Bill of Materials (BoM) in Tally Prime

Bill of Materials (BoM) :

A Bill is termed as an authenticated document for the materials which are taken out from the stock either for sale or for transfer to other godowns or for manufacturing, etc. In order to avoid this continuous process of issuing a bill at every stage, a system has been evolved wherein the items with their quantity details can be allotted towards manufacturing a certain product or by-product. This facilitates the immediate reduction in stock of the item automatically. This process of listing the items that make up another item is termed as the Bill of Materials (BoM).
Steps
1. Create New Company using Company Info(Alt+K) --> Create Company

2. Creating Godown/Location :

GOT--> Master--> Create--> Inventory Master--> Godown--> Click on New--> Name: On Site

Press Ctrl+A

Creating Bill of Materials :
You can create a Bill of Material (BoM) for any stock item. BoM can be created at the time of manufacturing/ assembling the item. You may specify a BoM at the time of creating a stock item or altering its master.
National Traders in the business of assembling and manufacturing Televisions.
3. To enable Bill of Materials feature, Setup: Ensure that you are in National Traders.

4. Create the following stock item (Components Goods) :

Name of Item	Stock Group	Standard Cost	Units of Measure
VDU	Television Flatron	2,000	Nos
Picture Tube	Television Flatron	3,750	Nos
IC Chips	Television Flatron	5,000	Nos
Sound card	Television Flatron	500	Nos
Aerial	Television Flatron	300	Nos

GOT--> Create--> Inventory Master --> Stock Items

Press F12 for Configuration at Stock Item creation screen and activate the following option

Set Components List (Bill of Materials) in Stock items : Yes
Press CTRL + A to accept all

* Similarly create rest component goods
5. Create the following stock item (Final Goods) :

Name of Item	Under	Category	Units	Maintain in Batches	Set Components (BoM)
Television Flato-ron	Home Electronics	Not Applicable	Nos	No	Yes

The Bill of Material component screen of Television Flat-ron appears as shown below

Accept the above settings for the item Television Flat-ron. The purpose of creating a bill of material is to enable the consumption of the materials in the ratio specified, when the product is manufactured. Tally.Prime allows us to use a Manufacturing Journal to enter the goods manufactured with the bill of materials.
Creating a Manufacturing Journal :

To create a new Manufacturing Journal, Go to Gateway of Tally --> Accounting Master --> Voucher Type --> Create
1. Type Manufacturing Journal as the Name
2. Under Voucher Types, select Stock Journal
3. Type Mfg Jrnl for abbreviation and select automatic voucher numbering
4. Select Yes for Use as Manufacturing Journal and accept the screen
The Manufacturing Journal voucher type creation screen appears as shown:

5. Press Ctrl+A to accept the above screen and return to the Gateway of Tally.
Using Bill of Materials
On 21-12-18, bought 10 pcs of each of the following items from Star Electronics @ standard cost as mentioned below :
>>

Name of Item	Standard Cost
VDU	2,000
Picture Tube	3,750
IC Chips	5,000
Sound card	500
Aerial	300

The total purchase invoice value amounted to Rs. 1,15,500. The above goods are stored in On- Site. A Cheque was paid from Bank Account immediately. On the same day, 5 Nos of Television Flat-ron is manufactured in On Site godown. Additional expenses of Rs. 3,000 and Rs. 2,000 was incurred towards Wages and Power respectively.
Step 1: Create Purchase Invoice
Go to Gateway of Tally --> Vouchers --> F9: Purchase
1. Select the Party as Star Electronics
2. Allocate to Purchases Account
3. Select the items with the quantity and standard rates as given in the table above
4. Select the Godown as Onsite
5. Accept the entry

Step 2: Create Manufacturing Journal Go to Gateway of Tally --> Vouchers --> Alt+F7: Select Manufacturing Journal from list.
1. Select the Manufacturing Journal and ensure that the date is 21-12-2018.
2. Under the Name of Product to be manufactured, type Television Flatoron (you will notice the items given in the master as Bill of Materials appear automatically).
3. Manufacture it in On-Site.
4. Quantity to be manufactured
5. Under Additional Cost Components, specify additional cost of Wages - 3,000 and Power - 2,000 (If the ledger accounts for these expenses do not exist, create them under Direct Expenses).
The completed Manufacturing Journal as shown below:

6. Type the narration and press Y or Enter to accept the screen.
7. Return to the Gateway of Tally.
Display Stock Summary Go to Gateway of Tally --> Stock Summary * Press Enter on Home Electronics
You will find that the closing quantity, rate and value details for the stock item - Television Flat-ron.