8/2/2019 51202625 Tally Manual

1/16

Accounting is a Finance support system, that:

y Records transacationsy Classifies transactions and eventsy Expresses transactions in monetary termsy Helps to monitor the financial performance and condition of the businessy Helps to evaluate the businessy Helps to establish control the business

The main objective of any business is to make profit. Profit is difference between the price at which the

trader purchases goods and sells the same.

1. Need for Accountingy To know the true profit or loss of the business for a particular period.y To have a permanent record for all metcantile transactions taken place in the businessy To know the financial position of the business at any point of time.y To know the amounts due to suppliers from whom the goods are bought on credit.y To know the amounts due from the customers to whom the goods sold on credit.y To keep all the changes in the values of assets and liabilities on any date.y To know whether the line of business is profitable or not, if not, reasons for the same.y To keep a watch on expenses with a view to minimize the same.y To provide relevant information for legal and tax purposes when required.

2. Accounting Definition:Accounting is called as Language of Business. Accounting has been defined as The art of

recording, classifying and summarizing in a significant manner and in terms of money transactions

and events which are of financial character and interpreting the results.

Analysis of Definition:

Accounting is the art of

- Recording : The first stage of accounting which deals with the recording/journalizing thetransactions.

- Classifying : Classifying into expenses, income, assets, liabilities- Summarizing : Summarizing the data into trial balance for preference of Financial Statements- Interpreting

8/2/2019 51202625 Tally Manual

2/16

3. Types of Accounts:

1)Personal Account: Deals with person (artificial / natural)

Rule: Debit The receiver; Credit- The giver

2)Real Account: Deals with properties

Rule: Debit- What comes in; Credit- What goes out.

3)Nominal Account: Deals with expenses, losses, incomes and gains.

Rule: Debit All expenses and losses; Credit- All incomes and gains

8/2/2019 51202625 Tally Manual

3/16

INTRODUCTION TO TALLY

Introduction:

y Late Shri S S Goenka was the founder of the company Peutronics Pvt. Ltd. Set up tally softwarebusiness in 1986.

y Tally is the undisputed kind of all financial accounting packages available in India.y Capable of handling all kinds of transactions.y A post transaction system follows the traditional method of accounting, i.e the payment is first

made on the basis of existing accounting methods, and that information is fed into Tally.

y Covers a wide area can be used by the owner, financial controller, accountant, manager or anauditor.

y Is both accurate and convenient to use even if we are not well versed with the accounting, wecan still use and at the same time become known to accounting methods.

Tally versions:

Version Based on Features

1. Tally 4.5 (1988) MS DOS Single user tally silver.2. Tally 5.4 (1995) MS Windows Multi user tally Gold.3. Tally 6.3 (2000) Internet Online filing, auditing, import and export of files.4. Tally 7.2 (2005) MS Windows VAT, TDS, & Service Tax.5. Tally 8.1 (2006) MS Windows FBT & Excise Duty.6. Tally 9.0 (2007) MS Windows Payroll, Multi language and extra formatting.

8/2/2019 51202625 Tally Manual

4/16

Starting with tally:

Step 1:

Select company (F1): To select the particular company which is already Existed/Created.

Or

Create company:

y Company Information Menu.y The right half of the Gateway of Tally area displays the company info. Menuy This menu has the following three options:

i) Select Companyii) Create Companyiii) Quit

y In order to create a new company for accounting, following screen will appear: Name: Give the name of the company Mailing name, address etc. Email Maintain : Accounts / Accounts with inventory (as required) Financial year: Give the financial year Books beginning year: Give the start date of the books Tally Vault password: Leave the option blank and never put and vault password. Security Control: If required Accept/Reject: Accept the screen.

Alter the company:

A created company details can be modified at a later time through keys Alt + F3, or choosing the

alter option from the company info tab on the right hand bar on the screen. A company has been

created with the above information.

Short cut keys:

F1 : Select company

Alt + F1 : Shut Company

F2 : Change current date

Alt + F2 : Change current period

F3 : Change current company

Alt+F3 : Company Info

Ctrl + A : Save

8/2/2019 51202625 Tally Manual

5/16

Ctrl + N : Calculator

Ctrl + M : Gateway of tally

Ctrl + Q/esc: Exit from Tally screen

Altr + D : Delete

F11 : Company Features (Accounting, Inventory & Taxation Features)

F12 : Company Configuration

Step 2:

Creation of Accounts (Ledgers)

After company creation comes to

Gateway of Tally

Select Accounts Info

Select Ledger

Create

When we create a company, Tally automatically creates 2 accounts:

1. Cash accounts2. Profit & Loss Account

Enter the name ofledger/account in the name column, select the group from the list of groups and

enter the opening balance in opening balance column and accept the ledger.

To View reports:

After ledger creation comes to

Gateway of Tally Select Display Trial Balance Press Alt + F1 (To view full details)

Creation of Groups:

After company creation, come to

Gateway of Tally Accounts Info Select Group Create

Type the group name and select the under option and accept the group.

8/2/2019 51202625 Tally Manual

6/16

Reports:

To view the details of the Groups created, come to

Gateway of Tally Select Display Select Accounts Books Select Group Summary Select Particulars

under Groups Press Alt + F1 (to view full details)

VOUCHER ENTRY

A voucher is the primary document for recording the financial transactions. Recording and analysis

process in tally is a very easy process for different types of transactions because tally provides 16

different predefined voucher formats. Theses predefined vouchers fulfill our daily transaction needs.

Tally voucher are of two types:

y Accounting Vouchersy Inventory VouchersAccounting Vouchers: Accounting vouchers are classified into 8 types of vouchers, but we mostly use 6

types.

1. Contra Voucher (F4):C

ontra voucher is used forC

ash transactions with Banks i.eC

ash withdrawls &

Cash Deposits.

Eg: i) Cash withdrawn from bank for office use;

ii) Cash deposits into bank

To View the contra voucher entry screen and pass contra entries,

Go to Gateway of Tally Accounting Voucher F4: Contra from the button bar (or) Press F4.

2. Payment Voucher (F5):Payment voucher is used for Cash/Bank payments. When we pay cash/cheque to the party for

expenses, this type of voucher is used. By default, the payment entry screen appears in

Single Entry Mode.To view the Payment Voucher Entry Screen and pass payment entries.

Go to Gateway of Tally Accounting Voucher F5: Payment from the button bar (or) Press F5.

3. Receipt Voucher (F6):This voucher is used for Bank/Cash receipts. When we receive cash/cheque from the

party/income, this voucher is used.

8/2/2019 51202625 Tally Manual

7/16

To view the Receipt Voucher Entry Screen and pass r3ceipt entries.

Go to Gateway of Tally Accounting Voucher F6: Receipt from the button bar (or) Press F6.

4. Journal Voucher (F7):Journal Voucher is used for entries other than Cash/Bank and Purchase of goods/Sale of Goods.

For Eg. There may be outstanding salaries or Interest or prepaid insurance etc., for these

transactions Journal Voucher is used.

To view the Journal Voucher entry screen:

Go to Gateway of Tally Accounting Voucher F7: Journal from the button bar (or) Press F7.

5. Sales voucher (F8):This voucher is used for Cash/credit sales. It means when we sell goods to the party for cash or

credit, we record the entry though sales voucher.

To view the Sales Voucher Entry Screen and pass sales entries.

Go to Gateway of Tally Accounting Voucher F8: Sales from the button bar (or) Press F8.

6. Purchase Voucher (F9):This voucher is used for Cash/Credit Purchases. It means when we purchase foods from any

supplier for cash or credit then we record entry through purchase voucher.

To view the Purchase Voucher Entry Screen and pass Purchase entries.

Go to Gateway of Tally Accounting Voucher F9: Purchase from the button bar (or) Press F9.

Reports:

To view the details of transactions after recording, come to

Gateway of Tally Select Display Select Day Book Press Alt + F2 (only to change current period)

8/2/2019 51202625 Tally Manual

8/16

PURCHASE RETURNS & SALES RETURNS

When we receive the goods from customer and the same return the same return the goods to the

supplier is called sales return, purchase return. When we want to enter this type of transaction in

Tally, we must activate this feature in tally.

F11 Company features- F1 accounting features Use debit/credit note yes accept the screen Ctr+A

Debit note is used for purchase return transactions and credit notes is used for sales return

transactions.

Theses transaction are also entered into vouchers.

Debit Note (Ctrl + F9)

Debit: The Creditor (party name); Credit: The purchase return ledgers.

Credit Note (Ctrl + F8)

Debit: The sales returns ledger; Credit: The debtor (party name)

BANK RECONCILIATION STATEMENT

Reconciling the companys Bank accounts with the bankers statement is a regular task if accounting. In

Tally, Reconciling of Bank account facilitates the following:

Ability to check back the correctness of reconciliation

Tally uses date to mark against the voucher. For instance, if we issue a cheque on 8th

April, and our

bank clears it on 19th April, we would set the Bank date for the voucher as 19

th April. This means that

when we need to check back later, whether the entry made by us is correct, we will only need to

verify the bank statements of the 19th

April.

Recovering the reconciliation of any date

The bank reconciliation plays an important role in auditing and verification of the correctness of

accounts at the year end. However, it is not a real-time task means auditors do not do it on the first

day of the next year.

8/2/2019 51202625 Tally Manual

9/16

A quick experiment with Reconciliation will show what it all means. Here it is how we go about it. Take

the monthly summary of any bank book.

We can choose a Bank book from Balance Sheet or Trial Balance or Come to

Gateway of Tally Display Account Books Cash/Bank Books

Bring the cursor to the first month (i.e April), and press enter. This brings up the vouchers for the month

of April. Since this is a Bank Account, we can click on additional button; F5: Reconcile on the button

bar to the right or Press F5.

Display goes to the Reconciliation Mode, which can be edited. The cursor automatically blink at Bank

Date. The screen shows at the bottom:

i. Balance as per company Booksii. Amounts not reflected in Bankiii. Balances as per Bank

The balance as per company books reflects the balance as on the last date.

The amount not reflected in Bank are the debit and credit sums up all those vouchers, whose Bank date

is either blank or later that 30-Apr (i.e these vouchers have not yet been reflected in the bank

statement).

The balance as per bank is the net effect of the book balance and the amounts not reflected in the bank

which must be equal to the balance in the bank statements.

As we mark the individual vouchers by setting the bank date, we will notice that the reconciliation at the

bottom if the screen keeps updatizng the changes. Once this process is complete, press Ctrl + A. or

enter as many times as necessary to skip over the unmarked vouchers and accept the screen.

The nect time when we opt for reconciliation, the screen displays only those vouchers that remain

unreconciled.

We can also display vouchers that are already marked as reconciled in case we need to edit the marking

by using F12: Configure.

Set show reconciled vouchers also to yes to see the reconciled vouchers.

Set Allow back dated Reconciliation to Yes to enter bank date which is earlier than the voucher date.

We can also display vouchers that are already marked as reconciled, in case we need to edit the

marking, by using F12: Configure

Press Alt + P or click on the print button to print your reconciliation report.

8/2/2019 51202625 Tally Manual

10/16

Bill Wise Details:

Bill Wise details are affected only for party accounts. For ledger accounts classified under sundry

debtors, sundry creditors, activate Bill Wise details to track each invoice, and adjust the bull

payments Bill by Bill.

When we make sales or purchase voucher with Bill Wise details, tally prompts to identify the invoice

with an appropriate reference number. The reference can be used to allocate payments to the

correct invoice to maintain an accurate account of outstanding.

Bill Wise details, sub screen comes up for party accounts during receipt/payment voucher entry or

purchase/sale voucher entry.

To activate Bill Wise Details:

Set Maintain Bill Wise Details to Yes in F11: Feature Accounting Feature.

BillReference are of four types:

1. Advance 2. New Ref. 3. Against Ref. 4. On AccountAdvance

This can be selected when the money is received or paid in advance. We can adjust this advance amount

while making the sale or purchase entry.

New Reference

We select this for new transactions for a new bill raised on our customer or raised on us by our supplier.

If we mark the bill as a new reference; it is added to the list of outstandings.

Against Reference

Select this when adjusting a previous reference. Mark a bill as new reference and adjust its payment by

marking the payment against reference. When selecting against reference, tally gives a list of

pending reference (bills) for the party from which we select the relevant.

On Account

On account is selected when we are unable to mark a payment or a receipt against specific pending

references.

Maintaining Bill Wise details helps us to obtain information on Pending bills, bills due, overdue bills

etc. and reports such as outstanding analysis and ageing analysis. To view reports:

Gateway of Tally Display Statement of Accounts Outstanding

8/2/2019 51202625 Tally Manual

11/16

COST CENTRES

A cost centre is a unit to which transactions (generally, revenue) can be allocated. When only costs or

expenses are allocated to these units, they are referred to as cost centres. When profits are also

allocated to these units, they become Profit Centre. We can now obtain a Profit & Loss Account of each

such Profit Centre.

Cost Centre in Tally allows us an additional dimentsion to a transaction where a legder account indicates

the nature of the transaction. It does not readily disclose which part of the organization was involved in

the transaction.

By providing Cost centre, a transaction can be allocated to it, which would enable extraction of all

transactions for a cost centre. Tally gives us the cost centre break up of each transaction as well as

details of transactions for each cost centre.

Cost Centre in our Organization:

SIPL HO

Erode

Madurai

Trichy

Adharam Energy

IFMR

Employee of the company, who work in each cost centre act as a sub cost centre, which affect the cost

centre they are related to.

Use of Cost Centre:

We can classify Cost Centre just as how we classified Group/ledger accounts. We can have PrimaryCost

Centre and severallevels ofCost Centre under each Primary Cost Centre (SIPL HO)

Any kind of transaction of each Cost centre will be saved/entered under the respective cost centre so asto have a detailed report of all the transactions of that cost centre and expenses and income related to

it and finally obtain the Profit & Loss Accunt.

8/2/2019 51202625 Tally Manual

12/16

To make entries using cost centre,

Go to Accounting Voucher Select the type of Voucher you want to enter.

Example:

You are recording a payment transaction for Erode Branch, where the payment was made by Selvam

(the centre head), and the expenses include:

Daily allowance Rs. 150/-

Telephone charges 34/-

Courier Rs. 25/-

TravelHotel 100/-

Allocate expenditure incurred on sales by the salesmen, as well as the sales generated by them, directly

to their cost centre. The allocation is done respectively at the time of transaction entry. This prevents

allocation problems at the end of the period.

By allocating expenses and sales transactions to the salesman, we are setting up a valuable informationsystem that tracks the performance of our salesmen.

8/2/2019 51202625 Tally Manual

13/16

Reports:

To view the report on cost centers and cost category on category summary, Go to:

Gateway of Tally Display Statement of Accounts Cost Centre Category Summary

Periodical Reporting processes to be carried on and submitted to the higher authorities:

1) Weekly:(a)Cash & Bank statement: Pass all the bank transactions and make reports of

the weekly bank transaction.

GWT Display Account Ledgers State Bank of India/Cash

Select the necessary period of report required.

(b)Accounts Payable:(i) Purchases: Check for any recent purchases made and the payments

made against it and anything due for the same. Incase anything is due,

arrange for making payments immediately.

8/2/2019 51202625 Tally Manual

14/16

To check the accounts payable,GWT Display Statement of Accounts Outstanding Payables

Accounts Receivable:

Check for all the accounts that is due to be received. This generally includes sales

made on credit. This helps us to know the amounts to be received, and hence

follow up has to be done in order to receive the payment.

To check the accounts receivable,

GWT Display Statement of Accounts Outstanding Receivable

8/2/2019 51202625 Tally Manual

15/16

(c) Order status:This report needs to be generated to know the outstanding sales and

purchase orders, so that they are given importance to and are sett led pretty

soon.

Display Statement of Inventory purchase order / sales order summary

2. Monthly:1) Bank Reconciliation Statements

2) Cash Balance Reconciliation

3) Cost centre break up

Display Statement of Accounts Cost Centre Cost centre break up (individual

cost centre break up)

4) Godown summary:

This summary is to be reported to know the stock summary and stock in hand.

This is used, because during purchase, we select the godown to which we are

dispatching materials to.

8/2/2019 51202625 Tally Manual

16/16

Display statement of inventory godowns