Inventory Vouchers or what I call Manufacturing Vouchers in Tally are often seen as something very difficult by many people.

But let me tell you that it is not at all difficult.

In fact it is very much easy that after knowing it you will be surprised how easy it was.

If you are a manufacturing concern or business which requires manufacturing to be done, then this tutorial is surely for you.

Inventory vouchers are specifically created for manufacturing businesses which are involved in manufacturing of raw materials and ultimately the production of finished goods.

Well, I have explained in the following video tutorial exactly the same but with a simple, sweet and small example.

Though the example is small but applies to each and every manufacturing process.

Wait! Before directly jumping on to the video, let me tell you that I have already created stock items.

Now you must be thinking that what the hell are stock items? Right?

Well, in simple words they are items which are used as raw materials and which will be produced as finished goods.

Basically whatever the stock that will be used and whatever the products that will be produced are created as stock items in Tally.

For example, if you want to manufacture currency notes, you would require paper, ink, water and the finished goods will be the currency notes.

Therefore the stock items will be for paper, ink, water and the currency notes.

Side note – You and I cannot produce currency notes in reality. This is just an example.

Let’s Take an Example

I want to make bread.

For that I will need Raw Materials. At the end the Finished Goods will be Bread.

So, here is a list of raw materials.

  • Raw Materials – Flour, Water, Spices. These are the items that will be processed and at the end bread will be produced.
  • Finished Goods – Bread.

For simplicity and better understanding, I have only taken 3 items for raw materials.

Also I have NOT included any kind of expenses for simple explanation.

I know that there are manufacturing expenses like labor, processing etc and you can add them if you want.

Let us look at it step by step.

Process and Understanding inventory vouchers in Tally

From Gateway of Tally, go to Inventory Vouchers.


After pressing the button inventory vouchers you will see the Inventory Voucher Creation screen in Tally.

It looks like in the image below.


Accounting name of inventory vouchers is Stock Journal. 

You can see it in the image above in the top left corner in pink colour (just like our new ₹2,000 note).

The title of the screen says Transfer of Materials. 

This simply means you are going to transfer materials from one department to another department.

It can be manufacturing department to production department.

On the LEFT side, there is Source (Consumption) window.

On this side you have to enter Raw Materials which is required to produce the Finished Goods.

Therefore the name of the window is Source or Consumption because it consumes the materials or goods and it gets produced in the next half of the window.

On the RIGHT side, there is Destination (Production) window.

This side is where you have to enter what finished goods actually are produced in your factory or department.

The name of this window is Destination or Production thus states that a particular unit or product is produced in this department.

Creating Inventory Vouchers in Tally

Now let us look step by step on how to create inventory vouchers from what you understood above.

I am assuming you are currently at the Inventory Voucher Creation screen (Pink coloured screen) which is in the picture above.

If you are not at that screen, you can reach to that screen from following the steps which we have discussed above.

Now, from that screen we will enter the raw materials and finished goods about which we have talked in the example above.

In the above example, bread was produced as a finished product and the raw materials include flour, water and spices.

For the sake of simplicity, I have taken this kind of simple example. In the real world there can be more raw materials and more than one finished product.

Coming back to the example, we will enter raw materials first in the left window and their respective rates and finished product in the right window along with its rate.

Look at the picture below for clear understanding.


I have entered following items in at the following rates.

Raw Materials (Left hand side window):

Flour – 50 Kg at ₹40 per Kg = ₹2,000

Water – 5 Liters at ₹15 per Liter = ₹75

Spices – 2 Kg at ₹100 per Kg = ₹200

Finished Product (Right hand side window):

Bread – 60 Kg at ₹50 per Kg = ₹3,000

After entering all the above items, you have to just press enter and your entry will be completed.

Now if you see Stock Summary from Gateway of Tally, you can see both the bread produced as well as the quantities of flour, spices and water.

Here is the picture of what you can see in Stock Summary.


You can clearly see the quantity as well as the value of the Bread.

Apart from that you can see the quantities of raw materials which are left in quantity.

In the picture, it is showing quantities of raw materials in negative because I have already used them in production of bread while I did not had any quantity in stock.

For this example, I did not add any opening balance to the raw materials and therefore it is showing negative balance.

But, you do not need to worry as it will not show negative balance once enter the opening balance or the purchase entry if you are purchasing raw materials from some one else.

Inventory or Manufacturing Vouchers in Tally

At the End…

I am sure you have learnt every single detail about creating inventory vouchers in Tally.

This method can also be used even if you are only assembling goods and not manufacturing.

The reason behind it is very simple. Although it is assembly the process is same as manufacturing.

In manufacturing, raw materials are processed and a finished product is produced while in assembling of goods a product is created by putting some goods together.

In Tally, this is the correct way to create manufacturing entries with the help of inventory vouchers.

Now, you exactly know how you can create manufacturing entries in Tally.

If you have any doubts, comment below and I will be more than happy to help you.