Compound Units in TallyPrime: 3 Steps + Example

In TallyPrime, a compound unit is a combination of two simpler units used to measure a specific stock item.

It allows you to represent the quantity of an item in a more detailed way, especially when the primary unit alone might not be sufficient.

Here’s a detailed explanation of compound units in TallyPrime with an example:

1. Understanding Compound Units:

Imagine you sell bottled water.

While the primary unit could be “Bottles,” you might also want to track the quantity in terms of liters.

Here, a compound unit of “Dozen Bottles (12)” would combine “Dozen” (a simple unit for quantity) with “Bottles” (the primary unit).

This allows you to record not only the number of bottles but also the total volume of water you have in stock.

2. Creating a Compound Unit in TallyPrime:

1. Access Unit Creation:

  • Open the Gateway (usually Alt+F12).
  • Navigate to “Create” and select “Units of Measure” (or press Alt+G followed by “Create Master” and then “Units of Measure”).

2. Define the Compound Unit:

  • Click on the “Type” field or press Shift+Tab (or Backspace) to change the type from “Simple” to “Compound.”
  • Enter the first unit (e.g., “Dozen”).
  • Specify the conversion factor (e.g., 12, indicating 1 Dozen = 12 units).
  • Select the second unit (the primary unit in your inventory), which is “Bottles” in this example.

    3. Recording Transactions with Compound Units:

    Once you’ve created the compound unit, you can use it when creating Purchase Invoices, Sales Invoices, Delivery Notes, or Receipt Notes:

    1. Select the stock item (e.g., “Bottled Water”).
    2. Enter the quantity in the compound unit field (e.g., enter “2” for 2 Dozen Bottles).
    3. TallyPrime will automatically calculate the equivalent quantity in the primary unit (e.g., it will show 24 bottles based on the conversion factor).
    4. Enter the rate per unit, which should be based on the compound unit (e.g., price per Dozen Bottles).

    3. Example: Selling Shoes in Pairs

    You sell shoes, and each pair consists of two individual shoes (left and right).

    1. Steps:

    1. Create a compound unit named “Pair (2)” with “Pair” as the first unit and a conversion factor of 2 (as 1 Pair = 2 individual shoes).
    2. When creating a Sales Invoice for shoes, enter the quantity in the “Pair” field (e.g., enter “10”).
    3. TallyPrime will automatically convert this to 20 individual shoes (10 pairs * 2 shoes/pair).

    4. Benefits of Using Compound Units in TallyPrime:

    1. Detailed Inventory Tracking:

    Provides a more precise way to track inventory levels, considering both quantity and additional unit factors.

    2. Improved Reporting:

    Generates reports reflecting quantities in both compound and primary units, offering a clearer picture of inventory specifics.

    3. Enhanced Data Integrity:

    Ensures accurate representation of stock by combining relevant units for measurement.

    5. Additional Considerations:

    • You can create compound units with more than two simple units, but ensure the relationship between the units is clear and consistent for accurate calculations.
    • Review and update your compound units as needed to reflect any changes in your inventory management practices.

    By effectively utilizing compound units in TallyPrime, you can gain a more comprehensive understanding of your inventory composition, improve data accuracy in transactions and reports, and ultimately streamline your inventory management process.


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