Tally for Manufacturing Beyond GST

An accountant asked a plain question: does anyone use Tally for the factory, or only for GST and the books?

Plenty of factories use it for stock. TallyPrime has stock items, godowns, batches, a bill of materials, a manufacturing journal, and job work in and out. Those are real features, documented on Tally's own help, and an accountant who already lives in Tally can run them.

This note is the walkthrough of what those features cover, with one made-up batch of gate frames so the quantities are easy to check. The five operational gaps are written up separately in Tally limitations for manufacturers. The "have we outgrown it" checklist is signs your factory has outgrown Tally. How to write a factory BOM, apart from the Tally screen, is what a bill of materials is.

The figures below are an example. They are not a factory we measured.

What you set up once

Tally's inventory masters are the same idea as ledger groups, applied to material.

Stock groups classify items. Raw material, bought-out parts, consumables, finished goods, scrap. A group can add quantities only when the items share a unit. Kilograms of angle and kilograms of sheet can sit in one group and total. Hinges in numbers cannot be added to that kilogram total, so they belong in their own group. Tally's help says this directly on stock groups.

Stock items are the things you buy, make, and sell. Each item has a name, a unit, a stock group, and an opening quantity and rate. Tax details sit on the item when GST applies. That screen is Create stock item.

Godowns, which Tally also calls locations, are where the quantity sits. A godown can be a store room, a rack, a process bay, or material that has left your gate. Tally's godown help says you can follow stock from one manufacturing stage to another, and follow stock that goes out for job work. Godown Summary shows opening, inward, outward, and closing for each location.

Batches are lot numbers on a stock item. Batch Summary shows inward, outward, and closing for that lot. For food and other goods that expire, the same report can show manufacturing date, expiry date, and days remaining. A fabrication unit uses it for the mill lot on the steel, not for an expiry date.

Bill of materials and the manufacturing journal

A bill of materials in TallyPrime hangs on the finished stock item. You name the BOM, set the unit of manufacture (how many finished pieces this component list makes), and list each component with its godown and quantity. One item can carry more than one BOM, so a standard frame and a customer's heavier frame are two lists, and the voucher asks which list you used.

Components can be tagged as component, co-product, by-product, or scrap. For scrap, co-product, and by-product, Tally asks for a percentage of component cost, not a market rate you type in rupees.

The manufacturing journal is a stock journal with the mode changed to Manufacturing Journal. You pick the product, the BOM, and the quantity to make. The components come in on their own. Tally shows:

• effective cost of the batch
• effective rate of the primary item
• any additional-cost ledger, entered as a percentage

That additional cost is the place for power, gas, or a works overhead you are willing to load as a percent of material. It is one percentage on the voucher. It is not hours booked against cutting, then welding, then paint.

There is also a cost estimation report. Tally's help is careful here: the item estimate can include costs from purchase through to sale, while the effective rate on the manufacturing journal is the cost on that voucher. The two numbers are allowed to differ. If you need a full cost per saleable piece, with labour days and a monthly overhead rate, use the manufacturing cost calculator and keep the working with the batch.

If the product has sub-assemblies, give each sub-assembly its own stock item and its own BOM. Make the child on its manufacturing journal, then put that child on the parent's component list. How a factory writes that tree is in multi-level BOM. The Tally help used here describes the component list on the item, and a second list when the same item is made another way.

Job work in and job work out

Turn on job order processing under company features. After that, Tally separates two roles.

As the principal (you own the material), you record a job work out order: the party, the nature of processing, how long the process should take, the due date, the godown, and the quantity. If the vendor is assembling something from your components, you set Track Components to Yes and the BOM components appear. If the vendor is only coating or painting a piece you already made, Track Components stays No. Tally's own example of that second case is painting a rod.

Material Out is what leaves your premises. A principal can allow a zero value on that voucher, so the delivery is not pretending to be a sale. Material In is what comes back. Reports on the same menu include job work out orders, material movement, stock with the job worker, and receipt variance when the quantity back does not match the quantity sent.

The vendor's processing bill is a purchase voucher, then a payment. GST on that bill follows the tax invoice. The time limit, the delivery challan, and Section 143 are in job work under GST. How a factory tracks a process it does not own is in subcontracting.

If you are the job worker, the mirror vouchers are job work in, material in from the customer, and material out of the finished pieces. This note stays with the principal, which is the usual seat for a small manufacturer sending powder coating or heat treatment outside.

GST stays with the accountant

Sales invoices, purchase bills, and the GST return your CA already files do not have to move. That is the part of Tally almost every MSME already trusts.

When the tax invoice should start from a dispatch, rather than from a voucher typed at month end, that workflow is GST invoicing. FactoStack exports the finished sales invoice and the purchase record to Tally. The handoff is one way, into Tally. Ledgers, the return, and the final accounts stay with the accountant. The same split is written on the Tally integration page.

Worked example: 20 MS gate frames

A small fabrication shop makes a 7×4 ft MS gate frame. One batch this week is 20 frames. Rates are last-purchase rates sitting on the stock item. Nothing here is a quote to a customer.

Masters

Godowns: Raw store, Cutting, Welding, Paint bay, Finished goods. The powder coater is not a godown inside the shed. Material out, and the stock-with-job-worker report, carry that quantity.

The angle is received as batch JSW-2410, 500 kg at ₹68 per kg, into Raw store.

BOM name Standard, unit of manufacture 1, on the finished frame:

1,224 + 444 + 126 + 73.50 + 90 = 1,957.50.

One manufacturing journal for 20 frames

The accountant opens a manufacturing journal, selects MS gate frame, BOM Standard, quantity 20. Tally fills the components.

24,480 + 8,880 + 2,520 + 1,470 + 1,800 = 39,150. Divide by 20 and the effective rate of the primary item, before any extra ledger, is ₹1,957.50. The same rate as one frame. That is what the journal is doing: scaling the BOM.

Batch JSW-2410 goes from 500 kg to 140 kg (500 − 360). Batch Summary is where you see that 140 kg is still that mill lot.

If they add an additional-cost ledger for power and gas at 5% of component cost:

5% × ₹39,150 = ₹1,957.50 on the batch.

Effective cost = 39,150 + 1,957.50 = ₹41,107.50.

₹41,107.50 ÷ 20 = ₹2,055.375, which is ₹2,055.38 per frame to the nearest paisa.

That 5% is a single figure on the voucher. It does not say the welding set ran six hours and the paint bay ran one.

Cutting produced about 1.2 kg of offcut per frame, 24 kg on the batch. On the BOM that offcut is type Scrap. Tally then asks what percentage of component cost sits on the scrap. Put 0% and the whole ₹39,150 stays on the frames. Put a percentage and that share leaves the frame and sits on the offcut. The journal will not look up today's scrap-dealer rate for you.

Powder coating outside

The 20 welded frames go out for powder coating. This is a service on a finished piece, so the job work out order has Track Components set to No. Nature of processing: powder coating. Duration on the order: 4 days. Quantity: 20 Nos.

Material Out records 20 frames leaving. The principal can keep that voucher at zero value. It is a delivery, not a tax invoice.

The coater's bill, in this example, is ₹160 a frame.

20 × ₹160 = ₹3,200, booked as a purchase voucher when the bill arrives. GST is whatever rate is printed on that tax invoice. This page does not pick the rate.

Those ₹3,200 are not inside the ₹1,957.50. The manufacturing journal already happened, when the frame was still bare steel. The coating is a later purchase. If you want one cost per frame you can sell, add the ₹160 to the material and the 5% power line yourself, or put the lines into the production cost calculator.

If 19 frames come back, receipt variance shows the missing one. The report tells you the quantity is short. It does not tell you whether the frame was burnt in the oven, held back, or lost on the tempo.

Where this factory needs a record Tally is not trying to be

Tally's manufacturing help is honest about its shape. You post vouchers. Reports show stock, cost on the voucher, and material with a job worker. A supervisor running 20 open orders needs a different page. These are the usual breaks, for a unit in the ₹1–50 crore range that still has one accountant and a few bays.

Job cards and stage-wise WIP

You can create a godown called Cutting and another called Welding. A stock journal moves 20 frames from Cutting to Welding. Godown Summary then shows the quantity in each bay. Tally's dyeing example on the manufacturing help is exactly this: plain fabric in Store, then Washing, then Dyeing, each move a stock journal.

That is a stock balance by location. A job card is the customer's order: 20 frames for a site, due Friday, 12 welded, 8 still in cutting, 20 waiting on the coater. Work-in-progress is that card. The godown balance does not name the order.

Machine and operator

Payroll can record units a piece-rate worker produced. The attendance voucher has a production type (Tally's example is "Piece Production") and a value for units, and that value flows into wages. See attendance and production vouchers. Overtime hours can sit on the same voucher.

That is a wage input for the month. It does not say which welding set ran the 20 frames, on which shift, or that the helper only tacked and the welder finished. Shop floor tracking is the record of the machine, the operator, and the stage on the job.

Scrap and rework at the stage where it happened

The manufacturing journal can list 24 kg of offcut for the whole batch, and a scrap godown can hold damaged stock. If the 24 kg is cutting scrap and a later frame cracks at the weld, those are two events. Each one needs its own voucher, typed from a slip.

Rejection and rework is the slip itself: which stage, what failed, whether it was scrapped or sent back, and the extra time. The journal stores the kilogram and a cost percentage.

What to make tomorrow, against open orders

The manufacturing journal records a quantity you have decided to make. Tally also lets you mark an optional stock-journal type as a manufacturing journal and use it as a purchase requisition. That is a list of material to buy or issue.

A cutting list for tomorrow starts from open customer orders, what is already in Cutting, and which bay is free. That planning step is production planning and MRP. The difference between the customer's order and the paper that hits the bay is production order and work order.

Who types it

Every stock journal, manufacturing journal, and material out is a voucher. In a small factory the accountant types it from a notebook the supervisor keeps. The notebook is the system. Tally is the fair copy.

When the supervisor should enter the stage on the batch, the screen has to be the job, not a voucher the accounts desk understands. Factory OS is ₹2,999/month for that job record. Accounts stay in Tally. Sales invoices and purchase records export from FactoStack into Tally when they are ready to post.

What to leave in Tally

Keep the books, the GST return, and the stock masters your CA already trusts. Use godowns if you want a quantity by bay and you have someone who will post the transfer the same day. Use the manufacturing journal when a BOM and a percentage overhead are enough for the cost on that batch. Use job work out, material out, and material in when the question is "how many frames are still with the coater?"

Move the live order to a shop-floor record when the question becomes "which order, which stage, who has it, what was scrapped there, and are we cutting the right thing tomorrow?"

Related guides

• Tally limitations for manufacturers
• Signs a factory has outgrown Tally
• What a bill of materials is
• Job work under GST
• Subcontracting
• Shop floor tracking
• Production planning and MRP
• GST invoicing
• Manufacturing cost calculator
• Tally export for invoices and purchases

Frequently asked questions

Can a factory use TallyPrime for stock, or only for GST?

Both. Stock items, stock groups, godowns, batches, a BOM, the manufacturing journal, and job work in and out are in the same company as the GST invoices. GST is the screen the accountant opens every month. The stock screens are there when someone sets them up.

Does TallyPrime track godowns and batches?

Yes. A godown can be a store, a rack, a process bay, or a way to follow stock that has gone out. Batch Summary tracks the lot. Items with an expiry can show manufacturing date, expiry date, and days left.

Does TallyPrime have a bill of materials and a manufacturing journal?

Yes. The BOM lists component, godown, and quantity, and can mark scrap, co-product, or by-product with a percentage of component cost. The manufacturing journal applies that BOM to a quantity and shows effective cost. Additional cost is a percentage on a ledger.

Can TallyPrime record job work sent to a vendor?

Yes. Job work out, material out, material in, stock with the job worker, and receipt variance are part of job order processing. The processing charge is a purchase voucher. Confirm the GST treatment with your CA. The rules are summarised in the job work GST guide.

Where do small factories outgrow Tally for production?

When the bay needs a job card: the customer order, the stage, the machine, the operator, scrap and rework at that stage, and a plan for tomorrow's cutting. Tally stores the voucher and the godown balance. Shop floor tracking is the card.

Sources on Tally's help

Feature names in this note follow Tally's help for TallyPrime, read on 19 October 2026:

• Manage inventory in manufacturing — BOM, manufacturing journal, scrap, additional cost, godowns as process stages, cost estimation
• Stock groups and stock categories
• Stock items
• Godowns and locations
• Batch summary
• Job work
• Attendance and production vouchers — units produced for piece-rate wages

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