Commission Knitting Billing Without Disputes: A Guide

Why billing decides the margin

A commission knitting factory does not own the yarn and does not sell the fabric. It sells knitting, by the kilo. That makes the bill the whole business: every kilo that is knitted, delivered and not billed, or billed and then argued about, comes straight out of a thin margin.

How thin? In July 2024 the Bangladesh Knitting Owners' Association (BKOA) announced an indefinite shutdown of its member factories to demand higher knitting charges. According to The Business Standard, the charges then were Tk15–17 per kg for single jersey, Tk18–20 for rib and Tk20–22 for plain interlock, and the association asked for Tk20–22, Tk25–27 and Tk30–32. BKOA said it had about 450 active member factories, 300 of them in Narayanganj, and that its members' knitting supports about half of BKMEA members' knitwear exports. Knitwear itself earned about $5.96 billion of Bangladesh's $13.09 billion merchandise exports in July to September 2026, according to Export Promotion Bureau data reported by Dhaka Tribune.

At a few taka per kilo, a 200 kg billing gap on one program can wipe out the profit on several others. This guide is for owners and accounts teams of commission knitting factories who want bills that go out on time and are not disputed.

Start with a rate card per buyer

Most billing arguments start before the first kilo is knitted, because the rate was agreed by phone. Keep a written rate card for every buyer and confirm it on each program before production starts. It should say:

Item	What to write down
Rate per kg by fabric	For each fabric type and construction you knit for that buyer (for example single jersey, rib, interlock), the agreed charge per kg
Extra charges	Anything you charge on top, such as special yarns or constructions, small-lot or urgent work, and how it is calculated
Billing weight	Which weight is billed (for example good grey fabric delivered, weighed at delivery) and who signs the weight
Rejects	That rejected fabric is not billed, and how it is handed over or held
Process loss	The wastage allowance and how loss above it is settled (see yarn wastage allowance)
Validity and changes	From which date or program a new rate applies, and who approves it on both sides
Payment terms	When a bill is due and how part payments are matched to bills

When rates change, as they did across the industry in 2024, the date matters. A new rate should apply from a named program or delivery date, never quietly to bills already sent.

Bill on delivery, line by line

The cleanest rule is simple: bill what was delivered, and nothing else. Every line on the bill should point to a delivery the buyer received and signed for. If a line cannot be traced to a delivery challan or receipt, it should not be on the bill.

A good bill line carries:

the program reference and the buyer's order or style reference;
the delivery challan or receipt number and date;
fabric type, construction, GSM and dia;
number of rolls and good kg delivered;
the rate from the rate card and the amount.

Bill each delivery as it goes out, or at least weekly, rather than waiting for the program to close. Small bills tied to fresh deliveries are easy for the buyer to check while the fabric is still in their store. A month-end bill covering forty deliveries invites a month-end argument.

Keep rejects off the bill entirely. Record them by defect, machine and shift so you know what they cost you (our guide to grey fabric rejects shows how), but never let a rejected roll reach an invoice. Buyers who once find a reject billed will check every bill after that.

Adjustments: change the bill without rewriting it

Real life needs adjustments: a rate was entered wrong, the buyer weighed a delivery differently, a roll came back, or a program ran over its wastage allowance. The mistake is to edit or replace the original bill. Then nobody can tell what the buyer was first told, and the next dispute is about the paperwork itself.

Treat adjustments as their own records instead:

Never change a sent bill. Raise a separate adjustment (credit or debit) that refers to the original bill and delivery.
Give a reason. Rate correction, weight difference, returned rolls, excess process loss, or agreed discount.
Approve it. One named person, usually the owner or accounts head, approves every adjustment above a set amount.
Show it on the statement. The buyer sees the original bill, the adjustment and the net amount, side by side.

The same goes for deletions. If a delivery or a bill can be deleted without a trace, the closing statement cannot be trusted by either side.

The usual disputes and the record that settles them

Buyer says	The record that settles it
"We never received this delivery."	Numbered delivery challan or receipt, signed by the buyer's receiver, with rolls and kg
"Our weight is lower than your bill."	Roll-wise weights at delivery, and the billing-weight rule on the rate card
"This rate is wrong."	The rate card and the program confirmation, with the date the rate applied from
"You billed rejected fabric."	Reject register by defect and roll, and bill lines that only carry good kg
"Our yarn is short."	Yarn received by lot, issued to the program, returned on a challan, and process loss against the allowance (see yarn lot traceability)
"We already paid that."	Payments matched to specific bills, and a running buyer balance

Notice that every answer is a record made at the time, not a reconstruction. That is the point: if the record exists, most disputes end in one phone call.

A worked example

The numbers below are illustrative only, not market rates. A buyer's program is for single jersey at an agreed Tk20 per kg. Over a week the factory makes three deliveries:

Delivery	Rolls	Good kg	Amount (Tk)
D-1041	40	1,000	20,000
D-1047	48	1,200	24,000
D-1052	32	800	16,000
Total	120	3,000	60,000

The buyer reports that D-1047 weighed 1,180 kg at their end. The factory checks the roll-wise weights, agrees that one roll was recorded twice, and raises a credit adjustment of 20 kg × Tk20 = Tk400 against bill line D-1047, with the reason and the approver's name. The original bill stays as it was; the statement shows Tk60,000 billed, Tk400 credited, Tk59,600 due. 45 kg of rejects from the same program never appear on any bill; they are in the reject register.

Statements and the buyer balance

Send each buyer a regular statement: bills, adjustments, payments received and the balance, plus the yarn position (received, issued, returned, in stock). When the program closes, attach the one-page closing statement that shows process loss against the allowance. Owners who see a live balance per buyer can chase money before it becomes old, and can decide calmly whether to take the next program from a buyer who is slow to pay.

VAT invoicing and tax rules are separate from this commercial bill; follow your VAT adviser on what each document must contain.

Checklist: commission knitting billing

#	Check	Done?
1	Written rate card per buyer and fabric, confirmed per program	☐
2	Billing weight rule agreed and signed at delivery	☐
3	Numbered delivery challan or receipt for every delivery	☐
4	Every bill line tied to a delivery number	☐
5	Rejects recorded by defect and never billed	☐
6	Bills sent per delivery or weekly, not at month end	☐
7	Adjustments as separate records with reason and approver	☐
8	No silent edits or deletions of bills and deliveries	☐
9	Payments matched to bills; live balance per buyer	☐
10	Closing statement with yarn return and process loss at the end of each program	☐

Where AccelKnit fits

AccelKnit, our knitting ERP, was shaped on a working knitting factory and follows these rules. One Program ID sits behind every record, so store, production, quality, delivery and billing add up for the same program. Deliveries go out on coded, printable receipts; billing is done on delivery, with controlled adjustment; rejects are recorded by defect and never billed; the yarn return challan works against a per-buyer wastage allowance; and every buyer has a live balance. Amounts are shown in full, and deleting an entry needs a comment and admin approval. It runs in English and Bangla.

Comparing systems? Use our checklist for choosing a knitting ERP, or book a free demo and bring one week of your own deliveries and bills.

Commission knitting billing: bill on delivery, adjust in the open, settle disputes fast