Price levels and price lists in Tally

Why fixed rates matter

When billing staff type rates from memory or a printed sheet, two dealers of the same type end up paying different prices, discounts creep up, and nobody notices until margins fall. Defining rates once in Tally and letting them fill automatically removes the guesswork. The price list management guide covers the business side of designing tiers.

Price levels: the tiers

Price levels are enabled in the company's inventory features and given names that match your trade, for example:

• Distributor for sub-distributors buying in bulk.
• Dealer for regular retailers on credit.
• Retail for walk-in customers.

Each party ledger can carry a default price level, so when you bill that party, Tally uses their tier. Billing staff can still choose a level in the invoice where needed.

Price lists: the rates

Price lists are created for stock groups (or items) at a price level, with an applicable-from date. For each item you set the rate, an optional discount percentage, and optional quantity slabs. Because lists are dated, a price revision is a new list from a new date, and old invoices keep their old rates.

Worked example: an electrical distributor

A dealer ordering 60 switches gets ₹65 each automatically; a retail customer buying 2 pays ₹85. If the company revises prices from 1 December, a new price list from that date replaces these rates for later invoices only.

Discounts and schemes

Price lists can carry a discount percentage along with the rate, which prints on the invoice and keeps the list price visible. This is useful where dealers expect to see "MRP less 30%". More complex schemes, such as free goods on quantity or turnover discounts at quarter end, are usually handled outside the price list, through separate entries or credit notes; see managing dealer schemes and discounts. Where discounts reduce the taxable value on the invoice, GST is on the discounted value; post-sale discounts have their own GST conditions. This is general information, not tax advice.

Revising prices without chaos

When a manufacturer announces a price increase from the 1st, distributors scramble to update rates. A calm process:

1. Get the new rate sheet a few days early and prepare new price lists dated from the effective date.
2. Check a sample of items at each level against the sheet before the date.
3. Tell salespeople and key dealers the date and that orders confirmed before it will be honoured at old rates, if that is your policy.
4. On the effective date, bill a test invoice at each level to confirm the new rates fill.
5. Keep the old lists; they explain old invoices.

Pending sales orders taken at old rates need a decision: honour, revise with the dealer's agreement, or cancel. Decide before billing them, not at the counter.

Checking the lists are followed

Once a month, compare billed rates with list rates for your top items. A simple way is to look at the sales register by item and check the average rate against the list. Differences point to overrides at billing, wrong price levels on party ledgers, or schemes given informally. Fix the cause, not just the invoice.

Common pitfalls

• Party has no price level set, so staff pick one each time, inconsistently.
• Old lists left active for some groups after a revision, mixing old and new rates.
• Too many levels. Three or four tiers are usually enough; a level per customer defeats the purpose.
• Rates overridden at billing without approval, so the list exists but is not followed.
• Stock group design ignored, making lists hard to maintain; see stock groups and categories.

Price lists in Cashflow OS

Cashflow OS has its own price lists module for the selling side: dealer types such as A, B and C with layered discount rules that fill rates automatically in quotations, orders and vouchers created from the app. This helps salespeople in the field quote and order at the correct rate, and the resulting sales orders and invoices are posted to Tally once writing is switched on. Tally's own price levels continue to work for billing done in Tally. See price lists.