Purchase Order In Tally Prime: Manage Inventory, And Expenses

Every business whether the small-scale industry or any big player requires a robust inventory management system. It will help you to meet the demands of the customers. Tally Prime comes with some renowned features. This helps you to maintain the purchase order in Tally Prime accurately. 

A purchase order is used to communicate the objectives as well as details of any purchase from the supplier. Tally Prime is one of the most prominent accounting software that allows a consistent way to manage purchase orders to improve the procurement process. 

Are you curious to know about the Purchase Order in Tally Prime then it can help your business to grow at a rapid pace? Let’s dive deeper in order to smoothen the inventory management system. This will help you to make the optimization process smoother. 

What Is Purchase Order In Tally Prime? 

A purchase order is basically the contract between the buyer and the seller and it offers some specific information like all the products and services to be delivered, delivery date, and other terms and conditions that includes the price. PO is also known as the Purchase Order.   

Why Purchase Order? 

After knowing about the concept of purchase order let’s understand why the companies dive into the concept of purchase order within their accounting software. Almost just like the purchase order in Tally Prime, you must understand the core reasons why implementing a purchase order in Tally Prime can improve efficiently its operations. 

1. Enhanced Communication & Clarity 

The most essential feature of a purchase order from Tally Prme is that it serves as a formal agreement between you and your supplier. The document frames all the information regarding the order like the product or service description, delivery date, quantity, and price as well as payment terms. When you get all the details in a single frame then it reduces the complete risk of miscommunication between both parties in order to build the 

2. Improves The Level Of Inventory Management  

It helps to improve inventory management as you can track the entire inventory with the purchase order in the Tally Prime feature. However, it allows you to track incoming inventory, avoid potential shortages, and forecast stock levels. This will help you with the timely delivery of customer orders and prevent the chances of overstocking. 

3. Streamlines Purchasing Work Flow 

In most cases, Purchase orders in Tally Prime will help you to smooth the way of creating and managing the purchase orders. Thus it helps to automate repetitive tasks and will assist you in creating the purchase orders in case of frequently purchased items. Features like approval workflows help in efficient authorization. 

4. Cost Control & Budgeting 

Purchase orders can help your budget for purchases. Additionally, you can set a specific price range and number of quantities on purchase orders in Tally Prime. This function will help you to negotiate and close better deals with the suppliers within your allocated budget. 

5. Improves The Relations With Vendors    

Building trust and strengthening vendor relationships rely on clear communication, timely purchases, efficient deliveries, and prompt payments with suppliers. This is how Purchase Order In Tally Prime can help you to manage the inventory management perfectly. 

6. Audit Trail & Record Keeping 

Tally Prime streamlines vendor relationships by maintaining detailed records of past purchases, enabling seamless order tracking, trend analysis, and optimized future purchasing decisions. This is why audit trail and record keeping will become easier for you. 

How To Record Purchase Orders In Tally Prime? 

You need to follow some simple steps to record the purchase orders in Tally Prime. Some of the key steps that you need to follow are given below.       

Step -1 Purchase Order Processing 

• Open Tally Prime.
• Go to Gateway of Tally > F11 (Features) > Inventory Features.
• Set “Enable Purchase Order Processing” to Yes.
• Save the settings by pressing Ctrl + A.

Step -2 Create A Purchase Order 

• Navigate to Gateway of Tally > Vouchers > F9 (Purchase).
• Press Alt + F4 to switch to the Purchase Order voucher type.
• Select the Supplier’s Ledger.
• Enter the Order Number and Date.
• Select the required Items, specifying Quantity, Rate, and Amount.
• Press Enter to confirm.
• Save the purchase order by pressing Ctrl + A.

Step -3 Track & Convert Purchase Order Into Purchase Entry 

• Go to Display More Reports > Outstanding > Purchase Order Outstanding to track pending orders.
• To convert an order into a purchase entry, go to Gateway of Tally > Vouchers > F9 (Purchase) and select Purchase Order Pending.
• Select the order and update details if required.
• Save the entry.

Features Of Purchase Order In Tally Prime  

There are several features of purchase orders in Tally Prime that you must be well aware of. Some of the key features of it are as follows:-   

• Order Management – Helps record and track purchase orders efficiently.
• Supplier Ledger Linking – Links purchase orders directly with supplier accounts.
• Inventory Control – Tracks ordered stock and updates inventory upon receipt.
• Pending Order Tracking – View outstanding purchase orders to manage deliveries.
• Automatic Order Numbering – Assigns unique order numbers for easy identification.
• Rate & Quantity Management – Records item rates and quantities to avoid discrepancies.
• Order to Invoice Conversion – Easily converts purchase orders into purchase invoices.
• Audit & History Tracking – Maintains past order details for audits and analysis.
• GST & Tax Integration – Automatically applies GST and other applicable taxes.
• Customizable Reports – Generates reports on order status, vendor performance, and more.

How To Process A Purchase Order In Tally Prime? 

There are some simple steps you need to follow to process the purchase order in Tally Prime. So, let’s go through the steps and process one after the other to have a better understanding of it. Thus, you need to follow the correct steps from your end. 

1. Enable Purchase Order Processing 

• Open Tally Prime.
• Go to Gateway of Tally > F11 (Features) > Inventory Features.
• Set “Enable Purchase Order Processing” to Yes and save.

2. Record A Purchase Order    

• Navigate to Gateway of Tally > Vouchers > F9 (Purchase).
• Press Alt + F4 to switch to Purchase Order.
• Select the Supplier’s Ledger.
• Enter the Order Number and Date.
• Select the Items, specifying Quantity, Rate, and Amount.
• Save the purchase order by pressing Ctrl + A.

3. Record Goods Receipt Purchase Entry 

• When goods arrive, go to Gateway of Tally > Vouchers > F9 (Purchase).
• Select Purchase Order Pending to retrieve the order.
• Verify and update the received quantity and rate.
• Save the purchase voucher.

4. Make The Payment 

• Go to Gateway of Tally > Vouchers > F5 (Payment).
• Select the Supplier’s Ledger and enter Amount & Payment Mode.
• Save the payment voucher.

5. Tracking Orders & Generating Reports 

• View outstanding orders under Display More Reports > Outstanding > Purchase Order Outstanding.
• Generate Purchase Order Summary under Gateway of Tally > Display More Reports > Purchase Reports.

Managing Purchase Order 

Tally Prime not only creates Purchase orders but also allows you to manage them through various features. Some of the key ways to manage the purchase orders are as follows:-    

• Viewing & Editing Orders 

After creating a purchase order, Tally Prime enables quick access to existing orders through party name, order number, or date range search. Users can also make necessary edits before finalizing the order.

• Approving Orders   

Tally Prime ensures strong access control by requiring approval from designated personnel before processing purchase orders, provided that approval workflows are enabled.

• Printing All The Purchase Orders 

You can send the final draft to the suppliers as it is easily printable and you can send them for your supplier confirmation. 

• Converting To Purchase Invoice    

Once the goods or services are received along with the supplier’s invoice. Tally Prime enables seamless conversion of the purchase order into a purchase invoice, automatically updating inventory and accounts payable.

Reporting & Analysis 

Reporting and analysis form an essential part of purchase orders in Tally Prime. Additionally, this can make things work perfectly well in your favor. Some of the core factors that you must know from your end are as follows:-    

1. Pending Purchase Order Report 

You can make use of this section of reporting if you want to track purchase orders. It helps you to keep track of upcoming deliveries in order to manage the inventory levels. 

2. Partywise Purchase Report 

This particular function offers you the option for generating all the reports that are based on vendor names. Thus it makes it easy to analyze the purchases from specific suppliers. 

3. Itemwise Purchase Report 

You need to track the purchase history of the specific items in your inventory. Thus it can boost the scope of your purchase delivery to a greater level. 

4. Order Turnaround Time Report 

You have to track the order fulfillment period to track the order turnaround time report. This is one of the crucial aspects of purchase orders in Tally Prime. 

5. Purchase Cost Analysis Report   

You can make use of this reporting section to monitor purchase trends and find potential cost optimization areas. However, you cannot make your selection on the incorrect end. 

Final Take Away 

Hence, these are some of the crucial facts that you should be well aware of while you want to manage the purchase order in Tally Prime. This is one of the crucial facts that you need to know and understand while meeting your goals. 

You can share your views and comments in our comment box. This will help us to know your take on this matter. Here, perfect planning holds the key. Try to develop a better solution that can make things work well in your favor.