Purchases with Trade Discounts in TallyPrime: 5 Steps + Example

1. Understanding Trade Discounts in TallyPrime:

A trade discount is a reduction in the list price of a product or service offered by a seller to a buyer.

It’s typically used to incentivize bulk purchases or long-term relationships.

2. Steps to Record a Purchase with a Trade Discount in TallyPrime:

1. Create a Purchase Invoice:

Go to Gateway of Tally > Vouchers > Press F9 (Purchase).

2. Enter Supplier Details:

Enter the supplier’s account name.

3. Add Items:

Add the purchased items and their quantities.

4. Apply the Trade Discount:

• In the “Discount” section of the purchase invoice, select the “On Total Amount” option.
• Enter the trade discount amount or percentage.

5. Save the Invoice:

Press Ctrl+A to save the purchase invoice.

3. Example of Purchases with Trade Discounts in TallyPrime:

Let’s say you purchased items worth Rs. 10,000 from a supplier and received a 10% trade discount.

1. Create a Purchase Invoice:

• Go to Gateway of Tally > Vouchers > Press F9 (Purchase).
• Enter the supplier’s details.

2. Add Items:

Add the purchased items and their quantities.

3. Apply the Trade Discount:

• In the “Discount” section, select “On Total Amount”.
• Enter “10%” as the discount.

4. Save the Invoice:

Press Ctrl+A to save the purchase invoice.

4. Key Points:

1. Discount Calculation:

TallyPrime will automatically calculate the discount amount based on the total amount of the purchase.

2. Net Amount:

The net amount payable to the supplier will be the total amount minus the discount.

3. Inventory Valuation:

The inventory will be valued at the net purchase price (after the discount).

4. Tax Implications:

Ensure that the trade discount is applied correctly for tax purposes, as it may affect the taxable value of the purchase.

By following these steps, you can accurately record purchases with trade discounts in TallyPrime, ensuring correct inventory valuation and financial reporting.