INVENTORY MANAGEMENT

INVENTORY MANAGEMENT

  • June 03, 2019

1. What is Inventory Management ?

Stock management or Inventory management is a disciplineprimarily about specifying the shape and placement of stocked goods. It isrequired at different locations within a facility or within many locations of asupply network to precede the regular and planned course of production andstock of materials.

Inventory is one of the most valuable assets that businessvalues. In manufacturing, retail, food service and other inventory-intensivesectors, a company’s inputs and finished products are the core of its business,and a shortage of inventory when and where it’s needed can be extremelydetrimental.

Its for these reasons, inventory management becomesimportant for businesses of any size. Taking up the decisions of when torestock certain items, what amounts to purchase or produce, what price to pay –as well as when to sell and at what price – can easily become complexdecisions. Small and medium sized enterprises will often keep track of stockmanually and determine reorder points and quantities using Excel formulas.Bigger companies will use specialized enterprise resource planning (ERP)software.

2. How to maintain stock in Tally.ERP 9 ?

Let us understand this with a Tally inventory example. ABCLTD purchased 10 pieces of ABC Brand TV units for Rs. 5,000 per piece and sold5 pieces of TV units of ABC Brand for Rs. 10,000 per piece to XYZ & SonsPrivate Limited.

Recording the above transaction in Tally.ERP 9 would revealas how inventory management in Tally could be achieved.

For inventory management in Tally.ERP 9 :

Particulars Path/Direction Entry to pass or details to be filled.
First step is to create a company On Gateway of Tally
Press Alt + F3 to create a new company.
Select Create Company option in the menu and press enter key. The screen displayed in front of you is company creation screen. Under Company details select Accounts with Inventory in order to activate Tally ERP 9 Inventory management feature. Type the name of the company, address, financial year begins and all other details asked by the creation screen.
Second step to create
ledger
Gateway of Tally >
accounts info > ledge> create (single).
Create purchase ledger under purchase accounts and Create sales
ledger under Sales account Press Ctrl + A every time a ledger is created and Yes to accept the ledger on ledger creation screen.
To create a stock
group
Gateway of Tally >
Inventory Info > Stock Group > Create
Under the Stock group name type “TV” and Assign the group
under primary
category.
To create a stock item Gateway of Tally >
Inventory Info > Stock Item > Create
Under the Stock item name type “ABC” And assign the stock item to stock group created
“TV” Select/ Create Units/ Unique Quantity
Code to “PCS” Under GST Rate Classification fill in the Description/ HSN Code and then enable GST tax classification. To enable GST
tax classification, set
the Tax details to
taxability and then tax type feed the GST rates applicable to the product Since TV is an electronic item it falls under 18% GST slab so under IGST Rate type feed 18% and CGST and SGST are automatically  fed from the entry by dividing the same into two halves i.e., 9% for CGST and 9% for SGST Finally Press Enter to accept the stock creation.
To Pass Voucher Entry for purchase Gateway of Tally >
accounting voucher > F9 (Purchase Voucher)
F2 select the date Feed Suppliers Invoice No. Create Suppliers ledger by pressing Alt + C from voucher creation screen and feed all particulars including suppliers GSTIN Now under purchase ledger select purchase ledger created in earlier steps. Under Name of the Item select ABC stock item ledger and feed in the quantity and rate particulars and Finally select the GST tax ledgers for example for
Intra state purchase select CGST and SGST
ledger and for Inter State purchase select
IGST Tax ledger and press enter to create the voucher.
To view stock summary under inventory management in Tally
after passing purchase
voucher
Gateway of Tally >
Stock summary
Under particulars column the Stock Item “ABC” with group name “TV” will appear along with quantity, rate and value.
To Pass Voucher Entry for sales Gateway of Tally >
accounting voucher > F8 (Sales Voucher)
Pass entry in similar
way as in case of
purchase voucher with a only change that you will be selecting sales ledger instead of purchase ledger.
To view stock summary under inventory management in Tally after passing sales voucher to finally view as how inventory management in Tally ERP looks Gateway of Tally >
Stock summary
In Stock summary screen now you will find
the quantity reduced by 5 units after passing the sales voucher.
To view detailed summary Press Alt + F1

In similar way entries can be passed for any stock item onewants to create and view the Stock summary from the Stock register maintainedby Tally. ERP 9 solution and track the inward and outward details withinventory management in Tally.

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