A delivery challan is a legal document that is necessary for transporting goods from one location to another, which may or may not result in sales. These goods may be transported between the same company's branches, warehouse, and headquarters, or to a customer when they are unable to finalize an invoice. This document normally includes item descriptions, order value, sender and recipient addresses, and other important information.
These are some of the scenarios in which a business cannot generate an invoice and use a delivery challan to move goods.
Job Work
Imagine a scenario where you run a toy store and sell handcrafted products. You purchase handcrafted products from suppliers, then paint, bundle, and label them with your brand name for sale. Once you procure and store these products in your warehouse, you transfer them to your own packaging unit, where they get painted, packed, and labeled. Following this process, it will be returned to the warehouse for distribution. In this case, you are transferring products to complete a project, which does not include any sales, so you cannot create an invoice for it. Instead, you can create a delivery challan to transfer the products.
Supply on approval
Imagine you own a wholesale grocery business that buys groceries directly from farms and sells them to all of the big retail stores in your neighborhood. Because grocery sales are primarily reliant on freshness and quality, retailers only confirm sales after ensuring both. You cannot create an invoice since sales of products are not confirmed until after delivery. Therefore, products can only be transported with a delivery challan.
Create a delivery challan
Note
- Challan type is the purpose for which the delivery challan is created.
- Navigate to Sales > Delivery challan, then click the New+ button.
- Enter the required details in the New Delivery Challan form.
- Click Save as Draft.
Stages of Delivery Challan
Stage 1: Once the delivery challan is created, it will be moved to draft status, which means the goods are yet to be dispatched.
Stage 2: After the goods are dispatched for delivery, the delivery challan will be moved to open status.
Stage 3:
i) Upon successful delivery of the goods, the delivery challan will be moved to delivered status.
(or)
ii) If the dispatched goods have been returned, the delivery will be moved to the returned status.
Other Actions
Convert to Invoice
After a successful delivery of the goods, you can convert the delivery challan into an invoice.
- Navigate to Sales > Delivery challan.
- Select the delivery challan and click the three dotted icon and select Convert to Invoice.
Add E-way bill details
The GST regime mandates that the e-Way bill number be displayed on invoices, credit notes, and delivery challans. If the goods you're delivering require an e-Way bill, it must be generated and linked to the delivery challan.
- Navigate to Sales > Delivery Challan.
- Select the delivery challan and click the three dotted icon and select Add e-Way Bill Details.
Record a partial return.
After delivering the goods, if your customer only accepts and purchases some of them, then you can record a return for the remaining items.
For example, imagine you run a grocery store and deliver vegetables to one of your customers. At the time of delivery, your customer might decide to purchase only half the quantity. In this case, you can only issue the invoice for the delivered vegetables, and the rest should be returned to your inventory.
Note
- Some items in your delivery challan must be invoiced, and the delivery challan shouldn't be marked as delivered to record partial returns.
- Select the delivery challan.
- Click the three-dottedicon and select Record Partial Returns.
- In the Returned Items pop-up screen, configure the items and the quantity of those items that are returned, then click Proceed.
Note
- As of now, you can't do more than one partial return. If you want to redo the partial return, you need to undo the existing one and record a new partial return.
Undo partial return
- Select the delivery challan.
- Click the three-dotted icon and select Undo Partial Returns.
