Royalty passes: what to reconcile, and when

Royalty is one of the few areas in a crusher operation where the record has to satisfy someone outside the business. That changes what "good enough" means.

Internally, an approximate figure that everyone understands is usually fine. For royalty, the quantity you dispatched and the quantity your passes cover have to agree — and if they do not, the explanation has to be available, not reconstructed.

What is actually being matched

Three things, and most plants only hold two of them properly:

• Passes issued — quantity authorised, by period
• Material dispatched — actual net weights leaving the gate
• Material produced — what the plant crushed, by size

Dispatch against passes is the compliance question. Production against dispatch is the commercial one. Both use the same underlying weighment data, which is why plants that solve one usually find the other becomes answerable too.

Why period-end reconciliation fails

Reconciling monthly or quarterly means investigating a difference weeks after the events that caused it. Nobody remembers which day the loader operated differently, which vehicle was reweighed, or which load was returned.

So the difference gets absorbed. It goes into a rounding, or a note, or simply gets accepted — and the same gap appears next period, because the cause was never found.

Reconciling continuously changes the size of the problem. A daily or weekly check produces small differences attached to recent events, which are traceable while people still remember them.

The gaps that actually create mismatches

Loads dispatched against the wrong pass

Where several passes are active, attributing a load to whichever pass is convenient makes each individual pass wrong even when the total is right. Totals reconcile; passes do not.

Returned and reweighed loads counted twice

A vehicle that is weighed, rejected at site, and returns is a single dispatch that produced multiple weighments. Unless the return is recorded as a return, the quantity is overstated.

Internal movement treated as dispatch

Material moved to a sister unit or used on site is not a sale, and if it is recorded as dispatch, royalty consumption looks higher than it is. If it is recorded as nothing, production reconciliation breaks instead.

Size-wise output not tracked separately

Royalty is on material extracted, but the plant sells by size. Without output by size against boulder consumed, there is no way to demonstrate that what left the gate is consistent with what was quarried.

What good practice looks like

1. Every weighment attributed to a specific pass at the time of dispatch, not later
2. Returns and reweighments recorded as such, so a single dispatch cannot count twice
3. Internal movements recorded with their own document type
4. Production captured by product size against boulder consumed
5. Reconciliation run weekly, so differences stay small and recent
6. Records retained in a form that can be produced on request rather than assembled on request

The point that gets missed

Most plants treat royalty reconciliation as a compliance chore. It is also the single best check on whether your dispatch records are honest.

If passes, dispatch and production all reconcile, your weighbridge data is trustworthy — which means your revenue figures are too. If they do not, the compliance exposure is the smaller of your two problems.

If you want to see how passes and dispatch are held together, see our stone crusher ERP or book a demo.