Purchase and Sales Order

Processing
Course Facilitator: Prof. Radhakrishna
 What is Purchase Management?
• Managing purchases in an organisation is concerned
with the procurement of proper equipment, materials
and supplies of the right quantities, at the right prices
at the right time.
• Considering the complex nature of the manufacturing
activities today, purchasing has become a specialised
function and separate purchase departments are
established in almost all large concerns.
• In large sized companies, the major activities consist of
ordering material upon requisition by the users,
checking receipt of the material and maintaining files
and records of orders and price movements.
Objectives of Purchase Management
 Purchase Process

Purchase
Receipt Note
Order

Purchase
accounting Payment Entry
entry
What do we mean by purchase order ?
• A Purchase order (PO) (Alt + F4) is a
commercial document and first official offer
issued by a buyer to a seller indicating types,
quantities, and agreed prices for products or
services.
• A PO or purchase order is used to control the
purchasing of products and services from
external suppliers.
After Purchase order what is done?
• After receiving this order the supplier Prepare
purchase invoices and deliver the goods as
agreed.
• When the goods are delivered, the buyer cross
verify the goods received with purchase order
issued and Prepare goods receipt note.
• After receiving process only the purchase invoice
is forwarded to accounts department for entering
purchase entry and arrange payment for supplier.
To enable purchase order processing in
Tally
• To enable Purchase Order in Tally.ERP 9, click
on “F – 11” : Features (F2 : Inventory
Features).
• In the Order Processing section, set Allow
Purchase Order Processing to “YES”, to create
purchase order.
Note : PO is just an order, This entry will never affect the inventory or
accounts of the company. meaning no party ledger nor stock summary will
affect by this order.
How to prepare purchase order in
Tally.ERP 9?
To view purchase order summary
 Receipt Note Voucher (GRN)
• A Receipt Note voucher is used to record receipt
of goods/items at stores.
• For example , the Company receives new stock
item from a Supplier. If a Purchase Order exists
for that supply, selecting the PO reference in the
Receipt Note will display its particulars.
• The details recorded in the Receipt Note are the
PO reference, Ledger account, Supplier's name
and address, Name of stock item, Stock location,
quantity, rate, amount and the transaction
narration.
 Receipt Note Voucher (GRN)
• In Tally when a Receipt Note is tagged to a
Purchase entry the whole transaction
is completed.
• If Receipt Note is accounted but the Purchase
entry is not, it is treated as Goods Received
but Bills are not received.
• If the Purchase entry is accounted and the
Receipt Note is not, it is treated as Bills
Received but Goods are not received.
Configuration of receipt note
 Purchase entry

• Once ordered goods are received from the

supplier, the supplier will issue an Invoice
which will be the conclusive evidence of the
transaction. The accounts department will
account liability in the books.
 Payment entry

• Once liability is created for the goods

purchased on credit, the next step is to pass a
payment entry as and when the liability is
settled.
Purchase order illustration
Place a purchase order to Digital India
Enterprises for the following items
 Step 1
• Go to Gateway of tally> Order
Vouchers>Purchase Order- F4
 Step 2
Create party ledger using the shortcut key Alt+C
 Step 3
• Create a purchase ledger using shortcut key Alt+C – Ledger
name – Purchases of televisions under purchases account.
Step 4 Select the required stock items
and quantities
Receipt Note illustration: In continuation of the previous illustration, We need to create
a receipt note(GRN) for confirming the receipt of the goods.
• Step 1 Go to Gateway of Tally>Inventory
Vouchers> Receipt Note – Alt+F9 (F9)

• Step 2 Select the Party A/c Name- Digital India

Enterprises
 Step 3
Select the Purchase Order reference
no 1
 Step 4
Once the reference is selected, Purchase order details
will pop up. Same shall be accepted by pressing Enter.
Purchase Entry: In continuation we need to create an
accounting entry for purchase to book liability

• Step 1 : Go to Gateway of Tally>Accounting

Vouchers> F9
• Step 2: Select the Party A/c name and select
the Receipt note reference number.
 Step 3
Receipt note details will appear and same can be accepted by
pressing ENTER
Sales Process
Sales Order Processing
How to create sales order
 DELIVERY NOTE VOUCHER
• The delivery Note Voucher is used for
recording goods delivered to a customer.
• To view the Delivery Note Voucher
1. Go to Gateway of Tally > Inventory Vouchers
2. Press the Alt + F8 or select the button F8: Dely
Note from the button bar.
Sales Order Illustration
 Delivery Note
• In continuation of the illustration, we need to
create a Delivery note.
• Step 1
• Goto Gateway of Tally>Inventory Vouchers>
Delivery Note – Alt+F8 (F8)
• Step 2
• Select the Party A/c Name- One stop retailers
Sales entry
Illustration