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Purchase of Goods and Services

In your business, you might need to purchase goods or services to fulfil the demands of your customers. You may do a simple cash purchase or purchase on credit. For each purchase transaction, you will need to keep a record of the items you bought, payments made, goods returned, and so on. Using TallyPrime, you can do all of these and more. Moreover, you can view reports any time to know about all the purchases made in your business and compare against the sales performance.

Generate purchase bills: Record a cash bill or invoice when you make an instant payment to the supplier, using cash or any other mode like cheque or credit/debit card. If it is purchase on credit, record a credit purchase by using the supplier ledger. There are also situations when you want your supplier to deliver goods to a specific location that is different from your billing address. TallyPrime handles all such needs of recording purchases and more.

Record additional charges, discounts, and free items: Your purchase transaction may include additional expenses, such as transportation charges, insurances, and taxes. If your supplier has given discounts on your purchases, you will need to record the discounts in your invoices. Similarly, if you have received free items or samples from your supplier, all of these can be recorded and tracked in TallyPrime.

Reports: In TallyPrime, you can track all the purchase bills using different reports, such as Purchase Register, Day Book, and so on. You can view your purchases across different periods, filter the data for specific details, configure the reports to view more purchase-related details, and more.

Record Purchase of Goods or Services

Whether you make a purchase on cash or credit, the procedure in TallyPrime remains similar. The only difference is that you will select cash or bank for cash purchases and the supplier ledger for credit purchases. You can record purchase of items using the Item Invoice mode and record purchase without items using the Accounting Invoice mode. TallyPrime also provides the flexibility to use these invoice modes interchangeably for recording purchases. You can also print the invoices with the necessary details, if needed.

1. Open the purchase voucher screen.
   1. Gateway of Tally > Vouchers > press F9 (Purchase).
      Alternatively, press Alt+G (Go To) > Create Voucher > press F9 (Purchase).
   2. Press Ctrl+H (Change Mode) to select the required voucher mode (Item Invoice, in this case).
2. Specify the supplier details.
   1. Supplier Invoice No. and Date: The invoice number and date should be the same as given in the corresponding sales bill.
   2. Party A/c name: Select Cash or Bank for cash purchases. For credit purchases, select the supplier ledger.
   3. Party Details: Enter the supplier’s name and address, if needed.
      If you do not see the Party Details screen, press F12 (Configure), and set Provide Receipt, Order, and Import details to Yes.
      

      Note: You may want to maintain specific details about your suppliers, such as address with landmark, alternative contact number, and so on, in the invoices. In such cases, you can create party ledgers with the required details. In the Suppliers field of Party Details screen, select the required ledger.

3. Purchase ledger: Select the accounting ledger to allocate the stock items.
   If you do not see this field on the screen, press F12 (Configure) and set Select common Ledger Account for Item Allocation to Yes.
   In Accounting Invoice, you can select the purchase ledger under Particulars.
4. Provide the stock item or service details.
   As in other transactions, you can create the item or ledger on the fly by pressing Alt+C.
   In Item Invoice, select the stock item, enter the Quantity. The Rate will be auto-filled, if available for the stock item. However, you may choose to enter the Rate or Amount.
   In Accounting Invoice, select the service ledger and enter the Amount.
5. Select additional ledgers, like transportation charges, insurance, or discount, if any.
6. Provide Narration, if needed, and accept the screen. As always, you can press Ctrl+A to save.
   
   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.
   
7. Print the invoice.
   1. Press Alt+P (Print) > press Enter on Current.
   2. Press I (Preview) to check the invoice before printing, if needed.
   3. Press P (Print) to print.

The following is a sample preview screen of the purchase invoice.

Click here to see the possible F12 configurations.

Record Expense or Fixed Assets in Purchase

In case you need to record the Expenses or Fixed Assets as purchases, you can change the voucher mode to As Voucher and select the required Expense or Fixed Assets ledger.

In the purchase voucher screen

1. Press Ctrl+H (Change Mode) > select Accounting Invoice.
   
2. Under Particulars, select the Expense or Fixed Assets ledger.
   
3. Provide other details in the voucher and, as always, press Ctrl+A to save the voucher. 

Use Less Paper Space for Printing

By default, TallyPrime prints invoices on A4 size papers. In certain cases, your transaction may involve more stock items, which can be printed by optimising the print space.

1. In the sales invoice, press Alt+P (Print) > press Enter on Current.
2. Press C (Configure) > type or select Optimise printing to save paper and press Enter to set it to Yes. This will print maximum information in the print area and save paper.
   

   Note: This option will appear only when:
   ? The Country selected for the company is India.
   ? The company is enabled for GST/VAT/TDS/TCS.
   ? The service tax and excise features are disabled.

3. Press Esc to return to the Voucher Printing screen.
   Henceforth, all the sales invoice you print will continue to have the same print size, until you change the option in F12 (Configure) for invoice printing.
4. In the Voucher Printing screen, press P (Print) to print the invoice on the paper used.
   

As the above invoice is printed by enabling the option Optimise printing to save paper, all the stock items are appearing on a single page. If this option was set to No, the same information would have printed in two pages.

Specify Separate Supplier and Consignee Details

In certain cases, you may want your supplier to deliver goods to a location different from your billing address. You can enter the delivery address as the consignee details when recording a purchase transaction in TallyPrime.

1. In the Party Details screen of purchase invoice having the Supplier (Bill from) section, press F12 (Configure) > set Provide separate Buyer and Consignee details to Yes.
   Henceforth, you can add both the consignee and supplier details in every purchase invoice, until you change the option in F12 (Configure) of the invoice.
2. Enter the Consignee and Supplier details.
   
   What you see on the screen can vary based on your choices. Press F12 (Configure) to change the options.
3. Accept the screen. As always, you can press Ctrl+A to save.

When you print the invoice, the consignee name and address where the supplier will deliver the consignment or goods will be printed.

Purchase of Items with Discounts

You may have received discounts from the supplier on the total item amount or on each amount separately. Using TallyPrime, you can record all such discounts. You can also record the item-level discounts as either indirect incomes or rate discounts.

In this section

• Purchase with discount on total item amount
• Purchase with trade discount

Purchase with discount on total item amount

If you have received discounts on items from your supplier, say on purchase of items worth Rs. 10,000 or more, you can account for such discounts while recording your purchase invoice.

1. In the purchase invoice, after you have selected the stock items, press Enter twice to skip one line.
   Alternatively, press Enter > Spacebar > and select End of List.
   This takes you to the next line in the screen where you can now select the discount ledger.
   In Accounting Invoice, select the discount ledger.
2. Provide details of the discount.
   1. Select the ledger for discount created under Indirect Incomes, say Discount Received.
   2. Enter the discount percentage (%) under Rate as a negative number (in minus, for example, -12%). TallyPrime applies the discount to the total item amount and displays the discount amount against the selected discount ledger.
      Alternatively, you can enter the Amount.
3. Enter the remaining details and accept the screen. As always, you can press Ctrl+A to save.
   
   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.

TallyPrime calculates the invoice total by subtracting the discount from the total amount for the items.

If your supplier calculated the discount after including additional charges, such as transportation, press F12 (Configure) > set Calculate Tax on Current Subtotal to Yes.

Henceforth, when you select the discount ledger, the discount will be applied to the total amount after including any additional charges, until you change the option in F12 (Configure) of the invoice.

Purchase with trade discount

Based on your business terms with your supplier, you may get discounts on certain items depending on the quantity or supply. To record a sale with such trade discounts, you can show the discount percentage against the quantity of the item. You can also enter the discount percentage or amount for each item, and book the total discount as indirect income in your purchase invoice. See more…

In this section

• Enter discount percentage against each item – without using ledger account
• Enter discount percentage and amount on item rates – using ledger account

Enter discount percentage against each item – without using ledger account

1. Press F11 (Features) > set Use Discount column in invoices to Yes.
   If you do not see this option, set Show more features to Yes.
   Henceforth, you will see the Disc % column in every purchase invoice.
2. In the purchase invoice, after you have provided the Quantity and Rate, enter Disc % for the selected item.
   The Amount for the given quantity of the stock item is displayed after deducting the discount, without showing any change in the Rate.
   
3. Enter the remaining details and accept the screen. As always, you can press Ctrl+A to save.
   The discounted item amount appears against each item.

Enter discount percentage and amount on item rates – using ledger account

1. In the purchase invoice, press F12 (Configure) > set Provide Cash/Trade Discount to Yes.
   If you do not see this option, set Show more configurations to Yes. If the option does not appear, press F11 (Features) > enable the statutory options applicable for your business.
2. After you have entered the Amount of the stock item, in the Discount field, enter the discount percentage that you have received for that item.
   This automatically calculates the discount and displays the amount in the next field.
   Alternatively, press Enter to leave the first field blank and enter the discount amount in the next field.
3. Select the discount ledger created under Indirect Incomes.
   Ensure that in the discount ledger, the option Type of ledger is set to Discount.
   
   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. Enter the remaining details and accept the screen. As always, you can press Ctrl+A to save.

The total discount amount appears against the selected discount ledger. This amount is the sum of the discounts displayed under each stock item.

Purchase with Free items

When you make a purchase, you might receive a few items for free from the supplier. For example, if you had placed an order for 12 pcs of an item, the supplier might have billed you for only 10 pcs and given the remaining 2 pcs without any additional cost. Alternatively, the supplier might have billed you for all 12 pcs, and sent 2 additional pcs of the same item or a different item as samples. In TallyPrime, you can account for such purchases in different ways during voucher entry.

In this section

• Account for free items using Actual and Billed quantities
• Account for free items using zero-valued transaction

Account for free items using Actual and Billed quantities

1. Press F11 (Features) > set Use separate Actual and Billed Quantity columns in invoices to Yes.
   If you do not see this option, set Show more features to Yes.
   Henceforth, you will see the Actual and Billed columns under the Quantity column in every purchase invoice.
2. Actual: Enter the quantity purchased from the supplier, say 12 nos of the item.
3. Billed: Enter the quantity for which you will pay the supplier, say 10 nos of the same item.
   
   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. Enter the remaining details and accept the screen. As always, you can press Ctrl+A to save.

The total amount calculated is based on the billed quantity; however, the items supplied to you are based on the actual quantity, which includes the free items.

Account for free items using zero-valued transaction

1. Gateway of Tally > Alter > Voucher Type > select Purchase > and press Enter.
   Alternatively, press Alt+G (Go To) > Alter Master >Voucher Type > select Purchase > and press Enter.
2. Set the option Allow zero-valued transactions to Yes.
   Henceforth, you can enter stock items without entering the Rate (zero value) in every purchase invoice.
3. In the purchase invoice, provide details of the items – Quantity, Rate, and Amount – that you have been billed for.
4. Select the same item again or a different item, as supplied to you, and enter the Quantity. Leave the Rate and Amount fields blank.
   
   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. Enter the remaining details and accept the screen. As always, you can press Ctrl+A to save.

The invoice generated displays the billed items with the Amount details, along with the total quantity received from the supplier.

Note: TallyPrime also provides you the flexibility to record purchase transactions only for zero-valued items, such as free items or samples received from suppliers.

Purchase of Fixed Assets

If you are purchasing fixed assets (for example, furniture) which you do not trade in, you can record such purchases in TallyPrime.

1. Open the purchase voucher screen, and press Ctrl+H (Change Mode) to select the required voucher mode (Accounting Invoice, in this case).
2. Specify the supplier details.
3. Provide the fixed asset details.
   1. Select the ledger grouped under Fixed Accounts.
   2. Enter the amount.
      
      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. Provide Narration, if needed, and accept the screen. As always, you can press Ctrl+A to save.

This value will appear in the Balance Sheet.

You can record the same transaction in voucher mode, as per your business needs.

1. Open the purchase voucher screen, and press Ctrl+H (Change Mode) to select the required voucher mode (As Voucher, in this case).
2. Credit the party or cash/bank ledger.
3. Debit the fixed asset ledger.
   
4. Accept the screen. As always, you can press Ctrl+A to save.

Track Stock Item Cost in Purchases

When multiple stock items are purchased and the expense is charged as a lump-sum amount, you may want to allocate such expenses to each stock item. In TallyPrime, you can automate the allocation of such expenses to stock item on a predefined basis.

Note: The additional costs reflect only in the stock value. It will not affect the accounts.

In this section

• Enable expense ledger to track additional costs of purchase
• Track additional costs in purchase invoice

Enable expense ledger to track additional costs of purchase

1. Enable the purchase voucher type to track the additional costs on purchase.
   1. Gateway of Tally > Alter > Voucher Type> type or select Purchase > and press Enter.
      Alternatively, press Alt+G (Go To) > Alter Master >Voucher Type > select Purchase > and press Enter.
   2. Set the option Track Additional Costs for Purchases to Yes.
   3. Press Ctrl+A to save.
2. Enable the expense ledger to track the additional costs on purchase.
   1. In the expense ledger, press F12 (Configure) > set Select Appropriation Methods to allocate Additional Costs to Yes.
   2. In the expense ledger select the Method of appropriation in purchase invoice as Appropriate by Qty.
      
3. Press Ctrl+A to save the expense ledger.

The additional costs/expenses incurred can be allocated to each item based on Quantity or Value.

Track additional costs in purchase invoice

You can automate the allocation of expenses to each stock item in the invoice mode. If you want to manually allocate the expenses, you can record the transaction in voucher mode.

1. In the purchase invoice (press Ctrl+H and select Item Invoice mode), select the required stock items.
2. Select the additional expenses ledger and enter the amount.
   
3. Press Ctrl+A to save.
4. Press Page Up to view the same transaction in alteration mode.
5. Press Ctrl+H (Change Mode) and select the voucher mode (As Voucher in this case). The purchase voucher with additional expenses apportioned automatically, appears as shown below:
   
   You can manually enter the percentage of allocation or change the amount as needed. The same details will appear in Stock Summary.
6. Press Alt+G (Go To) > type or select Stock Summary.
   Alternatively, Gateway of Tally > Stock Summary.
   

Reports | Know Your Purchases

Businesses require real-time updates on the day-to-day purchases. This helps in keeping track of the stock availability. Tracking purchases day-wise, month-wise, or for any period provides insights on the overall purchase, returns if any, payment dues, and so on. TallyPrime provides different reports to get purchase-related data to analyse and make informed decisions for the business.

In this section

• Day Book
• Purchase Register

Day Book

This report tracks all your transactions on a day-to-day basis. You can filter this report to check all the purchase transactions made on a particular day.

1. Press Alt+G (Go To) > type or select Day Book.
   Alternatively, Gateway of Tally > Display More Reports > Day Book.
   By default, this report displays all the transactions as of the Current Date displayed on the Gateway of Tally screen.
2. To view the purchases recorded on any given day:
   1. Press F2 (Date) to change the date.
   2. Press F4 (Voucher Type) > select Purchase.
      

This report lists all the purchase transactions recorded on the selected date. For more information, refer to the topic Day Book.

Purchase Register

This report provides a comprehensive view of the month-wise purchases done in your business. You can drill down from the selected month to view the voucher-wise listing of purchases. You can further configure the report to view the data for different periods and represent the purchase details in different ways, based on your business needs.

1. Press Alt+G (Go To) > type or select Purchase Register.
   Alternatively, Gateway of Tally > Display More Reports > Account Books > Purchase Register.
2. Scroll Up or Down and press Enter to view purchase vouchers recorded in the selected month.
   

View Edit Log for Purchases

You may be making changes in your purchase voucher for various reasons. You may have ordered some quantity of a product and then you may want to change for which you need to change the purchase voucher recorded for your supplier. Similarly, you may record a purchase order and then you may need to cancel it because your supplier cannot supply the product. , you will be performing an activity in the voucher that would lead to creation of Edit Log, if you are using TallyPrime Edit Log or TallyPrime Release 2.1 and its successors. 

To know how to view Edit Log, refer to View Edit Log for Transactions section in the Accounting Entry in TallyPrime topic.