of each registered buyer is correct, because input credit for large bills is closely watched. Purchases from unregistered scrap sellers can have special rules; ask your accountant. This is general information, not tax advice.

Daily rates, quotations and broker deals

Because rates change daily, quotes should carry a date and a validity, for example valid till today's dispatch. Send the quotation in writing even when the deal is made on the phone, so the bill rate matches what was agreed. When a customer disputes a rate weeks later, the dated quotation settles it.

Broker deals and back-to-back trades

A large share of steel trade happens through brokers, or as back-to-back deals where the trader buys from a stockyard and the truck goes straight to the buyer without touching the trader's godown. These deals are quick and need little space, but they create their own risks: the purchase and sale must be booked on the same day at the agreed rates, the brokerage must be recorded, and the weight on the purchase bill should match the weight on the sale bill.

When back-to-back trades are entered late or from memory, the stock in Tally shows material that was never in the godown, or the sale is booked at a rate different from the one agreed. Record both sides of each deal together, attach the weighbridge slip and the vehicle number, and review a list of the day's trades every evening. For brokers, keep a separate ledger so brokerage paid can be checked against the deals they brought.

Cashflow OS for steel traders

Cashflow OS syncs your TallyPrime books to the phone, so you can see every customer's bill-wise outstanding and ageing before you agree to the next load, and check supplier payables. Quotations with your letterhead carry the date and terms and convert into a sales order or Tally invoice. Party statements can be shared on WhatsApp in Tally's format. Reports such as stock summary and top customers export to Excel. See quotations for how documents are created.