For manufacturers · AS-2 costing

Accounting software for people who actually make things.

Set the recipe, record what the floor produced, and let the month-end run value your raw material, WIP, finished goods and by-products the AS-2 way. Built for small Indian manufacturers — an oil mill, a food unit, a fabrication shop — not a shop-floor mega-ERP.

Reviewed June 2026
7 min read
CA Anil Agarwal & CA Ayush Agarwal

What you get

The recipe (single-level BOM).What comes out, what goes in, the quantity per unit, and the normal scrap you’d expect.
Production in quantities. Floor staff log inputs consumed and output made, by-products included — no costing maths on the shop floor.
AS-2 valuation at month-end. One run values closing raw material, WIP, finished goods and by-products at net realisable value, then posts the closing-stock entry.
Conversion cost, absorbed properly. Tag your power, labour and factory-overhead ledgers and that pool flows into the cost of what you produced.
Inventory underneath. FIFO or weighted-average per item, across godowns, updated live on every sale and purchase.

AS-2 valuation, done at month-end

Most small manufacturers value closing stock once, at period-end — and that’s exactly how this works. The month-end run takes what the floor produced and consumed, absorbs the conversion-cost pool, and values raw material, WIP, finished goods and by-products at the lower of cost and net realisable value, as AS-2 (Valuation of Inventories) requires. It posts the closing-stock entry for you. Book a late voucher and re-run it: the previous run reverses cleanly, so you never carry a double-counted stock figure into the Balance Sheet.

TatvaBooks vs Tally for manufacturing

Tally is the deep end of Indian manufacturing, and we won’t pretend to match it feature-for-feature. Here’s the honest picture so you can decide.

Dimension	TatvaBooks	Tally
Bill of materials	Single-level BOM — output, inputs, quantity per unit, normal scrap	Multi-level BOM with job-work and sub-assemblies
Inventory valuation	AS-2 periodic costing — RM, WIP, finished goods and by-products at NRV	Perpetual costing with deeper cost categories
Production recording	Log inputs consumed and output made (by-products included) in quantities	Manufacturing journals, multi-stage production and job-work
Conversion cost	Tag power/labour/overhead ledgers; the pool is absorbed into cost of production	Detailed cost-centre and cost-category allocation
Stock granularity	FIFO / weighted-average per item, across multiple godowns	Godown-, batch- and serial-wise tracking
Access & platform	Cloud — open from any browser, multi-user, daily backups	Desktop-first; offline-capable
Plan	Included on the Growth plan (₹1,099/mo)	Perpetual licence (Silver / Gold) + annual TSS

The honest line: if you need multi-level BOM, job-work or batch/serial tracking, Tally goes deeper than we do today. Many manufacturers keep Tally for that and move accounting, GST and payroll to TatvaBooks — see the Tally alternative page.

Who it fits

Process units — oil mills, food and spice units, dairies — where inputs convert into a main output plus by-products.
Job shops and fabrication with a clear single-level recipe per product.
Small assemblers who want correct AS-2 closing stock without running a separate ERP.

Manufacturing is on the Growth plan (₹1,099/month), which also includes payroll (PF, ESI, PT, TDS) and multi-location inventory.

Frequently asked questions

Does TatvaBooks actually do manufacturing accounting?

Yes, the AS-2 way. You define a single-level bill of materials (what comes out, what goes in, the quantity per unit and the normal scrap), your floor staff record production in quantities, and a month-end run values your closing raw material, work-in-progress, finished goods and by-products before posting the closing-stock entry. It's built for businesses that actually make things — an oil mill, a small food unit, a fabrication shop.

Is it good for a small manufacturing business in India?

That's exactly who it's for. The costing follows AS-2 (Valuation of Inventories) so your closing stock stands up to your auditor, without the complexity of a full shop-floor ERP. If you're a small or mid-sized manufacturer who wants correct inventory valuation and clean books in one cloud product, it fits well.

How does AS-2 valuation work here?

At month-end, one run values your closing raw material, WIP, finished goods and by-products at net realisable value and posts the closing-stock entry. Your tagged power, labour and factory-overhead ledgers are absorbed into the cost of what you produced, the way AS-2 asks for. Re-run it and it cleanly reverses the previous run — so a late entry never leaves a double-counted stock figure.

Does it support multi-level BOM, job-work or batch tracking?

Not today — and we'd rather be straight about it. TatvaBooks does single-level BOM with AS-2 periodic costing. Multi-level BOM, job-work, and batch/serial-wise stock go deeper in Tally. If those are core to how you run, the honest answer may be to keep Tally for manufacturing and move your accounting, GST and payroll to TatvaBooks. We'll tell you so on the call.

Which plan includes manufacturing?

Manufacturing (single-level BOM + AS-2 valuation) is on the Growth plan at ₹1,099/month, which also includes payroll for up to 25 employees, multi-location inventory (godowns) and the REST API. Lower plans cover invoicing, GST and basic inventory but not the BOM and AS-2 run.

Does it value inventory FIFO or weighted average, and handle by-products?

Both methods, chosen per item, with cost of goods posted on every sale. By-products are valued in the month-end run, and the normal scrap you'd expect is built into the BOM so your yields stay realistic.

Keep going.

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Manufacturing on the Growth plan

Value your stock the AS-2 way — without a shop-floor ERP.

Talk to a CA on our team. We’ll set up your BOM, show you the month-end valuation run, and tell you honestly if Tally still fits your floor better.

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Accounting software for people who actually make things.

Reviewed June 2026

7 min read

CA Anil Agarwal & CA Ayush Agarwal

What you get

The recipe (single-level BOM).What comes out, what goes in, the quantity per unit, and the normal scrap you’d expect.

Production in quantities. Floor staff log inputs consumed and output made, by-products included — no costing maths on the shop floor.

AS-2 valuation at month-end. One run values closing raw material, WIP, finished goods and by-products at net realisable value, then posts the closing-stock entry.

Conversion cost, absorbed properly. Tag your power, labour and factory-overhead ledgers and that pool flows into the cost of what you produced.

Inventory underneath. FIFO or weighted-average per item, across godowns, updated live on every sale and purchase.