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Manufacturing organization in Tally
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Manufacturing organization in Tally

Manufacturing organization in Tally

Manufacturing organization is that organization where transfer of raw material took place to manufacture finished goods for the end customer.
Manufacturing frequently employments man and machine with the division of labor on large scale production .It includes manufacturing transaction like raw material which is finally y converted into finished goods. In this type of organization many tupe of voucher are used under Tally like PO Purchase order ,receipt note RN,(Tracking NO),rejection out ,purchase sale ,purchase return,sales return delivery note ,refection in ,physical stock ,stock journal voucher sales order voucher and manufacturing journal.
For maintain particular record of these transaction stock categories of each item provide the facility of recording transaction in multiple go down and maintain batch wise detail,multiple go down and how to analysis the report for the transaction recorded in the respective books on accounts.

Benefits of business in manufacturing from Tally 

Stock Item Classification as

  • Raw material
  • Work in Progress
  • Finished Goods

Bills of Materials with auto adjustment of stock

In assembling units there are number of component involved in manufacturing of finished Items.It is extremely difficult to issue stock items every time a product is manufactured such situations can be handled in Tally.ERP 9 by using Bills of Materials.

Additional cost of Manufacturing with notional value and percentage

When a product is manufactured other than the component cost there are manufacturing cost like labour ,electricity,accessories etc which will have to be added to the cost of Products.

 

Examples of Manufacturing in Tally erp 9

Introduction

Mr. Alok Kumar & Karan Patwal both are started the business as “Swastik  Oil Industries Pvt. Ltd.” By investing capital in equal ratio. Since 1st Oct. 2013 and decided to share profit / loss equally.

In “Swastik Oil Industries Pvt. Ltd.” We purchase raw material (soya seeds) and process on it. With the help of different types of vochers and stored the goods in different godowns.

The both partners wants to maintain their account in Tally. ERP 9. The transaction details recorded for  Swastik Oil Industries from 1st Oct. 2013.

  • Process of Oil Industry
                                                                         Soya Seeds
                     Crude (Raw) Oil DOC Wastage
Loose Oil (Final)    Soap Stock
è Oil Barrel 15Ltr.
è Oil Barrel 5Ltr.
è Oil Barrel 1Ltr.

 

 

  • Swastik Oil Industries Pvt. Ltd.

The complete company creation screen appears as shown below.

Company creation screen in manufacturing Tally

Press Enter to accept the screen

  • Activation of VAT

Go to Gateway of Tally > F11 Features > Statutory & Taxation > Set > Enable Value Added Tax (VAT) to “Yes” > Set alter VAT details to “Yes”

Press enter & set the option as shown in the following screen.

Press enter to accept the screen

In Tax information field

Enter VAT/ TIN (Regular) number & inter state sales tax number

October 2013

Transaction for the month of Oct. 2013.

1) 01-10-2013 Mr. Alok Kumar & Mr. Karan Patwal started business by bringing in cash of Rs. 25,00,000/- as Rs. 12,50,000/- by Mr. Prakash Mittal & Rs. 12,50,000/- by Mr. Sham Agrawal and deposited the same amount in HDFC Bank by opening a new account.

 

Create ledgers > Mr. Alok Kumar capital a/c & Mr. Karan Patwal capital a/c (under capital account) and HDFC Bank (under bank account).

  • Make an entry of the transaction in F6 Receipt voucher

Go to Gateway of Tally > Accounting Vouchers > F6 Receipt.

Press F2 to change voucher date

  1. Date : 01-10-2013
  2. : Mr. Alok Kumar capital a/c > 12,50,000
  3. : Mr. Karan Patwal capital a/c > 12,50,000
  4. : HDFC Bank > 25,00,000

 

2) 02-10-2013 Company paid preliminary expenses of Rs. 2,00,000 for company Registration & start up expenses by cheque. (ch. No. 12001

 

Create ledger >  Preliminary expenses (Misc. exp. (asset))

 

  • Make an entry of the transaction in F5 Payment voucher

Go to Gateway of Tally > Accounting  Voucher > F5 Payment.

Press F2 to change voucher date

 

  • Date : 02-10-2013
  • : Preliminary Expenses > 2,00,000
  • : HDFC Bank > 2,00,000

 

3) 03-10-2013 Company started Contraction for Industry to Build Godown and paid Rs. 6,00,000 by cheque (Ch, no. 12002)

 

Note : As per Rule of Contraction Expenses are charged to Profit & Loss account over a period of 4 Year i.e. 25% for each year

 

Create ledger > Contraction expenses (under Misc. exp. (asset))

  • Make an entry of the transaction F5 Payment voucher

 

  • : Contraction Expenses > 6,00,000
  • : HDFC Bank > 6,00,000

 

4) 04-10-2013 The company purchase the following Assets from Star Machineries Pvt. Ltd. Of Rs. 5,77,500/- by paying part payment. Of Rs. 200,000/- by Cheque. (Ch no. 12003)

Processing Machine of Rs. 3,15,000/-

Packing machine of Rs. 2,62,500/-

 

Create Ledgers > Processing machine & Packing machine (under Fixed Assets) Star machineries Pvt. Ltd. (under Sundry creditor).

Press 12 Configuration (In journal voucher screen)

Set “Allow cash account in journal” – Yes

  • Make an entry of the transaction in F7 journal voucher.
  • Date : 04-10-2013
  • : Processing machine > 3,15,000
  • Packing machine > 2,62,500
  • HDFC Bank > 2,00,000
  • Star Machineries Pvt. Ltd. 3,77,500

 

In bill wise details

  • Type of Ref : New ref
  • Name : SM-01

Accept the default details

Press Y or Enter to accept the voucher.

 

5) 05-1-2013 Company took Unsecured Loan Mr. Bhushan Shah of Rs. 10,00,000

 

Create ledgers > Mr. Bhushan Shah (under Unsecured loan)

  • Make an entry of the transaction in F6 Receipt voucher

Go to Tally. ERP 9 > Accounting vouchers > F6 Receipt.

Press F2 to change voucher date

 

  • Date : 05-10-2013
  • Mr. Bhushan Shah > 10,00,000
  • : Cash > 10,00,000

 

06 06-10-2013 The company Deposit cash in HDFC Bank Rs.8,00,000

 

  • Make an entry of the transaction in F4 Contra voucher

Go to Gateway of Tally > Accounting vouchers > F4 Contra.

Press F2 to change voucher date

 

  • Date : 06-10-2013
  • : Cash 8,00,000
  • HDFC Bank > 8,00,000

 

07 08-10-2013 The company purchased oil tanks from Sudhir Oil Tank Pvt. Ltd. Of Rs. 4,25,000/- by paying part of payment Rs. 2,50,000 bill no. ST-01 Ch. 12004

 

Create ledgers > Oil Tank (under Fixed assets) & Sudhir Oil Tank Pvt. Ltd. (under sundry creditors)

*make an entry of the transaction in F7 journal voucher.

 

  • Date : 08-10-2013
  • : Oil Tank > 4,25,000
  • : HDFC Bank > 2,50,000
  • : Sudhir Oil Tank Pvt. Ltd. > 1,75,000

 

In bill wise details

  • Type of Ref. New Ref
  • Name : ST-01, Accept the default details

 

08) 09-10-2013 The company purchased Computer of Rs. 20,000/- on credit from AXN Computer Ltd. Bill no. AXN-01.

 

Create ledger > Compute (under Fixed asset ) & AXN Computers (under sundry creditors)

  • Make an entry of the transaction in F7 Journal voucher.

 

  • : Computer : 20,000
  • : AXN Computers > 20,000

 

In bill wise details

  • Type of Ref : New ref
  • Name : AXN-01, Accept the default details

 

09 10-10-2013 Purchase the following assets by cheque (Ch. No. 12005)

(i)                  Furniture & Fixture of Rs. 30,000

(ii)                Office Equipment of Rs. 20,000

(iii)               Electrical Fittings of Rs. 25,000

 

Create ledgers > Furniture & Fixtures, Office Equipment, Electrical Fitting (under Fixed assets)

  • Make an entry of the transaction in F5 Payment voucher.

 

  • Date : 10-10-2013
  • : Furniture & Fixture > 30,000
  • : Office Equipment > 20,000
  • : Electrical Fitting > 25,000
  • : HDFC Bank > 75,000

 

10) 10-10-2013 The company Withdrew Rs. 50,000 from bank for office use, of which Rs. 30,000 was transferred to the petty cashier.

 

Create ledger Petty Cash (under Cash in hand)

  • Make an entry of the transaction in F4 Contra voucher.

 

  • Date : 10-10-2013
  • :HDFC Bank > 50,000
  • : Petty Cash > 30,000
  • : Cash > 20,000

 

11) 12-10-2013 The petty cashier purchased Stationary of Rs. 8,000/- for office use from Hari Book Stall.

 

Create ledger > Printing & Stationary expenses (under indirect expenses)

  • Make an entry of the transaction in a F5 Payment

 

  • Date : 12-10-2013
  • : Printing & Stationary Expenses : 8,000
  • : Petty cash > 8,000

 

Introduction of Stock Groups

 

Stock items can be grouped together under stock groups to reflect their classification based on some commonality. Grouping enables easy location and reporting of stock items in statements. Hence, items of a particular brand type- can be grouped together so that one can extract stock of all items of that brand or type. For further analysis, sub –groups of stock groups can be created.

 

  • To create stock group

Go to Gateway of Tally > Inventory  Info. > Stock Groups

 

  • Name : Raw Material
  • Alias : Skip by pressing enter
  • Under : Primary
  • Can quantities of items be added : Yes

The stock group creation screen appears as shown below :

Stock group in tally manufacturing

Press Enter to accept.

Similarly, create Multiple stock groups as mentioned below

  • O.C. (Oil Cake)
  • Loose Oil
  • Soap Stock
  • Wastage

 

  • To Display stock group

Go to Gateway of Tally > Inventory Info. > Stock Group > Single Display > Select Stock

Group which you want to display.

 

To Alter stock group

Go to Gateway of Tally > Inventory Info. > Stock Group > Single Alter > Select stock group

Which you want to alter.

 

To Delete stock group

Go to Gateway of Tally > Inventory Info. Stock Group > Single Alter > Select stock group which you want to delete . and press “Alt + D”.

 

  • Introduction of Units of Measures

 

Units of Measures is the basic unit of measurement used to measure stock items. For every stock item, a unit of measure need to be created. These can be simple units ( for example numbers, meters, kilograms, pieces) or compound units (for example box, where one box equal 10 pieces, Dozen of 12 Nos.) etc.  a compound unit is a between two simple units. Hence, before a compound unit is create, ensure that the two simple units are created.

 

To create Simple units of measures

Go to Gateway of Tally > Inventory Info. > Units of Measures

 

  • Type : Simple
  • Symbol : Mt.
  • Formal Name : Metric Tons
  • Number of Decimal Places : 2

 

The completed Simple units of Measures appears as shown below.

Unit of measurement manufacturing

Press Enter to accept.

 

Similarly create Simple units of measures as mentioned below.

Symbol Formal name Number of Decimal Places
Kg. Kilograms                  2
Ltr. Litres                  0
Nos. Numbers                  0

 

  • To Display units of Measure

Go to Gateway of Tally > Inventory Info. > Units of measure > Display > Select unit which you want to display.

 

  • To Alter units of measure

Go to Gateway of Tally > Inventory Info. > Units of measure > Display > Select of unit which you want to alter.

 

Godown Creation

 

  • To Activate Godowns

 

Press F11 Features > Select Inventory Features > Set “Maintain Multiple Godowns” to Yes

 

  • To Godown Alteration
  • Go to Gateway of Tally > Inventory Info > Godown > AlteIn Tally one godown is predefined known as “Main Location” replace it with “Raw Material Godown”

 

 

  • To create godown

Go to Gateway of Tally > Inventory Info > Godown > Create

 

  • Name : D.O.C. Godown
  • Alias : skip by pressing enter
  • Under : Primary

 

Similarly create godown as mentioned below (under primary)

 

  • Crude (Raw) Oil Tank
  • Open Place
  • Loose Oil Tank
  • Soap Tank
  • Finished Goods Godown

 

Introduction of Stock Items

 

Stock item is the inventory entity. Stock items are used while recording receipts and issues of inventory.

This is the lowest level of information of Inventory. Each item that is required to be accounted needs to be created. A stock ledger accounts is created for each item and Tally calls this accounts stock item.

 

  • To create stock item as mentioned below.

Go to Gateway of Tally > Inventory Info. > Stock Items > Create

Press F12 Configuration > Set “ use alternative units  for stock items” to Yes

 

The complete F12 Configuration screen appears as shown

f12 configuration in tally manufacturing

Press enter to save

In stock item creation screen

  • Name : Soya Seeds
  • Under : Raw material
  • Units : Mt.
  • Alternate units : Kg.
  • Where : 1000kg = 1Mt.

 

Skip all field & Save the screen.

The complete stock item creation screen appears as shown

Press Enter to save

 

Similarly create stock items as mentioned below.

Sr. no. Name of item Under Units
1 Crude (Raw) Oil Raw Material Mt.
2 Soap Stock (Liquid) Soap Stock Ltr.
3 Wastage Wastage kg
4 Loose Oil (Final) Loose Oil Ltr.
5 D.O.C. D.O.C (Oil Cake) Mt.
6 Oil Pouch 1 Litre Finished Goods Nos.
7 Oil Pouch 5 Litre Finished Goods Nos.
8 Oil Pouch 15 Litre Finished Goods Nos.

 

 

 

Accounting Voucher with VAT Applicable

 

12) 12-10-2013 To start operation company purchased 40mt. Soya seeds @ 3145/- per mt. soya seeds on credit of 10 days from Captain Industries with 5% VAT & freight charges of Rs. 15,00/- and also received discount of Rs. 590/- goods stored in Raw Material godown bill no. CI-214.

 

Create ledgers : Captain Industries, Purchase @ 5%, In put vat @ 5%, Freight charges, & Discount Received.

 

Captain Industries

  • Under : Sundry creditors
  • Maintain balance bill-by-bill : Yes
  • Default credit period : leave blank
  • Accept the rest of the field at default values

 

Purchase @ 5%

  • Under : Purchase account
  • Inventory values are affected : Yes
  • Used in VAT returns : Yes
  • VAT/TAX class : Purchase @ 5%
  • Use for assessable value calculation : No

 

Input vat @ 5%

  • Under : Duties & Taxes
  • Type of duty/tax : VAT
  • VAT sub type : Input vat
  • VAT/TAX class : Input vat
  • Inventory values are affected : No
  • Other fields are updated automatically.
  • Rounding method : Not applicable

 

Freight charges

  • Under : Direct Expenses
  • Inventory values are affected : No
  • Used in VAT returns : No

 

Discount Received

  • Under : Indirect income
  • Inventory values are affected : No

 

Press enter to save the screen.

 

Make an entry of the transaction in F9 Purchase voucher.

  • Date : 12-10-2013
  • Supplier invoice no. : CI-214
  • Party’s a/c name : Captain Industries
  • Name of item : Soya Seeds
  • Godown : Raw material godown
  • Quantity : 40mt.
  • Rate : 3145
  • Amount : skip the field
  • Press enter to accept the item allocation screen
  • Press enter to view the accounting details screen
  • Select Purchase @ 5% on particulars field & accept the screen
  • Press enter twice and select Input vat @ 5% from the list of ledger accounts displayed
  • Select Freight charges from the list of ledger accounts & enter Rs. 1500 in amount field
  • Select Discount received from the list of ledger accounts & enter Rs. (-) 590 in amount field
  • Show statutory details : Yes

 

The affected statutory details screen appears as shown below

 

  • Press enter thrice to view Bill-wise details for Captain Industries.
  • Type of Ref : New ref
  • Name : CI-214
  • Due date or credit days : 10 Days
  • Amount : automatically comes

 

The complete purchase voucher screen appears as shown below.

Press Enter to save.

 

13) 14-10-2013 Paid Octroi expenses of Rs. 960/- by cash for the month of Oct 2013

 

Create ledger > Octroi expenses (under direct expenses)

Make an entry in F5 Payment voucher

  • : Octroi Expenses > 960
  • : Cash > 960

 

Introduction of All Vouchers

 

  1. F4 : Contra voucher
  2. F5 : Payment voucher
  • F6 : Receipt voucher
  1. F7 : Journal voucher
  2. F8 : Sales voucher
  3. F9 : Purchase voucher
  • Ctrl + F8 : Credit note
  • Ctrl + F9 : Debit note
  1. F10 : Reversing journal
  2. Ctrl + 10 : Memorandum voucher

 

Inventory vouchers

  1. Alt + F4 : Purchase order
  2. Alt + F5 : Sales order
  • Alt + F6 : Rejection out
  1. Ctrl + F6 : Rejection in
  2. Alt + F7 : Stock Journal
  3. Alt + F8 : Delivery note
  • Alt + F9 : Receipt note
  • Alt + F10 : Physical stock

Inventory vouchers

In Module-ll we learn how to enter accounting vouchers & view effect of accounting voucher on accounts. Accounting vouchers will update both Accounts & Inventory. Inventory vouchers will update only inventory.

Inventory vouchers perform the function in the inventory system that accounting vouchers do in the accounting system. Inventory vouchers are also means of entering transactions. Inventory vouchers records  the receipts and issue of stock/goods (movement of goods), the transfer of stock between locations and physical stock adjustments

Tally. ERP 9 has excellent facilities in itself. One of them is inventory vouchers, various kinds of inventory vouchers are use for various purpose. Inventory vouchers means those vouchers which are just related to stock e.g. delivery of goods, Stock transfer, goods rejected, verification of goods etc. in inventory vouchers every voucher is related to another voucher. Lets have a look what is the use of these vouchers & how these voucher are practically use.

  • Purchase order : Alt + F4 – To place order to supplier for purchasing goods
  • Sales order : Alt + F5 – To receive order from customers for sales
  • Delivery note : Alt + F8 –Goods delivered but sales bill not Delivered/ Made
  • Receipt note : Alt + F9- Goods received but purchase bill not Received/Made
  • Rejection in : Ctrl + F6 – Goods rejected by the customer which were delivered
  • Rejection out : Ctrl + F6 – Goods rejected by the supplier which were received
  • Stock journal : Alt + F7 – Stock journal used for material transferred from one location to another location. This voucher updates only inventory. In case of integrated accounts & inventory, it updates financial accounts with the value of closing stock in final accounts.

In stock journal voucher, you  may enter the following transactions :

  1. Consumption /Production ii) Stock Transfer iii) Process of Manufacturing
  2. iv) Process of transformation of an item, its semi- finished or finished stage.
  3. v) Transfer of Material from one location/ Department to another location/ Godown.

 

  • Physical Stock Alt + 10 – The actual stock verification in the business is very difficult i.e., the stock mentioned in books and stock in godown should be equal. Example ; if you bought 5kg of sugar  out of which 4kg. is sold out & you may have  only 800 gms. For such  kind of problem  Tally has introduced a voucher called Physical stock voucher. On physical verification when you find that there  is 800 ms of sugar (instead of 1 kg as per books). You make a physical  stock voucher on that day for 800 gms. & the stock for subsequent period will be  considered as 800 gms. & adjust the stock (Adjustment of 200 gms done)

 

Sometimes  the problems of Negative Stock appears in business concerns i.e. your books show more quantity issued than has come in.

 

For example : Purchased goods 10 nos. – Issued 6 nos.  Balance 4 nos. again sold 5 nos. Balance (-1) nos.

Processes of Inventory vouchers

 

As  per above details in many business if you want to purchase goods first of all you have to place Purchase Order then the party issue goods & you receive goods. For that the transaction is entered in Receipt note voucher if you Reject goods for any reason then for that Rejection out voucher is used. And when the party send you invoice for purchases made by you then purchases voucher is used, after receiving of invoice if you  reject  goods then Debit note voucher is used & after all the process when you Pay to party for the Retained stock  then Payment voucher is used. The process of Goods Purchasing ends here.

 

With the help of different examples we will learn about all inventory vouchers

 

14) 18-10-2013 After Purchased Soya seeds company process on 35mt. Soya seed & manufactured Crude Oil, D.O.C., Wastage, from raw material
 

 

 

 

 

 

 

 

 

 

 

 

                                   Source (Consumption)
Name of item Godown Qty. Rate Amount
Soya seed Raw material godown 35mt. 3145 1,10,075
                              Destination (Production)
Name of item Godown Qty. Rate Amount
Crude (Raw) oil Crude (Raw) oil tank 21mt. 5023 105483
D.O.C D.O.C Godown 10.50mt 15,700 164850
Wastage Open place 3500kg 3 10500

 

 

Create  voucher types as mentioned below

  • To create voucher types

Go to Gateway of Tally > Accounts/ Inventory Info. > Voucher type > Create

 

  • Name : Processing journal
  • Type of voucher : Stock journal
  • : Pro. Jrnl.
  • Method of voucher numbering : Automatic
  • Use Advance Configuration : No

Skip all option by pressing enter

Press enter to accept the screen

 

Similarly create Packing journal (pack jrnl.)

 

Make an entry of the transaction in (Alt + F7) Processing journal voucher

Press Alt + f7 & select Processing journal from the list of voucher types

Date : 18-10-2013

Enter the item according to the entry in the Source (Consumption) column

  • Name of item : Soya seed
  • Godown : Raw material godown
  • Quantity : 35mt.
  • Rate : 3145
  • Amount : 110075 (Automatically calculated and displayed)

In the destination (Production) column

  • Name of item : Crude (Raw) Oil
  • Godown : Crude (Raw) Oil Tank
  • Quantity : 21mt.
  • Rate : 5023
  • Amount : 105483 (automatically calculated and displayed)
  • Name of item : D.O.C
  • Godown : D.O.C Godown
  • Quantity : 10.50mt
  • Rate : 15700
  • Amount : 164850 (automatically calculated and displayed )
  • Name of item : Wastage
  • Godown : Open place
  • Quantity : 3500kg
  • Rate : 3.00
  • Amount 10500 ( Automatically calculated and displayed)

The complete Processing journal voucher appears as shown below

Press enter to save

 

15) 19-10-2013 Company purchased Packing material (Like Barrels & Pouches for Oil Packing ) of Rs. 12,000/- by cheque (Ch. No. 12006)

 

Create ledger > Packing material (under Indirect expenses)

 

Make an entry of the transaction in F5 Payment voucher.

 

  • Date : 19-10-2013
  • : Packing material > 12000
  • : HDFC Bank > 12000

 

16 20-10-2013 Company processed on 15 mt. Crude Oil and Found Soya seed oil and soap stock.
                                     Source (Consumption)
Name of item Godown Qty. Rate Amount
Crude (Raw) Oil Crude (Raw) Oil Tank 15mt. 5023 75345
                                 Destination (Production)
Name of item Godown Qty. Rate Amount
Loose Oil (Final) Loose Oil Tank 10500 Ltr. 50 525000
Soap Stock (Liquid) Soap Tank 4500 Lrt. 2.50 11250

 

Make an entry of the transaction in Alt + F7 Processing journal voucher

Press Alt + F7 & Select Processing journal voucher

Date : 20-`10-2013

 

In source ( consumption) column.

  • Name of item: Crude (Raw) Oil
  • Godown : Crude (Raw) Oil Tank
  • Quantity : 15mt.
  • Rate : 5023
  • Amount : 75345 (automatically calculated and displayed)

 

In the destination (Production ) Column

  • Name of item : Loose Oil (Final)
  • Godown : Loose Oil Tank
  • Quantity : 10500Ltr.
  • Rate : 50
  • Amount : 525000
  • Name of item : Soap Stock (Liquid)
  • Godown : Soap Tank
  • Quantity : 4500Ltr.
  • Rate : 2.50
  • Amount : 11250

The complete Processing journal voucher appears as shown below.

Press enter to save.

 

 

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