Manage Inventory in Manufacturing

Use of inventory in manufacturing is a common aspect in businesses. If you deal with manufacturing products and therefore maintain inventory, you can manage all of them using TallyPrime.

Bill of Materials for a Stock Item

A Bill of Materials is a list of constituent items along with quantity details that can be allotted for the manufacture of a certain product, by-product or likewise. This facilitates immediate reduction in stock of the item automatically. This process of listing the items that make up another item is made possible in Tally by enabling the Bill of Materials Facility.

Bill of Material (BoM) is created only for those items that are being assembled in-house. Therefore, you need to specify a BoM at the time of creating a Stock Item or while altering the stock item. For trading items, you do not need a BoM.

Bill of Material feature is useful for manufacturing organisations and can be set up through F12 (Configure).

In this section

  • Set Up Bill of Materials
  • Single Bill of Material for a Stock Item
  • Multiple Bill of Material for a Stock Item
  • Manufacturing Journal for a Stock Item with Multiple Bill of Materials
  • Single/Multiple Bill Of Material with Type of Item
  • Manufacturing Journal for a Stock Item with single/Multiple BOM created with Component Type
  • Copy Components of BOM

Set Up Bill of Materials

  1. Gateway of Tally > Create > type or select Stock Item > and press Enter. Alternatively, press Alt+G (Go To) > Create Master > type or select Stock Item > and press Enter.
  2. Press F12 (Configure) > set Set Component List (Bill of Materials) in Stock Items to Yes to allocate Bill of Materials for the stock item. If you do not see this option, set Show more configurations to Yes. If you need to use this option only for the current master, press Ctrl+I (More Details) > type or select Component list (BoM) > and press Enter.
  3. In the Stock Item Multi Components (M BOM) screen specify the required details.

  4. Accept the screen. As always, you can press Ctrl+A to save.

For a Stock Item you can create:

  • A Single BOM
  • Multiple BOM
  • Single/Multiple BOM with Type of Item.

Single Bill of Material for a Stock Item

Single BOM can be created for a stock item where you use standard set of inputs to manufacture finished goods.

Let us create a new Stock Item Television and specify BoM.

  1. Create a stock item.
  2. In the Stock Item Creation screen:
    • Set components (BOM): To create the component list required to manufacture the Finished goods, set this option to Yes and press Enter to view Stock Item Multi Components (M BOM) screen.

      • Note: The Set Components (BOM) option will not displayed in Stock Item master if the unit of measure in the Units field are not selected.

  3. In Stock Item Multi Components (M BOM) screen:
    • Under Name of BOM specify component list name as Standard and press enter to view Stock Item Components (BOM) screen.

  4. In Stock Item Components (BOM) screen:
    • BOM Name: By default, the BOM Name specified in Stock Item Multi Components (M BOM) screen will be defaulted and application will not allow to move the cursor to BOM Name field.
    • Components of: In this field application displays the Name of the Stock Item for which the components are defined.
    • Unit of manufacture: Specify the appropriate number of finished product that will be manufactured by using the components identified in the component list.
    • Item: In this field identify the raw materials which are required to manufacture the finished goods
    • Location: If there are multiple Locations, specify the storage location of the items from where the items will be used for manufacture.
    • Quantity: In this field mention the quantity of Raw Material required to manufacture the finished goods.

    • Specify other required details in the stock item master.
  5. Accept the screen. As always, you can press Ctrl+A to save. You can create Stock Item on the fly or move back and forth when creating Stock Item.

    6. Create Manufacturing Journal for a Stock Item with Single Bill of Materials. All the manufacturing transactions can be accounted through a Stock Journal.

    To record manufacture of finished goods in Stock Journal.

    • Press Alt+G (Go To) > Alter Master > type or select Voucher Type > Stock Journal.

      • Alter the Stock Journal Voucher Type, by setting the option Use as a manufacturing Journal to Yes.

    • Press Alt+G (Go To) > Create Master > type or select Voucher Type > and press Enter.

    Create a Manufacturing Journal under Stock Journal by setting the option Use as a Manufacturing Journal to Yes.

    Note: Bill of Material should be created before accounting the manufacture of an item.

  6. Press Alt+G (Go To) > Create Voucher > press Alt+F7 (Manufacturing Journal).

    • Name of Product: Select the product which needs to be manufactured from the List of Items.
    • Name of BoM: In this field the BoM created for the stock item will be displayed automatically with one more option Not Applicable.

    Note: The list of Raw materials required for the manufacture of finished goods will be displayed in Components (Consumption) side based on the BOM defaulted.

    • Location: Select the location where you would like to place the produced goods.
    • Qty: In this field specify the quantity of finished goods manufactured.
    • Components (Consumption): In this section the components required to manufacture the finished goods will be displayed automatically based on the components defined in the BoM.

    Quantity of Raw material will be defaulted based on the quantity requirement defined in the BOM multiplied by the Quantity of finished goods manufactured, click here. The completed Manufacturing Journal is displayed as shown:

  7. Accept the screen. As always, you can press Ctrl+A to save.

Multiple Bills of Material for a stock item

Multiple BOM can be created for a stock items where you use varying set of components to manufacture a specific finished goods based on the availability of goods or customer requirements.

The facility to create Multiple Bill of Materials for Stock Item has been provided in TallyPrime. Where you can create multiple BOM with different component list for a stock item & appropriate BOM can be selected in the manufacturing Voucher.

This feature will be useful where you are using different components to manufacture the same stock item based on the customer requirement

Example: Customer A wants Television to be manufactured with specific brand of Picture Tube. Where as other customers has not specified any such specifications. In this scenario ABC company needs 2 BOM, one for Customer A as per his component specification & other may be a standard BOM for all other customers

  1. Gateway of Tally > Create > type or select Stock Item > and press Enter. Alternatively, press Alt+G (Go To) > Create Master > type or select Stock Item > and press Enter.
  2. In Stock Item Creation screen:
    • Enter the Stock Item Name under Name field, select the appropriate stock group in the Under field and specify the appropriate unit of measurement in Units field.
    • Set Component (BOM): To create the component list required to manufacture the Finished goods enable this option to Yes and press Enter to view Stock Item Multi Components (M BOM) screen.
    • In Stock Item Multi Components (M BOM) screen, under Name of BOM specify component list Name – Customer A and press enter to view Stock Item Components (BOM) screen. If BOM is specifically created for a specific customer/sale you can enter the customer or sale name in Name of BOM field to identify the BOM while recording manufacturing transaction.
    • In Stock Item Components (BOM) screen enter the BOM Name: By default the BOM Name specified in Stock Item Multi Components (M BOM) screen will be defaulted and application will not allow to move the cursor to BOM Name field.
    • Components of: In this field application displays the Name of the Stock Item for which the components are defined.
    • Unit of Manufacture: Specify the appropriate number of finished product that will be manufactured by using the components identified in the component list.
    • Item: In this field identify the raw materials which are required to manufacture the finished goods
    • Location: If there are multiple Locations, specify the storage location of the items from where the items will be used for manufacture.
    • Quantity: In this field mention the quantity of Raw Material required to manufacture the finished goods.

    • Press Enter to save the Stock Item components for BOM – Customer A and to view Stock Item Multi Component screen.
    • In Stock Item Multi Component screen enter the second Bill of Material name- Standard in Name of BOM field.
    • In Stock Item Components (BOM) screen specify the Unit of Manufacture, Item, Location and Quantity details as shown:

      • Note: In the above scenario for Stock item – Television we have created 2 BOM. Similarly you can create multiple BOM with different component list for the stock items.

  3. Specify other required details in the stock item master.

Job Work

TallyPrime’s simple yet powerful Job Work feature enables you to record transactions related to Job Work with ease. The Job work functionality in TallyPrime has the following features:

  • Simple and user-friendly
  • Quick and easy to set up and use
  • Job Work Out Process
    • Record Job Work Out Order by capturing the details of Components to be issued and Finished Goods/Scrap to be issued
    • Account the Receipt of Components towards a Job order or directly record the Material receipt by creating the Job Order.
    • Flexibility to account the Receipt of Finished goods without raising Job Work Out Order and Material In voucher
    • Track cost against the Job Work Out Orders
  • Job Work In Process
    • Record Job Work In Order by capturing the details of Components to be received and Finished Goods /Scrap to be delivered
    • Account the Receipt of Components towards a Job order or directly record the Material receipt by creating the Job Order.
    • Flexibility to account the delivery of Finished goods without raising Job Work Out Order and Material In voucher
    • Track the Own Consumption of Goods against the Job Orders and Bill the same on the Principal manufacturer
  • Generate Annexure II for Removal of Goods for Job Work
  • Maintain and Generate Annexure IV (by Principal Manufacturer – if excise applicable)
  • Maintain & generate Annexure V (By Job Worker – if excise applicable)Reports
    • Generate Order Outstandings report for Orders & Components
    • Generate Job Work Registers such as Job Work Out Order/Job Work In Order
    • Material Out Registers
    • Material In Registers
  • Material movement Register
    • Provision to view the details of Stock lying with the Job worker and ageing of the stock
    • Provision to generate the report to analyse the variance in issue of components and receipt of finished goods and vice versa.

Enabling Job Work

In TallyPrime, Job Work feature can be enabled from F11 (Features)

  1. Press F11 (Features) > set Enable Job Order Processing to Yes. If you do not see this option:
    • Set Show more features to Yes.
    • Set Show all features to Yes.
  2. Accept the screen. As always, you can press Ctrl+A to save.