Gold Wholesale Accounting: Transfers and Weight-Based Settlement

Gold wholesale accounting means keeping every trade partner’s account in three columns at once: cash, gold (in grams at a standard karat equivalent) and coins, so that transfers and gold-for-gold or coin-for-coin settlements are recorded without being forced into cash, and the balance of each column is always clear.

A gold wholesaler deals with dozens of stores and trade partners, and a large share of the trades move no money at all: gold goes out, gold comes back, and only the making charge or a difference is settled in cash. That is exactly why ordinary ledgers and general accounting software fall short for wholesale. In Iran this trade is called bonakdari and the wholesaler a bonakdar; the same logic applies to any business that runs weight-based accounts with other jewelers. In this article we cover the right structure for partner accounts, the types of settlement, a hypothetical week of ledger movements and a routine for periodic reconciliation.

What is gold wholesaling and why does it need its own accounting?

A gold wholesaler buys finished gold and jewelry from manufacturers or importers and supplies it to stores and galleries. The main differences from a retail store’s books are:

• Partner debts and credits are mostly in weight, not money.
• The making charge may be set in cash or in weight, and is settled separately from the gold itself.
• Coins have their own column and are usually settled with coins.
• Part of the movement happens through transfers (havaleh), not physical delivery.
• Gold changes hands at different karats and must be converted to a common equivalent.

The right structure for a trade partner account

Each partner should have one account showing three separate balances at the same time:

The key principle is never to add these three columns together. A partner can owe you gold and be owed cash at the same time. Converting everything to cash at today’s rate distorts their real obligations, and the balances shift with every price move.

For the gold column to add up, gold of any karat must be converted to a standard equivalent: 750-equivalent weight = weight × fineness ÷ 750. See our gold karat conversion guide for the methods and fine points.

What is a gold transfer and how is it recorded?

In market practice, a gold transfer is a document that moves a quantity of gold (or coins) from one party’s account to another’s, without the gold necessarily passing through the wholesaler’s hands. For example, a partner who is owed gold by the wholesaler asks for part of that credit to be assigned to a third party. Recording a transfer correctly has three requirements:

1. Both parties identified: whose account is debited and whose is credited.
2. Clear unit and karat: how many grams at what karat, or how many coins of which type.
3. Traceability: the transfer number, date and status (delivered or pending) must be searchable later.

Most disputes between a wholesaler and its partners come from transfers that were agreed verbally or on paper and never recorded in one of the two sets of books.

Types of settlement in gold wholesaling

Gold-for-gold settlement

The partner repays a weight debt with gold (new, old or melted). The delivered weight, once converted to the standard equivalent, is deducted from the gold balance, and no price rate is involved at all.

Coin-for-coin settlement

A coin debt is repaid with the same type of coin: three full coins for three full coins. This protects both the partner and the wholesaler from coin price swings.

Cash settlement

Cash making charges, differences, or any part of a weight debt that both sides agree to convert at a set rate are settled through the cash column. When a weight debt is converted to cash, the agreed rate and time must be recorded on the document so they cannot be disputed later.

Hypothetical example: one partner’s account over a week

All figures in this example are hypothetical and serve only to show the recording logic. The days follow the Iranian working week. Partner A starts the week with a zero balance:

At the end of the week Partner A owes only 32 g of 750-equivalent gold and has no cash or coin debt. Had the same movements been recorded by converting everything to cash, the balance would have shifted with every rate change and neither side would know exactly what was owed.

Periodic reconciliation with trade partners

Even with the best records, regular reconciliation with partners is essential. A simple routine:

1. At the end of each period (weekly or monthly), prepare each partner’s statement split into cash, gold and coins.
2. Send the statement to the partner and ask them to compare it with their own books.
3. Trace every difference down to the individual document; most come from an unrecorded transfer, a different karat conversion or a missed payment.
4. Post corrections as new documents rather than editing old ones, so the trail of changes is preserved.
5. Track outstanding checks separately and do not treat them as final in the closing balance until they clear.

Checklist: accounting software for gold wholesalers

• A dedicated wholesale invoice with weight, karat and making charge
• Simultaneous cash, gold and coin balances for every partner
• Automatic karat conversion to a standard equivalent
• Recording and tracking gold transfers
• Gold-for-gold and coin-for-coin settlement
• Management of incoming and outgoing checks
• Recording melting and refining of old and melted gold
• Detailed account statements and periodic statements for reconciliation

For the other features a gold and jewelry accounting system should have, read our complete guide to gold accounting software. If some of the gold you receive goes for melting, we explain how to record its input and output in our gold and jewelry inventory coding guide.

What does Zaran offer gold wholesalers?

Zaran gold wholesale accounting software covers the core wholesale features from the Zaran Pro plan upward:

• Wholesale invoices with exact weight, karat, making charge and price calculation; calculations matched against tens of thousands of real gold-market records, not guesswork.
• Gold transfers and weight-based settlement between partners: gold for gold, coin for coin.
• Cash drawer, bank and checks.
• Automatic conversion of karats to a standard equivalent, plus per-gram and per-mithqal pricing.
• Account balances split into cash, gold and coins; searchable, filterable transaction history; downloadable periodic statements and transfer tracking.
• Melting and refining with precise input and output records, plus opening stock entry.
• Account statements, journal, stock card, trial balance and profit and loss.

If your wholesale business has regular customers who ask for the rate every day, Zaran’s price board and ordering app are available on the same plan; see our article on the live gold price board and customer app.

Frequently Asked Questions

How is gold wholesale accounting different from jewelry store accounting?

In wholesaling most accounts are weight-based and are settled with partners through transfers and gold-for-gold or coin-for-coin settlement, whereas a retail store mainly issues cash invoices to end customers.

Why shouldn’t a partner’s gold balance be converted to cash?

Because the converted balance changes with every price move and you no longer know exactly how many grams the partner owes. Conversion to cash should only happen by agreement, at a recorded rate.

What is a gold transfer?

A gold transfer is a document that moves a specific quantity of gold or coins from one party’s account to another’s, without the gold necessarily moving physically.

How is melted 900-fineness gold recorded in a partner account?

Its weight is converted to the 750 equivalent and then posted to the gold column; for example, 40 g at 900 equals 48 g of 750 equivalent.

Which Zaran plan includes wholesale features?

Wholesale, checks, transfers and weight settlement, melting and refining, and opening stock are available from the Zaran Pro plan upward.

To see transfers and weight settlement recorded on your own wholesale accounts, request a Zaran demo.

Further reading

• How to Choose the Best Gold Accounting Software for Your Shop
• How to Calculate Gold Jewelry Price: Making Charge, Profit, VAT
• Live Gold Price Board and Customer Ordering App for Jewelers

Complete guide: gold and jewelry accounting software