RICE, FLOUR AND OIL MILLS
How a Mill Owner Can Track Recovery, Stock and Buyer Credit
The truck of paddy is weighed in at the gate. The miller takes a handful and decides by feel what the lot will give. A month later the godown is full of rice, the cash is in the stock, and a wholesaler's payment is promised for next week for the third time.
The business side is where we come in. How much comes out for what goes in, how much money sits in grain and at what price, what the by-products bring, what power costs and who owes you. Machine settings, quality standards and anything tied to licences stay with your millwright and the authority.
Book a first callCOMMON CHALLENGES
What goes wrong in
rice, flour and oil mills.
- 01Recovery, the output from a given input, is known by feel and by the last good lot. A small slide in it is an expensive leak that nobody sees on the day.
- 02Grain is bought when it is available and stored. A large part of the working capital sits in that stock, valued at what it cost and not at what it would fetch.
- 03Bran, husk, broken grain, oil cake and other by-products are sold in small lots to whoever comes, and their income is not written against the lot that produced them.
- 04Power is the largest running cost after grain, and the electricity bill is read at the month end without any sense of the units used per tonne milled.
- 05Wholesalers and distributors take credit, and a few buyers hold most of the money outstanding, while the next purchase of grain depends on their payment.
NUMBERS TO TRACK
Count these
every week.
Recovery per lot
Weight of main product out (rice, oil or flour) divided by weight of grain or seed in, written for every lot.
Grain stock against today's rate
Purchase cost of stock held less its value at today's selling rate, by grain type.
Power units per tonne
Meter units used across a run divided by tonnes milled in the same run.
Buyer dues overdue
Buyer dues beyond the date promised, as a share of everything buyers owe, with the top five named.
Timing and seasons: Grain arrives in bulk after harvest and the mill buys and stores for the year, so cash need is highest soon after the arrival months. Plot your own purchases and dispatches by month before deciding how much grain to carry.
WORKED SAMPLE (ILLUSTRATIVE, NOT CLIENT DATA)
Recovery and the value of one point, by product (illustrative, not client data)
| Product | Input | Output | Recovery | Rate a kg of output | Output value | Value of one point |
|---|---|---|---|---|---|---|
| Rice from paddy | 10,000 kg | 6,700 kg | 67.0% | ₹38 | ₹2,54,600 | ₹3,800 |
| Oil from seed | 1,000 kg | 380 kg | 38.0% | ₹150 | ₹57,000 | ₹1,500 |
| Flour from wheat | 2,000 kg | 1,640 kg | 82.0% | ₹32 | ₹52,480 | ₹640 |
Made-up figures and rates. One point of recovery is 1 percent of the input. 100 kg of rice at ₹38 is ₹3,800, 10 kg of oil at ₹150 is ₹1,500 and 20 kg of flour at ₹32 is ₹640 on a lot. A slide of two points on the rice lot costs ₹7,600.
COMMON MISTAKES
What owners often
get wrong first.
- 01Trusting the last good lot as the standard. Recovery per lot, written every time, shows a slide that feel alone does not.
- 02Valuing grain only at what it cost. The gap between cost and today's rate is the price exposure, and it turns a calm godown into a risk.
- 03Reading the power bill after the month. Units per tonne in the same run shows a motor, a belt or a shift that is costing more.
OUR FOCUS AREAS
Where the work
usually starts.
- 01Recovery per lot: input weighed in, output weighed out, by-products weighed and recorded
- 02Grain stock by type and by purchase rate, valued at cost and at today's selling rate
- 03Working capital view: cash in grain, cash in finished goods, cash owed by buyers, cash owed to suppliers
- 04By-product register with quantity, rate and buyer, written against the lot
- 05Power units per tonne milled, from the meter reading at the start and end of a run
- 06For oil mills, oil and cake per 100 kg of seed; for flour mills, flour and bran per 100 kg of grain
- 07Buyer ageing list with the top five dues and the next purchase they hold up
- 08A rule for how much grain stock the owner is willing to hold against price swings
START THIS WEEK
Things you can do
before you call anyone.
- For the next three lots, weigh the input and the output and write both on one sheet. Divide output by input for each lot. A figure that moves between lots is a question for the shift.
- Hypothetical example: if 5,000 kg of paddy gives 3,300 kg of rice, recovery is 66 percent. If it gives 3,250 kg, recovery is 65 percent, and 50 kg less rice at ₹38 a kg is ₹1,900 lost on that lot. Oil and flour work the same way: 1,000 kg of seed giving 380 kg of oil is 38.0 percent.
- List your grain stock with its purchase rate and today's selling rate. The gap, positive or negative, is the price exposure you are carrying.
- Take the buyer ledger and add up the dues. Note the three largest and ask each for a payment date this week.
WHAT YOU GET
Start with the priorities
that matter most.
Your first sheet: a lot-wise recovery sheet showing grain in, product out, by-products and power units per tonne, with the stock and buyer dues set beside it
- A lot-wise recovery and by-product sheet that the mill supervisor fills at each run
- A grain stock and price exposure sheet comparing purchase cost with the current selling rate
- A working capital summary showing where the money is held, for the owner and the accountant
- A buyer dues list with a collection routine and a named caller
Not the right fit when: Machine settings, product quality and safety rules, and any food or weights-and-measures matter are for your millwright, your lab and the authority. We keep to recovery as a management figure, stock, cash and credit. A packaged-food maker is at /industries/manufacturing/food-product-manufacturers.
HOW THE WORK RUNS
What happens after
you book.
- First call: you describe the business and the numbers you already track.
- Your first sheet: the one described under What you get, built from your own books.
- The rhythm: a regular review of recovery per lot, grain stock against today's rate, power units per tonne, buyer dues overdue.
- What you hold at the end: a written sheet and a named owner for each number.
WHICH SERVICE FITS
Where we usually start
for this trade.
Financial Health Audit
A management-level review of margin by product, the cash cycle, receivables and costs, ending in indicators you track monthly. Not a statutory audit.
Business Audit
Financial Health Audit is part of Business Audit. See the full service if the problem is wider than one piece.
PROBLEMS THIS SHOWS UP AS
How owners in this trade
describe it.
Cash is always tight, even when sales look good
Full order book but an empty account? See how collections, stock, credit terms and timing gaps drain cash, and how a 13-week forecast eases the squeeze.
Our revenue is growing, but our profit is not
Sales are up but the money left over is not. Find where margin leaks in pricing, discounts, rework and overheads, and what to check this week.
COMMON QUESTIONS
Before you
get in touch.
HOW THIS DIFFERS
Close trades,
different work.
How this differs from Food product manufacturers
A packaged-food maker sells brands and pack sizes through distributors, while a mill sells weight against a market rate and carries grain-price exposure.
How this differs from Cold storage operators
A cold-store operator rents space and is paid for storage, while a mill buys the grain, owns the price risk and sells what it turns it into.
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