Stock Items – Scrap, By-products, & Co-products in TallyPrime

TallyPrime treats Scrap, By-products, and Co-products differently when it comes to Stock Items. Here’s a breakdown for each:

1. Scrap in TallyPrime:

• Stock Item Creation: Create a regular Stock Item for Scrap with an appropriate name and Unit (e.g., Steel Shavings – Kg).
• Group: Categorize it under a relevant Stock Group like “Scrap” (create one if needed).
• BOM Consideration: Scrap isn’t directly included in the Bill of Materials (BOM) for finished goods.
• Accounting for Scrap: You can’t directly record scrap generation within a manufacturing voucher. However, TallyPrime offers alternative methods:
  • Stock Journal: Use a Stock Journal voucher to record scrap generated during production.
    • Set “Source” to “Consumption” (indicates outflow).
    • Select the Scrap Stock Item.
    • Enter the quantity of scrap generated.
  • Variance in Manufacturing Voucher: If scrap is consistent and predictable, you can account for it as a variance during production.
    • In the Manufacturing Voucher, slightly overestimate the raw material consumption to account for expected scrap.

1. Example: Creating Scrap in TallyPrime

• Stock Item Name: Steel Shavings
• Group: Scrap
• Unit: Kg

2. By-products in TallyPrime:

• Stock Item Creation: Create a By-product Stock Item with a name and Unit (e.g., Leather Remnants – Sq. Ft.).
• Group: Categorize it under a relevant Stock Group like “By-products” (create one if needed).
• BOM Consideration: By-products aren’t directly included in the BOM for the main product. However, their selling price can be considered when calculating the overall production cost of the main product.
• Accounting for By-products: There’s no specific voucher to record by-product generation. You can manage them through:
  • Stock Journal: Use a Stock Journal voucher to record By-products produced during manufacturing.
    • Set “Source” to “Production” (indicates inflow).
    • Select the By-product Stock Item.
    • Enter the quantity of By-products generated.
  • Sales: By-products can be sold independently, generating revenue.

1. Example: Creating By-Products in TallyPrime

• Stock Item Name: Leather Remnants
• Group: By-products
• Unit: Sq. Ft.

3. Co-products in TallyPrime:

• Stock Item Creation: Create Co-product Stock Items with names and Units (e.g., Plywood – Sq. Ft., Sawdust – Kg).
• Group: Categorize them under relevant Stock Groups (e.g., “Finished Goods” for Plywood, “Scrap” for Sawdust).
• BOM Consideration: Co-products can be included in the BOM for the main product alongside raw materials. However, their relative profitability might influence the valuation method chosen.
• Accounting for Co-products: There’s no specific voucher to record co-product generation. You can manage them through:
  • Manufacturing Voucher: Include co-products in the BOM during production.
    • List co-products alongside raw materials.
    • Specify the quantity of each co-product produced per unit of the main product.
  • Separate Stock Ledgers: Maintain separate Stock Ledgers for co-products to track their inventory and sales.

1. Example: Creating Co-Products in TallyPrime

• Stock Item 1: Plywood (Main Product) – Sq. Ft. (Finished Goods)
• Stock Item 2: Sawdust (Co-product) – Kg (Scrap)

4. Key Points while Creating Stock Items – Scrap, By-products, & Co-products in TallyPrime:

• Scrap has no direct BOM integration but can be managed through Stock Journals or production variances.
• By-products are tracked through Stock Journals and separate sales.
• Co-products are included in the BOM and require separate Stock Ledgers for proper tracking.