Manufacturing businesses use machines, tools and labour to produce goods from raw materials. Sometimes these finished goods become the components used in the manufacture of more complex products such as household appliances or automobiles.

The user can classify stock items under the typical three broad classifications (Stock Groups)
  • Raw Materiel
  • Work in Progress
  • Finished Goods
  • All ingredients that are used to manufacture a particular item are called Raw Materials. A product whose shape has changed but not reached its finished stage is called Semi-finished item and grouped under 'Work-in-Progress'. Any item that is completely transformed in nature, has reached its final form, and is ready to sell is labelled 'Finished Goods'. The user can also create these ledgers under ‘Stock-in-Hand’. Once the option 'Integrate Accounts with Inventory' has been deactivated, Tally.ERP 9 automatically displays the total closing balances of all the ledgers grouped under the Stock-in-Hand, based on the Closing balances entered by the user.

    Bill of Material with auto adjustment of stock:
    In many industries, especially assembly units, multiple components are used in the manufacture of finished items. Bill of Materials in Tally.ERP 9 provides a workaround to the difficulty of issuing stock items each time a product is manufactured. To generate a Bill of Materials, create a new item (finished or intermediate product) and specify the components that go into its manufacture. Now, using manufacturing journal, specify the quantity of items to be manufactured. Tally.ERP 9 immediately selects all items required and automatically decreases the stock.