Company Information

The very first time you start Tally, you would require to 'create' a 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 Gateway of Tally screen is separated into four sections, – Title Area, Main Area (Ctrl + M), Calculator Area (Ctrl + N) and the Button Bar. The screen elements of the Gateway of Tally screen is explained below: Top Area Top Area contains Version number, Release details (every time a new release of Tally is made, it is identified with a different release name like Release 3.14) and Current Date (the date configured in the computer). The name of the day, date, month and year is displayed in DD, MM, YYYY format on the left-hand side. Tally logo is displayed at the centre of the Top Area. The Product type (Tally Gold, Tally Silver, Tally Bronze or Educational) and Tally Serial Number appears on the upper-right corner. The software serial number is usually a unique number (taken directly from the TallyLock connected to the USB / Parallel port of the system). System time (the time configured in the computer) appears on the upper-right corner in Hour: Seconds: Minutes (HH/MM/SS) format. Minimize Button The Minimize button performs the standard Windows Operating Systems function (Windows 95 onwards), allowing you to minimize Tally and work on other applications. To restore Tally, click on the Tally icon on the taskbar.

Main Area (Gateway of Tally) Main Area is separated into two areas: 1. Left-hand side area 2. Right-hand side area The left-hand side area in Main Area provides information of Current Period, Current Date and List of Selected Companies (Name of the company and the date of last entry details). The right-hand side area in the Main Area screen displays the Company Information menu (to select your instructions to Tally) > Select a Company, Create a Company, Backup a Company or Restore a Company. Hot Keys Hot keys are the text that are capitalized and are red in colour on all the menu screens. Typing any of the Hot Keys in the Company Info Screen will either take you to that particular screen or it may display the sub - menu’s within that Option. Calculator Area Press [Ctrl + N] to activate the calculator functionality. Calculator Area is used for calculator functions. Any type of Independent calculation can be done using calculator to get quick answers. Button Bar The buttons are designed to make the work easier and faster. These buttons vary from one screen to another based on the screen functionality. The buttons appear on the right hand side of the Tally screen. Only buttons relevant to the current screen will be active and the inactive buttons are greyed. These buttons are enabled with the short cut keys (like F1, F2 and so on). You can either click on these buttons or you can press the shortcut keys to access.) On this screen, Tally displays the following buttons (keys): Help (Alt + H) – to access Tally's online context-sensitive help (This feature is not available for Tally on RHEL) Web Browser (Alt + W) – to access the Web Browser directly from Tally! F1: Select Cmp – to access data from other data directories either on the local system or through the network. F12: Configure – to access the configuration settings to manage the information put into Tally. Here, access the General Configuration to set country specific defaults. Use it before creating a company. Note: * Use the buttons on the right-hand side of the screen to explore the Potential of Tally. * Press [Enter] wherever the cursor is placed in Gateway of Tally Menu’s and sub menu’s to know the Depth of Tally. Buttons with a character or function key underlined means you have to press underlined character or the function key along with ALT key. Buttons with a character or function key double underlined means you have to press character or the function key along with CTRL key. F1: Press the shortcut function key to select a company

F1: Press ALT+F1 to shut a company F8 : Press CTRL+F8 to select the Credit Note voucher Ctrl+M: Press Ctrl + M to access the Gateway of Tally. Ctrl+N: Press Ctrl + N to access the Calculator/ODBC Server frame

Additional Information
The Tally Clock While Tally processes data, you will see a clock on the screen indicating that you should wait until it disappears before performing the next action.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Title Area

This area displays: 1. Tally logo in the centre 2. Version Number and Release details on the top-left side 3. Product type (Tally Gold, Tally Silver, etc) on the top-right side 4. Tally Serial Number on the top-right side (taken directly from the TallyLock connected to the parallel port of the system) 5. System time (the time configured in the computer) on the top-right side

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

The Main Area

This area is broadly separated into two sections, namely, the left-hand side and the right-hand side. The left-hand side of the Main Area gives information of Current Period, Current Date and List of Selected Companies. The right hand side of the Main Area displays the Company Information Menu (to select your instructions to Tally) > Create a Company, Backup a Company or Restore a Company.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Calculator Area

Using [Ctrl+N] – you can access the Calculator – You can specify any mathematical formula and get your answers immediately!

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Button Bar

Tally has different buttons to access a variety of information – which vary from screen to screen. On this screen, Tally displays the buttons (keys): Help (Alt + H) To access Tally's online context-sensitive help Web Browser (Alt + W) To access the Web Browser directly from Tally! F1: Select Cmp To access data from other data directories either on the local system or through the network. F12:Configure To access the configuration settings to manage the information put into Tally. Here, access the General Configuration to set country specific defaults. Use it before creating a company.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Country Specific Configuration

Gateway of Tally > F12:Configure > General The options available are, Country Details, Style of Names, Style of Dates, Configuration of Numbers and Other Options. The screen appears as:

The Configuration settings of Country Details, Style of Names, Style of Dates and Configuration of Numbers are self-explanatory. 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. The configuration options given under Other Options are explained as follows. Show Monthly reports with Graphs This option is set to YES by default. Here, the reports are configured to display the Graphs in accordance with the numeric information displayed. The graphs are not displayed if this option is set to NO Use separate Menu for Final A/c Stmts By default, this option is set to YES. Setting this to NO – Tally displays the final statements of Balance Sheet and Profit & Loss A/c directly on the Gateway of Tally menu. However, setting this option to YES - the final statements of Balance Sheet and Profit & Loss A/c can be accessed from Gateway of Tally menu - Final Accounts.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Create a Company

Gateway of Tally > Company Info. > Create

This would be the screen for Britain/Europe, where the State and PIN Code fields are not available. The screen for India/Asia would, however, be:

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Directory

The data path where you want the company to get created can be specified in the Directory field.

This field is skipped by default assuming that you wish to create the company in the data path given in the Tally.INI file. However, if you want to change it, simply use the backspace key and change it to what ever required. This is basically referred to as the TallyAnywhere concept – which is an ability to create/load companies in separate directories. The Directory field is found during Select, Create, Backup, Restore and Rewrite options for a company. By default, the cursor will skip the field, presuming that you wish to use the default data directory for your work. You may press backspace and give a completely new path and work through there. For example, the default Tally data directory could be C:\TALLY\DATA. You may now wish to create a new company on C:\TALLY\PERSONAL, and some other companies on C:\TALLY\BRANCHES. The next time, the default directory will continue to show C:\TALLY\DATA, and if you wish to work on the data of your branches, you would press backspace and enter C:\TALLY\BRANCHES for the directory name. This would bring up those companies whose data is stored there. We can even give the path of a network server or any storage device (example – TallyLocker).

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Name

Give the name of the company whose books are being opened. The name given here will typically be the name of 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).

Tally allows you to give very long names – you can specify Private Limited instead of Pvt. Ltd. The screen appears as:

As you type the name of the company, Tally compresses it so that all the characters can be viewed on the screen. This is Tally's marvellous innovative technology Auto-Fit which allows you to enter really long names. Tally does NOT scroll to the right - making the first few characters invisible. The information given, can be viewed all at once! Tally compresses the information on screen – however, at the time of printing – the given information is printed as required. An example printout appears as:

Remember: Information given in the Name field - is NOT restricted to the visible length of the (field) space for entry. Tally's marvelous innovative technology "Auto-Fit" allows you to enter long (really long) names. Tally 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). Tally handles compressed information correctly while printing. It adjusts the reports accordingly. Even if the information is not very clear on the screen – do NOT worry. Tally will print the information correctly!

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Mailing Name and Address

In addition to the Company Name - Tally provides the facility to enter the mailing name and

address of the company.

The Mailing Name field displays the Company Name automatically. However, you may change it if required, as the mailing name can be different from the Company Name. The mailing name and address details are 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. For example, the company name contains information of the year (so that you know which company data you wish to work on) – but in the mailing details obviously the company name cannot be given like that! Noting this Tally allows you to change the information as required.

Tally's reports print the mailing name and address as per this screen:

Another example The advantage of providing Mailing Name can be understood with this example > let's say you have branches in Delhi, Bombay and London. Each branch may begin the branch books by giving the company name as: "Tally Solutions" followed by the city name – ("Tally Solutions - New Delhi"). However, its mailing name is comprehensive with full details: Tally Solutions Private Limited New Delhi Branch R-44, Greater Kailash - 1 New Delhi – 110048 The mailing name and address would be available for financial statements and statements of accounts that may need to be given outside the company.

Tally does NOT restrict the number of lines for the address details. Any number of lines containing the address details can be given and Tally accommodates all the given information and vertically compresses the same. For example, a company's address details are given on separate lines – the screen appears as:

Remember: 1. In the space provided for the Address details - observe the vertical compression > as compared to the Mailing Name field where there is horizontal compression. 2. You can specify any length for the mailing name and you are permitted to give any number of lines for the address. The information is completely visible. 3. 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.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

State

You can select the appropriate state from the predefined list.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

PIN Code

This option allows you to specify the PIN Code (Postal Index Number) of the specified address.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

E-mail Address

Give the e-mail address that will be used to e-mail documents, reports and data from Tally.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Income Tax Number

The Income Tax Number is the number allotted by the Income Tax Authorities. In India – this could be the Permanent Account Number - which comprises of 10 digits and may be alphanumerical.

The information given here will appear in Account Confirmation Statements. However, it is NOT compulsory to provide this information – this field can be left blank.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Local Sales Tax Number

In India, the States as well as the Centre (Central Government) charge tax on transfer of merchandise. The State usually taxes transfers within the State (Local Sales Tax), while the Central Government will charge tax on transfers from one State to another (Central Sales Tax). You may be required to register your company with both local and federal (or central) governments. Registration is acknowledged by way of numbers, which often need mentioning in different documents, especially invoices. The Local Sales Tax Number refers to the registration number allotted by Local (State) Sales Tax Authorities. The details given here comprises of a number and date of registration (in India). This information, if given, can be printed on invoices.

It is not compulsory to give this information and you may leave it blank.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Inter-State Sales Tax Number

In India, the States as well as the Centre (Central Government) charge tax on transfer of merchandise. The State usually taxes transfers within the State (Local Sales Tax), while the Central Government will charge tax on transfers from one State to another (Central Sales Tax).

You may be required to register your company with both local and federal (or central) governments. Registration is acknowledged by way of numbers, which often need mentioning in different documents, especially invoices. The Inter-State Sales Tax Number refers to the registration number allotted by Central Sales Tax Authorities. The details given here comprises of a number and date of registration (in India). This information, if given, can be printed on invoices.

It is not compulsory to give this information and you may leave it blank.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Currency Symbol

Currency symbol is the symbol of the base currency, that is, the books of account will be maintained in this currency. Tally uses this symbol in reports, where necessary.

The symbol Rs. - appears by default. You are NOT allowed to change the same. Incase you require multiple currencies, you can procure the module on payment. For information of different modules please refer the section Functions and Features.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Maintain

Tally displays a pop-up list called Type of Company – this is how your books of accounts will be maintained.

Accounts only
Select this only if you do not have any inventory transactions (suitable for professionals and corporate offices). Tally would not permit intrusion of Inventory related information that are not required. However, at a later date (if required) you can alter the information as Maintain Accounts-withInventory – Tally accordingly now provides all the inventory-related information.

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. Note: You can always modify the company information (to Accounts only company) to change these settings to allow or to discontinue accounts or inventory. However, exercise caution – as the inventory-related information will no longer be available.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Financial Year From

In most countries, the books of accounts of a company is maintained for a stipulated period like, 12 months, 15 months, etc. This stipulated period is referred to as the Financial Year. Therefore specify the required Financial Year date - for the company being created.

The stipulated period of the financial year is 12 months in most countries. Hence, Tally automatically considers 12 months from the date you give here as the Financial Year.

For example, if 1st April 2001 is given as the date, the Financial Year will be April to March in this case, ending with 31st March 2002. Give 1st October 2001 as the Financial Year From and the Financial Year will be from October to September in this case, ending with 30th of September every year. Tally allows you to maintain data for multiple years by changing the period (Alt+F2) at the Gateway of Tally. In addition, you can also specify the date of actual establishment of the company (date of incorporation). This is possible in Books beginning from.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Books Beginning From

Tally presumes that you wish to maintain books from the beginning of the financial year – hence, Tally displays the date given in Financial Year From automatically. However, you can change the date if required.

The date for Books beginning from can be changed – in case of companies, which are started in the middle of the year (not many people wait for the 1st day of the Financial Year (FY) to start companies!). If your company is a new company, you would like to start the books of accounts from the date of actual establishment of the company (date of incorporation) but close books according to the Financial Year specified by you. This is because - you do not want reports including the period when your company was not even in existence. Tally provides the required flexibility in such a case by allowing you to give the date when the books of accounts actually began. 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 2001. The opening balances for all the accounts can be given as on 19th August 2001 even though the Financial Year given is 1st April 2001 (April to March financial year). The company's books will begin on 19th August 2001 and close on 31st March 2002. It ensures smooth transition to the next year. This concept can be applied even when you are migrating to Tally from any other system or a manual accounting 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.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

TallyVault Password

TallyVault is an enhanced security system, which allows for encryption of the company data. Encryption means converting normally accessible Tally information into unrecognisable information, which can only be reconverted by authorized persons.

Give a password here and repeat the same. This basically results in the creation of an encrypted company whose information is not accessible to users other than the password holder.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Use Security Control?

Set it to Yes, if you want to initiate a password-protected system to control access to Tally data. Otherwise set it to No. 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 Administer Tally 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. Note: 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.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

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 Administer Tally.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Base Currency Information

The lower portion of the Company Information screen is reserved for Base Currency Information. Tally is multi-currency 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.

Base Currency is the currency in which your accounts would be maintained. Financial statements would be prepared in the base currency by default and these would normally be required for local statutory authorities. The Base Currency information has to be compulsorily provided in Tally, during creation of a company. Base Currency Symbol The currency symbol given earlier in the Company Creation screen is displayed here automatically. The different currency symbols cannot be provided unless the Multi-currency module is enabled. You can procure the Multi-currency module on payment. For more information – please refer Functions and Features. Tally uses this currency symbol in reports, where necessary. Formal Name

Formal Name is the full name of the currency specified. The Formal Name for the base currency is set to Indian Rupees. For other currency symbols – the Multi-currency module may be procured on payment. For more information – please refer Functions and Features Number of decimal places The number of decimal places for the base currency is set to 2 by default. Upto 4 decimal places can be specified in the Company Creation screen. Indian currency has 2 decimal places – certain other countries require 3 decimal places and so on. This is possible only if the Multi-currency module is enabled. The Multi-currency module can be procured on payment. For more information – please refer Functions and Features. Show Amounts in Millions This is useful for companies which require reporting the financial statements in millions. This is possible only if the Multi-currency module is enabled. The Multi-currency module can be procured on payment. For more information – please refer Functions and Features. Is Symbol Suffixed to Amounts For countries which specify the symbol after the amount (value) – this facility is provided. For example, Yen is specified after the amount (5000 Yen) unlike in India where the symbol is specified before the amount (Rs.5000) Put a space between Amounts and Symbol This facility is provided to users who require a space between the amount and the symbol. However, incase of cheque printing – putting a space between the amount and symbol could give an opportunity to misuse – hence, the flexibility to turn this option on and off as required – is provided.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Load a company

A newly created company loads automatically. However, for subsequent working on the same - you must load or select the company (Select and Load are synonymous). A company can be loaded in two ways: 1. Automatically by Tally. 2. Using the Select Company option (Company Information)

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Tally Loading the Company Automatically

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 (example – 0001, 0002… 0009..0020, etc ? these are system generated codes for the company). In order to automatically load a company – Tally has to be configured appropriately by setting the TALLY.INI file (available in the Tally directory). Ensure that Default Companies is set to YES and specify the company number which has to be loaded automatically – for example, Load = 0001 Note: You can specify any number here as per the information available in the data directory (0001 or 0002 or 0003, etc) Example of sub-directories created by Tally for different companies:

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Company Information

In order to load a company using the Select Company option – you need to disable the default loading of a company. To do so - set, Default Companies = No OR place a semi-colon before Load = [company number] - (placing a semi-colon means that the words following it in that line would not be executed. Each line is a separate command). On double-clicking the Tally icon, the screen appears as:

You can use the Select Company option in two ways - from the Company Information Menu OR using the button F1: Select Cmp (available on the Gateway of Tally screen on the button bar on the right-hand side). This screen is separated into three sections, – Title Area, Main Area (Ctrl + M), Calculator Area (Ctrl + N) and the Button Bar. The Button Bar on this screen comprises of the following buttons: 1. Help (Alt + H) – to access Tally's online context-sensitive help 2. F1: Select Cmp – to select or load a company 3. F12:Configure – to access the configuration settings to manage the information put into Tally. Important: 1. Use the buttons on the right-hand side of the screen to Explore the Potential of Tally. 2. Press [Enter] wherever the cursor is placed to know the Depth of Tally!

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Select Company

Press [Enter] on Select Company or using the button F1: Select Cmp > Tally displays this screen:

Tally displays: 1. Company Name (All the companies created are displayed). 2. System-generated code for each company displayed. 3. The Financial Year information – relating to the number of years data present in the company (for example, 1-4-2001 to 31-3-2002; 1-4-99 to 31-3-2001; 1-4-96 to 31-3-97, etc). Note: The system-generated code for each company is displayed to assist you in identifying which company you wish to work on? in case you have multiple companies with the same name (as displayed in the above screen) Select the required company to bring you to the Gateway of Tally of that company

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Gateway of Tally

Gateway of Tally is the menu that appears on selection of the company. The Gateway of Tally menu differs based on the type of company selected, that is, Accounts Only Company has a different Gateway of Tally menu from that of an Accounts-with-Inventory Company.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Gateway of Tally of an "Accounts Only" Company

The Gateway of Tally menu of an Accounts Only company appears as:

The Gateway of Tally screen is separated into four sections, – Title Area, Main Area (Ctrl + M), Calculator Area (Ctrl + N) and the Button Bar.

Main Area
The left-hand side of the Main Area gives information of 1. Current Period – this is the currently loaded or selected company's accounting period. 2. Current Date – this is the date of the last Voucher Entry of the selected company (this is NOT the calendar date). 3. List of Selected Companies – This displays the name of the loaded or selected company. 4. Masters – for creation of Accounting Masters and Importing Master information 5. Transactions / Vouchers - for creation of Accounting Vouchers and Importing transaction information 6. Reports – for viewing and printing financial reports using the information given in Masters and Transactions.

Button Bar
The Button Bar area on this screen, displays the following buttons (keys): 1. Help (Alt + H) – to access Tally's online context-sensitive help

2. F1: Select Cmp – to select a company 3. F1: Shut Cmp – to shut or close the company 4. F2: Period – to change the period 5. F3: Cmp Info – to access the Company Information Menu 6. F11: Features – to access the Company features for a company 7. F12:Configure – to access the configuration settings to manage the information put into Tally. Note: You cannot load more than one company at one time. The loaded or selected company will be shut first and then the other company is loaded. Important: 1. Use the buttons on the right-hand side of the screen to Explore the Potential of Tally. 2. Press [Enter] wherever the cursor is placed to know the Depth of Tally!

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Gateway of Tally of an "Accounts-with-Inventory" Company

The Gateway of Tally menu of an Accounts-with-Inventory company appears as:

The Gateway of Tally screen is separated into four sections, – Title Area, Main Area (Ctrl + M), Calculator Area (Ctrl + N)and the Button Bar.

Main Area
The left-hand side of the Main Area gives information of 1. Current Period – this is the currently loaded or selected company's accounting period. 2. Current Date – this is the date of the last Voucher Entry of the selected company (this is NOT the calendar date). 3. List of Selected Companies – This displays the name of the loaded or selected company. 4. Masters – for creation of Accounting Masters and Inventory Masters and Importing Master information. 5. Transactions / Vouchers - for creation of Accounting Vouchers and Inventory Vouchers and Importing transaction information. 6. Reports – for viewing and printing financial and inventory reports using the information given in Masters and Transactions.

Button Bar
The Button Bar area on this screen, displays the following buttons (keys):

1. Help (Alt + H) – to access Tally's online context-sensitive help 2. F1: Select Cmp – to select a company 3. F1: Shut Cmp – to shut or close the company 4. F2: Period – to change the period 5. F3: Cmp Info – to access the Company Information Menu 6. F11: Features – to access the Company features for a company 7. F12:Configure – to access the configuration settings to manage the information put into Tally. Note: You cannot load more than one company at one time. The loaded or selected company will be shut first and then the other company is loaded. Important: 1. Use the buttons on the right-hand side of the screen to Explore the Potential of Tally. 2. Press [Enter] wherever the cursor is placed to know the Depth of Tally!

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Company Information Menu

The Company Information menu appears as:

The Company Information menu comprises of: Select Company To Select or load a company Shut Company To Shut a company Create Company To Create a company Alter To Alter a company Change TallyVault To secure the data by providing a TallyVault password. Backup To take a backup of the company data Restore To restore a data backup

Important: 1. Use the buttons on the right-hand side of the screen to Explore the Potential of Tally. 2. Press [Enter] wherever the cursor is placed to know the Depth of Tally!

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Shut a Company

Shut a company means to unload it. It does not mean that you have deleted it. Simply select it again to load and work on it again. You can shut a company in two ways – either using the button F1:Shut Cmp (Alt + F1) or pressing [Enter] on Shut Company on the Company Information Menu. If you use the Shut Company on the Company Information Menu, the screen appears as:

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Alter a Company

You can modify, at any time, any information given whilst creating the company. At the Gateway of Tally > [ALT]+F3 > Alter Press [Enter] on Alter and the screen appears as:

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Delete a Company

In order to delete a company, you have to load the same first. 1. Use Alt+F3 at the Gateway of Tally to proceed to the Company Information menu. 2. Press [Enter] on Alter and reselect the required company > the Company Alteration Screen is displayed. 3. Use Alt+D to delete. Tally will prompt for a confirmation on deleting the company. 4. Press [Enter] and Tally asks you whether you are sure. Note: Please exercise caution before doing the above.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

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. 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 using [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 Ledger.

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Operations Configuration

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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Licensing

Licensing option is provided to activate your Tally Licensing Online or Offline.

The option is available under F12: Configure > Licensing . The screen appears as:

Functions/Features: This option allows you to view the Functions/Features enabled in Tally Online:The term Online indicates that your computer is connected to the Internet. Offline:The term Offline indicates that your computer is not connected to the Internet.

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General

This has already been configured by you under Country Specific Configuration before creating the company. It caters to country specific requirements. The options available under F12: Configure > General – are, Country Details, Style of Names, Style of Dates, Configuration of Numbers and Other Options. The screen appears as:

The Configuration settings of Country Details, Style of Names, Style of Dates and Configuration of Numbers are self-explanatory. The configuration options given under Other Options are explained as follows. Show Monthly reports with Graphs This option is set to YES by default. Here, the reports are configured to display the Graphs in accordance with the numeric information displayed. The graphs are not displayed if this option is set to NO Use separate Menu for Final A/c Stmts By default, this option is set to YES. Setting this to NO – Tally displays the final statements of Balance Sheet and Profit & Loss A/c directly on the Gateway of Tally menu. However, setting this option to YES - the final statements of Balance Sheet and Profit & Loss A/c can be accessed from Gateway of Tally menu > Final Accounts. Print State and PIN Code with Address By default, this option is set to NO. Setting this option to YES, will allow you to print the reports with State and PIN code details entered in the company creation screen. Note: If you already have a company created with state and PIN code in the address field, then you need to set this option to NO. Ignore errors & continue during data import By default, this option is set to NO. Setting this option to YES, will continue to import even if an error is reported.

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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 Configuration

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 Configuration

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. 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. Click Allow Alteration of TDS Rates and Values to get more information.

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Invoice/Orders Entry Configuration

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.

For India/Asia, the options would automatically use Excise instead of Interstate provided you have set your General Configuration accordingly.

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Excise/VAT Setup

Whether to use Excise Duty or VAT depends on the General configuration. F12: Configuration > General

Use Accounting Terminology of: Select Britain/Europe for British style VAT handling Select India/Asia for Excise Duty handling According to this selection the F11: Company Features will contain the option to set up Excise Duty or VAT. The F11 set up for Excise Duty/VAT affects method of calculation of duty in invoices. For example, 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. Please read through method of calculation for more details. Activate Excise Duty F11:Features > Set/Modify Other Company Features Follow Excise Rules during invoicing – YES Give the following excise information that will be printed on invoices.

After completing the entry accept through the entire F11:Features and return to Gateway of Tally. Activate British Style VAT Returns Unlike Excise Duty, this option simply controls the VAT Return preparation. More ledger level set up may be required, which is discussed under UK VAT Analysis. F11:Features > Set/Modify Other Company Features Prepare and Follow British Style VAT Returns – YES

Group Name Under which EEC Debtors are classified. Group Name Under which EEC Creditors are classified. If you deal with EEC countries, select a group. (If you deal with the EEC, it is advisable to group your EEC Customers separately under a subgroup under Sundry Debtors. Likewise, group EEC Suppliers under a separate sub-group of Sundry Creditors. Take care to group only VAT registered companies in these groups as they would affect Box 8 and 9 as well as the EC Sales List. Unregistered companies or individuals (Distance Sales) should be grouped separately and treated like UK companies.) If you not deal with EEC countries, Select Not Applicable British style VAT handling and returns are more fully discussed under the section UK VAT Analysis. After completing the entry accept through the entire F11:Features and return to Gateway of Tally.

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Activate Excise Duty

F11:Features > Set/Modify Other Company Features Follow Excise Rules during invoicing – YES Give the following excise information that will be printed on invoices.

After completing the entry accept through the entire F11:Features and return to Gateway of Tally.

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Activate British Style VAT Returns

Unlike Excise Duty, this option simply controls the VAT Return preparation. More ledger level set up may be required, which is discussed under UK VAT Analysis.

F11:Features > Set/Modify Other Company Features Prepare and Follow British Style VAT Returns – YES

Group Name Under which EEC Debtors are classified. Group Name Under which EEC Creditors are classified. If you deal with EEC countries, select a group. (If you deal with the EEC, it is advisable to group your EEC Customers separately under a subgroup under Sundry Debtors. Likewise, group EEC Suppliers under a separate sub-group of Sundry Creditors. Take care to group only VAT registered companies in these groups as they would affect Box 8 and 9 as well as the EC Sales List. Unregistered companies or individuals (Distance Sales) should be grouped separately and treated like UK companies.) If you not deal with EEC countries, Select Not Applicable British style VAT handling and returns are more fully discussed under the section UK VAT Analysis. After completing the entry accept through the entire F11:Features and return to Gateway of Tally.

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Printing Configuration

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. Therefore, it will truncate data longer than the allotted space. To prevent this, set Yes for the two

questions under Quick Format.

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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 Sale Order/Quotation

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: 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. 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.

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.

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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. Purchase Voucher/Invoice

Purchase Orders Purchase Orders are required to be printed and sent to suppliers.

Receipt Notes Receipt Notes may also be entered in the same format as Delivery Notes, and with Purchase Order enabled, would automatically fill-up with the details of the order. Further, Purchase Invoices would also auto-fill with the Receipt Note or Purchase Order details as relevant.

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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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Group Company

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 ies 7.2 makes consolidation of accounts that is ready an easy task at all times. 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 an identity given to the merged accounts of constituent (member) companies of the group. Note: Do not confuse Group 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 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:

Create a Group Company
A group company can be created only for companies that have already been loaded . Hence, you must first load the companies 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 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.

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. Note: You are not permitted to go to the voucher level in the group company and hence are not allowed to create or alter vouchers.

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 de-select 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. 1. Hence, it is possible to combine accounts of different companies at will. 2. Create as many group companies as you need. 3. A constituent company can be a member of more than one group. 4. A group company can also be a constituent of another group company. 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.

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Create a Group Company

A group company can be created only for companies that have already been loaded . Hence, you must first load the companies 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 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.

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. Note: You are not permitted to go to the voucher level in the group company and hence are not allowed to create or alter vouchers.

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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. 1. Hence, it is possible to combine accounts of different companies at will. 2. Create as many group companies as you need. 3. A constituent company can be a member of more than one group. 4. A group company can also be a constituent of another group company. 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.

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Security Levels – Types of Security

Tally has a very customizable 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 & Company Alteration screen which are 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 > [ALT]+F3:Create Cmp >Security Control

More: Types of Security (security or authority levels)

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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] > Data Entry[Enter]

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Create a New Security Level

Types of Security > Data Entry > [Down Arrow] (Press the down arrow key at the option data entry.) 1. This is one of the few places in Tally where you create a new entry in this fashion. 2. Type the new security level, e.g. Manager

3. Press [enter] to bring up the Level Definition screen More: The level definition screen

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The Level Definition Screen

Name of security level This defaults to the name you have 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. Disallow the following facilities/Allow the following facilities 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 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.

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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.

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.

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Tally Audit

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 and authority lists. Only a user designated as an auditor or the 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. More: How to view TallyAudit Lists

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How to View Tally Audit Lists?

Gateway of Tally > Display > Statements of Accounts >Tally Audit

More: Display Vouchers Audit List Display Ledgers Audit List

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Display Vouchers Audit List

Gateway of Tally > Display > Statements of Accounts > TallyAudit > Vouchers Note the three buttons relevant to the audit list. 1. F7:Accept one 2. F7:Accept All 3. F12:Configure Audit listing of changes to vouchers with names of users

F12:Configure

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. 1. Once you accept an entry it is not available for listing. Hence it is recommended that you take a print before acceptance. Note: 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.

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Display Ledgers Audit List

To display the changes to ledger masters, follow the same steps as for vouchers. The listing here differs from the vouchers in two ways namely: 1. 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) 2. 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 malafide 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.

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Introduction

The Security of Data, Financial or otherwise, has always been a matter of concern. Most businesses depend on the confidentiality of information. TallyVault is an enhanced security system which allows for encryption of the company data with the most secure method of encryption being used. TallyVault ensures, that under no circumstances, the original information is available in any form. The technique could be likened to "encryption-decryption-on-the-fly", and the decrypted form of data is never stored in the system. Apart from this, it uses the "non-stored password" mechanism. By using highly advanced mechanisms to validate a new user without any prior knowledge of the original password. The combination of these facilities means, that TallyVault becomes one of the most secure means of information storage.

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How to Use TallyVault?

TallyVault password can be given at the time of company creation. For existing companies, the procedure is: 1. Load the desired company and using Alt+F3 proceed to the Company Information screen. 2. Go to Change Tally Vault. You will be required to select the company name once again (this incase you have more than one company loaded). Give the new TallyVault password and confirm it. The screen is:

3. Once you encrypt the data, the result is that the company name no longer becomes visible to anyone and appears as:

4. Select the company and Tally will prompt you for the Tally Vault password.

5. By the above procedure, once can ensure that data is kept confidential and is available only to administrator (initiator of the TallyVault!).

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Backup

Tally has a flexible back-up mechanism where in you can take a backup of the data from virtually any storage medium into any other medium. The more commonly used media are floppy drive, hard disk drive, zip drive, tape drive, etc installed either locally or on a network. In the backup screen, the source of the backup and the destination of where it has to be stored has to be given, Tally will do as required. The Backup screen appears as:

More: How to take a Backup Backup Precautions

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How to Take a Backup?

1. Start Tally - If the Company Information screen is loaded first – there is a menu option "Backup". Select this to get the "Select Companies to Backup" screen. However, if the Gateway of Tally Loads – use Alt+F3 to get the option Backup. Note that this option is available only on the Company Information screen 2. To change either the source or the destination paths, use the Backspace key and change the path as required. Let us say we want to backup the data to a directory Tally backup in the D Drive – change the path to D:\Tallybackup and choose the companies as required. Incase we want to take a backup onto another person's system – the path will be \\machinename\\drivename\directoryname The process of backing up data begins when at least one company is selected for the same. To stop selecting companies, select the option "End of List" which appears at the top of the selection list. Note: This option appears only after one company is selected for backup. 3. The backup file is stored as TBK500.001. If the backup is taken in a medium likely to extend more than one – for example, floppy, then the extension digits (001, 002) will be stored accordingly.

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Backup Precautions

As we are already aware, data on a computer is vulnerable to all types of difficulties. Considering the same, it is important that we do not overlook the importance of regular backing-up of data, however strong the database may be. With a little planning and forethought, we can ensure that maintenance of the important data is continuous and hassle-free. Depending on the volume of data entry, an appropriate backup mechanism will have to be devised. One method to achieve the same will be by maintaining a backup directory in the local hard disk or the server (external storage media such as the floppy disk, zip diskette can also be used). We can have sub-directories for every day of the week under the main backup directory and regularly take

data backups in the following manner depending on the day of the week. Monday – C:\TallyBackup\Monday Tuesday - C:\TallyBackup\Tuesday Wednesday- C:\TallyBackup\Wednesday and so on till Saturday. Note: In the example, we have given the C drive path- this does NOT mean that the Tally backup facility is limited to the Hard Disk drive alone. The above procedure ensures that there exists a reliable data backup at any given time. In order to use that reliable data backup or bring back the data from that existing data backup we have to use the "Restore" option.

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Restore

Restore literally means 'to bring back'. Similar to backing up of data, Tally allows restoring of data from any medium into any other storage medium. In Tally's context restore means – we have a Tally backup and we wish to work on the data backup instead of the current data – this can be achieved by simply restoring from the existing data backup. The Restore screen appears as:

More: How to Restore: Restore Precautions

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How to Restore?

1. Start Tally If the Company Information screen is loaded first – there is a menu option "Restore". Select this to get the "Select Companies to Restore" screen. However, if the Gateway of Tally Loads – use Alt+F3 to get the option Restore. Note that as in the case of backup - this option is available only on the Company Information screen.

2. The Source and Destination paths displayed here are those that were used last. 3. The source field has to have the appropriate path from which we intend to bring back the previous data. Accepting the path will read the contents of the particular file and will then display the list of companies available. 4. Select as required and restore the data accordingly.

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Restore Precautions

It is preferable NOT to restore a backup on the original data directory – primarily to ensure that No data is unintentionally overwritten.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Split Financial Years

Tally's flexible period-less accounting permits entry of data for any number of years. This in itself has tremendous benefits. However, presence of old data in cases where they are voluminous, causes greater overhead on the system. Splitting financial years enables you to retain most benefits while overcoming this overhead. When you split the data, two things happen: 1. New companies are created for the respective split periods. 2. Full data is retained in the original company. Important pre-split activity (Not carrying out these will result in mismatched information.) Before you split data, ensure that: 1. All unadjusted forex gains/losses have been fully adjusted by journal entries. Verify that the item does not appear in the Balance Sheet. 2. There are no Purchase Bills/Sales Bills to come.Check the Profit & Loss Account and Inventory Statements – Purchase/Sales Bills Pending. You may account them to the respective party accounts or to respective 'Bills Pending' Account. 3. Ensure that a backup of the data exists.

Note for users of Sales/Purchase Order Processing features: Since open orders are not carried forward, you either should not split data or if you do be aware that you have to enter the outstanding orders afresh. When carry forward of orders become available in Tally, this difficulty will be removed. More: How to Split Financial Years

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

How to Split Financial Years?

1. At the Gateway of Tally, Select [ALT]+F3: Cmp Info (Create Cmp in earlier releases). 2. Select Split Company Data. 3. Select the Company whose data is to be split. 4. Tally recommends the split-off date based on the data existing. It is recommended that the Split Point is set as the beginning of the latest financial year though Tally permits any date as the split point. 5. Splits occur in sets of two periods. Hence, start with the latest. For example assuming that three years data – from 1-1-96 to 31-12-98 for a company and you want them split into three separate 'companies' each with a financial year. First, select the beginning of the latest financial year (this is what Tally would prompt you to do). 6. On confirming the activity, two new companies will be created – one with data from 1-1-96 to 31-12-97, i.e., two years, and the other for 1-1-98 to 31-12-98. Typically, this is all you need to do. Your historical data, whether of 1 or more financial years, will be preserved as one company, and your current financial year, as another. There is, normally, no reason or benefit to split the prior years again into separate years. However, should you wish to do so, repeat the above steps for the prior period company. All the companies are full companies in their own right. Data can be entered, displayed and altered. Please display or print out the key financial reports (Trial Balance, Balance Sheet, Profit & Loss, Stock Summary etc.) from each of the companies for the relevant periods and compare them for accuracy. Once you are satisfied that you have a successful split, it is advisable to backup the original company onto diskettes and permanently delete its data from your hard-disk. This will ensure that you do not accidentally use it to enter fresh data. To delete a company, press Alt+F3 at the Gateway of Tally, select to Alter it, and at the point where you can modify the Company Information, press Alt+D. You will also need to alter the names of the two freshly created companies to suit you.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Introduction

1. The top bar of the screen contains the product message, system date and time. 2. The left hand side of the screen displays the activity status. 3. The right side contains the menu system and the button bar. The menu Accounts Info. is the current active menu. More: Main functions in Masters menu

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Main Functions in Masters Menu

Accounts Information contains the masters as listed in the Accounts Info menu . 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.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Introduction

Classification of Account-heads
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 that is done only when reports are needed. This has an inherent 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 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. The concept of sub-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 a. 2. Current Assets a. Bank Accounts b. Cash-in hand c. Deposits (Asset) d. Loans & Advances (Asset) e. Stock-in-hand f. Sundry Debtors 3. Current Liabilities a. Duties and Taxes b. Provisions c. Sundry Creditors d. Fixed Assets 4. Investments 5. Loans (Liability) a. Bank OD Accounts [Bank OCC Accounts] b. Secured Loans c. Unsecured Loans 6. Suspense Account 7. Miscellaneous Expenses (Asset) 8. Branch/Divisions 9. Sales Account 10. Purchase Account 11. Direct Income [Income Direct] 12. Indirect Income [Income Indirect] 13. Direct Expenses [Expenses Direct] 14. Indirect Expenses [Expenses Indirect] Reserves and Surplus [Retained Earnings]

More:

A discussion on each of the reserved groups: Common and possible errors in Grouping and account classification

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

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. 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.

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.

4. 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.

5. 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. 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.

6. 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.

7. 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.

8. 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
9. 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.

10. Purchase Account
This is similar to sales accounts, except for the purpose of the transaction.

11. 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.

12. Indirect Income [Income Indirect]
For miscellaneous non-sale income accounts, e.g., Rent Received and Interest Received.

13. Direct Expenses [Expenses Direct]
For manufacturing or direct trading expenses. These accounts determine the Gross Profit of the company.

14. 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.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Common and Possible Errors in Grouping and 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 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. 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):

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:

You may prefer to classify creditors according to their tax status, e.g.,

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:

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 subclassification of accounts; you may simply use the reserved groups for grouping your ledger accounts.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

How to Manage and Operate Groups?

Gateway of Tally > Accounts Info > 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.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

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] > Acct/Inv info > Accounts 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) Single Group Gateway of Tally > Accounts Info > Groups > Single Create

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, Currency, Budgets: 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. Note: 1. Configuration changes affect all companies whereas Features changes affect only the current company. 2. Advanced mode allows entry of additional information as follows: Creation of Primary Group Control behaviour like sub-ledger Used for calculation for taxes and discounts in invoices (These are further explained at the end of the section) If you have not opted for advanced entries in masters, you will need to enter only the following information to create a 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 Special Key Combinations. More: Advanced mode of master entries for Groups

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Advanced Mode of Master Entries for Groups

The following are applicable only when advanced mode is activated.

Under
If it is a new primary group, select Primary (requirement of a new primary group would be extremely rare but the option 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).

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Display or Alter a Group

Gateway of Tally > Accounts Info > Groups > Single Display/Alter > 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. 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 behavioural 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 Tally > Accounts Info > Groups > Single/Alter The Delete function is performed through the single alteration mode. You cannot delete groups from the multiple alteration mode. 1. Select the group to be deleted. 2. Press <Alt>+<D> to delete. Note: You will not be allowed to delete a group if: it is a reserved group; or there are sub-groups or ledgers under it.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Advanced Usage

Position index in reports
Position index is the primary key for sorting groups and ledgers for reports; the group name being the secondary key. It determines the position of the group in relation to 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: 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".

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>). 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.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Expert Usage

Multiple Creation of Groups
Gateway of Tally > Accounts Info > Groups > Multiple Create

Explanation on Buttons 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. 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 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. 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. 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. Note: 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 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 Tally > Accounts Info > Groups > Multiple Display/Alter. 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.

Managing Groups in multiple companies
Copy masters from one company to another Master information is generally similar for most group companies and it is certainly beneficial to maintain same group structure and ledgers, more so if you have a parent company with subsidiaries or branches. This ensures uniformity of reports in all 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 > Select Company A Gateway of Tally > Select Company B Copy a single group from one company to another First select the source company [F1], unless already selected. Gateway of Tally > Select Company A Gateway of Tally > Accounts Info. > Groups > Single/Alter Select the particular group > [F3]: Change to destination company (Company B) > Accept 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. 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 Tally > Accounts Info > Groups > Multiple/Alter. Select the particular group or [All Items] > [F3]: Change to destination company > Accept 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. Note: The alternate mechanism to transfer information between companies is to use the 'Export of Data' 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.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Introduction

In the previous chapter, the concept of groups, as implemented in Tally, was explained. You were also given a number of examples 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.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

How to Manage and Operate Ledgers?

Gateway of Tally > Accounts Info. > Ledgers

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 Section 'Expert Usage' at

the end of this Chapter.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Creation of a Ledger Account

The information required for creation of ledgers depends on the features opted by you. If the setting of the Accounting Features [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-inhand) 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 > Accounts Info. > Ledgers > Single Create

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. 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 should go through the Chapter on Groups now if you not already done so). You must specify which group the ledger falls under. Note: 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. Note: alter a ledger or a group from any display by <ctrl>+<enter>. More: Common and possible errors in Grouping and account classification Groups - a revisit Opening Balance

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Common and Possible Errors in Grouping and Account Classification

Reproduced below are some very important issues pertaining to groups.

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. 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. Note: 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 analyzing 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.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Groups - A Revisit

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):

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:

You may prefer to classify creditors according to their tax status, e.g.,

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:

Obviously, you could have done with simply creating ledgers directly under Marketing Expenses. 1. 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 account

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

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.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Display or Alter a Ledger Account

Information in display and alter is the same, hence only alter is discussed. Display option does not permit any modification. Alter option is accessible only to authorised users. Gateway of Tally > Accounts Info. > Ledgers > Single Alter > 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 'Stockin-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 <Alt>+<D>. Tally does not allow deletion of accounts that have transactions. Therefore, should you wish to delete an account, which has transactions, you must first delete all its voucher entries.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Advanced Usage

Assuming that you have set up your configuration and features as below.

[F12] Configure

[F11] Features

…And that you have also activated bill wise details and cost centres in features. 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 Tally Solutions Pvt Ltd. could also be called Tally 7.2. If you need to do so, simply open Tally Solutions Pvt. Ltd. as 'Name' and under 'alias' give Tally 7.2. Another possible example is International Business Machines, which is popularly abbreviated as IBM. In such a case, you 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 Tally Solutions Pvt Ltd with two aliases, viz., Tally 7.2, and 001005001. 1. 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. More: Currency of Ledger Maintain Balances Bill-by-bill (Yes/No) Allocate to Cost-Centres (Yes/No) Method of Calculation

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

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. Note: * 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 Advanced Information (ONLY if the ledger is maintained in base currency). (The relevant options should have been activated in the company features)

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

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 2001. 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. Remember, the purpose of the break-up is to enable you to adjust it later when the relevant transaction is squared off. 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. 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 aversely. In the example below, 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.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

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.

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. 1. 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.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Method of Calculation

There are four methods of calculating a duty. 1. Duty Based on Items – Tax based on Item Rate 2. Additional Duty 3. On Total Sales 4. 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. 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 28000/12% on 15000/Total Duty
Additional Duty

2800/- (Item A & C) 1800/- (Item B) 4600/-

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'. 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 above example if you have added a line Surcharge 10% it will appear as:

Item A Item B Tax 2% Surcharge 10%

10000/15000/25000/500/50/- (10% of 500)

If your invoice is as below:

Item A Item B Tax 2% Surcharge 10% Addl.Surcharge8%

10000/15000/25000/500/50/- (10% of 500) 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 > Invoice Entry > 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 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.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

UK VAT Analysis

Tally produces the VAT Analysis Report in the British VAT Return Form 100 format with Box 1 to 9. It is automatically produced for a quarter ending the last date of voucher entry and picked from the sales and purchase voucher entries. Set-up required to produce the return The set-up is more detailed if you deal with the European Union. Where Boxes 2, 8 and 9 are not applicable (Businesses not trading in Goods or related services with the EEC. – Domestic trade only or Exports to other countries or supply of services, like consultancy, to EEC. In short, where Boxes 2, 8 and 9 are not applicable.) 1. Activate British Style VAT Returns in F11:Company Features. Group Name Under which EEC Debtors are classified. Select 'Not Applicable'. Group Name Under which EEC Creditors are classified. Select 'Not Applicable'.

2. Use Voucher Classes for sales to automate sales invoice entry if required. 3. Ensure that all VAT entries are made through Purchase, Sales, Debit Note and Credit Note vouchers only. VAT entries made in other voucher types like Payment, will not be included in the VAT Return. Note: The set up determines the figures that go into the VAT Analysis Report. Hence, check the figures and the entries carefully before copying them into your VAT Return. Adjustment items like Fuel scale charges are typically entered through a journal and would not be reflected in the Report. For this, you might have to adjust the Report figures. More: VAT Analysis Report Businesses trading in goods with the EEC and not services VAT Analysis Report Print VAT Analysis Return and Reports

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

VAT Analysis Report

The VAT Analysis, in the broad format of Form 100, can be displayed and then statements printed through the Display option in Gateway of Tally. Display > VAT Analysis Drill down to further details in each box. Press <enter> or double click the box. Box 1 Gives VAT due calculated from the sales vouchers. Double click on the row or press <enter> to view Output Details. Output Details The sales entries are displayed in columns showing break-up of net value of sales on which VAT is applicable or not. The VAT charged on each invoice is shown in a column. VAT calculated but not applied is shown for EC Sales information for items on which VAT is charged in the UK. This is directly relevant for Box 2 purposes. The amount shaded green is brought to the VAT box. Box 2 Not relevant if there are no inputs from EEC. The EC VAT calculated but not applied is brought in. It is also included in Box 4, which is the total VAT Charged and EC VAT Calculated (not applied). Box 3 It is total VAT due by summing up Box 1 and 2 figures. Box 4

It is the VAT claimable calculated from Purchase Voucher entries. It includes the Box 2 figure. Press <enter> to view input details. Box 5 Net VAT due to be paid or refunded being the difference between Boxes 3 & 4. Box 6 Total Net Value of sales and other outputs as obtained from the sales voucher entries. Drill down to see Output Details. Box 7 Total Net Value of purchases and other inputs as obtained from the purchase voucher entries. Drill down to see Input Details.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Businesses Trading in Goods with the EEC and Not Services

Where Boxes 2, 8 and 9 are applicable (If you deal with the EEC, it is advisable to group your EEC Customers separately under a sub group of Sundry Creditors. Take care to group only VAT registered companies in these groups as they would affect Box 8 and 9 as well as the EC Sales List. Unregistered companies or individuals (Distance Sales) should be grouped separately and treated like UK companies.) 1. Activate British Style VAT Returns in F11:Company Features. Group Name Under which EEC Debtors are classified. Select the group name, e.g. EEC Customers. Group Name Under which EEC Creditors are classified. Select the group name, e.g., EEC Suppliers. 2. Alter the group Sales Accounts to enable Used for Calculation. Set it to Yes. 3. Now create or alter the ledger account used for recording sales of Goods (not services) to EEC Countries. Activate percentage of calculation and set it to the standard rate of VAT, e.g. 17.5. Set the method of calculation to any one method. 4. If you have sales for items with different VAT rates, create separate sales accounts for them and give percentages accordingly. 5. Follow the same steps for EEC Purchases accounts. 6. Use Voucher Classes for sales to automate sales invoice entry if required. 7. Ensure that all VAT entries are made through Purchase, Sales, Debit Note and Credit Note vouchers only. VAT entries made in other voucher types like Payment, will not be included in the VAT Return. Businesses providing services to the EEC in addition to Goods as well as exporting to other countries

(If you deal with the EEC, it is advisable to group your EEC Customers separately under a subgroup under Sundry Debtors. Likewise, group EEC Suppliers under a separate sub-group of Sundry Creditors.) 1. Activate British Style VAT Returns in F11:Company Features. 2. Group Name Under which EEC Debtors are classified. Select the group name, e.g. EEC Customers. 3. Group Name Under which EEC Creditors are classified. Select the group name, e.g., EEC Suppliers. 4. Alter the group Sales Accounts to enable Used for Calculation Set it to Yes. For Goods follow the instructions in 2 above. For sale of services to EEC Countries, do not give any percentage, i.e. give 0. For export sales, do not give any percentage. 5. Follow the same steps for EEC Purchases accounts. 6. Use Voucher Classes for sales to automate sales invoice entry if required. 7. Ensure that all VAT entries are made through Purchase, Sales, and Debit Note and Credit Note vouchers only. VAT entries made in other voucher types like Payment, will not be included in the VAT Return. Note: The set up determines the figures that go into the VAT Analysis Report. Hence, check the figures and the entries carefully before copying them into your VAT Return.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

VAT Analysis Report

The VAT Analysis, in the broad format of Form 100, can be displayed and then statements printed through the Display option in Gateway of Tally. Display > VAT Analysis Drill down to further details in each box. Press <enter> or double click the box. Box 1 Gives VAT due calculated from the sales vouchers. Double click on the row or press <enter> to view Output Details. Output Details The sales entries are displayed in columns showing break-up of net value of sales on which VAT is applicable or not. The VAT charged on each invoice is shown in a column. VAT calculated but not applied is shown for EC Sales information for items on which VAT is charged in the UK. This is directly relevant for Box 2 purposes. The amount shaded green is brought to the VAT box. Box 2

The EC VAT calculated but not applied is brought in. It is also included in Box 4, which is the total VAT Charged and EC VAT Calculated (not applied). Box 3, Box 4 It is the VAT claimable calculated from Purchase Voucher entries. It includes the Box 2 figure. Press – It is total VAT due by summing up Box 1 and 2 figures. <enter> to view input details. Box 5 Net VAT due to be paid or refunded being the difference between Boxes 3 & 4. Box 6 Total Net Value of sales and other outputs as obtained from the sales voucher entries. Drill down to see Output Details. Box 7 Total Net Value of purchases and other inputs as obtained from the purchase voucher entries. Drill down to see Input Details. Box 8 This shows the sale of goods to EEC customers. The figure depends upon correct classification of EEC customers and activation of percentage of calculation in sales ledger accounts. It is the total of the amounts in the Nett Value (VAT Applicable) column in the Output Details for EC Member Countries. Note: It will not include those items that although have a VAT Rate specified, but whose sale account allocation does not have a percentage of calculation. Hence, it is important to allocate EC Sales to a separate Sales Account for which percentage of Calculation has not been set to 0. On the other hand, services supplied to EC Customers are not to be considered and hence should be allocated to a sales account for which the percentage of calculation is 0. A small example of allocations is given at the end of this document. Drill down to view Output Details for EC Member Countries. Select F4:EC Sales List to view the sales to VAT registered EC customers. Box 9 This reflects the purchase of goods from EEC Suppliers. The same note of caution as for Box 8 applies.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Print VAT Analysis Return and Reports

Display the Return and click on the Print Button or press <Alt>+<P>. The Print option cycles through all reports including EC reports. Example:

Create the following groups: 1. EC Customers under Sundry Debtors 2. EC Suppliers under Sundry Creditors 3. EC Customers for services 4. Export Customers Note: Alter the Groups Sales Accounts and Purchase Accounts to change the setting for the question Used for Calculation to Yes. Create the following Ledger accounts (alter if they already exist). Under the Group Sales Accounts EC Sales – Goods : where Inventory Values are affected? is set to Yes and Percentage of Calculation – 17.5 Method of Calculation – On Total Sales. EC Sales – Services : where Inventory Values are affected? is set to Yes and Percentage of Calculation–0. Export Sales: where Inventory Values are affected? is set to Yes and Percentage of Calculation – 0. Sales – UK: where Inventory Values are affected? is set to Yes and Percentage of Calculation – 17.5 Method of Calculation – On Total Sales. Under the Group Purchase accounts EC Purchases - where Inventory Values are affected? is set to Yes and Percentage of Calculation – 17.5. Method of Calculation – On Total Sales. VAT Accounts under the group Duties and Taxes 1. Output VAT – with percentage of calculation 17.5% Method of calculation – Based on Item Rate 2. Output VAT – 0% 3. VAT Exempt 4. Input VAT. Classes (to automate invoice entry) Alter the Sales Voucher Type and create the following classes: VAT Sales – Ledger Allocation: Sales – UK 100% Additional ledger allocation: Output VAT Value Basis 17.5% EC Sales (Goods) – Ledger Allocation: EC Sales – Goods. Additional ledger allocation: VAT 0% EC Sales (Services) – Ledger Allocation: EC Sales – Services. Additional ledger allocation: VAT Exempt Export – Ledger Allocation: Export Sales. Additional ledger allocation: VAT Exempt

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Interest Calculations

Tally ies 7.2 allows you to obtain reports on interest calculated by Tally based on the instructions you furnish. Interest figures are typically desired in the following situations: 1. On outstanding balance amounts 2. On outstanding bills/invoices/transactions (Receivable and payable) Tally gives you an exhaustive capability to obtain interest implications on both. Set-up required You first need to activate the feature for the Company and then activate it for each specific ledger account for which interest is to be calculated. F11: Company Features contains the option to activate Interest Calculations for the Company. Look at the Accounting Features in this screen. The questions asked of you are: Activate Interest Calculations? Set it to Yes. Use Advanced Parameters? Set it to No. We will discuss Advanced Parameters separately. More: Simple Mode - where advanced parameters are not applicable Advanced Mode Interest Calculation Reports Interest calculation on Ledger Balances (e.g. Loans) Statement of Interest due on invoices Group Interest Calculation

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Simple Mode (Where advanced parameters are not applicable)

Steps required 1. Activate and specify interest calculations in ledger masters. 2. Enter Interest details in Vouchers (only in case of transaction by transaction/Bill-by-bill). 3. View Interest reports.

Interest calculations on outstanding balances
Activate and specify interest calculations in ledger masters You will have to alter existing ledger accounts to permit interest calculations on them. The same operation will apply when creating a new ledger account. Interest calculation on outstanding balances is allowed for any ledger account. You simply specify the interest rate and style of calculation. Nothing is required to be done for interest during voucher entry. You might want to activate this on a Bank Account. Let's take an example: 1. Alter a bank account e.g. Bank Ltd. 2. Tab (or press <ENTER>) down to the option Activate Interest Calculation? 3. Set it to Yes. 4. Now you have to set the Interest Parameters – the basis on which interest will be calculated for this ledger account. 5. Only two pieces of information have to be given:Rate – give a rate say 15% Style – this the basis on which the rate is applied. There are 4 options 6. 30-day month 7. 365-day Year 8. Calendar Month 9. Calendar Year Select the one applicable to you. For this example, select 365-day Year. Accept the screen. You are now ready to view the amount of interest that could be charged by the bank.

Report on Interest Calculated on outstanding balances
The Interest Calculations Report can be displayed and printed through the Display option in Gateway of Tally. Display > Statements of Accounts > Interest Calculations > Ledger > Bank Ltd Note that interest is calculated with respect to each change in balance figures. (A report has been reproduced under the Advanced Parameters section below).

Interest calculation transaction by transaction
Activate and specify interest calculations in ledger masters. Transaction by transaction or bill-by-bill interest calculation is permitted for 'Party' accounts like accounts falling under the groups Sundry Debtors and Sundry Creditors.

Take an example to explain this feature:1. Alter a customer account, e.g. CP Ltd (under the group Sundry Debtors or one of its subgroups) 2. Set Yes to Activate Interest Calculation. 3. The Interest Parameters now have three lines to answer. 4. Calculate Interest Transaction-by-transaction - Set it to Yes 5. Over-ride Parameters for each transaction - Set it to No. If set to No, you are not allowed to change interest parameters in voucher/invoice entry. If set to Yes, you can change the interest parameters during entry.

Report on Interest Calculated on outstanding transactions/bills
Display > Statements of Accounts > Interest Calculations > Ledger > CP Ltd The report is similar to the Bill-wise Outstandings Statement. The last column gives the interest amount on the transaction. Press Detailed to see the calculation. (A report has been reproduced under the Advanced Parameters section ).

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Advanced Mode

Set Use Advanced Parameters to Yes in F11:Company Features.

Advanced Parameters - Interest Calculations on outstanding balances
Follow the steps given in Simple Parameters. The following extra options now become available: 1. You can now have multiple rates of interest. 2. Choice of balances – All Balances, Credit Balances only, Debit Balances only. 3. Applicability period – when is the interest applicable from and to which date. 4. Choice of methods for Rounding off of interest amounts. A brief explanation on each is called for: Balances Interest can be calculated on all outstanding balances whether debit or credit. You would like to select only credit balances in case of accounts like Bank accounts if you want to know the interest that the bank might charge on overdrawn balances. Applicable from The date from which the rate is applicable to a specific date. If left blank then it is up to the last

date. Rounding off Whether the amount is to be rounded off normally or upward or downward. You need to give the rounded to amount. e.g. round off upwards to the nearest 10. The advanced parameters are particularly useful where interest rates change from time to time. You may want to set your Bank Ltd interest parameters as follows:

Display Report – Interest on Outstanding Balances
Display > Statements of Accounts > Interest Calculations > Ledger > Bank Ltd

Advanced Parameters - Interest calculation transaction by transaction
Activate and specify interest calculations in ledger masters. Follow the steps given in Simple Parameters. The following extra options now become available: 1. You can now have multiple rates of interest. 2. You can override advanced parameters during voucher entry. Hence, each entry could have different parameters.

3. Choice of balances – All Balances, Credit Balances only, Debit Balances only. 4. Applicability - This actually applies to the viewing of the statement and not the levy of interest. 5. Calculate from - You can decide whether interest is to be levied from the Due Date or from the Effective Date of the transaction (or the voucher date if effective date is not activated) or even date ranges specified during voucher entry. 6. Choice of methods for Rounding off of interest amounts. Set up the Interest Parameters for CP Ltd, a customer as follows:

Note: * To obtain the option 'Calculate From Date Specified during Entry', you must have Override advanced parameters set to Yes. The option is required if you want to specify interest to be calculated at different rates for different periods. * In case any of the other two options are selected, viz, Due Date of Invoice/Ref or Eff. Date of Transaction, you will not have variable rates for different periods but for the same period. Hence, it could be useful as a surcharge or penalty for past due dates for example. * If you choose to override parameters then information would be asked during voucher/invoice entry. The interest information is required after the bill-wise details have been entered.

Report on Interest Calculated on outstanding transactions/bills
Display > Statements of Accounts > Interest Calculations > Ledger > CP Ltd Press Detailed to see the calculation and the period. Previous transactions are calculated from Effective date of Transaction as a default. Date Specified During Entry has not been used. Note: Part monies received have been accounted for and interest calculated on the balance.

A look at 'Calculate From Dates Specified during Voucher Entry You have set up the Interest Parameters for CP Ltd to calculate on Dates specified during Voucher Entry. We will take one invoice and put in the interest information.

On 28-2-99, the Interest Report will display the calculation as below: Display > Statements of Accounts > Interest Calculations > Ledger > CP Ltd

Book Entries and adjustment of interest We have seen the reports on interest amounts calculated in different ways but these have not been brought into books! They simply give you the interest implications. You must book them now.

How to enter the calculated interest amounts? You must use Debit Notes and Credit Notes with Voucher Classes You will use Debit notes for Interest receivable and Credit Notes for Interest payable. Interest is calculated on Simple or Compound basis and separate classes should be used for them. Set-up Debit/Credit Note Classes for interest entries We will set up Debit Notes. Credit Notes will behave the same way. Alter the Voucher Type Debit Note. Tab down to the field Class. Simply type the name of the Class. Type Simple Interest.

Set the other options as above. Likewise, create a Class – Compound Interest and set Yes to Amounts to be treated as Compound Interest. Accept the Voucher Type and return to the Gateway of Tally. Create a ledger account Interest Received under Group Indirect Income. Voucher Entry for booking Interest 1. Go to Voucher Entry 2. Select F7:Journal à Debit Note àClass – Simple Interest 3. A Cost Centre Class is also selected if required. Marketing Expenses Class has been selected here. There are two situations for interest adjustment:4. Billwise interest Simple Interest – Interest amounts are not debited onto the same bills. Create a fresh reference for it. Compound Interest – Amounts are auto-debited to the selected bills. Bill-wise details will not appear in this case. 5. Interest on balances only Bill-wise interest entry Debit CP Ltd Credit Interest Received When you debit the party account, a list of bills for which interest is applicable pops up. Select the bills to adjust. Note that even cleared bills appear.

Select Demo/45/98 and Demo/6/98. Select <end of list> . The debit amount is filled up with the total. Select New Ref in the bill-wise allocation. In the interest sub-screen, ensure that the rate of interest is 0. Now Credit Interest Received. The amount is already filled in. Your voucher will resemble the one below:

Entries for compound interest are exactly the same as for Simple Interest where all you do is select the Voucher Class Compound Interest. Also the Bill-wise details popup sub-screen does not come up as the amounts are added onto the bills. Select Demo/28/98 and Demo/31/98 from the list and complete a Debit Note. Now display Outstandings for CP Ltd Note the contents:

The Bill references Demo/28/98 and Demo/31/98 are invoices onto which interest has been

compounded. A new Reference no 2 has been created for Simple Interest due from CP Ltd. Entries for Interest on Balances only Again, the issues are Simple and Compound Interest Compound Interest Make the following entries in a Debit note with Compound Interest Voucher Class Debit Bank Ltd the amount is automatically filled up with the calculated interest Credit Interest Received And nothing needs to be done! The Bank Account has been increased by the amount of interest due and the Income account of Interest Received also credited. Simple Interest Make the same entry as above. However, since it has the effect of increasing the Bank Ltd account with the amount due (compound effect), you must make a journal entry to reverse it. The reversal entry would be something like this: Debit Interest Receivable (a current asset account) CreditBank Ltd Use a normal Journal voucher for this entry. We have to necessary go this route to take advantage of the auto filling of the interest amount which can appear only when we use the Bank Ltd account in Debit Note in the first place.

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Interest Calculation Reports

Interest Calculation reports are automatically produced if the feature is activated In Company Features and the parameters are set for individual ledger accounts. (See Interest Calculations for details on activating and setting up Interest Calculations). There are two types of reports, one pertaining to interest on balances of accounts like loans, and the other interest on overdue invoices. Interest reports are available for individual ledger accounts as well as for Groups.

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Interest calculation on Ledger Balances (e.g. Loans)

Display > Statements of Accounts > Interest Calculations > Ledger Select Account, e.g., Bank Loan Account Interest is re-calculated with every change in balance outstanding. The Cr in the interest amount should not be confused to mean an Income. It only means that it is payable and is a liability. The figure is illustrative only and you will need to account for the interest expense and liability through a journal entry. To ease interest recording, Tally has an interest template, a special voucher class in Debit Note and Credit Notes. The interest screen will appear similar to the one below: Interest calculation on Bank Loan account

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Statement of Interest Due on Invoices

You can calculate interest on each invoice for the period it is outstanding wholly or partly. Transaction by transaction or bill-by-bill interest calculation is permitted for 'Party' accounts like accounts falling under the groups Sundry Debtors and Sundry Creditors. Bill-wise details should be active for the company and the party. The report is similar to the Bill-wise Outstandings Statement. The last column gives the interest amount on the transaction. Press Detailed to see the calculation. Gateway of Tally > Display > Statements of Accounts > Interest Calculations > Ledger Select Account, e.g., Peutronics Bangalore

Interest is re-calculated with every change in balance outstanding. The Cr in the interest amount should not be confused to mean an Income. It only means that it is payable and is a liability. The figure is illustrative only and you will need to account for the interest expense and liability through a journal entry. To ease interest recording, Tally has an interest template, a special voucher class in Debit Note and Credit Notes.

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Group Interest Calculation

Gateway of Tally > Display > Interest Calculations > Group Select a Group,e.g., Loans (Liability)

The Group Interest Calculation statement is a list of all accounts and sub-groups belonging to the selected group that displays the current balance in each account or sub-group and the total interest. The Cr in the interest amount should not be confused to mean an Income. It only means that it is payable and is a liability. The figure is illustrative only and you will need to account for the interest expense and liability through a journal entry. To ease interest recording, Tally has an interest template, a special voucher class in Debit Note and Credit Notes. Drill down to the Ledger level Interest report.

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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. 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 31th October 97 (or of any date up to 30 May 2001) would report Closing Stock worth 127983. The Balance Sheet as on 31st March 2002 (or any day between 1st July 2001 to 31st March 2002) would report the stock value of 15000.

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Effective Date for Reconciliation (Bank Accounts only)

To be given for accounts falling under the Bank Accounts Group (or Bank OCC a/c). Default is the books beginning date.

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.

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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 Tally > Group Summary > Indirect Expenses 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. 1. 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

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Expert Usage

Multiple ledgers
Create ledgers in multiple mode 1. 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. 2. 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 > Accounts Info > Ledgers > Multiple Creation

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.

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). More: Alter Ledgers in multiple mode

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Alter Ledgers in Multiple Mode

Gateway of Tally > Accounts Info > Ledgers > Multiple Alter > Select 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. Explanation on Buttons 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. 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 nullify (change to zero) 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. F12:Configure:To change configuration of master information. Note: Configuration changes affect all companies whereas Features changes affect on the current company

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Credit Limits

Credit limits can be specified for any party account, viz, any account falling under the groups Sundry Debtors and Sundry Creditors. Accounts under sundry creditors are permitted because there can be a two-way trade with a party even if it is classified as a creditor or debtor. Classification is done on the basis of the major role. More: How to set Credit Limits Effect of setting credit limits Exceeding Credit Limits

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How to Set Credit Limits?

Credit amount limits and credit periods
If you do not set credit limits, you can still make invoices and give credit periods at the time of invoicing. However, that may not be desirable, especially in a decentralised environment. Therefore, to minimise errors during invoicing, you might prefer to set these important terms beforehand. Gateway of Tally > Accounts Info > Ledgers > Credit Limits Select the group of ledgers for which to set credit terms You set credit limits for both amounts and periods here.

You can set the amount limits in foreign currency if you wish for customers who are usually invoiced in foreign currency. Credit Periods are in days only and are calculated from the effective date. If a separate effective date field appears in your voucher, the credit period is from the effective date, which might differ from the voucher date. If the voucher date is the only date field in the voucher, then it is also the effective date and the credit period is from this date.

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Effect of Setting Credit Limits

The effect of setting credit limits is that during voucher entry (also invoice entry), the credit terms are filled up by the pre-set figures. If the voucher configuration (through F12) is set to disallow modifications of all fields during voucher entry, the cursor skips these fields and modification is not permitted. However, the configuration is set to permit modifications to all fields, alteration of the pre-filled fields is allowed. The current balance and the credit limit of the party are displayed in the order and invoice entry forms, which is helpful to assess the amount acceptable.

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Exceeding Credit Limits

During invoice or order entry, if the credit amount limit is exceeded, the voucher entry does not proceed further. You have two choices at this stage: 1. Enter a lower value so that the entry can be completed. 2. Abandon the current entry and obtain authorization to increase the credit amount limit in the Credit Limits set-up screen. This is controlled activity and will depend on the security permissions for altering credit limits.

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Introduction

Cost Centres
Tally's concept of Cost Centres allows an additional dimension to a transaction. While a ledger account would indicate the nature of a transaction, it would not readily disclose, except in the narration, which part of an organization 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: 1. Departments of an organisation, e.g., Finance, Manufacturing, Marketing, etc. 2. Products of a company, e.g., Tally dss 4.5, Tally eis 5.4,Tally ees 6.3, Tally ies 7.2 etc. 3. Even individuals like, Salesman A, Salesman B, etc. 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:

More: Cost Categories (For advanced usage only) How to manage and operate Cost Centres Alter a Cost Centre

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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. 1. Most organisations 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 work 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: Cost Centres:

Departments Marketing Manufacturing Finance

Executives Salesman A Salesman B Salesman C

Projects Airports cont. Roads const. 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. 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

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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 > Accounts Info. > Cost Centre > 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.

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. Note: 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).

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Alter a Cost Centre

Gateway of Tally > Accounts Info. > Cost Centres > Single Alter > List of Cost Centres The screen is exactly the same as the creation screen and is, therefore, not reproduced here. 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. F12:Configure:To change configuration of master information. Note: Configuration changes affect all companies whereas Features changes affect on the current company.

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Expert Usage

Create Multiple Cost Centres
Gateway of Tally > Accounts Info. > Cost Centres > 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 Management under it. If you do not want to be restricted to one parent cost centre while creating cost centres, choose 'All Items'. 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 Management. 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. More: Alter Cost Centres in multiple mode

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Alter Cost Centres in Multiple Mode

Gateway of Tally > Accounts Info. > Cost Centres > Multiple Cost Centres Alter > Select from List of Cost Centres

Under Cost Centre Since you selected Finance from the pop-up 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 pop-up 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. Explanation on Buttons 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. 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 categorization 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:

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.

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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 > Accounts Info. > Cost Categories > Single Create Name The name of the cost category, e.g., Products. Earlier, we had created Departments, Branches and Executives. Note: 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 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. Note: 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
Gateway of Tally > Accounts Info. > Cost Categories > Single Alter >List 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
Gateway of Tally > Accounts Info. > Cost Categories > Single Alter >List 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.

Buttons in single cost category screens
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. F3: New Comp: 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. Note: Configuration changes affect all companies whereas Features changes affect on the current company.

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Expert Usage for Cost Categories

Create Multiple Cost Categories Gateway of Tally > Accounts Info. > Cost Categories > 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. Note: There is no 'Under' field. You cannot sub-classify cost categories. Cost categories have cost centres as their sub-classification.

Alter Cost Categories in multiple mode
Gateway of Tally > Accounts Info. > Cost Categories > 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 through the Single Alter mode. Explanation on Buttons 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. F3: New Comp: To work on the same report of another company. Available only 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. 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. Note: Configuration changes affect all companies whereas Features changes affect on the current company. More: How to manage and operate Cost Centres under Cost Categories

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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 > Accounts Info. > Cost Centre > 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.

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. Note: 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 > Accounts Info. > Cost Centres > Single Alter > List of Cost Centres The screen is exactly the same as the creation screen and is, therefore, not reproduced here. 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 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 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 under Gateway of Tally. F12: Configure: To change configuration of master information. Configuration changes affect all companies where as Features changes affect on the current company.

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Expert Usage for Cost Centres under Cost Categories

Create Multiple Cost Centres under Cost Categories Gateway of Tally > Accounts Info. > Cost Centres > 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 Management 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 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. Under

Give the parent cost centre here. The pop-up 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. More: Alter CostCentres (under cost categories)in multiple mode Explanation on Buttons in multiple mode

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Alter Cost Centres (under cost categories) in Multiple Mode

Gateway of Tally > Accounts Info. > Cost Centres > Multiple Cost Centres Alter > Select from List of Cost Centres All fields may be altered for a given Cost Centre. Under Cost Centre Since you selected Finance from the pop up 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 pop up 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 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 through the Single Alter mode.

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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. 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 categorization rules, Tally complains after you accept the screen. (The error message is reproduced after the explanation on buttons. 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. Note: Configuration changes affect all companies where as 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.

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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. Gateway of Tally > Accounts Info > Budgets

More: How to manage and operate Budgets Alter a Budget

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How to Manage and Operate Budgets?

Gateway of Tally > Accounts Info > Budgets Create

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. We shall take up budget for group only. Follow the same process for setting budgets for individual ledgers and cost centres. More: Budget for Groups Budget for Ledger accounts Budgets for Cost Centres

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Budget for Groups

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 after reducing the credits for the same period. Opening and closing balances not withstanding. 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.

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Budget for Ledger Accounts

Gateway of Tally > Accounts Info > Budgets > Create You may choose Alter if a Budget exists for other entities like Groups and Cost Centres but not for Ledgers. Name for the Budget 1. Give the name of Budget. E.g. Corporate Budget under Primary Budget. 2. Specify the period of the Budget. The period could be a Month, a Year or any period starting from any date to any date. 3. Under Set/Alter Budgets of, you may set the budget for groups of ledger accounts or for ledger accounts individually or for cost centres or all of them. 4. Here we shall take up Budget for ledgers. Hence, set Yes under Ledgers and let others remain No. 5. Select the ledgers for which you wish to set the Budget. Budget for an account allocated to a cost centre A budget can be created for each ledger account pertaining to a cost centre, e.g. Accountancy Fees for Finance Group. Then, Accountancy Fees could be repeated for another cost centre, e.g., a Branch. However, if you select not applicable then the budget is not for any particular cost centre but the company as whole. Type of Budget Under the Type of Budget a pop-up of two different kinds of Budgets appears. On Closing Balances Where you wish to monitor the balance of the accounts and are not too keen on the transactions. For e.g., balances of Bank Accounts or Debtors. This means that the magnitude of transactions is ignored. You are concerned only with the amount remaining in the account. This is useful for Balance Sheet items. On Nett Transactions If you are concerned with the magnitude of transaction amounts use this option. Revenue items reflect the transacted amounts. Why nett? This is because you do not expect to have a negative figure in such accounts and if they exist, they are adjustments. E.g., an expense account like travel will always have debit entries only unless there is a reversal due to error or charge to a customer. Caution When using Nett Transactions, the Budget Closing Balances actually get adjusted even if you have not selected this type. The figures in the Profit & Loss Account will reflect the Closing Balance figures. Note: For comparing closing balance figures in final statements, especially the Balance Sheet items, viz., assets

and liabilities, choose Closing Balances. For comparing transactions against budgets, especially revenue income and expenses, choose On Nett Transactions. Apportionment of budget specified for periods longer than a month Ledger Budgets are apportioned for each month on the basis of number of days. Group Budgets do not get apportioned. Hence Budget for Current Assets will not automatically flow to sub-groups. Closing Balances Budget: Each month will have the same budget value except that the actual Opening Balance is also taken into account. Nett transactions Budgets specified for a period get equally apportioned over the period. Enter the budget amount for the specific ledger. You can Budget as many ledger accounts as needed and finally accept the screen. Ledger Budget

Budget figures are available for comparison with actuals in most statements through the use of Columns and Variance options.

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Budgets for Cost Centres

The main purpose of Budgeting is to control the expenditure. Tally allows you to create multiple budgets. There could be budget for specific purposes, e.g. for the Bank, for the Head Office, Marketing Budget, Finance Budget etc. Name for the Budget Give the name of Budget E.g. Corporate Budget under Primary 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. Under Set/Alter Budgets of, you may set the budget for different entities, viz., groups of ledger accounts or for ledger accounts individually or for cost centres or all of them.

We shall take up Budget for Cost Centres here. Hence, set Yes under Cost Centres and let others remain No. Select the Cost Centres for which you wish to set the Budget. Cost Centre Budget

Budget figures may be given for Expenses, Income and Closing Balance for each selected cost centre. These figures will be available for comparison with Actuals in Cost Centre Display reports.

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Alter a Budget

Accts Info. > Budgets > Select the budget to alter If you select to 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 From the Menu Go to Alter select the Budget and Press [ALT]+[D] to delete it. Budget Variance The Trial Balance and Group Summaries carry an additional 'Budget Variance' button (Alt+B) which is active if Budgets are active and at least one budget exists. Pressing this button will create an automatic display of Budgets, Actuals with Percentage, Variance from budget with Percentage in three columns. This is a first-step offering of the facility and is being fine-tuned to enhance its range and diversity of options which you should see shortly.

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Introduction

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: Gateway of Tally > Display > List of Accounts > <Ctrl>+<V> [Voucher Types]

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How to Manage and Operate Voucher Types?

Tally acknowledges the special requirements of some users for more voucher types. These arise in cases like when you need the same voucher but in different names or separate series of 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.

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 predefined voucher 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 > Display > List of Accounts > <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. More: Create a Voucher Type

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Create a Voucher Type

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

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 (already listed in introduction). 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 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'. 1. 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. 2. 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. Automatic This method is both flexible and exhaustive. Use it carefully to give you your desired numbering system. Select this option to let 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.

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Advanced Usage

Prefill 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 of a voucher. This would be applicable for a multiple entry voucher where you want separate details for each entry. Select No if you do not want separate narration for each entry. Example of separate narration for each entry: -

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.

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: 1. month of the voucher as given above- 'April/' 2. company info like 'TSPL/' 3. even fixed number series like '1000' Note: 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.

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Voucher Classes

Voucher Classes are available for all major voucher types. However, Cost Centres could not be allocated if classes were used. Now, cost centres too can be 'classed'. Automation of cost centre allocation has met the need of 'percentage allocation' based on predefined figures. Cost centre classes affect all voucher types and will be taken up separately.

Voucher Classes for Payment, Receipt and Contra Vouchers
The primary intention of using classes for payment, receipt and contra vouchers is to enable data input in 'single entry' or list mode rather than in Tally's traditional double entry mode. You can also use it to have a separate form for each cash and bank account. Let us take an example of a Payment Voucher. You can either alter the existing Payment Voucher Type or create a new voucher type based on it. (From Gateway of Tally > Accounts Info > Voucher Types) The item Name of Class is below Effective Dates for Vouchers and above the Numbering Table. Give a name to the class by simply typing it, e.g. Barclays Bank Payment. You may create more than one class. Hence, you might want to have one more for Cash Payment. The Class Table

Exclude these Groups Groups other than Bank or Cash groups should not be selected. This is used to exclude Cash or Bank Groups that are not to be used in this class to pay out the money. In our example, we want to exclude Cash and Credit Cards. Include these Groups Groups other than Bank or Cash groups should not be selected. You might exclude a top level group but include its sub-group. Ledger Name Selecting the ledger account that will be used to pay out the money will eliminate the need to select it during entry. In this case, it is BarcSlays Bank. In a receipt voucher, you will select the ledger account into which monies will be received. You may even select 'Not Applicable'. The purpose of selecting 'Not Applicable' will be to permit Single Entry mode and at the same time retaining the option of selecting the account during entry. Note: Exclude or Include Groups are irrelevant when you specify a Ledger Name for which the class is created. They are useful when you select 'Not Applicable' . In case you do not require split payments, you could create only one class with nothing in include/exclude Groups and without any ledger Name. A single class does not require class selection and is a rapid way of using Single Entry mode with full functionality of all ledgers available. Accept the class table and the voucher type alteration. You may use [CTRL]+[A] combination. More: Payment Voucher Entry with Classes Purchase Entries in Invoice mode (without classes) Purchase Voucher Classes Additional Accounting Entries Purchase Invoice Entry with Voucher Classes Voucher Classes for Journals

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Payment Voucher Entry with Classes

Select Voucher Entry at the Gateway of Tally. Press F5:Payment. You have to select a class or Not Applicable if no class is desired for this entry. If Cost Centre Class has been set, it can be selected too.

The entries will be made as follows:

The Voucher Class is Barclays Bank Payment. We have selected a Cost Centre Class called Departments too. That will be discussed later. Note that you do not have to select the bank account and the entries are not in the regular Dr/Cr format. Data entry in Tally was already very rapid. It is now faster than before!

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Purchase Entries in Invoice mode (without classes)

Purchase Vouchers can now be created in Invoice mode. You can enter the suppliers' invoices in the same way as they physically appear.

Set-up Invoice Mode entry for Purchase transactions
1. Select F11:Company Features. 2. Set the option 'Allow Invoicing' to Yes. 3. Enter Purchases in Invoice Format? Set it to Yes . 4. Accept the screen using Ctrl+A.

Entry of Purchase vouchers in Invoice mode
Select F9:Purchases. Select As Invoice button or use CTRL+[V]. This button is a toggle for Invoice and Voucher modes. You may want to use the voucher mode for more complex entries. Entries are exactly like sales invoices and hence are not discussed.

The treatment of additional cost of purchases needs elaborating.

Additional Cost of Purchases
If it is desired to add the other purchase expenses like freight and import duty to the cost of the item, you would have activated the option in F11:Company Features 'Track Additional Costs of Purchases'. In voucher mode, the additional cost details have to be filled in after the allocation of each purchase item. In Invoice mode, the treatment of additional costs on stock items is automated by altering the parent group master details of the expenses. In many situations, more than one item is purchased where the expense that is incurred for them is charged as a lump-sum. However, to give an effective cost including the expense to each purchased item, you would earlier give additional costs of purchase for each item. That method though very flexible and practical could be tedious. That process is now automated and allocation of

the expense to stock item can be done on a predefined basis. The following set-up activity is required to be carried out: 1. Alter the Parent Group of the expense ledger accounts, e.g. Direct Expenses. You will find a new option - Method to Allocate when used in Purchase Invoice. If you want to appropriate the ledger accounts under this group to stock items by either Quantity or value, you must select the option. Select Appropriate by Qty for our example.

Now if freight belongs to the group Direct Expenses, the amount will be apportioned by quantity, i.e., in the ratio of 1:5. If however, the parent group does not have an allocation method or is set to No Appropriation or Not Applicable, the amount of freight will not be apportioned to the items and will simply remain in the financial books as expense. Note: In Invoice mode, Purchases can be allocated to Cost Centres only when Cost Centre classes are used, i.e., you have to auto-allocate purchases to cost centres if you are using the Invoice mode of entry. Using the voucher mode of entry for purchases allows manual allocation of purchases to cost centres.

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Purchase Voucher Classes

Purchase Voucher Classes are templates where you can restrict accounts to be used in entries as well as automate accounting entries for items and expenses. You can either alter the existing Purchase Voucher Type or create a new voucher type based on it. From Gateway of Tally > Accounts Info > Voucher Types The item Name of Class is below Effective Dates for Vouchers and above the Numbering Table. Give a name to the class by simply typing it, e.g. Imports. You may create more than one class. The class table is now to be completed.

Exclude and Include Groups have been discussed before and do not require further elaboration. Default Accounting Allocations Each Stock Item in the invoice can be allocated to the financial (nominal) account mentioned here. Hence, all the stock items that will be entered in this class will automatically affect the Nominal ledger account Purchase – Imports. Of course, the stock item record remains as it is and can be viewed separately. The allocation cannot be split up at present but in future releases you will be able to split this to cater to Tax inclusive prices.

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Additional Accounting Entries

Expenses and other charges like Import Duty, Freight, VAT, Sales Tax can be specified here which will be calculated automatically on the Type of Calculation and Value basis. For explanation on each Type of Calculation, refer the Appendix. We have selected Freight which is an account under the group Direct Expenses.

Type of Calculation We select User defined value as we would like to input the amount of freight charged on the invoice.

However, we would like Freight expenses to be apportioned to each stock item based quantity and we want the apportionment done automatically. Auto-allocation of Additional Entries to Stock Items Purchased (This method is not applicable for sales invoices) The Group Direct Expenses had been altered earlier to allocate by quantity. Hence, the allocation will be done automatically based on quantity. Your purchase voucher class has been set-up. You can have more than one additional accounting entries. You can also have more than one Class.

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Purchase Invoice Entry with Voucher Classes

Your Purchase Entry would look like this:

You have bought 10 Pcs of Item A and 90 Pcs of Item B. The Freight spent in total is 1000. What

should the apportionment be? 10:90. Movement Analysis shows the additional cost factor charged to the stock item in this proportion.

Stock Items can be given 'default' ledger accounts for both Sales and Purchase Invoices, which will further simplify entry of data through the Voucher Class mechanism for Sales/Purchase.

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Voucher Classes for Journals

Classes allow Journals to handle Forex Gain Loss Adjustments for companies having Multi-Currency Accounts. You would create a 'class' in the normal way (Accounts Info > Voucher Types > Alter > Journal). And having selected the class during Voucher Entry, will find only those Ledger Accounts appearing which have a Gain/Loss to be adjusted as of the date of voucher and autocalculation of these amounts.

Voucher Classes for Debit Notes and Credit Notes
Voucher classes for Credit Notes are similar to sales invoices except for one important inclusion. You can set the class for interest entries to enable adjustment of interest payable. If the Interest option is selected, the other sales invoice-like options will not be available. A separate class may to be created for entries like Sales Returns. Since Sales and Purchase Invoice classes have already been dealt with, we shall not elaborate on this behavior anymore. Debit Note classes can be set for interest entries only. Classes for other entries are not available as the invoice mode of entry is not possible for Debit Notes. Classes for interest entries are covered under Interest Calculations.

Voucher Classes for Stock Journals
Stock Journals classes allow you to handle transfers from one location (Godown) to another, for companies having Multi-Location Inventory and at least two location/Godowns created. Once the class is selected, you will need to specify the Destination and simply provide the list of items to be transferred. Through this class all items/batches thus selected will be exactly mirrored to the destination, including Batch Number, Rate and Value.

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Cost Centre Classes

The purpose of Cost Centre Classes is to facilitate predetermined allocation of ledger accounts (like expenses and incomes) to cost centres during voucher entry. Allocation to cost centres can be made while using voucher classes and the cost centres can be 'classed' too.

How does it work?
Automation of cost centre allocation involves 'percentage allocation' based on predefined figures. Cost Centre Classes are defined where percentages at which allocation is to be made are given. Cost centre classes affect all voucher types. In voucher entry, depending upon the cost centre class, the allocation will be carried out in the background without the allocation screen appearing at all. More: Set up required for Cost Centre Classes Voucher Entry with Cost Classes An explanation of 'Types of Calculation'

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Set up Required for Cost Centre Classes

Before you select classes, it is advisable to create the cost centre structure. Hence, create your cost categories and cost centres before creating classes. Draw out on paper the Classes required and indicate which cost centres will be affected for each class. For example, You might have the following structure: Divisions 1. Export 2. Wholesale 3. Retail Departments 4. Finance 5. Marketing Where Divisions and Departments are Cost Categories the others are cost centres.

Now, you want to allocate sales to the following Cost Centre Classes: 6. Export - to allocate 100% of Export sales to the cost centre Export 7. Wholesale - to allocate 100% of wholesale sales to the cost centre Wholesale 8. Retail - to allocate 100% of retail sales to the cost centre Retail You also want to allocate all the sales to the Marketing Department You want to allocate Marketing Expenses pro-rata in the following manner : 1. Export – 60% 2. Wholesale – 25% 3. Retail-15% 100% to Marketing Department With this structure, let us now set up the classes.

Set up Cost Centre Classes
At the Gateway of Tally, select F11: Company Features Tab down to or simply click on No of the last option 'Set/Alter other Company Features?' Set it to Yes. You bring up the Advanced Features one of which is Use Pre-defined Cost Centre Allocations during Entry – Cost Centre Classes.

Set this option to Yes. (The other options can remain as previously set and are not discussed here.) You now bring up the Cost Centre Class creation screen. Type in the Class names and select the Categories and the respective cost centres. Specify the percentage of allocation. After entry, your auto-cost allocation screen will appear as follows :

We have created the Cost Classes as Export, Wholesale, Retail and Marketing Expenses. Divisions and Departments are cost categories. Export, Wholesale and Retail are cost centres under Divisions. Marketing Group is a cost centre under Departments. Although the names of the class and the cost centres are the same in the example, you need not have them with same names.

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Voucher Entry with Cost Classes

Each voucher now contains the Cost Class option at its head. Select Not Applicable in case you want to allocate manually. Select a cost class to auto-allocate according to the predefined percentages set in that class. We will take two examples, sales and payment. In sales, we will select Export as the Cost Class. Go to the Voucher Entry Screen Select F8: Sales You have the following options:

Your voucher type : Sales. You could select another voucher type if required. Class This is the Voucher Class which automates ledger allocation and additional accounting entries Cost Centre Class Select one of the classes created earlier, Export in this case. Now enter the sales invoice as usual. The cost centre allocation sub-screen will not come up and the allocation will be done automatically in the background. After accepting the entry, check the cost centre displays to verify whether the allocation was done correctly. Similarly, when you press F5:Payment, you are presented with similar options. Select Marketing Expenses in that case. The cost centre allocation sub-screen will not come up and the allocation will be done automatically in the background. Check the cost centre reports for allocation. You may even use PgUp or alter the voucher to display the allocation made. It would show the allocation in the voucher. Example

You could combine Voucher Class and Cost centre class to maximize automation!

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An Explanation of 'Types of Calculation'

As Additional Excise
In the Indian sub-continent, a manufacturing tax, or Excise is levied. For some products, a supplementary levy on the 'Basic Excise Duty' is charged, or 'Additional Excise Duty'. This is a surcharge calculation. For example, an Additional Excise Duty of 10% on the Basic Duty. While the calculation method is identical to 'As Surcharge' (see below), the result is to provide a 'Total Excise Payable' calculation accurately during Invoice printing.

As a Flat Rate
When you wish to specify a standard mark-up/down on an invoice. For example, 100.00 for every invoice, independent of the qty/value of the invoice.

As Surcharge
When you wish to calculate the value based on the immediately preceding figure. For example, a Sales Tax of 10% is applicable on an invoice, which would be calculated on the value of goods sold. On this, a 'Surcharge' of 5% - i.e. 5% of the Sales Tax value is applicable.

As Total Amount Rounding
Typically, the last line in an invoice. You would need to create an account which would carry the 'rounding difference'. Now, as the other values of the invoice are calculated, this account would automatically get adjusted to keep the Total Invoice Value to the desired rounding limits. Normally, you would also mark this invoice as 'Remove if Zero ? Yes', so that the account head is not retained in the invoice print-outs if no rounding was applicable.

As User Defined Value
This allows you to specify a value while creating the invoice itself. Normally, you would use this when the basis of calculation is neither Value nor Qty dependent, and therefore, needs to be entered every time you create an invoice.

Based on Quantity
In case of calculations based on the 'Total Qty' supplied. For example, you may have Freight or Forwarding charges as 2.00/Kg, and if the total qty supplied in the invoice is 200.000 Kg, then the amount should become 400.00. The 'Value Basis' will also need to be provided as '2.00/Kg' or '0.50/Pc' as the case may be.

On Current Sub Total
In certain environments, taxes are applicable on the Total Goods Value as well as supplementary charges such as 'Excise Duty', 'Packing Charges' etc. Normally, when the tax calculation method is

specified as 'On Total Sales' (see below), the calculations are based on the Total Goods Value only. When you wish the supplementary charges to be included, then you would set 'On Current Sub Total' as the type of calculation.

On Item Rate
Typically used for both VAT as well as Excise Duty style calculations. Here, you would have specified the Rate of Tax applicable for each Stock Item, and you would want only those items to be used for calculation purposes which equals this Rate of Tax. The advantage is to be able to mix multiple Tax Rate products in the same Invoice, and yet get the correct ones picked up for each Tax bracket.

On Total Sales
The most common basis of Tax Calculation is on the total value of goods/services. This method would calculate using the sum of Stock Items used in the invoice.

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Currencies

(Multiple currencies and foreign exchange)
Introduction
For many organisations, globalization of business has necessitated working with more than one currency. Transactions are often made in currencies other than the home currency. Such 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. 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. Note: 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. More:

Managing and operating multiple Currencies

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Managing and Operating Multiple Currencies

You must first activate multi-currency capabilities. Gateway of Tally > [F11]:Features

Now, let us work with currencies. Gateway of Tally > Accounts Info. > 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.

More: Create a foreign currency master Alter Currency Rates of Exchange

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Create a Foreign Currency Master

You will now need to create the foreign currencies that would be used.

Gateway of Tally > Accounts Info. > Currencies > Create

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. 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

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.

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Alter Currency

If you do not have multiple currencies, the Alter screen is identical to the Display screen. When you have more than one 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.

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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 specify the rates of different currencies for a day. Note: the date column in the previous Alter screen. Standard 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 banker. If you input this rate before any transaction entry, while 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 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 – 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

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Inventory Information

The different inventory information that you would provide to Tally by way of masters are: Gateway of Tally > Inventory Info

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 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 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 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. 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. Note: 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: Note: 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.

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Advanced Usage

Configuration
And company features affecting inventory information You can control the detail and type of information that you need from the [F12] configuration settings and [F11] company features settings. Carefully study your needs and select the desired options. Of course, Tally allows you to modify most settings at any time. [F12]Configure > Accts/Inv Info

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 These issues need to be discussed here, as they would determine the information to input during transactions entry. More: Maintain Stock Categories? Maintain batch-wise details? Set expiry date for batches? Maintain multiple locations (godowns)? Use Tracking Numbers? Use Rejection Notes? Use different Actual & Billed Qty? Track additional costs of Purchase?

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Maintain Stock Categories?

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. Note: 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.

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Maintain Batch-wise Details?

This option is for maintaining batch information pertaining to stock items. The batch does not extinguish itself after it is 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.

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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. Note: 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.

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Maintain Multiple Locations/Godowns?

If you have more than one stock point/storage locations/warehouses/godowns, and you want to track stock movement in these locations, set it to Yes. Tally permits any 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.

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Use Tracking Numbers?

Quite often businesses do not issue invoices (bills) along with the goods they deliver. Goods are accompanied by a document 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. Note: Goods Receipt Note and Goods Delivery Note voucher types are not available if you do not use tracking numbers.

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Use Rejection Notes?

Yes, if you wish to record rejection of goods separately and not through a common Goods Receipt Note or Goods Delivery Note.

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Use Different Actual & Billed Qty?

This option enables you to specify quantities, that are different from that delivered, when invoicing, and record the fact. It is 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 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.

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Track Additional Costs of Purchase?

If you enable this option, you are allowed to obtain a break-up of purchase costs, without the need to separately debit ledger accounts for expenses. Typically, on Purchases, one is interested in total costs and the break-up is of interest for analysis (except for expenses like VAT or Modvat, which are reclaimable). In such cases, you do not want to pass accounting entries for expenses, which are of no consequence other than lengthening your ledgers. For example; You purchase from ABC & Co 10 Pcs of Widgets @20/- = 200/-. Expenses incurred=Tax-20/-, packing charges –15.40/-, Total purchase cost – 235/-. When Track additional costs is enabled, you will pass the entry in either of following two ways:

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:

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 Tally > Inventory Info > Stock Groups

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'. 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 More: Creating a Stock Group Expert Usage Display or Alter a Stock Group

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Creating a Stock Group

Gateway of Tally > Inventory Info > Stock Groups > Single Create

Name Give the name of the stock group. Here we wish to create a group Sony. 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. Display/Alter Stock Group Buttons in single mode stock group creation Category Items Budget Location Vch Types Units Currency You may switch to these master types to create them. Currency & Budget option are activated only when you have opted for the same in [F11]:Company Features.

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Expert Usage

Creating multiple Stock Groups
Gateway of Tally > Inventory Info > Stock Groups > Multi 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. 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, i.e.,remain same as Specified for the parent Stock Group, then 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/Godown Display/Alter Stock Group

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Display or Alter a Stock Group

Gateway of Tally > Inventory Info > Stock Groups > Single/Multiple Display Or Gateway of Tally > Inventory Info > Stock Groups > Single/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 Tally > Inventory Info > Stock Groups > Single Alter Press [ALT]+[D] to delete the stock group Note: You cannot delete a stock group from multiple mode.

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Stock Categories

Gateway of Tally > Inventory Info > Stock Categories

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. Note: This option will come up in the menu only if you have opted for stock categories in [F11] Company Features. Stock Categories offers parallel classification of items. You may create Stock Categories like Floppy Disks and Floppy Drives. In the example given 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. More: Creating a Stock Category Expert Usage Display or Alter a Stock Category

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Creating a Stock Category

You can create sub-categories of Stock Categories to better organise your information. Gateway of Tally > Inventory Info > Stock Category > Single Create

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/Godown Budget Vch Types Units Currency You may switch to these master types to create them. Currency & Budget option are activated only when you have opted for the same in [F11]:Company Features. Display/Alter Stock Category.

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Expert Usage

Creating Multiple Stock Categories
Gateway of Tally > Inventory Info > Stock Categories > Multi 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. 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. Use the following buttons to switch to the respective masters for creation Groups Item Location/Godown Display/Alter Stock Category.

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Display or Alter a Stock Category

Gateway of Tally > Inventory Info > Stock Categories > Single/Multiple Display Or Gateway of Tally > Inventory Info > Stock Categories > Single/Multiple Alter 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. 1. 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. 2. 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 item or both. Gateway of Tally > Inventory Info > Stock Categories > Single Alter Press [ALT]+[D] to delete the stock category Note: You cannot delete a stock category from multiple mode.

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Stock Items

Gateway of Tally > Inventory Info > Stock Items

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. More: Creating a Stock Item Expert Usage Display or Alter a Stock Item Advanced Usage

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Creating a Stock Item

(Please refer to the Advanced Usage section for other fields/information that would appear if activated in the Inventory configuration and company features. This section deals with creation of basic stock item). Gateway of Tally > Inventory Info > Stock Item > Single 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 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. 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/Godown Budget Vch Types Units Currency You may switch to these master types to create them. Currency & Budget options are activated only when you have opted for the same in [F11]: Company Features. Other options like categories appear only if they too were activated. Display/Alter Stock Item.

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Expert Usage

Creating multiple Stock Items
Gateway of Tally > Inventory Info > Stock Items > Multi 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.

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 pop-up 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. F9:Skip Category To avoid the curser going to the Category field ,use this button .It toggles with Edit Category. Which allows entry of Category details. Use the following buttons to switch to the respective masters for creation Groups Category (if activated) Location Display/Alter Stock Item Advance Usage

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Display or Alter a Stock Item

Gateway of Tally > Inventory Info > Stock Items > Single/Multiple Display or Alter Select the stock item whose particulars you wish to display. When you display or alter a stock item, the information entered while creating it is displayed.

Delete a Stock Item

You can delete a stock item only if it has not been used form transaction entry. Gateway of Tally > Inventory Info > Stock Items > Single Alter Press [ALT]+[D] to delete the Stock Item Note: You cannot delete a Stock Item from multiple mode.

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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. Note: 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. Gateway of Tally > Inventory Info > Stock Items > Single 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.

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. More: Remarks Alternate Units Enter Standard Rates? Bill of material and Costing method

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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.

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Alternate Units

This is another unit, apart from the main unit, that you can use for the stock item. This is particularly useful when you need to 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.

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Enter Standard Rates?

If you wish to specify standard purchase and sales rates for the item, select Yes. Standard rates enable valuation of inventory at 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.

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Bill of Material and Costing Method

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 subassemblies 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 :

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 Difference 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.

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? If you wish to avoid the need to pass entries for manufacture or goods in and have them automatically done when goods are sold, select Yes. This way you also avoid negative balances in the stock records. It is particularly useful for smaller manufacturing companies that make things but do not want the problem of receipting stocks. Treat all Purchases as consumed? This is quite the converse of the previous question. Issues are automatically raised for all goods purchased, if you select this. 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.

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Reorder Levels

Reorder level is that quantity in hand for a stock item, reaching which, you should order your supplies. The importance of reorder level arises from the desire to have sufficient stocks to service customer orders and at the same time not to have unnecessarily high stocks. Therefore, the points to be considered in deciding reorder levels are the lead time for suppliers to deliver stock , the delivery time specified by the customer, and the stock in hand to satisfy orders in the meantime. In simple mode, Tally accepts your specified quantities only. In advanced, Tally considers past consumption patterns to suggest reorder levels. You can however, give your own levels. You may also specify the minimum quantity that is to be placed for each order in either simple or advanced mode. The purpose of specifying reorder levels is to obtain a report that indicates the stocks that need to be ordered. Hence, we will first specify and then obtain the report. More: Specifying Reorder Levels Obtain Reorder Status and Quantities to order Alter Reorder Levels and minimum quantities

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Specifying Reorder Levels

Gateway of Tally > Inventory Info > Reorder Levels Select the Group of stock items for which to specify reorder levels Say, you select Software Note that for each item a reorder level and minimum order quantity can be specified. If you click on the Simple Reorder button, the consumption alternatives will not be available and you will input the quantities. For each item's Reorder level and Minimum Order Quantity the entry options are identical and they are: Level/Quantity It requires input of quantity. Or Consumption of Last Here you are given the option to let Tally calculate the reorder level/order quantity based on past total consumption for a chosen period. Past periods offered are: Days, Weeks, Months and Years. Please note that it is not average consumption for the period but total consumption. Give 0 if you do not want the previous consumption for an item. Which ever is Higher/Lower Select whether you want the higher of the two – i.e., input level/quantity or calculated Rounding Method And specify whether the calculated quantity should be rounded and the method.

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Obtain Reorder Status and Quantities to Order

Gateway of Tally > Display > Statements of Inventory > Reorder Status Select from List of Groups of Stock Items In this case Software is selected. On selection:

This report gives you the reorder status for stock items under the stock group Software. To remove those items for which there is no order to be placed, click on the button Reorder Only. In particular, you have the following information: Apart from knowing the quantity to be ordered, you are able to move your cursor on the fields and drill down for more relevant information. Name of the Stock Item Press Enter on this for suppliers of this item and the details of their previous supplies Stock in hand Drill down for Monthly Inwards and Outwards Summary and further details. Purchase Order Pending Sales Orders Due Hence, Free Stock Available for sale Reorder Level Drill down to the specification sheet for the item which you can even modify! Shortfall As calculated Minimum Reorder Quantity As determined from the specification. Drill down to the specification sheet. And finally Order to be placed

Print this statement or send it for action to place orders!

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Alter Reorder Levels and Minimum Quantities

There are two ways to alter/amend already specified Reorder levels and minimum order quantities. 1. Gateway of Tally > Inventory Info > Reorder Levels It is a single menu without separate Create and Alter options. 2. Drill down in the Reorder Status Report As explained above for the fields Reorder Level and Minimum Order Quantity drill down these field to amend specifications.

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Locations/Godowns

You may want to distinguish between stock held on-site and at the warehouse, and this can be done by creating two separate stock locations. You may even amend Tally's default location and 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. More: Create a Location Displaying and Altering Stock Locations

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Create a Location

Gateway of Tally > Inventory Info. > Locations > Create

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. 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.

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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.

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Voucher Types

This is exactly similar to Voucher Types under Accounting section. Please refer to that section. You may wish to alter existing inventory voucher types or create new ones based on those existing.

Note: 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.

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Units of Measure

You will need to create units of measure for stock items. These can be simple units such as numbers., metres, kilograms, pieces, or compound units, e.g. box, where, say, one box equals ten pieces.

More: Create a Unit of Measure Compound Units

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Create a Unit of Measure

Gateway of Tally > Inventory Info. > Units of Measure > 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. 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. Note: 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. More: Displaying and Altering Units of Measure

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Displaying and Altering Units of Measure

Gateway of Tally > Inventory Info. > Units of Measure > 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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Introduction

Price Lists are useful for orders and invoices. An up-to-date price list helps in decisions at even the lower levels of the organisation and quickens the sales process. Tally assists in creating quantity based pricing with complex discount structure. Price Lists are available only for inventory items and hence the feature is available only if inventory and invoicing are activated for the company. You can have one or more price lists. More than one price list is required when you have different price structures or levels for different purposes, usually, different groups of customers requiring different discounts or dealing in different products.

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Price Levels

Customers can be assigned to specific price lists, called Price Levels in Tally, so that only the relevant price is used during entry of orders and invoices. Before you begin creating Price Lists, you should decide whether you want different price levels. In a running business, you will already know that. You might want different price levels for various reasons; e.g., different types of customers like wholesale customers, retail customers, export customers and so on. Each customer type could have a different discount structure. Write down on a piece of paper the price levels/bands that are required.

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Enable and Create Price Lists

Ensure that the company has been set up for Accounts with Inventory. F11:Company Features Allow Invoicing – set to Yes (without invoicing the option for Price Lists will not be available) Tab down to: Set/Modify other company features –set to Yes Use Multiple Price Levels for Invoicing – set to Yes

Type out the price levels that you wrote on the paper earlier.:

Accept through each screen of Company Features by pressing the Enter key (do not press escape) and return to Gateway of Tally. Alter Price Level names To alter the name of a price level, go through the same procedure as enable and create Price Levels.

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Assigning Ledger Accounts to Price Levels

When the Price List feature is activated, it enables an option in party (debtor and creditor) ledger accounts where the account can be assigned or tagged to a specific price level. An account can be assigned to only one Price Level. If the ledger accounts already exist and you wish to assign them to a price level, you have to alter the ledger account. If it is a new ledger account, the option to select a Price Level will be available. Either way, the options will be the same and therefore, we will take alteration of an account as an example. Gateway of Tally > Accounts Info > Ledger > Alter (single) Select the ledger account, e.g. CP Limited

Tab down to Pricing Level Applicable and select Export Accept the rest of the options and return to Gateway of Tally. You may assign other ledger accounts in this way. It is not mandatory to carry out the assigning activity before creating price lists. It can be done even after price lists are created. The Pricing Level can be changed to reflect changed circumstances. For this, simply alter the ledger account and select a different pricing level option.

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How to Create and Use Price Lists

Gateway of Tally > Inventory Info > Price List If the price list option does not appear, confirm the activation procedure given in the introduction above. From the list of Stock Groups: Select a group, e.g., Software.

Under Group To select a stock group whose items will be given prices. Price Level To select a Price Level. This is the level to which a specific group of ledgers (customer accounts) will be assigned. Applicable From

The date from which the price list is applicable. The columns are: Sl No A simple serial number to track the number of items in the price-list. Name of Item Name of the stock item for which the price may be given. Quantities - From & Less Than These fields are repeated for an item and begin with a blank for 0 items and end with a blank for any number of items. This is useful for quantity based pricing and discounts. A staggered quantity price structure can be created if needed. If no quantity based pricing is required, simply keep both the From and Less Than fields blank. Rate & Discount (if any) For each quantity band give a specific price or keep the price the same for all bands but give different discounts. Different methods can be given for different items. Previous Price List Rate and Discount If a price list existed before the Applicable From date, it will be displayed. Cost Price The Cost (based on the Cost method set for it) of the item is displayed to help deciding prices. Print/Export/Email/Upload Price Lists Simply select the relevant button while the price list is displayed to print it or to send by e-mail or even to publish it.

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Price Levels in Voucher Entry - Invoicing

Price levels automate invoice pricing and help avoid errors. The entry can be configured to prevent using a different price than set. First configure to prevent changes to price settings in a voucher Gateway of Tally > F12:Configure > Invoice/Orders Entry

The Allow modification of ALL fields during entry should be set to No to prevent changes to prices. Setting it to Yes will allow overriding set prices. Now an example invoice entry: Gateway of Tally > Voucher Entry > F8:Sales > As Invoice

A new field Price Level appears and it is already selected for the party on the basis of assignment made earlier. If a price level was not assigned in the ledger master for the party, the cursor moves to that field to allow selection. The cursor skips the field in case the assignment was already made and the entry is configured (through F12 to prevent all changes. On selecting the stock item and the quantity, the price is filled in automatically and the cursor skips the price fields again. Override price list during voucher entry In case overriding price lists during invoicing is required, then the Invoice/Order Entry should be configured to allow modification to ALL fields. Set it to Yes.

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Simple Voucher Entry

You should set the configuration for voucher entry so that only those features that you require appear when entering vouchers.

We shall first learn simple vouchers, for accounting and inventory. Extra information would be dealt with under Advanced Usage section. Hence, in the voucher entry configuration, set all the features to No. Selectively set to Yes only those features that you want. (To be discussed under advanced usage) Gateway of Tally > F12: Configure > Voucher Entry

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. More: The Voucher Entry screen Special keys for voucher narration field

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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 this area, and in the current version of Tally, is limited to 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:

Switching between screen areas On selecting Voucher Entry from the Gateway of Tally, you are taken to the main voucher entry area. However, you may toggle between this and the Direct Commands/Calculator area at the 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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Special Keys for Voucher Narration Field

ALT + R: Recalls the Last narration saved for the first ledger in the voucher, irrespective of the voucher type. CTRL + R: Recalls the Last narration saved for a specific voucher type, irrespective of the ledger.

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Types of Vouchers

Tally is pre-programmed with a variety of accounting vouchers, each designed to perform a different job. The standard 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 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. More: Contra Entry (F4) Payment Entry (F5) Receipt Entry (F6) Journal Entry (F7) Sales Entry (F8) Sales and Purchase Voucher Entry Unconventional Vouchers How to enter Vouchers Sales and Purchase Voucher Entry

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Contra Entry (F4)

Gateway of Tally > Accounting Vouchers > selecting F4: Contra > displays the Contra voucher entry screen. As per accounting rules, Contra Entry is a transaction indicating transfer of funds from: 1. Cash account to Bank account 2. Bank account to Cash account 3. Bank account to Bank account Contra Entry screen appears in the Single Entry Mode by default. You are prompted to choose the account, which will receive the amount (the debit ledger). For example, you wish to transfer of funds from Cash Account into Bank Account – you will debit the Bank Account and credit the Cash Account > the entry appears as:

The ledger selected in "Account" (State Bank of India) is the destination ledger – debited. Advantages of Single Entry Mode: 1. Faster data entry! 2. Selection of Multiple Ledgers to be credited with a Single Ledger to be Debited OR Multiple Ledgers to be debited with a Single Ledger to be Credited -> depending on the nature of transaction. Important: 1. Use the buttons on the right-hand side of the screen to Explore the Potential of Tally. 2. Press [Enter] wherever the cursor is placed to know the Depth of Tally! More: Contra Entry - Double Mode

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Contra Entry - Double Mode

In Double entry mode – you can select multiple debit and credit ledgers. To do so, on the Contra voucher screen, click on F12: Configure and set the option "Use Single Entry Mode for Payment/Receipt/Contra" to NO. The entry displayed in Single Mode appears in Double entry mode as:

In the above example, we have transferred from Cash account to our Bank account. Here, the first credit "To Cash" is the source and the following debit "By State Bank of India" is the destination. Use F2: Date to change the date of the voucher. If you require Dr/Cr instead of To/By –> as explained in the Configuration section, please activate the required feature in F12: Configure.

1. In the above example, we have changed the date to 2nd April 2001 and we have Dr/Cr instead of To/By.

2. As the contra voucher is active, the Buttons of the other voucher types of Payment, Receipt, Journal, Sales and Purchase are visible. Important: 1. Use the buttons on the right-hand side of the screen to Explore the Potential of Tally. 2. Press [Enter] wherever the cursor is placed to know the Depth of Tally!

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Payment Entry (F5)

Gateway of Tally > Accounting Vouchers > selecting F5: Payment > displays the Payment voucher entry screen. Payment transactions can be entered using Tally's Payment Voucher. The Payment Entry screen appears in Single Entry Mode by default (as the option "Use Single Entry mode for Pymt/Rcpt/Contra" is set to YES > in F12: Configure from Payment Voucher). For example, the company settles expenses of conveyance, staff welfare, postage and stationery through cash – all in one voucher. The entry is displayed as:

You are prompted to choose the cash or bank ledger, which will pay the amount (the credit ledger). Click on the links under "More" for more information on Payment Vouchers. More: Payment Entry - Double Mode Payment Entry – Single Narration Payment / Receipt as Contra Warn on Negative Cash Balance Cheque Printing

How to print Cheques Trouble-shooting Cheque printing TDS Payment

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Payment Entry - Double Mode

In Double entry mode – you can select multiple debit and credit ledgers. To do so > on the Payment voucher screen, click on F12: Configure and set the option "Use Single Entry Mode for Payment/Receipt/Contra" to NO. The entry displayed in Single Mode appears in Double entry mode as:

Advantages of Double Entry Mode:
1. You can select any number of ledgers to be debited and credited in the payment voucher. 2. You can view on screen whether a ledger has been debited or credited – thereby enabling you to cross-verify.

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Payment Entry – Single Narration

In Payment transaction - Single and Double entry modes – you viewed the vouchers with common narration – where the narration details are given for the entire voucher at the end.

However, if you want the narration details for every ledger you debit or credit (Single narration) – you can configure Tally's Narration details accordingly. To do so > from Gateway of Tally > Accounts Information > Voucher Types > Alter > select the required Voucher Type and activate the option Narrations for each Entry and accept the details. Return to Accounting Vouchers on Gateway of Tally and enter a payment voucher as required. Given below is an example of a Payment transaction with narrations for each entry:

The entry consists of both common narration and narrations for each entry – the advantage being in case of multiple debit / credit entries - you can give single line narration separately - for every ledger account selected.

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Payment / Receipt as Contra

To indicate transfer of funds from Bank to Cash, Bank to Bank and Cash to Bank – Tally has a voucher type called Contra. However, for users who wish to use the Payment and Receipt vouchers for this nature of transaction > Tally has the flexibility of defining Payment and Receipt behaviour as per Contra voucher by activating the option "Use Payment / Receipt as Contra". On the Payment entry screen, access F12: Configure > activate the option "Use Payment/Receipt as Contra" – an explanation is given below: Using the space bar in the debit field in the payment voucher screen, you notice that the cash and bank accounts are not displayed:

By activating the option "Use Payment/Receipt as Contra" in F12: Configure > the screen appears as:

Important: 1. Use the buttons on the right-hand side of the screen to Explore the Potential of Tally. 2. Press [Enter] wherever the cursor is placed to know the Depth of Tally!

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Warn on Negative Cash Balance

You can configure Tally to warn you incase the Cash ledger reaches a negative balance. On the Payment voucher screen > F12: Configure > activate the option Warn on Negative Cash Balance and accept the settings. Example: Assuming our cash balance is Rs. 53000/- and we need to make a payment of Rs. 55000/- towards advertising expenses. This results in a negative balance. The entry is displayed as:

Tally warns and displays the credit cash balance in RED! The user can accordingly decide whether to proceed with the entry or not. An important feature available only for Payment Vouchers is Cheque Printing. Important: 1. Use the buttons on the right-hand side of the screen to Explore the Potential of Tally. 2. Press [Enter] wherever the cursor is placed to know the Depth of Tally!

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Cheque Printing

You can choose to write cheques directly from Tally. Cheques will be printed when printing a Payment Voucher. However, first activate the capability in F11:Company Features and set the dimensions. Tally accepts user defined cheque dimensions! Gateway of Tally > F11: Features > Set/Modify other Company Features Enable cheque printing – Yes

Company Name on Cheque: If you want Tally to print the company name on the cheque for signature purposes, give the name e.g. Demo Company Limited. If you do not want Tally to print the name, leave it blank. Many banks give cheques with your company name already printed on it, in which case, you do not want Tally to print it. Name of Banks: Type the name of the bank. The name should also exist as a ledger account in Tally. You now fill in the dimensions of the cheque. Take the bank's chequebook and measure the dimensions of a cheque carefully in millimetres and fill the form. You may need to correct it after trying out a couple of cheques so that the positioning is accurate. The placing of the cheque in the printer also determines the printing. Trial could be made on photocopies of a cheque before using an actual cheque leaf.

All the fields are self-explanatory. Note the Salutation fields; these are for signatures and naturally follow the Company name (that you might have chosen to print), e.g. Director. The program would then print:

For Demo Co. Ltd Director If your cheque has two signatories, both can be specified. Both could be the same salutation or different, e.g., one could be Director, the other could be Secretary, etc. Give whatever you currently use. Many banks will pre-print both the company name and the salutation, in which case leave them blank. You are now ready to print the cheque. Remember that the option is available only for the banks that you set up for.

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How to Print Cheques?

Gateway of Tally > Voucher Entry > F5:Payment Cheque printing option is available only from Payment Voucher. Name on the Cheque You debit the party and give the bill reference details if any. Credit the bank for which the cheque dimensions were set up. In the example it is Natwest Bank. On selection, the Name on the cheque is filled with the Debit account name. You can change it if necessary, e.g., in case the debit account name is an expense head but the cheque is made out to a supplier/creditor like Telephone Expenses is debited but Cheque is to be made out to British Telecom. Cross Cheque using This is filled in by the most common words used - Account payee. However, you can change it.

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Trouble-shooting Cheque Printing

Go to F11:Features and check the dimensions. Ensure that you have not left any field, other than the salutation fields, blank. Trial and error is the only way to get the printing in the right positions. Therefore do not panic if some words do not print in the correct positions. Change the set-up a couple of times to set it right. This is necessary to be able to print on the many different cheque styles used by different banks.

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Receipt Entry (F6)

Gateway of Tally > Accounting Vouchers > selecting F6, we get the Receipt voucher screen. Similar to Payment and Contra vouchers – the Single Entry Mode appears for Receipt Entry as well. Transactions accounting for money received are entered into Tally through the receipt voucher. For example, your company receives money from a customer for an earlier transaction. The customer account has to be credited and if cash is received – debit the cash account. If cheque is received debit the bank account where you will deposit the money received. The entry in double-entry mode is displayed as:

On the Receipt entry screen, access F12: Configure -> activate the option "Use Payment/Receipt as Contra" – the behaviour is similar to that of Payment entry as Contra. Important: 1. Use the buttons on the right-hand side of the screen to Explore the Potential of Tally. 2. Press [Enter] wherever the cursor is placed to know the Depth of Tally! More: Print Formal Receipt after saving

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Print Formal Receipt after Saving

For example, the company receives a certain amount from the customer against a particular invoice and a Formal Receipt has to be issued acknowledging receipt of the same. Tally's Formal Receipt printing fulfils this requirement. To activate this facility: 1. From Gateway of Tally > Accounts Info > Voucher Types > Alter > Receipt 2. Set the option Print Formal Receipt after saving to YES and accept the same 3. Viewing the Receipt Voucher screen – one can observe an additional field "Name on Receipt" – the entered receipt voucher will have the name given here. (The receipt will be printed either having the Ledger Name or the name given in the "Name on Receipt" field.) Enter a receipt voucher and Tally prompts to print the Formal Receipt (to be issued) and then the Receipt Voucher (for the company's records).

The Formal Receipt prints as:

The Receipt voucher for the same information prints as:

The information required can be configured in F12: Configuration after giving the Print Command. Important: 1. Use the buttons on the right-hand side of the screen to Explore the Potential of Tally. 2. Press [Enter] wherever the cursor is placed to know the Depth of Tally!

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Journal Entry (F7)

Gateway of Tally > Accounting Vouchers > selecting F7: Journal. Journal entries are used in instances where the company requires to adjust the debit and credit amounts without involving the cash or bank accounts. Hence, they are referred to as adjustment entries. For example, there may be entries made for interest accrued or interest to be paid. If a party is involved in such a transaction – the entry will be

DrParty CrInterest Account The entry appears as:

Journal entries are used usually for finalization of accounts. For more options in Journal Entry – please click on the links under "More". Important: 1. Use the buttons on the right-hand side of the screen to Explore the Potential of Tally. 2. Press [Enter] wherever the cursor is placed to know the Depth of Tally! More: Cash Accounts in Journals TDS Deduction in Journals VAT in Journal

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Cash Accounts in Journals

Journals are adjustment entries (as stated earlier). However in many cases companies require journals to account for day-to-day transactions – where Cash or bank accounts are required. Tally supports this requirement through the option "Allow Cash Accounts in Journals". In Journal entry screen - press the spacebar at the debit or credit fields > the screen is displayed as:

Click on F12: Configure > set the option "Allow Cash Accounts in Journals" to YES and accept the settings. Now press the spacebar at the debit or credit fields and the screen is displayed as:

The journal entry can be accordingly made. Important: 1. Use the buttons on the right-hand side of the screen to Explore the Potential of Tally. 2. Press [Enter] wherever the cursor is placed to know the Depth of Tally!

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Sales Entry (F8)

When a sales transaction takes place, a document, detailing the transaction (item name, tax, etc) has to be given to the buyer (debtor) as proof of purchase by him. This document is called "Invoice" or "Bill" or "Cash Memo". The practice of issuing an Invoice, which is in vogue, is available in Tally. Gateway of Tally > Accounting Vouchers > selecting F8, Tally displays the Sales Invoice

screen. The Invoice mode is default. To enter details of sale transactions – use Tally's Sales entry (F8 – in Accounting Vouchers). Sales entries can be made in the Voucher as well as Invoice Formats. Invoicing or sales invoicing is not very different from sales voucher entry. The advantage of using the invoice format for sales invoice entry is that, automatic calculations of taxes and duties (ledger accounts classified under the group 'Duties & Taxes') is possible. The default Sales Invoice screen appears as:

Tally prompts for the Sales Ledger to be allocated to - at the beginning of the entry. There after, any number of stock items or account ledgers can be selected one after another – enabling faster data entry. This is possible as the option Use Common Ledger A/c for Item Allocation in F12: Configure on the invoice entry screen is set to YES (by default) There are two types of Invoices, namely, Item Invoice > you can select ITEMS for invoicing Account Invoice > you can select LEDGERS for invoicing Note: Click on the links – "Example" for more details More: Sales Item Invoice Sales Account Invoice

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Sales Item Invoice

Invoicing is generally used for sale of stock where the details of the items sold are listed. Selecting the Item Invoice allows you to select the stock items to be invoiced. This format is more commonly used by trading and manufacturing organisations.

On the Sales invoice screen - click on the button (Item Invoice) on the right-hand side of the screen and the Sales Item Invoice appears as:

Tally's Item Invoice mode - displays the list of stock items, which can be invoiced as required. The Item Invoice button toggles with Account Invoice. Important: 1. Use the buttons on the right-hand side of the screen to Explore the Potential of Tally. 2. Press [Enter] wherever the cursor is placed to know the Depth of Tally!

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Sales Account Invoice

As stated earlier - Invoicing is generally used for sale of stock where the details of the items sold are listed. However, for users (professionals such as doctors, consultants, etc) who require to invoice for certain services provided – such as consultancy charges, professional fees, etc - Tally's account invoice can be used. Trading and manufacturing organisations can also use the Account Invoice for invoicing service charges, etc. On the Sales entry screen, click on the button Acct Invoice on the right-hand side of the screen – the Sales Account Invoice appears as:

Tally's Account Invoice mode - displays the list of ledger accounts, which can invoiced as required. This is unlike Item Invoice where Tally displays the list of stock items. The Acct Invoice button toggles with Item Invoice. Important: 1. Use the buttons on the right-hand side of the screen to Explore the Potential of Tally. 2. Press [Enter] wherever the cursor is placed to know the Depth of Tally!

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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. More: Inventory allocations VAT

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Inventory allocations

Inventory items need to be considered in financial vouchers in cases where you use ledger heads that have stated 'Yes' to the question 'Are Inventory Values affected?'. (Display your Sales Account to verify). Typically, you will have the accounts of the 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]. Location If you have more than one location, you must specify the 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, 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). Quantity Normally, no explanation is required. However, you can set Company Features to allow Actual and Billed Quantities. Then, 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 In all multiple allocations or selections, you must either be required to select the option End of List or press [Enter] at the first blank field. This would accept the multiple allocation and take you back to the parent screen. E.g., Multiple locations, batches or items.

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Unconventional Vouchers

These special vouchers are used to record provisional or non-accounting transactions. They do not clutter the main books of accounts with unnecessary entries and at the same time make the information available. These vouchers enable valuable reports in terms of provisional accounts and forecasting. This aspect of reporting has been dealt with under a separate section 'Scenario Management'. More: Memo Voucher Memorandum Voucher Register Optional Voucher Optional Vouchers Register

Reversing Journals Reversing Journal Register Post-dated Vouchers Post-dated Vouchers Register

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Memo Voucher

This is a non-accounting voucher and the entries made using it will not affect your accounts. That is, Tally does not post these entries to ledgers but stores them in a separate Memorandum Register.

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.

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Memorandum Voucher Register

View all memorandum vouchers through Display > Exception Reports > Memorandum Vouchers. View them from the Day Book as well. You can alter and convert a Memo voucher into a regular voucher when you decide to bring the entry into your books. Use Scenarios to see the effect of Memo entries on reports and statements.

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Optional Voucher

This is another non-accounting voucher. However, it differs from the Memo voucher in that it is not a separate voucher type. 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 make a voucher type default to 'Optional'. This is done during creation of a new voucher type or alteration of an existing voucher type. (Gateway of Tally > Accounts Info > Voucher Types). Use of Optional Vouchers 1. If a transaction has not been completed, you may 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, an optional sales invoice prints as a Proforma Invoice. 2. You might want to see the impact of transactions without actually posting them. Optional vouchers allow you to do so. This not unlike the reversing journal. Use Scenarios to see the effect of Optional vouchers entries on reports and statements.

Forecasts You may create new voucher types and make them default to 'Optional'. Example: Create a New Voucher Type Sales Forecast. Record future sales projections using this voucher type. 1. Use a Scenario to view Actual Sales against Forecasts. Normally, since these vouchers have no bearing on the books and statements.

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Optional Vouchers Register

You can view all optional vouchers through Display > Exception Reports > Optional Vouchers. View them from the Day Book as well.

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Reversing Journals

Reversing Journals are special journals that are automatically reversed after a specified date. They exist only till that date and are effective only when called for in reports like the Balance Sheet. These are used in interim reporting in the course of the financial year where accruals are required to be reported. These accruals are usually short term and are cleared in the subsequent period. However, to get a proper perspective, decision makers require the reports with full impact of all aspects and transactions. An example is the provision for depreciation. Depreciation is usually provided for at the end of the year. However, for monthly reporting including it would give a more accurate status.

Another example: it is 30th June and you want to view the Balance Sheet as of today but June salaries are not paid 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. Applicable up to This is the date up to which the reversing journal is available for inclusion in a scenario report. The Reversing journal can be created as of a particular date and made Applicable up to a different date. For example the depreciation entry could be dated 1st Oct 2000 and applicable up to 31st October 2000. The journal will be available for inclusion in a scenario for any day from 1st Oct 2000 till 31 st October 2000. It will does not exist before 1st Oct and will be reversed automatically after 31st Oct and consequently not be available.

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Reversing Journal Register

All vouchers are maintained in a Reversing Journal Register. These are not posted to any books of accounts and are consequently cannot be included in regular reports. They can only be seen through a scenario.

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Post-dated Vouchers

While entering vouchers, you can post-date them, and Tally will 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'.

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Post-dated Vouchers Register

All Post-dated vouchers are maintained in a Post-dated vouchers Register. Difference in the treatment of Post-dated Vouchers and other Unconventional Vouchers The major difference between Post dated vouchers and other Unconventional vouchers is that these actually affect regular books of accounts on the date of the voucher. Post-dated vouchers are not

available for selection in Scenarios.

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How to Enter Vouchers?

You should have gone through the immediately preceding section for the concept of Tally vouchers. Different vouchers may be set 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 > Voucher Entry 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, whether 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. 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. Note: 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. 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. Note: 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. More: Buttons in a typical Voucher Entry screen

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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 Note: 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. Note: The alteration facility is subject to security and access rights. All alterations are available for audit.

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Voucher Classes

Voucher Class is the novel way of automating accounting allocations during Invoice entry. It is a table for predefining the entries that you wish to automate to make Invoice creation a breezy task. This is particularly useful in sales invoicing where you can define once, the nominal ledger account to be credited for each item of sale. Then during voucher entry, the accounting credits for items sold are done automatically. The automation is taken a step further; the additional accounting

entries (that fall below the stock items line) like Tax, freight and other charges can also be predefined to be carried out untouched during actual invoicing. The benefit of this approach is that decision is taken out of the hands of the data-entry operator and control rests with senior management who can set the class parameters. It also reduces chances of errors during voucher entry. Of course, you can still continue to use Tally as before without classes if you do not require it. Classes can also be used to automate the rounding off of values. Rounding method can be preset when defining a class for a single line or for the entire voucher or invoice! Hence, Voucher Class permits: 1. Automation of entries to predefined ledger accounts. 2. Automatic rounding off to preset value limits. Another feature that has been added is the ability to define default sales ledger account to be affected for each stock item. This capability is available for companies maintaining accounts with inventory. Activate it through F12:Configure > Accts/InvInfo. Now when you alter or create a stock item, you can define the nominal ledger account (usually the sales account) which should automatically be credited when you invoice this item. For example, You might have sales ledgers broken up as Sale of Finished Goods and Sale of Intermediates.Let's assume that your finished goods are Computers and intermediate goods are CD ROM drives. Against the stock item Computers, you will specify Sale of Finished Goods as the Sales Ledger account to be affected. Against CD ROM drive you will select Sale of Intermediates. These will be the default sales ledger accounts that will be affected only when invoicing. They can be overridden by the account that you may set in the Class table. The dual facility of ledger allocation with stock item and ledger allocation defined in a class provides the flexibility to permit allocation of different stock items to different sales accounts as set up in the class table. You can either alter the existing Sales Voucher Type or create a new voucher type based on Sales. (From Gateway of Tally > Accounts Info > Voucher Types) The item Name of Class is below Position Index on Reports and above the Numbering Table. Give a name by simply typing it, e.g. Taxable, VAT, Local or Export. You may create more than one class. Hence, you might want to have one Taxable Class and another Export Class. The Class table for that name is created.

The Class Table is split horizontally for accounting allocations and additional accounting entries. More: Default Accounting Allocations Type of Calculation An explanation of 'Types of Calculation' VAT

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Default Accounting Allocations

Ledger Name Select the ledger to be credited for each item sold in the invoice. More than one ledger can be affected for each item, e.g., for Tax-inclusive items, the ledgers to be credited will be Sales and Tax in a definite proportion. This is where percentage comes in. Percentage % Useful in tax-inclusive price cases, you can specify the sales ledger account as, say, 82.5% and in the next line the Tax account with the balance 17.5%. Normally, for tax-exclusive prices, you will give 100% for the Sales account. The % symbol is required to be mentioned. Rounding Method This may be used only where the sales account is NOT 100%. Calculated amounts may be required to be rounded off upwards or downwards or normal. Normal is rounding to the number of decimal places specified for the currency based on the less than 5 & greater than 5 rule. You can set your own rounding off rule e.g. round off to the next whole number. In such a case, you will give

Upwards. Rounding Limit For the previous example, you will set it to 1 to achieve the amount to the next whole number. To round off upwards to the nearest 50P, you will set it to 0.50. Override using Item Default? This a question to be answered Yes or No. Item default here refers to the Sales Ledger account that you may have set for a stock item, e.g. For Computers – Sale of Finished Goods. If in the Class Table here, you mention Sales –Local, and set No to this question, then Sales –Local will be the account affected and not Sale of Finished Goods. Setting it to Yes will affect Sale of Finished Goods. The advantage of this is that you can use different classes to affect different sales accounts. Additional Accounting Entries This part is relevant for Tax and other charges like freight and insurance. Ledger Name - this is self explanatory. You can give more than one ledger.

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Type of Calculation

Different class methods are provided and select the one suitable. The Value Basis that you will provide in the next column will calculate using the type of calculation specified. See below for an explanation of each 'Type of Calculation'. Value Basis Give the amount which is to be used for the Type of Calculation. For percentage, you must use the symbol %. Hence, Tax on Sales is 17.5% on Item Rate to use the rate given in the stock item. The method Total Amount Rounding will round the total invoice and put the difference in the Ledger name mentioned here. Hence, the account Rounding Off will contain the sum that essentially rounds off the invoice to the desired level. Rounding Method and Rounding Limit have been explained already. Remove if Zero? This is a question to be answered Yes or No, essentially to permit Tally to ignore the account and not to make any entry in it if its value is zero. If Yes, ensure that you are permitted to make Zero value entries in F11:Features. No will record the invoice in the ledger account with nil amount. Under normal circumstances, you will probably wish to set this value to Yes. However, in cases such as 'Zero Rated VAT', you may wish to retain the Ledger Account line, even though the calculation yields a nil amount. Effect on Cost Centres Cost centres will remain un-allocated when Classes are used to allocate account entries. Cost centres can also be predefined under Cost Centre Classes. Refer to Cost Centre Classes for further information

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An Explanation of 'Types of Calculation'

As Additional Excise In the Indian sub-continent, a manufacturing tax, or Excise is levied. For some products, a supplementary levy on the Basic Excise Duty is charged, or Additional Excise Duty. This is a surcharge calculation. For example, an Additional Excise Duty of 10% on the Basic Duty. While the calculation method is identical to As Surcharge (see below), the result is to provide a Total Excise Payable calculation accurately during Invoice printing. As a Flat Rate When you wish to specify a standard mark-up/down on an invoice. For example, 100.00 for every invoice, independent of the qty/value of the invoice. As Surcharge When you wish to calculate the value based on the immediately preceding figure. For example, a Sales Tax of 10% is applicable on an invoice, which would be calculated on the value of goods sold. On this, a 'Surcharge' of 5% - i.e. 5% of the Sales Tax value is applicable. As Total Amount Rounding Typically, the last line in an invoice. You would need to create an account which would carry the 'rounding difference'. Now, as the other values of the invoice are calculated, this account would automatically get adjusted to keep the Total Invoice Value to the desired rounding limits. Normally, you would also mark this invoice as 'Remove if Zero ? Yes', so that the account head is not retained in the invoice print-outs if no rounding was applicable. As User Defined Value This allows you to specify a value while creating the invoice itself. Normally, you would use this when the basis of calculation is neither Value nor Qty dependent, and therefore, needs to be entered every time you create an invoice. Based on Quantity In case of calculations based on the 'Total Qty' supplied. For example, you may have Freight or Forwarding charges as 2.00/Kg, and if the total qty supplied in the invoice is 200.000 Kg, then the amount should become 400.00. The 'Value Basis' will also need to be provided as '2.00/Kg' or '0.50/Pc' as the case may be. On Current Sub Total In certain environments, taxes are applicable on the Total Goods Value as well as supplementary charges such as 'Excise Duty', 'Packing Charges' etc. Normally, when the tax calculation method is specified as 'On Total Sales' (see below), the calculations are based on the Total Goods Value only. When you wish the supplementary charges to be included, then you would set 'On Current Sub Total' as the type of calculation. On Item Rate Typically used for both VAT as well as Excise Duty style calculations. Here, you would have specified the Rate of Tax applicable for each Stock Item, and you would want only those items to be used for calculation purposes which equals this Rate of Tax. The advantage is to be able to mix multiple Tax Rate products in the same Invoice, and yet get the correct ones picked up for each Tax

bracket. On Total Sales The most common basis of Tax Calculation is on the total value of goods/services. This method would calculate using the sum of Stock Items used in the invoice.

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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, inventory vouchers will not have any impact on the Balance 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. More: Types of Inventory Vouchers How to enter pure Inventory Vouchers How to create a Stock Journal

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Types of Inventory Vouchers

Tally is pre-programmed with a variety of inventory vouchers, each designed to perform a different job. The standard vouchers are: 1. Receipt note voucher (Alt + F9) 2. Rejections-in voucher (Ctrl+F6) 3. Delivery note voucher (Alt +F8) 4. Rejections-out voucher (Alt+F6) 5. Stock journal voucher (Alt+F7)

6. Physical stock voucher (Alt+F10) 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. Note: 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. More: Receipt note Voucher Rejections-in Voucher Delivery note Voucher Rejections-out Voucher Stock Journal Voucher Physical Stock Voucher

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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.

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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.

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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.

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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

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Stock Journal Voucher

For recording stock transfers from one location to another. For example, the company transfers items of stock from the warehouse to the shop.

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Physical Stock Voucher

For recording actual stock as physically verified or counted. For 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.

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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 discussed separately, we shall include advanced usage of inventory vouchers here. Vouchers involving pop-up screens depend upon configuration settings and it will be assumed that these settings have been activated. Gateway of Tally > Voucher Entry The basic process to enter each voucher is:

1. Change the date if necessary. 2. Select the voucher type from the button bar menu: 1. F7 - Stock journal 2. F8 - select Delivery Note or Rejections-out 3. F9 - select Receipt Note or Rejections-in 4. F10 - Physical Stock 3. Type in the details and check they are correct before accepting. A typical inventory voucher screen:

The screen is split into three sections: 1. The type, reference and date of the voucher. 2. Party's particulars. 3. Inventory item details. More: Type of Voucher Tracking Number Default Voucher number Order Details (in case Purchase Order Processing is active)

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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. 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. Name of the Item From the pop-up list of Stock item, select the stock item that is being received. If it is not in the list, create it using [ALT]+[C].

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Tracking Number

You will use the tracking number to link this receipt note with the Supplier's Invoice that will be received later. (You will record the Supplier's Invoice through the Purchase Voucher). Hence, select the number you think will help maintain the link. Tally gives you two numbers that are defaults of the Receipt Note number and the Reference. However, you may opt to give your own number, in which case select New Number. If you do not wish to give a tracking number at all, select Not Applicable. An explanation on the four options in the list is necessary. Tracking numbers link the different accounting and inventory vouchers as follows: 1. Receipt Note/Goods In vouchers with Purchase Vouchers 2. Goods Out /Delivery Note with Sales Voucher/Invoice. 3. Rejections-In with Credit Note 4. Rejections-Out with Debit Note 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:5. 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. 6. 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. 7. The same applies to Debit Notes-Rejection Out and Credit Note-Rejection In. 8. 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

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.

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.

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Order Details (in case Purchase Order Processing is active)

If, however, Purchase Order Processing is activated (Company Features), an order field is now available. Select Not Applicable if there were no orders particulars to adjust or record. If the order

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 If you have more than one location, you must specify the 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, 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). Quantity Normally, no explanation is required. However, you can set Company Features to allow Actual and Billed Quantities. Then, 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 In all multiple allocations or selections, you must either be required to select the option 'End of List' or press [enter] at the first blank field. This would accept the multiple allocation and take you back to the parent screen. E.g., Multiple locations, 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 > Voucher Entry > [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 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. More: Common Information

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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.

Note: 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 specified in the stock item master, it will be brought up when you indicate the item name. Note: 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.

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

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 > F12:Configure > Accts/Inventory Info

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 Tally > Accts.Info > Voucher Type > Display > Stock 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. More:

How to create a new Manufacturing Journal How to create a Bill of Material Input fields Advanced Usage

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How to Create a New Manufacturing Journal?

Gateway of Tally > Accts.Info > Voucher Type > Create

Name Give a new name to the voucher type, e.g., Mfg. Journal. It could be any other name. 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?

You can create a bill of material (BoM) for any stock item. 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 Tally > Inventory Info > Stock Items > Create

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. 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.

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. 1. Input your options for other questions for the stock item and accept the screen. The stock journal/manufacturing journal entry screen Gateway of Tally > Voucher Entry > Click 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. 1. Select Mfg. Journal

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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. 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. Note: 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 > Inventory 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. 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.

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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 > Stock Item or through Statistics > Mfg or Stock Journal.

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. Note: 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 POs 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. More: How to create a Purchase Order Alter a Purchase Order How to create Sales Orders

Alter a Sales Order View order position

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How to Create a Purchase Order?

Purchase Order details will also depend on configuration settings. Hence, have a look at the configuration and voucher types. Gateway of Tally > Voucher Entry > F9:Purchase > Select 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. Order No The voucher number can be treated as your Purchase Order number. You may configure the voucher type through Acct. Info > Voucher 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. 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. 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.

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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 > Display > Day Book or Gateway of Tally > Display > Inventory Books > Purchase Orders Book

Delete a Purchase Order
Alter an order and use [alt]+[D] to delete it.

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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 > Display > Day Book or Gateway of Tally > Display > Inventory Books > Sales order Books

Delete a Sales Order
Alter an order and use [alt]+[D] to delete it.

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How to Create Sales Orders?

Sales order entry is exactly like Purchase Orders. Sales Order details will also depend on configuration settings. Hence, have a look at the configuration and voucher types. Gateway of Tally > Voucher Entry > F8:Sales > Select 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. 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. 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.

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View Order Position

Stock summary is perhaps the best place to view the order position. Gateway of Tally > Stock Summary > Detailed [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. You get the following menu.

Select Orders & Stock Details. Remove Rate and value from display by configuring it using F12. This will enable all columns to fit in one screen.

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. 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).

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Invoice Entry

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. Note: Ensure that you have activated Invoice Entry capability in F11:Company Features. Ensure that: 1. In [F12]: Configure under Gateway of Tally, Voucher Entry, in the Accounting Vouchers section of the screen, Show Inventory Details is set to Yes.

2. 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. 3. If you want a separate column for discounts in invoices, say Yes.

Also ensure that: 4. In Accounts Info. > Ledgers, ledgers of the type Purchases and Sales Accounts have Inventory values are affected set to Yes. 5. 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. Note: Refer to the Accounts Info. ->Ledgers chapter for details. More: Configuring the Invoice Printing Invoices and Vouchers

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Configuring the Invoice

Gateway of Tally > F12:Configure > Invoice Entry/Delivery Note

Set the options as required. Please note the last two options. 1. Complete Accounting Allocations in Order/Delivery notes?: 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. 2. Allow modification of ALL 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. Further to invoice entry configuration, you can configure its printing. Gateway of Tally > F12:Configure > Printing > Sales Transactions > Sales 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. The field Generated by contains This is a self Computer Generated Invoice by default. However, you can change it as required. 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. 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. More: Despatch Details VAT

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Despatch 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 popup 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.

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 allocations
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. Note: The location column appears only if Multiple Location feature has been activated.

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. 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.

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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.

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 > F12:Configuration > 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. Note: If you do not have authority to alter a voucher, the voucher would be brought up for display only.

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Advanced Voucher Entry

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 are available, firstly when activated in 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 Display > Statement of Accounts > Outstandings). 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. 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. Note: 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 Tally Solutions 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: 1. Advance 2. New Ref 3. Against Ref 4. 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 1st

May 2001 and then 10000 where it is due on, say, 31st May 2001. 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 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. Cost centre allocations

Cost centre allocations would be relevant if you have opted for cost centres in [F11]: Company Features. Moreover, it applies to only those ledgers for which you have activated cost centres. You may wish to display relevant ledgers through Gateway of Tally > Accounts Info > Ledgers. 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 Tally > Display > Statement of Accounts > Cost Centres. Assuming that you have created cost centres and cost categories in Accounts Info (masters) as below, we shall see how they appear. More: Cost Categories Inventory allocations Tracking Number Default voucher number and reference number Foreign Exchange transactions Zero Valued entries in vouchers

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Cost Categories

Cost Categories: Cost Centres:

Departments Marketing Manufacturing Finance

Executives Salesman A Salesman B Salesman C

Projects Airports Roads 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 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:

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Inventory allocations

Inventory items need to be considered in financial vouchers in cases where you use ledger heads that have stated Yes to the question Are Inventory Values affected?. (Display your Sales Account to verify). Typically, you will have the accounts of the 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. 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:

1. New number – give a number not in the list. You will use this number to reconcile, when making goods inward entry. 2. 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. 3. Not Applicable option is important and hence we repeat the cases where you would use it. 4. 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. 5. 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: 1. 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). 2. Likewise for a sales voucher/invoice. Location If you have more than one location, you must specify the 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, 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). More: Quantity

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Quantity

Normally, no explanation is required. However, you can set Company Features to allow Actual and Billed Quantities. Then, 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 In all multiple allocations or selections, you must either be required to select the option End of List or press [enter] at the first blank field. This would accept the multiple allocation and take you back to the parent screen. E.g., Multiple locations, batches or items.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

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. Note: Remember that you must have foreign currency enabled in F11:Company Features. Only genuine bank accounts that are maintained in foreign currencies need to have their currency set up in that foreign currency otherwise all other ledgers should preferably be set to home/base currency only. 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. More: Example 1: Foreign exchange transaction of an import transaction. Example 2: Voucher entry of a forex bank payment

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Example 1: Foreign Exchange Transaction of an Import Transaction.

In the purchase voucher: 1. Give the date, voucher number, and reference as usual. 2. You need to first credit the supplier.

3. 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.

4. 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 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.

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. Note: 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.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

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): 1. Enter the date and voucher number as usual. 2. Debit the supplier 3. In the amount field, begin with the forex symbol 4. 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). 5. 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.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Zero Valued Entries in Vouchers

To use zero values in vouchers, activate the feature in F11:Company Features. There is usually no point in having a voucher that is totally without value. However, in some situations, zero values are required, for example, 1. One of the entries may not have a value but yet needs to be shown in the records. Example: Zero-rated VAT or Exempt from Tax Account. You are permitted to make such an entry. The Exempt Ledger account can be viewed for all Exempt Sales. 2. Zero valued vouchers are possible for sales and purchase vouchers as these permit invoicing for free samples. A whole voucher could be of zero value in only sales and purchase vouchers but this is not possible in receipt, payment vouchers and journal vouchers. Example 1 – Export Invoice with Tax Exempt

Columnar Ledger – VAT Exempt – lists all Exempt Sales

Example 2 – Invoice for Free Samples

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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! Display screens take advantage of your monitor's capabilities. They are dynamic and interactive and are not merely print files. The purpose of putting in all your data is, after all, to present them in the form of comprehensible accounting reports. Tally far exceeds these expectations. By way of entry, all you do is to enter your vouchers. You do that, any way for your accounting purposes. Tally uses the same data and gives you management control reports in addition to all books and statements. Tally is real-time – all reports are up-to-date at all times. They are displayed as at the last voucher entered. Note: 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. Displays are divided as follows:

Only the Balance Sheet and Profit & Loss Account are displayed directly from the Gateway of Tally. Tally accords these statements the highest importance. As you can see from the menu, displays are roughly organised into Accounts information displays and Inventory information displays – conforming to the 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. The List of Accounts gives the tree structure of all your masters, namely, Groups, Ledgers, Stock items, Cost Centres, Currencies, etc. Exception Reports are reports that track unusual transactions or balances. More: Basic features of displaying reports Modifying reports

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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 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.

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.

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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.

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. 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'. NewColumn 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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Display Account Books and 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. 1. All books are displayed first as a monthly summary with opening and closing balances. 2. 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. 3. 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. Note: 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. More: Viewing Cash/Bank Books Display Balance Sheet Display Profit & Loss Account Display Trial Balance Day Book Books and Registers Group Summary List of Vouchers Ratio Analysis Cost Centre Reports Outstandings and Credit Control

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Viewing Cash/Bank Books

Gateway of Tally > Display > Account Books > Cash/Bank Books

This displays the Cash/Bank Summary. 1. Select a bank account if there are more than one. Press Enter to display the Ledger Monthly Summary. 2. Select F12: Configure to bring up the Configuration/Graphs option menu. 3. 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. 4. 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. 5. 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. 6. Keep pressing [Esc] until you return to the Gateway of Tally menu.

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Display Balance Sheet

The Balance Sheet gives the state of financial affairs of a company on a given date. It lists out the Assets and Liabilities based on the Primary Groups of Tally. The Balance Sheet in Tally is updated instantly with every transaction voucher that is entered and saved. No special processing is required to produce a Balance Sheet. To view the Balance Sheet:

Gateway of Tally > Balance Sheet

The Balance Sheet is displayed in the form set up for it in F12:Configure.

Horizontal Form of Balance Sheet
The above example is of the horizontal form. It could be set up to appear in the vertical form. You can extract different information by using the various options in the Button Bar. 1. Select Detailed to explode the summarised information. 2. Change the date of the Balance Sheet using F2:Period. 3. Bring up new columns and 4. Select a Balance Sheet for a different date to compare alongside the present date or 5. Select a column to give the Balance Sheet in a different currency or 6. Select a column with Budget figures and analyse variances or 7. Select a column and see the effect of different Stock Valuations on the Profit/Loss. More: Configure the Balance Sheet Integrate Accounts with Inventory

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Configure the Balance Sheet

Show Vertical Balance Sheet? No will display Horizontal form. Yes will display Vertical form. In the British/Europe configuration the Vertical Balance Sheet will have the titles Liabilities and Assets whereas the Indian/Asian configuration will have Sources of Funds and Application of Funds as titles. Profit or Loss, both as Liability? (Applicable only in the horizontal form.) If no, then Loss moves the Profit & Loss Account to the Assets side of the Balance Sheet. Show Percentages? Each line will be expressed as a percentage of the total. Show Working Capital figures? To show Current Assets-Current Liabilities.

Method of Showing the Balance Sheet The options are: Liabilities/Assets and Assets/Liabilities. This is simply the order in which the Balance Sheet is shown: For Horizontal Balance Sheet it is in the format: Left Hand Side/Right Hand Side For Vertical Balance Sheet it is in the format: Top/Bottom.

Vertical Form of Balance Sheet Select the Format using F12:Configure.

This Balance Sheet is in the UK/Europe Style where Assets are given first. The default order is, however, Liabilities/Assets. In India/Asia Style, the Vertical Balance Sheet will be:

Columnar Balance Sheets Some examples: Select a Balance Sheet for a different date to compare alongside the present date: Select New Column or keys ALT+C and change only the period.

Select a column to give the Balance Sheet in a different currency Select New Column or keys ALT+C and change only the Currency and give the closing Exchange Rate. The Balance Sheet figures are converted at this rate.

Show Quarterly Balance Sheet Select Auto-column or keys ALT+N. Select Quarterly from the list of periods.

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Integrate Accounts with Inventory

Effect on Balance Sheet and Profit & Loss Account The option in F11:Features has a significant effect on the Balance Sheet and Profit & Loss Account. If set to Yes, it brings the stock/inventory balance figures from the inventory records and provides a drill down to the Stock registers from the Balance Sheet. If it is set to No, it ignores the inventory books figures and picks up manually entered closing stock balances. Stock records often contain compensating errors caused by wrong allocation to items and the like. The feature enables finalisation of financial books without waiting for reconciliation of stocks that may take time.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Display Profit & Loss Account

The Profit & Loss Account shows the operational results for a given period. It lists out the Incomes and Expenditures based on the Primary Groups of Tally. The Profit & Loss Account in Tally is updated instantly with every transaction voucher that is entered and saved. No special processing is required to produce a Profit & Loss Account. To view the Profit & Loss Account: Gateway of Tally > Profit & Loss Account You may even drill down from the Balance Sheet. The Profit & Loss Account is displayed according to the configuration set up for it in F12:

Configure.

Horizontal Form of Profit & Loss Account The above example is of the horizontal form. It could be set up to appear in the vertical form. You can extract different information by using the various options in the Button Bar. 1. Select Detailed to explode the summarised information. 2. Change the date of the Profit & Loss Account using F2:Period. 3. Bring up new columns and: 4. Select a Profit & Loss Account for a different period to compare alongside the present period or 5. Select a column to give the Profit & Loss Account in a different currency or 6. Select a column with Budget figures and analyse variances or 7. Select a column and see the effect of different Stock Valuations on the Profit/Loss. More: Configure the Profit & Loss Account Income/Expense Stmt instead of P&L?

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Configure the Profit & Loss Account

Show Vertical Profit & Loss Account? No will display Horizontal form. Yes will display Vertical form.

The vertical form always shows the Trading Account and the Income Statements separately. Show Percentages? Each line will be expressed as a percentage of Sales Accounts, i.e., Sales Accounts will be 100% and the rest of the lines will be a percentage of Sales Accounts. Show With Gross Profit? (Applicable to Horizontal Form only) The Profit & Loss Statement is split to show Trading Profit considering only the Cost of Sales and Direct Expenses. From the Gross Profit, Indirect Expenses are deducted to show Net Profit. If no, the Profit & Loss Statement is not split to show Gross and Net Profits separately. In Vertical form, the Trading Account shows the Gross Profit and the Income Statement, the Net Profit.

Columnar Profit & Loss Accounts: Some Examples Select a Profit & Loss Account for a different period to compare alongside the present period Select New Column or keys ALT+C and change only the period.

Select a column to give the Profit & Loss Account in a different currency Select New Column or keys ALT+C and change only the Currency and give the closing Exchange Rate. The Profit & Loss Account figures are converted at this rate.

Select a column to give the Profit & Loss Account in a different stock valuation method Select New Column or keys ALT+C and change only the Stock Valuation Method to Last Purchase Cost.

Show Quarterly Profit & Loss Account Select Auto-column or keys ALT+N. Select Quarterly from the list of periods.

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Income/Expense Stmt instead of P&L?

Account statements for Non-Trading Organisations For Non-Trading accounts like accounts for Charitable Organisations, the Trading and Profit & Loss Statement are irrelevant. They need an Income & Expenditure Account. They should activate the feature in F11:Features and set the option Income/Expense Stmt instead of P&L to Yes. The Profit & Loss Account is now displayed as Income & Expenditure Statement.

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Display Trial Balance

Gateway of Tally > Display > Trial Balance The Trial Balance Report provides account balance listing for all accounts for the company sorted according to groups, i.e., the Trial Balance is displayed in grouped form with main groups and their closing balances. The fact that the debit and credit balances match proves the arithmetic accuracy of the entries. In Tally, the matching of the Trial Balance is a foregone conclusion as all voucher entries are in the debit and credit format and must balance at the entry point. Note: As per accounting principles, the Trial Balance does not list Closing Stock.

You can drill down a Group for further details of that particular group. or Select Detailed to break down the grouped information to another level. or Select Led-wise to take an alphabetic listing of all ledgers and their closing balances. Select Columns to bring up the closing balances for another date. More: Account Reconciliation Statement

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Account Reconciliation Statement

Take a single report that shows the flow of the accounts from Opening Balance to the effect of transactions on Closing Balance. Select F12:Configure Set the options as below:

The Trail Balance Reconciliation Statement is produced:

Similarly, the Trial Balance can be configured to show only Opening and Closing Balances.

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Day Book

Gateway of Tally > Display > Day Book The Day Book is a list of all transactions for a particular day, by default the current date. It can also list all the transactions for a period. Transactions include all financial vouchers, reversing and memorandum journals as well as inventory vouchers. For example: Day Book for the current date:

Day Book for a period:

The list can be filtered to show transactions of a particular voucher type. Use Chg Vch button. When in a specific voucher, e.g. Delivery Notes, options like Extract and Columnar become available.

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Books and Registers

All transactions are posted to different books and registers. The purpose of the books and registers is to compile similar entries in one place so that they are meaningful, e.g., all cash entries in the Cash Book, all sales entries in the Sales Day Book (called Sales Register in Tally). A Tally voucher may contain many lines of debit and credit entries. Each line is a Ledger Account and has to be ultimately reflected in the Ledger. The Tally transaction flow

Apart from the subsidiary books, entries are also filed under each Voucher Type Registers. Therefore, there will be as many registers as there are voucher types. More: Journals, Day Books and Registers Sales Register (Sales Day Book) Invoice Profitability Columnar Sales Register Registers from Statistics Monthly Summary

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Journals, Day Books and Registers

Journal, Sales Register, Purchase Register, Debit Note Register, Credit Note Register, Payment Register, Receipts Register, etc.. There are three ways to see different registers: 1. From the display menu 2. By Changing the Voucher type from within a Register 3. From the Statistics Page We will discuss the Sales Register, which has the most options. Other Registers are similar. Please use the same explanation (except for Invoice Profitability) for other Registers.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Sales Register (Sales Day Book)

This explanation should be used for all Day Books and Voucher Registers. Gateway of Tally > Display > Account Books > Sales Register

All registers first display the Monthly Summary with Transactions and Closing Balance. For Balance Sheet Accounts, Opening Balance will be given at the top. Select a month and press enter to see the Sales Voucher Register. This is a list of all sales vouchers for that month. Use the options in the button bar to change the details. You can change the period of the report as well as the depth of information. Use F12:Configure to see the report with some or all of the following details: Narrations, Bill-wise details, Cost Centre details and Inventory details. Click on Detailed to see all the details selected.

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Invoice Profitability

Display the Sales Voucher Register for a period by drill down a month and change to the period required. Select F7:Gross Profit (or select from F12:Configure)

The Report now shows each invoice with: Transaction Value which is the Invoice Value including taxes. Gross Revenue – this is the actual sale value minus taxes. Cost – This is the book cost of the product Gross Profit – Amount of profit or loss on the sale.

Sales Register Extract
While in the Sales Voucher Register: Select/click on Extract

The Extract gives a break-down of the sales vouchers and groups them to provide totals for each group and ledger used in all sales vouchers for the period. The information is useful where you

want to know the how much each group of customers bought, what the tax component is or what is the total value of each sales ledger.

Inventory-wise Extract of Sales Register
In the Sales Voucher Register, click on Extract. F12:Configure. Set Yes to Inventory-wise Extract to take a report of the stock items sold with quantity and value details.

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Columnar Sales Register

While in the Sales Voucher Register: Select/click on Columnar. The different columns can be selected for the report and are retained for future use.

Type of Column The Type of Column needs to be explained. Here you select the type you want and if it is a ledger or a group, the selection is shown under Name of Account. The options are:

All Item (Automatic Columns) Every ledger account used in any voucher in the period of display takes a column.

All Item (in one column) All the ledger accounts are shown in one column Group Select a group of ledger accounts to be shown together in one column, e.g., All sales accounts. For other columns you can now have further options, viz., Related accounts in automatic columns or related accounts in one column, in addition to available options.

Ledger Select a specific ledger account for which you want the sales register, e.g., VAT/Sales Tax. All other accounts can be put in one or more columns. Related Items (automatic columns) Related items means the ledger accounts used in a voucher. Hence, the report will be similar to All Items (automatic columns) if only this option is selected. However, the option is useful if selected in conjunction with a Group or a specific ledger account in the first column. Related Items (in one column) Related items means the ledger accounts used in a voucher. Hence, the report will be similar to All Items (in on col.) if only this option is selected. However, the option is useful if selected in conjunction with a Group or a specific ledger account in the first column. Change Vch Use this button option to see a different Register from within an existing register. E.g. Change to Payment Register from a Sales Register by pressing the button Change Vch. Payment Register

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Registers from Statistics

Voucher registers can be accessed from the Statistics page: Gateway of Tally > Display > Statements of Accounts > Statistics

Drill down a specific Voucher Type to view the Register.

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Monthly Summary

When drilling down from a statement into any Group, Ledger, Stock item or cost centre or any such object, the first screen is the Monthly summary. Monthly Summary is also available from a Voucher level screen by using the button Monthly. The monthly summary shows the Opening Balance for the year, then lists each month's total transactions both debit (inwards for stocks) and credit (outwards for stocks) and finally each month's closing balance. Below the monthly summary, is a bar chart showing the movement of transactions. Use F12:Configure to see more or less details including the graph. E.g.

The different options under the button bar are very useful for managerial reports. E.g. Use the New Columns option to bring up the Monthly Summary of another ledger or object or the same object in another company. Quarterly shows summarised quarterly figures. F12:Configure provides options to see Percentages, Average details as well high/low information .

Ledger Monthly Summary

Cost Category Monthly Summary

Item Monthly Summary

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Group Summary

Gateway of Tally > Display > Account Books > Group Summary Select a Group, e.g., Current Assets

The Group Summary Statement shows the Closing Balances of the accounts falling under the selected group for the period up to the current date. The standard view is that of sub-groups in the group. Using the different options provided in the buttons bar, you can change the view to: Detailed, Individual Ledger account listing under the selected group, monthly summary as well as bringing up new columns of information for comparison and analysis. An example of an option is given below:

Led-wise Display of Group Summary

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List of Vouchers

Vouchers or transactions of a similar nature or type are collated and listed together for a period to give meaningful information. There are different types of Voucher Lists, e.g., Group Vouchers, Ledger Vouchers, Stock Vouchers, Godown/Location Vouchers, etc. The main feature of such statements is that they belong to a particular entity from which they were accessed and provide the lowest level of detail after which the only detail possible is the voucher itself. More: Group Vouchers Ledger Vouchers

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Group Vouchers

Gateway of Tally > Display > Account Books > Group Vouchers Select a Group,e.g., Current Assets

Group Vouchers is a list of all vouchers that have at least one ledger account entry belonging to the selected group during the period of display. This statement is useful when you want to list all transactions for a particular group.

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Ledger Vouchers

Gateway of Tally > Display > Account Books > Ledgers Select Ledger Account The list of vouchers for the current month is displayed. This list of vouchers for a ledger is the lowest level of collated data drilling down after which is the actual voucher. You may also access Ledger Vouchers by drilling down from different statements, like, Group Summary and Monthly Summary.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Ratio Analysis

Gateway of Tally > Ratio Analysis The Ratio Analysis Statement is a Single Sheet Performance Report for a selected period. It gives important values and key performance indicators for the company. It is one report that top management need to look at to know the state of the company's financial health and where it is going in the short term.

The Ratio Analysis Screen is divided into two parts: Principal Groups and Principal Ratios. The Principal Groups are the absolute key figures that give perspective to the ratios. Principal Ratios relate two pieces of financial data to get a comparison that is more meaningful when compared with ratios of other companies. More: Principal Groups and key figures Principal Ratios Payment Performance of Sundry Debtors

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Principal Groups and Key Figures

Working Capital Tally follows the Accountants' definition and is the Net Working Capital calculated as Current Assets less Current Liabilities. Financial Analysts often mean total Current Assets as Working Capital. This is a measure of the extent the firm is protected from liquidity problems. Cash in Hand and Bank Balances These are indicated in the Ratio Analysis screen to give the liquidity perspective. Sundry Debtors (Due till today) These are two figures, total debtors and debtors that are due as on the date of the Statement. Sundry Creditors (Due till today)

These are figures for total creditors and those that are due as on the date of the Statement. Sales and Purchase Accounts These show the trading activity for the period Stock in Hand This is the stock in hand as on the date of the report. Together with Cash and Bank Balances and Debtors, Stocks complete the Current Assets aspect of Working Capital. Net Profit This is derived from the Profit & Loss Account and is the profit after all direct and indirect expenses.

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Principal Ratios

These should be compared to industry averages, as well as for other periods to assess current period's performance. Working Capital Turnover Sales/Working Capital This is an activity or efficiency ratio that shows the number of times the working capital has been rolled over during the period of the report. It depicts how effectively the firm is using its working capital. Inventory Turnover Sales/Closing Stock This is an activity or efficiency ratio that shows the number of times stocks has been rolled over during the period of the report. It depicts how effectively the firm is using its inventories. Current Ratio Current Assets:Current Liabilities This is a liquidity or solvency ratio and is the most oft-used ratio for assessing the capability of a firm to meet its short-term obligations. It specifically shows a firm's ability to cover its current assets with current liabilities. Quick Ratio Current Assets-Stock in Hand : Current Liabilities This liquidity or solvency ratio is also called Acid-Test Ratio that concentrates on more liquid of the current assets to measure a firm's ability to meet its current obligations. It is thought that stocks and inventories are the least liquid of all current assets and hence a firm might become insolvent if its current assets comprise a high proportion of inventories. Debt-Equity Ratio

Loans (Liability: Capital+Net Profit) This is a gearing ratio that shows the extent to which long-term debt is used to finance the firm. It shows the proportion of borrowed funds to Owners' Equity. The lower the ratio, the higher the amount of funds invested by the owners. If the ratio is high, it indicates that borrowed funds are more than own funds and the firm, which makes the firm lower credit-worthiness. Gross Profit % This is the trading profit before indirect expenses and taxes expressed as a percentage of total sales. It measures the efficiency of a firm's operations as well as indicates how products are priced. Net Profit % This is the profit after all expenses including direct and indirect expenses but before taxes expressed as a percentage of total sales. It is a more specific measure of the efficiency of a firm's operations. By considering both Gross Profit % and Net Profit % together, we are able to gain considerable insight into a firm's operations and the part played by the direct and indirect expenses. Operating Cost % As a percentage of Sales Accounts This is total cost including direct and indirect expenses but before taxes expressed as a percentage of sales. A high ratio shows that even a slight rise in costs would be risky and might necessitate increase in price. Return on Investment % (Net Profit/Capital+Net Profit) % Net Profit here is Profit after all expenses but before taxes. This is a profitability ratio that an investor is most interested in. The investor needs to know how much is earned on each dollar invested. If the investor finds other avenues that give better returns, he will move his money from the firm. Return on Working Capital % (Net Profit/Working Capital)% This is another profitability ratio that ignores sunk costs in Fixed Assets and assesses how profitably a firm uses its net current assets. Receivable Turnover in Days Payment Performance of Debtors It is an efficiency ratio that measures the quality of a firm's receivables and how successfully it collects its debts. Receivable Turnover in days is a figure that tells us the average number of days that receivables are outstanding before being collected. It should be compared with the average credit policy of the firm. It is arrived at using the formula (Closing Balance of debtors/Total Sales)*Number of Days.

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Payment Performance of Sundry Debtors

Payment Performance of Debtors is the average of the time customers to actually pay their bills irrespective of the outstanding balance on the statement date. It is possible that the receivable turnover is low but payment performance ratio is high indicating that though the customer(s) cleared their outstandings, they took a long time doing it. To get group level and customer level performance reports, drill down. Drill down into the ratio to get a more detailed position of debt collection. It is possible to take a customer's statement that shows both the receivable turnover in days and the customer's actual payment performance.

The Ledger Payment Performance statement shows at the top, the receivable turnover in days as 322.83 days, which is the balance outstanding in relation to total sales to the customer multiplied by total number of days in the period. However, even if the outstanding balance is only a few days old, the ratio will still be the same. Therefore, the ratio should be read with the Average Performance of actual payments and the payment history of the customer to assess how long it might take to pay the outstanding balance. The Actual payment history is given in the table for each invoice that was paid by the customer. It shows when the invoice was paid, when it was due and what was the delay in payment. At the bottom, the customer's average performance is given for all cleared invoices.

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Cost Centre Reports

For conceptual information on Cost Centres and Cost Categories, please look up the relevant chapters under Accounts Information. Cost Centre Reports are primarily performance reports that give different views of how transactions and their relation to cost centres. To access Cost Centre Reports:

Gateway of Tally > Display > Statements of Accounts > Cost Centres

More: Cost Category Summary Cost Centre Vouchers Cost Centre Break-up Ledger Break-up of a Cost Centre Group Break-up of a Cost Centre

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Cost Category Summary

Gateway of Tally > Display > Statements of Accounts > Cost Centres > Category Summary The information on all cost categories to which voucher transactions have been allocated is accessed here as shown below:

In the above example, two cost categories have been created apart from the default Primary Cost Category. These are Executives and Projects. Each Category has some cost centres under it.

Executives comprises of a Cost Centre Group – Managers, which has cost centres under it. Note that the names in italics are cost centres that do not have any sub-cost centre. Names that are in normal font, e.g., Managers, are of cost centres that have sub-cost centres under them. General Overheads is a cost centre under Primary Cost Category. The debit and credit transaction totals and the closing balance for each cost category are displayed together with their breakdown consisting of cost centres summaries.

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Cost Centre Vouchers

From the Cost Category Summary, drill down into a cost centre for monthly break-up of the figures. Select a month to display the Cost Centre Vouchers for that month. Use F2: Period to expand the date range if required. Use Detailed option, drill down to access the original voucher or use F12: Configure to display more details.

The Cost Centre Vouchers screen is accessible from all other Cost Centre Reports menu options too but the vouchers displayed are those that relate to the cost centre and relevant to the report.

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Cost Centre Break-up

Cost centre Break up shows the ledger accounts that were used in vouchers and allocated to the cost centre, their total transaction values and the balance. If only revenue accounts are considered, the Cost Centre break up becomes the Profit or Loss statement of activities for the cost centre, ignoring only the Opening and Closing Stocks. It is then a powerful performance statement. Gateway of Tally > Display > Statements of Accounts > Cost Centres > Cost Centre Break-up Select a cost centre, e.g., Andrew (which belongs to the Category Executives): You get a grouped summary of the break up. Select (click) Detailed to see the ledgers. The report will resemble this:

Use the buttons to see the report in alphabetic order of ledger accounts. A useful report is the columnar Cost-centre break-up that allows comparison of two or more cost centres and assessment of their relative performance. Use New Column to bring up another cost centre and compare. Drill down for further details.

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Ledger Break-up of a Cost Centre

This is another view of a cost centre report. It enables you to analyse the distribution of a ledger account amongst different cost centres. If you want know how much Conveyance Expenses were incurred by different cost centres, this is the report that you should look at. Gateway of Tally > Display > Statements of Accounts > Cost Centres > Ledger Break-up Select a ledger account, e.g. Motor Car Expenses

The total Motor Car Expenses allocated to two different Cost Centres under the category Executives is given. If you have more than one category, that will also be listed. Use the buttons to see the report in alphabetic order of ledger accounts. A useful report is the columnar Cost-Break up of Ledger that allows you to compare how different cost centres used two or more ledgers (e.g. expense accounts) For example Use New Column to bring up another ledger account, say, Sales. The report will give you how much each executive sold and how much he spent on running the motorcar. You will be able to judge their relative performance. Even compare the data with that of another company! As usual in any Tally report, drill down for more details.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Group Break-up of a Cost Centre

This is another view of a cost centre report. It enables you to analyse the distribution of a group (of ledger accounts) amongst different cost centres. If you want know how what Indirect Expenses were incurred by different cost centres, this is the report that you should look at. Gateway of Tally > Display > Statements of Accounts > Cost Centres > Group Break-up Select a Group account, e.g. Indirect Expenses

The total Indirect Expenses allocated to two different Cost Centres under the category Executives is given. If you have more than one category, that will also be listed. Use the buttons to see the report in alphabetic order of ledger accounts. A useful report is the columnar Cost-Break up of Groups that allows you to compare how different cost centres used two or more Groups. For example, use New Column to bring up another Group, say, Sales Accounts. The report will give you how much each executive (cost centre) sold and how much he spent. You will be able to judge their relative performance. Even compare the data with that of another company! As usual in any Tally report, drill down for more details.

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Outstandings and Credit Control

Receivables and Payables Receivables and payables are two important components of any firm's working capital and indeed its business activity. Receivables are a part of current assets whereas payables are of current liabilities. Each influences the short-term liquidity and financing of the company. Effective control of both types of Outstandings is necessary for the financial health of the firm. Tally provides many reports and analysis to aid credit control. Gateway of Tally > Display > Statements of Accounts > Outstandings

More: Receivables (Bills Receivable) F12: Configure Bill-wise Outstandings report Payables (Bills Payable) Outstandings Report of a Single Ledger Account Age-wise Analysis of a Single Ledger Account Outstanding Report for a Group Age-wise Analysis for a Group Reminder Letters Reminder letters to a Group of ledgers

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Receivables (Bills Receivable)

(The discussion is based on Receivables. Payables are exactly the same and hence not discussed separately). Gateway of Tally > Display > Statements of Accounts > Outstandings > Receivables This report is for all receivables invoice by invoice outstanding on the current date. Remember that this report only takes into consideration those accounts that have Bill-by-Bill option activated. (To verify display the account master through Accounts Info.)

Date This is the EFFECTIVE date of the invoice. It is not the actual invoice date. Hence, if your invoice date is 15 November but the effective date is 30 November, 30-Nov-98 will be shown here. Credit period is calculated from effective date. Ref No The is the Bill reference number that was entered in the Bill-wise Details Party's Name The ledger name appears here. Pending Amount This is the outstanding balance on the particular invoice. To see the break-up, press SHIFT+ENTER. To see the break-up of all the bills, select the Detailed button. Due On The due date of the bill as entered during voucher entry. It is with reference to the Effective date. Overdue by days It is the period in days from the due date to the end date of the report; in the above example, the end date is 1-Dec-98.

Drill-down Drill down any invoice for further details. Buttons Print or e-mail the report to your bills collector. Use other buttons to configure, query or change the report.

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F12: Configure Bill-wise Outstandings report

Include Post-Dated Transactions?
Post-dated transactions are those whose voucher dates are after the date of display. These can be included in the Outstandings report if you set this to Yes if you want to see the effect of post-dated transactions.

In the above example, note the change in the columns. The payment for the first bill was received by way of a post-dated cheque – (31-12-98). The receipt entry was made for 31-12-98 and marked 'Post-dated'. In the date range 1-1-98 to 1-12-98, the invoice, which is still outstanding, will be cleared on 31-12-98 and such the Final Balance will be nil.

Show Bills in Foreign Exchange?
The Bills Outstanding report will show only those bills raised in foreign currency. Remember, bills raised in base currency will be excluded.

Show Over dues using Bill dates?
Instead of using due dates for calculating overdue days, do you want to use the invoice date for the calculation? Yes or No.

The Overdue column is recalculated to show the age of the invoices in number of days. The other configuration options are self-explanatory.

Age-wise Analysis of All Receivables
If you are not already in the receivables screen: Gateway of Tally > Display > Statements of Accounts > Outstandings > Receivables Select (click) Age-wise Select one of the two Methods of Ageing: By Bill Date or By Due Date Set the age periods required for the report. An earlier setting is given and can be accepted as it is or modified. The aged bills report is produced accordingly. You can drill down to query the individual invoices.

Age-wise analyses for a ledger account or group of accounts are discussed separately.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Payables (Bills Payable)

Gateway of Tally > Display > Statements of Accounts > Outstandings > Payables (Payables are treated exactly the same way as Receivables. Since Receivables contain a detailed discussion, please read that section). The button F4: Payable in the Receivable screen switches to Bills Payable report. Likewise, when in Payable Screen, F4: Receivable button is available to switch to Bills Receivable report.

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Outstandings Report of a Single Ledger Account

All receivables or all payables serve to give you a total picture of the bills received and issued. If you want to know the outstanding status of the bills of a particular party account, those reports are not suitable. You should use the Ledger Outstandings Report. Gateway of Tally > Display > Statements of Accounts > Outstandings > Ledger

Detailed functionality available in this report, including F12: Configure and Age-wise Analysis is the

same as in All Receivables and has been discussed in detail there. You can however produce Reminder Letters from the ledger Outstandings report. Use the Contact button to view address and other contact details.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Age-wise Analysis of a Single Ledger Account

If you are not already in the receivables screen: Gateway of Tally > Display > Statements of Accounts > Outstandings > Ledger 1. Select the ledger account. 2. Select (click) Age-wise Select one of the two Methods of Ageing: By Bill Date or By Due Date 3. Set the age periods required for the report. 4. An earlier setting is given and can be accepted as it is or modified. The aged bills report is produced accordingly. You can drill down to query the individual invoices.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Outstanding Report for a Group

Gateway of Tally > Display > Statements of Accounts > Outstandings > Group Select a Group This report gives the outstandings for a group of ledger accounts, e.g. UK Customers and is useful to hand out to managers of different groups of customers.

Drill down further into each account. Configure using F12. You can view net amounts in this case to see the net balance outstanding for each ledger. For a group that contains sub-groups, e.g., African Customers, the button F5:Led-wise is useful. It also toggles to Group-wise.

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Age-wise Analysis for a Group

If you are not already there: Gateway of Tally > Display > Statements of Accounts > Outstandings > Group 1. Select a Group 2. Select (click) Detailed 3. Select (click) Age-wise Select one of the two Methods of Ageing: 4. By Bill Date or By Due Date 5. Set the age periods required for the report. 6. An earlier setting is given and can be accepted as it is or modified. 7. The aged bills report is produced accordingly. You can drill down to query the individual invoices. You can see Net Balances by configuring it using F12.

You cannot print Reminder letters to a group from here but from Multi-Account Printing in the Gateway of Tally.

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Reminder Letters

If you are not already there: Gateway of Tally > Display > Statements of Accounts > Outstandings > Ledger Select (click) Print (or e-mail) If the Print (Y or N) box appears, select No. Tab down to: Print Reminder Letter: Change to Yes Set, accept or modify, as the case may be, the ageing period. Show Bills in Foreign Exchange Type Yes or No according to what you need and accept. In this case, we selected Yes. The text of the reminder letter can be changed through F12: Configure while in the Print option.

If you want to print Reminder Letters to a group of customers' ledgers, you should use the Multiaccount printing option.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Reminder letters to a Group of ledgers

Gateway of Tally > Multi-Account Printing > Outstanding Statements > Ledgers > Group of Accounts

1. Select the group for which reminder letters are required, e.g. Sundry Debtors.

2. Select No to Print? 3. The report by default is a Bill-wise details report that lists the outstanding bills for each ledger in the group. 4. Tab down to Print Reminder Letter. Set it to Yes. 5. Set the age periods. 6. Set other options as necessary. 7. Reminder letters for each account in the group will be printed.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Cash and Fund Flows

Cash management is essential for any business. Many companies continue to be project profits even as they go into liquidation because of insolvency. Businesses close down because of lack of cash despite being profitable. Cash and Fund Flow Statements aid in cash management and are an important component of management accounts. More: Cash Flow Funds Flow

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Cash Flow

Tally's Cash Flow Statement is a historical statement of cash (including those with the Bank) moving in and out of the business. It explains changes in cash by listing those activities that increased cash and those that decreased cash. When used with the Balance Sheet and Profit & Loss Account, the Cash Flow Statement helps to assess the reasons for differences between net income and net cash flow from operating activities as well as the effect of cash and non-cash investing and financing transactions. Gateway of Tally > Display > Cash/Fund Flow > Cash Flow This produces a Monthly Cash Flow Summary that shows the Cash Movement – inflow and outflow for each month and the Net Flow.

Select a month and drill down by pressing enter. Select (click) Detailed. You have the cash flow for that month. For Quarterly (or for any other period e.g., Monthly) Cash Flow: Change Period by pressing F2: Set the period e.g., 1-1-98 to 31-12-98 Select (click) Auto Column Select Quarterly (or Monthly or any other period) You have your columnar cash flow: Columnar Cash Flow Statement

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Funds Flow

While Cash Flow Statement is concerned only with cash, Funds Flow takes into account the movement of the entire working capital. It includes increases and decreases in inventories, creditors and debtors apart from cash and bank. The statement reveals the Sources of Funds and how they were applied. Gateway of Tally > Display > Cash/Fund Flow > Funds Flow This produces a Monthly Funds Flow Summary with movement of working capital for each month. It takes a slightly different approach to Cash Flow Summary in that it gives Opening and Closing Balances of each month with the Flow as the extension.

Select a month and drill down by pressing enter. Select (click) Detailed. You have the funds flow for that month.

The screen is divided into two portions: 1. Application of funds for Long Term Assets 2. Current Assets and Liabilities, i.e., Working Capital movement - Note the bottom portion where movement in Working Capital is shown. You can drill down any line for further details.

For Quarterly (or for any other period e.g., Monthly) Funds Flow: Change Period by pressing F2: Set the period e.g., 1-1-97 to 31-12-97 Select (click) Auto Column Select Quarterly (or Monthly or any other period) You have your columnar Funds Flow:

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

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 of the reconciliation. This has been done, by marking the 'Bank Date' against the voucher. For instance, if you have issued a 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 (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:

1. 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). 2. 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. 3. The display now becomes an 'Edit' screen in 'Reconciliation' mode. The primary components are:A column for the 'Bankers Date' 4. The 'Reconciliation' at the bottom of the screen, showing: 5. Balance as per Company Books 6. Amounts not reflected in Bank 7. 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 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!

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Display Inventory Reports & Statements

Tally prepares the inventory reports 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, and so on. In each case, when you display a report, you can step-down to 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. More: Viewing Stock Summary Viewing stock items Making a Stock Query Analysis of Inventory Movements Godown Summary (Location Summary) Sales Bills Pending Purchase Bills Pending

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Viewing Stock Summary

Stock Summary is a statement of stock in hand on a particular date. The statement is updated with every transaction so that it provides current stock position at any time. The statement can be drilled down as with all Tally reports, and configured to view different details. Indeed, it is possible to see the total flow of stock on a single report. Experiment with the different buttons for this purpose. Tally treats Stock Summary as one of the primary statements and makes it accessible directly from the Gateway of Tally. To view the Stock Summary: Gateway of Tally > Stock Summary The default display is that of stock group balances. Select Detailed to show another level of detail. This could be sub-groups or directly stock items in cases where there are no sub-groups.

In the above example, note the stock groups with stock items below them. Here, there are two stock groups, viz, Hardware and Software that have closing balances. The Stock groups show total quantities. This is because the unit of measure is the same for all the stock items that have been set up to have quantities of items added. The stock group Services, does not have any balance. This is because of the original set-up of the Services items, where stock is valued at Zero Cost and all sales are treated as Manufactured. Note that there is a grand total too because of a single unit of measure for all 'addable' items. If there were different units of measure, then there would not be a grand total. More: Stock Flow (reconciliation) Gross Profits – (Item and stock group profitability)

Stock Valuation Methods Stock Group Summary Stock Category Summary

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Stock Flow (reconciliation)

The Stock Summary Statement can be configured to display the flow of goods. Select F12:Configure while in the Stock Summary Screen

Set the configuration as given above.

This statement shows the flow of stock: Opening Stock, Goods Inwards, Goods Outward and Closing Stock. The statement is quantitatively reconciled but not monetarily. What that means is that: Opening quantity + Inward Quantity – Outward Quantity = Closing Stock Quantity. However, this is not true of values and you should not be disturbed because values do not add up this way. This is because the Outwards value shows Sale Values and not Cost. The Closing Stock Value is however based on cost and the Cost Method adopted for each item. Value reconciliation is possible using Consumption figures instead of Outwards.

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Gross Profits – (Item and stock group profitability)

The Stock Summary can be expanded to show consumption and gross profits for each stock item. F7: Show Profits or F12: Configure while in the Stock Summary Activate Show Consumption and Gross Profits The statement will now be (quantities have been set to No in this example):

The Outwards Column is expanded to show cost of Goods Outwards termed Consumption and Gross Profit value and percentage. This statement is useful for two purposes: Profitability Analysis of Sales (Outwards) and Value Reconciliation of Stock.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Stock Valuation Methods

Stock Summary with different stock valuations serve to show the effect of different methods on the value of stock. Most popular methods are available. Each stock item could be set up to have a different stock valuation method as default. However, there are occasions when another method of valuation is needed, for example to assess the replacement value or the saleable value of stock. Tally shows the stocks in any or all the valuation methods dynamically and simultaneously without going through complicated procedures. Last Purchase Cost method can be used to assess the replacement value whereas Last Sale Price for realizable (saleable) value. While in the Stock Summary, select New Column Select defaults for all except Stock Valuation Method

Select another method,e.g., Last Sale Price For the following statement:

The prices having fallen, the value that can be realised if all the stocks were sold is actually less than the book values! For Balance Sheet purposes, the lower of cost or realisable value is preferable. The Balance Sheet can be configured to take that value. How to view Ageing Analysis

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Stock Group Summary

This report is available only if the option in Company Features: Integrate Accounts and Inventory is set to No. The statement shows the Opening and Closing Stock figures that have been input in the ledger

account master rather than picked up from the Stock Summary. Hence, the Stock Summary figures and the Stock Group Summary will show different figures. The Ledger account belongs to the Stock-In-Hand Group. Drill down the Stock Group Summary to reach the Stock Ledger account where the closing balance for a given date can be input. Different Closing Stock figures can be put in for different dates that will remain effective till the next figure. The relevant figure for a date is picked up into the Balance Sheet and Profit and Loss Account. To get to the Stock Group Summary, Gateway of Tally > Profit & Loss Account > Opening Stock (or Closing Stock)

Drill down the Stocks Account to be able to input Closing Stock figures:

The different dates for Closing Balance are dates beginning from the date and till the following date. If there is no date that follows the last, then that Closing Balance continues. A blank amount figure against a date will mean zero balance.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Stock Category Summary

Gateway of Tally > Display > Statements of Inventory > Categories Select a Category, e.g., Spreadsheets.

The Stock Category Summary lists out the Closing Balances of all items belonging to the selected category. Drill down an item for Item Monthly Summary and for the Stock Voucher list. Use Show Profit for profitability analysis for the Items in the Category.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Viewing Stock Items

1. Gateway of Tally > Display > Inventory Books > Stock Item. You may go through the Stock Summary as well. Simply place the cursor on the item and press [enter]. 2. Select an item from the List of Items. 3. 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).

More: Stock Vouchers

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Stock Vouchers

Gateway of Tally > Display > Inventory Books > Stock Items Select Item Select and drill down a month.

The list of stock vouchers for the current month is displayed. This list of vouchers for a stock item is the lowest level of collated data drilling down after which is the actual voucher. You may also access Stock Vouchers by drilling down from different statements, like Stock Summary.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Making a Stock Query

Stock query – the one place for all information on an item Gateway of Tally > Display > Statements of Inventory > Stock Query. 1. Select an item, from the List of Items. Notice how Tally uses the Stock Category to display Items of the same Category. You can offer alternative products immediately. The locations at which you have stocks are also given, which is invaluable for your logistics planning.

2. 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. 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.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

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 > Display-Inventory Books > Movement Analysis

You can analyze stock movements by stock groups, or categories or even by financial group or ledger. More: Movement Analysis (Stock Group Analysis) Item Movement Analysis Item Voucher Analysis Stock Category Analysis - Movement Analysis Ledger Analysis Transfer Analysis

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Movement Analysis (Stock Group Analysis)

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.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Item Movement Analysis

Item Movement Analysis is the next level of information (press Enter on the stock Item or Display Inventory Books Stock Item Analysis). This 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. 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').

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Item Voucher Analysis

This report gives value details of all transactions for a selected stock item from a particular supplier or to a particular customer. It is obtained from Movement Analysis of a stock item. Gateway of Tally > Display > Inventory Books > Movement Analysis Select Item from List Select a Supplier (or a customer) from the Item Movement Analysis

The report above shows each purchase from Tally Solutions, Bangalore during the period with break-down of Basic Value and Addl. Cost. To see full details of additional cost, use F12:Configure to set the option. The report considers only billed transactions and not those for which invoices have not been raised. Drill down further into the actual voucher, if necessary. Use F12:Configure for more details.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Stock Category Analysis - Movement Analysis

Gateway of Tally > Display > Inventory Books > Movement Analysis > Category Analysis Select a category, e.g. Spreadsheets Change period, if necessary.

The Stock Category Analysis statement shows the movement of stock items of a particular selected

stock category. In the example above, the stock items, Lotus 1-2-3 and MS Excel belong to the Category Spreadsheets (though they are grouped under Software). The Inward and Outward movement of these two items are summarised in the Summary. Drilling down will bring up the Item Movement Analysis for the selected item.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Ledger Analysis

Ledger Analysis is 'similar' to Movement Analysis, except for bringing up the movements of the items for the selected Ledger (Party). Thus, you get an 'analysis' of all purchases made from a supplier, or all items sold to a customer. The next level of information brings up the transaction level detail.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Transfer Analysis

Transfer Analysis gives the movement details of each type of Stock Journal. This can be used powerfully by following a 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.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Godown Summary (Location Summary)

The Godown/Location Summary statement shows the Stock Summary for different Godowns/Locations. While the main Stock Summary shows the stock position for the entire company on a given date, the Godown/Location Summary is a statement of stock in hand at each location on a particular date. As with all Tally statements, it is updated with every transaction so that it provides current stock position for any godown/location at any time. The statement can be drilled down as with all Tally reports, and configured to view different details. It is also possible to see the total flow of stock for each location in a single report. Experiment with the different buttons for this purpose.

Gateway of Tally > Display > Statements of Inventory > Godown/Location Select Primary - to view the summary for all Godowns/locations. Alternatively, select a specific Godown/Location to limit information to that location/godown. The default display is that of Godown/Location Group balances. Yes, you might have sub-groups of godowns/locations quite like sub-groups of stock items or any other Tally Master entity. Select Detailed for second level of detail.

This could be a sub-group of godowns/locations or directly the stock groups under the godown/locations in cases where there are no godown/location sub-groups. In the above example, note the two godowns/locations with stock groups below them. Here, there are two stock groups, viz., Hardware and Software that have closing balances. The Godowns/Locations as well as Stock groups show total quantities. This is because the unit of measure is the same for all the stock items and they have been set up to enable aggregation of item quantities. The stock group Services, does not have any balance. This is because of the original set-up of the Services items, where stock is valued at Zero Cost and all sales are treated as Manufactured. Note: There is a grand total too because of a single unit of measure for all 'addable' items. If there were different units of measure, then there would not be a grand total. In fact, there would not be a total quantity for the Godown/Location too. Two different units cannot be added. More: Views of Godown/Location Summary Statement Godown/Location Stock Flow/Reconciliation Godown/Location Vouchers Batch information in Summary Statements

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Views of Godown/Location Summary Statement

Use options in the button bar to set up different information views. The buttons are similar to those available in Stock Summary. The Godown/Location Summary shows stocks at each location. In the above example, Bangalore Warehouse has a negative balance for Software. Wimbledon warehouse has disproportionately high stock. Further investigation is possible by expanding the groups and zeroing down on the stock items at both the locations. Perhaps, there was an error in transfer of goods? Bring the cursor on Software and press SHIFT+ENTER to expand the group. Do so for each location.

It is now clear that the stock item Tally eis 5.4 – single-user has negative balance of 24 pcs. By drilling down further into the stock item, it is found that there was a stock transfer entry that caused the problem.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Godown/Location Stock Flow/Reconciliation

The reconciled flow of goods at each location is available. Select F12:Configure while in the Godown/Location Summary Screen

Set the options as above to opt for Opening, Goods Inward, Goods Outward and Closing Balances. The statement shows the flow of stock: Opening Stock, Goods Inwards, Goods Outward and Closing Stock at each location.

The statement is quantitatively reconciled but not monetarily. What that means is: Opening quantity + Inward Quantity – Outward Quantity = Closing Stock Quantity. However, this is not true of values and you should not be disturbed because values do not add up this way. This is because the Outwards value shows Sale Values and not Cost. The Closing Stock Value is however based on cost and the Cost Method adopted for each item. Value reconciliation is possible using Consumption figures instead of Outward Values. Press F:7 Show Profits to expand the Outwards Column to give consumption and Profit figures. The Value Reconciliation is now possible using Opening Value + Inward Value – Consumption Value = Closing Stock Value. Columns Use Columns to see stock balances of the godowns/locations on different dates/periods or other

options. If you have selected a specific Godown/Location to display, you can still bring up information of the other godown(s) /location(s) in columns. Select New Column or Auto-Column for such displays.

The above statement is obtained by selecting: Auto-Column > Location And Show Total column. Different reports are available from the Stock Item Monthly Summary including different periodicity and Average stocks. Drill down an item in the Stock or Godown/Location Summary level to the Item Monthly Summary and use F12:Configure options.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Godown/Location Vouchers

Gateway of Tally > Display > Statements of Inventory > Godowns /Locations Select a Godown/Location,e.g., Bangalore Warehouse Select Item.

Godown/Location Vouchers is a list of all vouchers for a selected item that have a relation to the selected Godown/location during the period of display. The relationship could be a stock in our out of the particular location. This statement is useful when you want to list all transactions for a particular Godown/location.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Batch Information in Summary Statements

To view the stock of batches of an item: Gateway of Tally > Stock Summary This could even be the Godown/Location Summary. Expand the Stock Group using Detailed or SHIFT+ENTER till it you get the Items displayed. Use SHIFT+ENTER to reveal the Batches and their stock position. Use F12:Configure to use Opening Balances, Goods Inwards and Goods Outwards.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Sales Bills Pending

Gateway of Tally > Display > Statements of Inventory > Sales Bills Pending

Sales Bills Pending Report is created when Tracking Numbers option is active. It lists out all instances of incomplete sales where goods may have been delivered but not fully invoiced. It also lists instances of invoices raised but for which goods have not been delivered. The default report looks something like this:

Use Detailed to see the transactions that lead to the Pending Quantity Use F12:Configure to see the Initial Quantity

Note: To drill down, bring the cursor on the voucher detail line and press enter.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Purchase Bills Pending

Gateway of Tally > Display > Statements of Inventory > Purchase Bills Pending Purchase Bills Pending Report is created when Tracking Numbers option is active. It lists out all instances of incomplete purchases where goods may have been received but not fully invoiced. It also lists instances of invoices received but for which goods have not been received. The default report looks something like this:

For variations in the report, read the section on Sales Bills Pending.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Aged Stock Analysis (Ageing Analysis)

A very important function of Working Capital management is monitoring stocks. Money locked up in stocks can adversely affect the liquidity of a company and every company strives or should strive to reduce stock levels to the optimum. Every business (except perhaps the liquor and antiques dealers) would prefer to dispose of older stocks as they might deteriorate with time, go out of fashion, or simply get forgotten. Tally's aged stock analysis or Stock ageing enables you to know the age of stocks in hand according to when they were received and the purchase value. More: How to view Ageing Analysis

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How to View Ageing Analysis?

Gateway of Tally > Display > Inventory Books > Ageing Analysis Select the Group of Stock Items to be analyzed

Ageing Analysis report produces a default ageing period of <45 days, 45-90 days, 90-180 days and >180 days. You can change the setting by using F6. The default report also gives stock values based on Actual Purchase. Use Hide Amount to view the report without values as has been done above. Since Negative Stocks cannot be aged, they are shown in a separate column. More: Item Inward Details

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Item Inward Details

Gateway of Tally > Display > Inventory Books > Ageing Analysis Move the cursor to any of the age-wise columns (viz., <30 days, 30 to 60 Days, >60 Days) for an item and press Enter.

The Item Inwards Details statement shows the inward movement of the item for the date range calculated from the age period. Age Analysis is done for stock in hand based on when they were purchased. Hence, while viewing the Ageing Analysis Report, the Item Inwards details statement is very useful and relevant. It provides further information of aged stock like date of purchase, supplier and provides drill down to the actual transaction voucher.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Scenario Management

Scenario management is a management tool that enables different views of your information, both accounts and inventory related, by selectively including certain types of vouchers without affecting the base data. This is useful in reports with provisional figures without actually putting the entries through the main books. It is also useful for forecasting by entering forecast figures in provisional vouchers and including them to get forecasted figures. The vouchers that are used in Scenario Management are: Optional Vouchers Memorandum Vouchers Reversing Journals In this section we will dwell on the way we can use these vouchers in Reports. How to enter them have been dealt with in the Voucher Entry chapter. You can create a number of scenarios each including and/or excluding one or more types of these voucher entries. Hence, you may have one scenario that is used for reporting monthly figures in which you have to report depreciation provided for the month as well as account for all accruals and outgoings. Obviously, you do not want to put through your books journal entries for this purely temporary reporting. Of course the entries are available for reference in separate registers. You would decide to include Reversing Journals for Provisional monthly reporting.

More: Create a Scenario Alter or Display Scenario Information How to use Scenarios List of Accounts (Chart of Accounts) Exception Reports

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Create a Scenario

Ensure that you have activated the option Use Reversing Journals & Optional Vouchers in F11:Company Features. Now do the following: Gateway of Tally > Accounts Info > Scenario > Create

Name Give a suitable name to the scenario. In this case, we give Provisional. Include Actuals Yes, if you want the report to Exclude Forex Gains/Losses Calculations Yes, if you do not want to the Unadjusted Forex Gain/Loss element to appear in the scenario. No if

you want it to appear. Exclude Inventory Tracking Calculations Yes, if you do not want to the Sales/Purchase Bills Pending element to appear in the scenario. No if you want it to appear. Include Include from the list of vouchers, the type of vouchers that you want to affect this scenario. Notice that it picks up the Voucher Types created for this company. Only provisional vouchers are permitted for selection Normal vouchers that are marked Optional are available but not those not marked as such. They would affect the books of account. Exclude Include from the list of vouchers already included under Include above, the type of vouchers that you DO NOT want to affect this scenario. You would use this typically later in Alter mode and hence is discussed under Alter or Display Scenario Information. Accept to create this scenario.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Alter or Display Scenario Information

Gateway of Tally > Accounts Info > Scenario > Alter. Select the scenario to alter from the List of Scenarios The information given while creating the scenario is brought up and you can amend any selection. Exclude You would use the Alter mode when you do not require a selected included voucher anymore to affect the scenario. It is easier for you put that in the Exclude List than to remove it from the Include List.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

How to Use Scenarios?

Now that you have created one scenario, you are ready to use it in any report. But first let's create a reversing journal. Gateway of Tally > Voucher Entry > F10:Memo Select Reversing Journals from the list

For 31-12-98 make the following entry: Dr Depreciation (under Group Indirect Expenses) 15000 Cr Prov. For Depreciation (under Group Fixed Assets) 15000 Narration: depreciation for the month for HO reporting purposes. Actual depreciation to be provided for the whole year at year end. Accept the Voucher. More: Display/Alter a Reversing Journal Using Scenarios in Statements and Reports

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Display/Alter a Reversing Journal

You can view or alter the reversing journal through the Reversing Journals Book found under Exceptional Reports. Gateway of Tally > Display > Exceptional Reports > Reversing Journals Select a month to list all the reversing journals for that month. Drill down to view or alter the entry.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Using Scenarios in Statements and Reports

You can use scenarios in most statements (not registers) that have the Column buttons active. Display the Balance Sheet Select New Column In the column details, tab down to Types of Values to Show Select Provisional. You will note that it is described as Scenario. You now have two columns in the Balance Sheet for the same date; in the figure below for 31-1298.

Note the Provision for Depreciation figures in both the columns. The actual column shows –18250 while the Provisional column shows –33250. This is because the Provisional Scenario contains a reversing journal for the difference. If you try to drill down the Provisional figure, you will not be able to see the actual transaction as it is not actually in the books. To view it, you must go through the Exceptional Reports Display Menu. Note: Unadjusted Forex Gain/Loss figure is not included in the Provisional column confirming the Scenario set-up. You can use the same procedure to create another scenario for Sales Forecasts. Create a new Scenario and call it Sales Forecasts. Include Sales Vouchers Optional Only. Now create 12 Sales Vouchers one in each month in the future. Remember to mark them Optional. View the Sales Accounts by drilling down the Profit & Loss A/c. Bring up New Columns and limiting each column date range to the following month. You will have the sales forecast figures. For this purpose, you could even used Memorandum Vouchers.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

List of Accounts (Chart of Accounts)

You create the chart of accounts from the Accounts Info menu. However, to view an existing chart: Gateway of Tally > Display > List of Accounts

The List of Ledgers is displayed in alphabetical order of main groups. Hence, Branch/Divisions is listed first and not the account name Anil, which is under the group Capital. Note the indentation and change in font. The groups are in bold, and begin on the extreme left, sub-groups slightly indented towards the right and still bold, while at the lowest level it is the ledger account, which is in italics and not bold. Drill down a ledger name to alter its details or Use the keys SHIFT+ENTER to reduce the details. Use the buttons to switch to their respective lists, (these are all lists of different Masters), viz, List of Groups List of Cost Categories List of Cost Centres List of Budgets List of Locations List of Stock Groups List of Stock Items List of Currencies List of Units List of Voucher Types

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Exception Reports

Exception reports are reports that track unusual transactions or balances. The different Exception Reports are: Gateway of Tally > Display > Exception Reports

More: Negative Stock Negative Ledgers Overdue Receivables Overdue Payables List of Memorandum Vouchers List of Reversing Journals List of Optional Vouchers Post-dated Vouchers

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Negative Stock

Gateway of Tally > Display > Exception Reports > Negative Stock This is a list of all stock items that have a negative balance at the end of the period of display.

If a negative balance occurs within the period but is adjusted by a purchase so that the balance is not negative at the end of the display period, the item will not be listed. Change the period or select multi-column display, via auto-column, and see the negative items come up:

Drill down for further details. Of course, you can also see the Stock Item display for greater detail.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Negative Ledgers

Gateway of Tally > Display > Exception Reports > Negative Ledgers This is a list of ledger accounts that have obverse balances, i.e., balances that are opposite to the nature of the account. For example, a creditor account having a debit balance and an asset account having a credit balance.

Here, Bank of Paris is a Bank Account and is expected to have a debit balance. British Telecom is a Creditor/Supplier account and should normally have a credit balance.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Overdue Receivables

Gateway of Tally > Display > Exception Reports > Overdue Receivables This is a list of all invoices that are overdue on the current date.

Ageing - use the Age-wise button. Overdue Payables – use the Payable button.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Overdue Payables

Gateway of Tally > Display > Exception Reports > Overdue Payables This is a list of all purchase bills that are overdue on the current date.

Ageing - use the Age-wise button. Overdue Receivables – use the Payable button.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

List of Memorandum Vouchers

Gateway of Tally > Display > Exception Reports > Memorandum Vouchers This is a list of Memorandum Vouchers entered during a period. Change the period as required.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

List of Reversing Journals

Gateway of Tally > Display > Exception Reports > Journal Vouchers This is a list of Reversing Journals entered during a period. Change the period as required.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

List of Optional Vouchers

Gateway of Tally > Display > Exception Reports > Memorandum Vouchers This is a list of vouchers marked as 'Optional' during a period. This list includes all types of vouchers that are marked Optional.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Post-dated Vouchers

Gateway of Tally > Display > Exception Reports > Post-dated Vouchers This is a list of vouchers that are marked 'Post-dated' within a given period. The list includes all types of vouchers that are marked 'Post-dated'.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Printing Reports

Reports and documents generated through Tally's extensive display capabilities can also be printed. Printing is possible in two ways: Using the Print button You can choose to print directly from the screen currently displayed by selecting the button PRINT (top-most button on the right-hand side of the screen). This brings up the Print Configuration screen for the report and new button options on the right-hand side of the screen. Multi-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. 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. Common printing options affect the printing of current selected reports. They are changed by selecting the appropriate button on the right-hand side of the screen: With Preview: To view the report on screen before printing. 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. Print Format: A pop-up list displaying the printing formats available in Tally. The formats provided are, Dot-Matrix Format, Neat Format and Quick (Draft) Format. With Colour: This option is only relevant if you have a colour printer. Copies: To specify the number of copies to be printed. Printer: To change the printer settings. This also displays the default paper size that you have set for the printer. More: Print Format Draft Mode Printing (Quick Format)

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Print Format

Print Format is a button that appears on the Print screen (after pressing Alt+P or clicking on the Print button). Click on the Print Format button, Tally displays a list of Print Formats as follows:

Neat Mode and Quick/Draft Mode print formats are compatible with most of the printer drivers installed on the Windows Operating System. Dot Matrix Format in Tally is a special print format that allows you to print Tally reports in text format using the Blazing speed of Dot Matrix printers. In today's hi-technology software environment, most GUI-based softwares do not provide Dot Matrix printing capabilities. However, Tally being a Windows-based software has a print format

compatible with dot matrix printers considering that time is valuable and time taken to print reports should be as quick as Tally's real-time report generation! Select Dot Matrix Format, the screen appears as:

By default, the Epson printer drivers have been defined. You may install Epson Printer drivers in Windows for any Dot Matrix printer and use this format for faster report printing! Note: Any Dot Matrix printer may be used, but ONLY the Epson printer drivers (LQ and FX series) should be used for Dot Matrix Format printing of Tally.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Multi-Account Printing

You can print documents and reports generated by Tally using the Multi-Account Printing option. To drill-down to Multi-Account Printing, open Gateway of Tally > Multi-Account Printing.

You can further drill-down to Accounts Books, Outstanding Statements and Inventory Books, and you can select the appropriate reports to print. You can change the common printing options by selecting the appropriate buttons on the righthand side of the screen.

To get to know about these buttons click Printing Reports.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Draft Mode Printing (Quick Format)

Almost every report can also be printed in Draft Mode (except for Cheques!). The default behaviour of Tally is to print in Neat Format – and you may alter this by pressing Alt+F just before 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. After selecting Draft mode or Quick Format, click on Alt+S – to select the option Print to a File. Specify the name of the File to output the data and select the Printer whose dimensions are to be used.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Importing Master data

Gateway of Tally > Import Masters A file containing the masters exported from another Tally company data should exist so that it can be imported and merged with the data of the current company.

On selection of All Masters, you will be required to give the source file name and format in which it is to be imported. Give the full path of the source file. Data may be imported in Tally from either Tally 4.5 Format, or Tally (XML) Format or plain Tally 6.3 Format. The support for Tally 4.5 format has been included keeping in mind the thousands of programs running all over the world. Select the format required and the data will be effortlessly imported. Tally 7.2 Formats are inherently richer in content. Lists of Accounts (Masters), and Vouchers (e.g. Daybook), exported out from Tally ies 7.2 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 ies 7.2, may be imported back using the Tally 7.2 Format. Tally's design permits it to import any kind of data. It is capable of being programmed to use data from other systems much more easily. This permits you to continue using other systems and use some of their data in Tally as if they were parts of one integrated system. For example, a customer contact management program may contain various details like status of an order and last contact made. Bring in that data into Tally to merge into a report containing outstanding balances. Any changes in the other data will be immediately reflected in Tally. For those who wish to connect to other programs and use external data in Tally contact Tally Solutions at 'enterprise@tallysolutions.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.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

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. Or export it to another company using Tally that will import it directly. Export of all reports and statements is possible. A separate button is provided in the button bar and press it to export the current report. All the four formats are available for export. For more details on the formats, please see the E-mail section under E-capabilities.

The exported file is saved in the parent Tally directory on your computer. You can now use that file to import its contents into another program, send it as it is (say if it is HTML file) to a colleague or view it using a browser. More: Export Master Data

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Export Master Data

Gateway of Tally > Display > List of Accounts

Click on Print Click on Export

File Name The file name is required and can be anything. Format Four formats are available for selection – ASCII, SDF, HTML, XML. Select HTML only if you want to publish or display it. If the export is required to import the file into another system, select any of the others. Type of Masters A wide selection of masters is available.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Import of Masters

Import Masters Ensure that you have the Company activated where you want to import masters If the Company is not selected, load the Company Select Import Masters Type in the file name. The name and path of the source file should match.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Import Vouchers

Return to Gateway of Tally and Select Import Transactions. Type in the file name. The name and path of the source file should match.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

XML

To export transactions, select Day Book to export. If you wish to import those transactions in another system, XML format is recommended. An XML output will have an XML envelope and is formatted with XML tags to enable import into other systems. The destination system would need a little re-formatting of XSLT (XML Style Sheets) based on the Tally Styles and can then import the data. However, another Tally system can import the XML data directly using the import menu option and without any re-formatting. Merge data: The imported data can be merged with existing data in this way. Please refer to the Import of Data section.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Tally ODBC

Tally uses ODBC to connect to other programs and exchange data dynamically. More: Outward Connectivity Inward Connectivity

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Outward Connectivity

Pick up data from Tally directly into other programs like Microsoft Excel or Word without any programming! Print labels for greeting cards from the ledger addresses stored in Tally! Even create templates for the likes of Audit Reports and Schedule VI forms and plug in data from Tally. Tally's database is now open for use in most popular programs to give you the unlimited flexibility of creating your own reports using up-to-date data from Tally.

How to Use ODBC?
A brief exercise will explain the process. We wish to send greeting cards to all our customers. The customer database in Tally already exists. You want to use the names and addresses that you stored there to print out labels for the Greeting Cards. For this job, we will use Tally data in MS Word. Start Tally. It should keep running. Ensure that the words ODBC Server is visible in the Gateway of Tally screen 1. Start MS Word > Select Tools > Select Mail Merge 2. Main Document >Create > Mailing Labels 3. Now press the Data Source button 4. Get Data > Create Data Source 5. Click on MS Query (at the bottom of the dialog box beside File Name)

6. Select TallyODBC. (You could use a saved Query by clicking the Tab Queries. Do that after you have saved this query that we are creating) Let the Use the Query Wizard remain ticked. The Query Wizard brings the Tally fields that may be selected. You can also give filter conditions to limit the data brought in to only those that match your criteria. Hence,

Select Ledger and move by click the > button to the right the following fields: $Name, $Parent, $Address (move all the other address fields as well. Then in the next Query Wizard Screen – Filter data to limit all ledger accounts belong to the Group that contains the name 'Customer'. (In our Sundry Debtors Group we have created sub-groups called Trade Customers below which we have different Customer Groups as well) We want to print labels for customers only.

You can save the Query for future use. Then the process of Mail Merge is intuitive and is the domain of MS-Word. You can set up the main document and bring in the Create Labels dialog box,

Insert Merge Fields from Tally. The labels will be created.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Inward Connectivity

On the other hand, Tally ies 7.2 is capable of being programmed by TallyExperts to use data from other systems much more easily. This permits you to continue using other systems and use some of their data in Tally as if they were parts of one integrated system. For example, a customer contact management program may contain various details like status of an order and last contact

made. Bring in that data into Tally to merge into a report containing outstanding balances. Any changes in the other data will be immediately reflected in Tally.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Synchronization using Tally Server and Tally Client.

Synchronization refers to a process in Tally, where data is being replicated between two or more locations. This enables a branch office to send its data to the head office over the internet or a private network. Tally provides complete control over the frequency of replication. The user can opt to replicate the data after every transaction or he can post his updates at specific intervals. Synchronization has to be initiated by the Client only. Synchronization is both ways – i.e, all data from the client company goes to the server and all data from the server company gets copied to the client company. After the synchronization has been set up, replicating data between the locations is a single click activity.

Setting Up Synchronization between 2 Locations using Tally.
The following configuration variable has to be specified in Tally.INI file (available in the Tally directory) in order to activate the synchronization modules - TallyClient and TallyServer. ClientServer = Client / Server / Both ServerPort = Any valid TCP-IP Port Number. Ex: 9000 ClientServer specifies the mode in which Tally should run. The possible modes are: Client - Tally would function as a Client, which initializes the synchronization process. It cannot service requests from other hosts for synchronization. Server – Tally would function as a Server that can service requests from other hosts (clients) for synchronization. Both – Tally would function both as a client as well as a server. The Client Rule is created, at the TallyClient end, in one of the companies specifying the details of the host (TallyServer) it wants to exchange data with. Any version of Tally ees 6.3 and above can act as a TallyClient / TallyServer, depending on the module that is purchased.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Creating the Client Rule from the client machine

At the TallyClient end, load the desired company and create a Client Rule. A client Rule is created by selecting the following option: Gateway of Tally > Import of Data > Synchronization > Client Rules > Create

Name of Rule Specify any suitable name. Like - "Sync with H O". Rules with same name are not allowed. Server URL Specify the IP address / Machine Name followed by the TCP/IP port of the TallyServer. Ex: 192.168.1.1:9000 - where 192.168.1.1 is the IP address of the server and 9000 is the TCP/IP port number. Secure Server Specifies whether HTTPS (Secure HTTP) should be used instead of HTTP for synchronization. Company Name on the Server Specify the company name on the server with which you wish to synchronize the data. Synchronize the Altered transaction If any back dated/current altered transactions need to be synchronized with the Server set this option to YES. Synchronize Over Slow Connection Can be set to YES while synchronizing through the DialUp connection. Accept the Rule. Once client rule is created, switch back to the Synchronization menu and opt for Synchronize. A request would be sent to the server from the client machine for creating a Server Rule corresponding to the Client Rule. A user can never create a Server Rule manually. A Server Rule gets created implicitly whenever a Client Rule tries to synchronize with the server. If you don't receive any error message in the calculator pane of Tally in the client machine, then it is confirmed that the Server Rule has been created successfully on the server machine.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Activating the Server Rule from the Server machine

Gateway of Tally > Import of Data > Synchronization > Server Rules > Activate. You will get a list containing the GUID and name of the company on Client that requested the synchronization. A client cannot exchange data with the server unless a user on the server activates a server rule. This is required for enforcing security. You can have more than one server rule as a result of multiple client requests.

Name of Rule shows the GUID of the client company that requested synchronization. Company Name on Client shows the name of the company in the Client that has sent the request for synchronization. Select the appropriate server rule and set Yes for Is Active. The GUID (Globally Unique Identifier) is a 16-byte value that uniquely identifies a company created in Tally. Technically, a GUID is a very large, statistically unique identifier generated from the address of the Ethernet card in the current machine, the current time since 1582 (10 bits), etc. No two Ethernet cards anywhere should have the same address. If the machine has no network card, another number is synthesized that will almost certainly be unique to the machine. It is very unlikely that duplicate GUIDs will ever be created. GUIDs are useful because they ensure that there will be no naming clashes within the companies created in Tally. Tally assigns a GUID to every company while creating it. Once a server rule has been activated, data can now be exchanged between the two hosts. Now from the TallyClient machine, click on Synchronize again. All the data from the client gets posted to the server and all data from the server get saved in the client. To sum it up, setting up synchronization can be done by performing the following steps: 1. Define the Client / Server parameters in the Tally.ini on the TallyServer and TallyClient machines. 2. Create a client rule in TallyClient machine. 3. Select Synchronize menu option. The client connects to the server and creates a Server Rule 4. Activate the Rule on the TallyServer. 5. Click on the option "Synchronize" in TallyClient machine again. 6. The data will be synchronized.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Synchronizing Back-dated Vouchers

If you have set up synchronization between 2 companies having large amount of data, the initial synchronization can take a large amount of time over the Internet. The client can also display an out of memory error. The recommended way to start synchronization in this scenario is to export data from the source company to a disk file and import the data into the target company. However, since Tally maintains the last ID of the remote company along with the rules, you have to make sure that the ID gets updated when you import data into the target company. To ensure proper update of Remote Ids in the corresponding rules – perform the following steps: Client is supposed to send data to the server Create a Client Rule on the Client Select Synchronize on Client – This will create the corresponding server rule on Server Activate the rule on server DON'T synchronize again. Export all masters in XML format from the client company to disk file Export all vouchers in XML format from the client company to disk file Import the masters into the server company from disk file Import the transactions into the server from disk file The TID of the last imported voucher gets updated in the Server Rule Subsequent syncs would be incremental OR If you want to sync over LAN / Internet, you can choose to send one transaction at a time by selecting Sync Over Slow Connection in the client rule. This will ensure that the XML for 1 transaction is created and sent at a time avoiding any "out of memory" errors. Note: This works ONLY for client sending data to the server. The server always creates and sends the entire XML to the Client. Client is supposed to retrieve data from the server Create a Client Rule on the Client Select Synchronize on Client – This will create the corresponding server rule on Server Activate the rule on server DON'T synchronize again. Export all masters in XML format from the server company to disk file Export all transactions in XML format from the server company to disk file Import the masters into Client Company Use the Select Import Initial Option to import the transactions and NOT the regular Import Transaction.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

E-capabilities

Tally has extensive internet capabilities. E-mail, Web-publishing and data interchange over the Internet are all easily achieved from within Tally. Pre-requisites to using E-capabilities of Tally: 1. You should have an internet connection accessible from your computer. This could be through a direct dial-up modem or through the network. 2. For E-mail - an E-mail account. 3. For Web Publishing - you should know the sites URL (address) and have authority to upload files on the sites. More: E-mail Internet Publishing Web-browser

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

E-mail

Send Invoices to your customer by e-mail. Or your purchase order. In fact, e-mail any Tally report or document as easily as you print! Even Reminder letters and statement of accounts need not be printed and posted. Simply e-mail them. E-mail is the single largest use of the Internet and is set to penetrate even the very small towns. You are uniquely positioned to take advantage of this medium. It is not only postage cost that you save, you save on so much of your valuable time.

E-mail a Reminder Letter
Select a customer's Outstandings Statement from Statements of Account. Click the E-mail button.

There are various options that are automatically filled in if the information had been supplied in the master records. Check if the details are all right. If they are, select Yes, if not select No to change the options. The cursor first goes to the To E-mail address field as it seeks to save your time in skipping standard information. However, if you wish to change them, e.g. the Format, use backspace. The options are: E-mail Server (Mandatory Field) Give the name of your E-mail SMTP server, e.g. mail.btinternet.com. It should be a valid SMTP server that will accept sending your mail. If in doubt, refer to your Internet Service Provider or ask your network administrator. You need to give this only the first time you use e-mail services of Tally. Next time onwards, Tally will remember. From Your Company name is picked up from Company Information Master records. From E-mail Address Your own e-mail address. It is picks up the address given in the Company Information master data . If it does exist there, you will be required to fill it in. Format Four Formats are available for selection: ASCII (Comma delimited) HTML (Web-publishing) SDF (Fixed Width) XML (data interchange)

Select the one required by your recipient. An explanation on each format is given below: ASCII This is plain text format where data is separated by commas. This format does not have any special formatting or fonts. This is the most common e-mail format as all mail programs will be able to read it. ASCII data can be easily worked upon by other programs. HTML Reports are attractive and retain their formatting and fonts. They can be read by a HTML enabled mail program. It can also be read using only a simple Browser like Microsoft Internet Explorer. SDF Standard Data Formats are fixed width columnar data that is also without any formatting or font. Like ASCII, SDF data is easily imported and used by many programs. XML Short for Extensible Mark-up Language, it is an extension of HTML but the data is capable of being imported by other XML aware systems. Using XML, Tally enables you to exchange information even with non-Tally systems. An XML output will have an XML envelope and is formatted with XML tags to enable import into other systems. Therefore, Your Tally invoice in XML format can be import by another system without difficulty reducing data entry time and errors. This language is fast emerging as the de-facto standard for information exchange all over the world and with it Tally gives you the means to collaborate with others and share information like never before. Resolution Required only in the case of HTML formats, this refers to the resolution in terms of pixels used to format the report and the selection affects the quality of output. Higher resolutions are generally recommended. Tally recommends 1024x768. To E-mail Address (mandatory field) This is for the recipient's e-mail address. A valid e-mail address is required. CC (if any) For copying the mail to another recipient. Subject This is pre-filled for you. Change it to any other meaningful subject. Additional Text The text in this will appear as the first lines in the message body of the reception's mail program. The other options are the same as in Print option and are self-explanatory Print Preview The Print Preview screen through the Print option, allows you to view the document and even scrolls if it is multi-page; print from there or even E-mail the document as an attachment. Hence, if you want to see how a document that you originally wanted to E-mail, would appear at the destination, use Print Preview.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Internet Publishing

Websites – most businesses will have one in the near future. Tally helps make commercial use of your web space with the ability to publish all reports and documents on your website. For this purpose, it creates reports in the web-language HTML that Tally directly put on your website. You can use this feature to inform customers the new price-range and stocks available for sale. Tally has ensured that this transmission of data is secure by using world-standard encryption of data.

Upload
Any report or statement or data can be published on the internet. Publishing is carried out by uploading the report to an Internet Server that has been configured to accept files in specific protocols. A Site is a basically a specific directory space allotted to you on that server. Protocols are sets of rules and specifications on how data and files are transferred over a network and cover all aspects of communication between computers including content, formatting and error control. Say you want to publish your Price List on your Website. 1. Select the Price List from Inventory Information. 2. Click the Upload button. The first time you upload, you have to supply Tally with some information. Therefore select No to the question Upload?.

Upload to FTP Site This is a site that accepts files transfers in FTP. A FTP site is a directory space in a Server that

accepts FTP connections called the FTP Server. FTP or File Transfer Protocol is the most common choice to transfer data or files of any type to an internet site. You will use this unless you know that your site accepts HTTP or HTTPS uploads. Web Page – HTTP/HTTPS HTTP short for Hyper Text Transfer Protocol is a standard for transfer of HTML files over the internet. HTTP Servers are pre-programmed to accept HTTP connections. HTTPS sites are Servers that are configured to accept secure connections. They conform to standard security protocols (e.g. SSL and SET) to ensure that your data and files are not tampered or while the connection remains. If you know that you'r server is set up for HTTP/HTTPS , then use them, else chose FTP. URL Short for Universal Resource Locator that tells Tally the server address where you want your report published. If you are using FTP you will need to know the FTP server name and directory path. The FTP server name is the domain name of the Web server to which you are publishing (for example, ftp.server.com). The directory path is the folder on the server where your web is stored (for example, /public_html). For a web page, an URL will typically be in the form www.myweb.com. Secure Server If you select Web Page to Upload to, this question seeks to know whether you want to use a secure connection. Select Yes, if you think your data is sensitive and provided your server is configured for it . A secure site is one that has the 's' with http. You will know it is a secure site when you see in your browser URLs like https://www.mybank.com/myaccount/stats.htm. User Name and Password Your Internet server wants to know who you are before permitting Tally to put in data and files on the site. If you are unsure about your user name, password, or FTP location, contact your Internet service provider. File Name A file name is proposed if you have select FTP Site to Upload to. Accept it as it is or modify only if necessary. Format The same four format options are available. Select the most appropriate to your needs. An explanation on each format has already been given under the E-Mail section.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Web Browser

You have a button to access the World Wide Web from Tally. Click on the button Web Browser to begin your session. When you want to end it, press End Browser. Of course, you should have a valid internet access account set up on your computer and a browser that is already installed.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Tax Deducted at Source (TDS)
Tax Deducted at Source (TDS) is one of the modes of collecting income tax. The buyer (deductor) deducts the tax from the payment made to the seller (deductee) and remits the tax to the Income Tax Department within the stipulated time. The buyers (Corporate and Non-Corporate) make payments (such as Salary, Rent, Interest on securities, Dividends, Insurance Commission, Professional Fees, Commission on Brokerage, Commission on Lottery Tickets, etc) to the sellers (Services) and deduct the requisite amount from such payments towards tax. The buyer files the TDS returns containing details of the seller and the bank, where the TDS amount is deposited to the Income Tax Department (ITD). The Income Tax Department has prescribed the formats for filing these returns electronically, which the buyer does in a CD/floppy. For additional details you can visit the Income Tax Website at http://www.incometaxindia.gov.in

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Flowchart of TDS
A seller (deductee) provides services to the buyer (Deductor). The buyer deducts the amount towards TDS prior to the services or the bills received. The buyer issues Form No.16A to the deductee and deposits the deducted amount to the Authorised Bank (Treasury). The buyer files annual returns electronically to the Income Tax department.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Who is required to file e-TDS return?
The Income Tax Department has made it mandatory for all Corporate companies like private limited and public limited to file their TDS returns in electronic media (i.e. e-TDS returns). However, the Non - Corporates like individuals, proprietary firms and partnership firms can furnish their returns in physical form to their respective Income Tax Offices. They can also furnish their returns in electronic form through TIN facilitation centres established by NSDL. Filing of e-TDS return to Non- Corporate deductors is optional.

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Filing e-TDS Returns
The Buyer (Deductors) has to furnish the TDS returns in electronic form and Form 27A in physical form

along with the e-TDS return CD/floppy. Form 27A must be furnished separately for each return (Form 24, 26 or 27). NSDL has developed a utility called File Validation Utility (FVU) to verify whether the e-TDS return file prepared by the Buyer (deductors) conforms to the prescribed format.

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Transaction Flow in Tax Deducted at Source
Example 1: Indirect Expenses (Fees for Professional or Technical Services (Section 194J)
Mr. Manohar is a technical consultant for automobiles. He inspects used cars and prepares a report. Mr. Manohar (seller of the service) receives Rs.500 for inspection of one car. He inspects five cars in January 2005. So he has to receive Rs.2500 as service charges. Company 'A' pays him Rs.2250 towards service charges and pays Rs.250 to any Bank or IT counter towards TDS. The following diagram explains the transaction flow in TDS:

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TDS in Tally ies 7.2
TDS (Tax Deducted at Source) in Tally ies 7.2 provides an easy-to-use interface with complete flexibility. It helps you to handle any intricate cases and to calculate the tax amount payable to the Income Tax Department. This also helps you to account for Form 16A related TDS issues and enables you to view various TDS reports, Challans and TDS Outstanding statements.

Features of TDS in Tally ies 7.2
The TDS functionality in Tally ies 7.2 supports the following features:
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Simple and User-friendly Quick and Easy to set up and use Accounting for tax on Partial/Full payment of bills Flexibility to have Auto and Manual calculation of TDS amount Generates Form 16A, TDS Challan, TDS Computation and TDS Payable reports Complete tracking of each transaction from deduction to payment Challan management and printing ensures prompt and accurate filing of Tax The Auto allocation feature prevents error-prone data entry and helps to track the transactions faster

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Company Creation
Company Creation means providing basic information about the company whose books of accounts you want to maintain in Tally. Gateway of Tally > Alt + F3 > Create Company

State Select the appropriate State from the list. PIN Code Enter the Postal Index Number, which is a numerical of six digits The State and Pin Code fields are added to capture the state details.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Enabling TDS in Tally
You can enable Tally TDS in F11: Features screen. The F11: Features button is available in almost all screens of Tally. This screen helps you to activate the TDS feature. Gateway of Tally > Click on the F11: Features button or Press the F11 Key 1. Set Enable TDS to Yes

2. Set Set/Modify other Company Features? to Yes. You will see the Advanced Company Operations dialog window

3. Set Enter TDS Deductor Details to Yes will display the below dialog window:

Tax Assessment Number Enter the Tax Assessment Number (TAN) in this field. The Tax Assessment Number (TAN) is a ten-digit alphanumeric number, issued by the Income Tax Department (ITD) to the deductors. Only one TAN is required for different types of deductions. TAN must be quoted properly on all Challans payment for TDS, Returns, All Certificates - Issue in Form No.16/16A, All Returns and in all documents and other correspondences with Income-tax Department. The format of the 10 digit TAN is something like this BLRM00123A
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BLR indicates the location code of the TAN allotment center (Eg: BLR for Bangalore) M indicates the first alphabet of the deductor name 00123 is the number within each location A is the check digit for security and verification

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Income Tax Circle/Ward (TDS) Enter the Income Tax Circle/Ward (TDS). The Income Tax Department issues Income Tax Circle/Ward (TDS). Deductor Type Select the Deductor Type (Company or Non Company) depending on whether your organisation is a Company or a Non Company. Name of person responsible Enter the name of the authorised person responsible to file the TDS returns of your company. Note: If Tally has a security feature enabled then this field is automatically filled with the user name. Designation Enter the designation of the authorised person filing the TDS returns.

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TDS Masters
The information required for TDS in the creation of ledgers depends on the features opted by you in the F11: Features screen. If you set Enable TDS [F11: Features] to No then you would not find any TDS related information in the Creation of Ledger. Hence, make sure Enable TDS option in F11: Features is set to Yes.

You can specify the TDS Ledger Names under any of these main group heads Duties and Taxes, Sundry Creditors or Sundry Debtors or sub groups of these main group heads. In case of all Loans (Liability), Branch/Divisions and Capital Account groups, you need to set Maintain Billwise Details and for Non-Trading Alcs also to YES in F11:Features to get the Is TDS Applicable option. The TDS related issues are created as Ledgers. The TDS ledger master screen now contains a new option to specify the Tax details. Firstly, create the following ledgers under different groups:
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Tax Ledger under Duties and Taxes Party Ledger under Sundry Creditor

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Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Creating Tax Ledger
The Tax ledgers have to be created under the group Duties and Taxes. The group 'Duties and Taxes' is automatically used for calculation of tax. This Ledger holds the entire automatic calculation for TDS tax deductions at the voucher entry level. It is internally enabled to calculate the Tax. The option to specify the Tax Type is available only for ledgers under the group 'Duties and Taxes'. The Tax ledger master screen can be reached by following the menu path: Gateway of Tally > Accounts Info > Ledgers > Create

Name Enter the name of the Tax Ledger Under

Select the group as Duties and Taxes from the list. On the selection of group Duties and Taxes, you will get the option to select type of Duty/Tax. Type of Duty/Tax Select TDS tax type from the list Nature of Payment Select the appropriate TDS Nature of Payment as statutorily applicable, given/ desired by the Govt. e.g. Fees for Professional Or Technical Services. By default, Tally provides you with a List of TDS Nature of Payment. You need to select the appropriate TDS Nature of Payment from the list.

Note: • Nature of Payment - You will find different categories that come under the Tax Deduction. Select the relevant TDS Nature of Payment from the List of TDS Nature of Payment that applies to your company. Ignore TDS Exemption Limit If the total transaction limit exceeds the actual limit you need to set the Ignore TDS Exemption Limit field to Yes then the tax is not calculated up to exemption.

Accept the Ledger creation screen.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Creating Party Ledger
You need to create ledgers for party/suppliers under the group Sundry Creditors/Sundry Debtors for whom TDS has to be calculated automatically by the system. The options Is TDS Applicable and the Deductee Type are available only for ledgers under the group Sundry Creditors/Sundry Debtors. You can either Create/Alter a ledger to specify your TDS account details. Gateway of Tally > Accounts Info > Ledgers > Create

Name Enter the name of the Party/Supplier, who provides services to you. Under Select the group as Sundry Creditors/Sundry Debtors from the list Is TDS Applicable Set Is TDS Applicable to Yes. This will open the Ledger Deductee Details sub-form. Deductee Type Select the Deductee Type from the list Ignore Surcharge Exemption Limit If Ignore Surcharge Exemption Limit is set to Yes then the exemption Limits will be ignored.

Maintain balances bill-by-bill By default this field is set to Yes for Sundry Creditors/Sundry Debtors. Mailing & Related Details Enter the Mailing and Related Details like Name, Address, Pin Code and select the State from the list, and enter the Income Tax and Sales Tax Number.

Similarly, you can create Ledgers that provide services to your company under Sundry Creditors//Sundry Debtors. Note: If the party is a Non Resident then PIN Code, State and the Sales Tax Number fields are not applicable

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Vouchers/Transactions
Vouchers/Transactions are used to enter/record a transaction in Tally. Gateway of Tally > Accounting Vouchers This will open the Accounting Voucher Creation screen

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Booking the TDS Expense
This voucher enables you to book the expenses directly and helps you to deduct the TDS and pay the amount to the party for their services. Select F7: Journal button to the right or press F7 to create a Journal Voucher. Gateway of Tally > Accounting Vouchers > Journal Voucher Or Press F7 key at the Voucher Entry screen to make a Journal Voucher This will open the Journal voucher creation screen. 1. Select Fees for Professional Or Technical Services (under Indirect Expense) from the list in the Particulars column and enter the Amount in the Debit column. 2. Select the Party from the list (ABB Enterprise) and the Amount appears automatically in the Credit column 3. Press Enter to view the Billwise details sub form as displayed below:

a. Select the Type of Ref as NewRef b. Enter the Name c. Select the TDS Ledger from the list to the right. d. The Amount is automatically picked up by the system. 4. Accept the Billwise Details sub form
5. Accept the screen to save the Journal voucher.

Note: Booking the TDS Expense can be done using the Purchase voucher available in default Tally.

Journal Voucher Using TDS Deduction Button
TDS Deduction button is available in Journal Voucher screen. You can pass a Journal voucher using this button to record all the Tax ledger transactions for a particular party who provides services. The list of ledger accounts displays only those ledger accounts enabled for the party selected. Gateway of Tally > Accounting Vouchers > F7: Journal button from the button bar on the right- side of your screen or press the F7 key

You are free to make any changes to the percentages of Income Tax, Surcharge or Additional Surcharge with the help of F12: Configure screen by pressing F12 key or clicking on F12: Configure button and set Allow Alteration of TDS Rates and Values to Yes. This will allow you to override the default TDS rates supplied by Tally.

1. Select TDS Deduction Button or Press ALT+S. You will get a list of TDS Ledgers for the party selected 2. Select the TDS Party Ledger from the list (ABB Enterprises). 3. Select the TDS Ledger from the list (TDS on Technical Services). The system calculates the Net TDS to deduct amount.

4. Select the TDS Applicable Bills from the list.

5. Accepting the TDS details sub form will post the Net TDS to Deduct amount in the Debit column of the Journal Voucher screen. Press the Enter key to credit the Tax Ledger (TDS on Technical Services). You may enter the New Reference Number for identification and accept the screen to save the Journal Voucher.

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Payment Voucher
Payment voucher is a multi-function voucher, which is used to enter/record all TDS related transactions. All transactions related to payment (through Bank) are recorded in Payment Voucher.
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TDS Challan Payment Payment to the Party ( While Paying the Advance)

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You can enter the payment voucher using TDS Helper Button (or Press ALT+S) and pay the TDS pending bills in one shot operation, for a selected TDS ledger OR You can also pay the TDS pending bills manually.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

TDS Challan Payment (Using the TDS Helper button)

The TDS transactions in payment voucher can be automatically entered one-time for a particular deductee status, using the TDS Helper functionality of TDS available in Tally. When a Payment Voucher entry is made for a Tax Ledger, click the button TDS Helper (ALT+S). This takes you to the sub-form TDS filters and allows you to specify the criteria for Auto-filling the voucher in association with the TDS ledgers. Gateway of Tally > Accounting Vouchers > Payment Voucher > TDS Helper 1. Press F5 at the Voucher Entry screen and Click on TDS Helper button or Press ALT+S to make a TDS Challan Payment Voucher 2. This functionality of Tally gives you tremendous flexibility to generate the payment vouchers, for any period and to any deductee.

Fields in TDS Filters sub form:
TDS Ledger Select the TDS ledger from the list. Deductee Status Select the Deductee Status from the list. You have to do this because you may require separate challan for different types of deductees. To Date In this field user may enter, the To date of the period for which the TDS values should be computed and auto-filled. Select the Bank ledger in which the payment to the Tax Ledger is made after the TDS deduction. Shown below is the resulting payment voucher screen. The Tax amount is automatically calculated.

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You can print this voucher as a TDS Challan. Click on the Print button or Press ALT+P from the payment voucher. It will display the Voucher Printing dialog window. You can configure the payment voucher as depicted in the screen below. If you wish to view the challan in a preview mode, click on With Preview button or Press ALT+I

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Set Print As TDS Challan to Yes. Accepting the Voucher Printing sub form will display the TDS Challan in Print Preview mode.

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Click on Zoom or press ALT+Z from the print preview screen to view the screen in a bigger size.

Note: Press Esc key to close the Preview screen..
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Click on Print to print the TDS Challan. Accept the payment voucher to save the entries made.

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Payment to a Party Ledger

The entry for the Payment to a party ledger is the same as in default Tally. 1. Select the Bank from the list. 2. Select the Party from the list. 3. Enter the Amount.

4. On entering the amount you will get the Bill wise details sub form. Select the Agst Ref from the list of pending bills. Accept the Billwise Detail sub form

5. Accepting the Billwise sub form will display the screen shown below.

6. Accept the Payment voucher to save the entry.

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Advance to a Party
Assume ABC Company Limited has decided to pay an advance of Rs.1,50,000 to a party (Smart Enterprises) for their service on advertising for this year. The Total taxable amount on Rs.1,50,000 will be 1% as Tax, 2.50% as surcharge and 2% as Additional surcharge after deducting the TDS from your Total Amount Paid/Payable, the Net TDS to deduct would be Rs. 1568.00. Click here to know how you can implement transactions based on the above example to pay advance to a party using TDS.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Payment Voucher (To Party Account)

The entry for the Payment to a party ledger is the same as in default Tally. Gateway of Tally > Accounting Vouchers > Payment 1. Select the Bank Account from the list. 2. Select the Party from the list and enter the advance amount that you wish to pay to the party. 3. You will get the Bill wise Details sub form, select the type of reference as Advance and enter a name, select the appropriate TDS ledger (TDS on Advertising Contractors) from the list. (If the TDS Ledger is selected as Not Applicable then such transactions are considered as Payments for which TDS will not be deducted). 4. The amount entered in the debit amount is displayed in the Amount column.

5. Accept the Bill-wise details sub form. Press Enter in the Payment voucher screen. It will display the TDS details for the selected TDS ledger (TDS on Advertising Contractors). This sub form will display the party name, type of deductee, amount, and total taxable amount, income tax, surcharge and additional surcharge. The system calculates the total taxable amount till date in this sub form. Enter the name of the reference.

6. You can change the percentages in the TDS details sub form. (Ensure Allow Alteration of TDS Rates and Values is set to Yes in that F12: Configure screen). This will calculate the Net TDS to Deduct on the Tax ledger according to the changed percentages. Accept the TDS details sub form. The Taxable amount for TDS on Advertising Contractors appears in the credit column of the Payment voucher screen.

7. Accept the Payment voucher screen to save the entry.

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Journal Voucher
You need to book the expense against the advance mentioned in the previous section. Gateway of Tally > Accounting Vouchers > F7: Journal button from the button bar on the right side of your screen or press the F7 key. Follow the below steps to pass the Journal Voucher: 1. Select Advertising Contractors from the list and enter the amount in the debit column 2. Select the Party (Smart Enterprises) from the list. Amount appears automatically in the Credit column. 3. Press Enter to view the Billwise details sub form as displayed below:

a. Select the Type of Ref as Agst Ref b. The Name and Amount is automatically picked up by the system. c. Accept the Billwise Details sub form. 4. Accept the screen to save the Journal voucher.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Preparing TDS Challan
The TDS transactions in TDS challan payment voucher can be automatically entered using the TDS Helper button functionality of TDS available in Tally. When a Payment Voucher entry is made, click the button TDS Helper. This takes you to the sub-form TDS filters and allows you to specify the criteria for Auto-filling the voucher in association with the TDS ledgers. Gateway of Tally > Accounting Vouchers > Payment Voucher Or Press F5 at the Voucher Entry screen to make a payment Voucher This will open the Payment voucher creation screen.

Select Bank Account from the list TDS Helper functionality in Tally gives you tremendous flexibility to generate the payment vouchers, for any period and to any deductee. After entering all the fields in TDS filters sub form. Select the Account (Bank) from the list.

Accept the Payment voucher screen to save the entry.

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TDS Outstandings
You can go to TDS Outstandings screen from Gateway of Tally > Display> Statement of Accounts > TDS Outstandings

TDS Outstandings
The TDS Outstandings option in Tally TDS provides the users with the facility to view the TDS Computations report, TDS Payables report and the Ledger Outstandings report that are pending for payment. Gateway of Tally > Display > Statements of Accounts > TDS Outstandings

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TDS Computations
You can go to TDS Computations from Gateway of Tally > Display > Statements of Accounts > TDS Outstandings >TDS Computations TDS Computation report provides you with a list of party and TDS Ledger name for which the TDS bills are pending till date.

Particulars column provides you with a list of Party and the TDS ledger names Amount Paid/Payable Till Date column gives the total amount that has to be paid to the party. Tax Rate displays the rate specified by the Income Tax department for the services provided by the party. Tax gives the total income tax amount calculated at the rate specified in the previous column Surcharge Rate displays the rate of additional levy on Income Tax Surcharge provides the total surcharge value calculated at the rate specified in the previous column Addl. Surcharge (Cess) Rate displays the rate of additional levy on Income Tax and Surcharge Addl Surcharge gives you the additional surcharge value at the rate specified Total TDS Amount displays the total TDS amount Less: TDS Deducted Till Date provides the TDS amount deducted till date Net TDS to Deduct provides the TDS amount that are not paid Click on the Print button or use ALT+P to print the TDS Computation report. This brings up the Printing TDS Computation configuration sub-form by which the user can customise the appearance of the Ledger report. Accept the TDS Computation configuration sub-form to view the TDS Computations report in print preview mode.

If the TDS payment is made to the government then such payment will not be displayed in TDS Computation drill down report.

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TDS Payables
TDS Payables report gives you information on the status of TDS payable (pending) amounts for a particular TDS Ledger account. Gateway of Tally > Display > Statements of Accounts > TDS Outstanding > TDS Payables The TDS Payables report provides the Outstandings for a Tax ledger accounts, e.g. TDS on Rent or TDS on Technical Services. If you want to know the status a particular TDS Ledger, press Enter on the Ref. No.

Note: If you wish to know more details on the voucher drill down further by pressing Enter. 1. Date: Date of creation as entered in the Payment/Journal/Purchase voucher 2. Ref No: The payment Reference number 3. TDS Ledger Name: TDS Ledgers created under Duties and Taxes 4. Pending Amount: The pending amount that needs to paid by your company to the bank/party. 5. Due on: The last date for the payment (Due date). 6. Overdue by days: The number of days passed from the date of payment

Click on the Print button or use ALT+P to print the TDS Payable report. This brings up the Printing TDS Payable configuration sub-form by which the user can customise the appearance of the TDS Payable.

Accept the sub form to view the report in print preview mode.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Ledger

To find out the outstanding status of a particular tax ledger account, you can go to Gateway of Tally > Display > Statements of Accounts > TDS Outstandings > Ledger Select the Tax ledger created under Duties and Taxes from the list Ledger: The selected Tax ledger name appears at the top left corner of the screen.

1. Date: Date of creation as entered in the Payment/Journal/Purchase voucher 2. Ref No: The payment Reference number 3. Opening Amount: The Opening balance amount if any. 4. Pending Amount: The pending amount that needs to paid by your company to the bank/party. 5. Due on: The last date for the payment (Due date). 6. Overdue by days: The number of days passed from the date of payment

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Challan Reconciliation
Reconciliation of Challan Payments made to Bank for TDS accounts is done in the Ledger Voucher report. Gateway of Tally > Display > Accounts Book > Ledger > Select the TDS ledger from the list.

The Ledger Vouchers Report provides a list of payment vouchers for the current month. You have the access to view the Ledger Vouchers by drilling down.

1. Click on the F5: Challan Reconcile button or press ALT+F5 to view the Challan Reconciliation report. 2. Enter the Bank Challan Number, Challan Date, Cheque/DD Number, Bank Name and the Bank Branch Code. 3. Accept the Challan Reconciliation report to save the entry.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Form16A Reconcile
This Report helps you to record the issue date of Form 16A Gateway of Tally > Display > Account Books 1. Select the TDS party ledger from the list

2. Press CTRL+F5 or click on F5: Form16A Reconcile button.

3. Click on F5: Form16A Reconcile button to reconcile Form 16A for a selected TDS party. Enter the Form 16A issue date and accept the screen.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

TDS Reports
TDS Reports in Tally display the tax amount of the concerned parties/suppliers. Tally generates Form 16A and also provides the printing option to print Form16A. Gateway of Tally > Display > TDS Reports Click on the TDS Reports option to display the following screen:

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Print Form16A
Print Form 16A option provides the facility to preview and print Form 16A. Gateway of Tally > Display > TDS Reports > Print Form 16A

1. On selecting the TDS Party Ledger from the screen, Tally generates Form 16A report in preview mode. 2. Select the buttons from the button bar and set the printing option (select the printer, set the number of copies, method, page range, paper type, paper size and print area).

3. Select TDS ledger from the list and enter the From and To date. 4. Select the Type of Copy; enter the Certificate No, Place and Date.

5. The date can be changed if required. 6. Click on Yes to view Form 16A in print preview mode

7. Click on Zoom or Press ALT+Z from the print preview screen to display the report as below:

8. Press Esc key to exit the zoom screen. 9. Click the Print button or press ALT+P to print Form 16A.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Multi-Form16A Printing
Form 16A can be printed for a selected TDS ledger with details of all the parties/suppliers associated with that ledger. Gateway of Tally > Multi- Accounting Printing > Multi-Form 16A Printing

1. Click on Multi-Form 16A printing. Before printing, set the date range and configure for printing. 2. Select TDS ledger from the list and enter the From and To date, Place and Date and accept the screen.

3. Navigate using the PgUp and PgDn links in the print preview screen. 4. Click the Print button or press ALT+P to print Multi-Form 16A.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Statutory Masters
The Statutory Masters comprises Deductee Type and TDS Nature of Pymts reports. Gateway of Tally > Display > Statutory Masters

The menu consists of the following options: 1. Deductee Type 2. TDS Nature of Pymt A detailed explanation on each of the options follows:

Deductee Type
Gateway of Tally > Display > Statutory Masters > Deductee Type Select any desired type from the list of various types of deductees to go to Deductee Type Display. The display screen comprises Name of the Deductee Type, Residential Status and Deductee status. There is also a table for Deductee TDS Details with columns for Applicable from, Surcharge Exemption Limit, Surcharge and Addl Surcharge. Here is a sample for Individual/HUF – Resident deductee type:

TDS Nature of Pymt
Gateway of Tally > Display > Statutory Masters > TDS Nature of Pymt Select any desired type from the list of various nature of payments to go to TDS Nature of Pymt Display. The display window comprises the following fields: Name, Section and Payment Code. There is also a table, where you have details such as Deductee Type, Applicable from, Exemption Limit and Rate. Here is a sample for Rent display:

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Introduction

VAT is a system of indirect taxation, which has been introduced in lieu of sales tax. It is the tax paid by the producers, manufacturers, retailers or any other dealer who add value to the goods and that is ultimately passed on to the consumer. VAT has been introduced in India to ensure a fair and uniform system of taxation. It is an efficient, transparent, revenue-neutral, globally acceptable and easy to administer taxation system. It benefits the common man (consumer), businessman and the Government. Further, VAT enhances competitiveness by removing the cascading effect of taxes on goods and makes the levy of tax simple and self-regulatory, ensuring flexibility to generate large revenues. The cascading effect is brought about by the existing structure of taxation where inputs are taxed before a commodity is produced and the output is taxed after it is produced. This causes an unfair double-taxation. However, in VAT, a set-off is given for input tax (tax paid on purchases). This results in the overall tax burden being rationalized and a fall in prices of goods. In the subsequent sessions, we will explore how VAT makes the tax structure simple, hassle-free, export-oriented and how the integration of VAT with Tally will help you in the smooth functioning of your business and eliminate the complications that might otherwise arise in VAT.

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Concept of VAT

The essence of VAT is in providing set-off for input tax and this is applied through the concept of input credit/rebate. This input credit in relation to any period means setting off the amount of input tax by a registered dealer against the amount of his output tax. The Value Added Tax (VAT) is based on the value addition to the goods, and the related VAT liability of the dealer is calculated by deducting the input credit from the tax collected on sales during the payment period. This concept is explained with an example, in the Computation of VAT section . VAT works in two different ways: 1. If VAT-registered businesses receive more output tax than the taxes paid as input, they will need to pay the difference to the Commissioner of Taxes (State). 2. If the input tax paid is more than the output tax collected, You can carry forward the Input credit and adjust it against the output tax in the subsequent months. You can have the Input Credit refunded to you at the end of the current or following year, by the Government. You can receive refunds for Input Credit on exports within a period of three months.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

General terminologies used in VAT

Term Input tax

Description This is a tax paid on purchases

Output tax

This is a tax charged on sales

Input Credit

The amount of Input tax that is permitted to be set off against Output tax.

Composite Dealers

Dealers with annual gross turnover not exceeding a certain threshold (threshold - decided by the respective State Governments) can opt for a composition scheme whereby they will pay tax as a small percentage of their gross turnover. However, retailers opting for this composition scheme will not be entitled to Input Credit. The State Governments fix the periods and the procedures for the payment of the lump sum.

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Justification of VAT

VAT was adopted because the Sales Tax system is complex and induces non-compliance. Moreover, it has been found to be a hindrance in the economic growth of Industry, state and the Country. This causes a huge loss of revenue to the government. VAT also helps in eliminating the dreaded cascading effect of Tax. For instance, in the existing structure, inputs are taxed before a commodity is produced and the output is taxed after it is produced. This causes an unfair double taxation with cascading effects. However, in VAT, as a setoff is given for input tax as well as tax paid on previous purchases, overall tax burden will be rationalized and prices in general will fall. VAT thus makes the tax system simple and transparent.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Advantages of VAT over Sales Tax

As VAT is a multi-point tax with set-off for tax paid on purchases, it prevents repeated taxation of the same product. Simple and Transparent – In the Sales tax system the amount of tax levied on the goods at all stages is not known. However, in VAT, the amount of tax would be known at each and every stage of goods sale or purchase. VAT has the flexibility to generate large and buoyant revenues, as it levies tax on value additions. Zero rating of tax on exports is possible in case of VAT. Fair and Equitable – VAT introduces uniform tax rates across the state so that unfair advantage cannot be taken while levying the tax. Procedure of simplification – Procedures, relating to filing of returns, payment of tax, furnishing declaration and assessment are simplified under the VAT system so as to minimize any interface between the taxpayer and the tax collector. Ability to provide same revenue to the Government with lower rates of tax. Tax does not become a cost of doing business.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

VAT Rates

According to the White Paper, there are 550 categories of goods under the VAT system. They are classified into the following four groups, depending on the VAT rate: VAT @ 4% The largest number of goods (270) comprising of basic necessity items such as drugs and medicines, agricultural and industrial inputs, capital goods and declared goods are under 4% VAT rate. Exempted from VAT There are about 46 commodities under the exempted category. This includes a maximum of 10 commodities that each state would be allowed to select, from a broader approved list for VAT exemption. The exempted commodities include natural and unprocessed products in unorganized sector as well as items, which are legally barred from taxation.

VAT @ 1% This is for a specific category of goods like gold, silver, etc. VAT@12.5% The remaining commodities are under the general VAT rate of 12.5%.

Note: The few goods that are outside VAT as a matter of policy would include liquor, lottery tickets, petroleum products, as the prices of these items are not fully market-determined. These items will continue to be taxed under the sales tax act of the respective states.

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Computation of VAT and Profit

The above diagram depicts computation of (10 %) VAT at each stage of business. Hence, it is not the manufacturers and retailers but only the consumer who has paid 10% VAT to the government. The profits for manufacturers and retailers thus remain unaffected.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

VAT in Tally ies 7.2

Features of VAT in Tally ies 7.2
VAT is completely integrated with Tally 7.2. The VAT functionality in Tally 7.2 supports the following features, making it easier for computation: Quick & easy setup Fast & error-free voucher entry Pre-defined list of sales & purchase classifications Complete tracking of each transaction till annual returns Printing of Tax invoice VAT computation report Better VAT-returns management Monthly Return

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Enabling Tally VAT

Company Creation/Alteration
You can enable Tally VAT in the Company Creation/Alteration screen shown below by setting Use Indian VAT to Yes. Use Indian VAT -Yes On setting Use Indian VAT to Yes in the Company Master, you need to enter the Applicable From date, VAT TIN and Inter-state Sales Tax Number. Note that in this case the Local Sales Tax Number field is skipped.

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Applicable From Mention the date from which VAT is applicable. Only if this date is greater than the company's current date, the VAT functionality will hold good in your transactions.

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VAT TIN Enter your TIN or LST number as the case may be, in this field. The Tax Payer’s Identification Number (TIN) consists of 11 digit numerals. The first two characters represent the State Code as used by the Union Ministry of Home Affairs. The set-up of the next nine characters may, however, be different in different States.

Use Indian VAT -No If you do not wish to enable VAT, set this to No. In this case, you need to enter Local Sales Tax Number and Inter-state Sales Tax Number. Also, note that the VAT TIN is skipped.

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Local Sales Tax Number If you do not enable VAT for your company, you will see this field, where you can enter your Local Sales Tax number.

Inter-state Sales Tax Number In either case, enter the Inter-state Sales Tax Number if applicable. Note: All Classifications and Statutory forms shown here are based on the Karnataka State Model.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Configuring Ledger for VAT Reporting

VAT Classification
It is a list of VAT rates, which describes the nature of the Business Activity and the type of transaction. These are in-built in the system and will be updated if and when any statutory changes take place. Some of the classifications are: InputVAT@4% InputVAT@1%

InputVAT@12.5% OutputVAT@1% OutputVAT@4% OutputVAT@12.5% Purchases - Capital Goods Purchases - Exempt Purchases from unregistered dealers Depending on the type of the business, type of transaction, and the statutory requirements of your State, you will need to select the appropriate classifications from the list during Ledger creations, voucher entries, etc. This is explained in detail in the following sessions. The Sales and Purchase transactions are segregated based upon the classification selected during voucher entry and shown in the VAT computation. Thus, you can see in the VAT Computation, the classification-wise VAT and Nett Values. Further, the enabling and selection of VAT classifications is explained in detail in the following sessions.

Ledger Masters
The VAT Classification will be displayed as a drop down list in the Ledger Masters. Tally gives the flexibility to the user, to either have the classification selected in the Ledger Master tagged to all transactions, Or, select different classifications each time during voucher entries. This is explained in detail in the Vouchers and Transactions section. The Ledgers that are affected by VAT are: Purchase Ledger Sales Ledger Duties and Taxes Ledger Direct Expenses/Income

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Purchase Ledger

The following additional fields, pertaining to VAT, can now be seen in the Ledger entry screen (Gateway of Tally > Accounts Info > Ledger > Create/Alter).

Used in VAT Return Set this to Yes if you wish to select VAT classifications for this Ledger. Once you set this to Yes, you will see the Default VAT/Tax Class field. Default VAT/Tax Class Select the required classification here from the drop down list as shown above. The drop down list consists of the Purchase classifications pertaining to your state. If you do not wish to select a classification at the Ledger level, you can set this to Not Applicable. Note: Tally gives the flexibility to the user, to either have the classification selected in the Ledger Master tagged to all transactions, Or, select different classifications each time during voucher entries. This is explained in detail in the Vouchers and Transactions section The rest of the Ledger creation process is the same as in default Tally. In the above example we have selected a VAT classification of 4%. Let us also take an example of a VAT exempted transaction below.

VAT classification - Purchase-Exempt

We will also create a ledger for the Supplier from whom we are buying the VAT exempted item:

Note that the TIN or Sales Tax number of the creditor, whichever applicable, needs to be entered in

the Ledger. However, if VAT is not enabled for your company, the TIN/Sales Tax No. field will be replaced by Sales Tax No. To learn about the actual transaction in case of imports, go to the Voucher section of the document. Back to Ledger Master Back to VAT Computation Back to Purchase Voucher

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Sales Ledger

Like in the Purchase Ledger screen, select the required VAT/Tax classification in the Sales Ledger too (Gateway of Tally > Accounts Info > Ledger > Create/Alter.)

The rest of the settings are the same as in default Tally.

Similarly for Ledgers Direct Expenses/Income

Back to Ledger Master

Back to VAT Computation

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Duties and Taxes Ledger

The ledger for Input VAT is shown below:

Type of Duty/Tax On the selection of group Duties and Taxes, the list of Tax Types CST, others and VAT, is displayed. Select VAT for VAT related transactions. Note: If you have VAT and TDS enabled, the list will also include TDS. Default VAT/Tax Class Like in the Purchase and Sales Ledger, this is a drop down list containing the VAT classifications. Select the appropriate classification or select Not Applicable if you wish to select the classifications at the Voucher level. Percentage of calculation This will display the VAT rate that you selected in the Default VAT/Tax class field. Method of calculation This will display On VAT Rate if you have selected VAT under Type of Duty/Tax. Similarly for Output VAT:

On selection of CST

Default VAT/Tax Class

On selection of CST for Type of Duty, you can select either Inter-State Purchases or Inter-State Sales for Tax Class. Once you select this, you need to manually enter the Percentage of Calculation.

Method of Calculation Once you enter the Percentage of calculation, select the Type of Duty from the drop down list. Back to Ledger Master Back to VAT Computation

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Direct Expenses/Income Ledger

The VAT related fields in the Direct Expense ledger is the same as for Purchase and Sales Ledgers.

Similarly, for Direct Income Ledger. Back to Ledger Master Back to VAT Computation

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Vouchers and Transactions

The entire Data entry and Reporting architecture is based upon VAT Classifications selected during Voucher Entry. The Vouchers that are affected by VAT are as follows: Purchase Sales Debit Note Credit Note Journals

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Purchase Voucher (As Invoice)

Invoice can be classified into As Item Invoice and As Accounts Invoice. The VAT functionality
though, is the same for both. Given below are examples of transactions in Item Invoice with implementation of VAT.

As Item Invoice
The selection and display of the VAT classifications in the vouchers differ according to the settings in the F12: Configuration screen. F12: Configuration screen

Use Common Ledger A/c for Item Allocation - NO When you wish to use more than one ledger during a voucher transaction, you need to set this to No. This way, you need to select a ledger for every item during voucher entry. When you set this to No, you can see the VAT/Tax Class at the header region of the screen if the Allow Selection of VAT/Tax Class during entry? field is set to Yes. Allow Selection of VAT/Tax Class during entry?-YES Once you select Yes, you have the option to select the VAT classifications in the field VAT/Tax Class which is in header region of the Voucher screen. If it is set to no, the VAT/Tax Class will not

be displayed in the voucher screen and the classifications will be taken from the Ledgers. Consider the following examples Example 1: Purchase@4% The following is the entry for the purchase of item1 when VAT classification is Purchase@4%. Like mentioned before, this classification is selected from a drop down list at the header region of the screen as shown below.

Note: In the VAT/Tax Class field, there is also an option called Not Applicable. You can select this option if you need different classifications for each item during voucher entry. You will need to select the Duties and Taxes ledger after you are done with the entry of all items.

It will now calculate the VAT amount and add it to the Amount to give you the total. F12: Configuration screen

Use Common Ledger A/c for Item Allocation-YES When you wish to use the same Ledger for all items in a transaction, you can set this to Yes. Thus, you need not select a Ledger each time you enter an item during the voucher transaction. The following example to demonstrate the functioning of Assessable Value is shown by setting this field to Yes. Assessable Value: It is the value on which VAT is to be calculated. The value is arrived at after making proper deductions towards Trade discounts if any, and adjustments towards Excise/ED Cess payable. It is up to the user to calculate this and enter it under the Assessable Value column. This manual entry gives flexibility to the user to make the calculations as per the local statutory requirements. As this example does not include discount or Excise/ED Cess taxes, the Assessable Value will be Rs. 5000, which is retrieved from the Amount column. Let us assume we have: A discount of Rs.200 on purchases Excise tax of Rs.800 (16% of 5000) ED Cess of Rs.16 (2% of 800) 1. Subtracting the discount amount: 5000 -200 = 4800 2. Adding the Excise tax amount : 4800+800= 5600 3. Adding the ED Cess amount : 5600+16= 5616 Therefore, our Assessable Value amount is Rs.5616. On the selection of the Duties and Taxes Ledger, you will see the following screen where you need to enter the Assessable value.

VAT is now calculated on this amount automatically on the selection of the tax ledger (Rs.224), as shown below.

Similarly for Sales Voucher and Credit/Debit notes. Example 2: Purchase-Exempt This example is to demonstrate the working of Tally in the VAT exempted transactions and also to show the type and patterns of reports generated for such transactions. We are passing the following entry for the purchase of the VAT exempted item.

As it is exempt from VAT, this particular transaction does not affect the VAT amount in any way. Similarly for Inter-state Sales/Purchases. Note: In the Voucher mode there is no option for selection of the VAT classification at the header region. Therefore, the VAT classification selected in the Ledgers will apply always. Back to Top Back to Vouchers and Transactions Master Back to VAT Computation Back to Ledger

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Sales Vouchers (As Invoice)

Functionality of Sales Voucher is similar to that explained in the Purchase Voucher. However, in order to understand the calculation of VAT, let us take the following example:

Assessable Value: Calculation - similar to that explained in Purchase voucher.

Printing Configuration
The Printing Configuration screen after the addition of new features will appear as follows:

Tax Invoice

You will see the following new sections pertaining to VAT, in the Invoice: Title of Document Prints the title entered in the Voucher Type Master. E-mail The e-mail address of your Company (as specified in the Company Master) will also be printed in the Sales Invoice, just below the address. VAT % This column can be activated by setting Print VAT % to Yes in the Printing Configuration screen. The rate of VAT from the VAT classification selected during voucher entry is printed in this column. VAT Analysis Prints the VAT amount on the total Net Value. That is, Rate of VAT, Assessable Value and VAT Amount is printed at the bottom right of the screen. VAT Amount (In words) Prints the VAT amount in words. Company's TIN/LST No. Prints the Company's TIN or LST number. Company's CST No. Prints the CST number entered in the Company master. Buyer's TIN/Sales Tax No. Prints the buyer's TIN or Sales Tax number, as the case may be. Date & Time The field Print Date & Time in the Printing Configuration screen needs to be set to Yes in order to print the date. However, in case Excise details are activated, the Date & Time is printed regardless of the setting in the Printing Configuration screen. Declaration The declaration entered in the Sales Voucher type Master will be printed. If it is not entered in the Sales Voucher type, Tally will print the following line by default: "We declare that this invoice shows the actual price of the goods described and that all particulars are true and correct". If you do not require this, you can set Print declaration to No in the Printing Configuration screen shown above. Generated by By default the Generated by field will display This is a Computer Generated Invoice. However, you can change it if required. This is printed at the bottom of the Invoice. Copies of the Invoice For five or more copies of the Invoice, each copy will be marked as follows:

Original - Original Buyer's Copy Duplicate - Duplicate Seller's Copy Triplicate - Triplicate Transporter's Copy Quadraplicate - Extra copy Fifth and above - Extra Copy Back to Vouchers and Transactions Back to VAT Computation

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Sales Voucher Type Master

New Fields
The following are the new fields added in the Sales Voucher Type Master (Gateway of Tally > Accounts Info > Voucher Types > Alter): Default Print Title You can set the title for the Tax Invoice in the Default Print Title field. This is helpful since you need not change the title in Print Configuration each time you use different voucher types. For example, you can set it as Tax Invoice for Local Sales and Bill of Sale for Retail Invoice. Declaration Provision is made to enter the Statutory declaration if applicable. The same will be printed in the Tax Invoice.

Voucher Class
Given here is an example of how a Tax Invoice having items with multiple tax rates can be generated using Voucher Class. If you press [Enter] on Name of Class in the screen above, you will see the following screen: Make the entries as required.

Override using Item default As mentioned before, it is now possible to enter a Tax Invoice having multiple items with different VAT Rates. Item default here, refers to the Sales Ledger account that you may have set for a stock item. However, if you set Override using item default to Yes and specify a Sales Ledger in the Class Table, the sales Ledgers set in the item masters will still be considered. Setting Sales Ledger in the Item Master Consider the item Masters shown below:

Here, set Set/Modify Default Ledgers for Invoicing to Yes. Once you do this, you will see the following screen:

Note: If you do not see the field Set/Modify Default Ledgers in the Item Master, set Specify Default Ledger Allocation for Invoicing to Yes in the Gateway of Tally > F12; Configuration > Accts/Inv Info.

Using the Sales Class in a Sales Invoice
Gateway of Tally > Accounting Vouchers > F8: Sales Invoice, select the Voucher Class, Sales Class and make the entries as follows:

When entering Sales Invoices with the Voucher class, note that you will not be able to edit Assessable Value Field. However, if you have an additional ledger, say, Discount Ledger, there is a facility to edit the Assessable Value manually in the sub screen that pops up when you press [Enter] on the Output VAT Ledgers.

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Payment of VAT

The following is an example to demonstrate the Journal and Payment Voucher entries for the payment of VAT. Consider the VAT Computation screen below (Refer the Purchase and Sales Voucher entries):

As shown above, the Output Tax is Rs.700.00 and Input Tax is Rs.424.64. The VAT payable is thus Rs.275.36.

Journal entry

Note: The VAT payable Ledger is under the group Duties and Taxes.

Payment Voucher Entry

Thus the VAT payable, Rs.275.36 is transferred to the Cash or Bank account.

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Debit Note / Credit Note

Purchase Returns - Debit Note
This is a Purchase Returns entry. Here, you will need to use the Debit Note Voucher.

Sales Returns - Credit Note
Let us now take the example of a Sales Return. Here, you will need to use the Credit Note voucher.

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Journal

If you need the Journal transactions for VAT Computation (for example, adjustment of Input credit, output tax, etc) you will need to make the following settings: Go to Gateway of Tally > Accounts Info > Voucher type > Create/Alter. You will see the following screen:

Name of Class Name the voucher class. In the above example, we have named it as VAT Adjustment Class. Once you hit enter, you will see the following screen

Use Class for VAT Adjustments As the name implies, you will need to set it to Yes if you want the journal entries to be included in VAT computation.

Journal Entries
Let us consider a Purchase transaction and then a reverse entry for adjustment of Input credit. Typical Purchase transaction

Reversal of Input Credit You can go to the Journal screen by clicking on F7: Journal button on the right side of your screen Or by pressing the F7 key. Firstly, you will see the following screen where you need to select the Voucher class created before.

Once you have selected this, you can pass the typical reversal entry as shown below:

VAT Computation Report
The VAT Computation report will thus show as follows:

Thus Rs.50 of the Input credit is reversed and only the remaining of Rs.50 can be claimed. Back to Vouchers and Transactions

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Input Credit Adjustment for Capital Goods

Input Credit for capital goods is available over a maximum period of 36 monthly instalments (States have the option to reduce the number of instalments.) Given below is an example for the adjustment of the Input credit. The entry for the Purchase of Capital Goods is the same as in default Tally. Consider the following example: Purchase of Capital Goods for Rs. 5,00,000. The Input Credit is Rs.20,000, which will be available over a period of 36 monthly instalments. That is, (20,000/36)= 555.56 Therefore, Rs.555.56 can be claimed in the first instalment as Input credit. We will pass a Journal entry for this as shown below:

The Drill down report will thus show as follows:

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Activating the MRP Feature

In order to activate the Maximum Retail Price (MRP) feature in Tally, go to Gateway of Tally > F12: Configure > Accts/Inv Info and set Calculate VAT on MRP to Yes.

MRP in Stock Item Master
Once MRP is activated, two new fields, MRP and MRP Incl. of VAT will appear in the Stock Item Master Creation/alteration . If MRP is inclusive of VAT, enter the MRP value in the MRP field and select Yes in the MRP Incl. of VAT field. Single Stock Item Creation

Multiple Stock Item Creation

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Sales Invoice

Given below are few examples to show the calculation of VAT based on MRP (inclusive and noninclusive of taxes).

VAT Rate 4%
MRP Inclusive of Tax Consider the sale of Item 1, which attracts 4% VAT:

Item Name Item 1

Item Vatable @% 4.0

MRP Incl. of VAT % Tax Yes 3.85

MRP 200

QTY 10

VAT On 2000

VAT Amount 76.92

Calculations: 1. As MRP is inclusive of Tax, the actual VAT% is calculated as (100*Rate of VAT)/ (100+Rate of VAT) 2. VAT amount = (VAT % * VAT On)/100. 3. VAT On = MRP * Qty MRP not Inclusive of Tax Consider the sale of Item 2, which also attracts 4% VAT:

Item Name

Item Vatable @% 4.0

MRP Incl. of VAT % Tax No 4

MRP

QTY

VAT On

VAT Amount

Item 2

115

10

1150

46

However, as MRP is not inclusive of tax, VAT is calculated on MRP as (MRP * QTY )/100.

VAT Rate 12.5%
MRP Inclusive of Tax Consider sale of Item 3, which attracts 12.5% VAT:

Item Name

Item Vatable MRP Incl. of @% Tax

VAT %

MRP

QTY

VAT On

VAT Amount

Item 3

12.%

Yes

11.11

55

10

550

61.11

Calculations: 1. As MRP is inclusive of Tax, the actual VAT% is calculated as (100*Rate of VAT)/ (100+Rate of VAT) 2. VAT amount = (VAT % * VAT On)/100. 3. VAT On = MRP * Qty. MRP not Inclusive of Tax Consider the sale of Item 4, which also attracts 12.5% VAT.

Item Name

Item Vatable @% 12.5

MRP Incl. of VAT % Tax No 12.5

MRP

QTY

VAT On

VAT Amount

Item 4

215

5

1075

134.38

However, as MRP is not inclusive of tax, VAT is calculated on MRP as (MRP * QTY )/100.

Sales Invoice Entry

Note: MRP calculation is supported in the Sales Invoice (item Invoice) with:
n n n n

Single VAT Rate / and additional ledger entries Multiple VAT Rates / and additional ledger entries or without Voucher Class Voucher Class with Over ride values

MRP calculation is not supported during sales entry:
n n

As Voucher As Accounts Invoice

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Tax Invoice

Printing Configuration

A new field is included in the Printing Configuration screen called Print MRP Column. Set to Yes in order to have the MRP printed on the Invoice.

The Tax Invoice for the transaction shown

Note: The VAT Computation screen will show the original Assessable value and the VAT amount as in the default case.

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VAT Computation

You can go to the VAT Computation screen via Gateway of Tally > Display > VAT Reports > VAT Computation. You will need to go through the following sections before learning VAT Computation screen below: Purchase Ledger > Sales Ledger > Duties and Taxes > Purchase Voucher > Sales Voucher VAT Calculations Let us consider the following that we made, for VAT Computation: 1. Purchased from Creditor-1, 100 quantities of item1 at the rate of Rs.50 each. The Input VAT@4% for this amount is Rs.200. 2. Purchased from Creditor, 100 quantities of item2 at the rate of Rs.50 each. However we applied a discount of Rs.200 here. Also, Excise tax of Rs.800 and Educational Cess of Rs.16 were levied on this. Therefore we applied the InputVAT@4% on the Assessable value of Rs.5616, which is Rs.224.64. Therefore total Input VAT = Rs.200 + Rs.224.64 = Rs.424.64 3. Sale of 50 quantities of item1@Rs.300 to Debtor-1 . OutputVAT@4% = Rs.600. 4. Sale of 100 quantities of item @ Rs.100 each. Output VAT@1%= 100 Therefore total Output VAT = Rs.600 + Rs.100 = Rs. 700 Therefore VAT Payable-> Output VAT - Input VAT = Rs.275.36 This is calculated automatically by Tally for you and the VAT Computation screen shows as follows:

The Reports for the two Purchase and one Sales transaction is shown below respectively:

For VAT exempted or zero rated transactions
If you have transactions that are exempted from VAT but however want to have it displayed in the

VAT Computation screen, you will need to click on the F12 button and set the Show non VAT classifications also? to Yes.

For example, in the case of Inter-State Sales, the Tax Amount column will show as NIL in the Computation screen.

Learn the affect of Purchase and Sales returns transactions in the VAT Computation and VAT Reports Screens

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VAT Computation after Purchase/Sales returns

The following example is demonstrated assuming that you have gone through the VAT Computation section.

Purchase Returns - Debit Note
Consider the following Purchase Returns entry:

Once this is done, the VAT Computation will show as follows:

That is, in the Purchases section, Rs. 500 is reduced from the Assessable Value and Rs. 20 is reduced from the Tax amount (while comparing with the VAT Computation before Purchase

Returns). Therefore the VAT Payable is now Rs. 295.36 The VAT Computation Report will now show as follows:

Sales Returns - Credit Note
Let us now take the example of a Sales Return.

The VAT Computation screen will now show as follows:

The Assessable Value under Sales has reduced from Rs. 25,000 to Rs. 23,500 and the Tax Amount has reduced to Rs. 640.00. This will show in the Reports as follows:

Therefore the VAT Computation and Reports are updated automatically as you pass the entries. Back to VAT Computation

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Sales Register

Gateway of Tally > Display > Account Books > Sales Register Click on Columnar button or press the F5 key.

Set Show Partys' Tax Regn. No. to Yes. The Columnar Sales Register displays as below:

TIN/Sales Tax No. The TIN Or the Sales Tax No. (Central or Local) of the Party is displayed here. As there is only a need to enter either the TIN or the Sales Tax No.(Central or Local) at any point of the transaction, and not both, one single field serves the purpose for all transactions (with or without VAT) . Thus, the TIN or Sales Tax number, whichever applicable, is entered in the TIN/Sales Tax No.(Central or Local) field in the Party Ledger Master. This is picked up in the Tax Invoice and displayed as shown above in the Sales Columnar Register. However, if VAT is not enabled for your company, the TIN/Sales Tax No. column will be replaced by Sales Tax No.

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Service Tax

Introduction
Service tax is an indirect tax levied on certain category of services provided by a person, firm, agency, etc. The Government of India has marked a set of services as taxable under the service tax structure. The seller provides a service and the responsibility of paying the service tax to the government rests with the seller.

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Information on service tax

Currently, the rate of service tax on all the taxable services is 10%. Presently, service tax is applicable on 73 categories of services. A few of the listed services have an abatement facility. Service tax returns are to be filed to the Commissionerate of Service Tax for the fiscal half-year. Over a period of time, the government has made changes to the rules, list of services, rate of service tax, etc. Information on the registration, rules, list of services, rate of service tax, forms, etc can be found on the official website for service tax-http://www.servicetax.gov.in/

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Service Tax Flow

When you buy and sell services?
A person/firm providing a service that comes under the service tax category has to pay service tax. Service tax is to be shown separately in the invoice and is payable based on the payment realized and not on the total amount shown in the invoice. Similarly, when you buy a service that falls under service tax category, you avail service tax credit based on the payment made. So, you pay service tax on the services that you sell and get credit on the service tax payable when you buy a service.

Adjusting credit?
While you pay service tax on sale of services that come under the service tax category, you can adjust service tax credit availed on purchase of services (Buyer). This deduction is called adjusting credit against service tax. The difference between the service tax that you have to pay for selling

services and the service tax credit on purchases that can be adjusted is the payable service tax. Service tax (sales) that is adjustable against service tax credit (purchases) is also called availing input credit. Let us look at an example.

Adjusting 100% credit & 20% credit
If your input service (Purchase) can be directly related to the output service (Sales) then you can use 100% credit adjustment on the service tax payable. For example: If you are providing a consultancy service over the phone, then you can use the input credit from the telephone charges to adjust against 100% of the service tax payable on your consultancy service. If the input service is not solely used for the output service, then 20% credit adjustment is applicable. Input service tax credit can be adjusted to both output service tax and output cess (surcharge on tax). But input cess credit can be adjusted only towards output cess.

Assessable value
Service tax is calculated on the assessable value. The assessable value is the service charge value minus abatement and expenses.

Abatement
The government has given a deduction on the value to be considered for service tax on a few categories of services. For example, some categories of services include material value. A caterer has to procure materials to prepare food products and sell services. Service tax is charged on the total amount for the service and does not include the rate of the materials procured. Hence a deduction is provided. This deduction from the service charges to be considered for service tax is called abatement. Abatement is either a percentage of the service charges a lump sum value.

Example: a. Charge on Service b. If an abatement of 30% is applied, then abatement c. Here, the assessable value is (a-b) Therefore, service tax @ 10 % on Rs.7, 000/Rs.10, 000/Rs.3, 000/Rs.7, 000/Rs.700/-

Expenses
Expenses can be deducted from the total service charge to get the taxable amount. E.g. a technical consultant might travel to different locations with respect to work. The invoice is prepared as ‘consultancy’ and the travel expenses are included in the total service charges. If supported by records, you can deduct the travel expenses from the total service charge to derive the assessable value on which service tax is applicable.

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Payment of Service Tax

How much do I pay?
A seller provides a service to a buyer and bills the buyer for the service. The bill is inclusive of the service tax. The seller does not have to pay service tax on the total bill amount but only on the payment received. Example: a. Charge on service b. Service tax @ 10% c. Cess on Service Tax @ 2% Total bill Rs.10, 000/Rs.1, 000/Rs.20/Rs.11, 020/-

Here, the service-tax calculated turns out to be a. Service Tax b. Cess on Service tax Total Rs.1, 000/Rs.20/Rs.1, 020/-

Assuming, the buyer pays the seller Rs.5, 000/- as part payment, the service-tax payable for the payment received is calculated as given below. a. Charge paid on service b. Service tax on Rs.5000/is c. Cess on service tax is (10,000 x 5,000)/11,020 (1,000 x 5,000)/11,020 (20 x 5,000)/11,020 Rs.4537.21 Rs.453.72 Rs.9.07

Hence, service tax is payable only on the value of payment received by the seller and not on the gross amount charged or billed (invoice value). Another case is when you receive an advance payment on services to be provided. Service tax is not applicable on advances paid until it is adjusted against the invoice.

Where do I pay?
The service tax amount is to be paid in Form TR-6 challan in a bank designated by the Commissionerate of Service Tax. For a particular area there is a Focal bank, with branch and code. This is the designated bank. Service tax payments will be accepted in all the branches of the bank, which are connected with the focal branch. The list of the banks and their branches accepting service tax payments is available with the Commissionerate of Service Tax. If your company is a corporate company, service tax is payable on a monthly basis by the 5th of the following month. For example, Service tax has to be paid by 5th January for the month of December. Non-corporate like individuals, proprietary firms, partnership firms, etc. have to pay service tax for the fiscal quarter. The payment is to be made by the 5th day of the month following the quarter. For example, service tax for the quarter ending 30th June is to be paid by 5th July. For the corporate and non-corporate bodies, service tax for the month of March is payable by 31st of March.

Filing returns
Corporate and non–corporate organizations have to file service tax half-yearly with details in Form ST-3 and Input Credit Form (Form 5) to the Commissionerate of Service Tax. The filing of returns should be within 5 days from the last day of the fiscal half-year. For the fiscal half-year ending-date of 30th September, the last day for filing service-tax returns is 5th October. Copies of all TR6 Challans issued during the period must be attached.

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Service Tax in Tally ies 7.2
Features of Service Tax in Tally ies 7.2

Service tax integrated in Tally 7.2 ies takes care of your service tax transactions. It eliminates error-prone information, incorrect remittance, penalties, interests, compliance issues, etc. Service Tax in Tally ies 7.2 needs a one-time configuration for service tax features to be activated.

Tally tracks bill-wise (bill-by-bill) detail and automatically calculates service tax payable and input credit with the flexibility to make adjustments later. Service tax is part of a regular transaction. Information on service tax is maintained and produced category-wise, which is mandatory in service tax returns. Adjusts input credit towards service tax payable. Accounts for abatement and expenses. Provision for exemption notification details. Built-in assessable value feature on which service tax is calculated. Transfer earlier pending service tax payable and available service tax input credit in to Tally Reports are generated as per government suggested format. Print and file reports: TR6 Challans. Management Information Services (MIS) reports: Service Tax Payable Report.

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Activating Service Tax in Tally

Open Tally ies 7.2. You will see the Company Info menu to the right. Select the Select Company option. This will take you to the Select Company screen. Note: When you open Tally ies 7.2, the Select Company option will be displayed only if a company has been created earlier. If there is a default company configured to be loaded at start, the Select Company option will not be displayed.

Where do I look for it?
From the Select Company screen, select the company for which you want to activate service tax. The Gateway of Tally screen will be displayed. On this screen, click the mouse on the Features option at the right-bottom corner or press the F11 key.

This operation will take you to the Company Operations Alteration screen.

Enabling service tax
In the Company Operations Alteration screen, enter Yes in the Enable Service Tax? option. This will enable service tax for the selected company. Note: The Maintain Billwise Details? field is set to Yes when you enable service tax. This is a default feature.

Enter Yes in the Set/Modify other Company Features? option. This will take you to the Advanced Company Operations option.

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Entering Service Tax Details

In the Advanced Company Operations screen, you will find the Enter Service Tax Details option. Enter Yes in this option to take you to the Company Service Tax Details screen.

Company Service Tax Details
The Company Service Tax Details screen is where you will enter the service tax details. The name of the company is displayed at the top followed by different fields.

Company Service Tax Details Service Tax Registration No. – Enter the registration number allotted to you by the Service Tax Department. Date of Registration – Enter the date of registration of service tax for your service. Assessee Code- Enter the code given to your company by the Service Tax Department. Type of Organization – In this field select the type of your organization from the List of Organisations menu.

Major Service Category Name- Here you will find options for different categories that come under the service tax net. You might be providing two or more services in a company. In such a situation, select the service category that is the mainstay or forms the major part of your business. Select the relevant option from the List of Service Categories that applies to your company.

Credit Adjustment (%) – By default this field is set to 20. Enter the percentage of credit adjustment that you would like to avail. Division Code- The code of the division in which your company falls. Name - Enter name of the division under which your company falls. Range Code- Enter the code of the range of your company.

Name- Enter the name of the range under which your company falls. Commissionerate Code- This is the code of the Commissionerate of Service Tax under which the address of your registered premise is located. Name- This is the name of the Commissionerate of Service Tax under whose range the address of your registered premise falls. Focal Bank Details Focal Bank Code-The Commissionerate of Service Tax allots a code to banks nominated for payment of service tax in a particular area. This code is available with the Commissionerate of Service Tax. Focal Bank Name- This is the name of the bank nominated by the Commissionerate of Service Tax to receive service tax payments in a particular area. This information is available with the Commissionerate of Service Tax. Focal Bank Address- Enter the address of the branch of the focal bank. Press ‘Enter’, once you have entered the service tax details. This will take you to the Company Operations Alteration screen. Accept to save the changes.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Creating Party Ledgers

To create party ledgers, open Tally, go to Gateway of Tally > Accounts Info > Ledgers > Create. This will open the ledger creation screen.

In the Ledger Creation screen enter the details. For example: You enter the name of the company providing services to you in the Name field and in the Under field, select Sundry Creditors option from the List of groups. Set Yes in the Is Service Tax Applicable? field if service tax is applicable. This will open the Exemption Notification Number screen, which has the Exemption Detail sub-form. Set Yes/No. Enter details in the Default Credit Period if applicable. By default the Inventory Values are affected? field is set to No. Though entering the details of the company is optional, it is necessary that you enter the Service Tax No. and Service Tax Reg. Date fields and accept yes to save.

Similarly, create ledgers for companies that you provide services to. Enter the name of the company and in the Under field, select Sundry Debtors option from the List of groups. Set Yes in the Is Service Tax Applicable? field if service tax is applicable. This will open the Exemption Notification Number screen, which has the Exemption Detail sub-form. Set Yes/No. Enter details in the Default Credit Period if applicable. By default, the Inventory Values are affected? field is set to No. Though entering the details of the company is optional, it is necessary that you enter the Service Tax No. and Service Tax Reg. Date fields and accept yes to save.

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Exemption Notification

Set Yes in the Is Service Tax Applicable? field. This will display the Exemption Notification Number screen. Set Yes in the Is Exempted? field if an exemption is applicable for the party you are creating. This is a default value and can be changed in a transaction. Enter in the Notification Detail and press ‘Enter’. The notification detail is displayed in the Narration field. This is provided to make a note or reference to the act/rule under which the service tax is exempted. This is set as default and

can be changed later in a transaction.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Creating Service Tax Ledgers

You will have to create a service tax ledger to calculate service tax. The rate of service tax and rate of cess are predefined values in Tally and this can be changed in a transaction. Note: Tally will update changes in the rate of service tax, rate of cess and abatement for different categories. You can download this from the updates section on our website.

In Tally, go to Gateway of Tally > Accounts Info > Ledgers > Create. In this screen enter the service tax ledger name in the Name field. In the Under field, select the Duties & Taxes option from the List of Groups.

In the Type of Duty/Tax field select Service Tax from Type of Duty/Tax.

Enter other details and press ‘Y’ or ‘Enter’ to accept. Note: Create a service tax ledger for each service category. For example, if you purchase services in two categories and sell services in three categories, create five service tax ledgers

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Creating Sales Ledgers for Services

Open Gateway of Tally > Accounts Info > Ledgers > Create.

If you are selling a service then create a ledger for the service provided. These ledgers can be in Sales Accounts or Direct Incomes Groups. Enter the name of the service you provide in the Name field. In the Under field, select Sales Accounts/Direct Incomes from the List of Groups menu. Set the Is Service Tax Applicable? field to Yes. Select the category of service from the List of Service Categories. Note: Set the Inventory Values are affected field to Yes if you are maintaining service as item. For example: You sell consultancy charged by the number of hours.

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Creating Purchase Ledgers for Services

Open the Gateway of Tally > Accounts Info > Ledgers > Create.

Creating ledgers for purchasing services fall under Purchase Accounts and Direct Expenses groups. Enter the name of the service you are buying. In the Under field, select Purchase Accounts/Direct Expenses from the List of Groups menu. In the Is Service Tax Applicable? field set Yes/No. If you set as Yes, you will get the Category Name field. Select the category of service.

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Service Tax Display in Statutory Masters

You can view the values in each service category in Tally. These are predefined values and any changes can be updated from the Tally website. Open Gateway of Tally > Display > Statutory Masters > Service Categories

Select the service category which you want to view. The Service Category screen has a Name field showing the category. This is followed by the Code, Accounting Code and Category fields. The Applicable From column displays the period for which the Abatement (%), Service Tax Rate (%), and Cess Rate (%) are applicable.

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Creating Sales Vouchers

Open Tally, Gateway of Tally > Accounting Vouchers (Transactions/Vouchers). This will open the Accounting Voucher Creation screen. Select F8: Sales to create a sales voucher.

If you are entering a service sale with an item, select Item Invoice (ALT+I) mode. Enter a reference in the Ref field. In the Party’s A/c Name field, select the company to be debited from the options in the List of Ledger Accounts and enter. This will take you to the Despatch Details form in the Party Details screen. Enter the relevant details here. Select the Service Ledger (under Sales Accounts) to be credited from the List of Ledger Accounts. Select the Name of Item if you are selling service as an item or else select the service ledger under Sales Ledger from the List of Ledger Accounts. Enter the Quantity and the Rate to get the amount in the Amount field. In the Accounting Details screen the first service ledger from the List of Ledger Accounts is displayed in the Particulars field by default. Press Spacebar key to display the List of Ledger Accounts and select the service ledger required. If service is not as an item, select Service Ledger and enter the amount in the account invoice mode. Note: To create service as an Item refer to topic Stock Items.

Select the service tax ledger to be credited from the List of Ledger Accounts. This will display the Service Tax Computations screen. This screen gives details of the default values for service tax in the ledger. You can alter these values here. There is an Abatement field and Expense field to arrive at the Assessable Value. The Service Tax and Cess is calculated and displayed. Enter a new reference in the New Ref field.

The Bill-wise Details screen is displayed. Select a new reference from the Method of Adj. Enter the due date or credit period, if any. Enter the Service Tax Ledger from the List of Service Tax Ledgers. Use the Narration field to enter other information. Accept to save the entries. Note: 1. Tally supports the services you sell or purchase as an Item. 2. Tally supports voucher entry in As Invoice mode and in As Voucher mode for sale and purchase of services in service tax feature. 3. In As Voucher mode, the amount has to be entered manually. The Debit and Credit fields have to be entered/modified manually to tally the voucher.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Creating Purchase Vouchers

Select F9: Purchase to open purchase in the Accounting Voucher Creation screen. Enter a reference in the Ref field. Now in the Party’s A/c Name, select the company to be credited from the options in the List of Ledger Accounts and enter. Enter in the Supplier’s Details form in the Party Details screen. Select the Purchase Ledger to be debited from the List of Ledger Accounts. Select the Name of Item if you are purchasing as item or select the Purchase Ledger from the List of Ledger Accounts. Enter the Quantity and the Rate to get the amount in the Amount field. Enter the amount if entering in the account invoice mode.

Select the service tax ledger to be debited from the List of Ledger Accounts. This will display the Service Tax Computations screen. This screen gives details of the default values for service tax in the ledger. You can alter these values here. There is an Abatement field and Expense field to arrive at the Assessable Value. The Service Tax and Cess is calculated and displayed. Enter a new reference in the New Ref field.

The Bill-wise Details screen is displayed. Select a new reference from the Method of Adj. Enter the due date or credit period, if any. Enter the Service Tax Ledger from the List of Service Tax Ledgers. Use the Narration field to enter other information. Accept to save the entries. Note: 1. Tally supports the services you sell or purchase as an Item. 2. Tally supports voucher entry in As Invoice mode and in As Voucher mode for sale and purchase of services in service tax feature. 3. In As Voucher mode, the amount has to be entered manually. The Debit and Credit fields have to be entered/modified manually to tally the voucher.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Creating Receipts and Payments voucher

Receipts

Open Tally, Gateway of Tallyà Accounting Vouchers (Transactions/Vouchers). This will open the Accounting Voucher Creation screen. Select F6: Receipt to create a receipt voucher. In the Particulars table, select the company to be credited for the payment received from the options in the List of Ledger Accounts. Enter the amount received in the Credit field.

Select the Method of adjustment from the Method of Adj field and the List of Pending Bills from the Bill-wise Details screen. Now select the bank/cash ledger where the payment is to be debited from the List of Ledger Accounts menu. Enter the amount received in the Debit field. Enter details of the receipt in the Narration field. Enter to accept the entries.

Payments
Open Tally, Gateway of Tallyà Accounting Vouchers (Transactions/Vouchers). This will open the Accounting Voucher Creation screen. Select F5: Payment to create a payment voucher.

In the Particulars table, select the company to be debited for the payment made from the options in the List of Ledger Accounts. Enter the total amount in the Debit field.

Select the Method of adjustment from the Method of Adj field and the List of Pending Bills, in the Bill-Wise Details for screen. Now select the bank/cash ledger where the payment is to be credited from the List of Ledger Accounts menu. Enter the amount paid in the Credit field. Enter details of the payment in the Narration field. Enter to accept the entries. Note: Service Tax does not support Payments and Receipts made in the Journal Voucher.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Payment of Service Tax in Tally

You can create entries for payment of service tax in a normal payment voucher.

Select the service tax ledger which is to be debited, from the List of Ledger Accounts. In the Tax Bill Details screen you will get the Service Tax Bill Details for form.

Against reference, you will find the List of Service Tax Bills. The different fields are reference number, the date of invoice, the service tax to be paid on payment received and the total service tax payable. Enter the amount. Note: You can make a payment for a single category in one payment voucher in Tally. In case you are dealing with multiple sales categories then you need to pass separate payment vouchers.

Adjusting service tax credit in Tally
You can adjust service tax credit in the same payment voucher. Select a service tax ledger to be credited from the List of Ledger Accounts. In the Tax Bill Details screen you will get the Service Tax Bill Details for form.

Against reference, you will find the List of Service Tax Bills. The different fields are reference number, the date of invoice, the service tax to be paid on payment made and the total service tax paid to the party. Enter the amount. The Maximum Credit Adjustment Limit: field displays the maximum amount you can adjust. If the amount in input credit exceeds the debited amount, Tally will display an error message Exceeds Input Credit Limit! In such a scenario, enter the amount equal to or less than the maximum adjustable amount. After the credit adjustment, the remaining amount can be credited to cash or bank accounts ledgers. In case, tax payable is zero after adjusting the input credit, you can save it as journal. Select F7: Journal and save as journal. Note: Any interest or penalty incurred can also be entered in the payment voucher

Printing of TR6 Challan

You can print the TR6 Challan in: Voucher Print TR6 Report The TR6 challan in voucher mode can be generated by printing the service tax payment voucher. Open Gateway of Tally > Display > Day Book In Day Book, select the Service tax payment voucher and enter. This will take you to the Accounting Voucher Alteration screen. Use Alt+P key or click on the Print option on the right side of the screen.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Transferring Earlier Service Tax Entries in Tally ies 7.2

You can transfer your pending service tax payable and available service tax input credit in to Tally ies 7.2. This can be done with the help of a service tax payable suspense account.

Opening Tax Bills for Purchase of Services
To transfer service tax input credit pending with your company in Tally ies 7.2, you have to debit all the service tax input credit for various service tax categories in a ledger created under suspense account. If you are splitting a company or creating a new company, the above amount will appear as opening balance amount.

Create a ledger under Suspense A/c with opening balance of Rs.51/-. Let us assume you have Rs.51/- service tax input credit for services purchased under category Telephone Service, which is subject to payment to the party. The procedure to transfer this in Tally is as follows

the Accounting Voucher Creation screen and select F7: Journal. Debit the service tax ledger for the category Telephone Services. Credit Rs.51/- to the Suspense A/c.

In the Tax Bills Details screen, select New Ref for Type of Ref to create an opening tax bill (Here, Rs.51/-). Enter the bill reference number and service tax bill amount. As per statutory rules, service tax is credit can be availed only on the payment made against purchase. It is mandatory to maintain bill details for the party. You will have to associate the party name and the bill reference number of the original invoice with the new tax bill. Realization of the bill will let you avail input credit on the tax bill.

Enter the details in the Service Tax Opening Bills screen. Select the name of the Party Ledger from whom the service is purchased. Enter the bill reference number associated with the tax ledger in the Bill Name field and enter the other details. Select Not Applicable in case there is no bill reference number.

Opening Tax Bills for Sale of Services
To transfer service tax payables pending with your company in Tally ies 7.2, you have to credit all the service tax payables for various service tax categories in a ledger created under suspense account. If you are splitting a company or creating a new company, the above amount will appear as opening balance amount.

Create a ledger under Suspense A/c with opening balance of Rs.102/-. Let us assume you have Rs.102/- service tax payable for services sold under category Chartered Accountant, which is subject to receipt from the party. The procedure to transfer this in Tally is as follows:

Open the Accounting Voucher Creation screen and select F7: Journal. Debit Rs.102/- to the Suspense A/c. Credit the service tax ledger for the category Chartered Accountant.

In the Tax Bills Details screen, select New Ref for Type of Ref to create an opening tax bill (Here, Rs.102/-). Enter the bill reference number and service tax bill amount. As per statutory rules, service tax is payable on the receipt against the invoice. It is mandatory to maintain bill details for the party. You will have to associate the party name and the bill reference number of the original invoice with the new tax bill. Realization of the bill will let you pay service tax from the tax bill.

Enter the details in the Service Tax Opening Bills screen. Select the name of the Party Ledger to which the service is sold. Enter the bill reference number associated with the tax ledger in the Bill Name field and enter the other details. Select Not Applicable in case there is no bill reference number.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Advance Service Tax

You can pay service tax to the government in advance and adjust it against service tax payable. Advance service tax can only be paid against major category for the company. While making TR6 Challan for advance payment you have to select the major service category for your company Advance service tax is paid on the major service category but can be adjusted against service tax payable on major and other service categories.

Payment of Advance Service Tax
Creating Advance Payment Voucher Go to Gateway of Tally > Accounting Vouchers > F5: Payment Select service tax ledger for the major service category. Advance service tax can be paid only using this category.

In the Tax Bills Details screen select type of reference as Advance and debit the advance amount.

Credit cash/bank account and accept.

Creating Sales Voucher Go to Gateway of Tally > Accounting Vouchers > F8: Sales Select the party and sales ledger (Item ledger if you sell service as an item).

Select the relevant service tax ledger and enter the details in the Service Tax Computations screen.

In the Bill-wise Details screen select New Ref for type of reference. Select the service tax ledger and accept.

Creating Receipt Voucher Go to Gateway of Tally > Accounting Vouchers > F6: Receipt Select the party ledger to be credited and enter the amount

In the Bill-wise Details screen select against Agst Ref for the type of reference. Select from the List of Pending Bills and accept.

Creating a Journal to adjust Advance Service Tax You can make the adjustment for the advance service tax paid in the TR6 by a separate Journal entry. The adjustment can be made for the same category or for any other payable category. Debit the service tax ledger and credit the service tax ledger for major service category. Go to Gateway of Tally > Accounting Vouchers > F7: Journal Select the service tax ledger in which the service tax is to be paid and debit the amount.

Select the service tax ledger for the major service category in which you made the advance service tax payment entries. In the Tax Bill Details screen select Agst Ref for type of reference. Select the tax bills from the List of Service Tax Bills.

Credit the amount and accept. Journal Voucher can be used for full adjustment i.e. the payable is equal to the advance service tax amount. Adjust Advance Service Tax in TR6 vouchers. Go to Gateway of Tally > Accounting Vouchers > F5: Payment Select the service tax ledger in which the service tax is to be paid and debit the amount.

Credit the Service tax ledger for major category. In the Tax Bill Details screen select Agst Ref for type of reference. Select the Tax bill from the List of Service Tax Advance Bills.

Credit the balance amount to your Bank ledger and accept.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Service Tax Reports

Open Tally, Gateway of Tally > Display > Service Tax RepOrts. There are four types of reports in the menu: TR6 Challan Service Tax Payables Input Credit Form ST3 Report

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

TR6 Challan

This report is to select a range of TR6 payment vouchers to be printed in one challan to file to the government. Open Tally, Gateway of Tally > Display > Service Tax RepOrts > TR6 Challan This will display the TR6 Challan Print Configure screen

Use the Print Preview option (ALT + I) to view the challan on your computer screen. The challan will print in government prescribed format and can be used to remit service tax. This is how the printed document will look.

TR6 Challan Titling
The Titling feature lets you change or alter the sub title of your TR6 Challan. You can use this to denote the TR6 Challan as original or revised.

In the TR6 Challan Print Configure screen by default it is original.

Use the ALT + L key or the Titling button to display Control on Report Titles

Enter in the sub title field under Report Title to change the title display in TR6 Challan from original to revised.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Service Tax Payables

Open Tally, Gateway of Tally > Display > Service Tax RepOrts > Service Tax Payables This will display the Service Tax Payable screen. Select the period for the report using the F2: Period option. This will display the service tax payable for the selected period.

Ref No. - The reference number given to the sales invoice.

Party Name – The name of the customer to whom the sale is made. Category Name – Name of the category of service selected from the list of service categories. Bill Value: This column displays the total invoice amount. Assessable Value – The assessable value for the service. Service Tax - The total service tax calculated on the assessable value. Cess - The total cess on the service tax. Realised Value: This column displays the amount received on the invoice value. Assessable Value – The assessable value based on the realised value. Service Tax Payable - The amount of service tax payable based on the realised value. Cess Payable – The cess on the service tax payable based on the realised value. Total Payable – The amount of service tax payable inclusive of educational cess. Use the Alt+P key or click on Print option to print your report. This is how the printed document will look

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Input Credit Form

Input Credit Form report displays details of Service Tax input credit available with the company for

a specified date. This can be used as a supporting form while filing the half-yearly returns using the ST3 report. Open Tally, Gateway of Tally > Display > Service Tax RepOrts > Input Credit Form to display the Input Credit Form screen. Select the period for the report using the F2: Period option. The report displays input credit available up to the period of the specified date.

Date - Date of the purchase invoice Ref No - The reference number of the purchase invoice. Party Name/Service Tax No. - Name and service tax registration number of the service provider. Party Address – Address of the service provider. Category Name - Name of the category of service purchased. Bill Value: This column displays Assessable value, Service Tax and Cess amount as per the invoice Assessable Value – The net assessable value for the service purchased. Service Tax - Service tax as per the purchase invoice. Cess - Cess on the service tax as per the purchase invoice Realised Value: This column displays the Assessable value, Service Tax and Cess realised based on the payment made against the invoice value. Assessable Value – The realised assessable value based on the payment made.

Service Tax Credit - The realised amount of service tax credit based on the payment made. Cess Credit – Realised cess on the service tax credit based on the payment made. Total Credit – Available service tax credit inclusive of educational cess. Use the Alt+P key or click on Print option to print your report. This will display the Report Generation screen.

This is how the printed document will look

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

ST3 Report

The ST3 Report is a statutory report. This report displays the ST3 Form in the government prescribed format that is used to file half – yearly service tax returns to the Commissionerate of Service tax. Go to Gateway of Tally > Display > Service Tax RepOrts > ST3 Report Use the Alt+P key or click on Print option to print your report. This will display the Form ST-3 screen.

This is how the printed document will look:

1. Name of the Assessee – Name of your company and the assessee code for the company. 2. Whether an individual or proprietary firm or any other (please specify) – Type of your company/Organisation 3. Category of Services – Major category of service you provide 4. Service Tax Registration No. – Your service tax registration number

Name of the Taxable Service Provided (1) – Name of the taxable service provided. Months(s) (2) – The month for which the taxable service is considered. Value of Taxable Service Charged or Billed (indicate break up of the amount month-wise) (3) – The assessable value of the service sold for the category during the specified month. Value of Taxable Service realised (indicate break up of the amount month-wise) (4) – The realised value of the service for the category during the specified month. This is based on the receipt made during the month for the category. Amount of Service Tax Payable: Service Tax (5a) – Service tax payable for the respective months and the service categories Cess (5b) – Cess on service tax payable for the respective months and the service categories Total (5c) – Sum total of service tax and cess payable for the category for the respective month. Amount of Service Tax adjusted in terms of sub-rule (3) of rule 6 of the Service Tax Rules (1994) (6) – Input credit amount adjusted against service tax payable for the category during the month Amount of interest, if any payable (7) – Interest or other payments made during the month for the category

Details of payment made to the Government credit – Includes details of service tax, interest and other amount Mode of Payment: Cash (8a) – Amount of service tax and cess as per the TR6 voucher. Challan No and date/Journal Slip No. and date – TR6 challan number/ Journal slip number with date. Note: This is a blank field and has to be entered manually. Service Tax Credit (8b) - Input credit adjusted against the payable in the voucher Total Amount Paid (8a+8b) – The sum of the service tax paid and input credit availed

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Service Tax Reports

Open Tally, Gateway of Tally > Display > Service Tax RepOrts. There are four types of reports in the menu: TR6 Challan Service Tax Payables Input Credit Form ST3 Report

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

TR6 Challan

This report is to select a range of TR6 payment vouchers to be printed in one challan to file to the government. Open Tally, Gateway of Tally > Display > Service Tax RepOrts > TR6 Challan This will display the TR6 Challan Print Configure screen

Use the Print Preview option (ALT + I) to view the challan on your computer screen. The challan will print in government prescribed format and can be used to remit service tax. This is how the printed document will look.

TR6 Challan Titling
The Titling feature lets you change or alter the sub title of your TR6 Challan. You can use this to denote the TR6 Challan as original or revised.

In the TR6 Challan Print Configure screen by default it is original.

Use the ALT + L key or the Titling button to display Control on Report Titles

Enter in the sub title field under Report Title to change the title display in TR6 Challan from original to revised.

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Service Tax Payables

Open Tally, Gateway of Tally > Display > Service Tax RepOrts > Service Tax Payables This will display the Service Tax Payable screen. Select the period for the report using the F2: Period option. This will display the service tax payable for the selected period.

Ref No. - The reference number given to the sales invoice.

Party Name – The name of the customer to whom the sale is made. Category Name – Name of the category of service selected from the list of service categories. Bill Value: This column displays the total invoice amount. Assessable Value – The assessable value for the service. Service Tax - The total service tax calculated on the assessable value. Cess - The total cess on the service tax. Realised Value: This column displays the amount received on the invoice value. Assessable Value – The assessable value based on the realised value. Service Tax Payable - The amount of service tax payable based on the realised value. Cess Payable – The cess on the service tax payable based on the realised value. Total Payable – The amount of service tax payable inclusive of educational cess. Use the Alt+P key or click on Print option to print your report. This is how the printed document will look

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

Input Credit Form

Input Credit Form report displays details of Service Tax input credit available with the company for

a specified date. This can be used as a supporting form while filing the half-yearly returns using the ST3 report. Open Tally, Gateway of Tally > Display > Service Tax RepOrts > Input Credit Form to display the Input Credit Form screen. Select the period for the report using the F2: Period option. The report displays input credit available up to the period of the specified date.

Date - Date of the purchase invoice Ref No - The reference number of the purchase invoice. Party Name/Service Tax No. - Name and service tax registration number of the service provider. Party Address – Address of the service provider. Category Name - Name of the category of service purchased. Bill Value: This column displays Assessable value, Service Tax and Cess amount as per the invoice Assessable Value – The net assessable value for the service purchased. Service Tax - Service tax as per the purchase invoice. Cess - Cess on the service tax as per the purchase invoice Realised Value: This column displays the Assessable value, Service Tax and Cess realised based on the payment made against the invoice value. Assessable Value – The realised assessable value based on the payment made.

Service Tax Credit - The realised amount of service tax credit based on the payment made. Cess Credit – Realised cess on the service tax credit based on the payment made. Total Credit – Available service tax credit inclusive of educational cess. Use the Alt+P key or click on Print option to print your report. This will display the Report Generation screen.

This is how the printed document will look

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

ST3 Report

The ST3 Report is a statutory report. This report displays the ST3 Form in the government prescribed format that is used to file half – yearly service tax returns to the Commissionerate of Service tax. Go to Gateway of Tally > Display > Service Tax RepOrts > ST3 Report Use the Alt+P key or click on Print option to print your report. This will display the Form ST-3 screen.

This is how the printed document will look:

1. Name of the Assessee – Name of your company and the assessee code for the company. 2. Whether an individual or proprietary firm or any other (please specify) – Type of your company/Organisation 3. Category of Services – Major category of service you provide 4. Service Tax Registration No. – Your service tax registration number

Name of the Taxable Service Provided (1) – Name of the taxable service provided. Months(s) (2) – The month for which the taxable service is considered. Value of Taxable Service Charged or Billed (indicate break up of the amount month-wise) (3) – The assessable value of the service sold for the category during the specified month. Value of Taxable Service realised (indicate break up of the amount month-wise) (4) – The realised value of the service for the category during the specified month. This is based on the receipt made during the month for the category. Amount of Service Tax Payable: Service Tax (5a) – Service tax payable for the respective months and the service categories Cess (5b) – Cess on service tax payable for the respective months and the service categories Total (5c) – Sum total of service tax and cess payable for the category for the respective month. Amount of Service Tax adjusted in terms of sub-rule (3) of rule 6 of the Service Tax Rules (1994) (6) – Input credit amount adjusted against service tax payable for the category during the month Amount of interest, if any payable (7) – Interest or other payments made during the month for the category

Details of payment made to the Government credit – Includes details of service tax, interest and other amount Mode of Payment: Cash (8a) – Amount of service tax and cess as per the TR6 voucher. Challan No and date/Journal Slip No. and date – TR6 challan number/ Journal slip number with date. Note: This is a blank field and has to be entered manually. Service Tax Credit (8b) - Input credit adjusted against the payable in the voucher Total Amount Paid (8a+8b) – The sum of the service tax paid and input credit availed

Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.

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