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Market Valuation Methods in TallyPrime

With the various valuation methods offered by TallyPrime, you will be able to determine the best sale price for your stock items.

The following methods will help you in setting appropriate selling rates for your closing stock.

• At Zero Price
• Average Price
• Last Sales Price
• Standard Price

At Zero Price

If you select this valuation method, by default there will be no rate included when recording the voucher. You have to decide the price at which you should sell each item and key in the rate.

Average Price

Using this method, you will be able to derive the average rate at which you will sell the stock item and yield maximum profit. The average price for selling the stock items is calculated by dividing the total amount at which the stock items were sold by the total quantity of the item sold so far.

In TallyPrime, this is the default valuation method for deciding the price at which stock items may be sold. 

Initially, you will have to key in the rate at which you will sell the stock item. Later on, TallyPrime will calculate the average price for the item and show it in the invoice. Whenever you want to change the rate, you can key in a different rate. Going forward, the average price will be calculated considering the revised rates too.

Assume that you are selling ball pens at varied rates over a period of time.

The selling price of the stock item is calculated by multiplying the average price and the quantity. 

Last Sales Price

Under this method, the selling price of the stock item is based on the last price at which the stock item was sold. When you make multiple sales of the same product over a period of time, due to reasons such as inflation, seasonal variation, increase in demand, limited availability, and so on, the price of the product may fluctuate. In this case, the last sale price will be shown for reference while deciding the selling price of the stock item.

Initially, you will have to key in the rate at which you will sell the stock item. Later on, TallyPrime will show the last selling price for the item in the voucher. Whenever you want to change the rate, you can key in a different rate.

Consider that you have sold sneakers at varied rates over a period of time. The following table shows the last sales price that TallyPrime shows in the voucher.

On selecting this valuation method, the price at which the sneakers were sold earlier will be prefilled in the voucher. You can change the selling price as required.

Standard Price

You can set standard prices for the stock items. The standard price of an item is set after adding charges like the cost of raw materials, production costs and other overhead charges that were required to make the final product.
Suppose you sell jute bags and due to the increasing price of jute, you decide to increase the price of the jute bags. After adding the overhead charges, you list the items for sale based on the set standard price. Thereafter, the sale will be done as per the prevailing standard price.

In this case, the sale will be at the rate of 300 until 10.12.2022. Then, the rate will change to 400 and will continue till 03.03.2023. Thereafter, the rate will change to 550.