Tally Ref

Ta l l y R e f e r e n c e : CONTENTS
COMPANY INFORMATION ............................................................... 5
Company Information ............................................................................ 6

Create a company ................................................................................ 8
Load a company................................................................................. 19
Shut a company ................................................................................. 22
Alter a company................................................................................. 22
Activate Company Features [F11] ..................................................... 23
Configure your company ................................................................... 24
Printing .............................................................................................. 30
Advanced Usage ................................................................................ 41
Security Control .................................................................................... 48
Security levels – types of security ..................................................... 48
Create a new security level ................................................................ 50
Users and Passwords.......................................................................... 53
Alter/Display a user or type of security............................................. 54
TallyAudit .............................................................................................. 55
How to view TallyAudit Lists............................................................ 56
Backup and Restore.............................................................................. 62
ACCOUNTS INFORMATION............................................................ 63
Groups ................................................................................................... 66
Advanced Usage ................................................................................ 86
Managing groups in multiple companies........................................... 93
Ledgers................................................................................................... 95
Expert Usage ................................................................................... 121
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Cost Categories and Cost Centres ..................................................... 125
Introduction ..................................................................................... 125
Expert Usage ................................................................................... 132
Advanced Usage .............................................................................. 136
Expert Usage for Cost Categories.................................................... 140
Expert Usage for Cost Centres under Cost Categories .................... 146
Budgets................................................................................................. 151
How to manage and operate budgets ............................................... 151
Create a budget ................................................................................ 152
Alter a budget .................................................................................. 154
Delete a budget ................................................................................ 154
Voucher Types ..................................................................................... 155
How to manage and operate voucher types ..................................... 156
Advanced Usage .............................................................................. 159
Currencies............................................................................................ 166
Introduction ..................................................................................... 166
Managing and operating multiple currencies .................................. 167
INVENTORY INFORMATION........................................................ 175
Inventory Information ........................................................................ 176

Advanced Usage .................................................................................. 179
Configuration................................................................................... 179
Stock Groups ....................................................................................... 185
Creating a stock group..................................................................... 186
Expert Usage ................................................................................... 188
Display or alter a stock group.......................................................... 190
Stock Categories.................................................................................. 191
Creating a stock category ................................................................ 192
Expert Usage ................................................................................... 194
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Display or alter a stock category ..................................................... 195
Stock Items .......................................................................................... 197
Creating a stock item ....................................................................... 198
Expert Usage ................................................................................... 201
Display or alter a stock item ............................................................ 203
Advanced Usage .............................................................................. 203
Locations/godowns.............................................................................. 210
Voucher Types ..................................................................................... 212
Units of measure` ................................................................................ 213
Create a unit of measure .................................................................. 213
Displaying and altering units of measure ........................................ 216
VOUCHER ENTRY ........................................................................... 217
Simple voucher entry.......................................................................... 219

Types of vouchers................................................................................ 222
How to enter vouchers ..................................................................... 231
Sales and Purchase Voucher Entry................................................... 236
Pure Inventory vouchers .................................................................... 240
How to enter pure inventory vouchers ............................................. 244
How to create a Stock Journal ......................................................... 252
Bill of Materials................................................................................... 256
How to create a new manufacturing journal .................................... 258
How to create a Bill of Material ...................................................... 259
Input fields....................................................................................... 262
Advanced usage ............................................................................... 264
Purchase and Sales Orders ................................................................ 266
How to create a Purchase Order ...................................................... 267
Alter a Purchase Order .................................................................... 271
Delete a Purchase Order .................................................................. 271
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How to create Sales Orders.............................................................. 272
Alter a Sales Order .......................................................................... 275
Delete a Sales Order ........................................................................ 275
View order position.......................................................................... 276
Invoice Entry ....................................................................................... 280
Printing invoices and vouchers ........................................................ 289
Display/Alter a voucher/invoice ...................................................... 290
Advanced voucher entry..................................................................... 291
Advanced accounting vouchers ....................................................... 291
DISPLAY – THE ALL POWERFUL EIS TOOL............................ 307
Display – Tally’s forte ......................................................................... 308

Basic features of displaying reports ....................................... 311
Printing reports................................................................................... 314
Display Account books & statements ................................................ 317
Reconciliation of Bank accounts........................................................ 325
D i s p l a y i nv e n t o r y r e p o r t s & s t a t e m e n t s ........................ 329
Analysis of Inventory Movements................................................... 335
THE EXPANSIVE TALLY ................................................................ 339
Import of Data..................................................................................... 340

Export of Data..................................................................................... 341
Special key combinations ................................................................... 343
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Company Information
Set-up with details

about your company
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Company Information
The very first time you start Tally, you would require to 'create' a
Company Info. company. 'Create Company' simply means giving basic
information about the company whose books of accounts Tally is
to maintain for you. Tally is smart, but it does need an
introduction to your company. The initial screen would appear
like this:
The menu screen is broadly separated into two sections. The

right hand side contains the menu popup, where you would select
your instructions to Tally.
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The left-hand side gives information of the companies that are
F12:Configure – already loaded or selected. It also gives information of the
General currently loaded company's accounting period and the date.
configuration to Current date is not the calendar date but the date you worked last
set country during the current period. You can select a company only if the
specific
company exists (obviously). Select one or companies if you need
defaults. Use it
before creating to switch between companies or if you need information from
a company. one or more companies for comparison purposes.
Country specific configuration

Gateway of TallyÆ F12:Configure Æ General
Make the necessary selections and accept them. The prime
differences are the use of terms like VAT in Europe and Sales Tax
in Asia and America.
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Create a company
Gateway of Tally Æ Company Info. Æ Create
This would be the screen for Britain/Europe.
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The screen for India/Asia would, however, be:
Name
Give the name of the company whose books are being opened. It
is typically your company. If you are a professional accountant
and are maintaining the books of your clients, give the Client
Company's name.
(Of course, you would maintain your firm's books on Tally too!
In that case, give your firm's name).
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& The name is not restricted to the visible length of the (field)
space for entry. Tally's marvellous innovative technology allows
entry of long (really long) names. It compresses the characters
horizontally, so that the name is fully visible and you needn't
scroll sideways (Now you do not have to wonder whether the
name visible on the screen is complete or not. Scrolling
sideways almost always makes you forget the first few words
that you had read and you have to scroll back).
Mailing Name and address

(Not compulsory - can be left blank)
The mailing name could be different from Company Name.
What is its use? The mailing name and address is picked up for
inclusion in any report which needs the company name and
address at the top, e.g., Balance Sheets, Statement of Accounts,
etc. You do not need full name and address in each report; hence
the option.
Let's say you have branches in say, Delhi, Bombay and London.
Each branch may begin the branch books by giving the company
name as 'Peutronics'. However, its mailing name is
comprehensive with full details:
Peutronics Private Limited
Bombay Branch
A-401, Adelphi
Shastrinagar, Bombay - 400053
The mailing name and address would be available for financial
statements and statements of accounts that may need to be given
outside the company.
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& Notice the vertical compression at work. You are permitted to
give any number of lines for the address. All the lines are visible.
& Tally handles compressed information correctly while printing. It

adjusts the reports accordingly. Even if lines are not very clear
on the screen, do not worry. They would be printed out fine.
Currency Symbol
Give the symbol of the base currency, e.g., £, $, Rs., or even
GBP, US $, etc. Tally uses this symbol in reports, where
necessary. You will maintain your accounts in this currency. For
more details, refer to the section on Currency Information below.
Income Tax Number – (Only for India/Asia)

Tax numbers For the number allotted by the Income Tax Authorities. This
could be the Permanent Account Number in India. The
information, if given, will appear in Account Confirmation
Statements.
Sales Tax / VAT registration numbers

In India and in many other federal countries (with many
states/provinces), the state as well as the Centre (Federal
Government) charge tax on transfer of merchandise. The state
usually taxes transfers within the state, while the Central
Government will charge tax on transfers from one state to
another. You may be required to register your company with both
local and federal governments. Registration is acknowledged by
way of numbers, which often need mentioning in different
documents, especially invoices.
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It is not compulsory to give this information and you may skip it.
On the other hand, you may give either or both, as applicable.
Similarly, VAT is the value-added tax levied on transfer of most
goods and services in the UK and Europe.
VAT / Local Sales Tax Number

For the registration number allotted by Local (State or
Provincial) Sales Tax/VAT Authorities. This information, if
given, can be printed on invoices.
Inter-state Sales Tax Number – Only for India/Asia

For the registration number allotted by Central (Federal) Sales
Tax/VAT Authorities. This information, if given, can be printed
on invoices.
Maintain
Specify whether you want to maintain only financial books of
accounts or only inventory or both accounts and inventory. Select
from the popup list.
Let us examine each option and its applicability.
Maintain - Accounts only

Accounts or Select this only if you do not have any inventory transactions
Inventory or
(suitable for professionals and corporate offices). Tally would not
Both
permit intrusion of Inventory related information that are not
required.
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Inventory only
Select this only if you do not want to maintain ANY financial
records for this company (may be suitable for pure stock
points/godowns and factories). Tally prevents financial
information from being recorded or displayed.
& You may opt for Accounts Only in your corporate office and
Inventory Only at your remote stock point.
Accounts-with-Inventory
This obviously allows you to maintain both financial accounts
and inventory. You may choose not to use one or the other until
the need arises.
& You can always modify the company information to change

these settings to allow or to discontinue accounts or inventory.
Once you have created the company and load it you would find a
button - [F11] Company Features - on the bottom right hand
corner of your screen. Company Features are modifiable settings
pertaining to the current company you are working with. One of
the settings is a question pertaining to maintenance of accounts-
with-inventory, viz., Integrate accounts and inventory
(Yes/No?). Why should this question be asked at all?
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An explanation is in order here:
While creating the company, you have selected accounts-
with-inventory to be maintained. Tally will, now, allow
maintenance of both accounts and inventory for the
company but you may or may not integrate the two. The
difference from accounts only and inventory only is that you
need to create only one company in this case. In the other
case, you would have to create two companies - one for
accounts and the other for inventory. Moreover, you can
then select to integrate or not integrate at any time. The
data is organised in a manner that the separation or merger
is done without taking any time.
The effects of integrated and non-integrated is described
below:
Integrated Accounts-and-inventory:
You are allowed transactions in Inventory records and the
account balances are automatically reflected in the Balance
Sheet as Closing Stock. You are not allowed to directly
change the closing balance of an account under this group.
Non-integrated Accounts-and-inventory:
Accounts that fall under the group ‘stock-in-hand’, are not
permitted any transactions. It allows you to hold opening
and closing balances only. Since no vouchers can be
passed for these accounts, they are the only accounts for
which the closing balances can be directly altered (by an
authorised user only)
Financial Year From

- To specify the Financial Year for this company. Tally considers
Financial Year 12 months from the date you give here as the Financial Year. The
books are closed exactly 12 months after this date. For example,
you may give 1 April 97 as the date. Your FY will be April to
March in this case, ending with 31st March of every year. (Give
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1st April even if the company is actually established on, say, 16
August 1997). You are permitted to modify the date at any time
(subject to security permissions, of course) and the FY will
change accordingly. In a manner of speaking, it is actually a
floating financial period.
& However, you may display or, in many ways, work through any
number of months; even more than 12. This flexibility can be
used to view performance of projects that take more than 12
months or when the accounting period itself is more than 12
months (in cases of first year of operation).
& Trans-national companies usually face dual reporting problems

- they have to draw out financial statements for two periods
(maybe more); one - for local statutory compliance and the other
- for parent company to enable global consolidation.
Tally gives you the ultimate in accounting period flexibility -

there is no restriction on your flitting around the accounting
period. There is no time lost as well. It is done instantly, so much
so that you will feel that it maintains parallel sets of reports!
Books Beginning From:

Tally presumes that you wish to maintain books from the
Books beginning of the financial year. However, it is possible that yours
beginning from: is a new company, begun in the middle of the year (not may
people wait for the 1st day of the FY to start companies). You
would like to start books from this date but close books according
to the FY selected by you. Moreover, you do not like reports
including the period your company was not even in existence. In
such a case, give the date the accounts actually begin. Tally will
open books from this date and close on the last day of the FY. For
example, your company is established on 19th August 1997. The
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FY stated previously is April-March. The books will begin on 19th
August 97 and close on 31st March 1998. It ensures smooth
transition to the next year.
This concept can be applied even when you are migrating to
Tally from any other system on any day during the FY. Simply
close books in that other system on the previous day and start
books on Tally from this day. You are allowed to give opening
balances of all ledger accounts including revenue accounts. (Of
course, you can take advantage of Tally's Import ability to import
data from that other system).
Use Security Control?

- Yes, if you want to control access to Tally data, otherwise No.
Security Control If you opt for security control, Tally offers a comprehensive
password based access control to different parts of the system
based on authority lists created by the Administrator. (The
section on Security Control under Advanced Usage contains
details on authority lists).
Give the name of the administrator (presumably yourself) and

your password. You repeat the password by way of verification.
The password is not displayed to protect it.
* Any password based security mechanism is only as good as the

discipline maintained in password management. You may need
layers of security beginning at the Operating System level depending
on the nature of information. Consult an IT Security Specialist, if
necessary.
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Use TallyAudit features
TallyAudit allows the administrator or an auditor profile user to
track changes in accounting information. If you wish to use this
facility, select Yes. TallyAudit will be available only to the
administrator/auditor, through Display of Statements of
Accounts. It will be discussed in fuller detail under the Security
Control section in Advanced Usage.
Base Currency Information

The lower portion of the Company Information screen is
Base currency reserved for Base Currency Information. Tally is multi-currency
information enabled. You can record transactions in foreign currency, raise
invoices in US Dollars (or any other currency), maintain bank
accounts or ledgers in foreign exchange, if required. However,
for accounts to be meaningfully reported, all transactions should
be converted to a common currency. A common factor enables
compilation and summarisation as well as analysis. Base
Currency is the common currency in which your accounts would
be maintained. It is usually your home (local) currency, assuming
that most transactions are in this currency. Moreover, financial
statements would be prepared in the base currency by default.
These would normally be required for local statutory authorities.
For example, if the accounts belong to a company in India, the
base currency would be Indian Rupees (Can you imagine the
local authorities accepting financial statements in Vietnamese
Dongs or even US Dollars for that matter?). On the other hand, if
the company were located in the UK, the base currency would be
Pound Sterling. Now, it is not compulsory for you to do this, you
could very well do the reverse. All Tally needs is any base
currency.
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Base Currency Symbol
Give the symbol of the currency, e.g., £, $, Rs., or even GBP, US
$, etc. Tally uses this symbol in reports, where necessary.
Formal Name
The full name of the currency, e.g., Indian Rupees, Sterling
Pounds, U.S. Dollars. Why do you need formal name?
It is expected that you will have more than one company on the
same computer. They may be branches, sister-companies or any
entity whose data you occasionally combine for consolidation or
bring together for analysis. If in one company you have the
symbol $ to mean Australian Dollars and in another company,
the same $ means U S Dollars, consolidating their accounts
would give an erroneous picture. In such cases, the formal name
is used to match them.
Number of decimal places

Give the number of decimal places for the base currency. Most
currencies have two (e.g. Indian Rupees, Pound Sterling, US
Dollars) but some (e.g. Dinar) have more.
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Load a company
When the company is created it gets loaded automatically the
first time. However, you must Select the company to load it.
(Select and load are synonymous)
Start Tally by double clicking the Tally icon.
Tally can be configured to automatically load companies by
Load a company appropriately setting the TALLY.INI file. The relevant portion of
the TALLY.INI file is reproduced below:
The above setting (Default Companies being set to Yes) loads

company 0001. When creating a company, Tally creates a sub-
directory under its \DATA directory for the company. The
directory is allotted a number in serial order starting with 0001.
You may load more than one company at a time. (The semi-
colon precedes a comment, which means that the words
following it in that line would not be executed. Each line is a
separate command). To load company 0002 also, simply remove
the semi-colon before the command Load-0002. Likewise, give
Load=0003, if you wish.
Example of sub-directories created by Tally for different
companies:
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On the other hand, if you do not want to load any company be
default, i.e., Default Companies=No, then on clicking the Tally
icon, Select a company you want to load:
Bring arrow to Select Company and press <ENTER> or double-
click the option.
Select the company to bring you to the Gateway of Tally of that

company.
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The left side of the screen gives details of the loaded companies.
Load more than In the example below, two companies (out of the 11 created -
one company refer the data directory listing above) are currently loaded:
ABC & Co is the active company. However, the current period

and the current date at the top of the screen are of the company
that was first loaded, i.e., of JC Computer Ltd. You may need to
be careful when selecting to load companies having different
accounting periods. When you do so and switch between the
companies, keep in mind that the current period may not be the
accounting period of the new company.
The advantage of loading other companies in addition to the
current company is that these become available for the purpose
of comparing and analysis for like periods. You may often need
to bring up data from other companies while working with the
current company.
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Shut a company
Shut a company
Shut a company means to unload it. It does not mean that you
-unload it
have deleted it. Simply select it again to load and work on it
again. Double-click the button [ALT][F1]:Shut Cmp or press
[ALT]+F1 and select the company you want to shut.
Alter a company
Alter company
info. You can modify, at any time, any information given whilst
creating the company.
At the Gateway of Tally
[ALT]+F3 Æ Alter
The menu below gives options relating to company information.
This includes Alter.
The option Create Group Company is not active when only one
company is currently loaded. For this option to be used, more than
one company should have been loaded.
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Activate Company Features [F11]
The different features of a company can be selected or modified
by F11 button. This button is available in almost all screens of
Tally as you might wish to modify it as your requirements
change. The Company Features screen is reproduced below:-
Unlike Configuration [F12], Company Features is specific to the

current company only. Therefore, each company may have
different features active. For example, a company in your group
may need multi-currency whereas another company may not.
Configuration options, on the other hand, affect all companies
maintained in the same DATA directory and setting configuration
for one company will affect other companies in that data
directory.
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Please note that certain features like multi-currency and multi-
locations, once set to Yes, cannot be modified if the feature has
been used. However, other features like Cost Centres and Bill-
wise details can be modified even if they are used. If you reset
the option after having used the feature in transactions, it is
advisable to rewrite the company by [CTRL+[ALT]+[R].
The two features - Cost centres and Bill-wise details- must be
activated here for them to be available for ledger accounts. Each
ledger account can then individually be set for the feature as
required. For example, the options will become available for both
‘A & Co’ (a Debtor A/c) and ‘Rent’ (an Indirect Expenses A/c).
You would want Bill-wise details but not Cost Centres for A &
Co and vice-versa for Rent. Further details on these features are
mentioned under Ledgers.
Configure your company

Before starting work on the company, it is advisable to configure
it by pressing F12 button at the end of the button bar, which will
bring up the following screen:
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General
This has already been configured by you before creating the
company. It caters to country specific requirements.
Numeric Symbols
This enables you to set the number styles. Defaults are also
given. You may change them by overwriting. For example
change negative sign from (-) to only ().
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Accts/Inv Info
This gives control over what details should appear in the masters
over and above those provided as default. This is available in the
Accounts and Inventory Master screens through the F12 button
and can be modified according to the needs at any time.
These have been discussed in detail in the relevant masters chapters.
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Voucher Entry
Configure different features of your voucher entry screen. The
screen will be filled up with varying details as specified here.
Other features of convenience, e.g., Use Payment/Receipt

Vouchers as Contra vouchers can be activated here to effect
transactions for funds transfer. By design, Tally allows such
transactions only through Contra Vouchers.
Likewise, you are not permitted to use Journal Vouchers to be
used for cash or bank transactions. However, recognising
exceptional needs, you can override that restriction by activating
the facility here.
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These are defaults and should be changed if required. Please
note that these are questions asked of you and you need Yes to
activate the facility and No to deactivate it.
Invoice/Orders Entry
Configure details for invoices, sales and purchase order entry.
The following options are country specific to Britain/Europe.
Again, the options are in the form of questions and you need to
state Yes or No to them. They have also been explained in the
relevant invoice entry sections.
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For India/Asia, the options would automatically use Excise
instead of Interstate provided you have set your General
Configuration accordingly.
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Printing
To configure voucher layouts for print output. Printing of
vouchers, invoices and statements are configurable through this
menu.
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General
This configuration is applicable for all print reports.
Print Date & Time of Report

This option enables printing of system date and time on each
report. (Note – vouchers, including invoices, are not reports).
These are printed on the right top corner of the report as a
control mechanism. It should not be confused with the date range
of the report.
Quick Format
Tally prints in two formats – Neat and Quick. Neat printing takes
advantage of fonts of the printer and is the default. It also
compresses long data like long names and amounts and auto-fits
them according to space.
Quick printing is suitable for Dot Matrix printers where speed is
an issue. Hence, quick printing does not print fancy fonts. The
auto-fit facility is, thus, not possible in quick printing.
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Therefore, it will truncate data longer than the allotted space. To
prevent this, set Yes for the two questions under Quick Format.
Payment/Receipt/Journal Vouchers, Credit

Note/Debit Note
Configure the dimensions and details to print.
Though the above options pertain to Payment Vouchers, those for

other vouchers are similar.
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Sales Invoice, Delivery Note and Sales
Order/Quotation{ XE "Printing: Notes, Orders"}
Printing configuration of all sales vouchers like invoices, Delivery
notes and Sales Orders are accessible through Sales Transactions
under Printing menu. Each transaction type is separately
configurable and selectable from the sub-menu.
The different configuration screens for each of the above follow:
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Sales Invoice
This is the configuration for the Tally invoice. Change as
necessary.
Details of the above configuration options have been discussed in

the chapter on Invoice Entry. These can be, however, set now or
later as necessary. As usual, the configuration can be amended
even if set.
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Delivery Note
Delivery Note appears very similar to Invoices. However, fields
like rate and amount may be required by some companies to be
printed out on Delivery Notes. Others might not wish it. Hence,
select the options as relevant to your company.
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Sales Order/Quotation
Print sales orders and quotations as you want by configuring the
following: Sales Orders, if marked ‘Optional’, during voucher
entry, are printed as Quotations.
Purchase Voucher/Invoice and Purchase Order

A surprising option to print purchase voucher and purchase
invoices! There has been a need to print these firstly to maintain
continuity in voucher numbers and, secondly to provide a
document in case the supplier does not. Purchase Orders are, of
course, required to be printed and sent to suppliers. To configure
these, select Purchase Transactions under Printing.
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Purchase Voucher/Invoice
37
Purchase Orders
Purchase Orders are required to be printed and sent to suppliers.
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Reminder Letters
Two paragraphs have been already provided which can be used
as themselves or modified or extended. To view the reminder
letter, simply print one out. Of course, you might want to make
subtle changes thereafter. You may, as usual.
The two paragraphs are followed by the account of the customer.

Ledger and Outstanding details with Age Analysis of pending
invoices serve as strong reminders to pay promptly.
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Confirmation Statements
Confirmation Statements are not the same as Reminder Letters.
These serve to confirm the account balances with customers,
suppliers, lenders and borrowers. Their use is most at period
ends, but can be produced for any period, at anytime.
You may change the text as per your requirements.
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Advanced Usage
Group Company
Introduction
Accounts of different companies belonging to the same
management or owners are normally required to be consolidated
to present the financial position of the group of companies as a
whole. In many developed countries, it is mandatory to
consolidate group company accounts. Shareholders would first
like to know the performance of the group as a whole and then
only the performance of individual constituent companies.
Tally eis 5.4 makes consolidation of accounts that is ready at all
times an easy task. The concept is simple yet so powerful (that is
the hallmark of Tally, is it not?) that you can consolidate the
accounts of any number of companies at any time, as well as
keep them separate. You may virtually play around with bringing
companies into the group and separating them at will. All this is
done in a jiffy!
You have to create a Group Company. This is simply a name and
Concept of a an identity given to the merged accounts of constituent (member)
group company companies of the group.
* Do not confuse Group Company to mean a member of the

group! It is, in fact, just the opposite. It contains accounts of
member companies.
You may even have a group company that includes other group
companies. For example, assume that yours is a world-wide,
trans-national organisation (or a 'group') headquartered in the UK
having subsidiary companies in many countries around the
world. The group has different lines of business. Let's say the
businesses are Thread, Fashion Retail, Home Fabrics and
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Accessories. You would prefer to present your group accounts in
grouped according to businesses which in turn are themselves
grouped accounts of the different companies around the world.
With Tally, it's easy!
The accounts structure would look something like this:
G rou p A c cou n ts
Th e W orld wid e Textiles In c
Th read
In d ian Th read C om p an ies U K Th read C o
F as h ion R etail
In d ian G arm en t F actory F ren ch F as h ion s
F ab rics
A m erican F ab ric M fg C o. K orean C loth C o.
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Create a Group Company
A group company can be created only for companies that have
Create a group already been loaded . Hence, you must first load the companies
company whose accounts are to be grouped. The companies can be loaded
automatically if specified in the TALLY.INI file (refer the
Installation Manual for details). Alternatively and what you
would normally do, select the companies using F1:Select Cmp
Button, e.g, the following companies have been selected as
shown in the right portion of the Gateway of Tally screen:
Once the constituent companies are loaded, you can create your
group company. Press <ALT>+F3 or click the button [F3:
Create Cmp] Select Create Group Company
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Enter the name (which is mandatory), address and tax details.
The members of the group have to be selected from the popup
list.
Say, you have selected the two as given. Select end of list to
finish selection.
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The group company Thread will be created and loaded. It also
becomes the active company. Notice the consituent companies
are given below the group company and are slightly indented to
distinguish the group company.
You can now display and print group accounts through the
'Thread’ company.
* You are not permitted to go to the voucher level in the

group company and hence, are not allowed to create or
alter vouchers.
45
Alter a Group Company
Simply follow the normal Alter method of a company for the
Group Company as well.
A Group Company is marked with an asterisk.

You can select or deselect members through the Alter Mode.
However, any change will come to effect only on shutting the
group company and then reloading it. Obviously, the group
company must contain at least two members.
& Hence, it is possible to combine accounts of different

companies at will.
& Create as many group companies as you need.
& A constituent company can be a member of more than one

group.
& A group company can also be a constituent of another group

company.
46
For example,
By selecting the two group companies Thread and Fashion

Retail, the new group company ‘The World-wide Textiles Inc.’
becomes the overall holding company.
47
Security Control
Security levels Security levels – types of security

Tally has a very customisable security system. You can set up
authority levels and users who are placed at these levels. The
authority levels or Types of Security decide the rights of the
users – what they can or cannot do when using Tally.
Tally has two security types already set up. One is Owner and
the other Data Entry. Owner has full access and rights to all
parts of Tally, except Tally Audit, which is reserved for the
administrator alone. Data Entry has restricted rights. You are
allowed to create other security types based on these predefined
types and allow more or less rights as required.
Gateway of Tally Æ [ALT]+F3:Create Cmp ÆSecurity Control
48
Types of Security (security or authority levels)
Owner has full access rights. The other predefined type, Data
Entry, is based on owner but is restricted by default. The default
settings for Data Entry are as follows. You can change them to
allow more or less rights as necessary.
Types of Security [enter] ÆData Entry[enter]
49
Create a new security level
Types of Security Æ Data EntryÆ [Down Arrow]
Create new (Press the down arrow key at the option data entry.)
levels of
security
* This is one of the few places in Tally, where you create a
new entry in this fashion.
Type the new security level, e.g. Manager
Press [enter] to bring up the Level

Definition screen
50
The level definition screen
Name of security level

This is defaults to the name you had created.
Use Basic Facilities of

The default is the owner. However, the other option is also
available – Data Entry. If the popup list does not appear when
you are at the field, press D – beginning to type the word. Going
back from the next field will also pop it up. The new level
Manager will, likewise, be available when you create a next
level.
Days allowed for Back-dated vouchers

This is the number of days the users of this level are allowed to
create back-dated vouchers. Specifying 0 will indicate that back-
dated vouchers are not allowed, and 7 will allow the user at this
level to insert vouchers going back 7 days.
Cut-off date for Back-dated vouchers.

Specify the date before which users of this profile or security
level may not create or alter vouchers. This is additional control
over and above the previous ‘days allowed’. This is useful in
cases where you have completed your Tax Assessment for a
period and no changes are desired in the data for that period.
51
Disallow the following facilities/Allow the following
Define security facilities
levels The screen is now divided into two broad columns each have two
sub-columns. The left side is to disallow access to the various
options of the system. The right side allows the security level the
different facilities.
The different access rights options – Types of Access - are
available in a pop-up list when the cursor is on an access rights
field (the first left column in the screen above). The options
sought to be controlled, are on the right (the second column from
the left).
To disallow access to different options; First select the type of

access and then select the option. Options may be selected from
the popup list of Reports. Repeat the procedure till you have set
access rights for the different options. Note the bracketed
sentence in italics. When you select a type of access, this type
would be disallowed for the option. Hence, if you select Full
52
Access for Balance Sheet, you want to prevent any access to
Balance Sheet by this security level.
Conversely, under ‘Allow the following facilities’, if you select
Full Access for Balance Sheet, you want to allow full access.
Full access incorporates all rights.
Select [End of List] at the Type of Access field to complete the
definition.
You are taken back to the screen ‘Security Levels for Company’
at a blank field following the one you just created, viz., Manager.
If you have any other level to create, simply type the name and
follow the same procedure. Otherwise press [enter] at the blank
field to accept and return from this screen.
Users and Passwords

Set users and
passwords You would need to create different users who belong to one or
more different security levels or types of security. Select the
option at the Security control menu to define users, give their
passwords and their security levels. Only the administrator can
assign users and their passwords.
53
& You need to create security levels first and then users.
Alter/Display a user or type of security

There is no separate menu option to alter or display a security
option. Use the same menu to display or alter user or security
level set-up. To delete a user, simply blank out the user name and
accept the screen. Do the same for a security level. Obviously, if
you have defined a user under a security level, then the security
level cannot be deleted before deleting the users under it.
54
Ta l l y Au d i t
TallyAudit provides the capability to the administrator/auditor to
track changes in the accounts following his previous review.
Changes of two areas are important – changes in transactions or
vouchers and changes in ledger masters. Only material changes
are considered, i.e., a change in the narration does not affect the
integrity of a transaction, hence it would not be considered as
changed. Any other change in a voucher is material and would be
logged. The name of a ledger account if changed, it is material,
hence it would be tracked. So also a change in the opening
balance of a ledger master.
TallyAudit feature should be enabled while creating the company
TallyAudit – and authority lists. Only a user designated as an auditor or the
track changes administrator can view the audit list and act upon it. Tally tracks
all changes made to vouchers that are more than 30 days old.
Hence, changes to vouchers that are less than 30 days old are not
reported. This is to allow adequate time to correct mistakes. A
change includes insertion of new transactions or accounts.
You are not required to make any additional input of data. The
authorised user simply needs to display TallyAudit lists and may
print out the lists. If he is satisfied with the authenticity of the
changes, he accepts the changes either selectively or all of them (by
clicking on the relevant button). Once the changes are accepted,
they are removed from the audit list and would not be available
again. If, however, a change is repeated, it is reflected in the audit
list.
55
How to view TallyAudit Lists
Gateway of Tally ÆDisplay ÆStatements of
AccountsÆTallyAudit
Display Vouchers Audit List

Gateway of Tally ÆDisplay ÆStatements of
AccountsÆTallyAudit ÆVouchers
Note the three buttons relevant to the audit list.
F7: Accept One and

F7: Accept All
F12: Configure
56
Audit listing of changes to vouchers with names
of users
F12:Configure
57
The listing now incorporates the user’s name.
Now print the list for records. Assess each or all the entries for
authenticity and accept. F7: Accept One can be pressed after
placing the cursor bar on the relevant voucher. This would accept
the voucher as valid and remove from this exception list. If you
are satisfied that all the vouchers are valid then press F7:Accept
All to accept them all together.
* Once you accept an entry, it is not available for listing.

Hence, it is recommended that you take a print before
acceptance.
It is recommended that the very first time you use TallyAudit, go

through the list and accept all the vouchers. Do a disciplined
verification of the list so that it is periodically cleared and only
vouchers that are of concern remain.
58
Display Ledgers Audit List
To display the changes to ledger masters, follow the same steps
as for vouchers. The listing is differs from the vouchers in two
ways:
It allows you to display all ledger accounts and with a toggle

the ones that have been changed – (by pressing the toggle
button F6:All Accts/Audit List)
The F12:Configure button is not available; but the list
always displays user names if available. (If you activate
TallyAudit sometime after you are well through the
accounts, the user names will not be displayed. In such
cases, accept the list after verification. Any changes
henceforth, would give the user names).
The first audit list below shows all accounts and there are no
accounts that were modified or created after the last review. The
second audit list below shows ledger accounts that were either
modified since last review or created. The modification could be
in the name or in the opening balance. The name is considered
important as a creditor’s name could be changed to some other
name with mala fide intentions. Please note that you need to
identify a change even in cases where two names are
interchanged. This would enable identification of fraudulent
transfer of account balances. You are able to make the
identification through the ID assigned to each ledger account. Of
course, you must first take a print of all the ledger accounts with
their original ID with which to match subsequent audit lists.
59
All accounts display
The Audit List is presently empty.
Now, we make changes to the name of ID 66 Saebord Pvt Ltd,
and ID 72 Bank Interest. These will be logged in the Audit List.
60
Audit List – List of new or altered ledger accounts
(Since last acceptance)
Notice that their ID does not change. Hence, it is useful to track

them. The user who changed the accounts and when he did it, is
identified.
Important steps
Display the audit list of all accounts when they are set up.
Take a print for future reference.
Accept the list so that they do not remain as exceptions.
Plan for periodic review of the audit list.
Now in following reviews, display the audit list. The list will
show the new accounts created since last review as well as
those that were changed in any way. In rare circumstances,
you may need to note the ID of changed accounts and
match with the original list that you had printed out.
* Take a print of the audit list for future reference before

acceptance of the changes. It is wise to make a note even
if the list is empty.
61
Backup and Restore
Gateway of Tally - Buttons [F4] and [ALT]F4
F4 for Backup, and Alt+F4 for Restore is now enabled from all
menus. You will need to provide the Destination directory
(typically, A:\or B:\, or A:\directoryname\) and the list of
companies, which you wish to backup or restore.
You may also backup to a Hard Disk or Network Disk by
specifying the appropriate path (e.g. C:\BACKUP)
62
Accounts Information
63
* The top bar of the screen contains the product message, system
date and time.
* The left hand side of the screen displays the activity status.
* The right side contains the menu system and the button bar. The
menu Accounts Info. Is the current active menu.
64
Main functions in Masters menu
Accounts Information contains the masters as listed in the menu
above. Each master has to have the following functions, besides
others and are consistent in all Masters menus throughout Tally:-
Create
This enables creation of new masters. Once a master has been
created, any modification to it must be done through the Alter
mode.
Display
Use this mode to view Master information. Changes are not
permitted.
Alter
Use this mode to view and change master information. You
cannot create a new master.
We shall begin discussion on Accounts Information with how to build
Groups and then follow with other accounts masters.
65
Groups
(Classification of Account-heads)
Introduction
Tally follows the 'Single Ledger' concept of accounting, which is
the modern way of managing accounts. This is in direct contrast
to Subsidiary Ledger Accounting. Thus, all financial entries are
performed using ledgers or account heads. Ledger account heads
are created to identify transactions. The single ledger concept
does away with the need for sub-ledgers and corresponding
control accounts in General Ledger. Ledger balances by
themselves do not convey much without some form of
classification. Tally, therefore, gives you a powerful way to group
ledger information, which is meaningful in reports and compliant
with laws. Groups, in Tally, serve to both classify and identify
account heads according to their nature and enable presentation
of summarised information.
Traditionally, grouping of accounts is a post-accounting activity
Introduction to that is done only when reports are needed. This has an inherent
Groups drawback of delayed reports that are not available at hand when
required. Tally gives you great flexibility in setting up your chart
of accounts. It allows you to group your ledger accounts right at
time of creating your accounts chart. Your reports and
statements will reflect the desired classification at all times.
Further, Tally permits you to re-group your ledgers anytime (with
some minimal restrictions), should re-classification be necessary.
We acknowledge that re-grouping is always possible and would,
in practice, be resorted to, when there are changes in the nature
of information. However, re-grouping can be done only by a
user account that has requisite authority under the access control
66
list. At the highest level of grouping, accounts are classified into
capital or revenue - more specifically into assets, liabilities,
income and expenditure. Based on mercantile accounting
principles, Tally provides a set of reserved groups and allows
you to modify their names or create sub-groups.
Concept of sub- The concept of sub-groups

groups Groups have a hierarchical organisation. At the top of the
hierarchy are Primary Groups. These are the main asset, liability,
income or expenditure groups of accounts that determine the
entire accounting and their presentation, i.e., whether a ledger
affects Profit & Loss Account (as a revenue item) or goes into the
Balance Sheet. The Reserved Primary Groups and subgroups
(shown indented) are:
Aliases for the groups are given in square brackets [ ].
Primary Groups of capital nature
1. Capital Account
Primary Groups Reserves and Surplus [Retained Earnings]
of capital nature 2. Current Assets
Bank Accounts
Cash-in hand
Deposits (Asset)
Loans & Advances (Asset)
Stock-in-hand
Sundry Debtors
3. Current Liabilities
Duties and Taxes
Provisions
Sundry Creditors
4. Fixed Assets
5. Investments
67
6. Loans (Liability)
Bank OD Accounts [Bank OCC Accounts]
Secured Loans
Unsecured Loans
7. Suspense Account
8. Miscellaneous Expenses (Asset)
9. Branch/Divisions
Revenue Primary Groups
10. Sales Account

Revenue 11. Purchase Account
Primary Groups 12. Direct Income [Income Direct]
13. Indirect Income [Income Indirect]
14. Direct Expenses [Expenses Direct]
15. Indirect Expenses [Expenses Indirect]
A discussion on each of the reserved groups:

1. Capital Account
This holds the Capital and Reserves of the company.
Examples of ledgers that may be opened under this group
are Share Capital, Partners' Capital A/c, Proprietor's Capital
Account.
Reserves and Surplus [Retained Earnings]
Open ledgers like Capital Reserve, General Reserve,
Reserve for Depreciation, etc.
2. Current Assets
Directly under Current Assets, you may find place for assets
that do not fall under the following sub-groups:
Bank Accounts
For Current, savings, short term deposit accounts, etc.
Cash-in hand
Tally automatically opens one Cash A/c under this group.
You are permitted to open more cash accounts, if
necessary.
68
Note: An account under Cash-in-hand group or Bank
Accounts/Bank OCC A/c group is printed as separate Cash
Book in the traditional Cash Book format and does not form
part of the Ledger.
Deposits (Asset)
In essence, a place for Fixed Deposits, Security Deposits, or
any deposit made by the company (not received by the
company, which is a liability).
Loans & Advances (Asset)
For all loans given by the company and advances of a non-
trading nature, e.g., advance against salaries, or even for
purchase of Fixed Assets. We do not recommend you to
open Advances to Suppliers account under this group.
Doing so gives rise to the difficulty in ascertaining advance
position of a particular supplier and to adjust future bills
against such advances. For further details, please refer to
the section on Common Errors.
Stock-in-hand
This is a special group. You may wish to open accounts like
Raw Materials, Work-in-Progress and Finished Goods.
How the balances are controlled depends on whether you
opted to maintain an integrated account-cum-inventory
system in the company features. (refer to Company creation
section for more details) Let's consider the options:
Integrated Accounts-cum-Inventory :
You are allowed transactions in Inventory records and the
account balances are automatically reflected in the Balance
Sheet as Closing Stock. You are not allowed to directly
change the closing balance of an account under this group.
Non-integrated Accounts-cum-Inventory:
Accounts that fall under this group are not permitted any
transactions. It allows you to hold opening and closing
balances only. Since no vouchers can be passed for these
accounts, they are the only accounts for which the closing
balances can be directly altered (by an authorised user
only)
Sundry Debtors
For your customer accounts. Do not open them under the
Sales Account group, which is a revenue account. For more
information on common and possible errors in grouping of
accounts, please refer below to the separate paragraph on
the topic.
69
3. Current Liabilities
You may open accounts like Outstanding Liabilities,
Statutory Liabilities and other minor liabilities directly under
this group. Sub-groups under Current Liabilities are Duties
and Taxes, Provisions and Sundry Creditors
Duties and Taxes

For all tax accounts like VAT, MODVAT, Excise, Sales and
other trade taxes. A convenient place to find the total liability
(or asset in case of advances paid), as well as the break-up
of individual items.
Provisions
For provision accounts like Provision for Taxation, Provision
for Depreciation, etc.
Sundry Creditors
For trade creditors of the company. Do not open your
supplier accounts under the Purchases Account group,
which is a revenue account. For more information on
common and possible errors in grouping of accounts,
please refer below to the separate paragraph on the topic.
5. Investments
To group your investment accounts like Investment in
Shares, Bonds, Govt. securities, long term Bank deposit
accounts, etc. A convenient place to view the total
investments made by the company.
6. Loans (Liability)
For loans, typically long term, taken by the company.
Bank OD Accounts [Bank OCC Accounts]

Tally gives two distinct types of Bank Accounts, The Bank
OCC A/c is meant to record the company's overdraft
accounts with banks. e.g., Bill Discounted A/cs,
Hypothecation A/cs etc.
Note: An account under Bank OCC A/c group is printed as

separate Cash Book in the traditional Cash Book format and
does not form part of the Ledger.
70
Secured Loans
For term loans and other long/medium term loans that have
been obtained against security of some asset. Tally does
not verify the existence of the security. Typical accounts
would be Debentures, Term Loans, etc.
Unsecured Loans
For loans obtained without any security .e.g., Loans from
Directors/partners or outside parties.
7. Suspense Account
Theoretically speaking, this group should not exist. However,
in modern accounting, many large corporations use a
Suspense Ledger to track moneys paid or recovered, the
nature of which is not yet known. The most common
example is money paid for Travelling Advance whose
details would be known only upon submission of the TA bill.
Some companies may prefer to open such accounts under
Loans and Advances (Asset) group. Please note that
Suspense Account is a Balance Sheet item. Any expense
account even if it has 'suspense' in its name, should be
opened under a Revenue group like Indirect Expenses and
not under Suspense Account group.
8. Miscellaneous Expenses (Asset)

This group is typically used more for legal disclosure
requirements, like Schedule VI of the Indian Companies Act.
It should hold incorporation and pre-operative expenses.
Companies would write off a permissible portion of the
account every year. A balance would remain to the extent
not written off in Profit & Loss Account. Tally does not,
however, show a loss, carried forward in the Profit & Loss
Account, under this group. The Profit & Loss Account
balance is shown separately in the Balance Sheet.
71
9. Branch/Divisions
This group is provided to keep the ledger accounts of all
companies that are your company's branches, divisions,
affiliates, sister concerns, subsidiaries, etc. This is a group
of convenience. You may not wish to utilise it in this
manner. Note that Tally permits Sales and Purchase
transactions to take place with accounts opened here.
Remember, these are their accounts in your books and not
their books of accounts. Just treat them as you would any
party account. If you wish to maintain the books of that
branch/division on you computer, you must open a separate
company. (Tally allows maintenance of multiple company
accounts).
Revenue Primary Groups
10. Sales Account

- For different sales accounts. The natural segregation of your
sales accounts could be based on Tax slabs or type of
sales. This also becomes a simple mechanism for
preparation of Tax returns.
An example of such classification may be helpful:
Classify under Sales Accounts the following sub-groups

Domestic Sales
Export Sales
Now under Domestic Sales open the following ledgers:
Sales (10%)
Sales (5%)
Sales (exempt)
You may even open an account Sales Returns under the group
Domestic Sales to view your net sales after returns (or the
returns may be directly passed through journal against the
specific sales account).
Please do not open customer accounts under this group. For
more details on possible errors in this regard, please refer to
the paragraph given below.
72
11. Purchase Account
This is similar to sales accounts, except for the purpose of the
transaction.
12. Direct Income [Income Direct]

- For non-trade income accounts that affect Gross Profit. All
trade income accounts would naturally fall under Sales
Accounts. You may wish to use this group for accounts like
Servicing Contract Charges that follow sales of equipment.
If yours is a professional services company, you may not
use the Sales Account group at all. Instead, open accounts
like Professional Fees under this group.
13. Indirect Income [Income Indirect]

- For miscellaneous non-sale income accounts, e.g., Rent
Received and Interest Received.
14. Direct Expenses [Expenses Direct]

- For manufacturing or direct trading expenses. These
accounts determine the Gross Profit of the company.
15. Indirect Expenses [Expenses Indirect]

- For all other administrative, selling or non-direct expenses.
Tally automatically opens the Profit & Loss Account which is
a reserved primary account. You may use this account to
pass adjustment entries through journal vouchers .e.g.,
transfer of profit or loss to Capital or Reserve account.
Common errors Common and possible errors in Grouping and

in grouping
account classification
Debtor/Creditor classification
Placing individual party accounts under Sales or Purchase Accounts
groups:
Accounts of parties with whom your company has trade
relationship must be opened under any of the following
groups (or sub-groups under them) only:
Sundry Debtors
Sundry Creditors
Branch/Divisions
73
Sales and Purchase account groups are meant for revenue
accounts and would be reflected in the Profit & Loss
Account. If you open party accounts under these groups, you
will find it difficult to pass sales or purchase voucher
transactions. For example, in a sales voucher transaction
entry, you must debit an account which is a sundry debtor,
branch/division or even a sundry creditor (why a creditor? - it
will be explained soon). Moreover, other facilities like bill-
wise allocation and tracking would not become available
unless the accounts belong to one of these groups.
Opening two accounts of the same party:
Tally has separately classified debtors, creditors and
branch/divisions only for convenience. There is no
operational distinction except for the purpose of keeping the
accounts of a particular group together during displays and
analysis. Thus you can pass both sales and purchase entries
for a party account placed under Sundry Debtors. We
recommend that you use the classification depending on the
most natural group for the party. For example, parties from
whom you buy more frequently then you sell to, could be
placed under Sundry Creditors, as that would be the natural
place for you to look for his account. Tally does not restrict
the accounts from having obverse balances. Thus, a Sundry
Debtor can have a credit balance depending on the state of
his account.
You would, therefore, note that you need not open two
accounts of the same party - one under Sundry Debtors and
another under Sundry Creditors. Remember, Tally restricts
you from opening two identical ledger accounts. Of course,
you may decide to circumvent by marking one account as "A
& Co - S/Dr" and another "A & Co - S/Cr". Doing this would
allow you to have two accounts of the same party under two
groups, but you would lose the advantage of analysing his
net position in one place. We recommend that you maintain
a single account to obtain best benefits.
Placing expenditure items under a Liabilities group, e.g., the
expenditure item 'Rates & Taxes' under the group 'Duties
and Taxes'.
The group Duties and Taxes is specifically meant to handle
taxation liabilities of your company. Rates & Taxes and other
statutory expenses should be placed under Indirect
Expenses.
74
Simply adhering to the reserved groups may be sufficient for
many organisations. For greater diversity, Tally allows you to
create your own groups, either as sub-groups or primary groups.
Groups can be sub-classified to practically an unlimited level, to
give a virtual accounting tree. At the lowest level, of course,
would be the ledger account. An example of sub-groups would
help illustrate the power of this facility:-
The group Indirect Expenses can be sub-classified as under

(ledgers given in italics):
Indirect Expenses
Administrative Expenses
Interest Paid
Interest paid to banks
Interest paid to others
Marketing Expenses
Selling and distribution expenses
Packing expenses
Transportation
Sales Promotion expenses
Advertising expenses
Direct Promotion expenses
Remember, that during voucher entry, only the ledger accounts

are used, - and the grouping structure remains transparent,
irrespective of the use of sub-classification.
75
This idea can be easily extended to other areas like Sundry Debtors,
Sales Accounts, Purchase Accounts, etc. For example,
Debtors and Creditors are very useful when sub-grouped
according to geographical areas:
(Ledgers are shown in italics)
Sundry Debtors
Domestic Customers
Midland customers
A & Co
B & Co
Provincial customers
Foreign customers which can be further classified
European customers
Asian customers
Indian customers and so on.
You may prefer to classify creditors according to their tax
status, e.g.,
Sundry Creditors
Non-Trade Creditors
Party account 1
Party account 2
Trade Creditors (exempt from tax)
Party account 3
Party account 4 , etc.
Trade Creditors (tax registered)
Party account 5
Trade Creditors (tax unregistered)
Party account 7
76
You can see that unlimited levels of sub-grouping is a convenience to
be used thoughtfully. Use it to give a never before depth to
your presentation of accounting information but take care to
not carry it too far. Too many levels of sub-groups may
make their use redundant and their management unwieldy.
A simple guideline could be to create branches of sub-
groups or ledgers only if they are two or more than in
number. A situation where you have created groups as
follows should be avoided:
Marketing Expenses
Obviously, you could have done with simply creating
ledgers directly under Marketing Expenses.
* NOTE: While it is necessary to assign every ledger to a group/sub-

group, it is not essential to have your own sub-classification of
accounts; you may simply use the reserved groups for grouping your
ledger accounts.
77
How to manage and operate Groups
Gateway of TallyÆAccounts InfoÆGroups.
How to manage
and operate
Groups
You may create, alter, or display a single Group or multiple

Groups. Single group option is useful when you wish to work on
one group at a time. Multiple is a time and labour saving option
in a list format and is useful when working on many sub-groups
at a time. Once a sub-group is created, it behaves exactly like a
group. Any reference to group would deem to include a sub-
group.
78
Creating a group
If you are creating groups for the first time, it is advisable to
configure them before you proceed:
You may configure your groups to enable/disable advanced
mode.
[F12]ÆAcct/Inv infoÆAccounts masters
These are the default settings.

(The Masters Configuration screen allows settings for all types
of masters, and not just those that are relevant to the current
operations. Here, only the two mentioned options are of
relevance to accounts masters. Additionally, the ALIAS setting in
Master Configuration also affects accounts masters)
79
Single Group
Gateway of TallyÆAccounts InfoÆGroupsÆSingle Create.
80
Buttons in single group screens
F3:Company: To work with a different company. In the creation mode, you
can create groups in the other company. In alter mode, you
can copy the information by accepting the screen (<enter> or
<Ctrl>+<A>). The old company's information remains. Not
available in Display mode.
F3: New Cmp: To work on the same report of another company. Available
only in display mode.
Groups, Ledgers, Cost Categories, Cost Centres, Voucher Types:
To enable you to switch to these areas without having to quit
from the current screen.
F11:Features: To change company features. A detailed discussion on
features has been done in earlier section under Gateway of
Tally.
F12:Configure: To change configuration of master information.
* Configuration changes affect all companies whereas Features

changes affect only the current company.
& Advanced mode allows entry of additional information as

follows:
-Creation of Primary Group
-Control behavior like sub-ledger
-Used for calculation for taxes and discounts in invoices
(These are further explained at the end of the section)
81
If you have not opted for advanced entries in masters, you will need
to enter only the following information to create a group:
Creating a
single group
Name of Group
Enter the name of the desired group or sub-group. (e.g.,
Administrative expenses).
Alias
Give an alias to allow access the group using the Alias in
addition to its name; or leave it blank. (e.g., for Administrative
expenses, you can give 'Office Expenses' or even an
alphanumeric code, say 'E001', as an alias)
Under
Specify under which existing (Parent) group the sub-
classification is needed. You may create a new Parent Group by
using <Alt>+<C>. The use of <Alt>+<C> is explained in the
Annexure "Key operations".
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Advanced mode of master entries for Groups
The following are applicable only when advanced mode is activated.

Advanced mode *Under
of master If it is a new primary group, select 'Primary' (requirement of a
entries for new primary group would be extremely rare but the option
Groups exists). Creation of new Primary Group is not allowed if
Advanced entries are not permitted (set to No).
If a new Primary Group is created, you must specify whether it
is an asset, liability, income or expenditure by selecting the
appropriate option. If you specify an income or expenditure
you may also determine whether it affects gross profits by
suitably answering the question
Does it affect Gross Profits? Yes/No.
(This concept can be used in cases where you would like to

segregate your profits into Operative Profit and Net Profit
where you may want to consider other revenue accounts in
addition to Direct instead of Gross and Net Profit). Normally,
Tally calculates GP using Opening Stock, Purchase
Accounts, Direct Expenses, Sales Accounts, Direct Incomes
and Closing Stock only. To make other accounts contribute
to this, and yet not classified under these reserved heads,
you would set the answer to Yes.
*Group behaves like sub-ledger?
To display Sundry Debtors without Ledger break-up in
statements. Normally Sundry Debtors would have a large
number of ledger accounts under it and it can be exploded
during display to show ledger balances. To avoid this
detailed display, choose Yes.
*Used for Calculation (e.g. taxes, discounts?
Yes if ledgers under this group would have percentages for
discounts/taxes to be used for invoice entry. Remember
that only voucher entry in 'invoice' mode uses the automatic
calculation capability (for example, it would be fruitless to
specify a group 'Depreciation of Assets', and created
ledgers such as 'Depreciation 10%', 'Depreciation 25%' in
the hope of getting them used for automatic calculation
purposes.)
83
Display or Alter a Group
Gateway of TallyÆAccounts InfoÆGroupsÆSingle
Display/AlterÆ#select name from List of Groups
(Since display mode is identical to alter but without the

modification capability we would discuss only alter mode here.
Depending upon the access rights available, you may display a
master in simply display mode or in alteration mode.)
From the popup list of groups, select the group you wish to alter.
The information in the alteration/display screen is the same as in
'group creation' with an additional field 'Position Index in
Reports'. This field is displayed or hidden with the toggle
key/button[F10]- Change sort/Skip sort. A discussion on
position index follows.
84
You are allowed to alter any information in the screen except in
specific circumstances given below (these apply to multiple
alteration of groups as well):
* You cannot change the parent or behavioral attributes of a

Reserved group. Exceptions are the groups
Branches/Divisions and Suspense Account, where the
'Asset' or 'Liability' concept is modifiable. This determines
the location of the group in the VERTICAL Balance Sheet
only.
Deleting a group
Gateway of TallyÆAccounts InfoÆGroupsÆSingle/Alter.
The Delete function is performed through the single alteration
Delete a Group mode. You cannot delete groups from the multiple alteration
mode.
Select the group to be deleted.
Press <Alt>+<D> to delete.
* You will not be allowed to delete a group if:

it is a reserved group; or
there are sub-groups or ledgers under it.
85
Advanced Usage
Position index in reports
Advanced * Position index is the primary key for sorting groups and
Usage: ledgers for reports; the group name being the secondary
Position Index key. It determines the position of the group in relation to
in Reports other groups in a report. It is the default sorting method in
most reports. Sorting method can be changed when
viewing lists by changing the configuration [F12].
At the time of its creation, a group is automatically assigned the

position of its parent (or 500 if it is a new primary group) and
hence you do not need to give the index field when creating a
group. The default position indices for reserved groups are:
Capital Account 10
Loans (Liability) 20
Current Liabilities 30
Fixed Assets 40
Investments 50
Current Assets 60
Branch/Divisions 70
Miscellaneous Expenses (Asset) 80
Suspense Account 90
Reserves and Surplus [Retained Earnings] 100
Bank OD Accounts [Bank OCC Accounts] 110
Secured Loans 120
Unsecured Loans 130
Duties and Taxes 140
Provisions 150
Sundry Creditors 160
Stock-in-hand 170
Deposits (Asset) 180
Loans & Advances (Asset) 190
Sundry Debtors 200
Cash-in hand 210
Bank Accounts 220
Sales Account 230
Purchase Account 240
Direct Income [Income Direct] 250
Indirect Income [Income Indirect] 260
Direct Expenses [Expenses Direct] 270
86
Indirect Expenses [Expenses Indirect] 280
Your own Primary Groups 500
All reports, e.g. Trial Balance, including the above list, will be
sorted according to the position index in increasing order. You
will observe that it is not alphabetic. The positions have been
ascribed for the Balance Sheet and Profit & Loss Account, which
is based roughly on the liquidity concept and company law.
These indices may be changed to effect a shift in the location of
an account, as illustrated in the following example. The same
index number can be assigned to more than one group in which
case they will appear one after another in alphabetic order
(sorted on the secondary key).
Create a Group "My Own Group" under Primary as an Asset. It’s
sort index would default to 500.
You may verify this using single alteration of the group "My
Own Group".
87
Open a ledger account "My Own Ledger" under this group with
opening balance of 10,000. The group's position in the Balance
Sheet would be thus:
Let us now alter the Position Index (sort position) of the group
"My Own Group" to 45. (You may do this quickly by
positioning the cursor on ‘My Own Group’ and pressing
<Ctrl>+<Enter>).
88
The Balance Sheet would now be rearranged as follows:
You are therefore able to decide the position of an item in your

reports.
* Though position indices can be altered, you are advised not to do

so without being absolutely sure of its effect. Please remember that
the change affects all reports. If you have altered the index but which
you now do not wish to adopt, you may revert to the above default
settings through group alteration.
89
Expert Usage
Multiple creation of groups
Multiple creation of groups

Gateway of TallyÆAccounts InfoÆGroupsÆMultiple Create
Explanation on Buttons
can create groups in the other company. In alter mode, you
F3: New Cmp: To work on the same report of another company. Available only
in display mode.
F4:Chg Parent: To change parent of the selected group from popup names of
groups list.
for example, you are currently altering groups classified
under Loans Liability, and wish them all to be re-classified
90
under 'Bank OCC A/c'. Instead of individually altering each,
name, you may do so by pressing F4.
F4: New Parent: To change the parent group. (relevant in Alteration/Display
mode only)
for example, you are currently altering groups classified
under Loans Liability, and now wish to ABANDON the
current activity, and alter groups under Bank OCC instead.
F6: Skip names: For faster data entry when you need to alter only the parent of
many sub-groups but not the name of the sub-group itself.
F8:Skip Parent: For faster data entry when you do not need to alter the parent
of sub-groups but the sub-group names and/or position
indices.
F10:Chg Sort or Skip Sort: Toggle for altering the Sort Position
Groups, Ledgers, Cost Categories, Cost Centres, Voucher
Types:
To enable you to switch to these areas without having to
quit from the current screen.
Tally.
* Configuration changes affect all companies whereas Features

changes affect only the current company.
Choose multiple creation when you wish to create a number of

sub-groups which will automatically take the parent's advanced
mode information.
Under Group:
F4:Parent or first letter of existing group
The entry screen allows you to specify the parent group under
which the sub-group can be created in a columnar list. You are
91
allowed to create a new parent using <alt>+<C>. Select [All
Items] if the new sub-groups may have different parent groups.
Below the Parent Group, of the three columns 'Sl no.', 'Name of
Group' and 'Under', Sl no is filled up automatically. You must
give the new sub-group names in the Group Name column. The
"Under" column defaults to the Parent group name you had
specified in 'Under Group'. If you had selected [All Items], you
must specify the Parent Group for each sub-group. When
finished, press <enter> in the blank 'Name of Group' field and
<enter> again or yes to accept the list.
* In multiple group creation, the sub-groups will automatically adopt

the characteristics of their parent groups including those specified in
advanced mode. If you wish to change individual group behaviour
created using multiple groups, use 'single group/alter' option.
Display/alter multiple groups

Gateway of TallyÆAccounts InfoÆGroupsÆMultiple
Display/alter Display/Alter.
multiple groups
You would normally choose this option when you need to alter
names or change parents of many groups. Select a particular
group for altering sub-groups under it or [All Items] to list all
groups, their parents as well as the position indices. Change
restrictions as given above in Single Groups also apply to
multiple groups.
92
Managing groups in multiple companies
Copy masters from one company to another
Master information is generally similar for most group
Managing companies and it is certainly beneficial to maintain same group
groups in structure and ledgers, more so if you have a parent company with
multiple subsidiaries or branches. This ensures uniformity of reports in all
companies companies and proper consolidation of accounts. To avoid the
tedious task of re-creating masters in other companies, Tally
enables you to copy the groups created in one company to
another.
The companies must be selected to allow switching of
companies.
Gateway of Tally Æ Select Company A
Gateway of Tally Æ Select Company B
Copy a single group from one company to another

First select the source company [F1], unless already
selected.
Gateway of Tally Æ Select Company A
Gateway of TallyÆAccounts Info.ÆGroupsÆSingle/Alter.
Select the particular groupÆ[F3]:Change to destination
company (Company B)
ÆAccept the screen, after making alterations, if any.
If the parent of the group does not exist, you will not be able to
accept the screen without selecting a parent in the destination
company.
93
On accepting the screen, you are returned to the source
company 'list of groups'. The same group now also exists in
the destination company.
Copy multiple groups from one company to another

[F1] Select the source company (Company A)
Gateway of TallyÆAccounts InfoÆGroupsÆMultiple/Alter.
Select the particular group or [All Items] Æ
[F3]:Change to destination company
ÆAccept the screen, after making additions/alterations, if any.
On accepting the screen, you are returned to the source company
'list of groups'. The same group now also exists in the destination
company. It may be obvious that the above method of copying
masters is possible only if the books of accounts are maintained
on the same computer system.
& The alternate mechanism to transfer information between

companies is to use the 'Export' and 'Import' of data.
Export/import is more flexible in that it allows incoming
information from companies which do not exist on your system.
For example, you could export your Masters and send the
resultant files to your branches for their initial master creation.
& Note: The above method can be used for copying other masters
like ledgers, cost categories and cost centres.
94
L e d g e rs
Introduction
In the previous chapter, the concept of groups, as implemented in
Introduction to Tally, was explained. You were also given a number of examples
ledgers of grouping ledger accounts. You will now learn how Tally is
used to work with ledgers. A Ledger is the actual account head to
which you identify a transaction. You pass all accounting
voucher entries using ledgers. However, as mentioned in the
introduction to Groups, all ledgers have to be classified into
groups. Hence, a thorough understanding of account
classification is important for working with ledgers. We have
reproduced certain portions from the groups chapter here.
How to manage and operate ledgers

Gateway of Tally Æ Accounts Info. Æ Ledgers
95
Normal users would work with Single Ledger. Hence, we shall
discuss the different operations under Single Ledger here.
Multiple ledger operation is meant for expert users who may refer to
the paragraph 'Expert Usage' at the end of this Chapter.
Creation of a ledger account

The information required for creation of ledgers depends on the
Create a ledger features opted by you. If the setting of the Accounting Features
account [F:11] of your company is No for all options, your ledger
creation screen would need minimal information.
It should be noted that Tally automatically creates two ledger
accounts, viz., Cash (under Cash-in-hand) and Profit & Loss Account
(direct Primary account). It does not make any other presumptions.
You must create all other account heads. There are no restrictions in
ledger creation except that you cannot create another Profit & Loss
A/c (actually an account that behaves like one). You may create any
number of Cash accounts (by another name like "Petty Cash" ).
You will, now, be guided to create a ledger account with minimal
information. For discussions on additional features, please refer
to 'Advanced Usage'.
Gateway of Tally Æ Accounts Info. Æ Ledgers Æ Single Create
96
Name
Feel free to give the full name of the account. Tally fits it all in.
Press <enter> to move to the next field. Tally does not allow
duplicate names. The uniqueness check is made here itself
instead of after you have entered all other information.
You will find that punctuation and other non-relevant
information are ignored by Tally in its recognition of a name,
Thus, CST, C.S.T. and C. S. T. are all considered identical.
We have already given you the philosophy of Tally in the first
few pages of this manual. You will now actually experience the
small conveniences, which you would soon take for granted. You
notice that Tally converts the first letter of all relevant words to
upper case which helps you speed up your data entry. You need
not bother about changing the case every time it is a different
word.
Group
All accounts must be classified in their appropriate groups. (You
Ledger under a should go through the Chapter on Groups now if you not already
Group done so). You must specify which group the ledger falls under.
The method of selecting an item from a popup list has been
explained in the chapter on the Philosophy of Tally.
& You may always create a new group by pressing <alt>+<C>.
A Group is not important by itself, but because it controls the

usage of ledger accounts. A wrong classification would affect the
treatment of the ledger account in final statements and during
voucher entry. You can, of course, alter a ledger account to
change its group classification at any time.
97
& alter a ledger or a group from any display by <ctrl>+<enter>.
Reproduced below are some very important issues pertaining to

groups.
Common Common and possible errors in Grouping and

grouping errors account classification
Debtor/Creditor classification
1. Placing individual party accounts under Sales or Purchase

Accounts groups:
Accounts of parties with whom your company has trade
relationship must be opened under any of the following
groups (or sub-groups under them) only:
Sundry Debtors
Sundry Creditors
Branch/Divisions
Sales and Purchase account groups are meant for revenue
accounts and would be reflected in the Profit & Loss
Account. If you open party accounts under these groups,
you will find it difficult to pass sales or purchase voucher
transactions. For example, in a sales voucher transaction
entry, you must debit an account which is a sundry debtor,
branch/division or even a sundry creditor (why a creditor? -
it will be explained soon). Moreover, other facilities like bill-
wise allocation and tracking would not become available
unless the accounts belong to one of these groups.
98
2. Opening two accounts of the same party:
Tally has separately classified debtors, creditors and
branch/divisions only for convenience. There is no
operational distinction except for the purpose of keeping the
accounts of a particular group together during displays and
analysis. Thus you can pass both sales and purchase
entries for a party account placed under Sundry Debtors.
We recommend that you use the classification depending
on the most natural group for the party. For example, parties
from whom you buy more frequently then you sell to, could
be placed under Sundry Creditors, as that would be the
natural place for you to look for his account. Tally does not
restrict the accounts from having obverse balances. Thus, a
Sundry Debtor can have a credit balance depending on the
state of his account.
You would, therefore, note that you need not open two
accounts of the same party - one under Sundry Debtors and
another under Sundry Creditors. Remember, Tally restricts
you from opening two identical ledger accounts. Of course,
you may decide to circumvent by marking one account as
"A & Co - S/Dr" and another "A & Co - S/Cr". Doing this
would allow you to have two accounts of the same party
under two groups, but you would lose the advantage of
analysing his net position in one place. We recommend that
you maintain a single account to obtain best benefits.
3. Placing expenditure items under a Liabilities group, e.g., the

expenditure item 'Rates & Taxes' under the group 'Duties
and Taxes'.
The group Duties and Taxes is specifically meant to handle
taxation liabilities of your company. Rates & Taxes and
other statutory expenses should be placed under Indirect
Expenses.
99
Groups - a revisit
Simply adhering to the reserved groups may be sufficient for many
organisations. For greater diversity, Tally allows you to create your
Groups - a own groups, either as sub-groups or primary groups. Groups can be
revisit sub-classified to practically an unlimited level, to give a virtual
accounting tree. At the lowest level, of course, would be the ledger
account. An example of sub-groups would help illustrate the power
of this facility:-
The group Indirect Expenses can be sub-classified as under (ledgers
given in italics):
Indirect Expenses
Administrative Expenses
Interest Paid
Interest paid to banks
Interest paid to others
Marketing Expenses
Packing expenses
Transportation
Advertising expenses
Direct Promotion expenses
Remember, that during voucher entry, only the ledger accounts are
used, - and the grouping structure remains transparent, irrespective
of the use of sub-classification.
This idea can be easily extended to other areas like Sundry Debtors,
Sales Accounts, Purchase Accounts, etc. For example, Debtors and
Creditors are very useful when sub-grouped according to
geographical areas:
(Ledgers are shown in italics)

Sundry Debtors
Domestic Customers
Midland customers
A & Co
B & Co
Provincial customers
Foreign customers which can be further classified
European customers
Asian customers
Indian customers and so on.
100
You may prefer to classify creditors according to their tax status, e.g.,
Sundry Creditors
Non-Trade Creditors
Party account 1
Party account 2
Trade Creditors (exempt from tax)
Party account 3
Trade Creditors (tax registered)
Party account 5
Trade Creditors (tax unregistered)
Party account 7
You can see that, unlimited levels of sub-grouping, is a convenience

to be used thoughtfully. Use it to give a never before depth to your
presentation of accounting information but take care to not carry it
too far. Too many levels of sub-groups may make their use
redundant and their management unwieldy. A simple guideline could
be to create branches of sub-groups or ledgers only if they are two or
more than in number. A situation where you have created groups as
follows should be avoided:
Marketing Expenses
Obviously, you could have done with simply creating ledgers directly
under Marketing Expenses.
* While it is necessary to assign every ledger to a group/sub-

group, it is not essential to have your own sub-classification of
accounts; you may simply use the reserved groups for grouping
your ledger accounts.
101
Opening Balance
(As on date of beginning of books)

If yours is an existing company whose books you are putting
onto Tally, this would be applicable in the following
circumstances:
If the ledger is an asset or a liability and if it has a balance in the
account as on the date of beginning of books in Tally.
Tally recognises normal accounting principles of debit balances
for Assets and credit balances for Liabilities. Of course, it
accepts the reverse for obverse balances. Revenue accounts
normally do not have balances. Tally, however, permits you to
give balances even for such accounts - You may be transferring
your books on to Tally in the middle of the year and may not
have closed them in your earlier system. Hence, you may specify
whether the balance is Debit or Credit. Simply D or C would
suffice.
& Tip to speed up data entry: You may use <Ctrl>+<A> at the
field following which the information in other fields do not need to
be changed.
102
Display or alter a ledger account
Information in display and alter is the same, hence only alter is
Display or alter discussed. Display option does not permit any modification.
a ledger Alter option is accessible only to authorised users.
Gateway of Tally Æ Accounts Info. Æ Ledgers Æ Single Alter
Æ select ledger
You are allowed to alter any information of the ledge master with
the exception of the Closing Balance of a ledger account, if any,
other than closing balance of accounts under the group 'Stock-in-
hand'.
Please refer to 'Advanced Usage' for specifying closing stock
values.
Deleting a ledger account

You can delete a ledger from the alteration mode by pressing
Delete a ledger <Alt>+<D>. Tally does not allow deletion of accounts that have
account transactions. Therefore, should you wish to delete an account,
which has transactions, you must first delete all its voucher
entries.
103
Advanced Usage
Assuming that you have set up your configuration and features as
Advanced below..
usage
[F12] Configure
F11] Features
…And that you have also activated bill wise details and cost
centres in features.
104
Your ledger creation screen would now require/allow additional
information.
(alias)
(unless you have configured not to give this information)
A simple mechanism to call an account head by another name.
For example, an account head by the name Peutronics Pvt Ltd
could also be called Tally 5.4. If you need to do so, simply open
Peutronics Pvt Ltd as 'Name' and under 'alias' give Tally 5.4.
Another possible example is International Business Machines,
which is popularly abbreviated as IBM. In such a case, you
105
might want to use IBM as an alias. For those of you who wish to
continue with account codes, you may use this field to enter your
codes. If an 'alias' is given, both 'Name' and 'alias' are available to
you while entering a voucher. You may use either to affect the
same account. If you do not want an alias, simply press <enter>
in the blank field.
Tally permits you to create any number of aliases for a ledger
name. Therefore, in the above example screen, you find the
account name Peutronics Pvt Ltd with two aliases, viz., Tally
5.4, and 001005001.
* Avoid the temptation to give many aliases just because the

facility is available. Use it on need basis and not to cater to
the whims of individuals.
Currency of ledger
Give the currency in which the ledger will be maintained. Tally
allows you to maintain ledgers in any currency. The account will
reflect amounts in the selected currency.
& You may always create a new currency by pressing <alt>+<C>.
& It is strongly advised that you maintain the currency of ledger

as the base currency. Maintain foreign currency accounts only if
you want its balance in that currency. You would normally need
to maintain only foreign currency bank accounts and not other
ledgers in foreign currency. When you maintain an account in
base currency, it nevertheless allows you to enter transactions in
any other currency. For details, please refer to the chapter on
multiple currency.
106
Advanced information
(ONLY if the ledger is maintained in base currency). (The
relevant options should have been activated in the company
features)
Maintain Balances Bill-by-bill (Yes/No)

Yes, if you wish to give a bill-wise break-up of the ledger
balance including the opening balance. You may give any
number of bills here. The option here would also determine the
ability to track transactions according to bill references. The bill-
by-bill concept in transactions would be discussed in detail under
the Vouchers chapter.
The following information for all pending bills of the previous

accounting period would be required when entering the
Opening Balance:
Date
Since you are giving the break-up of the opening balance, the
date of the bill would naturally be prior to the accounting
period. Tally defaults to the last date of your previous
accounting period, e.g., 31 March 95. Change it, if
necessary, to the actual date. To end your list of entries,
leave the Date or Name blank.
Name
Give a name to which you can later refer when adjusting the
bill. Typically, you would give the bill no or document
number. We have entered the Bill no 23 which is the
Creditor's Invoice Number. Remember, the purpose of the
break-up is to enable you to adjust it later when the relevant
transaction is squared off.
107
Due date (or credit days)
Give the credit period or the date when the bill is due. You may
give either. Tally automatically calculates the other. Another
of those small conveniences that make life easier. In the
above example, we have given the credit period as 45 days.
Tally has calculated the due date from the date of the bill 15
May 95. (You may enter the period as days, weeks, mths, or
even years, e.g. 6 weeks)
Note: During transaction entry, there would be another concept-
that of effective date. If you opt for "using effective dates"
instead of "bill dates" the due date would be calculated
accordingly.
Amount
For the amount of the bill due.
You would give particulars of all the pending bills one by one.
Tally fills in the difference between your Opening Balance,
and the sum of the Bills, and reflects it as ‘On Account’ at
the bottom of the screen. If all your bills exactly cover the
Opening Balance, the On Account becomes NIL. You may
have Bills totalling beyond the opening balance, in which
case the On Account will accumulate obversely. In the
above example, we have shown two bills 1000 and 1100 of
5000/- each. Now if the balance brought forward is 12000/- ,
the On Account amount will reflect 2000/-. If you obtain the
bill particulars at a later date, you can always alter the
ledger to put in the details, which will nullify the On Account.
108
Allocate to Cost-centres (Yes/No)
If you have activated Cost Centres in the Company Features
[F11], you will be asked this information. Tally presumes that
you would want Cost Centres for Revenue Accounts but not for
non-revenue accounts like Assets and Liabilities. Hence, in this
case you will find it set to No. If you want cost centre allocation
to this account during voucher entry, give Yes. The cost centre
concept is discussed separately.
109
Inventory values affected?
This is applicable only in case your accounts are integrated with
inventory. Accounts like sales and purchases would normally
affect inventory values in which case set this field to Yes. For
other accounts, set it to No. Tally does not restrict you to
particular accounts as you may have the need to affect inventory
with accounts like Customs Duty, and perhaps, direct expenses
related to purchases such as Freight Inwards.
Percentage of Tax (e.g. 5)

This is applicable only for ledgers falling under the group Duties
and Taxes, or under any group for which 'Used for Calculation'
is enabled. The Group Duties and Taxes is automatically used for
calculation. It is internally set as enabled and will remain so
regardless of whether you disable it.
You need to specify the rate of tax e.g. 5, 10, 12.5 etc. as a
percentage. Do not give the percent symbol.
& You may use an automatic Discount calculation facility by

specifying a negative percentage. The process will involve
creating a sub-group (preferably called Discounts), which has
‘Used for Calculation’ activated. Typically, this group would be
created under Sales or Expenses. Now, ledger accounts similar
to ‘Discount 10%’, and ‘Discount 15%’ may be created giving ‘-
10’ and ‘-15’ as the ‘Percentage of Tax’, and the relevant
‘Method of Calculation’ as explained below.
110
Method of Calculation
There are four methods of calculating a duty.
Duty Based on Items – Tax based on Item Rate

Additional Duty
On Total Sales
Surcharge on Tax
Tax or Duty Based on Items Rate (or Excise Duty)

This type of account is suitable in cases where there are
differential rates of duty/tax on items. In India, excise duty
accounts would normally adopt this method. In the UK, VAT
accounts would do likewise.
111
When creating your Inventory item masters, you might specify
Rate of Duty for each item. In your account books, you would
open a ledger for the duty, possibly by the name VAT 17.5% or
Excise Duty 12.5%. You will select this method to instruct Tally
to pick up the Rate of Duty specified in your Inventory item
master during invoice entry. If one or more items exist with the
same rate of duty, then the amount is calculated using the total.
Otherwise, it is calculated on total sales. For example,
Your invoice lists:
Item A (Rate 10%) for 10000/-
Item B (Rate 12%) for 15000/-
Item C (Rate 10%) for 18000/-
Duty (VAT or Excise) will be calculated as follows:
10% on 28000/- = 2800/- (Item A & C)
12% on 15000/- = 1800/- (Item B)
Total Duty = 4600/-
Additional Duty
When excise duty is not enabled for invoicing purposes in
Company Features [F11] (as applicable for many products in
India), Additional Duty and Surcharge function alike. In case it is
enabled, then Additional Duty is added to the ‘Duty Based on
Items’ in the invoice to reflect the ‘Total Duty payable’. Its
method of calculation is explained under ‘Surcharge’.
112
On Total Sales
As the type suggests, duty will be calculated on the total of
individual values of the items. It does not consider the Rate of
Duty specified for each item in your inventory masters.
It does not calculate duty on the current sub-total unless you
have specifically opted for it in the company features. Hence, the
two scenarios could be as follows:
When you have not opted for calculation on

current sub-total:
Assuming that there are two items in the invoice:
Item A 10000/-
Item B 15000/-
Tax 2% will be calculated at 2% on total sales of 25000/- = 500/-
tax amount following which you obtain a current sub-total of
25500/-.
If you now add another line, Tax 4%, it will calculate 4% also on
25000/- (on total sales) giving another 1000/- as tax.
If you opt for calculating on current sub-total:

The above Tax 4% will be calculated on 25500/- (25000+500)
giving 1020/- .
Surcharge on Tax
Surcharge and Additional Duty are charged on the immediately
preceding entry. A surcharge is treated as a percentage of the
duty levied. Tally expects the preceding line in the invoice to be
the duty on which surcharge is to be calculated. Hence, in the
113
above example if you have added a line Surcharge 10% it will
appear as:
Item A 10000/-
Item B 15000/-
-----------
25000/-
Tax 2% 500/-
Surcharge 10% 50 /- (10% of 500/-)
If your invoice is as below:
Item A 10000/-
Item B 15000/-
----------
25000/-
Tax 2% 500/-
Surcharge 10% 50/- (10% of 500)
Addl. Surcharge 8% 4/- (8% of 50)
During invoice creation, this figure is used to calculate tax

amount based on the method of calculation as well as specified
in invoicing configuration.
( [F12] configure ÆInvoice Entry Æ Calculate tax on current
sub-total?).
Though invoicing has been discussed separately in greater detail,
we shall touch upon relevant aspects here.
Calculate tax on current sub-total: (Yes/No)

Tax here refers to VAT or sales tax. During voucher entry in
Invoicing mode, you may enter additional ledger accounts after
giving the list of items in the invoice. Typically, the ledgers
would pertain to duties, taxes, delivery charges, other charges
114
and discounts. Sales Tax may be calculated on the total of item
values, viz., Inventory sub-total, or you may specify it to
calculate on the immediately preceding sub-total. In the latter
case, the immediately preceding sub-total could include any
entry that you may have passed, e.g. Delivery Charges. Tally
does not make any presumptions and would not verify its
appropriateness or otherwise.
Normally, you would not answer Yes to this option. The facility
of Surcharge being available, the need to calculate on current
sub-total is fulfilled by it. Hence, use it sparingly, maybe only
when you have both Excise Duty and Sales Tax (on Excise Duty)
applicable on an item.
Specifying closing stock values

Closing stock values have to be specified when accounts and
inventory are not integrated. Tally allows you to specify closing
stock values even if your books are integrated. It would simply
ignore the specified figure so long as you maintain the
integration. If and when you select to separate the books, the
specified values would automatically be considered.
115
To enter the closing stock as on a specific date, you must alter
the ledger account. Simply follow the ledger alteration procedure
or go from the Balance Sheet via Current Assets. Assuming that
you had a ledger account 'Stock ' under the group 'Stock-in-hand'
the information would be as follows:

You are allowed to alter the opening balance as well as
specify/alter closing balances on different dates. You would
typically specify Balance Sheet dates so that the Balance Sheet
reflects the amount of that date. Hence, your Balance Sheet of
30th April 1995 (or of any date up to 30 May 95) would report
Closing Stock worth 587000. The Balance Sheet as on 31st
March 1996 (or any day between 1st July 95 to 31st March 96)
would report the stock value of 457098.
116
Effective Date for Reconciliation (Bank Accounts
only)
To be given for accounts falling under the Bank Accounts Group
Effective date (or Bank OCC a/c). Default is the books beginning date.
for
reconciliation -
for Bank
accounts
This is the date from which you can reconcile your bank account
in your books with the bank statements. Normally, it would the
beginning date itself. However, you could have imported data
from a previous version of Tally or from any other system (where
the reconciliation process was not available or was different). In
that case, you may not need to reconcile the bank account with
your bank statements from the very beginning. Give the date
from which you want the reconciliation facility to be activated.
Then, previous entries will not appear for reconciliation.
117
Mailing & related details
Applicable basically for party accounts like Sundry Debtors,
Creditors and Branch Divisions. This is also available for loan
accounts. You are to give the party's particulars here. These are
used in mailing outputs like statement of accounts.
Position Index in Reports

This is viewed when you press [F10]:Chg Sort when in alteration
mode.
If this done once, it remains so till you deactivate it by pressing
[F10]:Skip Sort.)
The topic has been discussed under the chapter "Groups" under
Advanced Usage. Please refer that Chapter for the concept. The
default setting is 1000 for all ledgers. Please note that the index
is relative to other ledgers and groups within a parent group.
Hence, the position of a ledger may be changed within the Group
to which it belongs, by changing the number 1000.
Any change would not position the ledger outside the parent
group. If a group has children comprising of many groups (sub-
groups) and ledgers, the position index of the children would
determine their position within the parent group. An example is
given below:
Prior to any change in their indices, the ledgers and the sole
group 'Communication Expenses' under the group 'Indirect
Expenses' are displayed as below. (Ledgers are directly under
the group Indirect Expenses and not under Communication
Expenses sub-group):
Gateway of TallyÆGroup SummaryÆIndirect Expenses
118
Indirect Expenses
The position index of Communication Expenses (it is a group as

indicated by its bold font) is 290 and all ledgers 1000. You would
notice that because of this, Communication Expenses is at the
top, and the others sorted alphabetically as they have the same
index of 1000.
We now change the index of Motor Car Expenses to 280 and of
Staff Welfare to 900. We now see Motor Car Expenses at the top,
followed by Communication Expenses and Staff Welfare. Then
the rest with 1000 would be in alphabetic order.
119
& You can change the index from the display screen itself by
positioning the cursor on the particular account and pressing
<control>+<enter> to bring up its master to alter.
Indirect Expenses
120
Expert Usage
Multiple ledgers
Create ledgers in multiple mode
& Default values are inserted for Cost Centres and Inventory
values are affected options. The defaults are : Cost Centres – for
revenue accounts – Yes, for non-revenue accounts – No.
Inventory Values are affected – Yes for Sales and Purchase
Accounts, No for others.
& However, you are encouraged to first create a ledger under

each group in single mode and then the rest of the ledgers in
multiple mode. Tally will set the settings of that ledger as default
for other ledgers created in multiple mode. Gateway of Tally
ÆAccounts InfoÆLedgers ÆMultiple Creation
121
Under Group
Give the name of the group under which you want to create the
ledgers. Here, we have selected Bank Accounts from the List of
Groups.
Below this field, the other fields are arranged in a table. The
cursor rests at the field Name of Ledger.
Name of Ledger
Type in the ledger name.
Under
This field defaults to the parent group selected for 'Under Group'
e.g. Bank Accounts. All entries in this column would be the same.
Your cursor skips this column. However, in case the 'Under Group'
field is 'All Items', this column is not skipped and you may specify
the group. You are then allowed to even create a new group.
122
Opening Balance
- For the opening balance of the ledger account. This is the
balance remaining when you first put your books on Tally, i.e.,
the date of beginning of books. If you have opted to maintain
balances bill-by-bill, you must give the bill details. (for more on
this refer to the explanation given above under single mode
ledger creation)
Dr
Specify whether the Opening Balance is Debit or Credit. Tally
follows the normal accounting principals of accounting. (For
details, refer to the explanation under single mode ledger
creation).
Alter ledgers in multiple mode

Gateway of Tally ÆAccounts InfoÆLedgers ÆMultiple Alter
ÆSelect Group
The screen is exactly similar to the multi-mode creation screen.
You are allowed to alter any field.
Delete ledgers in multiple mode

You are not allowed to delete a ledger from this mode. Select
single alter mode to delete.
123
F3:Company: To work with a different company. In the creation mode, you can
create cost categories in the other company. In alter mode, you
F3: New Cmp: To work on the same report of another company. Available only
in display mode.
F4: Parent: To move the cursor to the field 'Under Group'
F4: New Parent: To bring up the list of Groups to select a new parent Group.
Zero Op Bal: To delete (zeroise) all opening balances in this group.
F6: Skip names: For faster data entry when you do not need to the names of
ledgers. The cursor will not go to that column. Toggle to 'Edit
names'.
F7:Skip Parent: For faster data entry when you do not need to alter the parent
Group. The cursor will not go to the column 'Under'. Toggle to
'Edit Parent'.
F8:Skip Details: The cursor will not go to the columns Opening Balance and
Dr/Cr. Toggle to 'Edit Details'.
F9:Show Closing: Closing Balances replace Opening Balances. This is available
only in alter mode. Closing balance is not alterable and the cursor
skips the field.
F10:Chg Sort: To display a column of sorting position indices. Toggle to 'Skip
Sort'. You may change display positions of ledger accounts under
the group. (refer to the discussion on the subject in Advanced
Usage).
Groups, Ledgers, Cost Categories, Cost Centres:
To enable you to switch to these areas without having to quit from
the current screen.
F11:Features: To change company features. A detailed discussion on features
has been done in earlier section under Gateway of Tally.
Configuration changes affect all companies whereas Features changes affect on the
current company.
124
Cost Categories and Cost Centres
Introduction
Cost Centres
Tally's concept of Cost Centres allows an additional dimension to
Introduction to a transaction. While a ledger account would indicate the nature
Cost Centres of a transaction, it would not readily disclose, except in the
narration, which part of an organisation was involved. By
providing cost centres, a transaction can be allocated to it which
would then enable extraction of all transactions for a cost centre.
Hence, a cost centre can be said to be any unit of an organisation
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. Tally gives you the cost centre break-
up of each transaction as well as details of transactions for each
cost centre. When you also allocate income to the units, they
become Profit Centres. You can now obtain a Profit and Loss
account of each such Profit Centre. For your purposes, the terms
Cost Centre and Profit Centre are interchangeable.
Examples of cost centres:
Departments of an organisation, e.g., Finance,

Manufacturing, Marketing, etc.
Products of a company, e.g., Tally dss 4.5, Tally eis 5.4 etc.
Even individuals like, Salesman A, Salesman B, etc.
125
Use of Cost Centres
Quite like the Groups/Ledger classification of accounts, you can classify

your cost centres too. Hence, you may have Primary Cost Centres and
several layers of cost centres under each
Primary Cost Centre. e.g.
Primary cost centres = Finance, Manufacturing, Marketing
Under Marketing, you may wish to create the company's sales
executives as cost centres. This would be so, if you
need to keep track of a sales executive's performance -
cost and revenue generated. Hence, you would have
the following cost centre structure (shown only for
Marketing Department):
Primary cost centre - Marketing
Under marketing:
- Salesman A
- Salesman B
- Salesman C
You may allocate expenditure incurred on sales by the salesmen, as
well as the sales generated by them, directly to their cost centres.
The allocation is done online at the time of transaction entry itself.
This prevents period end allocation problems when you find a large
number of transactions not allocated. Of course, you would by now
have assumed, Tally allows modification of wrong allocations at any
time by alteration of entries. (Facility available to authorised users
only). By allocating your expense and sales transactions to the
salesmen you have set up a valuable information system to know
the efficiency and effectiveness of the salesmen.
Your actual screens would appear thus:
126
Cost Categories (For advanced usage only)
Cost Categories have been introduced for organisations requiring
allocation of resources to parallel sets of cost centres. Such
organisations would usually be project oriented.
& Most organisation s would not need cost categories at all.

Proper use of Cost Centres itself would give you the same
benefits. Cost categories would increase your data entry worked
as well as complexity. Hence, before opting for it, please
evaluate carefully whether you actually need cost categories.
Always attempt to first use cost centres alone.
Use of Cost Categories

If it were not for Cost Categories, there would be only one set
of cost centres, e.g., only one set of Primary Cost Centres
with each Primary cost centre having its own subsidiaries.
By using Cost Categories you may allocate, in parallel, a
transaction to more than one set of cost centres. Its use
becomes apparent with the following example: Let us
extend the above example itself. The Primary Cost Centres
Marketing, Finance and Manufacturing can now belong to a
category - Departments. The Salesmen A, B & C can be
cost centres under a Category - Executives. Similarly, you
can create a new Cost Category 'Projects' under which cost
centres Airport construction, Road construction and
Buildings may be created. The classification would look
somewhat like the matrix below:
Cost Categories: Departments Executives Projects
Cost Centres: Marketing Salesman A Airports cont.

Manufacturing Salesman B Road const.
Finance Salesman C
Buildings
You may specify a cost category to allow allocation of only
revenue items or items of both revenue and capital nature.
In this example, we would allow both for Departments and
Projects categories and only revenue for Executives.
127
Now, Salesman A incurs conveyance expenses of 1000/- .
If he has incurred it for marketing, allocate this amount to
the cost centres Marketing and his own cost centre
Salesman A. (You would do it while entering a payment
voucher debiting Conveyance and credit Cash. If the
salesman now incurs expense for the project Buildings, you
would allocate to the cost centres Salesman A and
Buildings. You may allocate an expense to one or more
cost centres and it is not essential to always allocate to all
cost centres. An expense can remain unallocated to other
cost centres.
If you did not have cost categories, you would have been
able to allocate the expense to either the Project Buildings
cost centre or Salesman A and not to both. In such a case,
you would not obtain the third dimension.
Hence, you are able to obtain details of conveyance

incurred by Salesman A on Marketing as well as on
Buildings project when you have cost categories. You
cannot, however, extract a single report giving details of
marketing expenses incurred by Salesman A on Project
Buildings. These are different cost categories and cannot
be merged. If such reports are required, you must create
ledgers like Conveyance - marketing which will help
generate the desired report.
By allocating to parallel cost centres under different

categories, you are simply assigning the amount to them; it
does not increase the amount. In the above example, the
conveyance of 1000/- remains an expense of 1000/- only.
Tally performs an automatic reconciliation on real-time
basis and you do not need to worry about reconciling
ledgers and cost centres.
* Note: You do not allocate transactions to cost categories,

you allocate them to cost centres only. The concept is not
unlike group/ledger account classification.
128
How to manage and operate Cost Centres
In the introduction to this chapter, the concept and use of cost
centres were explained. You should go through them now if you
have not already done it.
Create a Cost Centre

Gateway of Tally Æ Accounts Info. Æ Cost Centre Æ Single
Create
Category
This field appears only when you have opted for 'more than ONE
Cost Category'. Otherwise, Tally automatically creates a
'Primary Cost Category' to which all cost centres are assigned.
This default Primary Cost Category is transparent to you and you
need not worry about it till you want more than one cost
category. (Cost categories have been explained above and under
Advanced usage). You will normally not need more than one
category and should not use it till you are absolutely sure that the
same information is not available with cost centres alone. We
shall create a primary cost centre Bangalore.
129
Name
The name of the Cost Centre. We create the Cost Centre
'Bangalore' here.
alias
We can call the Cost Centre Bangalore with another name, say
Head Office, or even a code number.
Under
This field is for the parent cost centre of the cost centre
Bangalore under creation. You had already created a Primary
Cost Centre Departments with cost centre Marketing, Salesman
A, Salesman B and Salesman C. You may put the cost centre
Bangalore under any one of these. However, since it would not
be suitable you may have it as a primary cost centre. Assign
Bangalore to Primary and accept the screen. You may go on to
create a new Cost Centre 'Finance' under 'Departments' as an
exercise.
* Unlike groups, you may allocate transactions to primary cost centres

too. However, you should do so when you do not have sub-cost
centres under the primary. Allocation to a higher level cost centre is
often unnecessary and your information is more meaningful if you
allocate to the lowest levels (similar to ledgers).
Alter a cost centre

Gateway of Tally Æ Accounts Info. Æ Cost Centres Æ Single
Alter Æ List of Cost Centres
The screen is exactly the same as the creation screen and is,
therefore, not reproduced here.
130
Name and alias
Change them if you need to do so.
Under
You may change the parent to any other cost centre.
Explanation on
Buttons for cost
centres in single
mode
F3:Company: To work with a different company. In the creation

mode, you can create cost categories in the other
company. In alter mode, you can copy the
information by accepting the screen (<enter> or
<Ctrl>+<A>). The old company's information
remains. Not available in Display mode.
Groups, Ledgers, Cost Centres, Voucher Types:
To enable you to switch to these areas without
having to quit from the current screen.
F11:Features: To change company features. A detailed discussion

on features has been done in earlier section under
Gateway of Tally.
NOTE: Configuration changes affect all companies whereas

Features changes affect on the current company.
131
Expert Usage
Create Multiple Cost Centres

Gateway of Tally Æ Accounts Info. Æ Cost Centres Æ Multiple
Create
This is a quick way to create a number of cost centres at a time.
Under Cost Centre

You would select a particular cost centre as the parent cost centre
if you wish to create a number of cost centres under it. In the
above screen, we have selected Finance as we would like to
create the cost centres Taxation, Management Accounts and
Financial Accounts under it. If you do not want to be restricted to
one parent cost centre while creating cost centres, choose 'All
Items'.
132
All Items
In case the parent cost centre is 'All Items', you will have to fill
up all the columns. The table below 'Under Cost Centre' has the
columns Name of Cost Centre and Under (Parent cost centre). If
your parent cost centre (the field 'Under Cost Centre') is not 'All
Items', your cursor would only go the column Name of Cost
Centre. This is obviously because the information is already
known.
Name of Cost Centre

Give the name of the new cost centre. In the above screen,
rapidly create cost centres Taxation, Management Accounts and
Financial Accounts. The alias facility is not available in this
mode. Select single alter to give aliases to cost centres being
created in multiple mode. To accept the screen and end entry
select End of List from the List of Cost Centres.
You are not permitted to accept a blank table.
Under
Give the parent cost centre here. You may not create a parent
here - the ubiquitous <alt>+<C> is not available for this field.
133
Alter Cost Centres in multiple mode
Cost Centres Alter ÆSelect from List of Cost Centres
Under Cost Centre

Since you selected Finance from the popup List of Cost Centres, it
fills up this field and the cursor goes to the field Name of Cost
Centre. In case you had selected 'All Items' from the popup List of
Cost Centres, the cursor would go to the field Name of Cost Centre
in the table. You are allowed to use <backspace> to move back to
the field 'Under Cost Centre' or use the button F4 to Change Parent.
Name of Cost Centre

You may alter the name of the cost centre
Under
Select from the available list of Cost Centres under the specified
category. Observe that other cost centres are available for
selection as a parent.
Delete Cost Centre in multiple mode
You cannot delete a cost centre here. IF you need to delete, go
through the Single Alter mode.
134
F3:Company: To work with a different company. In the creation mode, you can
create cost categories in the other company. In alter mode, you can
copy the information by accepting the screen (<enter> or
F3: New Comp: To work on the same report of another company.

Available only in display mode.
F4: Parent: To move the cursor to the field 'Under Cost Centre'
F4: New Parent: To bring up the list of cost centres to select a new parent
cost centre.
F6: Skip names: For faster data entry when you need to alter only the
Category and the Parent Cost Centre but not the names.
When you skip names, you might change the category or the
parent cost centre to one which belongs to another category.
Since this violates categorisation rules, Tally complains after
you accept the screen. (The error message is reproduced after
the explanation on buttons.
F7:Skip Parent: For faster data entry when you do not need to alter the
parent cost centres but only the name of the cost centre. The
same error as is possible with Skip names should be avoided.
Groups, Ledgers, Cost Centres:

Tally.
135
Advanced Usage
How to manage and operate Cost Categories

To use Cost Categories, you must activate the option 'More than
One Cost Category' in [F11] Company Accounting Features.
* The default is No for 'more than ONE Cost Category'. In

this state, Tally creates a single Cost Category called
'Primary Cost Category'. All cost centres created, prior to
enabling this feature, go into this category. Now after
activating it, you would need to create the new cost
categories, and alter the existing cost centres to bring them
under respective cost categories.
Create a Cost Category

Gateway of Tally Æ Accounts Info. Æ Cost Categories Æ Single
Create
Name
The name of the cost category, e.g., Products. Earlier, we had
created Departments, Branches and Executives.
136
* There is no sub-classification of cost categories and hence
you do not find an 'Under' option. Though there is a primary
cost category, it is not a parent of other categories.
Alias
You may call the category by another name or even a code
number.
The following information is additionally available when you
have opted for Advanced Information in [F12] Accounts
Configuration.
Allocate Revenue Items (Yes/No)

Enable this option to allocate all sales, purchase, expenses and
income related transactions to cost centres that you will create
under cost categories. Normally, you would enable this option.
However, should you need to allocate only capital/non-revenue
items only to cost centres in this cost category, disable it by
selecting 'No'.
Allocate Non-Revenue Items (Yes/No)

You would, normally, disable this option as most cost centres need
only revenue allocation. However, should you wish to allocate
137
items of non-revenue (capital) or Balance Sheet items, you may
select 'Yes'. Organisations are increasingly requiring allocation of
capital items to cost centres. They wish to monitor the capital
expenditure incurred on cost centres and measure them against
revenue earned. Hence, recognising this trend, Tally has provided
this facility.
* Remember that you must enable either revenue or non-revenue

item or both. You may not disable both. Tally sets a default of Yes for
revenue items and No for Non-revenue.
Alter a cost category

Alter ÆList of Categories
Simply alter any detail in the cost category. The display option is
exactly like alter but without the ability to modify anything in the
screen.
Delete a cost category

Alter ÆList of Categories
You may delete a cost category that does not have any cost centre
under it. Use <alt>+<D> to delete. Tally does not allow deletion
of a cost category which has cost centres.
138
Buttons in single cost category screens
Explanation on Buttons in single cost category

screens

can create cost categories in the other company. In alter
mode, you can copy the information by accepting the screen
(<enter> or <Ctrl>+<A>). The old company's information



Tally.
NOTE: Configuration changes affect all companies whereas Features

changes affect on the current company.
139
Expert Usage for Cost Categories
Create Multiple Cost Categories
Gateway of Tally Æ Accounts Info. Æ Cost Categories Æ
Multiple Cost Category Create

This is a quick way to create a number of cost categories in one
sitting. Give the name of the cost category and whether you need
to allocate revenue and/or non-revenue items to cost centres
under it. In the above screen, we have entered two cost
categories, Processes and Machines. We wish to allocate both
revenue and non-revenue items to Processes and only revenue to
Machines. Once the list is completed, press <enter> on the first
blank Name of Category field to accept the screen and exit.
* There is no 'Under' field. You cannot sub-classify cost

categories. Cost categories have cost centres as their sub-
classification.
140
Alter Cost Categories in multiple mode
Gateway of Tally Æ Accounts Info. Æ Cost Categories Æ
Multiple Cost Category Alter
You may alter name or allocation particulars without any

restriction.
Delete Cost Category in multiple mode

You cannot delete a cost category here. IF you need to delete, go
141
Buttons in multiple mode

mode, you can create cost categories in the other
company. In alter mode, you can copy the information
by accepting the screen (<enter> or <Ctrl>+<A>). The
old company's information remains. Not available in
Display mode.
F6: Skip names: For faster data entry when you need to alter only the
Allocation details but not the names of the cost
categories.
F8:Skip Details: For faster data entry when you do not need to alter the
Allocation (Revenue and Non-revenue) details. You
need to give only the names and the default allocations
of Yes for Revenue and No for Non-revenue would be
automatically inserted when you are creating cost
categories. If you are in alter mode, whatever allocation
you had opted for, when creating the categories, would
be retained.
Groups, Ledgers,Cost Categories, Cost Centres:
To enable you to switch to these areas without having
to quit from the current screen.
features has been done in earlier section under Gateway
of Tally.
(!!) Configuration changes affect all companies whereas Features
142
How to manage and operate Cost Centres under
Cost Categories
In the introduction to this chapter, the concept and use of cost
centres were explained. You should go through them now if you
have not already done it.
Create a Cost Centre

Gateway of Tally Æ Accounts Info. Æ Cost Centre Æ Single
Create
Category
This field appears only when you have opted for 'more than ONE
Cost Category'. Otherwise, Tally automatically creates a
'Primary Cost Category' to which all cost centres are assigned.
This default Primary Cost Category is transparent to you and you
need not worry about it till you want more than one cost
category. (Cost categories have been explained above). We had
already created the cost category Branches. We shall now create
Cost Centres under this category. Select Category from the List
of Categories or create one using <alt>+<C>. If your cursor goes
straight to the next field Name, press <backspace> if you wish to
go back to Category.
143
Name
The name of the Cost Centre. We create the Cost Centre
'Bangalore' here.
alias
We can call the Cost Centre Bangalore with another name, say
Head Office, or even a code number.
Under
This field is for the parent cost centre of the cost centre
Bangalore under creation. The parent must belong to the same
Cost Category -Branches. Since you do not have any other cost
centre under Branches cost category, you will find only Primary
as the available parent in the popup list of Cost Centres. Assign
Bangalore to Primary and accept the screen.
& Unlike groups, you may allocate transactions to primary cost

centres too. However, you should do so when you do not have
sub-cost centres under the primary. Allocation to a higher level
cost centre is often unnecessary and your information is more
meaningful if you allocate to the lowest levels (similar to ledgers).
Alter a cost centre

Gateway of Tally Æ Accounts Info. Æ Cost Centres Æ Single
Alter Æ List of Cost Centres
The screen is exactly the same as the creation screen and is,
therefore, not reproduced here.
144
Category
Though your cursor does not come to it right away, you are
allowed to change the Cost Category of the cost centre. Press
<backspace> to go to Category.
Name and alias

Change them if you need to do so.
Under
You may change the parent to any other cost centre under the
Category.
Buttons for cost centre single mode

Explanation on mode, you can create cost categories in the other
Buttons for cost company. In alter mode, you can copy the
centres in single information by accepting the screen (<enter> or
mode <Ctrl>+<A>). The old company's information

To enable you to switch to these areas without
having to quit from the current screen.
F11:Features: To change company features. A detailed

discussion on features has been done in earlier
section under Gateway of Tally.
F12:Configure:To change configuration of master information.
Configuration changes affect all companies whereas Features

145
Expert Usage for Cost Centres under Cost
Categories
Create Multiple Cost Centres under Cost
Categories
Create
This is a quick way to create a number of cost centres at a time.
Under Cost Centre

You would select a particular cost centre as the parent cost centre
if you wish to create a number of cost centres under it. In the
above screen, we have selected Finance as we would like to
create the cost centres Taxation, Management Accounts and
Financial Accounts under it. If you do not want to be restricted to
one parent cost centre while creating cost centres, choose 'All
Items'.
The table below 'Under Cost Centre' has the columns Category,
Name of Cost Centre and Under (Parent cost centre). If your
parent cost centre (the field 'Under Cost Centre') is not 'All
Items', your cursor would only go the column Name of Cost
Centre. This is obviously because the information of the other
146
fields is already known. In the above screen, rapidly create cost
centres Taxation, Management Accounts and Financial Accounts.
Select End of List to accept and quit.
All Items
In case the parent cost centre is 'All Items', you will have to fill
up all the columns. The cursor will wait at the first Category
field.
Category
For the category under which the cost centre will be created.
Select from List of Categories or create a new category using
<Alt>+<C>.
To accept the screen and end entry select End of List from the
List of Categories. You are not permitted to accept a blank table.
Name of Cost Centre

Give the name of the new cost centre. The alias facility is not
available in this mode. Select single alter to give aliases to cost
centres being created in multiple mode.
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Under
Give the parent cost centre here. The popup List of Cost Centres
will allow you to select only those cost centres that belong to the
category. For example, while creating the cost centre
Management Accounts, the List of Cost Centres for the field
Under would contain only the Departments Finance,
Manufacturing and Marketing. Other cost centres will be
excluded. You may not create a parent here - the ubiquitous
<alt>+<C> is not available for this field.
Alter Cost Centres (under cost categories) in

multiple mode
Cost Centres Alter ÆSelect from List of Cost Centres
All fields may be altered for a given Cost Centre.
Under Cost Centre

Since you selected Finance from the popup List of Cost Centres,
it fills up this field and the cursor goes to the field Name of Cost
Centre. The Category is automatically filled up. In case you had
selected 'All Items' from the popup List of Cost Centres, the
cursor would go to the field Category. You are allowed to use
<backspace> to move back to the field 'Under Cost Centre' or use
the button F4 to Change Parent.
Category
You may change the category or create a new one.
Name of Cost Centre

You may alter the name of the cost centre
148
Under
Select from the available list of Cost Centres under the specified
category. Observe that even Taxation is available as a parent.
Delete Cost Centre (under cost categories) in

multiple mode
You cannot delete a cost centre here. IF you need to delete, go
Explanation on Buttons in multiple mode
F3:Company: To work with a different company. In the

creation mode, you can create cost categories in
the other company. In alter mode, you can copy
the information by accepting the screen (<enter>
or <Ctrl>+<A>). The old company's
information remains. Not available in Display
mode.
F4: Parent: To move the cursor to the field 'Under Cost
Centre'
F4: New Parent: To bring up the list of cost centres to select a
new parent cost centre.
F6: Skip names: For faster data entry when you need to alter only
the Category and the Parent Cost Centre but not
the names. When you skip names, you might
change the category or the parent cost centre to
one which belongs to another category. Since
this violates categorisation rules, Tally
complains after you accept the screen. (The
error message is reproduced after the
explanation on buttons.
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F8:Skip Parent: For faster data entry when you do not need
to alter the parent cost centres but only the
name of the cost centre. The same error as is
possible with Skip names should be avoided.
Groups, Ledgers, Cost Categories, Cost Centres:
To enable you to switch to these areas
without having to quit from the current
screen.
F11:Features: To change company features. A detailed
discussion on features has been done in
earlier section under Gateway of Tally.
F12:Configure: To change configuration of master
information.
* Configuration changes affect all companies whereas

Features changes affect on the current company.
Error in categorisation of cost centres:
PARENT BELONGS TO ANOTHER CATEGORY!

This error occurs when you have attempted to assign a cost
centre to a parent cost centre belonging to a different
category. In most places, Tally prevents you from making this
error by not even displaying a cost centre belonging to a
different category. However, this prevention is not possible
when you are altering a cost centre in multiple mode -
selecting 'All Items' in Under Cost Centre (You may chosen to
skip either or both). You would first have changed the
Category, but not changed the name and the parent. Since
the parent could have belonged to a different category, Tally
complains. However, Tally is able to ascertain this error only
when you accept the screen.
150
Budgets
Tally allows you to create multiple budgets. There could be a
budget for specific purposes, e.g., for the bank, for the head
office, optimistic budget, realistic budget, pessimistic budget, etc.
Departmental Budgets can also be created, e.g., Marketing
Budget, Finance Budget, etc.
As usual, you first create budgets. You can of course alter them.
Budget figures are used to compare against actuals and to display
variances. This is done by bringing up a new column when
displaying a statement and selecting the appropriate budget.
We shall now go through the creation and alteration of budgets.
How to manage and operate budgets

Gateway of Tally ÆAccounts Info ÆBudgets
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Create a budget
Name
Give the budget a name, in this case, Corporate Budget. As you
may have other budgets as well, the name distinguishes them.
Under
In the true Tally tradition, you can have a hierarchical budget set-
up. At the top level is the Primary Budget. You can set up more
than one Primary Budget. Under each Primary Budget, sub-
budgets can be created.
Period of Budget
Specify the period of the budget. The period could be a month, a
year or any period starting from any date to any date.
Set/Alter Budgets of
You may want to set the budget for groups of ledger accounts or
for ledger accounts individually or for cost centres or all of them.
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We shall take up budget for group only. Follow the same process
for setting budgets for individual ledgers and cost centres.
Group
Yes, if you want to set budgets for a group or groups of ledgers.
If yes, fill in the fields in the Group Budget sub-screen:
Account Name
Give the names of the groups for which the budget is being set.
Cost Centre
For each group name, a cost centre may be earmarked, i.e.,
Indirect Expenses for a particular cost centre or a group of cost
centres only. If you select ‘Not Applicable’, then the budget is
not for any particular cost centre but the company as whole.
Type of Budget
Budgets could be of two types:
On Nett Transactions – where transaction amounts are to be
monitored and not the balances. Nett is net of debits and credits
for the specified period. Hence, nett transactions for Indirect
Expenses would mean the debit amount for the specified period
153
after reducing the credits for the same period. Opening and
closing balances notwithstanding.
On Closing Balance – where you wish to monitor the balance of
the accounts and are not too keen on the transactions., e.g.,
balances of Bank Accounts, balances of debtors.
Amount
The budget amount for the account for the specific cost centre.
Alter a budget
Accts Info. ÆBudgets ÆSelect the budget to alter
If you select the alter the Corporate Budget of Groups of ledger
accounts, say Yes to ‘Set / Alter Budgets of Groups’. The default
is No.
The same sub-screen for Group Budget pops up for alteration of

the figures. Alter necessary fields and accept.
Delete a budget
Choose to Alter a budget. Press [ALT]+[D] to delete it.
154
Vo u c h e r Ty p e s
Introduction to Introduction
voucher types A voucher is the primary online document for recording
transactions. Transaction recording and analysis are greatly
facilitated by having specific formats for different types of
transactions. Tally provides 16 different predefined voucher
formats or what it calls predefined types of vouchers. These are
used for recording various transactions. A payment voucher is
used for all types of payments, a receipt voucher for all types of
money receipts, a sales voucher for recording sales transactions,
and so on.
These predefined vouchers fulfil your normal transaction needs.
They pertain to both accounting and inventory. Some of these
vouchers can also be used differently according to the situation,
e.g., sales vouchers can be used as invoices, vouchers can be
post-dated, etc. Such use can be decided at the time of voucher
entry by selecting the appropriate button.
The predefined voucher types can be displayed as follows:
155
Gateway of Tally Æ DisplayÆ List of Accounts Æ <Ctrl>+<V>
Introduction to [Voucher Types]
voucher types
How to manage and operate voucher types

Tally acknowledges the special requirements of some users for
Manage and more voucher types. These arise in cases like when you need the
operate voucher same voucher but in different names or separate series of
types numbers.
Examples include Cash Payment Vouchers and Bank Payment
vouchers where the relevant predefined voucher is Payment
Voucher. You may have two or more sets of Sales Vouchers for
different kinds of sales transactions e.g. Credit Sales, Cash Sales,
etc.
156
You would need to alter a voucher type to change default settings
for different information appearing in vouchers. Using [F12] can
further configure a voucher.
Alter a voucher Alter a predefined voucher type

type Even if you do not need extra voucher types, you would
normally alter the predefined voucher types to customise them
according to your needs, e.g., to control their numbers.
Display or alter each voucher type (by pressing <enter> or
double clicking) after Gateway of Tally Æ#DisplayÆ#List of
Accounts Æ <Ctrl>+<V> [Voucher Types]
We shall create a new voucher type to explain the different
features. It would also be applicable to alteration of voucher
types including predefined types.
Create a voucher type

Create a new voucher type
Gateway of Tally Æ Accounts Info. Æ Voucher Type Æ Create
* Note: a new voucher type must assume the functions of a

predefined voucher type.
157
Name
Give the name of the new voucher type, e.g., Bank Payment
Voucher.
Type of Voucher
The type of voucher should be any one of the predefined voucher
types (listed in introduction above). The new voucher type would
inherit the properties of this predefined voucher type. It would
function exactly like the predefined voucher.
Abbreviation
An abbreviation is required particularly for unformatted reports,
which do not use compressing techniques. (Tally allows printing
of both formatted and unformatted reports). In this example, give
'BPymt' as the abbreviation. Though there is no restriction on the
158
length of the abbreviation, it should preferably be five characters
or less.
Method of Voucher Numbering

This is, perhaps, one reason for your opting for a new voucher
type. There are three methods available:
Automatic - instructs Tally to number the vouchers of this type
incrementing automatically.
Manual - if you wish to number the vouchers yourself.
None - if you do not want any voucher numbers for vouchers of
this type.
Advanced Usage
A further discussion on these options is necessary:
None
This will disable numbering of such vouchers. If you select this
method, no further information is required.
Manual
This method will allow you to number vouchers of this type
yourself. It does not check for sequence of the numbers and
permits you to specify anything you wish in the voucher number
field. However, you may choose to prevent entry of duplicate
numbers. If you do, enable the next field 'Prevent Duplicates'.
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* Prevention of Duplicates is possible if you enable the option
at the time of creation. You may enable it later (by
alteration) only if there are no transactions of this voucher
type.
* If you face difficulty because transactions now exist, simply

create another voucher type for preventing duplicates of
subsequent voucher numbers.
No further information is required for manual numbering

method.
Specific issues Automatic

in automatic This method is both flexible and exhaustive. Use it carefully to
numbering of
give you your desired numbering system. Select this option to let
vouchers
Tally number the vouchers automatically for you. You must give
the following additional information:
Starting number
Give the number for the first voucher. Usually it is 1. You can set
it to any number you want. Tally will auto-increment from this
number for subsequent vouchers. However, the numbering of
vouchers also depends on other variables supplied by you, which
follow hereafter.
Width of Numerical Part

You may leave it blank to let Tally automatically adjust the width
according to the number. However, for more aesthetically aligned
look in reports, you may keep a fixed width, e.g., 3.
160
Profile with ZERO?
When the width is specified, the digits before the number is
blank if 'No' and zeroes if 'Yes'.
E.g. 001 1
010 10
PEU/001/96-97
PEU/1/96-97
PEU/ 1/96-97
Use common narration?

Select Yes to give a common narration for the entire voucher. Tally
vouchers can have multiple entries. Hence, you may wish to give a
common narration for all the entries of the voucher or a separate
narration for each entry or both. Select Yes even when you want
both. Select No if you do not want a common narration.
Example of common narration in a voucher: -
Select Yes if you want to give a separate narration for each entry
Narration for of a voucher. This would be applicable for a multiple entry
each entry? voucher where you want separate details for each entry. Select
No if you do not want separate narration for each entry.
161
Example of separate narration for each entry: -
162
Print after saving voucher?
If you want to print every voucher after entering it, select Yes,
else select No. This is suitable for an online environment where
you use the Tally printed voucher as the formal voucher.
Remember, however, that the transaction is already recorded and
posted and should you wish to make corrections to the printed
voucher, you must alter the Tally voucher online and print it out
again.
163
Use EFFECTIVE dates for vouchers?
Select Yes if you want to enter effective dates for vouchers. You
would opt for this if you have instances where a transaction
under consideration for overdue/ageing analysis is recorded
currently but will take effect from another date. If effective date
is entered, the overdue/ageing will be considered from the
effective date and not from voucher date.
Restart Numbering
Voucher Numbering may be restarted with the starting number
(as specified) at intervals selected by you - Monthly, Yearly or
Never. You must give the date whence numbering should restart
under the field Applicable from. The date must be the first day of
the month. You may specify more than one Restart dates. For
example, should you wish to renumber your vouchers from 01
June 96 on yearly basis, you must specify it in the next field.
This would retain the numbering system in the prior period. If,
however, you want to change the numbers from the beginning
from monthly to yearly basis, simply alter the first field itself.
Prefix Details
If you want the voucher numbers to be prefixed with some fixed
information, give the information here. Examples of prefix
details are:
month of the voucher as given above- 'April/'

company info like 'PEU/'
even fixed number series like '1000'
164
* The numeric portion begins immediately after the prefix
information. Therefore, be sure to give a space or a slash '/'
or some such character should you want a separation, e.g.
we have specified April/. The slash would cause the
voucher number to appear as April/001, otherwise it would
be April001. This facilitates simple usage for fixed number
series appearing as 200100001 where 2001 is the prefix,
and 00001 is the starting number with a width of 5, and with
leading zeros.
You can choose different prefix information for different periods

or let one continue. The prefix continues from the date you
mention under 'Applicable from' till the next date that you may
give under 'Applicable from'. Hence, we have chosen to change
the prefix from April to May when the month changes. Please
note, however, that if we omit to change the prefix for the
subsequent months (i.e. do not give 'Applicable from' date for the
month), your voucher numbers for even June, July etc would
contain the prefix 'May/'.
Suffix Details
You can also give fixed suffix information for the voucher
number. The same rules and effects as for Prefix Details apply.
165
Currencies
(Multiple currencies and foreign exchange)
Introduction
For many organisations, globalisation of business has
Introduction to necessitated working with more than one currency. Transactions
multiple are often made in currencies other than the home currency. Such
currencies transactions have to be recorded either in the home currency or
in the foreign currency. If they are recorded in home currency,
the rate at which the foreign currency is exchanged for the home
currency should be recorded as well. Sometimes you need to
record the transaction in foreign currency itself. This would arise
when you maintain the balance of the concerned account in
foreign currency. Tally uses the term base currency for the
currency in which your account books is kept (typically in home
currency). Foreign Exchange is used interchangeably with
foreign currency.
You had, of course, specified your base currency while creating
the company.
Tally has attempted to make the complex task of handling
multiple currencies very easy for you. You would find some new
ways of working with multiple currencies, automatic calculations
of exchange rates, automatic conversion of any currency used to
record a transaction to the currency of the account, etc.
166
* The Balance Sheet and Profit & Loss Account of the
company will always be maintained in the base currency.
Conversion of foreign currency account balances will be
done as per rules set by you. An explanation on the rules
will be given below.
* You must assess the need for using multiple currencies.

Quite often, all you need is conversion of foreign currencies
to base currency at the time of recording a transaction. This
may easily be obtained with the calculator. If you
experience foreign exchange gains or losses, or have a
foreign currency bank account or need to maintain
accounts in different currencies, then by all means take
advantage of Tally's comprehensive forex management
features.
Managing and operating multiple

currencies
You must first activate multi-currency capabilities.
Create and alter Gateway of Tally Æ [F11]:Features
foreign
currencies and
rates of
exchange
Now, let us work with currencies.

Gateway of Tally Æ Accounts Info. Æ Currencies
The Currencies menu has the usual create, display and alter
options. There is an additional option, Rates of Exchange. We
shall examine each option in greater detail.
167
Create a foreign currency master
You will now need to create the foreign currencies that would be
used.
Gateway of Tally Æ Accounts Info. Æ Currencies Æ Create
Create a foreign
currency master
168
Symbol
Give the Currency symbol, as it should appear in all reports. If
your keyboard does not have the symbol, you may use ASCII
special characters with [Alt] key combination. Utilities like
Character Map in Windows will give the key combination for
most symbols. Some notebook computers may not easily allow
input of special characters through [Alt] key combination.
Consult the computer's user manual or ask the vendor.
Tally prevents you from having duplicate symbols.
Formal Name
This is meant for the name of the currency, e.g., U.S. Dollars,
Pound Sterling, Indian Rupees, etc. You are not allowed
duplicates.
Advanced users would be interested in the main reason for requiring
a formal name:
Suppose you have two companies, viz., Tally Demo & Company
and Tally Demo. Each company would have its own set of
currencies. In one you may have used the symbol $ for
Australian Dollars and in the other the symbol $ may be for U.S.
Dollars. You might have occasion to compare an account in the
two companies (by using New Column in displays). For proper
comparison, you would want the accounts in the same currency.
Since the symbol is the same but refer to two different
currencies, The Formal Name is used to distinguish them. How
does it do it?
The company that has been loaded first will retain the original
symbol for display purposes. The other company's currency
symbol will be prefixed with the first letter of the formal name (or
as many letters as necessary to make it unique). E.g., If Tally
Demo is loaded first and then Tally Demo & Company, the
symbol $ will remain for Australian Dollars in Tally Demo. In Tally
Demo and Company, the symbol $ will be prefixed with the letter
U which is the first letter of its formal name. Though you may not
appreciate the significance when working within one single
company, it will be quite apparent when you wish to compare
data with another company.
169
Number of Decimal places
Give the number of decimal places for the currency. You cannot
specify the name for loose change e.g. pence, cents, paisa etc.
Hence, you must specify decimal places. Some currencies have 2
decimal places, e.g. paisa; some have 3, e.g., Dinar. Still some
others do not have any decimal places at all, e.g., Vietnamese
Dong.
* You are not permitted to change the number of decimal places once
you have used the currency in entry of transactions.
Show amounts in millions? (Yes/No)

Tally has two formats for displaying an amount, viz., in millions
and in lakhs. 1000000 (one followed by six zeroes) in millions
format would appear 1,000,000 and in lakhs 10,00,000.
Selecting 'No' would mean you want amounts to appear in lakhs.
Note for advanced users:
You can always specify the appearance of numbers in specific
reports, e.g., when displaying the Profit & Loss Account
press [F12]:Configure
170
Here the default is either millions or lakhs selected by you for
the base currency.
Is symbol suffixed to amounts? (Yes/No)

Normally currency symbols are prefixed. However, if you want it
to appear after the amount, select Yes.
Put a space between amount and symbol?

(Yes/No)
This is purely for aesthetics. Select Yes for amounts to appear
like $ 100/, No for $100/-.
& If you put a '.' after a prefixed symbol, do not opt for a space.
This could be found suitable for currencies like Rs. where
amounts would appear Rs.100/-
Display
The Display screen is identical to the create screen. Use it to
display the particulars for a currency.
171
Alter Currency
Alteration of If you do not have multiple currencies, the Alter screen is
currency
identical to the Display screen. When you have more than one
masters
currency,
Select the currency whose details are to be altered.
Change any of the particulars. You may even delete the currency
here by using [Alt][D], provided you have not used it in any
voucher.
The specified rates of Exchange can also be altered. Specified
rates are those input by you through the Rates of Exchange menu
(discussed below) or may even be input now. Specified rates are
usually the rates quoted in the newspapers or obtained from
banks. The actual transaction rate may vary depending on the
fluctuation in the exchange rate.
172
Rates of Exchange
The screen always comes up in Alter mode:-
Date for Rates of Exchange

Rates of Exchange operate on day-to-day basis. Hence, you can
Rates of specify the rates of different currencies for a day.
Exchange
(Note the date column in the previous Alter screen).
Std. Rate
The standard rate is used to calculate variances from the actual
transaction rates. You may choose to leave it blank.
Selling Rate – Specified Rate

This is the rate obtained from the daily newspaper or your
Selling rate – banker. If you input this rate before any transaction entry, while
specified rate entering a foreign exchange transaction, this rate will be brought
up by default. (You may still change the actual rate). Selling rate
is your selling rate (as opposed to bank’s selling rate. Banks will
173
buy currency from you in this case) used for receipt voucher
entry where you receive foreign exchange. This foreign exchange
would be sold to your bank (which buys it at its buying rate).
The actual rate at which the currency was last used is displayed
and cannot be changed.
The specified rate is used for calculating foreign exchange
variances only in case there is no standard rate.
Buying Rate – Buying rate – specified rate

specified rate This is the rate at which you would buy the foreign currency (as
opposed to bank’s buying rate. Banks will sell currency to you in
this case). Hence, it is used in payment vouchers.
The actual rate at which the currency was last used is displayed
and cannot be changed.
Tally calculates Gain or Loss in foreign exchange transactions
automatically using the standard rates, specified rates and actual
transaction rates. In the chapter under Voucher Entry, we shall
examine how to handle foreign exchange transactions
174
Inventory
Information
175
I nv e n t o r y I n f o r m a t i o n
The different inventory information that you would provide to
Creating, Tally by way of masters are:
viewing and
Gateway of TallyÆInventory Info
altering stock
control master
information
Stock Items
Like Ledgers, Stock items are the primary inventory entity. You
Explanation on will use stock items while recording their receipts and issues.
stock items and This is lowest level of information about your inventory. Each
stock groups item that is required to be accounted for, needs to be created. In
fact, you will create a stock ledger account for each item and
Tally calls this account ‘Stock Item’.
Stock Groups
Stock items can be grouped together under Stock Groups to
reflect their classification based on some commonality. Grouping
would enable easy location and reporting of stock items in
176
statements. Hence, items of a particular brand can be grouped
together so that you can extract stock of all items of that brand.
For example, create Stock Groups like Sony, Maxell, Verbatim.
Your stock items could then be Sony 3.5” disks, Maxell 3.5”
disks, Sony tapes, Maxell tapes, etc. Classify the Sony products
under the Stock Group Sony. Now you have ready details of all
Sony products suitably classified. You may even group items as
Raw materials and Finished Goods.
You can create sub-groups of Stock Groups for deeper analysis.
Stock Categories
The concept is similar to Cost Categories. You may wish to refer
Explanation on to the Chapter on Cost Categories to grasp the
stock categories similarity/differences.
& This option will come up in the menu only if you have opted for
stock categories in [F11] Comp. Features.
Stock Categories offers parallel classification of items. You may

create Stock Categories like Floppy Disks and Floppy Drives. In
the above example in Stock Groups, you would know how many
Sony 3.5” floppies are in stock and separately, the stocks of
Maxell floppies. You would also know from the Sony stock
group the stock of all Sony items. However, should you require
information like total stock of floppy disks or alternative items
that could be used, these would be best available through Stock
Categories. If you classify both Sony 3.5” diskettes and Maxell
3.5” diskettes under the Stock Category Floppy Disks, you know
your total stock of floppy disks. Since the items are substitutes of
each other, if one is out of stock, you can offer the other of the
same category.
177
& The Stock Query option under Statements of Inventory Display
will reveal the strength of this feature.
We shall explain each type of information briefly and then take

up their maintenance in the following sections:
& You should configure inventory info using [F12] and [F11] to
select only those features that you need. Try not to select
features that you do not need.
178
Advanced Usag e
Configuration
And company features affecting inventory information
For advanced You can control the detail and type of information that you need
users and from the [F12] configuration settings and [F11] company
administrators
features settings.
Carefully study your needs and select the desired options. Of
course, Tally allows you to modify most settings at any time.
[F12]ConfigureÆAccts/Inv Info
Configuration
options
affecting
inventory
decisions
179
The questions pertaining to Inventory masters have default
answers set to No. If you set them to Yes, the features are made
available to you. Typically, they are additional fields that appear
during master creation, which enable you to obtain more
information and analysis. We shall discuss them in the
appropriate places. For that purpose, we would set all the
answers to Yes.
[F11] Comp. Features
Company
features
affecting
inventory
decisions
These issues need to be discussed here, as they would determine

the information to input during transactions entry.
Should you
maintain stock Maintain Stock Categories?
categories? Please refer to the above explanation on Stock Categories. If you
want the facility, select Yes. The advantages of cost categories
have been highlighted above. Even if you have selected No
initially, you can always return to this screen and set it to Yes.
180
* Tally would internally assign stock groups to default
Primary Stock Category. If you had initially selected No
but now set it to Yes, you may want to alter all previous
stock groups/items to properly categorise them, else they
would remain under Primary Stock Category.
Maintain batch-wise details?

This option is for maintaining batch information pertaining to
Want batch-wise stock items. The batch does not extinguish itself after it is
details? disposed of; it remains on record and is quite like the ledger in
behaviour. Hence, it is possible to view data like below:
Stock Item – cloth, Batches – red, white, and blue. Hence, you
can extract all sales of blue cloth at any time.
Set expiry date for batches?

This is useful for businesses that deal in goods that have expiry
dates like medicines, food and other perishables. While voucher
entry, date of manufacture of the product defaults to the date of
the voucher is which can be changed but not to a date later than
the voucher date. Expiry date can not be a date prior to the
voucher date.
* Batches should be used where they are small in number

and remain constant. Do not use the batch option for
tracking of lots through manufacturing processes. If that is
done, you will soon have a large number of batches which
are not deleted. You will not be able to assign costs to
particular lots as may be the intention.
Maintain multiple location (godowns)?

Do you have If you have more than one stock point/storage
multiple stock locations/warehouses/godowns, and you want to track stock
locations?
movement in these locations, set it to Yes. Tally permits any
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number of stock points. You will be able to know your stocks at
each location as well as assign stock movement to one or more
locations during voucher entry.
Use Tracking Numbers?

Need to track Quite often businesses do not issue invoices (bills) along with the
and reconcile goods they deliver. Goods are accompanied by a document
delivery notes
with invoices?
usually called a Delivery Note.
Deliveries have to be related to invoices that may be raised on the
customer later. It is important to track each delivery note to
ensure that it is invoiced. It is only by invoicing that a financial
liability is raised. Tally uses tracking numbers to maintain the
relation between delivery notes and invoices/bills. This is
available for both purchases as well as sales. Hence, if your
business is affected by this situation either for goods received of
goods sold, select this option. If you set it to No, you will not
need the facility of separate delivery notes recording as your
Purchase and Sales Vouchers would double up as delivery notes.
* Goods Receipt Note and Goods Delivery Note voucher

types are not available if you do not use tracking numbers.
Use Rejection Notes?

Want separate Yes, if you wish to record rejection of goods separately and not
rejection notes? through a common Goods Receipt Note or Goods Delivery Note.
Use different Actual & Billed Qty?

Do actual and This option enables you to specify quantities, that are different
billed quantities from that delivered, when invoicing, and record the fact. It is
differ?
possible that you have delivered goods but some of them are in
dispute and your customer wishes to be invoiced for only the
quantity that he agrees to. He may consider the rest later and
would then like to be invoiced. On the other hand, the rest is so
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bad that it is useless even for you to take back. Hence, you can
record the fact when raising the invoice without altering the
delivery note or passing a rejection entry. Select this option if
you have many such occasions.
Track additional costs of Purchase?

If you enable this option, you are allowed to obtain a break-up of
Want to know purchase costs, without the need to separately debit ledger
overhead accounts for expenses. Typically, on Purchases, one is interested
charges on in total costs and the break-up is of interest for analysis (except
purchases? for expenses like VAT or Modvat, which are reclaimable). In
such cases, you do not want to pass accounting entries for
Compare
expenses, which are of no consequence other than lengthening
suppliers
effective prices? your ledgers. For example;
You purchase from ABC & Co 10 pcs of Widgets @20/- = 200/-.
Without the Expenses incurred=Tax-20/-, packing charges –15/-, Total purchase
need to pass
cost – 235/-.
redundant
accounting When Track additional costs is enabled, you will pass the entry
entries? in either of following two ways:-
Cr ABC & Co 235.40
Dr Purchases 235.40
Widgets10 pcs 23.50 235.40
Or
Cr ABC & Co 235.40
Dr Purchases 235.40
Widgets 10pcs 20.00 200.00
Actuals: 23.50 (235.40)
Allocated as
Purchase Tax 10% 20.00
Packing Charges 15.40
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* From an accounting stand-point, both entries are identical.
The ledger accounts – Purchase Tax and packing charges
are not debited with the amounts and these figures will not
appear in those accounts. These are reflected only as
break-up or analysis figures of Purchases account. The
Actuals figure reveal the total cost incurred on the
Purchase and will also affect the stock value.
You may also allocate additional costs on Purchases through

subsequent entries or vouchers. For example, an invoice for 10
widgets received on 14th April may incur Customs Duty on 18th
April. Such a transaction would require the ledger account
‘Customs Duty’ to be created with the option ‘Inventory Values
affected’ set to Yes. The entry would then be made as follows:-
On 14th April:
Cr ABC & Co 235.40
Dr Purchases 235.40
Widgets10 pcs 23.50 235.40
On 18th April:
Dr Customs Duty 40.00
Widgets 40.00
Cr Cash/Bank 40.00
While entry, the quantity mentioned must be 0 (zero) and only a
value should be provided. This will result in reporting the
effective rate of the widgets purchased, i.e., 27.50 with a total
cost of 275/- for 10 pcs.
The rules for including subsequent vouchers in purchase costs
that Tally follows are:
Basic Cost+Additional costs allocated (if any) + all costs in
subsequent vouchers that have 0 (zero) quantity, up to the first
voucher that has qty.
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Stock Groups
Gateway of TallyÆ Inventory InfoÆStock Groups
Stock groups –
creation,
display,
alteration
What is a Stock Group?

The concept of stock groups has been explained above. Before
we consider stock groups you would need to know about stock
items. Like Ledgers, Stock items are the primary inventory
entity. You will use stock items while recording their receipts
and issues. This is lowest level of information about your
inventory. Each item which you want to account for , needs to be
created. In fact, you will create a stock ledger account for each
item and Tally calls this account ‘Stock Item’.
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Stock items can be grouped together under Stock Groups to
reflect their classification based on of some commonality.
Grouping would enable easy location and reporting of stock
items in statements. Hence, items of a particular brand can be
grouped together so that you can extract stock of all items of that
brand. For example, create Stock Groups like Sony, Maxell,
Verbatim. Your stock items could then be Sony 3.5” disks,
Maxell 3.5” disks, Sony tapes, Maxell tapes, etc. Classify the
Sony products under the Stock Group Sony. Now you have ready
details of all Sony products suitably classified. You may even
group items as Raw materials and Finished Goods.
You can create sub-groups of Stock Groups for deeper analysis.
Creating a stock group

Gateway of TallyÆInventory InfoÆStock GroupsÆSingle
Create
Name
Give the name of the stock group. Here we wish to create a
group Sony.
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Under
Specify whether it is a primary group or a sub-group of another
group. Select from the pop-up list. Here we select Primary from
the list.
& Use Alt+C to create a parent if you do not have the group you
want in the list.
Can quantities of items be ADDED?

This really pertains to information on the stock items that you
would create under this stock group – Sony in this case. The
stock items created under the group should have similar units to
be ‘addable’. You obviously would not want to add kgs with pcs
(where you have a group like ‘Consumables’ and items like
‘grease’ and ‘rag cloth’ which are measured in kg and metres
respectively). We select Yes here because we want to create
items like floppy disks and disk drives etc which at this point we
feel would be addable and the total meaningful. You may later set
it to No, if you find that the totals do not make sense. It is,
possibly, easier to set it to No initially and later set it to Yes on
assessing the item units in the group.
Buttons in single mode stock group creation

Category
Items
Location
Vch Types
Units
Currency
You may switch to these master types to create them.
Currency option is activated only when you have
opted for multi-currency in [F11]:Company Features.
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Expert Usage
Create multiple Creating multiple stock groups

stock groups Gateway of TallyÆInventory InfoÆStock GroupsÆMulti Create
Under Group
Select the parent group under which you want the new groups to
fall. If you select any group other than ‘All Items’, e.g., Software,
you indicate that all new groups being created at this time will
fall under the group ‘Software’. In that case, the column ‘Under’
is filled up automatically with ‘Software’ and your cursor skips
this column. This speeds up data entry.
Selecting ‘All Items’ allows you to specify the parent of each new
group created and would give flexibility and the cursor moves to the
column field ‘Under’ for the parent of each new group.
Name
Give the name of the stock group. In this case, we have given
Computers.
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Under
Since we selected ‘All Items’ in Under Group, we specify the
parent here. We want the parent of Computers to be Primary and
not as a sub-group of any other group.
Items are Addable? (Y/N)

As explained under Single Stock Group Creation, this really
pertains to information on the stock items that you would create
under this stock group. To repeat: the stock items that would be
created under the group should have similar units to be
‘addable’. You obviously would not want to add kgs with pcs
(where you have a group like ‘Consumables’ and items like
‘grease’ and ‘rag cloth’ which are measured in kg and metres
respectively). We select Yes here because we want to create
items like Pentiums, AS400, etc. which, at this point, we feel
would be addable and the total meaningful. You may later set it
to No, if you find that the totals do not make sense. It is,
possibly, easier to set it to No initially and later set it to Yes on
assessing the item units in the group.
Buttons
F4:Parent
To change the parent ‘Under Group’ when you may have
created sub-groups under it. The change affects all
the sub-groups created under the parent and they
would belong to the new parent.
F8:Skip Details
If the answer to the question, ‘Items are addable’ is to
remain the default, which is No for all items, use this
button. Your cursor will not go to that column which
speeds up data entry.
Use the following buttons to switch to the respective masters
for creation
Category
Item
Location
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Display or alter a stock group
Gateway of TallyÆInventory InfoÆStock
GroupsÆSingle/Multiple Display
Or
GroupsÆSingle/Multiple Alter
Select the stock group whose particulars you wish to display.
When you display or alter a stock group the information entered
while creating it is displayed.
* Display from this mode is for master information only. You

will not obtain any balances for a stock group here. Use the
Display option from the Gateway of Tally for display of
balances and transactions.
* In earlier days of computing, one would look at the master

information for balances. Tally believes that balances are a
logical consequence of the transactions; hence, they
should be available with the transaction summaries. You
would find all summaries and details through the Display
option in the main Gateway of Tally.
Delete a stock group

* You can delete a stock group only if it does not have any
children under it. The children could be stock group or
stock item or both.
Gateway of TallyÆInventory InfoÆStock GroupsÆSingle Alter

Press [ALT]+[D]to delete the stock group
You cannot delete a stock group from multiple mode.
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Stock Categories
Gateway of TallyÆInventory InfoÆStock Categories
Stock
categories –
creation,
display,
alteration
What is a Stock Category?

This has been explained at the beginning of the chapter.
However, we reproduce it below:
The concept is similar to Cost Categories. You may wish to refer
to the Chapter on Cost Categories to grasp the
similarity/differences.
* This option will come up in the menu only if you have opted
for stock categories in [F11] Comp. Features.
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Stock Categories offers parallel classification of items. You may
create Stock Categories like Floppy Disks and Floppy Drives. In
the above example in Stock Groups, you would know how many
Sony 3.5” floppies are in stock and separately, the stock of
Maxell floppies. You would also know from the Sony stock
group the stock of all Sony items. However, should you require
information like total stock of floppy disks or alternative items
that could be used, these would be best available through Stock
Categories. If you classify both Sony 3.5” diskettes and Maxell
3.5” diskettes under the Stock Category Floppy Disks, you know
your total stock of floppy disks. Since the items are substitutes of
each other, if one is out of stock, you can offer the other of the
same category.
& The Stock Query option under Statements of Inventory Display

will reveal the strength of this feature.
Creating a stock category

You can create sub-categories of Stock Categories to better
Create a stock organise your information.
category master Gateway of TallyÆInventory InfoÆStock CategoryÆSingle
Create
192
Name
Give the name of the stock category. Here we wish to create a
category Floppy Disks
Under
Specify whether it is a primary category or a sub-category of
another category. Select from the pop-up list. Here we select
Primary from the list (there is no other, at this moment).
& Use Alt+C to create a parent if you do not have the category
you want in the list.
Buttons in single mode stock category creation

Groups
Items
Location
Vch Types
Units
Currency
opted for multi-currency in [F11]:Company Features.
193
Expert Usage
Create multiple Creating multiple stock categories

stock categories Gateway of TallyÆInventory InfoÆStock CategoriesÆMulti
Create
Under Category
Select the parent category under which you want the new
categories to fall. If you select any category other than ‘All
Items’, e.g., Floppy Disks, you would indicate that all new
categories being created, will fall under the category ‘Floppy
Disks’. In that case, the column ‘Under’ is filled up automatically
with ‘Floppy Disks’ and your cursor skips this column. This
speeds up data entry.
Selecting ‘All Items’ allows you to specify the parent of each
new category created and would give flexibility and the cursor
moves to the column field ‘Under’ for the parent of each new
category.
S No.
The serial number is automatically filled up.
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Name of the category
Give the name of the stock category. In this case, we have given
Floppy Drives and Cartridge Tapes.
Under
Since we selected ‘All Items’ in Under Category, we specify the
parent here. We want the parent of both items to be Primary and
not as a sub-category of any other category.
Buttons
F4:Parent
To change the parent ‘Under Category’ when you may
have created sub-categories under it. The change
affects all the sub-categories created under the parent
and they would belong to the new parent.
F8:Skip Details
If the answer to the question ‘Under’ is to remain the
default, which is the same as ‘Under Category’ for all
new names, then use this button. Your cursor will not
go to that column which speeds up data entry.

for creation
Groups
Item
Location
Display or alter a stock category

CategoriesÆSingle/Multiple Display
Or
CategoriesÆSingle/Multiple Alter
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Select the stock category whose particulars you wish to display.
When you display or alter a stock category, the information
entered while creating it is displayed.
* Display from this mode is for master information only. You

will not obtain any balances for a stock category here. Use
the Display option from the Gateway of Tally for display of
balances and transactions.
* In earlier days of computing, one would look at the master

information for balances. Tally believes that balances are a
logical consequence of the transactions; hence, they
should be available with the transaction summaries. You
would find all summaries and details through the Display
option in the main Gateway of Tally.
Delete a stock category
* You can delete a stock category only if it does not have any
children under it. The children could be stock category or
stock group or both.
Gateway of TallyÆInventory InfoÆStock CategoriesÆSingle

Alter
Press [ALT]+[D]to delete the stock category
You cannot delete a stock category from multiple mode.
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Stock Items
Gateway of TallyÆInventory InfoÆStock Items
Stock items –
creation,
display,
alteration
What is a Stock Item?

A stock item needs no explanation. However, what needs to be
explained is how Tally uses it. Tally uses the phrase to include
what traditional accountants would call a stock ledger account.
All the stock items together would make up the stock ledger.
However, Tally does not use the term stock ledger. So to display
a stock ledger, display the stock items. You can draw a parallel to
ledgers in accounting for stock items in inventory.
197
Creating a stock item
(Please refer to the Advanced Usage section for other
Create a stock fields/information that would appear if activated in the Inventory
item master configuration and company features. This section deals with
creation of basic stock item ).
Gateway of TallyÆInventory InfoÆStock ItemÆSingle Create
Name
Give the name of the stock item. Here we wish to create an item
Sony Disks 3.5”.
Alias
This is for alternative names of stock items.
Under
Specify the group to which it belongs. The different groups that
we had created were Sony, Maxell and Computers. These as well
198
as Primary would appear in the pop-up list. Select ‘Sony’ from
the pop-up list.
& Use Alt+C to create a parent if you do not have the item you
want in the list.
Units
Give the unit of measurement of the item here. You would
normally use this unit for trading in this item. Select Box on 100
Pcs from the popup list. Please refer to the section ‘Units’ for
explanation of units. As usual, use [alt]+[C] to create a new unit.
Advanced Users and administrators
The unit ‘Packs of 10 Pcs’ is a compound unit. Tally has the
concept of simple and compound units. To create a
compound unit, you would first create its components as
simple units and then give their relation. In this case, ‘pcs’
and packs were created as simple units. Then a compound
unit ‘Packs of 10 Pcs’ was created separately. While
creating a compound unit, if the cursor goes straight to the
field ‘Symbol’ and you find the field ‘Type’ stating ‘Simple’,
backspace to the ‘Type’ field to select ‘Compound’.
Rate of VAT (Sales Tax/ Duty) (e.g. 17.5 or 5)

Give the rate of tax applicable for the item. The rate specified
here would be picked up when invoicing, if you selected the
method of calculation as ‘Tax Based on Item Rate’ for your
relevant accounting ledger account. Typically, this accounting
ledger account would be ‘VAT Account’ under the Group ‘Duties
& Taxes’. In such cases, the VAT or duty in invoice entry will be
automatically calculated.
199
Opening Balance
If you already have stock of this item at the time of creating its
account in Tally, give its balance particulars, i.e., quantity, rate,
unit and amount.
Buttons in single mode stock item creation
F3:Companies
To switch to another loaded company to create stock
item.
Groups
Categories
Location
Vch Types
Units
Currency
opted for multi-currency in [F11]: Company Features.
Other options like categories appear only if they too
were activated .
200
Expert Usage
Create multiple Creating multiple stock items

stock items Gateway of TallyÆInventory InfoÆStock ItemsÆMulti Create
Under Group
Select the parent group under which you want the new items to
fall. If you select any group other than ‘All Items’, e.g., Sony,
you indicate that all new items being created at this time will fall
under the group ‘Sony’. In that case, the column ‘Under’ is filled
up automatically with ‘Sony’ and your cursor skips this column.
This speeds up data entry.
Selecting ‘All Items’ allows you to specify the parent of each
new item created and would give flexibility and the cursor moves
to the column field ‘Under’ for the parent of each new item.
S No.
The serial number is automatically filled up.
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Name of the item
Give the name of the stock item.
Under
Since we selected ‘All Items’ in Under Item, we specify the
parent here. We have picked the parent from the popup list. Use
[ALT]+[C] to create a new parent.
Opening Balance
If you already have stock of this item at the time of creating its
account in Tally, give its balance particulars, i.e., quantity, rate,
unit and amount.
Buttons
F4:Parent
To change the parent ‘Under Group’ when you may have
created items under it. The change affects all the
items created under the parent and they would belong
to the new parent.
F8:Skip Details
To avoid the cursor going to the opening quantities field,
use this button. It toggles with Edit Details, which
allows to entry of opening details.
for creation
Groups
Category (if activated)
Location
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Display or alter a stock item
Gateway of TallyÆInventory InfoÆStock ItemsÆSingle/Multiple
Display or Alter
Select the stock item whose particulars you wish to display.
Display or alter When you display or alter a stock item, the information entered
a stock item while creating it is displayed.
Delete a stock item

* You can delete a stock item only if it has not been used
Delete a stock form transaction entry.
item
Gateway of TallyÆInventory InfoÆStock ItemsÆSingle Alter
Press [ALT]+[D]to delete the stock item
You cannot delete a stock item from multiple mode.
Advanced Usage
(We shall assume that all the advanced features of Inventory have
been activated under [F12]:Configuration and [F11]: Company
Features).
This section deals with the additional fields you would input
during creation of a stock item.
& If you do not find a field that you are looking for, or if you want
to remove some or all the extra fields, check configuration and/or
company features. Usually, you will be able to configure the
information to your requirements.
203
Gateway of TallyÆInventory InfoÆStock ItemsÆSingle Create
The additional information are:-
Part No
This is optional. You might wish to give part number for the item
to identify them. In certain industries, e.g., the automobile
industry, various parts are better known by their part number.
This field can be used alternatively for Bin Card number, code
number for the item, etc.
Alias
You are allowed to give aliases for the part number. Its use may
arise, where, for example, the manufacturer specifies his part
number, but you understand it better by its Bin Card number that
you have allotted it. Give both.
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Description
Give a description of the stock item that would appear in your
invoices as well, if you want them to.
Category
Classify stock items into stock categories. Refer to the section on
stock categories. Here we create a new stock category
‘Miscellaneous’ by using [ALT]+[C] at the field. (It did not exist
on the popup list). Modify previously created stock items to
assign them to stock categories, e.g., Sony Floppy Disks and
Maxell Floppy Disks to the category Floppy Disks.
Remarks
This is more to help identify the product or its usage when you
look at its details. For example, you may create a stock item
‘Printer Cable Type A’ under stock group ‘Printer cables’ and
stock category ‘Bi-tronic cables’ Give additional information
here, e.g., particulars of printers and other devices that can use
this cable. When you, now, query the stock of this item, it will
give these remarks, which will help you decide/advise whether
the item is suitable for a particular requirement.
Alternate Units
Different selling This is another unit, apart from the main unit, that you can use
and buying for the stock item. This is particularly useful when you need to
units
deal in different units at different times. For example, you buy
sugar by weight in kgs but sell in packets. Alternatively, you sell
the Maxell Cleaning kits both in pieces and in packs of 2 pieces.
For alternate units, you are asked to give a conversion factor so
that a link is maintained between the two. Here we give 2. What
you give here is simply a conversion factor that comes up as a
default during voucher entry. You may specify a different factor
during the voucher entry.
205
Enter Standard Rates?
Standard rates – If you wish to specify standard purchase and sales rates for the
cost and selling item, select Yes. Standard rates enable valuation of inventory at
price standard purchase or standard sales price. Moreover, these prices
come up by default during transaction entry, (but they can be
overridden with adequate authority). The standards are set to be
effective from specified dates and they continue to be used at
these rates until the next date where the standard rate changes.
For example, suppose you value your inventory based on

standard cost or market valuation based on standard price. For
valuation on any date between 1 April and 30 June 97, the rate
specified against applicable from 1-April-97 would be only
considered.
During transaction entry for any day during this period, this rate
will be brought up by default.
& Use the standard selling price as simple price-list.
206
Use BoM?
BoM or Bill of Materials has been dealt with separately. Please
refer to the Bill of Materials Chapter. It is however pertinent to
mention here that BoM should be used only for items that have
sub-assemblies or are manufactured.
Costing method
Select the method of valuation for the inventory. Tally permits
different valuation methods for different items – it does not
restrict you to one method of valuation only for all items. Hence,
select the appropriate costing method. You may, of course,
choose to use the market valuation method to value the inventory.
It would be interesting to know the value of your stock, both on
cost as well as sale basis. It could give you comfort with the
knowledge of approximate profit margins lying in the stocks.
The different costing methods are :
207
The different Market Valuation methods are:
An explanation on different methods of inventory

valuation
To value the stock, you can select from the following methods:
Average Cost / Price
Tally recalculates the value after each purchase or sale.
FIFO (First In First Out)
Tally assumes the sale of the oldest goods first.
Last Purchase Cost / Sale Price
The stock is valued at the latest price.
LIFO Annual (Last In First Out Annual)
Tally assumes the sale of the newest goods first taking into account the
current financial year.
LIFO Perpetual (Last In First Out Perpetual)
As above but the last purchase price continues from the previous financial
year.
Standard Cost / Price
A pre-determined value you have entered.
Ignore Diff. Due to Physical Counting? (Y/N)

You are allowed to record the physical stock as counted, by way
of a physical stock voucher. There is, usually, a difference
between physically counted stock and that appearing in the
records. If you wish to ignore the difference and continue using
the stock as per books, select Yes. It is, however, advisable not to
ignore the difference and let Tally consider stocks as per physical
count for subsequent transactions.
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Ignore Negative Balances (Y/N)?
This question really takes permission to ignore the item in stock
reports, should it have a negative balance. Select as required.
Treat all sales as new manufacture?

Do not want the If you wish to avoid the need to pass entries for manufacture or
hassle of goods in and have them automatically done when goods are sold,
tracking
manufacture of
select Yes. This way you also avoid negative balances in the
goods – suitable stock records. It is particularly useful for smaller manufacturing
for short companies that make things but do not want the problem of
process cycles. receipting stocks.
Treat all Purchases as consumed?

Consumables – This is quite the converse of the previous question. Issues are
automatic automatically raised for all goods purchased, if you select this.
issues, no stock
You do not wish to keep track of issues for this item. This is
particularly useful for consumables. The book stock of this item
will always be nil.
Treat all rejections inward as scrap?

If you do not want rejected goods coming in to be taken back
into stock, select Yes. Otherwise, rejected goods received, though
recorded separately through a Rejection Note, will be taken back
into stock.
209
Locations/godowns
You may want to distinguish between stock held on-site and at
Maintain the warehouse, and this can be done by creating two separate
multiple stock stock locations. You may even amend Tally’s default location and
locations create a new location for the warehouse. Tally permits any
number of locations that can be grouped and sub-grouped to
match the structure you need.
Create a location
Gateway of TallyÆ Inventory Info.Æ LocationsÆCreate
Name
In the Name field, give the name of the location.
Alias
Give an alias for the name, if required.
Under
Give the location under which this location is to be sub-grouped.
Use [alt]+[C] to create the parent location. Select primary if it is
not a child of any location.
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Allow Storage of Materials?
Tally permits you to create a location/godown where you may
not store materials at all but treat it as a virtual location. Virtual
location are useful in case like Head Office which may have
many different stock points under it that store materials. Hence,
Head Office acts like a primary group location. Or , for example,
designate London as a virtual location with Wimbledon
Warehouse, Harrow Warehouse, Brixton Warehouse as
sublocations/ godowns. These sub-locations or godowns will
allow storage of materials.
Displaying and altering stock locations

Once created, stock locations can be displayed and altered in
single and multiple mode. You can delete a stock location via
Single Location Alter by pressing [Alt]+[D]. However, you
cannot delete a stock location with sub-locations. The lower
levels must be deleted first.
211
Vo u c h e r Ty p e s
This is exactly similar to Voucher Types under Accounting
Inventory section. Please refer to that section. You may wish to alter
voucher types – existing inventory voucher types or create new ones based on
refer accounting those existing.
voucher types
* Your attention is drawn to the Stock Journal Voucher Type,
which can be used to create a Manufacturing Journal. This
has been discussed in the Chapter Bill of Materials.
212
Units of measure`
You will need to create units of measure for stock items. These
Specify your can be simple units such as numbers., metres, kilograms, pieces,
own units of or compound units, e.g. box, where, say, one box equals ten
measure – pieces.
simple and
compound
Create a unit of measure
Gateway of TallyÆInventory Info.Æ Units of MeasureÆ Create
Type
Symbols are of two types: Simple and Compound.
Simple units are considered as stated by you and Tally just
checks for duplication and nothing else. If you wish to give unit
symbol that are single and not a combination of other units ,
select Simple. Tally defaults to Simple and if you want to change
to compound, use Backspace from the Symbol field and select
compound from the popup list.
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Symbol
Give the symbol of the unit, e.g., No., Mtrs. This symbol given
by you is used in all displays and printouts. We give the symbol
‘no’ (for numbers.
Formal Name
Give the formal name of the symbol. This explains the symbol,
which is also used during consolidation of data of different
companies where the symbols might be the same but are
assigned to different Units. The formal name will be used to
match them. Here we type Number as the formal name for the
symbol ‘no’.
No. of decimal places

If the unit will be used in fractions, say for a kilogram you may
have to use grams as well, give the number of decimal places.
For kilograms, you would give 3 decimal places to accommodate
up to 999 grams. Hence, a measure 1 kilogram 865 grams will be
1.865 kilograms. For units like numbers, you do not normally
want a decimal place and you can specify 0 in such cases. You
can specify 0 to 4 decimal places.
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Compound units
A compound unit is a relation between two simple units. Hence,
before you create a compound unit, ensure that the two simple
units have been previously created. In the example here, we use
dozens as another simple unit (created as we did nos.) Now we
must give the relation between dozens and numbers as one dozen
equals twelve numbers.
* Use the up arrow or backspace key to position the highlight

in the Type field. Select Compound from the Types of Units
pop-up menu.
Select doz. as the First Unit. Type and enter 12 as the Conversion
factor. Select nos. as the Second Unit and accept the data.
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Displaying and altering units of measure
Gateway of TallyÆInventory Info.Æ Units of MeasureÆ
Display/Alter
Once created, units of measure can be displayed and altered. You
can delete a unit of measure in the alteration screen by pressing
[Alt]+[D]. However, you cannot delete a unit of measure that is
part of a compound measure. The compound measure must be
deleted first.
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Voucher Entry
The key to all business

information
217
218
S i m p l e vo u c h e r e n t r y
You should set the configuration for voucher entry so that only
Simple voucher those features that you require appear when entering vouchers.
entry, first
We shall first learn simple vouchers, for accounting and
accounting then
inventory. inventory. Extra information would be dealt with under
Advanced Advanced Usage section.
voucher entry
Hence, in the voucher entry configuration, set all the features to
treated in a
separate No.
section. Selectively set to Yes only those features that you want. (To be
discussed under advanced usage).
F12: ConfigureÆVoucher Entry
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A voucher is the basic recording document. To input any data
into Tally, you must use a voucher. Inputting data through the
voucher entry mode may be called creating a voucher or voucher
entry. You may create a voucher on-line on Tally and print it for
hard copy and authentication.
The voucher entry screen

The main voucher entry area - This is where you enter your
transactions This screen contains fields for date, ledger name and
amount as well as additional pop-up screens that are dependent
upon your voucher configuration.
Direct commands area - displays the commands you type into
Voucher Entry this area, and in the current version of Tally, is limited to
Screen calculator functions.
Buttons toolbar - displays buttons that provide quick interaction
with Tally. Only buttons relevant to the current task will be
visible.
Mouse conventions
While working with Tally, please use the following conventions:
Mouse conventions
To Action
Click Press the left mouse button
Double-click Press and release the left mouse button twice, without
moving the mouse pointer off the item
Choose Position the mouse pointer on the item and click the left
mouse button
Select Position the mouse pointer on the item and double-click
the left mouse button
Press Use the keys on the keyboard in the combination shown
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Switching between screen areas
On selecting Voucher Entry from the Gateway of Tally, you are
Use the taken to the main voucher entry area. However, you may toggle
calculator on between this and the Direct Commands/Calculator area at the
screen. bottom of the screen, by pressing [Ctrl] + [N] or [Ctrl] + [M] as
indicated on the screen. The active area of the screen is
highlighted by a green bar. [Ctrl] + [N] to go to the
Calculator/Direct Commands area and [Ctrl] + [M] for the
voucher entry area.
& Use calculator by [ALT]+[C] when in amount field.
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Ty p e s o f vo u c h e r s
Tally is pre-programmed with a variety of accounting vouchers,
Types of each designed to perform a different job. The standard vouchers
vouchers are:
Payment voucher
Receipt voucher
Contra voucher
Sales voucher
- Sales Orders
- Sales vouchers/invoices
- Delivery Notes
- Rejection In
Purchase voucher
- Purchase Orders
- Purchase vouchers
- Goods Receipt Notes
- Rejection Out
Journal voucher
- Credit Notes
- Debit Notes
- Journal
Memo voucher
- Reversing Journal
Stock Journal
Physical Stock
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You can alter these vouchers to suit your company, and also
create new ones. For example, if you wish to distinguish between
cash and bank payments you can create vouchers to do this.
The function of each voucher type is now explained.
Payment voucher
For example, the company settles an electricity bill by cheque.
Payment voucher
Description Records all bank and cash payments
Voucher entry Account Amount Amount

Ledger account paid, e.g., a Sundry Debit
Creditor, or an expense head like
Electricity Charges
Bank or cash account Credit
Receipt voucher
For example, the company receives notice that interest has been
credited to its bank account.
Receipt voucher
Description Records all receipts into bank or cash accounts

Bank or cash account, e.g. Grindlays Debit
Bank (Bank Accounts)
Income Ledger account e.g. Bank Credit
Interest (Indirect Incomes) or the giver
of money – e.g. A debtor (Sundry
Debtors)
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Contra voucher
For example, the company withdraws cash from the bank for
petty cash or transfers funds from one bank account to another.
Contra voucher
Description Records funds transfer between cash and bank accounts

Cash (Cash-in-hand) Debit
Grindlays Bank Credit
(Bank Accounts)
Sales
Sales Orders
To record orders for supply of goods or services. Record orders
received, follow them up by delivery notes and then invoices or,
if necessary, place Purchase Orders.
Sales voucher
For example, the company sells some software on credit. In this
case, the company has to account for VAT/Sales Tax on the
transaction. If inventory values are affected for sales accounts in
case of Acct-with-Inventory companies, item details have to be
given too. Where tracking numbers are not active, goods and
services move with the voucher/invoice. The invoice entry
section and the section ‘How to enter sales vouchers without
tracking numbers’ should be read.
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Sales voucher
Description Records all sales

Buyer’s ledger account, e.g. King & Debit

Co (Sundry Debtors)
Sales Accounts, e.g. Software Sales Credit
VAT Output/Sales Tax Credit
Sales Invoices
To make invoices on customers. The same sales voucher data
entry screen will toggle for invoice and voucher (please see
invoice entry).
Rejections In
To record receipt of goods rejected by the customer.
Purchases
Purchase Orders
Record orders placed on suppliers for supply of goods or
services. Print the orders as well.
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Purchase voucher
For example, the company buys computer parts on credit. Again,
the company has to account for the VAT on the transaction. If
inventory values are affected for purchase accounts in case of
Acct-with-Inventory companies, item details have to be given
too. The section under advanced usage and inventory should be
read.
Purchase voucher
Description Records all purchases
Purchases (Purchase Accounts) Debit
Input VAT/Tax Debit
Supplier’s ledger account, e.g. US Credit
Computers (Sundry Creditor)
Rejection Out
To record despatch to suppliers of goods rejected by you.
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Journals
Journal voucher
For adjustment entries, for example, the company had entered some
expenditure on advertising as general office costs, rather than
recording the transaction in the separate ledger for advertising.
Journal voucher
Description Records adjustments between ledger accounts

e.g. Advertising Debit
(Indirect Expenses)
e.g. Office Costs Credit
(Indirect Expenses)
Credit note voucher

For example, a customer returns a part that was incorrectly supplied.
Credit note voucher

Description Records credit note entry for sales returns or
Customer over-charging
Voucher Account Amount Amount
entry
Sales Accounts, e.g. Parts Sales Debit
VAT/Tax on Sales Debit
Buyer’s ledger account, e.g. King & Credit
Son (Sundry Debtors)
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Debit note voucher
For example, the company returns damaged goods to a supplier.
For inventory records, you will also effect inventory details.
Debit note voucher
Description Records debit note entry for purchase returns or

Over-charging by a supplier
Supplier’s ledger account, e.g. US Debit
Computers (Sundry Creditors)
Purchases (Purchase Accounts) Credit
Input/Purchase VAT/Tax Credit
Memo voucher
This is a non-accounting voucher and the entries made using it
Memo vouchers will not affect your accounts. That is, Tally does not post these
entries to ledgers but stores them in a separate “Memo Register”.
You can alter and convert a Memo voucher into a regular voucher
when you decide to bring the entry into your books. View all
optional vouchers through Display ÆException Reports Æ
Optional Vouchers. View them from the Day Book as well.
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Some uses for Memo vouchers
Making suspense payments
For example, the company gives an employee cash to buy
office supplies, the exact nature and cost of which are
unknown. You could enter a voucher for the petty cash
advance, a voucher to record the actual expenditure
details when they are known, and another voucher to
record the return of surplus cash. However, a simpler
way is to enter a Memo voucher when the cash is
advanced, and then turn it into a Payment voucher for
the actual amount spent, when known.
Vouchers not verified at the time of entry
It sometimes happens that you do not understand the
details of a voucher you are entering. Enter it as a
Memo voucher and amend it when you get the details.
Items given on approval
You will normally only enter completed sales into the
books. Suppose items are given “on approval”. You
can track them with a Memo voucher and convert it
into a proper Sales voucher, or delete the memo
voucher, depending on the outcome.
Reminder service
You can enter a Memo voucher for a transaction that will
take place in the future and get Tally to remind you
about it one day prior to the date. For example,
insurance premiums due, taxes due, installment
payments, post-dated cheques.
Memo voucher
Description Records the voucher entries in a memo register, without

affecting the ledger accounts and financial statements
Ledger account Debit

Ledger account Credit
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Optional voucher
This is another non-accounting voucher. However, it differs
Optional from the Memo voucher in that it is not a separate voucher type.
voucher You mark an existing voucher, (e.g., a payment voucher or a
receipt voucher) as ‘Optional’. Press [CTRL]+[L] or click on the
button. This button toggles with ‘Regular’. By marking it
‘Optional’ the voucher does not get posted anywhere but remains
in the have the Optional Register. You can view all optional
vouchers through Display ÆException Reports Æ Optional
Vouchers. View them from the Day Book as well.
Use of Optional Vouchers

Obviously, a transaction has not been completed and you
do not want it to affect the accounts. But you want to
record it so that you simply modify the voucher and
remove the ‘Optional’ mark by ‘Regularising’ it.
Display the voucher in ‘Alter’ form and click on
‘Regular’. This way you can regularise the voucher and
then post it. E.g. Proforma sales invoice. In fact, print an
optional sales invoice as a Proforma Invoice.
You can choose to view a Balance Sheet including
Optional vouchers. Normally, since these vouchers have
no bearing on the books and statements. However, you
might want to see their impact without actually posting
the transactions. Optional vouchers allow you to do so.
This not unlike the reversing journal.
Reversing Journals
Reversing Journals are special journals that are automatically
reversed after the date of the journal. They exist only for a day
and are effective on the date of the reversing journal. Moreover,
they are effective only when called for in reports like the Balance
Sheet.
230
For example, it is 30th June and you want to view the Balance
Sheet as of today but June salaries are not due for payment until
the first week in July. There is, therefore, a large liability, which
would not be reflected in the Balance Sheet. To overcome this,
you would enter a reversing journal voucher dated 30th June
which would look something like this:
Dr Salaries 5,000
Cr Provisions (Current Liabilities) 5,000
When you view the Balance Sheet, you would ask Tally for the
report with the reversing journals included. The voucher affects
the report only for that day, i.e., 30th June.
Post-dated vouchers
Post-dated While entering vouchers, you can post-date them, and Tally will
vouchers not update the ledgers until the date in question. This is most
useful for entering transactions that take place on a regular basis.
For example, if you pay for something by instalments, you can
set-up the payments in advance, and Tally will only enter them in
the ledgers as they fall due. Mark vouchers ‘Post Dated’ by
[CTRL]+[D] or click on the button. The button toggles with
‘Regular’.
How to enter vouchers

You should have gone through the immediately preceding section
Voucher data for the concept of Tally vouchers. Different vouchers may be set
entry up differently through the Voucher Types master maintenance.
Hence, what appears in the voucher screen, depends upon the
voucher configuration, company features and the voucher type
settings.
Gateway of Tally Æ Voucher Entry
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The default voucher entry screen that is displayed the very first time
you opt for it is the Payment Voucher. You do not need to get out of
this screen for other vouchers. Simply switch the vouchers using the
Button Bar or Function keys.
The screens for entering accounting vouchers are all very similar:
Let us consider a simple payment voucher screen.
Type of voucher
You need to check you are using the right voucher for the
transaction. You change the voucher type by selecting the new
type from the button bar. In some cases, Sales, Purchase and
Journal, as well as where you have created your own voucher
types, e.g. under Payment, Tally will display a List of Vouchers
for the type you select, from which you make a further choice.
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Voucher number
Tally will enter this for you if you have set-up the voucher type
to do it. If it is to be entered manually, do so.
Reference (not available for receipt and payment

vouchers)
You can enter a reference such as Purchase Order Number or
Invoice Number.
Date of voucher
The date of the voucher you are entering is displayed at the top-
right of the Voucher Creation screen. The date is taken initially
from the Gateway of Tally Current Date and you may need to
change it frequently to ensure vouchers are entered with the date
you want.
* You change the date using the F2: Date button on the
button bar.
Particulars
To/By or Dr/Cr
Tally defaults to To/By but this can be changed to ‘Dr’ and ‘Cr’
by selecting F12: Configure in the Voucher Creation screen. Tab
down to Use Cr/Dr instead of To/By during entry and type Yes.
Each voucher line displays a prompt of ‘Dr’ or ‘By’ for debit
entries, or ‘Cr’ or ‘To’ for credits.
Depending on the voucher type, Tally selects either ‘Dr’ or ‘Cr’
for the first prompt, which you cannot change. Thereafter, you
can change the prompt (if necessary) by typing over it with a D
or C.
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Particulars – ledger name and amount
After To/By or Dr/Cr, you enter the ledger names and the debit
and credit amounts. To select a ledger, type the first letter of its
name (either case) and Tally displays a List of Ledger Accounts,
(the ledgers starting with the typed letter are highlighted). Only
ledgers suitable for the voucher type are displayed. As you
continue typing, the highlights reduce until a match is found.
* The first ledger name prompt depends upon the voucher

type. For example, in a Payment Voucher, you are
expected to debit first, a personal account like a creditor or
a nominal account like Rent. Hence you are not allowed to
enter Cash or Bank as that would denote money received.
(In the special case where in the Voucher Configuration
you have activated the option Allow Payment/Receipt as
Contra you are permitted to do so).
* Likewise, in a Sales Voucher, you must first debit a

personal account name like a customer and not a nominal
account name.
When you select the ledger, the current balance is displayed (if
this option has been configured). When you enter the amount, the
revised current balance is shown. After selecting the next ledger,
Tally suggests the balancing amount as the value to enter, which
may be accepted or typed over. You cannot complete the voucher
entry until the debits equal the credits.
Narration
Here you type whatever is appropriate for the transaction. You
can have a separate narration for each line of particulars, if you
configure the voucher in that way.
Once you accept the data, Tally presents another blank data entry
screen.
234
Buttons in a typical voucher entry screen
F2: Chg Date. Use this button to change the date of the voucher.
F3: Chg Cmp. This would allow you to switch to another loaded
company and enter a voucher in it. Therefore, you can, almost
simultaneously enter vouchers for more than one company.
Accounting Vouchers
F4: Contra voucher
F5: Payment voucher
F6: Receipt voucher
F7: Journal. This is split into Journal, Debit Notes and Credit
Notes
F8: Sales
F9: Purchase
F10: Memos
F7: Stock Journal
F10: Phys.Stock. This allows recording of physical stock in hand
as distinct from computed stock figures.
Other Buttons
As Invoice. Available only in the sales voucher screen.
Post Dated. To mark the current voucher post dated.
Optional. To mark the current voucher optional. Toggles with Regular
F11: Features
F12: Configure
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& To check the accuracy of the vouchers entered, one of the
many ways is to select Day Book from the Display Menu. Then
Select F2: Period from the button bar and enter the period of
display (it defaults to the current date only but you may display
all the transactions for a particular period). Select F1: Detailed.
Check the vouchers against what you were asked to do. If you
find a mistake, position the highlight bar over the offending item
and press Enter for Tally to display the voucher details for
alteration.
& The alteration facility is subject to security and access rights. All
alterations are available for audit.
Sales and Purchase Voucher Entry

In Accounts-with-Inventory Companies when Tracking
Numbers is NOT activated
* We shall use sales as our voucher for discussion. The
same applies to Purchases.
* You do not get the voucher types Receipt Note and

Delivery Note in the Sales and Purchase Voucher sub-
menus.
In addition to the above particulars that are applicable for all

types of vouchers, sales and purchase vouchers have special
inventory considerations for accounts-with inventory companies.
Sales and Purchase ledger accounts must have the option ‘Are
Inventory Values Affected’ set to Yes for this section.
236
Inventory allocations
Inventory items need to be considered in financial vouchers in
Inventory cases where you use ledger heads that have stated ‘Yes’ to the
allocations in an question ‘Are Inventory Values affected?’. (Display your Sales
accounting Account to verify). Typically, you will have the accounts of the
voucher type Sales and Purchases affecting inventory. Hence, when you
enter a voucher (usually a Sales or a Purchase Voucher) a sub-
screen pops up after the concerned ledger head and amount
requiring you to give inventory item details.
* The inventory details that you give in an accounting

voucher (like Sales and Purchase Voucher), affects stocks
by immediately updating them, only if Tracking Numbers
are not activated in [F11]: Features.
* The information that you need to give in the inventory

allocation sub-screen depends upon the features enabled
for the company.
A typical inventory allocation sub-screen would look like this:
Name of Item
Pick the item from the list of items (or create a new item by
[ALT]+[C].
237
Location
Multiple If you have more than one location, you must specify the
locations location to which this item relates. Hence, a sub-screen would
come up after the tracking number to enable you to specify the
location quantity, rate and amount for the item. You can give
multiple locations, e.g.
Batch Number
In the locations sub-screen itself, the batch number can be given,
Batch numbers if batch numbers have been activated in Company Features.
Select a batch number from the list of existing batch numbers, or
give a new number for a new batch.
Mfg. Date
Again, it appears only if it has been activated. Give the date of
manufacture. This enables you to set expiry date for the batch as
a period from the date of manufacture e.g. three months from the
date of manufacture.
Expires on
It appears only if it has been activated. Give the date of expiry or
a period from the date of manufacture. If, for the item, you had
disallowed the use of expired goods; you cannot issue them after
the expiry date. (Check item master).
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Quantity
Normally, no explanation is required. However, you can set
Actual and Company Features to allow Actual and Billed Quantities. Then,
Billed Quantities you have to give both quantities here. The actual quantity
updates stock and the billed quantity affects the accounts. Give
the quantity either in the main unit or the alternate unit. You may
even specify quantities in both units, e.g., 100 bars=150 Kgs.
Rate
Give the rate for the stock item. If you have entered Standard
Rate for the item (Standard Cost and Standard Selling Price – see
item master), the voucher will pick the relevant standard rate for
that date by default. You may, however, modify it while entering
the voucher.
Per
Give the unit of measure for the quantity of the item here. This
can be the main unit or even the alternate unit.
Amount
The quantity multiplied by the rate per unit is the amount.
End of List
Select End of In all multiple allocations or selections, you must either be
List or press required to select the option ‘End of List’ or press [enter] at the
[enter] as the
case may be, for
first blank field. This would accept the multiple allocation and
multiple take you back to the parent screen. E.g., Multiple locations,
allocations batches or items.
239
Pure Inventory vouchers
Pure Inventory vouchers perform the same function in the
inventory system as accounting vouchers in the accounting
system, i.e. they too, are means of entering transactions. In this
case, the vouchers record the receipt and issue of goods/stock,
the transfer of stock between locations, and physical stock
adjustments.
If you have chosen not to integrate accounts with inventory,
Pure Inventory inventory vouchers will not have any impact on the Balance
vouchers Sheet stock figures. They will separately maintain the stock
balances. However, you can configure Tally so that the inventory
entries would automatically update the Balance Sheet stock
figures. (By choosing to integrate Accounts and Inventory in
F11:Company Features). Remember, you can trace an entire
transaction right from the goods transfer stage to the financial
accounting of it, irrespective of integration status. For example,
the purchase of stock can be tracked from the purchase voucher
through to the receipt note, through to the invoice from the
supplier, and on through to the eventual payment.
Types of inventory vouchers

Pure inventory Tally is pre-programmed with a variety of inventory vouchers, each
vouchers are designed to perform a different job. The standard vouchers are:
available only
when Tracking Receipt note voucher (F9:Purchase)
Numbers has
been activated. Rejections-in voucher (F8:Sales)
Check F11. Delivery note voucher (F8:Sales)
Rejections-out voucher (F9:Purchase)
Stock journal voucher (F7)
Physical stock voucher (F10)
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* Unless you have Tracking numbers activated in
F11:Company Features, the Goods In Receipt Note and
Goods Out Delivery Note vouchers will not be activated.
Tally will assume that goods are received along with
Purchase Vouchers and Goods are delivered along with
Sales Vouchers/Invoices. When Tracking Numbers are
activated, you inform Tally that you may receive goods that
are not accompanied by Supplier’s invoice – the invoice will
arrive separately. Also that you may not deliver goods
together with your invoice – you may invoice later.
* You are allowed, however, in a voucher, to select ‘Not

Applicable’ when the Tracking Number sub-screen comes
up. This would update inventory right away without the
need to pass a separate inventory voucher. The vice-versa
is also true. See Advanced voucher entry for more details.
You can alter these vouchers to suit your company, as well as

create new ones. For example, if you wish to distinguish between
delivery notes for stock delivered from different locations, you
can create vouchers to do this.
The function of each voucher type is now explained.
Receipt note voucher

For recording goods received. For example, the company
receives new stock from a supplier. If a Purchase Order exists for
that Supplier, selecting it will bring up the order particulars.
Receipt note voucher
Description Records receipt of new stock from suppliers

Details recorded Reference, ledger account, supplier’s name and address,
name of stock item, stock location, quantity, rate, amount,
narration
241
Rejections-in voucher
For recording goods received back that was rejected by a
customer. For example, the company takes back into stock items
rejected by a customer.
Rejections-in voucher
Description Records return of goods by customers
Details recorded Reference, ledger account, customer’s name and address,
name of stock item, stock location, quantity, rate,
amount, narration
Delivery note voucher

For recording goods delivered to a customer. For example, the
company delivers goods from stock to a customer. If a Sales
Order exists for that customer, selecting the appropriate Sales
Order will bring up the relevant particulars.
Delivery note voucher
Description Records the delivery of goods to customers

Details recorded Reference, ledger account, customer’s name and address,
name of stock item, stock location, quantity, rate,
amount, narration
242
Rejections-out voucher
For recording of goods that are rejected and returned to a
supplier. For example, the company returns items that had
previously been taken into stock to the supplier
Rejections-out voucher
Description Records return of goods to suppliers

Details recorded Reference, ledger account, supplier’s name and address,
name of stock item, stock location, quantity, rate, amount,
narration
Stock journal voucher

For recording stock transfers from one location to another. For
Stock journal example, the company transfers items of stock from the
voucher warehouse to the shop.
Stock journal voucher
Description Records the transfer of stock from one location to another

Details recorded Names of from and to locations, name of stock item,
quantity, rate, amount, narration
Physical stock voucher

Physical stock For recording actual stock as physically verified or counted. For
voucher example, stock found on conducting a stock-check. It is not
unusual that the company finds a discrepancy between the actual
stock and the computer stock figure. If you have configured your
inventory vouchers to Ignore physical stock differences, these
physical stock vouchers will really be for recording purposes
only. However, if you have configured the vouchers not to ignore
physical stock difference, then all transactions subsequent to the
physical stock voucher will use the balance as mentioned in that
voucher.
243
Physical stock voucher
Description Records the physical stock count as the new stock

balance
Details recorded Name of stock item, location, quantity
How to enter pure inventory vouchers

There are three different types of screen for entering inventory
vouchers. The screens for Receipt notes, Rejections-in, Delivery
notes and Rejections-out are the same except for the voucher
name, and , whether the voucher relates to a customer or
supplier. The other two types are for the Stock journal and
Physical stock vouchers.
Unlike accounting vouchers whose advanced usage is being
Entering pure discussed separately, we shall include advanced usage of
inventory inventory vouchers here. Vouchers involving pop-up screens
vouchers depend upon configuration settings and it will be assumed that
these settings have been activated.
Gateway of Tally Æ Voucher Entry
The basic process to enter each voucher is:
Change the date if necessary.

Select the voucher type from the button bar menu:
F7 - Stock journal
F8 - select Delivery Note or Rejections-out
F9 - select Receipt Note or Rejections-in
F10 - Physical Stock
Type in the details and check they are correct before
accepting.
244
A typical inventory voucher screen:-
The screen is split into three sections:
The type, reference and date of the voucher.

Party’s particulars.
Inventory item details.
Type of voucher
You need to check you are using the right voucher for the
transaction. You change the voucher type by selecting the new
type from the button bar. In some cases, like receipt notes (where
you have opted for ‘Use rejection notes’ in F11) you will see a
pop-up screen from which you select the right voucher.
245
Voucher number
Tally will enter this for you if you have set-up the voucher type
to do it. If it is to be entered manually, do so.
Reference number
This is optional. You can enter a reference such as Purchase
Order Number or Supplier’s Delivery Note Number.
Date of voucher
The date of the voucher you are entering is displayed at the top-
right of the Voucher Creation screen. The date is initially the
Current Date and you may need to change it to ensure vouchers
are entered with the date you want.
& You change the date using the F2: Date button on the button
bar.
Ledger Account
& There are no To/By or Dr/Cr in inventory vouchers.
To select a ledger, type the first letter of its name (either case)
and Tally displays a List of Ledger Accounts, (the ledgers
starting with the typed letter are highlighted). Only ledgers
suitable for the voucher type are displayed. As you continue
typing, the highlights reduce until a match is found. Here you
usually need a supplier’s ledger account.
Supplier’s name and address

Give the supplier’s name and address. This could be different
from the ledger name (but, on the other hand, could be the same).
This information is useful when printing out the Goods Receipt
Note.
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Name of the Item
From the popup list of Stock item, select the stock item that is
being received. If it is not in the list, create it using [ALT]+[C].
Tracking Number
You will use the tracking number to link this receipt note with
Tracking the Supplier’s Invoice that will be received later. (You will record
Numbers – the the Supplier’s Invoice through the Purchase Voucher). Hence,
important link select the number you think will help maintain the link. Tally
between gives you two numbers that are defaults of the Receipt Note
accounting and
number and the Reference. However, you may opt to give your
inventory
details - where own number, in which case select New Number. If you do not
goods do not wish to give a tracking number at all, select Not Applicable.
accompany
An explanation on the four options in the list is necessary.
invoices.
Tracking numbers link the different accounting and inventory
vouchers as follows:
Receipt Note/Goods In vouchers with Purchase Vouchers

Goods Out Delivery Note with Sales Voucher/Invoice.
Rejections-In with Credit Note
Rejections-Out with Debit Note
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New number
– give a number not in the list. You will use this number to
reconcile, when making a Purchase Voucher entry.
Not applicable
– if you do not want a tracking number. This may be resorted to
in cases where you want to update stocks immediately with this
entry and no goods inward entry will be needed. When in an
inventory voucher if you select ‘Not Applicable’, that will update
stocks and you do not want to make a separate
accounting/invoice entry. .Not Applicable option is important and
hence we repeat the cases where you would use it:-
When you raise a sales voucher/invoice that accompanies

the goods and you do not want to pass Goods Out entry.
‘Not Applicable’ will update stocks without the Goods Out
entry.
Likewise, when you record a purchase voucher and wish to
update inventory without a separate Goods In entry, select
‘Not Applicable’ for the tracking number.
The same applies to Debit Notes-Rejection Out and Credit
Note-Rejection In.
When you send out samples for approval, where you do not
want to raise an invoice. Likewise when you receive
samples but no invoice will be forthcoming.
Default voucher number
Reference number
The reference field if field in becomes the default. Tally also lists
the voucher number and the reference number of the current
voucher for selection. Select the one that is easy to track later.
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Pending tracking number
If you have a pending tracking number from a previous voucher,
it will be listed here together with details like location, quantity,
rate and amount. You will select a pending tracking number to
adjust that with the current voucher entry. This could be a
Purchase Voucher received and recorded, for which the goods are
now being received.
Order details
Order Details (in case Purchase Order Processing is

active)
If, however, Purchase Order Processing is activated (Company
Order details Features), an order field is now available. Select Not Applicable
if there were no orders particulars to adjust or record. If the order
249
existed, by selecting the order number from the pop-up list of
orders, the rest of the fields are automatically filled up. These
are, however, available for editing (can alternatively be set so that
editing is not permitted – through F12:Configuration).
Otherwise, select a new number to input order details at this
point.
Location
Multiple If you have more than one location, you must specify the
locations location to which this item relates. Hence, a sub-screen would
come up after the tracking number to enable you to specify the
Batch Number
Batch numbers if batch numbers have been activated in Company Features.
Mfg. Date
Expires on
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Quantity
Actual and Normally, no explanation is required. However, you can set
Billed Quantities Company Features to allow Actual and Billed Quantities. Then,
you have to give both quantities here. The actual quantity
Rate
the voucher.
Per
Amount
End of List
Select End of In all multiple allocations or selections, you must either be
List or press required to select the option ‘End of List’ or press [enter] at the
[enter] as the
case may be, for
first blank field. This would accept the multiple allocation and
multiple take you back to the parent screen. E.g., Multiple locations,
allocations batches or items.
Narration
Here you type whatever is appropriate for the transaction.
Once you accept the data, Tally presents another data entry
screen.
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How to create a Stock Journal
Gateway of Tally Æ Voucher Entry Æ [ALT]+F7 or Click on
Stock Journal
A stock journal is used to transfer materials or stock from one

location to another location. Stocks could even simply be shown
as consumed. Or even only produced without both consumption
and production. Hence, it is not like other journal where debits
and credits must match.
You can specify quantities that are move as well as their rates
and amounts. If standard rates have been entered in the stock
item masters, they will appear. In the target location, you can
specify additional costs incurred without actually affecting
accounting at all. Only the stock value goes up. Hence, it is
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technically correct where an expense incurred on production or
inward has been accounting for in the cost of that item.
The Stock Journal Screen has three parts – the top part accepts
general information, the left hand side is the Source location or
Consumption Part and the right hand side is the Destination
location or the Production Part. While you must furnish the
common information required in the top part, you may elect to
give information for only the left or the right part or both.
Common information
Reference, date and voucher number

If activated for this voucher, reference field will come up. Give a
reference number, if required. Voucher number depends upon the
settings in Voucher Type.
Source (Consumption)
Here give the name of the item and the location from which it
moves or where it is consumed as well as the rate and amount. If
the rate is specified in the stock item master, it will be brought up
when you indicate the item name.
* The effect of entry in this part is of reducing stock of the

items specified.
Destination (Production)
Here give the name of the item and the location into which the
named item moves. It is not necessary that the item names
should match the names in the source part. This is because of a
totally new item could be produced out of materials consumed.
You can specify the rate of the item and amount. If the rate is
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specified in the stock item master, it will be brought up when you
indicate the item name.
* The effect of entry in the Destination Part is of increasing

stock of the items specified in this part.
Additional cost details

Another interesting facility is available for the Destination
location (Production). You can specify what additional costs
were incurred in moving goods into the location or for producing
them. Though these costs are strictly accounting heads, they do
not get posted in the relevant nominal ledger accounts but add to
the cost of the item. In the target location, you can specify
additional costs incurred without actually affecting accounting at
all. Only the stock value goes up. Hence, it is technically correct
where an expense incurred on production or inward has been
accounting for in the cost of that item.
After entering the amount for an item, the additional cost details
entry box pops up.
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You may specify additional costs for transferring or producing
the item. These would, typically be wages, power, freight etc.
Remember that you must have ledger accounts opened for the
additional costs. Moreover, additional costs entered for the
ledgers, do not reflect in the relevant ledger with the amount but
only add to the cost of the item.
%
You can specify the additional cost by way of a percentage of the
cost of the item, in which case give the number, e.g. 2 for 2% of
the cost of the item. You may, alternatively, skip the percentage
field and input an amount directly.
Actuals
This displays the total additional cost for the item and the
effective cost per unit of item/product produced.
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Bill of Materials
Introduction to Introduction
Bill of Materials A Bill of Materials contains a list of items that make up another
item. In other words, it is a list of constituent items.
Enable bill of materials facility

This is relevant for manufacturing organisations and can be set
up through configuration.
Gateway of Tally Æ F12:CofigureÆ Accts/Inventory Info
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A Bill of Material should be available while manufacturing an
item. Hence, first enable manufacturing entries. This is done
through a stock journal. It is wise to create a new voucher type,
say, Mfg Journal which is based on Stock Journal.
Stock journal as Manufacturing Journal

Stock journal vouchers have a question ‘Use as a Manufacturing
Journal’.
Gateway of TallyÆAccts.InfoÆVoucher TypeÆDisplayÆStock
Journal
When you use a stock journal as a manufacturing journal, the

stock journal voucher entry screen would then be modified to
accept name and quantity of the product being manufactured, its
list of components and additional costs of manufacture
associated with it. If, for an end-product item, you have specified
a bill of material that contains the list of components, this list is
brought up automatically and filled in for the quantity of the end
product.
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How to create a new manufacturing journal
Gateway of TallyÆAccts.InfoÆVoucher TypeÆCreate
Name
Give a new name to the voucher type, e.g., Mfg. Journal. It could
Create a new be any other name.
manufacturing
journal Type of Voucher
This must be Stock Journal. Pick it up from the pop-up list.
Abbr.
The abbreviation to the voucher type name. Type in a suitable
abbreviation, e.g. Mfg. or mfg.jrnl.
Method of Voucher numbering etc.

Follow the normal voucher type creation. Refer the voucher type
section of the manual for more details.
Use as a Manufacturing Journal

Select Yes.
The other areas of voucher type screen have been discussed
under voucher type section. Please refer to that section for any
assistance.
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How to create a Bill of Material
How to create a
You can create a bill of material (BoM) for any stock item.
bill of material
Typically, you would like to create a BoM only for those items
that are being assembled in-house. For trading items, you do not
need a BoM. Therefore, we need to specify a BoM at the time of
creating a stock item (or altering its master)
Let us create a new stock item and specify its BoM.
Gateway of TallyÆInventory InfoÆStock ItemsÆCreate
This screen contains information for Britain/Europe.
* (Some information like Batches, Alt. Units and Intrastate

Classification depend upon the company features, configuration and
invoicing set-up. Please refer to the relevant stock item creation
section for more details).
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The difference for India/Asia would be in the terminology for
tax/duty:-
For details on fields other than Set Components (BoM) please

refer to the Stock Item Creation section under Inventory
Information Chapter. Here, we shall restrict our discussion to
BoM only.
When you activate Set Components (BoM) by selecting Yes, a
pop-list for the components now needs to be filled in.
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Unit of Manufacture
Give the appropriate (usually the minimum) number of the
finished product item that will be made. While manufacturing
(and recording through a stock/manufacturing journal), you will
make the item in multiples of this unit of manufacture. At that
time, the components will also multiply by the same factor
automatically. (You are, of course, allowed to alter the
components while recording to reflect actual consumption, if
there is a change from BoM).
* Note, however, that in certain circumstances, it is better to

give a larger unit of manufacture, e.g. , per 1000 pcs of
nails, as per nail consumption of raw material will be too
insignificant.
Item, Location (godown) and Quantity

Give the component name and quantity and, if multiple locations
(godowns) have been set up, the most likely location for the item.
Again, by specifying the location here, you are not restricted to
that location during transaction/voucher entry. The locations
would default to these but you can opt for another.
Input your options for other questions for the stock item and
accept the screen.
The stock journal/manufacturing journal entry

screen
Gateway of TallyÆVoucher EntryÆClick on Stk. Jrnl
If you had created a new voucher type Mfg Journal, a pop-up
menu will show both the default Stock Journal and the Mfg.
Journal.
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Select Mfg. Journal
Input fields
Reference
Give a reference number, if required.
Name of Product
For the stock item to be manufactured.
Location
Give the location in which it is to be manufactured. This location
will show the stock.
Qty
Give the quantity of the item to be manufactured.
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Component (Consumption)
The component list for the product to be manufactured and the
proportionate quantity of each component (based on the quantity
specified for the product) is produced. The default location as
specified in the BoM is also given for each component. However,
the entire component list can be altered, components added or
removed and locations amended.
* Any change made during this entry will not affect the original Bill of
Material for this product.
* If you want to make permanent change to the Bill of Material,

change the stock item master information (thru Gateway of Tally
ÆInventory Info)
Cost of components
The base cost of the components are automatically added and
displayed.
Additional cost components

You may specify additional costs for producing the item. These
would, typically be wages, power, freight etc. Remember that
you must have ledger accounts opened for the additional costs.
Moreover, additional costs entered for the ledgers, do not reflect
in the relevant ledger with the amount but only add to the cost of
the item.
%
You can specify the additional cost by way of a percentage of the
cost of components, in which case give the number, e.g. 2 for 2%
of the cost of components. You may, alternatively, skip the
percentage field and input an amount directly.
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Total additional cost
This displays the total additional cost for the item.
Effective cost
This is the sum total of the cost of components and additional
costs.
Effective rate
Effective cost per unit of item/product produced.
Advanced usage
You may create a stock or manufacturing journal directly while
creating a sales invoice. The need often arises in situations where the
manufacture has not been recorded but the invoice is being prepared.
While creating an invoice, when the cursor is at the quantity field
of the stock item (manufactured product), press [ALT]+[V] to
bring up the manufacturing stock journal screen for the
product/item. On completing the mfg journal, you are brought
back to the next field in the invoice screen. Thus, the item would
be manufactured, its components reduced from stock, and also
invoiced in a single transaction entry.
* [ALT]+[V] creates a new stock or manufacturing stock journal

transaction voucher and is not to be used as an allocation screen.
Therefore, if [ALT]+[V] is pressed again, (say during alteration of the
invoice), one more manufacturing journal will be created and will not
alter the previous manufacturing journal. The principal is the same as
[ALT]+[C].
* If you want to alter the related manufacturing/stock journal, you must

alter it separately, in the normal manner. It will be available through
Display-Inventory Books ÆStock Item or through StatisticsÆMfg or
Stock Journal.
264
Buttons in a typical voucher entry screen
F2: Chg Date. Use this button to change the date of the voucher.
F3: Chg Cmp. This would allow you to switch to another loaded
company and enter a voucher in it. Therefore, you can, almost
simultaneously, enter vouchers for more than one company.
Post Dated. To mark the current voucher post dated.
Optional. To mark the current voucher optional.
F11: Features
F12: Configure
* To check the accuracy of the vouchers entered, one of the

many ways is to select Day Book from the Display Menu.
Then Select F2: Period from the button bar and enter the
period of display (it defaults to the current date only but you
may display all the transactions for a particular period).
Select F1: Detailed. Check the vouchers against what you
were asked to do. If you find a mistake, position the
highlight bar over the offending item and press Enter for
Tally to display the voucher details for alteration.
* The alteration facility is subject to security and access

rights. All alterations are available for audit.
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Purchase and Sales Orders
Tally permits you to produce Purchase and Sales Orders from the
system. Purchase Orders may be produced, printed and sent to
suppliers. Goods received are linked with the PO s and Invoices.
Outstanding Purchase Orders should be monitored. In the
Chapter : Voucher Entry, we have shown how orders are linked
with delivery notes and invoices. Hence, we will only consider
creation, alteration and deletion of Purchase Orders here. Display
order position of any item from the Stock Summary. The
Purchase Order Book will list out all the Purchase Orders placed.
Likewise, Sales Orders received are recorded in Sales Order
Entry Screen. The details are available during Delivery Note and
Invoicing. You may view the order position in the Stock
Summary. The Sales Order Book lists all Sales Order received.
Activate Purchase and Sales Order Processing in F11:Company
Features.
We shall first take up purchase orders.
266
How to create a Purchase Order
Purchase Order details will also depend on configuration
Purchase settings. Hence, have a look at the configuration and voucher
Orders types.
Gateway of TallyÆVoucher Entry ÆF9:Purchase ÆSelect
Purchase Order
Party’s A/c Name

Give the supplier’s name. Type in the same manner as voucher
entry and select from list of Ledger Accounts. Use [alt]+[C] to
create a new account.
267
Order No
The voucher number can be treated as your Purchase Order
number. You may configure the voucher type through Acct.
InfoÆVoucher Types to set prefixes and suffixes for Purchase
Orders. This particular Order No. field is an additional field to
record order number if different from the voucher number.
Name of the item

Give the name of the stock item for which the order is to be
placed. Once the name is given the Item Allocations sub-screen
pops-up that needs to be filled in.
Due on
The due date for delivery of the item. This will enable
monitoring of outstanding deliveries. The order can be split for
delivery on different dates.
Location
In case multiple location feature is active, this field is required to
be given, else it does not appear.
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Quantity, Rate and Amount
Give the quantity of the item required, and its rate. The amount is
calculated but is modifiable to enable rounding off.
Additional Cost Details
Additional cost on the item may be incurred which can be

mentioned here. Give by way of percentage of the item cost or a
flat amount. If not, select ‘end of list’. Additional costs increase
the value of the item and do not independently appear in the
nominal ledger account or expense.
Next Item
The cursor then comes to the Item field once again and you can
enter another item to order. If no other item is required, press
[enter] on the blank field to take the cursor to the tax/expense
field.
269
Expense/Tax
Once the item details have been entered, you might specify tax to
be charged and other expenses like freight, if any. The tax or
expense has to exist as a ledger account or it may be created
using [alt]+[C]. We shall select tax @ 17.5% to be charged on
the item values. The order entry screen would then appear thus:
Narration
Optional. You may give some particulars about the order.
270
Alter a Purchase Order
You can alter a Purchase Order by displaying it from a variety of
place but is easier through the Purchase Orders Book or the Day
Book.
Gateway of Tally ÆDisplay Æ Day Book or
Delete a Purchase Order

Alter an order and use [alt]+[D] to delete it.
271
How to create Sales Orders
Sales order entry is exactly like Purchase Orders.
Sales Orders Sales Order details will also depend on configuration settings.
Hence, have a look at the configuration and voucher types.
Gateway of TallyÆVoucher Entry ÆF8:Sales ÆSelect Sales
Order
Party’s A/c Name

Give the customer’s name. Type in the same manner as voucher
entry and select from list of Ledger Accounts. Use [alt]+[C] to
create a new account.
Order No
The voucher number can be treated as your internal serialised
order number. The field Order No. is advised to be used for the
customer’s order number.
272
Name of the item
Give the name of the stock item for which the order is to be
placed. Once the name is given the Item Allocations sub-screen
pops-up that needs to be filled in.
Due on
The due date for delivery of the item. This will enable
monitoring of outstanding deliveries. The order can be split for
delivery on different dates.
Location
In case multiple location feature is active, this field is required to
be given, else it does not appear.
Quantity, Rate and Amount

Give the quantity of the item required, and its rate. The amount is
calculated but is modifiable to enable rounding off.
Additional Cost Details

There is no additional cost details for sales orders. They exist
only for Purchases as the values are added to the cost price. In
case of sales, additional cost need to be entered below the line
along with tax.
273
Next Item
The cursor then comes to the Item field once again and you can
enter another item to order. If no other item is required, press
[enter] on the blank field to take the cursor to the tax/expense
field.
Expense/Tax
Once the item details have been entered, you might specify tax to
be charged and other expenses like freight, if any. The tax or
expense has to exist as a ledger account or it may be created
using [alt]+[C]. We shall select tax @ 17.5% to be charged on
the item values. The order entry screen would then appear thus:
Narration
Optional. You may give some particulars about the order.
274
Alter a Sales Order
You can alter a Sales Order by displaying it from a variety of
place but is easier through the Sales Orders Book or the Day
Book.
Gateway of Tally ÆDisplay Æ Day Book or
Delete a Sales Order

Alter an order and use [alt]+[D] to delete it.
275
View order position
Stock summary is perhaps the best place to view the order
position.
Gateway of Tally Æ Stock Summary ÆDetailed [F1]
Currently the screen shows the 4 Nos. Tally as stock in hand as

on the last day of the period. However, you do not know how
much stock is on order both inward and outward. If you knew
that, you could take plan your stocks better and not lose out on
orders.
Press [alt]+[n] Auto-Column Button.
276
You get the following menu.
Select Orders & Stock Details.

Remove Rate and item from display by configuring it using F12.
This will enable all columns to fit in one screen.
277
We will limit our view to Tally here.
Note that though you have stock in hand of 4 Nos., your
outstanding sales orders already due to be delivered are 7 nos.,
leaving you with a negative balance of 3 Nos. Obviously, you
cannot take further orders. However, when you look at purchase
orders placed on suppliers, and the stock is already due to be
delivered, you are left with 2 Nos. of Tally for which you can
accept orders for sale from customers.
278
You may further drill down into each column to view greater
detail. In the Stock Summary screen, you can even bring up a
new column using [alt]+[C] the New Column button and get
more options for detail. Please experiment with the different
Types of Values to get familiar with them. They are powerful and
give great business information.
Sales Order Reports can be accessed through [Alt]+F7 of the

stock summary or Alt +C of the Stock Summary. They can also
be accessed through ALL other reports by pressing F9 or F10
(Accounting/Inventory Reports).
279
I nvo i c e E n t r y
Invoicing or sales invoicing is not very different from sales
voucher entry. In fact, you use the same voucher but select ‘As
Invoice’ option to turn it into a sales invoice. Purchase invoices
are recorded through normal Purchase Voucher entry and it does
not have the provision of being converted into an invoice format
for entry purposes. However, you can print the purchase voucher
as a Purchase Invoice or even a Purchase Order.
& The advantage of using the invoice format for sales invoice
entry is that it enables automatic calculations of taxes and duties
accounts (those falling under the group ‘Duties & Taxes’ or those
groups for which the field ‘Used for calculation’ is enabled.
In recording both sales and purchase invoice details, you can

adjust accounting and inventory balances and account for VAT,
all at the same time.
The default invoice formats have a variety of configuration
options. Using them you may print your invoices. You may not
need to create new invoice formats. It is recommended that you
attempt to configure the default invoice itself. However, should
you finally feel that the invoice does not meet the needs, you can
design a new invoice using Tally’s Definition Language Report
Designer. The TDL is quite an advanced language with which
you can create new reports and screens. You may even modify
existing reports and screens. However, it is a specialist’s job and
would require advanced training.
* Ensure that you have activated Invoice Entry capability in

F11:Company Features.
280
Ensure that:
In [F12]: Configure under Gateway of Tally, Voucher Entry,

in the Accounting Vouchers section of the screen, Show
Inventory Details is set to Yes.
In F11: Features and in the top section of the screen, Allow
Invoicing is set to Yes. This brings up another option, that
of a separate discount column.
If you want a separate column for discounts in invoices, say
Yes.
Also ensure that:
In Accounts Info.Æ Ledgers, ledgers of the type Purchases

and Sales Accounts have Inventory values are affected set
to Yes.
If you want tax accounts like VAT or Sales Tax (under the
group Duties & Taxes) to use automatic calculation, ensure
Percentage of calculation is entered (e.g. 17.5) and has
appropriate Method of Calculation. If it is to use Tax based
on Item Rate, then the stock item must have the rate
specified.
* Refer to the Accounts Info.Ledgers chapter for details.
281
Configuring the invoice
Gateway of TallyÆF12:ConfigureÆInvoice Entry/Delivery Note
Set the options as required.

Please note the last two options.
Accounting allocations are not normally made during order

recording or delivery notes. Hence, it is set to No. However,
it is permitted and, should you want it, change it to Yes.
Allow modification of all field fields during entry. Default
order/delivery note entries appearing in the invoice can be
changed during invoice entry. To permit modification of all
fields set it Yes. Else No.
282
Further to invoice entry configuration, you can configure its
printing.
Gateway of Tally ÆF12:ConfigureÆPrintingÆSales
Transactions ÆSales Invoice
Set the print options as desired. As you would see, you can
configure the invoice to a great extent. The options depend on the
various F11:Company Features and F12:Configure options that
have been set for your company either by you or by the
administrator. In the above screen, the options are tuned to
Britain/Europe settings. These would change if you opt for
India/Asia in the basic company settings.
283
Likewise, the details that you give during invoice entry, depend
very much on the configuration settings. Let us look at a typical
invoice entry screen:-
During invoice entry, some of the information will be input in

separate pop-up screens. The invoice format is different from the
normal sales voucher where the accounting information is the
primary information and the stock information is secondary. In
the invoice format, the accounting information is secondary and
the stock information primary. Hence, you give accounting
information, i.e., the sales account to be credited in a pop-up
window.
284
Sales Voucher number
This number is controlled by the settings in the voucher type
masters.
Date
Change date using [F2], when you need to.
Reference
This is an optional field. Give any reference particulars that can
be later picked up using the range or filter mechanism. This has,
traditionally, been used for tracking missing tax forms.
Party’s A/c name

Select the customer’s ledger account. This account will be
debited by the total invoice amount. You may select a party
ledger (Falling under the groups Sundry Debtors or Sundry
Creditors) or even Cash or Bank Account (for cash sales).
Party’s other details

This information is to be filled up in the secondary screen that
pops up.
You may have a different consignee name and address than the
buyer. (if configured for).
Delivery Note No(s)

Select the delivery note if there was any made for this shipment
from the Pop-up List of Tracking numbers. This way you
reconcile goods despatched with the invoice and financial
records. Select Not Applicable if no separate delivery exists. The
choice is required only in case Tracking Numbers are active.
285
Dispatch Details
Give the despatch details here. These are printed out on the
invoice.
Order Details
The order particulars may be entered here. If a prior order was
recorded for the customer, a pop-up list of pending orders
appears from which you select the relevant order or orders. You
may raise an invoice against a single order or even multiple
orders. Select New Number if no prior order exists for this
invoice but you want to record the order particulars. Select Not
Applicable if not applicable. Select End of List to move to the
next item.
286
Buyer’s Details
The Buyer’s Address as per the master records appear as default,
but you may alter it. If you have configured to have the
Consignee address as well as Buyer address, its details too
appear. Accept or modify them as necessary.
Inventory items that are to be invoiced have to be entered. Once
you have selected the first item and the tracking number, if you
have multiple locations set up, a secondary screen pops up for
accepting the item particulars:
Give the quantity rate and unit particulars. You may select more
than one location from where the goods have been despatched.
Press [enter] at the first blank location field to accept the first
item’s allocation of location and other details. You now have to
give the accounting ledger that will be affected for the sale of
this item.
* The location column appears only if Multiple Location

feature has been activated.
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Accounting details
This information is to be given in a secondary screen that pops
up after allocation of the each item. Select the relevant sales
account to be debited for the first item. The screen would be as
below:
Sales of Disks is a ledger account under the group Sales

Account. It is the credit entry to the debit effected by the Party
a/c name.
Where you have more than one stock item

Each item will require item allocation and accounting allocation
as above. You must repeat the procedure till you have completed
all the items for that invoice. Press [enter] on blank item or select
[end of list] to complete the cycle.
VAT / Tax or other expenses

These accounts are entered after the total value of stock items.
Select relevant ledgers for the list. These are ledger accounts and
would affect accounting ledgers. For accounts like VAT/Sales Tax
that are under the group Duties & Taxes (or are otherwise
specified as Calculate in invoice entry in their masters), the
amounts are calculated automatically. Press [enter] on blank item
or select [end of list] when you have completed.3
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Bill Details
After the cursor leaves the total amount field, you must give bill-
wise particulars, if the feature is activated for this particular party
ledger.
You do this in the bill-wise details screen.
After you give the narration, accept the invoice.
Printing invoices and vouchers

You can print any voucher or invoice by pressing [ALT]+[P] or
clicking on the button [Print]. Do this before saving the voucher.
You or your administrator may have configured the voucher type
to print automatically after saving the voucher.
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You can always configure the printing options by selecting the
appropriate buttons.
You can give additional information, change titles, print
additional pages, change printer settings, etc.
The buttons [Pre-Printed] and [Quick Format] are toggles for
[Plain Paper] and [Neat Format] respectively. These are print
specifications that you give. Pre-printed is for pre-printed
stationery. Quick Format does not give fonts or other niceties but
is ideal for fast printing. Select copies and give the number of
copies to be printed. 1 is the default. You can set the default
number of copies in Invoice Printing Configuration
(Gateway of Tally ÆF12:Configuration Æ Printing )
View invoice as voucher and vice-versa

Once you create the invoice, you can view it as a voucher by
simply displaying it and clicking on the toggle button [As
invoice]/[As Voucher] or pressing [CTRL]+[V]. You may do
likewise with a sales voucher to be brought up as an invoice.
Display/Alter a voucher/invoice
You can display a voucher or alter it (subject to authority), by
simply drilling down any display screen. For example, from the
Balance Sheet, press [enter] on the group Sundry Debtors, then
on the ledger Response Tech Ltd which brings up its monthly
summary. Continue the selection process till you see the list of
vouchers and then the voucher itself. You may opt to alter a
voucher by going through the ledger display screen or the Day
Book. Since the display interfaces are identical, feel free to use
the path most convenient for the circumstance.
* If you do not have authority to alter a voucher, the voucher

would be brought up for display only.
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A d v a n c e d vo u c h e r e n t r y
Advanced accounting vouchers
Please refer to Ledgers, Groups and Cost centres chapters for
more explanation on the different concepts. Here we will discuss
entry issues only.
Advanced usage in voucher entry involves using more features of
Tally. This would mean entering of data in various pop-up sub-
screens depending on the context and configuration (both F12
and F11) settings.
Bill-wise details
Bill-wise details
entry in Bill –wise details are available, firstly when activated in
vouchers F11:Company Features, and secondly when set to Yes in the ledger.
Bill-wise details are pertinent only for party accounts, viz.,
ledger accounts classified under Sundry Debtors, Sundry
Creditors and Branch/Divisions.
You would activate Bill-wise details if you wish to track each
invoice to its conclusion and you wish to adjust the bills and
payments bill by bill.
Moreover, you want to obtain such information as outstanding
analysis, ageing analysis, pending, due and overdue bills, etc.
(These are available through DisplayÆStatement of
AccountsÆOutstandings).
& You give bill details during voucher entry itself. This has the
advantage of immediate reconciliation of bills/invoices with
payments/receipts.
& Your outstandings position is correct and available at all times.
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Hence, bill wise details sub-screen comes up for party accounts
during receipt/payment voucher entry or purchase/sale voucher
entry or debit note/credit note entry.
* Bill-wise details sub-screen does not come up for inventory

vouchers. It is relevant only for accounting purposes.
Let us take an example of a Purchase Voucher where we credit

the supplier Peutronics with 15000. After the amount field, the
bill-wise sub-screen pops up. The sub-screen will appear as
below: -
Type of Ref
Bill reference can be of four types:
Advance
New Ref
Against Ref
On account
You must select one or more of these to adjust the amount. The
amount can be broken up and different references given. E.g. the
15000 above could have been firstly 5000 where it is due on 8
Aug 97 and then 10000 where it is due on, say, 31 Aug 97.
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Advance
This is relevant where you receive or pay monies in advance. You
can adjust this advance when making the sale or purchase entry.
At that time, it will be available for adjustment.
New Reference
You select this for new transactions, e.g.
For a new bill raised by you on your customer or raised on you
by your supplier.
If you mark the bill as a new reference, it is add to the list of
outstandings.
In the field, you can give the voucher number, the reference
number, or any alphanumeric set of characters that would
identify the reference and help set it off later using against
reference. You are not allowed to give the same name for two
new references. In other words, new references must be unique.
Against Reference
Select this when adjusting against a previous reference, i.e.;
adjust against a bill marked new reference. Typically, You would
mark a bill new reference and adjust its payment by marking the
payment against reference. When selecting against reference, a
list of pending references (bills) for the party comes up from
which you select. You may adjust the whole bill or part of it. The
rest of the bill remains unadjusted. You can use Against
Reference even to adjust advance with an invoice. This you
would do when entering a purchase or sales voucher. If there are
no pending bills, the option will not be available.
On account
On Account is selected when you are unable to mark a payment
or a receipt against specific pending references. Typically, you
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would do this in cases of lump sum payments where a number of
bills are pending but you are not instructed against which bill the
money should be adjusted.
Name
In the field, you can give the voucher number, the reference
number, or any alphanumeric set of characters that would
identify the reference and help set it off later using against
reference. You are not allowed to give the same name for two
new references. In other words, new references must be unique.
We have given New Bill as new reference (this is actually not a
good unique name).
Due date or credit days

This is applicable for new reference. Give the credit period for
the bill or the date when it is due for payment. Give either, Tally
will calculate the other.
Amount
Give the amount for the adjustment. You can break up the
amount and adjust it in several instalments giving different
references.
Dr/Cr
Specify whether the adjustment is debit or credit.
& It is usually Dr for sales new references and Cr for Purchase

New references. It is usually the same as the voucher entry.
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Cost centre allocations
Cost centre allocations would be relevant if you have opted for
Cost centre cost centres in [F11]: Company Features. Moreover, it applies to
allocations in only those ledgers for which you have activated cost centres. You
voucher entry may wish to display relevant ledgers through Gateway of
TallyÆAccounts InfoÆLedgers.
By allocating ledgers to cost centres at the time of voucher entry,
you do away with the need to reconcile them – they are
reconciled from that very moment. Hence, you save time and
effort when you wish to use the information for analysis. Cost
centre analysis is a powerful tool that enables you to know the
performance of the cost centres. Display cost centre information
through Gateway of TallyÆDisplayÆStatement of
AccountsÆCost Centres.
Assuming that you have created cost centres and cost categories
in Accounts Info (masters) as below, we shall see how they
appear.
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Cost Categories
Cost Categories: Departments Executives Projects
Cost Centres: Marketing Salesman A Airports
Manufacturing Salesman B Roads
Finance Salesman C Buildings
You may specify a cost category to allow allocation of only

revenue items or items of both revenue and capital nature.
In this example, we would allow for both Departments and
Projects categories and only revenue for Executives.
Now, Salesman A incurs conveyance expenses of 1000/-. If he

has incurred it for marketing, allocate this amount to the
cost centres Marketing and his own cost centre Salesman
A. (You would do it while entering a payment voucher
debiting Conveyance and credit Cash). If the salesman now
incurs expense for the project Buildings, you would allocate
to the cost centres Salesman A and Buildings. You may
allocate an expense to one or more cost centres and it is
not essential to always allocate to all cost centres. An
expense can remain unallocated to other cost centres.
If you did not have cost categories, you would have been able to
allocate the expense to either the Project Buildings cost
centre or Salesman A and not to both. In such a case, you
would not obtain the third dimension.
You may not have cost categories activated if you do not need to.
Without cost categories, you will allocate the ledger amount to
only one set of cost centres, and not to parallel sets. Hence, you
would allocate the conveyance expense to Salesman A only and
not to both Salesman A and Project Buildings. You may,
however, allocate the expense partly to Salesman A and partly to
Project Buildings that adds up to the total amount. This
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information will not enable you to know how much, Salesman A
spent, for the Project Buildings.
Cost Centre allocations have to be done in pop-up sub-screens in
the main voucher entry screen. The sub-screen pops up after the
amount field pertaining to the ledger for which cost centres have
been activated. Hence, the following is the sub-screen for the
ledger Conveyance – amount 1000/- in a payment voucher: -
Inventory items need to be considered in financial vouchers in
Inventory cases where you use ledger heads that have stated ‘Yes’ to the
allocations in an question ‘Are Inventory Values affected?’. (Display your Sales
accounting Account to verify). Typically, you will have the accounts of the
voucher type Sales and Purchases affecting inventory. Hence, when you
enter a voucher (usually a Sales or a Purchase Voucher) a sub-
screen pops up after the concerned ledger head and amount
requiring you to give inventory item details.
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* The inventory details that you give in an accounting
voucher (like Sales and Purchase Voucher), affects stocks
by immediately updating them, only if Tracking Numbers
are not activated in [F11]: Features. Otherwise, the
inventory allocation tracks against Goods In or Goods Out
notes through tracking numbers.
* The information that you need to give in the inventory

allocation sub-screen depends upon the features enabled
for the company.
A typical inventory allocation sub-screen would look like this:
Name of Item
Pick the item from the list of items (or create a new item by
[ALT]+[C].
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Tracking Number
The tracking number pop-up list appears after you have entered
the name of the item. A default list will contain the following:
Tracking
numbers – use
of ‘Not
Applicable’
New number – give a number not in the list. You will use
this number to reconcile, when making goods inward entry.
Not applicable – if you do not want a tracking number. This
may be resorted to in cases where you want to update
stocks immediately with this entry and no goods inward
entry will be needed. When in an inventory voucher if you
select ‘Not Applicable’, that will update stocks and you do
not want to make an invoice entry.
Not Applicable option is important and hence we repeat the
cases where you would use it:-
When you raise a sales voucher/invoice that accompanies
the goods and you do not want to pass Goods Out entry.
‘Not Applicable’ will update stocks without the Goods Out
entry.
When you send out samples for approval, where you do not
want to raise an invoice. Likewise when you receive
samples but no invoice will be forthcoming.
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Default voucher number and reference number
The voucher number and the reference number of the current
voucher are also listed and available for selection. Select the one
that is easy to track later.
Pending tracking number

If you have a pending tracking number from a previous voucher,
it will be listed here together with details like location, quantity,
rate and amount. You will select a pending tracking number to
adjust that with the current voucher entry. You will do so in the
following cases:
When you pass a purchase voucher for an invoice that is

towards a Goods Receipt Note that you had previously
passed. (You would have given a new tracking number
then).
Likewise for a sales voucher/invoice.
Location
If you have more than one location, you must specify the
Multiple location to which this item relates. Hence, a sub-screen would
locations come up after the tracking number to enable you to specify the
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Batch Number
Batch numbers

if batch numbers have been activated in Company Features.
Mfg. Date
Expires on
Quantity
Normally, no explanation is required. However, you can set
Company Features to allow Actual and Billed Quantities. Then,
Actual and
you have to give both quantities here. The actual quantity
Billed Quantities
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Rate
the voucher.
Per
Amount
End of List
In all multiple allocations or selections, you must either be
Select End of required to select the option ‘End of List’ or press [enter] at the
List or press first blank field. This would accept the multiple allocation and
[enter] as the take you back to the parent screen. E.g., Multiple locations,
case may be, for batches or items.
multiple
allocations
Foreign Exchange transactions
Entering foreign exchange transaction in Tally vouchers is quite
simple once you understand the principals of it. It would be
worthwhile going through the chapter on Currencies now.
* Remember that you must have foreign currency enabled in

Import purchase F11:Company Features. Only genuine bank accounts that
entry using are maintained in foreign currencies need to have their
forex. currency set up in that foreign currency otherwise all other
ledgers should preferably be set to home/base currency
only.
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Based on the above settings, we shall examine a Purchase
voucher entry of an import transaction in foreign exchange and
then a payment entry made from a forex bank account.
Example 1: Foreign exchange transaction of an import
transaction.
In the purchase voucher:
Give the date, voucher number, and reference as usual.

You need to first credit the supplier.
In the amount field, start with the foreign currency symbol
to signal to Tally that it is a forex transaction. In this case
we type Rs (our base currency is £, remember?) and
continue with the amount. Rs.150000.
A forex sub-screen now asks for information on the

exchange rate. Simply give the rate as quoted by your bank
or mentioned on the purchase invoice. (Tally gives the
default exchange rate that you had mentioned in the foreign
currency master). You are allowed to change the rate.
Alternatively change the amount and the rate will be
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adjusted automatically. If you want to give only the base
currency, clear the forex field and Rate of Exchange field
and simply mention the Value in base currency. The
exchange rate would then be ineffective.
In inventory item allocation, we show a purchase of 5 copies of

Tally software. You may give the rate of the item in base
currency or even in foreign currency. To mention in foreign
currency, start the rate entry with the forex symbol. Tally will
convert it to the base currency at the exchange rate previously
mentioned.
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The forex entry method is repeated here:
* In the amount field, start with the foreign currency symbol to

signal to Tally that it is a forex transaction.
* A forex sub-screen now asks for information on the

exchange rate. Simply give the rate as quoted by your
bank or newspaper or as recorded in the documents. (Tally
gives the specified exchange rate by default if it is
mentioned in the foreign currency master). You are allowed
to change the rate. Alternatively change the amount and
the rate will be adjusted automatically.
* If you want to give only the base currency, clear the forex
field and Rate of Exchange field and simply mention the
Value in base currency. The exchange rate would then be
ineffective. Of course, if you do not enter a foreign currency
in the amount field, the amount is assumed to be in
home/base currency.
Example 2: Voucher entry of a forex bank payment

It is assumed that the bank account ledger is maintained in
foreign currency.
In a payment voucher (bank payment):
Forex payment
Enter the date and voucher number as usual.
entry
Debit the supplier
In the amount field, begin with the forex symbol
You may debit the supplier with the same amount and
exchange rate as before or even change the rate to the
current rate. Here, we have changed the rate to a current
rate. Notice the display of pending bills in foreign
exchange when you are asked to adjust the payment against
previous reference (it would come up if you had bill-wise
outstandings activated).
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The forex gain or loss in the transaction is automatically
calculated and is shown as unadjusted Forex gain/loss in
the Balance Sheet. You may pass a journal entry affecting
the profit and loss account with the forex gain/loss figure to
bring it into the books.
If you view the ledger account of the supplier, you will notice
that its account has balanced out but a forex gain has accrued on
the transaction due to a rise in the exchange rate for the pound.
Advanced inventory vouchers

There is no separate section on this. Normal inventory voucher
entry includes a discussion on the advanced issues.
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Display – the all
powerful eis tool
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Display – Tally’s forte
Tally’s Display of information has been designed to give you
maximum benefit of the data that has been entered through
vouchers. You would have found that voucher entry itself is so
much like your thought process. Display of information and the
amazing variety of it all, puts you in charge of your business
information. The best way to extract utmost from Displays is to
experiment with the different options. It is not possible to cover
the almost infinite options and ways in which you can present
your data in a single manual. It is through Displays that Tally
users get money saving ideas!
The purpose of putting in all your data is, after all, to present
Display screens them in the form of comprehensible accounting reports. Tally far
take advantage exceeds these expectations. By way of entry, all you do is to
of your enter your vouchers. You do that, any way for your accounting
monitor’s purposes. Tally uses the same data and gives you management
capabilities.
control reports in addition to all books and statements. Tally is
They are
dynamic and real-time – all reports are up-to-date at all times. They are
interactive and displayed as at the last voucher entered.
are not merely
print files. & All reports are very pleasing to the eye and obtained
instantaneously. They are not spooled print files thankfully, but
are specially designed for the screen. However, whatever you
see on the screen, you can print as well – but using the printer’s
capabilities.
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Displays are divided as follows:
Only the Balance Sheet and Profit & Loss Account are displayed
Books and directly from the Gateway of Tally. Tally accords these
statements are statements the highest importance. As you can see from the
separated for menu, displays are roughly organised into Accounts information
both accounts displays and Inventory information displays – conforming to the
and inventory.
two major areas of operations. Each area is grouped separately
into books and statements.
Conforming to showing the main financial statements separately,
the Cash and Funds Flows are not grouped under Statements of
Accounts.
The Day Book contains all the vouchers for the day, including
inventory vouchers. Its purpose is to show you a day’s
transactions. However, you can display any report for any period
by using the change period option.
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The List of Accounts gives the tree structure of all your masters –
Groups. Ledgers, stock items, cost centres, currencies, etc.,
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Basic features of displaying
reports
Tally prepares the books of account and financial statements
based on the vouchers you have entered to date. You can then
vary the appearance of reports according to your needs, for
example, to make comparisons between different companies,
periods of the financial year, groups and ledgers.
In each case, when you display a report, you can step-down to
Basic features the next level of detail by highlighting the item and pressing
of display Enter, and you can keep going until you reach an individual
screens voucher. Similarly, you can step back to higher levels by pressing
[Esc]. The special features available for the currently displayed
report are indicated on the button bar, and can be selected with a
single click of the mouse.
Accessing reports
The Gateway of Tally menus provide access to all the financial
reports, as in the diagram opposite. For example, if you want to
view the Sales Register then, in the Gateway of Tally menu
select Display, Account Books and Sales Register in turn, and
Tally will display the report for the currently selected period.
Modifying reports
Once you have selected a report and its screen appears, you can
modify the display to suit your requirements using the
appropriate buttons on the button bar. You will get to know the
functions of the various buttons as you become more familiar
with Tally but some buttons perform similar functions in all
reports, providing they are appropriate to the screen you are
viewing.
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If you select the buttons using the keyboard, the conventions are:
Fn: - just press the Fn key.
Fn: - press [Alt]+Fn.
Fn: - press [Ctrl]+Fn.
F1: Detailed/Condensed
Adds a further level of detail to the report, or condenses the
report to a higher level of detail.
F2: Period
Enables you to change the period of the report by specifying
new from/to dates.
F3: Company
If you have more than one company selected, this button
enables you to change companies to display the new
company data in the current screen format.
F4: to F10:
The functions performed by these buttons vary from report to
report.
F11: Company Features
This button is not related to displaying reports but to
selecting options that affect voucher entry. The screen it
displays must not be changed during training.
F12: Configure
This button is very relevant to displaying reports and enables
you to define the report-specific options you wish to use. For
example, depending on the report you are in, you can
specify whether it should be in horizontal or vertical format,
show percentages, show gross profit, show opening and/or
closing balances, change the periodicity, change the sorting
method, and so on.
If you select F12: Configure while in the Gateway of Tally

screen, this takes you to a Configuration menu. If you select
General, it brings up an option screen which, amongst other
things, enables you to specify that you wish to see graphs
with monthly reports.
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F12: Range
This button enables you to filter the information you see
displayed based on monetary value. For example, you can
specify you only want closing balances greater than £5,000.
F12: Value
This button enables you to filter which vouchers you wish to
be used in the calculations. For example, you can specify
you only want vouchers having a narration containing the
expression ‘XYZ Project’.
New Column
This button enables you to add another column to the report
to display comparable information for another company, or
for a different period for the same company, all on the same
screen.
Alter Column
This button enables you to alter the details of a new column
you have previously created, for example, the date range.
You select the column to alter by positioning the cursor in it
prior to selecting the button.
Del Column
You use this button to delete columns you no longer wish to
see in the report.
Auto Column
You use this button to add multiple columns to a report, for
example, columns for each month, or to accommodate
several companies. You can also have a total column for
the total of each item across all columns.
Report specific options

If there are report specific options available for the report, they
are displayed in the bottom half of the screen and can be
amended according to your requirements.
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Printing reports
You can obtain a printed version of the screen you are currently
displaying by selecting Print from the top of the button bar
menu. This brings up new button bar options and the Print
Configuration screen for the report, which asks Print? Yes or
No. If you select Yes, the report will be printed using the options
specified on the screen. If you select No, you can change the
options before printing.
& Tally’s neat printing is just too neat! Print out an invoice and you
would not consider using pre-printed stationery at all.
There are two types of print configuration options:

Print option is
As a print button or [ALT]+[P] key combination is all
available as a
button in most display screens. Remember, it is not a print screen – it is
display screens. special printing and printed reports would differ from
displays. Tally takes advantage of a printer’s capability and
uses it to maximise aesthetics in printed output.
As a printing menu option through the Gateway of Tally.
You can print multiple reports at a time through this option.
Common printing options
Common printing options affect the printing of current selected
Configure your reports. They are changed by selecting the appropriate button
reports from the button bar:
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Auto Column:
- If the screen version of the report supports Auto Column, this
button will be available and performs a similar function.
Titling:
- To change the title of the report.
Page Nos:
- To specify the starting page number and page number range.
Pre-Printed / Plain Paper:
- Toggle to make the selection.
Quick Format / Neat Format:
- Toggle between quick (draft) and neat (standard) formats.
With Colour:
- This option is only relevant if you have a colour printer.
Copies:
- To specify the number of pages to be printed.
Printer:
- To change the printer settings. This also displays the default
paper size that you have set for the printer.
Multi-Account Printing
Print multiple
accounts Gateway of Tally ÆMulti-Account Printing
Principally geared towards printing the Primary Books of
Accounts, like the Cash and Bank Books, Account Ledgers,
Sales and Purchase Registers etc, without needing to select the
accounts one at a time and pressing Alt+P. The facilities provide
for printing One Account at a time, All Accounts, or All
Accounts in a selected Group. Before printing, the date range
and other selections may also be set up.
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The current mechanism of printing used by Tally, will require
that for large company accounts, you choose to print each ledger
account on separate pages, - otherwise the memory requirements
of the system become so large as to bring most systems to their
knees.
Draft Mode Printing (Quick Format)

Almost every report can also be printed in Draft Mode (except
Draft mode to for Cheques!). The default behaviour of Tally is to print in Neat
print quickly or Format – and you may alter this by pressing Alt+F just before
on DMPs. printing. All subsequent reports will be printed in Quick Format,
until Alt+F is pressed again at the Printing Screen. (The button
equivalent for this is marked Quick Format).
Draft mode necessarily brings in additional restrictions in the
printing , which you will quickly learn by experimentation. It
also enables Printing to a File, which may be selected by
pressing Alt+E (to Select the Printer whose dimensions are to be
used, and the name of the File to output to.)
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Display Account books & statements
Books of account record the individual transaction details you

have entered. Although you may post items to many different
ledgers, Tally brings all the transactions of one category together
into a book of account for viewing and printing. For example, the
Cash Book records all the transactions affecting cash, the Sales
Book records all the sales transactions.
Statement of Accounts pertain to cost centres and outstanding
analysis. These are derived from individual transactions but are
not statutory requirements.
Financial statements on the other hand are still derived from
individual transactions but tend to show summary totals, ratios
and statistics, analysing a company’s financial data in a wide
variety of ways. Typical financial statements include the Balance
Sheet, Profit & Loss A/c, and Cash Flow Analysis. Financial
statements are usually statutory requirements in most countries.
All books are displayed first as a monthly summary with

opening and closing balances.
Select a month and press [enter] to display all
transactions for the month. The opening and closing
balances as well as transaction totals are also
displayed.
Select a transaction to bring up the voucher. This
voucher comes up either in display or in alteration
mode depending upon the access rights available to
you.
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& This is a typical display method and is available from most
places, including statements. For example, even from a Balance
Sheet, you would first display the group summary, then the
ledger monthly summary and finally the transaction voucher
itself.
Let us see some typical examples of how to display the books of

account and financial statements. You will then be able to
experiment with other statements for yourself.
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Example 1 - viewing Bank books
Gateway of TallyÆ DisplayÆ Account BooksÆ Bank Books
This displays the Bank Group Summary.
Select a bank account if there are more than one. Press

Enter to display the Ledger Monthly Summary.
Select F12: Configure to bring up the
Configuration/Graphs option menu.
Use the Tab key to tab down to Show with graph? and
type Yes and press Enter. Select Bar and press Enter to
return to the Ledger Monthly Summary, now displaying a
graph of the figures.
With the highlight bar over one month’s, say July’s figures,
press Enter to display the Ledger Vouchers screen. Note
that all the vouchers for July are listed. Press [Esc] to return
to the Ledger Monthly Summary screen.
Select F12: Value to bring up the Value to Calculate in
Report screen. From the Particulars menu, select Voucher
Type. From the next Particulars menu, select Name (the
only option). From the Range of Info. menu select equal
to. Then type Contra and press Enter. From the
Condition menu select End of List and press Enter twice.
Notice in the Ledger Monthly Summary that the figures are
now reduced as they only show Contra vouchers. To check
this, position the highlight bar over the July figures and
press Enter to display the details.
Keep pressing [Esc] until you return to the Gateway of
Tally menu.
319
Example 2 - viewing the Balance Sheet
Gateway of TallyÆ Balance Sheet
Notice the format of the display.
320
Select Detailed to give break-up of the grouped figures.
Select F12: Configure to bring up the Configuration screen.
Select the following options and observe the new display.
Configuration
Show vertical balance sheet? Yes
Show percentages? Yes
Show working capital figures? Yes
Method of showing balance sheet? Assets/Liabilities
Scale factor for values Default
Select New Column and enter a date range, e.g., 1-1-97 to

1-5-97 to show the change in the balance sheet since 1st
May
321
Scroll down to highlight Net Profit and press Enter. This
takes you to the Profit and Loss screen. Select F1: Detailed
to show a more detailed report.
322
Place the cursor on any amount in the column for 16-12-97.
Different Select Alter Column. Change period to 1-1-97 to 31-5-97
Inventory and valuation to Last Purchase Cost. Notice the change in
Valuation – closing stock value and consequently the change in profit
select Valuation figures.
button or see
the difference in
another column
Example 4 - viewing the Trial Balance

Gateway of Tally Æ Display Æ Trial Balance.
Select F5: Led-wise to obtain a display of the ledger

balances.
Select F12: Configure and just change the Sorting Method
to Amount-wise (Decreasing).
323
Select F12: Range and in the Range of Information in
Report screen, set up Ledgers having Closing Balance
greater than 20000.
To exit, keep pressing [Esc] until you return to the Gateway
of Tally menu.
You are welcome to experiment. It is simply your opportunity to
explore the powerful display features of Tally. You have seen
some of the reports and how they can be stepped-through,
configured and modified, so use that knowledge to try similar
and new things on the other reports.
For example, you might like to look at the following:
Ratio Analysis - try using F12: Configure to put it into

vertical format and then using New Column to compare
month-by-month data.
Cash Flow - try changing the period to 1st May to 31st July
and then using F12: Configure to show a weekly analysis
and adding a graph to the display.
Outstandings (Ledger) - try using Enter and the arrow
keys to step-down to voucher level and then back up again
using [Esc].
324
Reconciliation of Bank accounts
Reconciling the Company’s Bank Accounts with the Banker’s

Statement is a fundamental and regular task of Accounting. Our
first presentation of this facility aims to tackle two issues.
First, there should be the ability to ‘check back’ the correctness
Bank of the reconciliation. This has been done, by marking the ‘Bank
reconciliation Date’ against the voucher. For instance, if you have issued a
statement cheque on 8th April, which was ultimately cleared by your Bank
on 19th April, - you would set the ‘Bank Date’ for the voucher to
be 19th April. This means, that when you next need to ‘check
back’ whether the entry made by you is correct, you will only
need to verify the Bank Statement of the 19th.
Second, that you should be able to ‘recover’ the reconciliation as
of any date. This is of crucial importance to Auditing. The Bank
Reconciliation is one of the pre-requisites of Auditing and
verification of the correctness of accounts at the year end.
However, it is not a ‘real-time’ task – in the sense, that it is not
done by the auditor’s on the first day of the next year. This
means, that the reconciliation made on 31st Mar, should be
‘viewable’ even in August, - by when almost all the cheques
would have subsequently been marked as reconciled. This has
again been achieved using the concept above.
Bank Accounts may have a different ‘Starting Date’ for
reconciliation purposes. When you create a Bank Account, you
are requested to give an ‘Effective Date for Reconciliation’ just
before the Opening Balance. Normally, this would be the ‘Books
Beginning from’ date itself. However, you could have imported
data from a previous version of Tally or from any other system
325
(where the reconciliation process was not available or was
different. In that case, you may not wish to reconcile the bank
account with your bank statements from the very beginning. Give
the date from which you want the reconciliation facility to be
activated. Then, previous entries will not appear for
reconciliation, but will be taken as a reconciled Opening Balance.
A quick experiment with Reconciliation will show you what is
meant. Here is how you go about it:
326
Bring up the monthly summary of any Bank Book. (You
could do this from the Balance Sheet, Trial Balance, or
Display/Account Books/Bank Books, and selecting a
Bank).
Bring you cursor to the first month (typically April), and
press Enter. This brings up the Vouchers for the month of
April. Since this is a Bank Account, an ‘additional’ button
F5: Reconcile will be visible on the right. Press F5.
The display now becomes an ‘Edit’ screen in
‘Reconciliation’ mode. The primary components are:
A column for the ‘Bankers Date’
The ‘Reconciliation’ at the bottom of the screen, showing:
Balance as per Company Books
Amounts not reflected in Bank
Balance as per Bank
The Balance as per Company Books reflects your Balance as on
the last date (in our example case, 30- Apr).
The Amounts not reflected in Bank is the debit and credit sums
of all those vouchers whose Bank Date is either BLANK, or
GREATER than 30-Apr (i.e. these vouchers have not yet been
reflected in the Bank Statement).
The Balance as per Bank is the Nett effect of your Book
Balance offset by the amounts not reflected in the Bank – which
should equal the balance in the Bank Statement. (Of course,
some variation may persist due to entries made in the Bank
Statement which you have not yet entered in your Books – but
since you WILL definitely enter them, and only then print your
reconciliation, it will ultimately reflect the correct balance).
You will find, as you mark off the individual vouchers by setting
the ‘Bank Date’, that the Reconciliation at the bottom of screen
327
keeps reflecting those changes instantly. When you are finished,
press Ctrl+A (or press Enter as many times as necessary to skip
over the unmarked vouchers), and accept the screen. (If your
screen has a largish number of vouchers it may take some time to
complete the acceptance – be patient).
The next time you come for reconciliation, you will be presented
only with those vouchers which remain unreconciled. Thus, the
task keeps becoming simpler.
(It may be possible, that due to an error of entry made earlier,
you wish to see those vouchers which are already marked as
reconciled – so that you may modify their marking. To do this,
press F12:Configure. In case you have already pressed a few
keys BEFORE pressing F12, Tally will query whether you wish
to discard changes made so far, if any, by asking ‘Quit Y/N’.
Simply press Y – and the configuration screen will appear. Here,
specify whether you wish to see the reconciled vouchers also).
Remember, to print your Reconciliation, just press Alt+P!
328
Display inventor y repor ts &
statements
Tally prepares the inventory reports based on the vouchers you
Display of have entered to date. You can then vary the appearance of reports
inventory according to your needs, for example, to make comparisons
reports – button between different companies, periods of the financial year, and
options are the so on.
same as in
accounting In each case, when you display a report, you can step-down to
reports the next level of detail by highlighting the item and pressing
Enter, and you can keep going until you reach an individual
voucher. Similarly, you can step back to higher levels by pressing
[Esc]. The special features available for the currently displayed
report are indicated on the button bar, and can be selected with a
single click of the mouse.
In other words, inventory operates in exactly the same way as
accounting regarding displaying, modifying and printing the
reports, and so you can use the knowledge gained during the
accounting module to good effect with inventory.
Because it is very similar in operation, the function of the buttons
on the button bar and the various printing options are not
repeated here. Instead, this unit concentrates on highlighting
some of the special inventory screens, before giving you the
opportunity to practice.
329
Examples on displaying inventory reports
Stock Summary
Gateway of Tally Æ DisplayÆ Statements of Inventory ÆStock
Summary
Use the buttons to configure this report. E.g. Select F2:

Period to change period to, say, 1-1-97 to 31-5-97.
Select Detailed to show list of items under the stock groups.
330
Auto Column, Half-yearly and No. You should now have three
columns showing the stock groups and items at the end of May,
June and July.
Position the highlight over Software and press Enter to see

the next level of detail, and so on.
Keep pressing [Esc] to return to the Gateway of Tally. Select
Stock Summary again.
Select New Column. Tab down the Column Details menu to
Method of Stock Valuation and select Std. Price. You
should now see two columns displaying the same details,
the first at Cost Price (default) and the second at Std.
(Sales) Price.
Highlight Systems and press Enter.
Select F1: Detailed to see the location breakdown.
Keep pressing [Esc] to return to the Gateway of Tally.
Example 2 - viewing stock items
Gateway of TallyÆDisplayÆ Inventory

BooksÆStock Item.
You may go through the Stock Summary as well. Simply
place the cursor on the item and press [enter].
Select an item from the List of Items.
Select F12: Configure. Tab down the Configuration menu
to Show with Graph? and type y and press Enter. Select
Bar and No. You should now see the particulars displayed
with a graph of goods inwards and outwards (red for
inwards and blue for outwards).
331
332
Example 3 - making a stock query
Gateway of TallyÆDisplayÆ Statements of InventoryÆStock
Stock query – Query.
the one place
for all Select an item, from the List of Items. Notice how Tally
information on uses the Stock Category to display Items of the same
an item Category. You can offer alternative products immediately.
The locations at which you have stocks are also given,
which is invaluable for your logistics planning.
333
Select F4:Item to switch to another item to display. Notice
the stocks at different locations.
You should attempt to explore the powerful display features of

Tally. You have seen some inventory reports and that how they
can be modified. Now use that knowledge to try similar and new
things on the other reports.
For example, you might like to:
Go to the Group Summary, select Software and then use F12:
Range to limit the display to “Stock Groups having Closing
Value greater than 3000”.
Explore the Locations report. Try selecting On-site, clicking on
F1: Detailed, changing the period to 1-5-97 to 31-7-97, and then
using Auto Column to bring up the month-by-month figures.
334
Bring up the initial display of each report and use Enter & [Esc] to
work your way down through the levels of detail & back up again.
Analysis of Inventory Movements
The Analysis of Inventory Movements are done for Accounted

Transactions only. This is in contrast to the details given
through the Stock Summaries and other statements, where
‘Goods Received but Bills not Received’ and ‘Goods
Dispatched but Bills not Raised’ are also considered. This
difference may lead to slightly different figures and values in
the Analysis statements. The purpose of these Statements are
for comparative study, and they should NOT be construed as
authentic Accounts or Inventory Statements.
Gateway of Tally Æ Display-Inventory BooksÆMovement

Analysis
335
You can analyse stock movements by stock groups, or
categories or even by financial group or ledger.
Movement Analysis of a selected stock group brings up the Total
Inward and Outward movement of all the items in the selected
Stock Group. The Quantities shown are ‘Actual Quantities’ of
movement (which in some cases, may be different from the ‘Billed
Qty’ in the transactions.) The ‘Inward’ detail shows the Effective
Rate or Final Landed Cost of the materials, after considering all
overhead costs (see ‘Valuation of Purchases’). In case the
Effective Rate is different from the basic Invoice rate of the
materials, it is shown in ‘Bold’ - to highlight a possible candidate
for further study. The ‘Outward’ detail shows the Basic Invoice
Rate and Value of goods sold/transferred out.
336
The next level of information (press Enter on the stock Item),
brings up the Party-wise/Transfer-wise detail of Movements In
and Out. The Inward details show the Basic Invoice Rate as well
as the Effective Rate.
This is a great comparative report to view the effect of Purchase

costs from different suppliers. For example, Supplier A may
have a lower Basic Invoice Rate as compared to Supplier B, but
the Effective Rate may be higher – (perhaps due to differences in
Taxes, Packing Costs, Freight Costs etc). Similarly, in context
where a material is both manufactured in-house, as well as
purchased – the difference in Purchase Costs and In-house Costs
can be compared. Lastly, by selecting multiple columns for
different periods, you would get to see the changes in Effective
Rate for your purchases.
337
The next level of information (press Enter on the Party Name or
Stock Journal Name), gives the transaction level detail of
information. Here, the Date of goods received/sold, the
Quantities, Basic Rates, Addl. Costs, and Effective Rate for each
transaction may be viewed. Pressing ‘Enter’ expands into the
Date, Type and Number of the Vouchers which have contributed
to this transaction.
The default screen shows the Addl.Costs (if any), put together in
a single column. To view the ‘spread’ of costs, press F12:
Configure, and select to view ‘A;; Addl. Costs’. This brings up
the bifurcation of all ‘Additional Costs’ entered (see ‘Valuation
of Purchases’).
Ledger Analysis is ‘similar’ to Movement Analysis, except for
Analyse all bringing up the movements of the items for the selected Ledger
purchases from (Party). Thus, you get an ‘analysis’ of all purchases made from a
a supplier supplier, or all items sold to a customer. The next level of
information brings up the transaction level detail.
Transfer Analysis gives the movement details of each type of
Stock transfer ‘Stock Journal’. This can be used powerfully by following a
analysis simple discipline of using different Stock Journal types for each
‘nature’ of transaction. For example, ‘Item A Prod’, ‘Item B
Prod’ can be used for the production of Items A and B
respectively. In this scenario, the report then represents the total
of Item A produced, as well as the ‘Raw Materials’ used for its
production, with overhead costs (as entered). This becomes a
very useful costing and waste analysis tool. In non-
manufacturing segments, but with Multiple Godowns, this report
becomes a quick check to verify that all transfer entries have
been entered correctly – since the Total Movement In and Out
must match.
338
The Expansive Tally
This chapter will be expanded with more

technical details. Additions will shortly be
available from the Internet site.
339
Import of Data
Gateway of Tally -> Import of Data
Data may be imported in Tally in either Tally 4.5 Format, or
Tally 5.4 Format. The support for Tally 4.5 Format has been
included keeping in mind the few hundred programs which were
working in tandem with the earlier versions of Tally, and which
users may wish to continue using – for example, to import
Payroll related data.
Tally 5.4 Formats are inherently richer in content and more
Import of Data complex than the 4.5 Formats. Lists of Accounts (Masters), and
Vouchers (e.g. Daybook), exported out from Tally eis 5.4 are in
this format, and may be imported into another company or
location. A typical use of this facility is to export the daily
vouchers from a Branch, and send it to the Head Office for
importing into the main Accounts.
The structure of the import files are sufficiently complex not to
merit discussion in a user level manual. For the normal user, it is
adequate to know, that the files exported out of Tally 5.4, may be
imported back using the Tally 5.4 Format. For those who wish to
enable other programs to create Data Files to be imported into
Tally, contact Peutronics at ‘support@peutronics.com’, or write
in to us for the structure of import files.
Tally creates a log of the import activity in a file TALLY.IMP
which is located in the same directory as the Executable
Program. Please do refer to this file to check whether all records
were successfully imported.
340
Export of Data
Export of data is provided mainly for summaries and statement
reports like Trial Balance, Stock Summary, etc. The main use
would be to export data to, say, a spreadsheet, and reorganise it
for statutory presentation.
Two formats are possible, ASCII and SDF.
Export is available through <ALT>=<P> along with Print in
Export of Data displays, on the top in the buttons bar (toggle with Print).
Various options similar to printing are available. Experiment
with them to get what you need.
341
All Reports excepting the ‘List of Accounts’ and Voucher Level
Reports are exported to give approximately the same information
that you see on screen. The ‘List of Accounts’ and the Voucher
Level Reports, e.g., DayBook, are exported in a format suitable
for Importing back into Tally 5.4.
342
Special key combinations
Key Function Where available
Combination
ENTER To accept anything you type into a You have to use this key at most
field. areas in TALLY.
To accept a voucher or master At the receivables report – press
Enter at a pending bill to get
To get a report with further details of
transactions relating to this bill
an item in a report.
(e.g., original sale bill, receipts
and payments against this bill,
etc)
ESC To remove what you typed into a field -------------------do---------------
To come out of a screen
To indicate you do not want to accept
a voucher or master.
CTRL + A To accept a form – wherever you use At almost all screens in TALLY,
this key combination, that screen or except where a specific detail
report gets accepted as it is has to be given before accepting.
CTRL + Q To abandon a form – wherever you At almost all screens in TALLY.
use this key combination, it quits that
screen without making any changes to
it.
ALT + C To create a master at a voucher screen At voucher entry and alteration
(if it has not been already assigned a screens, at a field where you
different function, as in reports like have to select a master from a
Balance Sheet, where it adds a new list. If the necessary account has
column to the report) not been created already, use this
key combination to create the
master without quitting from the
voucher screen.
343
Combination
ALT + D To delete a voucher At Voucher and Master (Single)
alteration screens. Masters can
To delete a master
be deleted subject to conditions,
(if it has not been already assigned a as explained in the manual.
different function, as explained above)
ALT + I To insert a voucher At List of Vouchers – inserts a
voucher before the one where
you positioned the cursor and
used this key combination.
ALT + A To Add a voucher At List of Vouchers – adds a
voucher after the one where you
positioned the cursor and used
this key combination.
ALT + 2 To Duplicate a voucher At List of Vouchers – creates a
voucher similar to the one where
you positioned the cursor and
used this key combination
344
Combination
SHIFT + To explode a line into its details In almost all Reports:
ENTER
At a Group/Stock Group/Cost
Category/Godown/Stock
Category – displays Sub Groups
and Ledgers/Stock Items/Cost
Centres/Secondary
Godowns/Secondary Stock
Categories
At a Stock Item –
At a Voucher – displays its
entries and narration
At a Stock Item- displays its
godowns and batch details
CTRL + To alter a master while making an At voucher entry and alteration
ENTER entry or viewing a report screens
At all reports
ALT + R To remove a line in a report At all reports
ALT + S To bring back a line you removed At all reports
using ALT + R
345
346
Ta l l y U s e r M a n u a l : I n d e x
A B
Accounting period ............... 15 Backup and Restore ............ 63
Accounts info Bank reconciliation statement325
alter ................................. 66 Base Currency ..................... 17
Create .............................. 66 Bill of Materials ................ 262
display ............................. 66 Books Beginning From ....... 15
Main functions ................ 66 Budgets ............................. 153
Activate Company Features. 24 Buying Rate....................... 177
Advanced accounting vouchers
C
...................................... 298
actual & billed............... 309 character compression
batch nbrs ...................... 308 scrolling .......................... 10
cost centre allocations ... 302 closing stock values........... 117
foreign exchange ........... 310 Configure
forex payment ............... 313 Confirmation Statements 41
forex sub-screen ............ 311 Delivery Note ................. 36
multiple locations .......... 307 Invoice and Purchase Order37
pending tracking nbr ..... 307 Invoices, Orders.............. 29
tracking numbers........... 305 printing............................ 31
Advanced Usage Reminder Letters ............ 40
Group companys ............. 42 Sales Order/Quotation .... 37
Alias .................... 84, 107, 139 Voucher Entry................. 28
Alter a company .................. 22 contents ................................. 1
alter a ledger ...................... 105 Cost Categories ................. 129
Alter ledgers in multiple mode Expert use ..................... 142
...................................... 125 manage and operate ...... 138
automatic Discount calculation under cost centre ........... 148
...................................... 112 Cost Centre
automatically load ............... 19 Alter a cost centre ......... 146
347
Use of ............................ 128 in categorisation............ 152
Cost Centres .............. 111, 127 Excise Duty ....................... 113
manage and operate....... 131 Export of Data................... 342
multiple Cost Centres.... 134
F
country-specific ..................... 7
create a company ................... 8 Financial Year ..................... 14
Create a company greater than 12 months.... 15
name.............................. 9 foreign currency master..... 170
Create a ledger account........ 98 Formal Name..................... 171
Currency G
Formal name ................... 18
not modifiable ................. 25 Group
Currency symbol ............... 171 Delete a Group................ 87
Currency Symbol........... 11, 18 Group company
option inactive ................. 22
D Group Company.................. 42
date ........................................ 7 accounts structure ........... 43
Date for Reconciliation...... 119 Alter ................................ 47
decimal places ..................... 18 concept............................ 42
Delete a ledger................... 105 identify............................ 47
Delete ledgers in multiple mode voucher level................... 46
...................................... 125 Groups................................. 67
Display............................... 308 Advanced mode .............. 85
accessing reports ........... 311 Advanced Usage ............. 88
comprehensive info ....... 308 Alias................................ 84
daybook......................... 309 avoiding errors................ 79
features.......................... 311 classification Intro .......... 67
layout............................. 309 Common grouping errors100
modifying ...................... 311 creating groups................ 81
Display/alter multiple groups94 errors in........................... 75
Expert Usage................... 92
E
extended to...................... 78
Errors manage............................ 80
348
multiple companies ......... 95 inventory reports ............... 329
Parent Group ................... 84 Invoicing ........................... 286
Position index.................. 88 configuring.................... 288
Primary Groups68, 70, 74, 89
K
reserved groups ............... 70
single ledger .................... 67 Key Combinations344, 346, 347
sorting reports ................. 89 Keyboard shortcuts344, 346,
sub-groups....................... 68 347
Subsidiary Ledger ........... 67 L
unlimited level................. 77
Ledger ................................. 97
I activate bill-wise details.. 25
import files ........................ 341 activate cost centre.......... 25
Import Of Data .................. 341 Introduction .................... 97
Indirect Expenses............... 121 Ledger account
Internet............................... 340 Advanced usage ............ 106
Inter-state Sales Tax Number12 Currency of ................... 108
Inventory info .................... 179 Ledger Analysis ............... 338
additional costs.............. 186 Ledger under a Group ......... 99
advanced use ................. 182 Letter Case .......................... 99
batch detail? .................. 184 Load a company .................. 19
compare suppliers ......... 186 Load more than one company21
configuration ................. 182 Local Sales Tax Number ..... 12
expiry date..................... 184 location
features affecting........... 183 not modifiable................. 25
maintain stock cat?........ 183 M
multiple locations .......... 185
rejection notes ............... 185 Mailing Name and address.. 10
stock categories ............. 180 making a stock query ...... 333
stock groups .................. 179 Manufacturing journal
stock items..................... 179 advanced use................. 270
tracking numbers........... 185 create new ..................... 264
Inventory Movements........ 335 Manufacturing Journal ...... 263
349
Menu...................................... 6 entry.............................. 250
Migrating to Tally................ 16 tracking number ............ 253
Movement Analysis .......... 336 types.............................. 246
Multiple currencies............ 168 Pure Inventory vouchers ... 246
Multiple ledger ...................... 98
R
Multiple ledgers................. 123
Rates of exchange ............ 169
N
Rates of Exchange ........... 176
Numeric Symbols ................ 26
S
O
Sales Orders ...................... 272
Opening Balance ............... 104 alter ............................... 281
delete............................. 281
P
how to create................. 278
Permanent Account Number 11 Security ............................... 49
Printing access rights .................... 49
Date & Time of Report ... 32 Back-dated vouchers....... 52
general............................. 32 create new level .............. 51
invoice............................. 35 levels............................... 49
neat.................................. 32 password management.... 16
Quick............................... 32 Passwords ....................... 54
Quick Format .................. 32 Users ............................... 54
vouchers .......................... 33 Security Control .................. 16
Printing invoices and vouchers Set-up .................................... 5
...................................... 295 Accounts only ................. 12
printing options.................. 314 Accounts-with-Inventory 13
Printing reports .................. 314 configuration................... 24
Profit Centres................... 127 configure......................... 25
Purchase Orders................. 272 create................................. 6
alter ............................... 277 Inventory only................. 13
how to create ................. 273 main & branch office ...... 13
Pure inventory vouchers Maintain.......................... 12
batch number................. 256 Non-integrated .............. 14
350
postpone .......................... 13 internet .......................... 341
Shut a company - unload ..... 22 Surcharge on Tax .............. 115
Single Ledger ........................ 98
T
Stock categories......... 180, 196
creating.......................... 197 Tally directories .................. 19
delete ............................. 201 TALLY.INI ................... 19, 44
display or alter............... 200 TallyAudit ........................... 56
expert............................. 199 audit list ......................... 60
multiple ......................... 199 first time.......................... 59
Stock groups ...................... 189 Important steps................ 62
creating.......................... 190 names changed................ 60
delete ............................. 194 track changes .................. 56
expert............................. 192 Tax / VAT registration numbers
explanation .................... 189 ........................................ 11
items addable ................ 192 Tax numbers........................ 11
multiple stock groups .... 192 Transfer Analysis ............ 338
Stock items ........................ 202 U
advanced ....................... 208
bill of materials ............. 212 Unit of measure
creating.......................... 203 compound unit .............. 220
display or alter............... 208 decimals ........................ 219
ignore negative.............. 214 display & alter .............. 221
multiple ......................... 206 symbol .......................... 219
opening balance............. 205 Units of measure ............... 218
rejections inward ........... 214 V
standard rates................. 211
vertical compression............ 11
tax.................................. 204
View order position........... 282
Stock Journal ..................... 258
view TallyAudit Lists.........See
Stock locations .................. 215
viewing Bank books......... 319
display & alter............... 216
viewing stock items.......... 331
Stock Summary ................. 330
viewing the Trial Balance 323
Support
Voucher
351
batch numbers ............... 244 debit note ...................... 233
data entry....................... 237 display / alter ................ 296
inventory allocations ..... 243 Introduction .................. 157
sale & purchase ............. 242 journal........................... 233
Voucher entry .................... 224 manage.......................... 158
direct commands ........... 225 memo ............................ 234
types .............................. 228 optional ......................... 236
Vouchers............................ 157 post dated...................... 237
creater............................ 159 predefined voucher ....... 159
credit note...................... 233 reverse journal .............. 236
352

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Ta l l y R e f e r e n c e : CONTENTS

COMPANY INFORMATION ............................................................... 5

Company Information ............................................................................ 6

Inventory Information ........................................................................ 176

Simple voucher entry.......................................................................... 219

Display – Tally’s forte ......................................................................... 308

Import of Data..................................................................................... 340

Set-up with details

The menu screen is broadly separated into two sections. The

Country specific configuration

This would be the screen for Britain/Europe.

Mailing Name and address

& Tally handles compressed information correctly while printing. It

Income Tax Number – (Only for India/Asia)

Sales Tax / VAT registration numbers

VAT / Local Sales Tax Number

Inter-state Sales Tax Number – Only for India/Asia

Maintain - Accounts only

& You can always modify the company information to change

Financial Year From

& Trans-national companies usually face dual reporting problems

Tally gives you the ultimate in accounting period flexibility -

Books Beginning From:

Use Security Control?

Give the name of the administrator (presumably yourself) and

* Any password based security mechanism is only as good as the

Base Currency Information

Number of decimal places

The above setting (Default Companies being set to Yes) loads

Select the company to bring you to the Gateway of Tally of that

ABC & Co is the active company. However, the current period

Unlike Configuration [F12], Company Features is specific to the

Configure your company

Other features of convenience, e.g., Use Payment/Receipt

Print Date & Time of Report

Payment/Receipt/Journal Vouchers, Credit

Though the above options pertain to Payment Vouchers, those for

The different configuration screens for each of the above follow:

Details of the above configuration options have been discussed in

Purchase Voucher/Invoice and Purchase Order

The two paragraphs are followed by the account of the customer.

* Do not confuse Group Company to mean a member of the

Th e W orld wid e Textiles In c

In d ian Th read C om p an ies U K Th read C o

In d ian G arm en t F actory F ren ch F as h ion s

A m erican F ab ric M fg C o. K orean C loth C o.

* You are not permitted to go to the voucher level in the

A Group Company is marked with an asterisk.

& Hence, it is possible to combine accounts of different

& Create as many group companies as you need.

& A constituent company can be a member of more than one

& A group company can also be a constituent of another group

By selecting the two group companies Thread and Fashion

Security levels Security levels – types of security

Type the new security level, e.g. Manager

Press [enter] to bring up the Level

Name of security level

Use Basic Facilities of

Days allowed for Back-dated vouchers

Cut-off date for Back-dated vouchers.

To disallow access to different options; First select the type of

Users and Passwords

Alter/Display a user or type of security