Refinery

The Refinery Desk: Tracking Gold Refining from Inward to Outward

April 24, 2026 · 5 min read · By JM Labs

Many Indian bullion trading businesses also handle refinery operations — receiving raw or impure gold from customers, processing it, and delivering refined metal back. This workflow creates a distinct set of records that sit completely outside the standard buy/sell ledger.

Generic accounting tools and even most gold trading software either ignore refinery operations entirely or force them into purchase/sale entries where they do not fit. This guide explains the actual refinery workflow and what a dedicated Refinery Desk module tracks.

Who Uses a Refinery Desk?

Refinery desk operations are relevant to:

Bullion traders with in-house refining — Larger businesses that melt and refine metal received from customers or from their own purchases
Commission refiners — Businesses that accept raw gold (kachcha sona) from jewellers or smaller traders, refine it, and return pure metal minus processing charges
Jewellery manufacturers — Companies that receive hallmark-grade gold from brands, melt and alloy it to required specifications, and deliver finished jewellery metal
Scrap dealers — Businesses that buy old jewellery, recycle and refine it, and sell the recovered metal

The Refinery Workflow: Step by Step

Inward Receipt

The customer brings in raw metal — old jewellery, kachcha sona, scrap, or impure bars. You weigh it, assess approximate purity, and issue an inward receipt. The inward record captures: party name, gross weight, approximate purity, and date of receipt.

Melting

The received metal is melted down. After melting, the actual weight may differ from the gross weight due to moisture, attached non-gold material, or estimation errors. The post-melt weight is recorded.

Assaying

A sample is taken from the melted metal and tested for purity (assayed). The assay result gives the exact fineness — for example, 912 out of 1000. This confirmed purity, applied to the post-melt weight, gives the net fine gold content.

Refining and Processing

The metal is refined to the target purity (typically 999 or 999.9). Chemical or electrolytic processes remove base metals and impurities. Processing loss (toofan or wastage) occurs during this stage and must be recorded.

Outward Delivery

The refined metal is delivered to the customer. The outward record captures: quantity delivered, final purity, processing charges deducted, and any difference settled in cash or additional metal. A delivery receipt is issued.

What a Refinery Desk Entry Records

Field	What It Captures
Party Name	Customer who sent metal for refining
Inward Date	When metal was received
Gross Inward Weight	Weight of metal as received (before melting)
Approximate Purity	Estimated fineness at receipt
Post-Melt Weight	Weight after melting
Assayed Purity	Confirmed fineness from assay test
Fine Gold Content	Post-melt weight × assayed purity = actual gold
Processing Loss	Weight lost during refining (toofan/wastage)
Outward Weight	Quantity delivered after refining
Outward Purity	Final purity of delivered metal
Processing Charges	Refining fee charged to customer
Balance Payable	Any amount owed to or from customer

Why Processing Loss (Toofan/Wastage) Must Be Tracked

Every refining operation involves some loss of metal. This is normal and expected — but it must be accurately recorded for two reasons:

Customer settlement: The customer's final delivery is net of processing loss. If you receive 100g at 916 purity (91.6g fine gold) and lose 1% in refining, you deliver 90.7g of 999 gold. The customer needs to understand and agree to this calculation.
Your own reconciliation: The total metal inward across all refinery jobs must equal total metal outward plus recorded wastage. Any unexplained gap is a serious accounting issue.

Common mistake: Recording the inward weight as a purchase and the outward weight as a sale in the regular ledger. This inflates your buy/sell volumes and makes your NDP and inventory calculations meaningless. Refinery transactions belong in a separate register — the Refinery Desk.

Pending Refinery Jobs and Open Lots

Not all refinery jobs complete in one day. A batch received on Monday may not be delivered until Thursday. Your refinery desk must track open lots — jobs that have been received but not yet delivered. At any time you should be able to answer:

Which customers have metal in process?
What is the total fine gold content of all open lots?
Which lots are overdue for delivery?
What are the pending processing charges across all open jobs?

How Bullion Master's Refinery Desk Works

Bullion Master's Refinery Desk module handles the full inward-to-outward cycle. When metal comes in, you create an inward entry recording party, weight, and approximate purity. As processing progresses, you update the assay result, record processing loss, and enter the outward delivery details.

Open refinery lots are visible in a pending list so nothing slips through. The module tracks fine gold content separately from gross weight, ensuring your customer settlement calculations are accurate. Completed jobs close off the record and post any cash or metal balance to the party's main ledger.

Manage refinery operations with a dedicated desk

Bullion Master's Refinery Desk tracks every lot from inward receipt to outward delivery — with assay results, wastage, processing charges, and pending job visibility.

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