In Surat's grey market most goods are sold on credit: the invoice today, payment in 30, 45 or 60 days. Many weaving units charge interest (byaaj) on late payment, usually as a % per month. Disputes are rarely about the rate and almost always about the days — when do you start counting, do grace days count, what if half the money came in? This guide explains the method the Loomiro app uses.
Four terms
- Credit days — how many days of credit the party gets. Invoice date + credit days = due date.
- Grace days — a little leeway after the due date. Interest starts from due date + grace.
- Rate % per month — e.g. 1.5% a month. A month = 30 days.
- Days late — from the day interest starts to the day of payment.
Interest starts = due date + grace days
Days late = payment date − interest start (never below 0)
Interest = amount × rate% × days late ÷ 30
This is simple interest — no interest on interest. 1.5% a month is roughly 18% a year, simple.
Example
- Invoice: ₹1,00,000 dated 01-07-2026, 30 credit days → due date 31-07-2026
- 5 grace days → interest starts 05-08-2026
- Paid on 15-09-2026 → days late: 26 in August + 15 in September = 41 days
- At 1.5% a month → ₹1,00,000 × 1.5% × 41 ÷ 30 = ₹2,050
Put in your own dates and rate in the interest calculator — due date, days late and interest, step by step.
What if only part of it came late?
Each part pays for its own days. Money that has come in counts up to its receipt date; whatever is still unpaid counts up to today.
Example
The same invoice (interest from 05-08-2026, 1.5%). ₹60,000 arrives on 20-08-2026, the other ₹40,000 hasn't come yet; today is 30-09-2026.
- ₹60,000 × 1.5% × 15 days ÷ 30 = ₹450
- ₹40,000 × 1.5% × 56 days ÷ 30 = ₹1,120 (05-08 to 30-09)
- Total interest so far = ₹1,570, and the unpaid ₹40,000 keeps adding interest every day
Every market and every party may do it differently — some count from the invoice date, some include the grace days. If your trade works another way, agree it with the party in writing up front, and print "credit days" and "interest % per month" on the invoice.
GST on interest
When late-payment interest is charged separately, it is generally treated as part of the value of the goods and GST applies at the goods' rate — which is why a debit note is raised for it. Confirm the rate and treatment with your CA. You can check the debit note's GST with the GST calculator.
Practical tips for a weaving unit
- Record each party's credit days and interest rate in the party master — verbal terms get forgotten.
- For a large, long-standing customer, set the rate to 0 or give more grace days — but write it down.
- Check outstanding every month: which bills are past 30 or 60 days. Getting the money back matters more than the interest.
- Set credit limits, and think twice before sending fresh goods to a party over its limit.
- Record kasar or discounts on their own line so the balance and the interest stay correct.
How Loomiro helps
In Accounts you set interest % per month and grace days once in Settings, with a different rate or grace on any party that needs one (0 = no interest). A sale invoice's due date comes from its credit days. Outstanding, the party ledger and the WhatsApp reminder show interest worked out exactly as above — money paid late up to its receipt date, the unpaid part up to today. There is an interest report by party and bill, and a one-click interest debit note. Kasar goes on its own line on receipts, and if a party crosses its credit limit or overdue-days limit, new invoices stop — only the owner or a manager can override.