Debit Note and Credit Note in Tally Prime

In Tally Prime, Debit Notes and Credit Notes are used to manage adjustments in transactions related to sales and purchases. They help in maintaining accurate records of financial transactions and are essential for GST compliance. Here’s a detailed explanation of both, along with how to create and manage them in Tally Prime.

Debit Note

Definition: A Debit Note is a document issued by a buyer to a seller, indicating that the buyer has returned goods or that there is a need to adjust the amount payable to the seller. It signifies an increase in the buyer’s liability.

Common Scenarios for Issuing a Debit Note:

• Goods returned to the supplier.
• Overcharging by the supplier.
• Shortage of goods received.

Creating a Debit Note in Tally Prime

1. Open Tally Prime: Launch Tally Prime and select your company.
2. Go to Vouchers: Navigate to the Gateway of Tally → Vouchers.

3. Select Debit Note: Press F4 to select the Debit Note voucher type.

4. Enter Details:
   • Date: Enter the date of the transaction.
   • Party A/c Name: Select the supplier’s ledger to whom the debit note is being issued.
   • Item Details:
     • If you are returning goods, select the stock item.
     • Enter the quantity and rate. The amount will be calculated automatically.
   • Narration: Provide a brief description of the reason for the debit note.
5. Accept the Voucher: Press Ctrl+A to accept and save the debit note.

Credit Note

Definition: A Credit Note is a document issued by a seller to a buyer, indicating that the buyer’s account has been credited for returned goods or adjustments. It signifies a decrease in the buyer’s liability.

Common Scenarios for Issuing a Credit Note:

• Goods returned by the customer.
• Discounts or allowances granted to the customer.
• Overcharging on an invoice.

Creating a Credit Note in Tally Prime

1. Open Tally Prime: Launch Tally Prime and select your company.
2. Go to Vouchers: Navigate to the Gateway of Tally → Vouchers.

3. Select Credit Note: Press F4 to select the Credit Note voucher type.

4. Enter Details:
   • Date: Enter the date of the transaction.
   • Party A/c Name: Select the customer’s ledger to whom the credit note is being issued.
   • Item Details:
     • If goods are being returned, select the stock item.
     • Enter the quantity and rate. The amount will be calculated automatically.
   • Narration: Provide a brief description of the reason for the credit note.
5. Accept the Voucher: Press Ctrl+A to accept and save the credit note.

Important Considerations

• GST Compliance: When creating Debit and Credit Notes, ensure that the GST rates are correctly applied. Tally Prime will automatically calculate the GST based on the rates defined for the stock items.
• Linking to Original Transactions: Debit and Credit Notes should be linked to the original sales or purchase transactions for accurate accounting and reporting.
• Reports: Tally Prime provides various reports to track Debit and Credit Notes, which can be useful for reconciliation and GST filing.

Example

Debit Note Example:

• A company returns goods worth ₹5,000 to the supplier due to defects. The Debit Note will reflect this return, increasing the liability to the supplier.

Credit Note Example:

• A customer returns goods worth ₹3,000 due to a wrong order. The Credit Note will reflect this return, decreasing the amount owed by the customer.