How to Record Purchase and Sales Entries in Tally Prime

Step-by-step guide to recording purchase and sales entries in Tally Prime, with ledger setup, voucher steps, and common mistakes to avoid.

Purchase and sales vouchers are where most of your daily bookkeeping happens in Tally Prime. Get the ledger setup right once, and recording each transaction afterward takes seconds. Get it wrong, and your reports and GST returns inherit the mess.

This guide covers both purchase and sales entries from setup through to saving the voucher, plus the mistakes that cause the most reconciliation headaches later.

What You Need Before You Start

• Tally Prime installed, with your company already created
• GST enabled if you’re a registered business — see our guide on how to create a GST invoice in Tally Prime if you haven’t set this up yet
• A clear idea of which ledgers you need: purchase/sales accounts, party (supplier/customer) ledgers, and tax ledgers if applicable

Step 1: Create the Required Ledgers

Purchase ledger:

• Gateway of Tally, then Accounts Info, then Ledgers, then Create
• Name: Purchase @18% (or whatever rate applies), Under: Purchase Accounts
• Set GST Applicable to Yes and enter the rate, if relevant

Sales ledger:

• Same path, Name: Sales @18%, Under: Sales Accounts
• Set GST Applicable to Yes and enter the rate

Supplier ledger (for purchases):

• Under: Sundry Creditors
• Enter GSTIN and state if the supplier is GST-registered

Customer ledger (for sales):

• Under: Sundry Debtors
• Enter GSTIN and state if applicable

Stock item (if you deal in goods):

• Gateway of Tally, then Inventory Info, then Stock Items, then Create
• Set GST Applicable to Yes and enter the HSN/SAC code and rate

Step 2: Record a Purchase Entry

1. Gateway of Tally, then Vouchers, then F9 (Purchase)
2. Enter the Supplier Invoice Number and Date from the actual bill you received
3. Party A/c Name: select the supplier ledger
4. Purchase Ledger: select the relevant purchase ledger (for example Purchase @18%)
5. Add the stock item(s), quantity, and rate — or use accounting mode for service-only purchases
6. Tax (CGST/SGST or IGST) calculates automatically based on the supplier’s state versus your own
7. Press Ctrl+A to save

Example: You buy 5 laptops at ₹30,000 each from a supplier in your own state. Tally Prime calculates the taxable value and splits CGST + SGST automatically based on the rate set on the purchase ledger and stock item.

Step 3: Record a Sales Entry

1. Gateway of Tally, then Vouchers, then F8 (Sales)
2. Party A/c Name: select the customer ledger
3. Sales Ledger: select the relevant sales ledger (for example Sales @18%)
4. Add the stock item(s) or service, quantity, and rate
5. Tax calculates automatically — CGST+SGST for same-state sales, IGST for interstate sales
6. Press Alt+A to check the tax breakup before saving
7. Press Ctrl+A to save

Item Invoice vs Accounting Invoice

Use Item Invoice mode when you’re selling or buying physical stock — it shows quantity, rate, and stock movement.

Use Accounting Invoice mode for services, where there’s no stock to track — it shows only the ledger amounts, not quantities.

You can switch between the two using Ctrl+V on the voucher screen.

Common Mistakes to Avoid

• Mixing GST rates under one ledger — keep separate purchase/sales ledgers per rate so your GST reports stay accurate
• Forgetting to enter the supplier’s actual invoice number on purchase entries — this causes mismatches when you reconcile against GSTR-2B
• Missing HSN/SAC codes on stock items, which causes incomplete data on GST returns
• Not checking the tax breakup (Alt+A) before saving, especially on interstate transactions
• Recording purchases and sales in the wrong financial period, which throws off your reports — pair regular entries with checks using our guide on how to generate financial reports in Tally Prime

FAQs

Can I record a purchase or sales entry without GST? Yes. If GST isn’t enabled, or the party/item isn’t GST-applicable, Tally Prime simply records the transaction without tax calculation.

What’s the difference between a purchase ledger and a supplier ledger? The purchase ledger represents the expense/purchase account (for example “Purchase @18%”). The supplier ledger represents the actual person or business you bought from, under Sundry Creditors.

How do I correct a sales or purchase entry after saving it? Open the voucher from the Day Book, press Enter to edit it, make your correction, and save again with Ctrl+A.

Can Tally Prime handle purchase returns and sales returns? Yes, using Debit Note and Credit Note vouchers respectively, which follow a similar entry process to purchase and sales vouchers.

Do I need separate ledgers for interstate and intrastate sales? No — one sales ledger per GST rate is enough. Tally Prime automatically determines CGST+SGST versus IGST based on the party’s registered state, not the ledger itself.