What are Inventory Vouchers in Tally

What are inventory or manufacturing vouchers in tally

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.

inventory-vouchers-from-gateway-of-tally

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

It looks like in the image below.

inventory-vouchers-creation-screen-in-tally

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.

creating-inventory-voucher-in-tally

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.

stock-summary-in-tally

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.

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50 thoughts on “What are Inventory Vouchers in Tally

  1. kuldip singh lamba says:

    The voice of video is very clear.I find the following expenses in a manufacturing process missing from your entries: Overhead expenses like Labour, rent, rates and taxes.
    The above case is for a running business. What about a business that is going to start. What entries are to be made?

    • Rishit Shah says:

      I have not included labour, rent and other overhead expenses just for the sake of simplicity. But you can obviously include while passing the entries.

      What are you exactly trying to say by “a business that is going start” and what type of entries do you want to know about while starting a business.
      Can you please explain in detail.

      Thanks for the appreciation Kuldip. I’m glad that you liked it. 🙂

  2. Nitish Agrawal says:

    Hello sir, can you please tell me whether there is any way through which we can transfer any stock balance into a puchase account or expenses balance.(i am not able to do it by JV).

    Thanks

  3. Priya Dilip says:

    Now that I run a manufacturing unit producing carbonated water and pdw. I have to use pet bottle for filling, cap for capping and sleeve for labelling. How do I add them, or just Bom is sufficient instead of a stock journal. Now I pack the pet bottles in a corrugated boxes, each box containing 50pcs ,30 pcs, 12pcs and 9pcs respectively depending on the capacity of the container. Now how can I maintain the stock of the corrugated boxes? When I register a sales entry how to make the entry cause an effect in the packing material also? Please give me guidance. Awaiting your reply.

    • Rishit Shah says:

      Hi, Priya!

      You can either create BOM or stock journal but not both.

      As that will overlap the same thing.

      Stock journal can be applied for corrugated boxes too.

      Finally, when you pass sales entry, your full accounting will be taken care of.

  4. Anbarasi Jaganathan says:

    Hi sir , 1st i thank u for the best teaching method , Now that I run a manufacturing unit producing carbonated water and pdw. I have to use pet bottle for filling, cap for capping and sleeve for labelling. How do I add them, or just Bom is sufficient instead of a stock journal. Now I pack the pet bottles in a corrugated boxes, each box containing 50pcs ,30 pcs, 12pcs and 9pcs respectively depending on the capacity of the container. Now how can I maintain the stock of the corrugated boxes? When I register a sales entry how to make the entry cause an effect in the packing material also? Please give me guidance. Awaiting your reply. this question is priya’s question from this i have a doubt , that is you have gave an exemple that is

    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

    in this that 3 raw materials is = to 60kg of bread this example got tally ,

    My doubt is i am get raw materials
    for 100 distilled water botttle
    is water 1000ltr
    1000 pet bottle
    1000 labels for pet bottle
    for example with this raw materials i can product 1000 distilled water bottles
    but iam going to product only 100 bottle while i am feeding in the stock journal in the right side of the production what i have to put 1000 distilled water bottle or 100 water bottle ,
    and if it is 1000 bottles , if i had product 100 bottles how i can check & Maintain the current stock for the balance 900 bottle raw materials , plz explain

    • Rishit Shah says:

      Hi, Anbarasi Jaganathan!

      You can do a simple thing.
      Put only those resources in Tally for which you have produced the finished product.

      According to your example, you can do the following.

      For 100 bottles of finished product, you can put in Tally 100 liters of water, 100 pet bottles and 100 labels.

      By doing this, you will know the exact amount of raw materials used.

      You can create stock items for raw materials of 1000 quantity but when passing stock journal, you use the method which I just described above.

      When you make a sales entry you can simply enter the number of corrugated boxes after you have entered the stock items.

      Thank you for such a long comment and your appreciation.

  5. Rohit kumar says:

    Hi Sir,
    Thanks for your guidelines. I want to know how does we make entry of purchase and sale of truck in tally. for example Mr. ABC purchase truck from XYZ but the payment of the purchase items will be done from different source .. please explain step by step from creating ledger.

    thanking you

    • Rishit Shah says:

      Hi, Rohit!

      You are the Sunny. Okay, no problem.

      When you purchase a truck, pass a purchase entry.
      Now, if the other party is making payment, it means you got the truck for free.

      So, no need to pass the entry because the other party will pass it.

  6. tina says:

    Hello,
    I am a tshirt manufacturer ….i procure fabric (in kgs), send it for dyeing (in kgs) ,i receive in kgs after shortage,give in job work (tshirts in pcs)…so wat would be the inventory vouching of this entire process….kindly guide me

    • Rishit Shah says:

      Hi, Tina!

      Good question.
      The entry will be as under.

      On the left side of the inventory voucher screen

      Fabric
      Dyeing expenses
      Job work expenses

      On the right hand side of the screen

      T shirts in pcs

  7. vishakha shah says:

    Hi ! Rishit shah
    My doubt is if we are creating inventory vouchers in Tally for manufacturing purpose right.

    But along with that we have to make a purchase entry as well as sales entry for running a business am i right or what ?
    because from your example we will be purchasing – Flour, Water, Spices etc. so, we need to make entry in purchase vouchers also and we will be selling the final product Bread so we need to make entry in sales vouchers isn’t it or not required
    Please explain

    Thanks

    • Rishit Shah says:

      Yes, Vishakha!

      What you are saying is 100% correct.

      In this post, I have not explained the purchase and sales of the stock items as the post will be much longer.
      Just explained manufacturing.

      You have understood the concept correctly.

  8. mahesh prajapati says:

    Hi,
    Rishit,

    After purchase entry done, Following are the item which are not related to Produce Finish goods, but i want to book these entry on behalf of respective departartment(like: admin, civil, design, maintainance etc.)

    what i have to do for this type of goods ?.

    1. diesel, petrol
    2. stationery
    3. mainainance component.
    4. gas
    5. personal protective equivepment. and many more.

    • Rishit Shah says:

      Hi, Mahesh!

      Either you can completely not show all the goods you purchase in Profit and Loss Account or show everything.

      In Tally, you cannot show some of the goods and not show some of the goods.
      Sorry. 🙁

  9. vishnu prasad says:

    sir i have one doubt regarding stock. because we are maintenance company for the buildings. we purchasing materials from outside shops in bulk and keep it in our store then whenever we need we take from this store and used for each building maintenance how can i make the entries for these

  10. mahesh agarwal says:

    sir…i run a business of wooden doors…my situation is i purchase plain doors for eg: 2000 ..then i give the plain door for carving ..carving charges is 500 rs. per door …nd after carving my plain door turns into design door..so basically my question is in inventory voucher what amount should i put in source product (plain door) and what amount should i put for destination product(design door) and if there is any transport expenses how will that be added

    • Rishit Shah says:

      Hi, Mahesh!

      Thank you for the question. You have to put ₹2,000 on the source side since that is cost of the plain door.

      Now, you have to put transportation expenses as additional costs of purchases.
      You have to enable that in Tally.

      For that, you need to go to F11 – Features from Gateway of Tally. Then to Inventory Features.
      Under Purchase Management, there is an option called track additional costs of purchases. Set it to YES.

      Now, you have to enter the destination price to ₹2,500 and it will include your carving charges.

      Then, as soon as you will press Enter, you will now have an option to add the expenses since we have enabled the option.
      Enter the transportation expenses and press Enter and then save the voucher.

      • mahesh agarwal says:

        thankyou sir …so after making the changes in inventory features and after adding the transport expenses , automatically the expenses will be added in the balance sheet ?? and the cost of making the designer door i.e rs. 500 , automatically that also will be added in the expenses ??

  11. Nadiya says:

    Thanks a lot sir for your good service. When i enter the finished product in stock journal, the next option I have to enter is the quantity, but it directly jumps to amount column. Please clarify my doubt sir

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