With inventory on, every purchase and sale updates quantities and stock value automatically.
Building blocks
Master
Example
Unit
Nos, Kg, Box; compound units like 1 Box = 10 Nos
Stock group / category
Computers, Stationery
Stock item
Laptop (HSN, GST rate, unit, opening stock)
Godown (location)
Main store, showroom, branch
Moving stock
Purchases and sales move stock in and out automatically.
Stock Journal for transfers between godowns or for manufacturing (consume raw materials, produce finished goods).
Physical Stock voucher to adjust to actual counts.
Reports and valuation
Stock Summary shows quantity and value by group and item; drill into movement. Valuation method (average cost, FIFO, etc.) is set per item and affects closing stock in the balance sheet.
💡 Turn on batches and expiry dates for medicines, food and chemicals; Tally then warns on expired stock and supports FEFO selling.
⚠️ Negative stock usually means a purchase wasn’t entered or dates are wrong. Fix it promptly; it distorts valuation.
Menus follow TallyPrime (current versions); older Tally ERP 9 menus differ. GST rates and rules shown are examples; confirm current rules before filing.
Practice
Set up the units, items and godowns in the checklist and transfer stock.
📎 Practice files for this article
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Lesson 5 checklistStep-by-step exercises for this lesson.
