eTIMS for Food and Agro Manufacturers in Kenya: What Your Factory Floor Must Capture
By Isaac Muthui, CEO, Tamalaki Business Network Ltd
Your sales clerk generates an invoice. Your accountant later tries to claim the supplier bills as expenses. Somewhere between the store, the production hall and the accounts office, a batch number, a delivery note or a quantity does not match. Under Kenya's electronic Tax Invoice Management System (eTIMS), that kind of gap is no longer only an internal headache. It can affect whether an invoice is valid and whether an expense is deductible.
This guide is for dairies, millers, juice and edible-oil processors, bakeries, packers and other small and mid-sized manufacturers in Kenya. It is not tax advice. It is a factory-operations view of what you need to capture so that eTIMS invoicing and expense records rest on facts you can defend.
Why eTIMS reaches the factory floor
eTIMS is KRA's system for electronic tax invoices. Manufacturers use it when they sell to customers and when they buy from suppliers. For years of income from 2026 onward, KRA has been clear in public notices that declared income and expenses are checked against eTIMS and related data. In practice, that means:
Sales you declare should be backed by valid eTIMS invoices.
Expenses you claim as deductible should be backed by valid eTIMS invoices from your suppliers.
Figures that do not line up with eTIMS data invite questions.
Weak stock and dispatch records still let invoices go out, but they make volumes and costs hard to explain later. Clean floor records support compliance and honest costing.
Map the documents that feed an invoice
Walk the paper or WhatsApp trail for one typical order:
Customer order — what was ordered, by whom, and when.
Stock availability — was the product finished goods, or did it need a production run?
Production / packing record — which batch or lot was packed, and how much?
Delivery note or gate pass — what left the store, when, and under whose signature?
Tax invoice (eTIMS) — what was billed, at what price, with what tax treatment?
Every step should leave a clear link to the next. If the invoice says 200 cartons of product X but the delivery note and stock issue say 180, you have a problem waiting to surface. Fix the process so that the invoice is raised from the same quantities that left the store, not from memory.
Capture the right fields at intake
Purchases are where many manufacturers lose deductibility. When raw materials, packaging or services arrive:
Record supplier name, delivery note or invoice number, date, item, quantity, unit and store location.
Keep the supplier's eTIMS invoice (or the process to obtain it) with the goods receipt. An expense without a valid eTIMS invoice is a risk for deductibility under the rules KRA has published for the 2026 year of income.
For food and agro plants, also record batch or lot, expiry or best-before where relevant, and QC status (accepted, held, rejected). That is food safety and stock accuracy first; it also supports the story behind the purchase invoice.
Do not leave purchase paperwork in a drawer until month-end. Match goods received to supplier invoices while the delivery is still fresh in people's minds.
Tie production to what you sell
Customers buy finished goods. Your cost of sales and your stock value depend on knowing which inputs became which outputs. For each production run, record at least:
Date and shift
Recipe or product code
Input quantities issued from the store (by batch where you track it)
Output quantity and packing units
Scrap, rework or yield notes
Operator or supervisor sign-off
When you invoice that product, you should know which batches were available. You do not need perfection on day one — only a habit: no dispatch without a stock issue, and no stock issue without a clear product and quantity.
Dispatch and invoicing: one source of truth
The safest pattern for most SME factories is:
Confirm stock is available and QC-released.
Create a delivery note / stock issue for the exact quantities leaving the gate.
Raise the eTIMS invoice from those same quantities and agreed prices.
File the delivery note, invoice and (if required) proof of delivery together.
Avoid raising the invoice from a verbal order while the store issues a different quantity. Avoid backdating dispatches to match an invoice after the goods have already gone. Those shortcuts create mismatches that are hard to explain later.
If you sell on credit, keep customer statements reconciled to eTIMS invoices. If you sell cash-and-carry, still issue the electronic tax invoice; cash sales are not an excuse to skip the system.
A monthly reconciliation that protects you
Once a month, before you close the books, assign one person a short reconciliation:
Sales: List eTIMS invoices for the month. Match totals and key invoices to your sales ledger and to delivery notes. Investigate gaps.
Purchases: List supplier eTIMS invoices you intend to claim. Match them to goods received notes. Flag invoices with no receipt, and receipts with no invoice.
Stock: Compare physical or system stock for a few high-value items to movements (receipts, issues, production, dispatches). Large unexplained gaps usually mean missing documents, not magic.
Adjustments: Credit notes, returns and damaged stock should have their own documents and, where required, the matching eTIMS treatment.
Sign-off: Production, stores and accounts each confirm they have reviewed their part.
This is not busywork. It is how you find a missing supplier invoice or a duplicated sale while you can still fix it.
Common factory pitfalls
WhatsApp-only orders with no link to a delivery note or invoice.
Shared eTIMS login, so nobody knows who raised what.
Stock books that ignore production, so finished goods appear without a run sheet.
Supplier invoices filed late, especially for cash buys of packaging and consumables.
Informal returns — stock adjusted by eye, invoice trail left untouched.
Each is fixable with a written rule and a named owner.
What "good enough" looks like in 30 days
Week 1: Draw the order-to-invoice and purchase-to-stock flows. Name owners for invoicing, goods receipt and reconciliation.
Week 2: Standardise goods received and delivery notes (date, item, quantity, batch if used, references).
Week 3: Match every purchase claim to a supplier eTIMS invoice and a receipt. Chase gaps weekly.
Week 4: Run the first full monthly reconciliation, list the top three mismatches, and fix their causes.
Where a manufacturing system helps
Spreadsheets and paper can work at very small scale. They break when orders, batches and invoices multiply. A manufacturing ERP connects stock, production, quality holds and sales documents so the quantity on the eTIMS invoice matches what left the store.
FactoraERP is built for food, agro and SME manufacturers in East Africa. It keeps intake, production, stock and dispatch in one place — the backbone tax invoicing depends on. To see how it could fit your plant, visit factoraerp.com.
Isaac Muthui, CEO, Tamalaki Business Network Ltd
Originally published at factoraerp.com.