A Rejection Out voucher is used when goods received from a supplier are rejected and returned because of damage, poor quality, incorrect specifications, expired items or excess quantity.
Lesson Objective
Learn how to record Rejection Out vouchers, return goods to suppliers, manage stock adjustments and maintain supplier records in Tally Prime.
1. What is Rejection Out?
Rejection Out records the movement of rejected goods from your warehouse back to the supplier.
Reason
Example
Damaged Goods
Broken Computer Monitor
Wrong Product
Keyboard received instead of Mouse
Poor Quality
Defective Electronic Items
Expired Goods
Expired Medicines
Excess Quantity
Supplier sent 105 instead of 100 units
2. Why is Rejection Out Important?
Maintains accurate inventory.
Reduces supplier disputes.
Records returned goods.
Tracks defective products.
Supports quality control.
Improves warehouse management.
Helps supplier reconciliation.
Provides audit records.
Rejection Out affects inventory movement only. The financial adjustment is generally completed through a Debit Note or Purchase Return.
3. Features of Rejection Out
Feature
Benefit
Supplier Returns
Return rejected goods.
Inventory Adjustment
Reduces stock.
Tracking Numbers
Links with Receipt Note.
Quality Control
Records rejected items.
Supplier Follow-up
Easy replacement tracking.
4. Example of Rejection Out
Soopro Computers received 20 monitors. Two monitors were damaged and returned to the supplier.
Item
Received
Returned
Monitor
20
2
Only the accepted quantity remains in inventory.
5. Rejection Out Workflow
Receive goods from supplier.
Inspect quality and quantity.
Identify rejected items.
Create Rejection Out Voucher.
Return goods to supplier.
Receive replacement or adjustment.
Create Debit Note if required.
Update inventory reports.
Rejection Out is an inventory voucher used for physical stock movement. Financial settlement is handled separately.
6. How to Enable Rejection Out in Tally Prime
Rejection Out is an Inventory Voucher. Before using it, Inventory Vouchers and Tracking Numbers should be enabled in Tally Prime.
Steps
Open Tally Prime.
Press F11 (Features).
Select Inventory Features.
Enable Use Tracking Numbers (Delivery/Receipt Notes).
Enable Use Rejection Out Voucher (if available).
Press Ctrl + A to Save.
After enabling these options, the Rejection Out Voucher becomes available in Inventory Vouchers.
7. Steps to Create a Rejection Out Voucher
Open Voucher Entry.
Select Rejection Out.
Select the Supplier Ledger.
Select the related Receipt Note or Tracking Number.
Select the Stock Item.
Enter the Rejected Quantity.
Select the Godown.
Enter the Reason for Rejection.
Add Narration if required.
Press Ctrl + A to Save.
After saving the Rejection Out Voucher, inventory is reduced by the rejected quantity and the supplier can arrange replacement or issue a credit adjustment.
8. Rejection Status
Rejected goods usually move through different stages until the issue is resolved.
Status
Description
Pending
Rejected goods are waiting to be returned.
Returned
Goods have been sent back to the supplier.
Replacement Received
Supplier has supplied replacement goods.
Closed
The rejection process has been completed.
Maintaining rejection status helps monitor supplier performance and pending replacement requests.
9. Important Fields in Rejection Out Voucher
Field
Description
Date
Date of returning goods.
Supplier Ledger
Name of the supplier.
Tracking Number
Reference to the Receipt Note.
Stock Item
Rejected product.
Rejected Quantity
Number of units returned.
Godown
Warehouse from which goods are returned.
Reason for Rejection
Damage, wrong item, poor quality, expiry etc.
Batch / Serial Number
If applicable.
Narration
Additional remarks.
Complete voucher details make supplier communication and inventory tracking much easier.
10. Common Mistakes While Creating Rejection Out Voucher
Common Mistake
Correct Practice
Selecting the wrong Supplier.
Verify the Supplier Ledger.
Returning incorrect quantity.
Count rejected goods carefully.
Selecting the wrong Stock Item.
Verify the item before saving.
Missing Tracking Number.
Link the voucher with the Receipt Note.
Skipping inspection.
Inspect all goods before returning them.
No reason mentioned.
Clearly specify the rejection reason.
Ignoring damaged goods documentation.
Keep photos or inspection reports if necessary.
Saving without verification.
Review the voucher before pressing Ctrl + A.
Incorrect Rejection Out entries may result in stock differences, supplier disputes and delayed replacements.
11. Real Business Case Studies
Let's understand how Rejection Out is used in different businesses.
Business
Rejected Goods
Reason
Retail Shop
Damaged Grocery Packets
Packing Damage
Medical Store
Expired Medicines
Expiry Date Passed
Computer Institute
Faulty Desktop Computers
Hardware Defect
Electronics Shop
LED TVs
Screen Damage
Furniture Showroom
Office Chairs
Broken Parts
Manufacturing Company
Raw Materials
Poor Quality
Rejection Out helps businesses return defective goods quickly and maintain accurate inventory records.
12. Rejection Out vs Receipt Note vs Debit Note
Rejection Out
Receipt Note
Debit Note
Returns Goods to Supplier
Receives Goods from Supplier
Financial Adjustment for Purchase Return
Inventory Voucher
Inventory Voucher
Accounting Voucher
Stock Decreases
Stock Increases
Supplier Balance Adjusted
Physical Stock Movement
Physical Stock Movement
Financial Entry
Before Debit Note (if required)
Before Purchase Voucher
After Return Confirmation
Easy Trick
📥 Goods Received → Receipt Note
📤 Goods Returned → Rejection Out
💰 Supplier Adjustment → Debit Note
13. Professional Tips & Supplier Quality Control
Inspect every shipment immediately after receipt.
Compare received goods with the Purchase Order.
Count the quantity before accepting delivery.
Check quality, model number and specifications.
Take photographs of damaged goods when required.
Inform the supplier immediately about defects.
Maintain proper Tracking Numbers.
Issue Debit Note for financial adjustment when applicable.
Keep transport and return documents safely.
Review supplier quality performance regularly.
Professional companies maintain a quality inspection report before creating a Rejection Out Voucher.
14. Practical Exercise & Interview Questions
Practical Exercise
Create a Rejection Out Voucher for damaged monitors.
Return expired medicines to the supplier.
Return excess quantity received.
Return goods using the Tracking Number.
Record the rejection reason.
Issue a Debit Note after returning goods.
Check Stock Summary after Rejection Out.
Verify Supplier Outstanding Report.
Interview Questions
What is Rejection Out?
Why is Rejection Out used?
Does Rejection Out create an accounting entry?
When should Rejection Out be created?
Difference between Rejection Out and Receipt Note?
Difference between Rejection Out and Debit Note?
Can Rejection Out be modified?
Can partial quantities be returned?
What is a Tracking Number?
Why is quality inspection important?
Can one voucher contain multiple stock items?
How does Rejection Out affect inventory?
Why should the rejection reason be recorded?
Can damaged goods be replaced?
What documents should accompany returned goods?
How does Rejection Out help supplier management?
What reports are updated after Rejection Out?
How are pending replacements tracked?
What precautions should be taken before returning goods?
Why is Rejection Out important in inventory management?
15. Lesson Summary
Learned the purpose of Rejection Out.
Returned defective goods to suppliers.
Managed inventory adjustments.
Performed supplier quality inspections.
Used Tracking Numbers for returned goods.
Understood the relationship between Rejection Out and Debit Note.
Compared Rejection Out, Receipt Note and Debit Note.
Learned professional warehouse practices.
Completed practical exercises.
Prepared for accounting interviews.
Congratulations!
You can now confidently use Rejection Out in Tally Prime to return defective goods, maintain accurate inventory and improve supplier quality management.