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How to Make Consignment Accounts in Tally.ERP 9 without Doubt ?

If you have learnt financial accounting, consignment accounting is just accounting record of consignor and consignee. Consignee is the commission agent and its duty is to sell the product of the party and that part will be consignor. Consignor sends the goods to consignee for sale purpose and but it means that it is not purchased by consignee or agent. Therefore, its accounting action is different from normal accounting treatment of sale and purchase transaction.



One of new feature of Tally.ERP 9 is to track the sale by consignee. For this, a step by step guide is given for proper accounting treatment of consignment accounts in the books of consignor and consignee.



Accounting Treatment in the books of Consignor

1st step: To create the company and Stock items

First of all consignor creates his company in his books , suppose svtuition.org has started the business of selling accounting books by making the network of distributers in India . For this purpose, I have to create the items which I have produced and I have opening balance in my godown. For this purpose, I have to click inventory info and add stock items and also add unit of measurement by pressing alt + c and create pc for piece.


2nd Step: To change the features F11 of Tally.ERP

Click the feature button right side and go to inventory option. Click it and note down yes in the front of maintain multiple godown


[* Important Note: Tally.ERP 9 understands after creating the feature that you want to transfer stock from one godown from another godown for selling by agent.]

3rd Step: To record the transaction of transfer goods from consignor to consignee


This transaction will record in Inventory vouchers in the gateway of tally. When you click inventory vouchers, you will find right side three button one is STK JRNL, other is Receipt note and another is dely note. Stk jrnl means stock journal, in this journal you have to write items





For my example, I have to write books and its quantity suppose, if I am transferring 200 books to my consignee Delhi distributor, then it means I am transferring my stock from my main location to my Delhi godown and write also cost price and then when you will enter you will reach destination right side and enter the name of item and if you not make godown then make Delhi distributor godown by pressing alt + c (short cut key ). and then





Accounting Treatment in the books of Consignee


When consignee or agent will receive the stock from consignor, he will also open tally.erp 9 and alter the features F11 and write yes in the front of maintain multiple godowns and also write yes use tracking number for receipt and delivery notes. He also create stock item in my example, Delhi distributor will create stock of books which he has to sell on the behalf of svtuition.org publisher.


Go to inventory info >> stock units >> Create


After this he will record this received goods in receipt notes


Go to inventory voucher >> see right side receipt note >> click and pass the receipt note with zero value , because stock is moved but ownership is unmoving , and record the quantity which he received from consignor . For this purpose , he has to also create godown of svtuition.org consignment and also create svtuition.org consignment account in ledger creation .





Now when goods are sold by consignee then further transaction will be recorded .
Suppose my delhi distributor sells the goods to the Delhi public school . Now , he will not pass the voucher entry of sale but he pass the voucher entry of delivery notes .





Go to inventory vouchers >> see right side and click on delivery note >> pass the delivery note with sold quantity of books .

Then he print this delivery note and inform consignor that he stock or its part are sold by him with attached bill of delivery note . He will also send his earned commission bill by passing in accounting vouchers and printing it from computer .

Svtuition.org consignment account Dr.xxxx
Commission account Cr. Xxxxx


It is calculated on certained percentage of sale which have agreeded both consignor and consignee at the time of consignment agreement .

Again Accounting Treatment in the books of Consignor

When consignor will get the delivery note from consignee ( Delhi distributor ) . He will raise the sale invoice on Delhi public school showing goods out from the godown . For this purpose , consignor has to create Delhi distributor account and sale account in ledger creation .

Delhi distributor account under debtor account

Sale account under sale account


He will also passed the payment entry , if he paid commission to agent .

Commission of delhi distributor account dr.
Cash/bank account cr.


Above record is just sample about how the system is generally used while accountant appoints to record these type of transactions . But I have experienced that after connecting Tally.ERP 9 with .NET , consignor and consignee can reduce steps in above accounting system . If accounts are maintained online , then only consignor books are to be maintained in both . But it only possible , if agent is appointed by consignor only for sale of his products but if agent is working independently , then you have to follow above procedure .


The above procedure of passing the delivery note and inform to consignor will continue when consignee sells any new product of consignor . At that time he will also raise new bill on the vendor for his commission towards services rendered by him . Tracking number writing is also very important because consignor will know what product is sold from which consignee. Suppose , if consignor sells his products from than one consignee , then he will compulsory to all consignee to activate tracking number features in delivery notes . After this consignor can analysis more scientifically which consignment agreement is more benefited for him.

COMMENTS

: 3
  1. sir if 'F' form is to be recieved from consinee then how to show that the abovementioned form is receivable.....

    ReplyDelete
  2. hi Thanks for the info. in the agents books, when entering receipt, stock value is not entered, but when delivery note is entered the value is entered and it is reflecting as "sales invoice to be made " in the agents sales account.. but actually it should not increase the agents sales account.

    ReplyDelete
  3. sir how i pass sales entry with select the item but can i enter sales without effect to stock

    ReplyDelete
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Accounting Education: How to Make Consignment Accounts in Tally.ERP 9 without Doubt ?
How to Make Consignment Accounts in Tally.ERP 9 without Doubt ?
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Accounting Education
http://www.svtuition.org/2009/12/consignment-accounts-in-tallyerp-9.html
http://www.svtuition.org/
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http://www.svtuition.org/2009/12/consignment-accounts-in-tallyerp-9.html
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