In a case of imports, stock items are purchased from a foreign country in another currency, for example, US Dollar. The expenses incurred to bring the stock item to the production unit will be in local currency.

In this scenario, the supplier’s bill amount should not include expenses incurred within the country. However, the item value should include such expenses to arrive at the actual cost.

For example, here is the invoice received from the supplier.

Expenses incurred for procuring the material:

• Custom Duty – Rs.15,000.00
• Clearing and forwarding charges – Rs.20,000.00
• Freight Charges – Rs.10,000.00

Amount payable to the foreign supplier is $3250.00, considering the currency exchange rate of Rs. 73/$. Also, the above expenses need to be appropriated to the item cost.

Let us create the masters and transaction in TallyPrime

Create Groups

1. Gateway of Tally > Create > Group.
   Alternatively, press Alt+G (Go To) > Create Master > Group.
2. Create Import Expenses group under Direct Expenses. Set the option Method to allocate when used in purchase invoice to Appropriate by Value.
3. Create Import Expenses Payable group under Current Liabilities. Set the option Method to allocate when used in purchase invoice to Not Applicable.

Create Ledgers

Gateway of Tally > Create > Ledger.

Alternatively, press Alt+G (Go To) > Create Master > Ledger.

1. Under Sundry Creditors group, create 2 ledgers – Foreign Supplier and Freight Forwarders.
2. Under Import Expenses group, create 3 ledgers – Customs Duty, Clearing and Forwarding Charges, and Freight Charges – Import.
3. Under Import Expenses Payable group, create 3 ledgers – Customs Duty Payable, Clearing and Forwarding Charges Payable, and Freight Charges – Import Payable.
4. Under Purchase Accounts group, create Purchase – Import

Create Stock Items

1. Gateway of Tally > Create > Stock Item.
   Alternatively, press Alt+G (Go To) > Create Master > Stock Item.
2. Create Item A and Item B with unit of measurement set to Nos.

Record a purchase invoice

1. Enter the details in purchase invoice as shown below:
   
2. Enter the additional costs incurred.
   
3. Accept the invoice. You can press Ctrl+A to accept.
4. You can view the break-up of additional expenses appropriated to item cost in the voucher mode. To view it,
   • Press Page Up key to open the invoice in alteration mode.
   • Press Ctrl+H (Change Mode) > select As Voucher.
     
   • Select the stock item and press Enter. You can see the breakup of the additional expenses appropriated to the item cost, as shown below:
     

Check the Stock Summary

Press Alt+G (Go To) > type or select Stock Summary > and press Enter.

Record the vouchers for additional expenses

1. Customs duty payment
   Debit: Custom Duty Payable – 15,000
   Credit: Cash – 15,000

2. Clearing and forwarding journal voucher
   Debit: Clearing and Forwarding Charges Payable – 20,000
   Credit: Freight Forwarders – 20,000

3. Freight payment voucher
   Debit: Freight Charges – Import Payable – 10,000
   Credit: Cash – 10,000

The difference between regular and optional purchase order is given below:

Regular Purchase Order: It allows you to track receipt note and/or purchase vouchers recorded against an order, therefore making it a complete cycle. Also, only regular purchase orders affect the Purchase Order Outstandings reports.

Optional Purchase Order: It will not allow you to track receipt note and/or purchase vouchers made against an order.

One similarity between both the vouchers is that they do not affect the books of accounts.

In case you have already recorded a purchase transaction, and there is a change in the price of the item, you don’t have to cancel or delete the purchase transaction. You can record another transaction to account for the increase or decrease in the price.

In TallyPrime you can record a credit note to increase the purchase value, and a debit note to decrease the purchase value. If the transaction attracts tax, enter the appropriate tax amount.

Record a credit note to increase the purchase value

1. Gateway of Tally > Vouchers > press F10 (Other Vouchers) > type or select Credit Note > and press Enter.
   Alternatively, press Alt+G (Go To) > Create Voucher > press F10 (Other Vouchers) > type or select Credit Note > and press Enter.
2. Press Ctrl+H (Change Mode) to select the required voucher mode (Item Invoice, in this case).
3. Select the Party A/c name and provide the supplier details. You can also enter the Original Invoice No. and Date, against which this transaction is being recorded.
4. In the Ledger account field, press Enter on Show More > select the purchase ledger to allocate the stock items.
5. Provide the stock item details, and select the tax ledgers.
6. Set the option Provide GST details to Yes, and select the Reason for Issuing Note.
7. In the Bill-wise Details screen:
   • Select Agst Ref as the Type of Ref, and select the purchase invoice for which the value is being increased.
   • Enter the amount to the extent to which purchase value is increased including tax under Amount and Cr under Dr/Cr.
     
8. Press Enter to return to voucher screen.
   
9. Accept the screen. As always, you can press Ctrl+A to save.

Decrease in assessable value of purchases

1. Gateway of Tally > Vouchers > press F10 (Other Vouchers) > type or select Debit Note > and press Enter.
   Alternatively, press Alt+G (Go To) > Create Voucher > press F10 (Other Vouchers) > type or select Debit Note > and press Enter.
2. Press Ctrl+H (Change Mode) to select the required voucher mode (Item Invoice, in this case).
3. Select the Party A/c name and provide the buyer details. You can also enter the Original Invoice No. and Date, against which this transaction is being recorded.
4. In the Ledger account field, press Enter on Show More > select the purchase ledger to allocate the stock items.
5. Provide the stock item details, and select the tax ledgers.
6. In the Bill-wise Details screen:
   • Select Agst Ref as the Type of Ref, and select the purchase invoice for which the value is being decreased.
   • Enter the amount to the extent to which purchase value is decreased, including tax under Amount and Cr under Dr/Cr.
     
7. Press Enter to return to voucher screen.
   
8. Accept the screen. As always, you can press Ctrl+A to save.

You can ascertain if the purchase order needs to be placed or not, and the quantity to order while recording a purchase order voucher.

• In the purchase order voucher, select the required stock item.
• Press Alt+S to view stock query report.
• In the stock query screen press F7 (Show Reorders) to view the reorder details. The reorder status related to the stock item appears, based on the reorder levels set.

Note: Similarly, while recording sales orders you can ascertain the reorder status of stock items.

You can create a user-defined optional voucher type, and record the requisition of items for manufacturing or consumption.

1. Create a voucher type (Gateway of Tally > Create > Voucher Types) as Purchase Requisition with Stock Journal as Type of Voucher. Enable the options Mark this voucher type as ‘Optional’ by default and Use as a Manufacturing Journal.
   
2. Create a stock item.
   • Gateway of Tally > Create > Stock Item.
   • Press F12 (Configure) > enable the option Set Components List (Bill of Materials) in Stock Items.
   • In the stock item master, enable the option Set components (BOM).
     
3. Specify the components as shown below:
   
4. Record the purchase requisition voucher (Gateway of Tally > Vouchers > F10 (Other Vouchers) > select Purchase Requisition > and press Enter).
5. The purchase requisition appears as shown below:
   

The difference between debit note and rejections out voucher is given below:

Debit Note

You can record a debit note to account in the following scenarios.

• To account for goods returned to the supplier against a purchase.
• To lower the value of the stock against a particular purchase, by entering only the amount.

A debit note can have both the quantity as well as the amount specified. The details entered in the transaction will reflect in accounting and inventory reports.

Rejection Out

You can record a rejection out voucher to return goods against a Receipt Note. This voucher can be used with or without selecting the tracking number. The rejection out voucher affects only the inventory reports.

Allocate inventory items in purchase voucher.

• Check whether it is an Item Invoice or an Accounting Invoice. Items can be selected in Item Invoice only.
• Press Ctrl+H (Item invoice) to record the transactions in item invoice mode.

Note: If you are recording the transaction in voucher mode, ensure the option Inventory values are affected is set to Yes in the purchase ledger.