Materials Delivery Accounting in Tally
Materials Delivery Notes and corresponding Invoice are sometimes created in separate instances. Challans Processing refers to the process of Integrating and linking these vouchers for complete Materials Delivery Accounts cycle.
Challans and Invoice Linking in Tally
We have discussed use of Tracking Number and linking of various documents through Tracking Number. Here we discuss about complete cycle of entry of Challans (Delivery Note / Receipt Note. Rejection In /Rejection Out) / Invoice (Sales / Purchase / Debit Note / Credit Note) and matching them against each other.
Normally, Challans (Delivery / Receipt / Rejection In / Rejection Out Notes) are created first at the time of Receipt / Delivery of materials, without corresponding Invoice, using a new tracking number . Later on, the Invoice (Sales / Purchase/ Debit Note / Credit Note) may be created using the same Tracking Number to link the pending Challan created earlier.
However, the reverse sequence may also happen. Sometimes, an Invoice (Purchase / Sales / Debit Note / Credit Note) may be created first using a Tacking Number. Later on, the pending Invoice is adjusted against a Challan using the same Tracking Number to link the pending Challan created earlier.
Invoicing has been explained in earlier chapters. Here, we explain the process of Invoice (Sales / Purchase) processing on matching the documents of OpenTracking Numbers.
Sales Invoice Entry with Tracking Number in Tally
Sales Invoice may be entered with Tracking Number. In such case, only an Accounting Entry is created but no Inventory Entry (Stock is not affected). Later on, a Delivery Note may be created against the Sale Invoice.
In the Sales Invoice entry, after selection of Stock Item, you get Tracking Number entry screen .
Sales Invoice entry with Tracking Number in Tally
Either you create a New Tracking Number (Click New Number,from the list and enter New Number, as explained earlier) or select one from the list of Tracking Number to add the quantity of the current Invoice to the selected Tracking Number)
Tracking Number details entry in Sales Invoice in Tally
Purchase Invoice Entry with Tracking Number
In the same way, Purchase Invoice may be entered with Tracking Number. In such case, only an Accounting Entry is created but no Inventory Entry (Stock is not affected). Later on, a Receipt Note may be created against the Purchase Invoice.
Purchase Invoice with Tracking Number in Tally
In the Purchase Invoice entry, after selection of Stock Item, in the same way, either you select the Current Purchase Invoice Number as Tracking Number , or select New Number and enter a New Tracking Number
Item Allocation for Purchase Invoice in Tally
If you select Not Applicable at Tracking Number screen, No new Tracking Number is created (hence there will be no pending Tracking Number) and both Accounts and Inventory is affected on entry of the Invoice.
Open Tracking Number List in Tally
Having entered the Vouchers with Tracking Number , you may get the Pending Reports of Open Tracking Number (Vouchers in which there is a balance against the Tracking Number)
Select Display > Statement Of Inventory to get Statement Of Inventory Menu from where Pending Tracking Reports may be displayed.
Statement of Inventory Menu in Tally
Sales Bills Pending Report in Tally
At Statement Of Inventory Menu , select Sales Bills Pending to print list of Pending Tracking references .
Sales Bills Pending shows 2 sections:
Goods Delivered but Bills not made
These constitute the Open Sales Inventory Vouchers
- Delivery Out voucher created but not completely set off against Sales Voucher.
- Rejection In voucher is created but completely not set off against Credit Note voucher.
Bills Made but Goods not Delivered
These constitute the Open Sales Accounts Vouchers
- Sales voucher created but not completely set off against Delivery Note
- Credit Note Voucher created but completely not set off against Rejection In voucher.
Pending Sales Bill Report in Tally
Purchase Bills Pending Report
At Statement Of Inventory Menu, select Purchase Bills Pending to print list of Pending Tracking references
Purchase Bills Pending shows 2 sections:
Goods Received but Bills not Received
These constitute the Open Purchase Inventory Vouchers
- Delivery In voucher created but not completely set off against Purchase Voucher.
- Rejection Out voucher created but completely not set off against Debit Note voucher.
Pending Purchase Bill Report in Tally
Bills Received but Goods not Received
These constitute the Open Purchase Accounts Vouchers
- Purchase Voucher created but not completely set off against Receipt Note voucher.
- Debit Note created but completely not set off against Rejection Out voucher.
Pending Bills Statement Configuration
At pending Bills Report , click F12: Configure to get pending Bills Configuration screen , to set the . Configuration options as follows:
Pending Sales / Purchase Bill Configuration in Tally
- Pending Sales Inventory Vouchers : At Show Outstanding Sales Bills, set :
- Yes to show Pending Sales Inventory Vouchers (with Balance in Tracking Number)
- No. The Pending Sales Inventory Vouchers are not shown
- Cleared Sales Inventory Vouchers : At Show Cleared Sales Bills, set :
- Yes to show the details of fully adjusted Sales Inventory Vouchers for which Balances have been completely adjusted (No Balance against Tracking Numbers)
- No. The fully adjusted Sales Inventory Vouchers are not shown
- Pending Sales Accounts Vouchers : At Bills Made but Goods not Delivered, set :
- Yes to show Pending Sales Accounts Vouchers (with Balance in Tracking Number)
- No. The Pending Sales Accounts Vouchers are not shown
- Pending Purchase Inventory Vouchers: At Show Outstanding Purchase Bills, set :
- Yes to show Pending Purchase Inventory Vouchers (with Balance in Tracking Number)
- No. The Pending Purchase Inventory Vouchers are not shown
- Cleared Purchase Inventory Vouchers: At Show Cleared Purchase Bills, set :
- Yes to show the details of fully adjusted Purchase Inventory Vouchers for which Balances have been completely adjusted (No Balance against Tracking Numbers)
- No. The fully adjusted Purchase Inventory Vouchers are not shown
- Pending Purchase Accounts Vouchers : At Bills Recd but Goods not Recd, set :
- Yes to show Pending Sales Accounts Vouchers (with Balance in Tracking Number)
- No. The Pending Sales Accounts Vouchers are not shown
You may further se the following options, where activated
- Batch Details : At Show Batch Details, set
- Yes to show Batch details for Items for which Batch Number is activated (applicable only when Batch Number is activated for the Company)
- No. Batch details are not shown
- Godown Details : At Show Location Details, set
- Yes to show Godown Details (applicable only when Godown is activated for the Company)
- No. Godown details are not shown
- Alternate Unit Details : At Show Using Alternate Unit Details, set
- Yes to Show Quantity details in Alternate Unit also for Items for which Alternate Unit is specified
- No. Quantity details in Alternate Unit are not shown
- Tail Unit Details : At Show Tail Units of Compound Unit, set
- Yes to Show Quantity details in Tail Unit also for Items for which Compound Unit is specified
- No. Quantity details in Tail Unit are not shown
Pending sales / Purchase Bills Report Button bar in Tally
Pending Bill Report Buttons in Tally
Pending Invoice figures in P & L Account
The figures of Pending Purchase Bills and Pending Sale Bills will also be reflected in Profit & Loss Account (in Detailed Mode). Pending Tracking number for goods received / delivered but invoice not entered, is shown in P L Statement to reflect the Sales & Purchase value properly (when Accounts & Inventory are Integrated, i.e you must have set Yes at Integrate Accounts with Inventory at F11:Featues >Accounting Features).
P L Account with pending purchase / Sales invoice in Tally
Drill down from Pending Bills in P & L Statement
- Purchase Bills to Come : To get Pending Purchase Bills Statement
- Sales Bills to Make : To get Pending Sales Bills Statement
Accounts Voucher Entry against Pending Inventory Voucher
We have discussed entry of Inventory Voucher with tracking number. The pending Tracking Number is to be linked and matched with corresponding Accounts voucher to update both Inventory & Accounts to complete the transaction
- Purchase Invoice / Debit Note Entry Against Receipt Note / Rejection Out Note
- Purchase Invoice entry against Pending Receipt Note
- Debit Note entry against Rejection Out Note.
- Purchase Invoice entry for Net Quantity Received against Pending Receipt Note & Rejection Out Note.
- Sales Invoice / Credit Note Entry Against Delivery Challan / Rejection In Note
- Purchase Invoice entry against Pending Receipt Note
- Debit Note entry against Rejection Out Note.
- Purchase Invoice entry for Net Quantity Received against Pending Receipt Note & Rejection Out Note.
Here we show linking of Inventory Vouchers created earlier, with Accounts Voucher
Purchase Invoice entry against Pending Tracking Number
At Gateway, select Accounting Vouchers, click F9:Purchase to get Purchase Voucher Entry screen
Purchase Invoice against Pending Tracking Numbers in Tally
Item Allocation details of Purchase Invoice
After you select a Stock Item at name of Item column , you get Tracking Number entry screen in which all Pending Receipt Notes / Rejection In Notes are shown.
Pending Tracking Number selection at Purchase Invoice entry in Tally
Select the Pending Note against which the Current Purchase Invoice is to be created . Now you get the Item Allocation screen showing the selected Tracking Number (you may overwrite the Quantity).
In the same way, you may select and link more Items / Pending Tracking Number.
On adjusting the pending tracking numbers of the Invoice being entered, save the Purchase Invoice
Item allocation linking for Pending Tracking Numbers in Tally
Sales Invoice entry against Pending Tracking Number
At Gateway, select Accounting Vouchers, click F8:Sales to get Sales Voucher Entry screen
Sales Invoice against Pending Tracking Number in Tally
After you select a Stock Item at Name of Item column, you get Tracking Number entry screen showing Pending Tracking Numbers.
Pending Tracking Number selection at Sales Invoice entry in Tally
Select the Pending Note against which the Current Sales Invoice is to be created . Now you get the Item Allocation screen showing the selected Tracking Number (you may overwrite the Quantity).
Item allocation linking Pending Tracking Numbers in Tally
In the same way, you may select and link more pending Notes.
On entry of all the Items of the Sales Invoice in this manner, you may save the Purchase Invoice
Inventory Voucher Entry against Pending Accounts Voucher
We have discussed entry of Accounts Voucher with tracking number. The pending Tracking Number is to be linked and matched with corresponding Inventory voucher to update both Inventory & Accounts to complete the transaction
Receipt Note / Rejection Out Note Entry Against Purchase Invoice / Debit Note
- Receipt Note entry against Pending Purchase Invoice
- Rejection Out entry against Pending Debit Invoice
Delivery Challan / Rejection In Note Entry Against Sales Invoice / Credit Note
- Delivery Challan entry against Pending Sales Invoice
- Rejection In entry against Pending Credit Note
Here we show linking of Inventory Vouchers with Accounts Voucher created earlier
Receipt Note Entry Against Pending Tracking Number
At Gateway, select Inventory Voucher, click F9:Rcpt Note to get Receipt Note Entry screen
Receipt Note Entry Against Pending Tracking Number in Tally
After you select a Stock Item at Name of Item column, you get Tracking Number entry screen showing all Pending Tracking Numbers.
Pending Tracking Number Selection at Receipt Note in Tally
Select the Pending Tracking Number against which the Current Receipt Note is to be created to get Item Allocation Screen, where the details of selected Tracking Number is carried (you may change the Quantity).
Item allocation linking Pending Tracking Numbers in Tally
In the same way, you may select and link more pending Notes.
On entry of all the Items of the Receipt Note in this manner, you may save the Receipt Note
Delivery Note Entry Against Pending Sales Invoice
At Gateway, select Inventory Voucher, click F8:Dely Note to get Delivery Note Entry screen
Delivery Note Entry linking Pending Tracking Number in Tally
After you select a Stock Item at Name of Item column, you get Tracking Number entry screen.
Pending Tracking Number Selection at Delivery Note in Tally
Select the Pending Tracking Number against which the Current Delivery Note is to be created to get Item Allocation Screen , where the details of selected Tracking Number is carried (you may change the Quantity)
Item allocation linking Pending Tracking Numbers in Tally
In the same way, you may select and link more pending Notes. On entry of all the Items of the Delivery Note in this manner, you may save the Delivery Note
After the Pending Inventory Vouchers and Accounts Vouchers are linked fully, the Pending Balances in P & L Statement would be NIL .
P & L Statement after linking of all Pending Balances of Accounts & Inventory Vouchers in Tally
Delivery Challans Processing in Tally
Often, the Supplier sends goods under their Delivery Note, but sends the corresponding Invoice later on. Sometimes, they send one Invoice against multiple Delivery Notes.
In such case, the Customer creates a Receipt Note on receipt of goods, corresponding to the Delivery Note of the supplier. The supplier then creates a Purchase Invoice corresponding to the supplier Invoice and links the Purchase Invoice to the Receipt Notes already created.
This process is illustrated with the following example
Example
Let us assume, the supplier sends goods under Delivery Note No D/5 Dt 1.9. The buyer receives the goods on 5.9 and creates his own Receipt Note No 1 dt 5.9 (Tracking No 1)
The supplier again sends goods under Delivery Note No D/16 Dt 12.9. The buyer receives the goods on 15.9 and creates his own Receipt Note 2 dt 15.9 (Tracking No 2)
The supplier sends an Invoice S/15 dt 31.12 in respect of Delivery Notes D/5 Dt 1.9. & Delivery Note No D/16 Dt 12.9. The buyer enters the Supplier’s Invoice under Purchase Voucher No 9 dt 15.9, linking the Receipt Notes 1 dt 5.9 & 2 dt 15.9.
The creation of Receipt Notes & Purchase Invoice in the books of Buyer are now explained
First the Receipt Notes ( 1 dt 5.9 & 2 dt 15.9) are entered as and when goods are received
Later on, the corresponding Purchase Invoice ( 9 dt 15.9) is entered against the Receipt Notes 1 & 2 created earlier
Sales Invoice entry against Delivery Note in Tally
Often, the Vendor sends goods under their Delivery Note. Subsequently, the Vendor creates corresponding Invoice linking the delivery Note (sometimes one Invoice is created against multiple Delivery Notes).
This process s illustrated with the following example
Example
Let us assume, the supplier sends goods under Delivery Note No 1 Dt .4.10 & again by Delivery Note No 2 Dt . 3.11 and then creates a Sales Invoice 5 dt 15.11. against these 2 Delivery Notes
The creation of Delivery Notes & Sales Invoice in the books of Vendor are now explained
The Delivery Note 1 Dt 4.10 (Tacking Number1) & Delivery Note No 2 Dt . 3.11 (Tacking Number 2) are first entered.
Later on, Sales Invoice No 5 dt 15.11 against the linking Tracking No 1 ( Delivery Note1 Dt 4.10.2010) & Tracking No 2 (Delivery Note No 2 Dt . 3.11.2010) is entered.
Debit Note entry against Rejection Out Note in Tally
Often, the Customer returns goods under Rejection Out Note and then creates a Debit Note against the Rejection Out Note
This process is illustrated with the following example.
Example
C returns bought goods to S, under Rejection Out Note No 1 Dt 15.9 and then C creates a Debit Note No 1 dt 15.10. on S, against the Rejection Out Note
The creation of Rejection Out Note & subsequent creation of Debit Note linking the Rejection Out Note is now explained
First, C creates Rejection Out Note No 1 Dt 15.9 (Tracking No 12). Later on, C creates Debit Note No 1 dt 15.10.against Tracking No 12 ( Rejection Out Note No 1 Dt 15.9)
Credit Note entry against Rejection In Note in Tally
In the above paragraph, we have explained the entries in the books of Customer (C ) who returns the Goods to Supplier S. Here, we explain the corresponding entry in the books of Supplier S , who receives back the returned goods from Customer C.
On receiving the returned goods from C (who sends a Rejection Out Note to S), the Supplier S creates Rejection In Voucher on C, on receipt of returned goods from C. Subsequently, the Supplier S creates corresponding Credit Note (on receiving Debit Note from the C) linking the Rejection In Note (one Credit Note may be created against multiple Rejection In Notes)
This process s illustrated with the following example
Example
S, on receiving Returned goods from C (sent by C under Rejection Out # 1 dt 15.9) under Rejection In voucher 1 dt 8.10 and later on creates Credit Note No 5 dt 15.12. The creation of Rejection In Note & Credit Note in the books of S are now explained
First the Rejection In Note No 1 dt 8.10 (Tracking No 12) is created.
Later on, the Credit Note No 5 dt 15.12 is created against the Tracking No 12 (Rejection In Note 1 dt 4.10)
Sale under Buy or Return scheme in Tally
Under this scheme, goods (like Books) are delivered by Seller to customers (Buyer) with an option to buy (nad test on trial) or return the item intact, within a specified period. The Items accepted or retained are then billed.
The versatile facility of Tally of creating Delivery Notes independently (without creating sale bill simultaneously) and inter adjustment of Pending Challans provide excellent mechanism for maintaining complete system of such type of trade.
Delivery on Buy-or-Return Basis : At the time of delivery of book, a Delivery Note is to be prepared with a new tracking number, in the name of the customer. Now the following cases may arise :
- Customer Retains / Accepts all Items : A Sale Bill (S/9) is created linking the Delivery Note (D/5). So, the all the items delivered are properly billed. The customer now pays for the sale bill (S/9).
- Customer Retains / accepts some Items and returns the rest of the Items : This involves 2 steps
- Creation of Rejection In Note for the goods returned : Create a Rejection In Note for the Items returned (R/7).
- Creation of Sale Bill after adjusting the Rejection Note from the Delivery Note : A Sale Bill (S/9) is created linking the Delivery Note D/5 and Rejection Note R/7. So, all the items delivered / retained are properly billed (the item returned gets adjusted through the rejection Note). The customer now pays for the sale bill (S/9).
- Customer Returns all the Items : In this case, the Delivery Note D/5 remains pending. A rejection note R/7 is created for the all the returned Item, linking the Delivery Note D/5. Now the Delivery Note is completely set off leaving a zero Balance
Sale through Agents (Consignment Sales) in Tally
In case of sale through Agents, the gods are merely transferred to Agent. It is not sale. When the agent, in turn, sells the goods to its customers, the sale invoice is created by the principal on the customer. There is no sale transaction between the Agent and the customer.
The trade of sale through Agent may be implemented by using the combined features of Godown (the Agent is treated as Godown) and the features of Delivery Challan, Rejection Note and linking of these documents to Sale Invoice.
The basic concepts of Sale through Agent are :
- Create a Godown for each Agent. So, Agents become godown of the organization. Consequently, godownwise transactions and stock give the necessary records and statements for Agents
- Create a Stock Journal for goods delivered to Agent. Within Tally, it is treated as stock Transfer to a godown. So, the stock lying with Agent is treated as stock lying in a godown and is part of the inventory of the organization.(perfectly complying to the principle of Accountancy).
- The Agent submits a sales statement for Items sold. A sales invoice is created in the name of actual customer (whom the goods are sold by the agent), using the goods from the respective godown (the agent). This way, the godown stock (stock with the agent) are properly accounted for.
- All the accounting transactions with agent are dome through account ts voucher as usual. This way, any organization trading through agents may maintain complete accounting & inventory system and tracking of stock lying with agents
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