Sales and Purchase Entry in Tally

A sales entry in Tally records goods or services you sold, using the Sales voucher (F8). A purchase entry records what you bought, using the Purchase voucher (F9). For a credit sale you debit the customer and credit Sales; for a credit purchase you debit Purchase and credit the supplier. If it's a cash deal, Cash takes the place of the party. These two entries are the heart of any trading business's books.

Cash sale vs credit sale

• Cash sale: the customer pays immediately. Debit Cash, credit Sales.
• Credit sale: the customer will pay later. Debit the customer's ledger, credit Sales. You'll pass a Receipt later when they pay.

The same logic applies to purchases with Cash and the supplier.

Step by step: sales entry

Example: selling goods worth ₹20,000 on credit to Gupta Stores.

1. Gateway of Tally ▸ Vouchers, press F8 (Sales).
2. Set the date with F2.
3. Party A/c name — select Gupta Stores (for a cash sale, choose Cash).
4. Under Particulars, select the Sales ledger and enter 20,000. If you track stock, pick the stock item and quantity instead, and Tally works out the value.
5. Tally debits Gupta Stores and credits Sales.
6. Save with Ctrl + A.

Step by step: purchase entry

Example: buying goods worth ₹12,000 on credit from Metro Supplies.

1. Vouchers ▸ press F9 (Purchase).
2. Party A/c name — select Metro Supplies (or Cash for a cash purchase).
3. Under Particulars, select the Purchase ledger and enter 12,000.
4. Tally debits Purchase and credits Metro Supplies.
5. Save with Ctrl + A.

Quick reference

Invoice mode vs voucher mode

Tally lets you record sales as a proper invoice (with item, quantity, rate) or in simple voucher mode (just ledgers and amounts). For a shop selling products, use invoice mode so stock updates. For services, voucher mode is fine. Toggle with Ctrl + H (Change Mode).

Worked example

You run a stationery shop. Today:

• Sold ₹5,000 goods for cash → Sales (F8): Dr Cash 5,000, Cr Sales 5,000
• Sold ₹18,000 goods on credit to a school → Sales (F8): Dr School 18,000, Cr Sales 18,000
• Bought ₹9,000 stock on credit from a supplier → Purchase (F9): Dr Purchase 9,000, Cr Supplier 9,000

Pro tips

• Use invoice mode for product businesses so inventory and sales stay in sync.
• Once GST is enabled, add the GST ledgers to these entries (covered in the GST lessons).
• Press Alt + P to print the invoice straight after saving.

Common mistakes

• Recording a credit sale as cash. If the customer hasn't paid, choose their ledger, not Cash. Otherwise your receivables are wrong.
• Debiting/crediting the wrong side. In a sale, Sales is always credited. In a purchase, Purchase is always debited.
• Skipping the Sales/Purchase ledger. The value must hit the Sales or Purchase ledger, not a random one, or your Profit & Loss goes wrong.

Key takeaways

• Sales (F8): credit sale = Dr customer, Cr Sales. Cash sale = Dr Cash, Cr Sales.
• Purchase (F9): credit purchase = Dr Purchase, Cr supplier.
• Use invoice mode for product businesses so stock updates.
• Pass a Receipt/Payment later when a credit deal is settled.

Practice task

In your practice company, record a ₹10,000 cash sale, a ₹25,000 credit sale to a customer, and a ₹15,000 credit purchase from a supplier. Then check the customer's and supplier's outstanding balances in their ledgers.

Master sales, purchases and GST invoicing in Tally in the ADFA program at HCI.