Managing the complete purchase and sales process is an important part of every trading and inventory-based business. From ordering materials from a supplier to delivering products to customers, each transaction must be recorded correctly.
The Purchase Order to Sale cycle in TallyPrime helps businesses manage purchase orders, receipts, purchase invoices, sales orders, delivery notes, sales invoices, inventory movement, and outstanding orders through one connected workflow.
This process improves stock control, reduces manual errors, and helps business owners track every stage of an order.
## What Is the Purchase Order to Sale Cycle?
The Purchase Order to Sale cycle is the complete business process that starts when a company places an order with a supplier and ends when the purchased goods are sold to a customer.
The cycle normally includes:
1. Purchase Order creation
2. Receipt of goods
3. Purchase Invoice entry
4. Sales Order creation
5. Delivery of goods
6. Sales Invoice creation
7. Order and inventory reporting
Each voucher plays a different role in the business process.
Step 1: Create a Purchase Order
A Purchase Order is created when the business places an order with a supplier.
It contains details such as:
* Supplier name
* Purchase Order number
* Order date
* Expected delivery date
* Stock item name
* Ordered quantity
* Purchase rate
* Total order value
Practical Example
Suppose a business orders 100 units of Product A from ABC Suppliers at a rate of ₹500 per unit.
The total Purchase Order value will be:
100 × ₹500 = ₹50,000
The Purchase Order records the requirement, but it does not immediately increase the available stock.
Step 2: Record the Receipt of Goods
When the supplier delivers the goods, a Receipt Note can be created in TallyPrime.
The Receipt Note records:
* Quantity ordered
* Quantity received
* Pending quantity
* Supplier details
* Purchase Order reference
* Warehouse or godown
* Batch details, if applicable
Suppose the supplier delivers only 80 units against the order of 100 units.
TallyPrime will show:
* Ordered Quantity: 100 units
* Received Quantity: 80 units
* Pending Quantity: 20 units
The Receipt Note helps the business track partial deliveries accurately.
Step 3: Create the Purchase Invoice
After receiving the supplier’s invoice, a Purchase Voucher is created.
The Purchase Invoice may include:
* Supplier invoice number
* Supplier invoice date
* Purchase Order reference
* Receipt Note reference
* Item quantity
* Purchase rate
* Tax details
* Freight or additional charges
* Total payable amount
The Purchase Invoice records the financial liability against the supplier.
It is important to match the Purchase Invoice with the related Purchase Order and Receipt Note. This helps identify differences in quantity, rate, tax, or value.
Step 4: Verify the Purchased Stock
Once the purchase transaction is completed, the available stock can be checked through inventory reports.
Businesses can verify:
* Current stock quantity
* Stock item balance
* Godown-wise stock
* Batch-wise stock
* Purchase rate
* Closing stock value
* Pending Purchase Orders
This ensures that the physical inventory and TallyPrime stock records remain accurate.
Step 5: Create a Sales Order
When a customer places an order, a Sales Order is created.
The Sales Order contains:
* Customer name
* Sales Order number
* Order date
* Delivery date
* Stock item
* Ordered quantity
* Selling rate
* Order value
* Delivery location
### Practical Example
Suppose a customer orders 50 units of Product A at ₹750 per unit.
The Sales Order value will be:
50 × ₹750 = ₹37,500
The Sales Order confirms the customer’s requirement but does not reduce the stock until the goods are delivered.
Step 6: Check Stock Availability
Before processing the customer order, the business should verify whether sufficient stock is available.
TallyPrime can help users check:
* Actual stock
* Available stock
* Stock committed in Sales Orders
* Stock expected through Purchase Orders
* Reorder level
* Minimum stock level
This prevents businesses from accepting orders that cannot be fulfilled on time.
Step 7: Create a Delivery Note
When the goods are dispatched to the customer, a Delivery Note can be created against the Sales Order.
The Delivery Note records:
* Sales Order reference
* Customer name
* Item quantity delivered
* Pending delivery quantity
* Dispatch details
* Transport details
* Godown from which stock is issued
Suppose the customer ordered 50 units, but only 40 units are delivered.
TallyPrime will show:
* Ordered Quantity: 50 units
* Delivered Quantity: 40 units
* Pending Delivery: 10 units
This helps the business track partial deliveries and pending commitments.
## Step 8: Create the Sales Invoice
After the goods are delivered, the Sales Invoice is created.
The Sales Invoice includes:
* Customer details
* Sales Order reference
* Delivery Note reference
* Item details
* Quantity
* Selling rate
* Tax amount
* Discount
* Freight or additional charges
* Final invoice amount
The Sales Invoice records the amount receivable from the customer and updates the accounting records.
Step 9: Receive Customer Payment
When the customer makes payment, a Receipt Voucher is entered.
The payment can be adjusted against the relevant Sales Invoice using bill-wise details.
This allows the business to monitor:
* Invoice amount
* Amount received
* Outstanding balance
* Due date
* Overdue amount
* Customer payment history
Benefits of the Purchase Order to Sale Process
A properly managed Purchase Order to Sale cycle provides several benefits:
* Better control over purchases
* Accurate inventory tracking
* Clear supplier order status
* Easy tracking of partial receipts
* Better customer order management
* Reduced stock shortages
* Accurate sales billing
* Improved outstanding management
* Better coordination between purchase, warehouse, sales, and accounts teams
## Common Mistakes to Avoid
Businesses should avoid the following mistakes:
* Creating Purchase Invoices without Purchase Order references
* Recording complete receipts when only partial stock is received
* Creating Sales Invoices without checking available stock
* Ignoring pending Purchase Orders
* Not linking Delivery Notes with Sales Orders
* Entering incorrect quantities or rates
* Failing to review outstanding customer payments
* Not checking order reports regularly
Conclusion
The Purchase Order to Sale cycle in TallyPrime provides a structured method for managing purchases, stock receipts, customer orders, deliveries, sales invoices, and payments.
By connecting every voucher with the relevant order and inventory transaction, businesses can maintain accurate stock records and improve overall operational control.
Practical training on this process helps users understand how each voucher affects inventory, accounting, order tracking, and business reports.
## Need Help Implementing the Purchase Order to Sale Cycle in TallyPrime?
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