How Useful Tally has been for Manufacturing and Trading Industry?

Posted by Riyaz Tamboli on September 28th, 2016

The businesses in the manufacturing sector make use of machines, tools and labour to produce goods from raw materials. At times these finished goods become the components used in the manufacture of more complex products such as household appliances or automobiles. Every industry has an accounting system and manufacturing and trading industry is no different. With Tally erp software emerging as one of the most favoured accounting software, it’s bound to play a vital role in every industry it’s used. Businesses in manufacturing industry benefit immensely from advanced features in Tally ERP 9 software at antraweb.

Stock Items Classified as Raw Material, Work in Progress, Finished goods:

The user can classify stock items under the typical three broad classifications, i.e. raw materials, work in progress and finished goods. Raw materials are the ingredients used to manufacture a specific item. A product with a changed shape but not having reached its finished stage is known as semi-finished item and grouped under ‘Work-in-Progress’. An item that’s totally transformed in nature, has reached its final form and is ready to sell is labelled as ‘Finished Goods’. There is also option for the user to create these ledgers under ‘Stock-in-Hand’. Once the option ‘Integrate Accounts with Inventory’ has been deactivated, Tally ERP 9 automatically displays the total closing balances of all the ledgers grouped under the Stock-in-Hand, based on the closing balances entered by the user.

Bill of Materials with Auto Adjustments of Stock

In several industries, particularly assembly units, several components are used in the manufacture of finished items. In the latest ERP version, bill of materials provides a workaround to the difficulty of issuing stock items each time a product is manufactured. For generating a Bill of Materials, create a new item and specify the components that go into its manufacture. Now, making use of manufacturing journal, you need to specify the quantity of items to be manufactured. The ERP 9 version instantly selects all the items required and automatically lessens the stock.

You can create a bill of Material for any stock item. Characteristically, you would like to create a BOM only for those items that are being assembled in house. For trading items there’s no need of Bill of Materials. Thus, we require stipulating Bills of Material at the time of creating a stock item.

Extra cost of Manufacturing with notional value and percentage

Often, indirect costs come into play, when a product is manufactured. These could include electricity, labour, accessories, etc. and needs to be added to the cost of the product. In Tally ERP 9, these costs can be added to the product while entering Stock Journals or even manufacturing journal. The user can then specify the extra cost as a percentage of the component cost, or even stipulate a notional value.