How To Handle Purchase Entry In Tally Prime

Purchase entry in Tally Prime is an important concept.  If you do not know how to pass entries in Tally Prime on this concept then this article can prove to be a game changer for you. Here, proper planning holds the key.

There are some simple ways to handle the process of purchase return in Tally Prime. You should go through the facts to have a better idea of it. In this article, you will get the clarity of thoughts regarding handling purchase entry in Tally Prime.

Once you follow the correct process things are going to be easier for you. So, let’s get through the details to have a better insight to it.

What Is Purchase Entry In Tally Prime?

In Tally, a Purchase Return refers to the process of returning goods to a supplier that were previously purchased, typically due to reasons like defective items, incorrect delivery, or excess supply. It is recorded to reduce the purchase value and adjust the inventory and creditor’s account.

Key Points About Purchase Entry In Tally Prime:

1. Purpose: It records the return of goods to the supplier, reducing the liability (creditor’s balance) and updating the stock.
2. Document Used: A Debit Note is created in Tally to record a purchase return.
3. Accounting Impact:
   • Decreases the purchase account.
   • Reduces the creditor’s (supplier’s) balance in accounts payable.
   • Updates the inventory by reducing the stock quantity.
4. Tally Voucher: The transaction is recorded using the Debit Note Voucher (Ctrl+F9).

Steps To Record Purchase Entry In TallyPrime:

Enable Debit Note:

• Go to Gateway of Tally > F11: Features > Accounting Features.
• Set Use Debit/Credit Notes to Yes.
• Enable Use Debit Notes for Purchase Returns.

Create Debit Note:

• Go to Gateway of Tally > Accounting Vouchers > Press Ctrl+F9 (Debit Note).
• Select the supplier’s ledger (party’s account).
• Choose the purchase ledger or relevant expense ledger.
• Specify the item details (if inventory is involved) or amount for non-inventory returns.
• Enter the reason for the return (e.g., defective goods).
• Save the transaction.

Inventory Adjustment (if applicable):

• If the return involves stock items, Tally automatically adjusts the inventory by reducing the quantity of the returned goods. It is a crucial step while handling purchase entry in Tally Prime.

GST Impact (if applicable):

• If the original purchase included GST, the debit note will reverse the input tax credit for the returned goods.
• Ensure the GST details are correctly entered in the debit note.

Accounting And Inventory Impact:

• Accounting: The supplier’s account (creditor) is debited, reducing the liability, and the purchase account is credited.
• Inventory: If stock items are involved, the inventory quantity is reduced.
• GST: The input tax credit is reversed for the returned goods.

Example:

Suppose you purchased 50 units of an item at ₹200 each (total ₹10,000 + GST) and return 10 units due to defects:

• Create a Debit Note (Ctrl+F9).
• Select the supplier’s ledger.
• Choose the purchase ledger and enter the item (10 units at ₹200 = ₹2,000).
• Adjust GST if applicable.
• Save the transaction.
• Tally Prime reduces the supplier’s balance by ₹2,000 (plus GST) and updates the inventory (40 units remain).

How To Account For An Increase In Purchase Value?

In Tally Prime, accounting for an increase in purchase value in purchase return cases typically occurs when the value of a purchase return needs adjustment due to additional costs, revised pricing, or errors in the original return transaction.

For example, the supplier may charge a higher amount for returned goods, add restocking fees, or correct the return quantity/value. This adjustment increases the purchase return value and affects the supplier’s account, purchase account, and inventory (if applicable).

Method 1: Modify The Original Debit Note (For Errors or Corrections)

If the increase is due to an error in the original purchase return entry (e.g., wrong quantity, rate, or taxes), you can edit the Debit Note.

Locate The Debit Note:

• Go to Gateway of Tally > Day Book or Accounts > Debit Note Register.
• Find and select the original Debit Note for the purchase return.

Edit The Debit Note:

• Quantity or Rate : Increase the quantity or unit price of the returned goods to reflect the correct value.
• Additional Charges: Add any restocking or handling fees in the appropriate ledger (e.g., “Restocking Charges”).
• GST Details: Adjust GST (CGST, SGST, or IGST) if the increased value affects taxes.Update the supplier’s ledger to reflect the higher debit amount (increasing the reduction in liability).

Save The Changes:

• Press Ctrl+A or click Save.
• Tally Prime updates the supplier’s account, purchase account, inventory (if applicable), and GST input tax credit reversal.

Method 2: Create A Journal Voucher (for Non-Inventory Adjustments or Additional Charges)

If the increase doesn’t involve inventory changes (e.g., restocking fees or non-stock adjustments), use a Journal Voucher.

Create A Journal Voucher:

• Go to Gateway of Tally > Vouchers > Press F7 (or select Journal).
• Set the transaction date.

Enter Journal Details:

• Debit: Select the supplier’s ledger to increase the reduction in liability (since the return value increases).
• Credit: Select the purchase return ledger (e.g., “Purchase Returns”) or a specific expense ledger (e.g., “Restocking Charges”).
• Enter the additional amount (e.g., ₹1,000 for restocking fees).
• Include GST ledgers if applicable (e.g., Credit CGST/SGST/IGST to reverse additional input tax credit).

Save The Transaction:

• Add a narration (e.g., “Adjustment for restocking fees on purchase return”).
• Press Ctrl+A or click Save.

Method 3: Create A Credit Note (If Supplier Issues Additional Liability)

If the supplier issues a credit note for additional charges (e.g., restocking fees or revised pricing), record it as a Credit Note to increase the purchase return value.

Enable Credit Note:

• Go to Gateway of Tally > Press F11 (Features) > Accounting Features.
• Ensure Use Debit/Credit Notes is set to Yes.
• Save the settings.

Create a Credit Note:

• Go to Gateway of Tally > Vouchers > Press Ctrl+F8 (or select Credit Note).
• Set the date.

Enter Credit Note Details:

• Party A/c Name: Select the supplier’s ledger.
• Ledger Account: Choose the purchase return ledger or an expense ledger (e.g., “Restocking Charges”).
• Amount: Enter the additional value (e.g., ₹1,000 for restocking fees).
• Item Details (if inventory is affected): Update the quantity or rate of returned items if applicable.
• GST Details: Include additional GST if applicable.
• Narration: Specify the reason (e.g., “Restocking fees for returned goods”).

Save The Transaction:

• Press Ctrl+A or click Save.
• This increases the supplier’s liability and adjusts the purchase return or expense account.

How To Post Purchase Entry In Tally Prime?

There are some simple steps that you need to follow in order to post Purchase Return In Tally Prime. Some of the key factors that you should go through from your end are as follows:-

1. Open The Debit Note Voucher:

• Go to Gateway of Tally > Vouchers > F10 (Other Vouchers).
• Select Debit Note or press Alt+F5.
• Alternatively, use Alt+G (Go To) > Create Voucher > F10 (Other Vouchers) > Debit Note.

2. Select Voucher Mode:

• Press Ctrl+H (Change Mode) and choose either:
  • Item Invoice Mode: If you want to record item-wise details with inventory (most common for purchase returns).
  • Accounting Invoice Mode: If you’re not maintaining inventory or recording non-inventory returns.
• For most purchase returns, select Item Invoice Mode to track stock items.

3. Enter Voucher Details:

• Date: Ensure the date reflects when the return is being recorded.
• Party A/c Name: Select the supplier’s ledger (e.g., ACER India Ltd.) from whom the original purchase was made.
• Party Details: Provide supplier details (e.g., name, address, GSTIN if applicable). If the Party Details screen doesn’t appear, press F12 (Configure) and set Provide Dispatch, Order, and Export/Import details to Yes.
• Original Invoice Details: Enter the Original Invoice No. and Date of the purchase transaction being returned.

4. Select Purchase Ledger:

• Choose the same Purchase Ledger used in the original purchase (e.g., Local Purchases or Interstate Purchases).
• Ensure the ledger has the correct taxability settings (Taxable, Exempt, or Nil Rated) configured.

5. Enter Stock Item Details (for Item Invoice Mode):

• Select the stock item being returned from the list of stock items.
• Enter the Quantity and Rate of the returned items. These should match the original purchase invoice to ensure accurate accounting.
• TallyPrime will automatically calculate the amount.

6. GST Adjustments (if applicable):

• Select the appropriate GST Input Tax Ledgers (e.g., CGST, SGST, or IGST) used in the original purchase.
• Enable Provide GST Details by pressing F12 (Configure) and set it to Yes.
• TallyPrime will automatically calculate the negative tax amounts for the return, reducing the input tax credit.

7. Narration (Optional):

• Add a narration to specify the reason for the return (e.g., “Returned 50 kg of defective flour to supplier”).
• This helps maintain clear records and transparency with the supplier.

8. Save The Voucher:

• Press Ctrl+A to save the debit note.
• If you’ve received a refund from the supplier, select the Payment Out Ledger (e.g., Cash or Bank). For outstanding balances, choose the Outstanding Liability Ledger.

Shortcut Key For Purchase Entry In Tally Prime

You must go through the list of short cut keys in Tally Prime to make things work perfectly well in your favour. So, in this article, you will get the complete details of it while reaching your goals with complete ease.

How To Delete Purchase Return Entry In Tally Prime?

There are some simple ways to delete the purchase return entry in Tally Prime. Some of the key ways or steps that you need to follow in this regard are as follows:-

1. Open The Debit Note:

• From the Gateway of Tally, go to Vouchers > press F10 (Other Vouchers) > select Debit Note and press Enter.
• Alternatively, press Alt+G (Go To) > Day Book > filter for Debit Note by pressing F4 (Voucher Type) > select Debit Note.

2. Locate The Entry:

• Use the Day Book or Debit Note Register (Gateway of Tally > Display More Reports > Account Books > Debit Note Register).
• Navigate to the specific purchase return entry using the arrow keys or date range filter (F2: Period).

3. Delete The Entry:

• Highlight the entry and press Alt+D (Delete).
• Tally Prime will prompt for confirmation: “Delete? Yes or No.”
• Select Yes or press Enter to confirm deletion.

4. Verify Deletion:

• Check the Day Book or Debit Note Register to ensure the entry is removed.
• Verify that the supplier’s ledger, inventory (if applicable), and GST reports (e.g., GSTR-3B, GSTR-1) are updated to reflect the deletion.

Final Takeaway

Hence, these are some of the crucial facts that you need to know while handling Purchase entry in Tally Prime. Without knowing the process you cannot make things work well in your favor. This will boost up your chances to maintain the purchase return in Tally Prime More effectively.

You can share your views and opinions in our comment box. This will help us to know your take on this matter. Here, proper planning holds the key. Here, you have to follow a better solution that can make things work perfectly well in your way.

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ICA Edu Skills Team

Working with businesses in diverse industries. I'm passionate about helping others understand and manage their finances effectively. This blog is where I share practical tips, insightful guides, and the latest updates on accounting, taxation, GST, TallyPrime, and advanced Excel. Feel free to ask questions, leave comments.

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