Delivery challans

When a challan is the right document

A delivery challan records that goods moved, not that a sale was billed. Indian businesses use one in situations like these:

• Goods sent on approval, where the customer may return part of them.
• Material sent to a job worker for processing.
• A large order delivered to a site in several lots before the final invoice.
• Stock moved between your own godowns or shops.
• Samples or replacement goods sent before the paperwork is settled.

Whether a challan is enough under GST, or whether a tax invoice is needed at the time of removal, depends on the case. Our guides on delivery challans under GST and when a challan is required go through the common situations. This is general information, not tax advice; check current rules on cbic-gst.gov.in.

What Cashflow OS gives you

• Your own look: logo, colours, letterhead and signature on every challan, set once for the company.
• Bank and UPI details printed on the document, as on your other documents, if you want them there.
• Items from Tally: the items on the challan are your Tally stock items, so names and units match your books.
• Sharing: send the challan as a PDF on WhatsApp or by email, straight from the phone or the web app.
• The Tally side: delivery notes are one of the voucher types Cashflow OS can create in Tally through the connector, once the owner switches writing on.

The challan is part of the same documents set as quotations, proforma invoices and purchase orders, so all your paperwork looks like it comes from one business.

A worked example: a site delivered in three lots

A tiles dealer has an order for a housing project: 1,800 boxes of floor tiles, delivered as the floors are ready. The billing is agreed at the end, but the builder's site engineer needs a document with every truck.

Each challan goes on WhatsApp to the site engineer and the builder's office the moment the truck leaves, so nobody argues later about whether lot two was 700 or 650 boxes. If the dealer also posts each lot as a delivery note in Tally, the stock summary shows the boxes as gone from the godown on the right day, not on the day the final bill is made.

From challan to invoice

The risk with challans is not the challan; it is the bill that never follows. Goods go out on approval, the customer keeps most of them, and three months later nobody remembers to invoice. A short month-end routine prevents this:

1. List every challan issued in the month.
2. Mark each as billed, returned, or still open.
3. For open ones, call the customer and agree what will be billed and what will come back.
4. Raise the invoice in Tally, or from the app if writing is switched on, and quote the challan numbers on it.

A quick figure shows why this matters. If a business sends goods on approval worth ₹4,00,000 a month and even 5% slips through unbilled, that is ₹20,000 of stock gone every month with no receivable behind it. Over a year it adds up to a figure that usually surfaces only at the stock audit, when it is hardest to recover.

Who uses it

• Dispatch and godown staff who need a clean document for each vehicle.
• Distributors and stockists moving goods between locations.
• Manufacturers sending material to job workers.
• Showrooms delivering furniture, appliances or fittings before the final settlement.

Tips for clean challans

• Number them in one series and do not reuse numbers; it makes reconciliation with invoices far easier later.
• Put the vehicle and the receiver's name in the notes where your format allows, so the proof of delivery is clear.
• Ask for an acknowledgement on WhatsApp when the goods arrive; a reply of "received" against the PDF is a useful record.
• Close the loop. Every challan should end up either billed, returned or explained. Review open ones at month-end.
• Keep Tally in step. If goods leave stock, post the delivery note so the stock summary stays true.

What it does not do

• The challan is not an e-way bill. Where the movement needs one, generate it on the portal as usual, or from the synced Tally voucher on plans that include e-way bills. If a movement needs one, generate it on the e-way bill portal.
• It does not decide whether a challan or a tax invoice is legally required; that depends on the transaction.
• It does not write into Tally unless the owner has switched writing on and the connector is running.
• It is not a transport or route-tracking system for vehicles.