KRA's eTIMS Stock Rule: Is Your Inventory Ready?

On 7 September 2026, the Kenya Revenue Authority issued a public notice asking businesses to keep accurate, up-to-date stock records. KRA is adding a stock management function to eTIMS. Once it is switched on, businesses will be expected to account electronically for every movement of goods: purchases, receipts, sales, transfers, returns, adjustments and disposals.

Manufacturers, through the Kenya Association of Manufacturers, have asked KRA for clear rules and enough time to adjust before the function goes live. Consultations are still going on and no start date has been announced. But the direction is clear, and the businesses that clean up their stock records now will have the easiest time when it arrives.

1. What KRA Is Asking For

Today, eTIMS mostly sees your invoices. With the stock function, it will also see the goods behind them. KRA wants your stock records to show where every item came from and where it went. The aim is to stop tax invoices being issued with no real trade behind them, and to put compliant businesses on an equal footing with those cutting corners.

In practice, that means your stock numbers can no longer be something you fix at year-end. They need to be right every day.

2. Why "Close Enough" Stops Being Good Enough

Most businesses already know their stock records drift. A delivery gets sold before it is recorded as received. A transfer to the branch goes on a piece of paper and never into the system. Damaged goods are thrown away without being written off. None of it felt urgent while the only person looking at those numbers was you.

Once KRA can compare what you bought, what you sold and what you hold, every one of those gaps becomes a question you may have to answer. The warning sign we covered at our Inventory Mastery workshop — selling an item that shows zero or negative stock — goes from an internal headache to a compliance risk.

3. The Questions Manufacturers Are Asking

The manufacturers' concerns are worth reading even if you only trade, because most of them apply to any business that holds stock:

• System integration: how existing ERP and accounting systems will connect to eTIMS
• Acceptable variances: what happens when physical stock does not exactly match the records
• Conversion: how turning raw materials into finished goods should be recorded, including wastage, by-products, damaged goods and samples
• Warehouse transfers: how moving goods between your own locations is documented
• Promotional goods and samples: stock that leaves without a normal sale
• Imports: whether the system will link to the customs system for imported raw materials
• Downtime: what happens when the eTIMS system is down and goods still need to move

KRA has not yet answered all of these. But every one of them depends on the same thing: having the movement recorded properly in your own books first.

4. Five Things to Get Right Now

You do not need to wait for KRA's final rules to start. These habits will be needed whatever the details turn out to be:

• Record goods received before you sell them. Use a goods received note the day stock arrives, so nothing is ever sold from zero.
• Record every transfer. Moving stock between your shop, store and branch should be a recorded entry, not a handwritten note.
• Write off what you lose. Damaged, expired and stolen stock should go through a proper adjustment entry with a reason, not just vanish.
• Count regularly and record the difference. A stock take only helps if the differences you find are entered and explained.
• Record production properly. If you make or assemble anything, record what went in and what came out, including waste.

5. Where TallyPrime Fits

TallyPrime already has a proper entry for each of the movements KRA has listed:

• Receipt notes and delivery notes record goods coming in and going out, linked to the order and the invoice
• Godowns (locations) and stock journals record transfers between your store, shop and branches
• Manufacturing journals and bills of materials record raw materials going in and finished goods, by-products and scrap coming out
• Physical stock vouchers record your stock take, so the system shows the difference between the books and the shelf
• Rejection in and out entries record returns from customers and to suppliers
• Negative stock warnings stop sales against stock you have not recorded

How Tally and other accounting systems will exchange stock data with eTIMS is one of the questions KRA has yet to answer. We are following the consultations and will share an update when KRA publishes the details. In the meantime, clean records in Tally put you in the best position for whatever form that link takes.

The Bottom Line

KRA's stock function is coming, even if the date is not set yet. The businesses that will find it easy are the ones whose books already match their shelves. Start with the five habits above, and if you would like a hand checking how ready your Tally stock records are, we are happy to go through them with you. Reach us on +254 116 246 074 or book a free demo through our website.

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