Godown and Stock Category
Manage inventory across multiple storage locations and organise products by brand category — Sunrise Retail's two-location setup
Prerequisites: Module 14 — Purchase and Sales Returns
Enabling Stock Category in Tally — Do This First
Stock Category is OFF by default in a fresh Tally Prime install. If you skip this step, the "Category" field simply won't appear when you create or alter a Stock Item — and you'll wonder why this whole lesson seems to talk about a field that doesn't exist on your screen.
Two equivalent paths to enable it:
Path A — Company-wide setting (recommended):
Path B — Per-screen, when you're already inside a Stock Item:
Path B is useful when you've already started entering stock items and don't want to break to Gateway — F12 toggles the field on for the current and future Stock Item screens. Once Path A or B is set, the Category field appears as a new line in every Stock Item Master, sitting just below "Stock Group" and above "Units of Measure".
Verify it worked:
If you don't see the field, Path A hasn't been saved properly — revisit F11 → Inventory Features and confirm "Maintain Multiple Stock Categories" reads Yes.
Learning Objectives
By the end of this module, you will be able to:
- Create and manage multiple godowns in Tally
- Record stock transfers between godowns using Stock Journal
- Create stock categories for secondary classification
- Generate godown-wise and category-wise inventory reports
What Is a Godown?
A Godown in Tally is any physical location where stock is kept. It could be:
- A warehouse where goods arrive from suppliers
- A showroom where goods are displayed and sold from
- A branch store in another part of the city
- A consignment location at a retailer's premises
By default, Tally uses a single godown called "Main Location." For businesses with multiple storage points, you need to enable and configure multiple godowns.
Why Multiple Godowns Matter
| Problem Without Multiple Godowns | Solution With Multiple Godowns |
|---|---|
| Can't tell which location has how much stock | Instant stock-by-location report |
| Can't process a sale from a specific store | Sales from each showroom tracked separately |
| No visibility into stock movement between locations | Inter-godown transfer report |
| Theft or discrepancy harder to detect | Each location has its own stock ledger |
Stock Categories — Secondary Classification
While Stock Groups provide the primary hierarchy (e.g., Consumer Electronics → Mobile Phones), Stock Categories provide a secondary classification that cuts across groups.
Stock Group (primary): Organises by product type Stock Category (secondary): Organises by attribute — brand, season, segment, etc.
Example for Sunrise Retail:
- Primary Group: Mobile Phones
- Stock Category: Samsung, Apple, OnePlus, Xiaomi
When you run a category-wise report, you see all Samsung products across all groups (phones + accessories + covers) in one place — regardless of their stock group.
Sunrise Retail — Case Study Application
💼 Sunrise Retail Pvt Ltd — Expanding to Two Locations
Sunrise Retail opens a showroom in HITEC City to serve the IT corridor market. Now they have:
- Main Warehouse (Madhapur) — receives bulk stock from suppliers
- HITEC City Showroom — display + point-of-sale for IT park employees
Step 1: Enable Multiple Godowns
Step 2: Create the Godowns
Main Warehouse (already exists — just rename if needed):
| Field | Value |
|---|---|
| Name | Main Warehouse — Madhapur |
| Under | Primary |
Create HITEC City Showroom:
| Field | Value |
|---|---|
| Name | HITEC City Showroom |
| Under | Primary |
| Contact Person | Suresh Babu |
Step 3: Create Stock Categories by Brand
Create each:
| Category Name | Under |
|---|---|
| Samsung | Primary |
| Dell | Primary |
| Apple | Primary |
| Generic / Others | Primary |
Link categories to stock items:
While creating or altering each Stock Item, set the Stock Category:
Step 4: Opening Stock — Godown-wise Allocation
When entering opening stock for Samsung Mobile Phones (97 Nos after April movements):
Step 5: Inter-Godown Stock Transfer
On May 1, Sunrise Retail transfers 10 Samsung phones from Main Warehouse to HITEC City Showroom (for display and sale).
Stock Journal Voucher:
Source (From):
| Item | Godown | Qty | Rate | Amount |
|---|---|---|---|---|
| Samsung Mobile Phones | Main Warehouse — Madhapur | 10 Nos | ₹12,000 | ₹1,20,000 |
Destination (To):
| Item | Godown | Qty | Rate | Amount |
|---|---|---|---|---|
| Samsung Mobile Phones | HITEC City Showroom | 10 Nos | ₹12,000 | ₹1,20,000 |
Journal entry generated automatically:
| Account | Dr (₹) | Cr (₹) |
|---|---|---|
| Samsung Mobile Phones — HITEC City Showroom | 1,20,000 | |
| To Samsung Mobile Phones — Main Warehouse | 1,20,000 |
Important: This is an inventory journal, not an accounting journal. It does not affect the P&L or Balance Sheet at all — total stock value remains unchanged. Only the location of stock changes.
Stock position after transfer:
| Item | Main Warehouse | HITEC Showroom | Total |
|---|---|---|---|
| Samsung Mobile Phones | 87 Nos | 10 Nos | 97 Nos |
Step 6: Godown-wise Stock Reports
This report shows:
| Godown | Items | Qty | Value |
|---|---|---|---|
| Main Warehouse — Madhapur | Samsung Phones | 87 Nos | ₹10,44,000 |
| HITEC City Showroom | Samsung Phones | 10 Nos | ₹1,20,000 |
| Total | 97 Nos | ₹11,64,000 |
Stock Category Report
| Category | Items | Total Value |
|---|---|---|
| Samsung | Phones: 97 Nos | ₹11,64,000 |
| Dell | Laptops: 20 Nos | ₹7,00,000 |
| Apple | Tablets: 15 Nos | ₹4,20,000 |
| Generic | Accessories: — | — |
Selling from a Specific Godown
When Suresh makes a sale from the HITEC City Showroom, the Sales Voucher must specify the godown:
After this sale:
- HITEC City Showroom: 10 − 2 = 8 Nos
- Total: 87 + 8 = 95 Nos
The system ensures you cannot sell more from a godown than it physically holds. If you try to sell 15 phones from HITEC (which only has 10), Tally shows a warning.
Practice Exercise
Exercise 1: Sunrise Retail receives a new shipment of 30 Dell laptops at Main Warehouse. They then transfer 8 laptops to HITEC City Showroom for display. Write the Stock Journal entry for the transfer.
Click to reveal solution
Stock Journal — Inter-Godown Transfer:
Source (From):
| Item | Godown | Qty | Rate | Amount |
|---|---|---|---|---|
| Dell Laptops | Main Warehouse — Madhapur | 8 Nos | ₹35,000 | ₹2,80,000 |
Destination (To):
| Item | Godown | Qty | Rate | Amount |
|---|---|---|---|---|
| Dell Laptops | HITEC City Showroom | 8 Nos | ₹35,000 | ₹2,80,000 |
Key points:
- No accounting journal entry — this is inventory only
- No P&L or Balance Sheet impact
- Total Dell laptops remains the same (e.g., 30 − 8 = 22 at Main, 8 at HITEC = 30 total)
- Use Inventory Vouchers → Alt+F7 (Stock Journal) — NOT a payment or purchase voucher
Exercise 2: Why would Sunrise Retail assign a "stock category" of Samsung to phones, and how does this help management?
Click to reveal solution
Why assign Samsung as a category: Stock categories provide a cross-cutting view that Stock Groups don't. While the Stock Group hierarchy shows "Consumer Electronics → Mobile Phones → Samsung Mobile Phones," a category report groups ALL Samsung products together — Samsung phones, Samsung accessories, Samsung covers — regardless of which sub-group they belong to.
How it helps management:
- Brand performance analysis — How much Samsung stock do we have vs Apple vs Dell? What's selling faster by brand?
- Supplier negotiation — If Samsung items move faster, Sunrise Retail knows to stock more Samsung and negotiate better terms with their Samsung distributor.
- Category-wise profit — If Samsung phones have 33% margin and Apple tablets have 25%, management can prioritise Samsung.
- Seasonal planning — If Samsung launches a new model, quickly identify what old Samsung stock needs clearance discounts.
Category reports are accessed at Gateway → Reports → Inventory → Stock Category Summary.
Key Terms
| Term | Meaning |
|---|---|
| Godown | A physical storage location in Tally (warehouse, showroom, branch) |
| Stock Journal | Inventory voucher for recording inter-godown transfers (no accounting impact) |
| Stock Category | Secondary classification for stock items (e.g., by brand, season) |
| Godown Summary | Report showing stock quantity and value by location |
| Inter-Godown Transfer | Movement of stock from one Tally godown to another |
| Source Godown | The location stock is moving FROM in a transfer |
| Destination Godown | The location stock is moving TO in a transfer |
Module Summary
- Multiple godowns allow location-wise tracking of stock — essential for multi-branch businesses
- Stock transfer between godowns uses Stock Journal (Alt+F7) — no accounting entry, just inventory movement
- Stock Categories provide brand/attribute-level classification across all stock groups
- Selling from a specific godown ensures the right location's stock is reduced
- Tally prevents overselling from a godown — if HITEC City Showroom has 10 phones, you cannot sell 15 from it
- Godown Summary and Category Summary are key reports for inventory management
Quick Quiz
- A Stock Journal entry for inter-godown transfer affects:
- a) Both the P&L and Balance Sheet
- b) Only the Balance Sheet (inventory value)
- c) Neither P&L nor Balance Sheet — only the inventory location
- d) Only the P&L (stock movement expense)
Show answer
c) Neither P&L nor Balance Sheet — a Stock Journal is purely an inventory movement; total stock value is unchanged and no expense or income is created.
- Sunrise Retail has 10 phones at HITEC Showroom. An attempt to sell 12 phones from HITEC will:
- a) Process successfully — Tally allows overdraft
- b) Show a warning/error — cannot sell more than godown holds
- c) Automatically pull from Main Warehouse
- d) Create a negative stock balance
Show answer
b) Show a warning/error — Tally flags negative stock at the godown level; it will not silently pull from another location.
- Stock Category and Stock Group are:
- a) The same thing — different names
- b) Both used for primary classification
- c) Different: Group = primary hierarchy by type; Category = secondary attribute by brand/etc.
- d) Both are mandatory in Tally
Show answer
c) Different — Stock Group is the primary type hierarchy (Consumer Electronics → Mobile Phones); Stock Category is a secondary cut by brand/season/attribute (Samsung, Dell, Apple).
- To enable multiple godowns in Tally, navigate to:
- a) Gateway → Masters → Inventory → Godowns
- b) F11 → Inventory Features → Maintain Multiple Godowns: Yes
- c) Gateway → Reports → Godown Summary
- d) F12 → Inventory Configuration
Show answer
b) F11 → Inventory Features → Maintain Multiple Godowns: Yes — you must enable the feature first; then the Godowns master becomes meaningful.
Next: Module 16 — Trade Discount — How TechWorld's 5% bulk discount works: why trade discount never appears as a separate accounting entry, and how GST is calculated on the net value instead of the list price.