Basic Inventory Masters in Tally

Inventory Masters in Tally

In Basic Financial Accounting part, we have explained Basic Financial Accounting System, involving Financial Transactions (transaction represented in Money). Now we will discuss Basic Inventory System involving (transaction involving Materials) also.  Without repeating what has already been explained in Basic Financial Accounting part, we discuss the additional aspects for maintaining Inventory System (Materials).

Inventory System Activation in Tally

To maintain Inventory system also, at Menu bar option K:Company, click F11:Features (or press F11 button). At Company Features screen, set Yes at Maintain Inventory.

Accounting Features set up in Tally

Inventory Masters Menu in Tally PRIME

Having activated Inventory for the Company, first you need to create the required Basic Inventory Masters like Unit of Measure (UoM) and Stock Item. You may optionally also create Stock Group, Stock Category, Godowns, where needed. Select GoT>Create to get Master Creation Menu, to create Inventory Masters.

Inventory Masters creation Menu in Tally

Unit of Measure (UoM) in Tally PRIME

Every Stock Item must be measured in some specified Unit (Unit of Measurement or UoM). So, first create the necessary UoM. At Masters creation (GoT>Create) Menu, select Unit to get Unit of Measure (UoM) Creation Screen.

Unit (UoM) Creation in Tally

At UoM Menu, select Create to get UoM Creation screen. Now enter the following Particulars.

  • Type: Cursor normally skips  Type field, with Simple as selected, to create a Simple Unit. Otherwise press <shift+Tab> or <backspace> to get the cursor at Type field and select Simple.
  • Symbol: At Symbol , enter the Short Name of the Unit (e.g., Kg. Ltr.). In all reports, the Unit Symbol appears alongwith Quantity, to indicate the UoM of the Quantity. The bare Quantity figure  (e.g 15) does not carry any meaning unless associated with Unit Symbol (like Pcs). The symbol must be distinct and unique. Duplicate symbols are not accepted.
  • Formal Name: At Formal Name, enter full Name of the Unit (e.g., Kilogram, Litre etc). It should be different from UoM Symbol. It is used for internal Info about the UoM. The Formal name is displayed in UoM selection list (in parenthesis), beside the UoM symbol, to identify the correct Unit record. The Formal Name  must be distinct and unique. Duplicate Formal name is not accepted. The Formal Name must be distinct from Symbol (e.g Kilograms & Kgs). Same name cannot be used as Symbol & Formal Name
  • Number of Decimal Places : At Number of Decimal Places enter the number of digits after decimal places, upto which the Quantity value may be shown. Decimal part beyond the decimal value specified would be dropped. This may cause rounding errors in computed value (particularly in large values) as the extra decimal places are dropped. Specify maximum number of decimal places (between 0 to 4) in which reporting is required (e.g 3 to show upto 3 places of decimals in Quantity, like 1.234 MT, 0 to omit the decimal values in Quantity, like 29 Pcs).

The higher decimal place values in Quantity figures are truncated (for example if decimal places is 3, then 1.2344 will be truncated to 1.234). So, specify adequate decimal places to avoid truncation. Maximum 4 decimal places may be set.

One  Unit may be used to measure many Sock Items. For example, Kg may be used as UoM in many Stock Items. In bulk Item (like Coal), Kg may be used without decimal place, while for smaller & costlier Items (e.g Cinnamon), the weight in Kg may be expressed upto 3 decimal places (e.g 12.125). In such case, you must set the decimal places keeping in mind the requirement of higher decimal place to avoid errors resulting from truncation.

The decimal places apply to all Items using the specified UoM. So, if you set 3 at Decimal place for Kg, then quantity of all Items having Kg as UoM will be shown with the specified decimal place (i.e 3). So, 200 Kg of Coal will be shown as 200.000 (and NOT as 200).

The number of decimal place in UoM cannot be modified later. So plan it properly before you create the UoM record.

Unit (UoM) Creation in Tally

Unit of Measure (UoM) Configuration in Tally

At UoM Creation screen, Click F12:Configure button to get UoM Configuration screen and set the options.

UoM Entry Configuration in Tally

Stock Item Group in Tally

Tally auto creates a reserved Stock Group called Primary. Creation of new Stock Group is optional. If you maintain a few Stock Items only (e.g Sugar), you may place the Stock Items under the Tally created Stock Group called Primary without any need to create new Stock Groups (Primary Stock Group is created by Tally when you create a Company).

However, on most cases, creation of Stock Group is necessary to get  organized reports with figures for each Stock Group. Creation of Stock Item Group is optional. Stock Item Group is required to organise Inventory in better way.

Select Inventory Info > Stock Group  to get Stock Group Menu

Select Inventory Info > Stock Group > Create under Single Stock Group to get Stock Group Creation screen. Enter the following Particulars:

  • Stock Group Name: At Name Enter Name of Stock Group (e.g Suitings)
  • Parent Stock Group: At Under, select the parent Stock Group for the Stock Group being created (select Primary to create top level Group). The first Stock Group created must be placed under Primary. To create a new parent Group (if the Parent Stock Group is not existing, press Alt+C to create the parent Stock Group).
  • Stock Group Quantity: At Can Quantities of Items be Added, set Yes to get Total Stock Quantity of the child Stock Items under the Stock Group (if all child Stock Items are measured in same UoM), else set No (Stock Group Quantity is not computed).

Stock Item Group creation in Tally Prime

Stock Item Group Configuration in Tally

At Stock Item Creation, Click F12:Configure and set  the Configuration options.

Stock Item Group Configuration in Tally

Stock Item Godowns in Tally

Godowns (Warehouse) are location of materials storage. Tally automatically creates a Godown called Main Location.  For storage of Stock Items at in different locations, create Godown.

Creation of Stock Item Godown Master in Tally

At Masters Creation Menu (GoT>Create), select Godown. A message appears about existence of auto created default Main Location .

Godown creation message

To change the name of Main Location, click A:Alter Existing and change the Name.

Click Create New to get Godown Creation screen. At Godown Creation screen, enter the following particulars :

Godown creation

Godown Master entry Configuration in Tally

At Godown creation, click F12:Configure and set the Configuration Options .

Godown Master Entry Configuration

Stock Item in Tally

Stock Item is the primary inventory entity and is the lowest level of information in  inventory system. You have to create a Stock Item in Tally  for each inventory item that you want to account for.

Create a Stock Item for each Inventory Item that you want to keep separate transaction & stock account.

Stock Item Creation in Tally

At Masters creation Menu (GoT>Create), select Stock Item to get Stock Item Creation screen. Now enter the following particulars.

  • Stock Item Name: At Name, enter a unique Name of the Stock Item.
  • Parent Stock Group: At Under, select the Parent Stock Group
  • Stock Item UoM: At Units, select the Unit of Measurement (from pop-up) in which the Item would be measured. Select Not Applicable if no UoM is applicable (e.g, for Service Item) and Quantity details will not be maintained for such Item.

Entry of Opening Stock Details

At Opening Balance field, enter Opening Stock details for the Item as on the Books Beginning From Date, as explained below.

  • Opening Balance Details : If there is Opening Stock as at Books Beginning From date, at Opening Balance fields, enter Opening Stock Quantity details as follows:
  • Opening Stock Quantity:At Quantity, enter the Opening Stock Quantity as on Books beginning from date.
  • Opening Stock Rate: At Rate, enter the Opening Stock Rate (if you do not know the Rate, leave it blank, enter the Opening Stock value, Tally will compute & fill up the Rate).
  • Opening Stock Value: The Opening Stock value is computed from the Opening Stock Quantity & Opening Stock Rate as entered and displayed at Value field. However, you may change the Amount. The Rate will get changed accordingly.

If the details of Opening Stock is readily not available at the time of Stock Creation, Press <Enter>at Opening Balance (to leave blank). You may enter the Opening Stock later on (if the Opening Stock figure is not readily available at the time of Stock Item master entry) through Stock Item Alteration mode.

After completing the Opening Stock entry for the Stock Item, a blank screen appears to enter for another Stock Item. Continue to enter more Stock Items. Press Esc to Quit.

Stock Item Entry Configuration in Tally

Click F12:Configure to get Stock Item Configuration screen and set the options.

Stock Item Entry Configuration in Tally

Godown Details entry of Stock Item Opening Stock

After creation of new Godowns, during creation / alteration of Stock Item Master, as explained, at entry of Opening Stock details, you get a screen to enter Godwnwise break up of Opening Stock. Enter the Quantity, Rate & Value of Opening Stock lying in each Godown.

Stock Item Opening Stock Godown Details in Tally

Inventory Masters Alteration Deletion in Tally

To Alter / Delete Inventory Masters as discussed above, select GoT> Alter to get List of Masters and then select the Master. The Masters list will be displayed. Now select the Master record to get the Alteration screen

  • Master Alteration : To Alter the Master record, edit the data in the respective field and save (as explained during Entry).
  • Master Deletion : To Delete the Master record, press Alt+D. A message Delete Yes / No appears. Type Y to Delete. The master will be Deleted (you cannot get back!)

Restriction in Deletion of Inventory Masters in Tally

In following cases, the Inventory Master Record cannot be Deleted.

  • Stock Group: The Stock Group would not be deleted if it is parent of any Stock Group or Stock Item.
  • Godown: The Godown cannot be deleted if it has been referred in any Voucher
  • UoM: The UoM cannot be deleted if it has been referred in any Stock Item.
  • Stock Item: The Stock Item cannot be deleted if it has been referred in any Voucher.

In such case, when you press Alt+D, the record remains visible (it does not get dimmed) and the Deletion Confirmation screen does not appear.

Inventory Masters Lists in Tally

Master lists shows the list of respective Master records entered.  It is useful to view/verify the Masters data and Edit mistakes instantly while viewing. To display / alter Inventory Masters :

  • Display of Inventory Master list : Select GoT>Chart of Accounts to get List of Masters. Now select the respective Master to get Masters records. In list of Stock Items, using F5 toggle button you may view the list of Stock Items or in hierarchical order of Stock Group/ Stock Item.
  • Alteration / Deletion of Masters: While viewing the Master record as explained above, you may also instantly Alter/ Delete the Master record as explained above.

Click here to see PDF