Sales with Trade Discounts in TallyPrime: 9 Easy Steps + Example

Table of Contents

1. Understanding Trade Discounts in TallyPrime

Trade discounts are discounts offered by suppliers to retailers or wholesalers.

They are typically based on factors such as purchase volume, customer relationships, or promotional offers.

2. Steps to Record Sales with Trade Discounts 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 items purchased and their quantities.

4. Apply 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.

6. Create a Sales Invoice:

Go to Gateway of Tally > Vouchers > Press F8 (Sales).

7. Enter Customer Details:

Enter the customer’s account name.

8. Add Items:

Add the items sold and their quantities.

9. Include Trade Discount (Optional):

If you want to pass on the trade discount to the customer, you can include it in the sales invoice.

However, it’s generally not considered a part of the sales revenue.

3. Example to Record Sales with Trade Discounts in TallyPrime:

Let’s say you purchased 100 units of a product at Rs. 100 per unit with a trade discount of 10%.

You then sold these units to a customer at Rs. 120 per unit.

1. Purchase Invoice:

Create a purchase invoice for 100 units at Rs. 100 each.
Apply a 10% trade discount.

2. Sales Invoice:

Create a sales invoice for 100 units at Rs. 120 each.
You can choose to either include the trade discount in the sales invoice or not. If you include it, the customer will effectively pay Rs. 108 per unit (120 – 10% of 120).

4. Key Points:

Trade discounts are typically not reflected in the final selling price to the customer.
The trade discount is recorded as a reduction in the cost of goods sold, affecting your gross profit.
If you pass on the trade discount to the customer, it will be reflected in the sales invoice as a discount.

By following these steps, you can accurately record sales with trade discounts in TallyPrime and manage your inventory and financial records effectively.