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If you manage stock or inventory for third parties in specific physical locations, you can use Godowns/Location in Tally.ERP 9 to store inventory. In the case of consignment sales or job work, you will need to manage inventory in specific godowns for your third party and track the stock movement.
Inventory for consignment sale or job work : Say you are sending stock to your third party. In this case, you will need to record the movement of stock that you send to a third party for sale (as consignment) or to produce finished products (as job work). In a consignment sale, you need to update your books by recording sales of your stock made by the third party. Similarly, a job work will involve movement of the finished goods from the third party or job worker to your godown. The same is applicable when you receive inventory from your third party to do a consignment sale or job work.
Using the Godown/Location feature in Tally.ERP 9, you can manage inventory sent to or received from a third party.
On this page:
● Inventory Sent to Third Party
● Inventory Received from Third Party
To track the inventory moving out of your business premises (from your godown, location, bin, rack, cabinet, and so on) for consignment sale or job work, use Godowns/Locations. In such cases, though the inventory is not with you, the closing stock in your reports will include the value of such inventory. See more >>
In this section:
● Create Godowns/Locations for stock sent to third party
● Record transfer of stock to third party
● Consume stock from Godowns/Locations created for third party
When you create the godown:
● In F12 , set Enable third party details to Yes .
● In the Godown Creation screen, set Our stock with third party to Yes .
What you see on the screen can vary based on your choices. Press F12 (Configure) to change the options.
Now that you have created third-party godowns, you can record transfer of stock to third party.
You can transfer the stock from your godown to a third-party godown using Stock Journals or Material Out .
1. Gateway of Tally > Accounting Vouchers > Alt + F7 (Journal) > Stock Journal .
2. Under Source (Consumption) , specify details of the stock items that you want to transfer.
● Select the stock item and your godown.
As always, you can create Stock Items and Godowns on the fly by pressing Alt + C .
● Enter the Quantity . The Rate will be auto-filled from the stock item master. However, you may choose to enter the Rate or Amount .
3. Under Destination (Production) , specify details of the same stock items.
● Select the stock item and the third-party godown.
● Provide Quantity , Rate , or Amount , as needed.
What you see on the screen can vary based on your choices. Press F12 (Configure) to change the options and F11 (Features) to enable or disable features.
4. Accept the voucher. As always, you can use Ctrl + A to save.
In case you are transferring stock items from one or more godowns to a single destination godown:
● Set the option Use for Inter-Godown transfers to Yes in the voucher class.
In this, you will need to select the items only once.
Record sale of items from godowns created for third party: In case of a consignment sale, once you get an update from your party about the sale, you will need to keep track of the sale to update your books.
1. Gateway of Tally > Accounting Vouchers > press F8 (Sales).
2. After you select the stock item and press Enter , in the Stock Item Allocations screen, select the Godown created for the third party.
3. Complete the transaction by entering other details, and accept the voucher. As always, you can use Ctrl + A to save.
Record stock transfer from godowns created for third party: In the case of a job work, you would have sent your stock to a third party. Once the job work is done and you receive the finished goods, you can record a stock transfer to track the transfer of the stock from your party.
1. Gateway of Tally > Accounting Vouchers > Alt + F7 (Journal) > Stock Journal .
2. Under Source (Consumption) , specify details of the stock items that you want to transfer from godowns created for the third party.
● Select the stock item and the third-party godown.
As always, you can create stock items and godowns on the fly by pressing Alt + C .
● Enter the Quantity . The Rate will be auto-filled from the stock item master. However, you may choose to enter the Rate or Amount .
3. Under Destination (Production) , specify the details of the stock items.
● Select the stock item and your godown.
● Provide Quantity , Rate , or Amount , as needed.
What you see on the screen can vary based on your choices. Press F12 (Configure) to change the options and F11 (Features) to enable or disable features.
4. Accept the voucher. As always, you can use Ctrl + A to save.
In case you are transferring stock items from one or more godowns to a single destination godown:
● Set the option Use for Inter-Godown transfers to Yes in the voucher class.
In this case, you will need to select the items only once.
To track the inventory moving into your business premises (to your godowns, locations, bins, racks, cabinets, and so on) from principal (consignor) for consignment sale, job work, and so on, use Godowns/Locations. Though this inventory will be shown as available with you, the value of this inventory will not be included in the closing stock in your reports. See more >>
In this section:
● Create Godowns/Locations for stock received from third party
● Record stock received from third party
● Consume or sell stock received from third party
When you create the Godown:
● In F12, set Enable third party details to Yes .
● In the Godown Creation screen, set Third party stock with us to Yes .
What you see on the screen can vary based on your choices. Press F12 (Configure) to change the options.
Now that you have created godown for the third-party stock, you can record stock items received from the third party.
1. Gateway of Tally > Accounting Vouchers > Alt + F7 (Journal) > Stock Journal > press Ctrl + W (Material In).
2. In Party A/c Name , select the party from whom you have received the stock.
3. In Source Godown , select Not Applicable since you are receiving the stock from third party.
4. Specify the details of the stock items that you are receiving.
● Select the stock item and the godown that you created for storing third-party stock.
As always, you can create stock items and godowns on the fly by pressing Alt + C .
● Enter the Quantity .
The Rate will be auto-filled from the stock item master. However, you may choose to enter the Rate or Amount . You will need to enter the Amount if the stock item has no UoM defined.
What you see on the screen can vary based on your choices. Press F12 (Configure) to change the options and F11 (Features) to enable or disable features.
5. Accept the voucher. As always, you can use Ctrl + A to save.
In case you do not want to capture the party details, you can record the stock received from third party using the Stock Journal voucher.
Record sale of items received from third party : In a consignment sale, you will receive stock to your store for sale on behalf of your party. You will need to account for the sale of such stock by entering sales transactions, and then update your party about the sale.
1. Gateway of Tally > Accounting Vouchers > press F8 (Sales).
2. After you select the stock item and press Enter , in the Stock Item Allocations screen, select the godown created for storing stock received from the third party.
3. Complete the transaction by entering other details, and accept the voucher. As always, you can use Ctrl + A to save.
Record consumption of stock received from third party : In case of a job work, you will receive stock from the party into your godown. As you consume the stock to produce finished goods, the consumption of the stock items can be recorded in Tally.ERP 9 using Stock Journal.
1. Gateway of Tally > Accounting Vouchers > Alt + F7 (Journal) > Stock Journal .
2. Under Source (Consumption) , specify details of the stock items you received from the third party.
● Select the stock item and the godown where you have stored the stock received from third party.
As always, you can create stock items and godowns on the fly by pressing Alt + C .
● Enter the Quantity .
The Rate will be auto-filled from the stock item master. However, you may choose to enter the Rate or Amount . You will need to enter the Amount if the stock item has no UoM defined.
3. Under Destination (Production) , specify details of the same stock items or items that you have produced.
● Select the stock item and the destination godown.
● Provide Quantity , Rate , or Amount , as needed.
What you see on the screen can vary based on your choices. Press F12 (Configure) to change the options and F11 (Features) to enable or disable features.
4. Accept the voucher. As always, you can use Ctrl + A to save.
In case you are transferring stock items from one or more godowns to a single destination godown:
● Set the option Use for Inter-Godown transfers to Yes in the voucher class.
In this, you will need to select the items only once.
In the case of a job work, the finished goods need to be transferred back to the third party. Such stock transfers can be recorded using the Stock Journal voucher in Tally.ERP 9.
1. Gateway of Tally > Accounting Vouchers > Alt + F7 (Journal) > Stock Journal > press Ctrl + J (Material Out).
2. In Party A/c Name , select the party to whom you have to return the stock.
3. In Destination Godown , select Not Applicable since the stock items are going out to the third party.
4. Specify details of the stock items that you are returning to the third party.
● Select the stock item and the godown in which you have stored the third-party stock.
● Enter the Quantity .
The Rate will be auto-filled from the stock item master. However, you may choose to enter the Rate or Amount . You will need to enter the Amount if the stock item has no UoM defined.
What you see on the screen can vary based on your choices. Press F12 (Configure) to change the options and F11 (Features) to enable or disable features.
5. Accept the voucher. As always, you can use Ctrl + A to save.
In case you do not want to capture the party details, you can record the stock received from the third party using the Stock Journal voucher.