Finance for traders and distributors, where margins are thin and every day of credit counts
Thin margins, high volumes, credit risk and inventory turns. We give you profitability by SKU and by customer, and tighten the cash cycle.
Where trading finance usually breaks
In distribution, a percentage point of margin or ten days of credit is often the whole profit.
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Margin known in total, not by SKU or customer
Schemes, rate differences, freight and post-sale discounts are booked in bulk, so nobody knows which products and accounts actually make money.
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Credit extended by the sales team
Limits exist on paper but orders go out to overdue accounts, and the ageing report is read after the damage is done.
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Stock that turns slowly, funded by the bank
Slow movers sit in the godown on your cash-credit limit, paying interest while fast movers go out of stock.
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Principal credit squeezed, customer credit stretched
Brands and principals tighten their terms while customers push for more days. The gap lands on your overdraft.
What we put in place
Four areas that decide whether a distribution business keeps its profit.
Gross margin by SKU
We rebuild margin at SKU, brand and customer level, with schemes, rate differences and freight allocated where they belong.
What you get A monthly margin ranking by SKU and customer, including the tail that loses money.
Credit control
We set credit limits and terms by customer, based on payment history, and build a weekly overdue review that sales and accounts both work from.
What you get A credit policy, customer limits and a weekly collections list.
Inventory turns
We measure turns and ageing by SKU and location, and flag slow and non-moving stock before it needs a write-down.
What you get An inventory ageing report and reorder signals for fast movers.
Cash cycle
We connect debtor days, inventory days and principal credit into one cash view, with a 13-week forecast against your bank limits.
What you get Monthly cash-cycle metrics and a rolling 13-week cash forecast.
What your monthly pack tracks
Agreed during the Finance Diagnostic. These are the usual measures for a trading business.
- Gross margin by SKU and brand Net of schemes and rate differences
- Margin by customer Including cost to serve where it matters
- Collection days By customer and by salesperson
- Overdues against credit limit Accounts to hold for dispatch
- Inventory turns and ageing By SKU and godown
- Principal credit days Against agreed terms
- Cash conversion cycle And its twelve-month trend
- Bank limit headroom Drawing power against utilisation
Statutory and lender points we watch
Specific to trading and distribution.
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Post-sale discounts and schemes under GST
Discounts given after the sale reduce GST value only if they are provided for in the agreement and linked to specific invoices, with the credit note issued and the corresponding credit reversed by the buyer. Schemes that do not meet these conditions leave you paying GST on money you have given back.
Reference: Sections 15(3) and 34, Central Goods and Services Tax Act, 2017 -
Payments to micro and small suppliers
Amounts owed to micro and small enterprises must be paid within the agreed credit period, capped at 45 days. If a payment runs past that limit, the income-tax deduction for the expense is deferred to the year it is actually paid, so an overdue supplier ledger at year-end raises that year's taxable income. We track this in the monthly creditors review, not at year-end. Note that the delayed-payment protection generally does not extend to wholesale and retail traders as suppliers: their inclusion as MSMEs was limited to priority-sector lending, so your own receivables are not protected in the same way.
Reference: Section 15, Micro, Small and Medium Enterprises Development Act, 2006; Section 37(2)(g), Income-tax Act, 2025 (formerly Section 43B(h), Income-tax Act, 1961, for tax years up to 2025-26); Ministry of MSME Office Memoranda dated 2 July 2021 and 1 September 2021 -
Working-capital limits from your bank
Stock statements, drawing power and the CMA data submitted at renewal all come out of the same numbers as your MIS. When they are prepared separately, they drift apart and the bank notices. We prepare them from one set of books. See our CMA data template .
Reference: Your sanction letter and bank's stock-statement format
This is general information, not tax or legal advice. Applicability depends on your entity, turnover and facts, and is confirmed during the Finance Diagnostic.
Is this a fit?
A good fit if
- You are an owner-managed distributor, stockist or trader, typically ₹20–200 crore in revenue, running on Tally.
- You handle hundreds of SKUs or several principals and cannot see margin below the total.
- Collections, overdues or your cash-credit limit are the main topic in your week.
Probably not yet if
- You do not maintain inventory in your books. That needs to be set up first; the Diagnostic will scope it.
- You only need GST returns filed. That is your CA firm's work, not a CFO's.
- You want a single SKU analysis with no ongoing review. That is specialist project work .
How engagements usually run
Most traders start with the Diagnostic, then move to a monthly retainer built around margin and collections.
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Start
Finance Diagnostic
We review margins, credit, stock and cash and give you a prioritised action list.
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Monthly
Fractional CFO Core
We own the monthly rhythm: SKU margin, collections review, cash forecast and compliance oversight.
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Expanding
Fractional CFO Growth
Adds budgets, new-principal or new-territory evaluation, bank engagement and board reporting.
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One-off
Specialist projects
A SKU profitability study, credit policy or CMA data for a limit renewal, as a scoped project.
Common questions
Can you get SKU profitability out of Tally?
Yes, if item-level inventory is maintained in Tally. Schemes and discounts booked as lump sums need an allocation method, which we agree with you during setup.
Will you speak to our sales team about credit?
We design the credit policy and the weekly overdue list with you. Enforcing it stays with you, but the numbers stop being a matter of opinion.
Do you work with multiple godowns or branches?
Yes, provided each is tracked as a location or cost centre in your books. If it is not, we set that up.
Do you replace our accountant or CA firm?
No. Your team keeps booking entries and your CA firm keeps audit and return filing. We sit above both.
See which SKUs and customers actually make you money.
An intro call with a senior member of the team. We will tell you plainly what the Diagnostic would look at.