How should a dairy turn fat and SNF readings into farmer bills and payments?

Start with centres, farmers and a rate chart

Farmer billing is only as good as the masters underneath it. Set up each collection centre, BMC or mandali with its own settings, and each farmer with their centre, bank details and, if you want, a farmer login. Then set the rate chart and quality parameters per centre. A rate chart maps fat and SNF readings to a rate per litre or per kg, so two farmers with different milk quality are paid differently for the same quantity.

Keep the rate chart dated and owned by one person. A change should apply to collections from its effective date, not rewrite what farmers were already shown. If some centres follow a different chart, keep them as separate charts rather than one chart with exceptions that only one clerk understands.

Record each shift with fat, SNF and the amount shown

At the centre, the collection clerk records each farmer's morning or evening milk with its quantity, fat and SNF. Naffo applies the centre's rate chart and shows the amount before saving, and the saved amount is the amount that was shown. This matters: if the system silently recalculates later, the farmer's slip and the dairy's record no longer agree.

Where centres keep a paper register or farmer slips, a photo of the collection slip can be read into rows that the clerk checks and corrects before saving. Treat the photo as a faster way to type, not as the record. The person saving the rows is still responsible for each quantity and reading.

Move milk from the centre to the plant

The farmer's amount is settled at the centre, but the dairy still needs to know what reached the plant. In Naffo, BMC milk is loaded into a tanker with its quantity and quality, the tanker is logged at the gate and weighed at the weighbridge, where kg can be converted to litres. Raw milk is tested at the plant with FSSAI checks and pending samples, and accepted milk is unloaded into a silo that tracks its stock, fat and SNF.

Comparing the centre total with the plant receipt each day shows where milk or fat is being lost. The dairy reconciliation screen brings collections, tankers, tanks and settlements together so the gaps can be explained before the month is closed. The dairy procurement guide describes the full chain in more detail.

Bill each farmer once per payment cycle

Most dairies pay farmers on a fixed cycle. In Naffo, each farmer has a monthly payment day (the 1st, 11th or 21st), so payouts are spread across the month, and each farmer is billed for the milk poured before that day. Choose the payment day and invoice date, and every farmer with milk not yet billed in that cycle is listed. Generate creates one purchase bill per farmer, in bulk, with the fat and SNF detail of each entry. A collection that has been billed is then locked, so it cannot be edited or billed again.

Each payment names the bank account or cash ledger it comes from, and a payout that would overdraw the chosen bank account is refused. A direct payment is capped at the value of milk not yet billed, so a farmer cannot be paid for milk that was never collected. When reminders are switched on, the team gets pay-day alerts, and the bills post to the same books as the rest of the business.

Settle centres, mandalis and contractors in the same books

Farmers are only one of the parties a dairy pays. Milk settlement covers collection centres, mandalis, direct suppliers and tanker contractors, and turns each period's milk into bills that are paid from the same bank or cash accounts. Milk returned to suppliers or transferred between plants is recorded too, so the settlement and the stock tell the same story.

Let farmers check their own entries

A large share of calls to a dairy office are farmers asking whether a shift was recorded or a payment was sent. The farmer portal answers that directly: a farmer logs in and sees their own milk entries with fat and SNF, their bills and payments, a simple analysis of their supply and their profile. A farmer login does not see other farmers, the company switcher, the dairy's internal menus or its own calendar items.

A checklist for your first billing cycle

1. 1Confirm each centre's rate chart and the date it applies from.
2. 2Record a test collection and check that the saved amount equals the amount shown.
3. 3Generate one cycle's bills for a single centre and compare them with the collection register.
4. 4Make one part payment and one early settlement, and check what stays open.
5. 5Try to edit a billed collection and confirm it is locked.
6. 6Reconcile the centre total with the plant receipt for the same days.

See the dairy ERP page for the full procurement and production workflow, or book a demo with your own centres, farmers and rate chart.