Multiple Price Levels

Prerequisites: Module 19 — Purchase and Sales Orders

Learning Objectives

By the end of this module, you will be able to:

• Explain what price levels are and why businesses need them
• Configure price lists in Tally for multiple customer categories
• Assign price levels to specific customer ledgers
• Verify that sales vouchers auto-populate the correct price

What Are Price Levels?

Most businesses don't charge the same price to every customer. A manufacturer charges differently to:

• End consumers (retail) — highest price
• Retailers (wholesale) — mid-range
• Large distributors (volume) — lowest price

Without a price list system, salespeople must remember or look up the correct price for each customer type — leading to errors, inconsistency, and potential revenue leakage.

Price Levels in Tally solve this: you set up named price tiers, assign each customer to a tier, and Tally automatically populates the right price when you raise an invoice for that customer.

Sunrise Retail's 3 Price Tiers

Customer mapping:

• Digital Hub Retail → Wholesale (regular 30+ phone orders)
• Tech Park Retail Store → Wholesale (25-30 phones/month)
• CloudStore Online → Distributor (50+ orders, online reseller)
• Walk-in customers → Retail (no ledger — cash sales)

Setting Up Price Lists in Tally

Step 1: Enable Price Lists

Gateway → F11 (Features) → Inventory Features
→ Use Price Lists: Yes
→ Use Multiple Price Levels: Yes

Step 2: Create Price Levels

Gateway → Masters → Inventory → Price Levels → Create

Create three price levels:

Step 3: Create the Price List

Gateway → Masters → Inventory → Price List → Create

Select: Price Level = Retail

Select: Price Level = Wholesale

Select: Price Level = Distributor

Step 4: Assign Price Level to Customer Ledger

Gateway → Masters → Accounts → Ledgers → Alter → Digital Hub Retail
→ Price Level: Wholesale

Gateway → Masters → Accounts → Ledgers → Alter → CloudStore Online Pvt Ltd
→ Price Level: Distributor

Tech Park Retail Store → Wholesale

Sunrise Retail — Case Study Application

Sales Voucher for Digital Hub (Wholesale)

When Suresh raises a sales voucher for Digital Hub:

Gateway → Accounting Vouchers → F8 (Sales)
Date: 05-May-2025
Party: Digital Hub Retail

As soon as "Digital Hub Retail" is selected, Tally reads the assigned Price Level (Wholesale) and auto-fills:

No manual entry of price needed. Suresh cannot accidentally enter ₹16,000 (retail) or ₹15,000 (distributor) for Digital Hub.

CGST+SGST @ 9% each on ₹3,87,500:

Journal Entry:

Sales Voucher for CloudStore (Distributor)

Party: CloudStore Online Pvt Ltd (Price Level: Distributor)

IGST @ 18% on ₹7,50,000 = ₹1,35,000 Invoice Total: ₹8,85,000

Comparison: Same 50 Phones, Different Price Levels

CloudStore gets ₹59,000 less invoice vs retail price — the volume discount benefit.

Price List Validity

Tally supports date-based price lists. You can create:

• A standard price list from April 1, 2025
• A festive season price from October 1 to October 31 (Diwali pricing)
• A new year price effective January 1, 2026

When raising an invoice on a specific date, Tally automatically uses the price list valid for that date. This eliminates the need to manually update prices during promotions.

Example:

Samsung Phone — Wholesale Price:
01-Apr-2025: ₹15,500 (FY start)
01-Oct-2025: ₹15,200 (festive discount)
01-Nov-2025: ₹15,500 (festive ends)

Practice Exercise

Exercise 1: Sunrise Retail wants to add a fourth price level: "Corporate" for IT companies buying directly for employee use (minimum 20 units per order). Samsung phones at ₹15,200, laptops at ₹41,000.

An IT company "Infosys Hyderabad" orders 30 phones. Calculate the invoice and write the journal entry (intrastate, CGST+SGST 9%).

Exercise 2: A salesperson accidentally raises an invoice to CloudStore (Distributor level) at Retail price (₹16,000) for 20 phones instead of ₹15,000.

a) What is the financial impact of this error? b) How would you correct it in Tally?

Gateway → Day Book → Find the invoice → Press Enter to alter
→ Change rate from ₹16,000 to ₹15,000 → Ctrl+A to save

Alt+F8 (Credit Note)
Raise credit note for the ₹20,000 base + ₹3,600 IGST = ₹23,600
Reference: SR/2025-26/XXX overcharge correction

Key Terms

Module Summary

• Price levels in Tally allow different selling prices for different customer categories
• Three tiers for Sunrise Retail: Retail (₹16,000), Wholesale (₹15,500), Distributor (₹15,000) per Samsung phone
• Setup: Enable in F11 → Create Price Levels → Create Price Lists → Assign to customer ledgers
• Once assigned, Tally auto-populates the correct price in every sales voucher for that customer
• Prevents pricing errors — salespeople cannot apply wrong tier to a customer
• Date-based validity supports seasonal promotions and price changes

Quick Quiz

1. When Digital Hub (assigned Wholesale price level) appears in a Sales Voucher, Tally:
   • a) Asks the user to manually choose a price
   • b) Automatically fills ₹15,500 for Samsung phones
   • c) Uses retail price by default
   • d) Leaves the price field blank for the salesperson to enter

2. To enable price levels in Tally, navigate to:
   • a) Gateway → Masters → Price List
   • b) F11 → Inventory Features → Use Price Lists: Yes
   • c) F12 → Voucher Configuration
   • d) Gateway → Reports → Price Analysis

3. CloudStore gets Distributor pricing (₹15,000/phone). Retail is ₹16,000. For a 100-phone order, the difference in sales revenue between retail and distributor pricing is:
   • a) ₹500
   • b) ₹10,000
   • c) ₹1,00,000
   • d) ₹50,000

4. A festive season price list valid October 1-31 is configured in Tally. A sales invoice raised on November 5 will use:
   • a) The festive price (last active price list)
   • b) The regular price list valid for November 5
   • c) Zero price — no price list found
   • d) Average of regular and festive prices

Next up: Module 21 — Bank Reconciliation Statement — Why Cash Book and Pass Book balances differ, and how to prepare the BRS for Sunrise Retail's April 2025 SBI account.