Using Tally Ies 7

Using Tally ies 7.
The Complete Business Solution
Integrated Enterprise Solution

Tally ies 7.2 version has the latest taxation structure integrated in it. These integrated
features in Tally will make it simple to manage myriad issues that will arise due to the
complexities of taxation in your day-to-day activities. Licensing has been simplified for
single-users and multi-users.
New Features & Corrections

Minor facilities and Corrections:
Provision for providing the Starting Number under "Restart

Numbering" option available in voucher type.
This facility allows you to specify multiple starting number, period wise, within a single
voucher type for "Automatic" method of voucher numbering.
E.g.: If you wish to start sales voucher from 100 every month, Go to Accounts Info >
Voucher Type > Alter > Sales > define "Method of Voucher Numbering" as
'Automatic' > this will allow you to specify 'Starting Number' under the option "Restart
Numbering". Here you may specify the Applicable from date, specify the starting number
as "100" and choose 'Monthly' for "Particulars".
Proxy Configuration support for SoftLock Version:

Proxy configuration was disabled if Tally Client/Server is not active. Now for SoftLock
Version of Tally it is always enabled.
Maintain Balances Bill-by-bill and Inventory Values are affected for a

ledger:
In ledger master enabling of both 'Maintain balances bill-by-bill' and 'Inventory values
are affected' is not possible > Resolved.
Additional Text while emailing from print preview is not available >
Resolved
F11: Features for Accts Only Company
Displays and allows you to alter the following Inventory Features in an Accounts Only
company:
o Separate Discount Column in Invoices -This is not required as Invoicing is
not possible in case of accts only company > Resolved
o Allow Sales Order Processing - This is an Inventory Transaction >
Resolved
o Allow Purchase Order Processing - This is an Inventory Transaction >
Resolved
Error while Syncing - "Cannot alter Units of item!(FOR OBJECT....
If the Stock item is created with Alternate units and the conversion rate provided has
more decimal places than that of the UOM Master. The conversion rate stored in the data
base is up to 5 decimal places and the item master stores up to 4 decimal places, after
upward/downward rounding off. Sync fails with above error.
Sync will fail if the conversion rate is 0.02575 (rounds off to 0.0258 in the stock item
master) and will not fail if incase of 0.033333... (rounds off to 0.0333) > Resolved.
Client Rule Use Compression is always shown as 'Yes'
Create a Client Rule with NO for the Option "Use Compression" and save. It is noted that
the option is changed to YES automatically in alteration mode, i.e., the setting NO for the
Option "Use Compression" is not saved > Resolved.
Sales invoice with consignee/buyer details manually typed for every invoice is not
retained. Ex: Cash Sales > Resolved
Budgets and Scenario
o Create a Budget and Go to Accounts Info > Scenario > it is noted that the
Alter key is enabled even though no scenario is created > Resolved
o The same case occurs if scenario is created and Budget is not created. The
Alter key gets enabled in Budget master screen > Resolved
o List of Accounts > Budget, will not show Tree wise Budget if any >
Resolved
o List of Accounts > Budget, Ctrl + Enter Key for Altering budget is not
working > Resolved
o No option to see scenarios in List Of accounts > Resolved
o Create a Budget under an existing Budget. Tally allows you to delete the
parent budget > Resolved
o When Altering Budget same Budget is also shown in parent list >
Resolved
o From List of accounts > Budgets and Scenarios > the Scenarios and
Budgets are getting mixed or listed in alphabetical order > should display
all the Budgets first then the scenarios or visa-versa > Resolved
o Multi-Account Printing with preview > The print job is sent to printer
and starts printing in-spite of canceling the print process from Print
Preview of Multi Account Printing > Resolved
Note:
1. Release 3.13 contains some additional minor corrections. It is advised that, all users of
Tally ees 6.3 should upgrade to Release 3.13.
2. Ensure that you have a back up of the data before installing the new release.
New Features
Following corrections have been done in release 3.11 build 4
o Additional text facility is not available while emailing from print preview
screen. The same needs to be provided so that remarks/note can be typed
in along with email. However, this facility is available while emailing
directly.
o Enter a cash sales invoice
o After selecting the cash ledger, enter the consignee address manually and
save the voucher
o Alter the voucher and press enter key > the address details will get
overwritten with the address in the ledger master (in this case blank)
New Features & Corrections enabled in Release 2.11

Major Facilities:
Tally Link Server

TallyConnected customers get access to a range of connected services known as Tally
Internet Services. Tally Link Server is one of the services available as a part of Tally
Internet Services. It enables two instances of Tally to communicate with each other
without the requirement of a fixed IP address in the server. TallyConnected customers can
synchronize their data using the Tally Link Server.
Import/Export Snapshot
Helpful to setup synchronisation when both the companies participating in
synchronization have large no. of transactions
Ability to Import any XML files of any size

There was a limitation on the size of data that can be imported in a single batch in earlier
releases, now resolved.
Option to compress data during Synchronisation

This increases the speed of synchronization and as the amount of data to be transferred
decreases significantly.
Insert Failure Voucher ID Error > Resolved
Minor Facilities & Corrections:

Installation of Tally with DataPhone as Modem on Win 2003 > Resolved (For
TallyConnect Customers Only)
New Features
VAT Enabled
Indian VAT enabled in Tally ees 6.3 release 2.0. If Use Accounting Terminology of is set
to India/Asia in F12: Configure > General, a new option Use Indian VAT? appears in
the company configuration screen (Create/Alter). Once the same is set to YES, two new
fields are available in the Item Master to input the VAT & SAT Rate. Also allows you to
define the Type of Calculation as VAT/SAT in the ledger master and Voucher class in
order to automate the VAT calculations in the invoice.
Print Preview
Option to zoom Print Preview added. Click on zoom or use ALT + Z.
Synchronization
Difficulty in synchronizing the data with Canceled vouchers – Resolved
Profit and Loss A/c

Displays incorrect values (negative) for Sales bills to make - Resolved
New Features
Proxy Server Configuration
A new configuration option has been added in the F12: Configure menu. From this
release onwards, Proxy server configuration is required for those users who are behind a
proxy server and use Synchronization feature of Tally as a Client. If TallyClient accesses
a TallyServer through a proxy server then proxy server details must be provided in this
option. Tally no longer depends on Internet Explorer for proxy settings.
F12 - Configuration Menu
Proxy Configuration – Sample Screen
Rejection In and Rejection Out

In Stock Vouchers sub-screen of Stock Item/Group monthly summary reports, Rejection
Out would be shown as Negative (-) quantity in Inward Column, and Rejection In as
Negative (-) quantity in the Outward Column. In the event of Rejection In (Material
Inward but considered as (-) Outward), the Rate at which the Item has been returned, will
not affect the value of Closing Stock and the value of material would be debited to
respective sales account only. In case of Rejection Out (Material Outward but considered
as (-) Inward), the Rate at which the Item is returned will change the rate of Item for the
balance Closing Stock.
Synchronization
Modification in Op. Balance of a Debtor or partial adjustment of the same against
multiple receipts were not getting synchronized to the server data. The same has been
corrected in this release. In case of change in the Op. Balance (In case of carrying
forward the balances to next year) the user must modify one of the existing vouchers in
order to synchronize the modified Ledger account.
New Features
ALT+R and ALT+S usage in stock item voucher register
The ALT+S takes you to the alteration of the stock item master and does not bring back
the removed line (using ALT+R). This is due to the reason that we have ALT+S for Stock
Alter also in that screen – now corrected and provided CTRL+S: Stock Alter for
alteration of stock item master.
Voucher register exported in HTML

Voucher register exported in HTML format does not export voucher number column –
now corrected.
Additional description for stock items in credit/debit notes

The same is provided in release 1.8.
Date and time of removal in Sales Invoice

Sales invoice with excise format and tracked against a sales order – carries the date of the
order in the printout for the option date and time of removal and date and time of
invoice – now corrected. This correction would work only for sales orders entered with
this release. If you enter ONLY an invoice in the new release, and link a SO entered using
previous releases, the difficulty will persist.
The purchase order details are not printed in Receipt Note

The option for activating the same is provided in F12: Configure of the print screen.
During Sync, the server should send one voucher at a time if "Sync over
Slow Connection" is set to YES in the Client Rule
Corrected
Sync does not work if Proxy Authentication is required at the client

Now corrected
Unable to handshake with the Mail Server message while sending emails
Resolved.
Printing documents (invoice, vouchers etc) with currency decimal place

in words (e.g. Paise, pence, cents, etc)
In the Company creation/alteration screen, an additional field displaying the name of the
currency decimal is available. The Currency decimals will print in words (in the
documents) based on the name given. However, if the same is left blank, Tally prints the
currency decimals in numbers (as in earlier releases).
Pre allocate bills for payment/receipt voucher in single entry and double
entry system
Gateway of Tally > F12: Configure > Voucher Entry > Pre-allocate Bills for
Payment/Receipt > set to YES - this allows you to set off against the bills, before
specifying the amount in Payment and Receipt entries.
TallySynchronization
Synchronization refers to the process of Tally data 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. If
the user is connected on a leased line, he can choose to replicate after every transaction
entry. If the user is not connected on a leased line, he can post his updates at specific
intervals. 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.
To replicate, the user at the client needs to select - Gateway of Tally > Import
Transactions > Synchronization > Synchronize. Tally connects to the server, finds out
the status of the last transfer (if any) and exchanges the incremental data that was entered
after the last transfer. Tally also takes care of creating all masters required to save the
transaction on the target machine. (This will work with TallyServer and TallyClient
capabilities - which is available as a Module).
TallyModular
Tally is now available in modules. Information on the modules that can be activated is
available in Functions and Features (Gateway of Tally > F12: Configure). For
example, enabling TallyServer and TallyClient capabilities for Synchronization.
Printing documents (invoice, vouchers etc) with currency decimal place

in words (e.g. Paise, pence, cents, etc)
In the Company creation/alteration screen, an additional field displaying the name of the
currency decimal is available. The Currency decimals will print in words (in the
documents) based on the name given. However, if the same is left blank, Tally prints the
currency decimals in numbers (as in earlier releases).
Pre allocate bills for payment/receipt voucher in single entry and double
entry system
Gateway of Tally > F12: Configure > Voucher Entry > Pre-allocate Bills for
Payment/Receipt > set to YES - this allows you to set off against the bills, before
specifying the amount in Payment and Receipt entries.
TallySynchronization
Synchronization refers to the process of Tally data 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. If
the user is connected on a leased line, he can choose to replicate after every transaction
entry. If the user is not connected on a leased line, he can post his updates at specific
intervals. 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.
To replicate, the user at the client needs to select - Gateway of Tally -> Import
Transactions -> Synchronization -> Synchronize. Tally connects to the server, finds out
the status of the last transfer (if any) and exchanges the incremental data that was entered
after the last transfer. Tally also takes care of creating all masters required to save the
transaction on the target machine (This will work with TallyServer and TallyClient
capabilities - which is available as a Module).
TallyModular
Tally is now available in modules. Information on the modules that can be activated is
available in Functions and Features (Gateway of Tally > F12: Configure). For
example, enabling TallyServer and TallyClient capabilities for Synchronization.
Gateway of Tally
The Gateway of Tally displays as Masters, Transactions and Reports. This is primarily
for ease of use!
Optional Vouchers by default

This is one of the methods to improve internal control. You can mark the default voucher
types as "optional by default". All entries made using the voucher type will automatically
display the optional tag. Accounts Info > Voucher Type > Alter > select Tally's default
voucher type and activate the option Mark Optional as default. These entries can be
accessed from the Optional Voucher Register to be regularized later at will.
Item Invoice & Account Invoice

Account Invoice enables you to select ledger accounts such as Service Charges, etc - in
the invoice. Stock Item details can be invoiced using the Item Invoice.
Common Ledger A/c for Item Allocation

A facility to select the accounting allocations once at the time of raising sales and
purchase invoices, delivery notes or orders. This is useful if the same sales or purchase
account is being selected for every item in the invoice. Enables faster data entry! On the
Invoice screen > F12: Configure > activate the option Use Common Ledger A/c for
Item Allocation.
Credit Period details in Ledger Master

For the ledgers under Sundry Debtors and Creditors, the credit period can be given in the
Master which will be automatically considered at the time of entry.
Use Defaults for Bill Allocation

Allows you to skip the Bill-wise Details screen at the time of invoice entry. The reference
is automatically taken as New Reference; voucher number taken as Bill Name; Credit
Period from the Ledger Master. Enables faster data entry!
Accept Supplementary Details

You can disable the sub-screen showing dispatch and address details in the invoice by
activating this option in F12: Configure (on the Invoice).
Single Entry Mode for Payment / Receipt / Contra

Allows you to enter Payment, Receipt and Contra vouchers in single entry Mode.
Activate this option in F12: Configure > Voucher Entry.
Introduction
Tally ies (integrated enterprise solution) 7.2 provides you with two specialized features:
o Single User Licensing
o Multi User Licensing
TallySilver for Single-User

The single-user Licensing allows the deployment of Tally on ONLY ONE computer with
an option of activating it Online or Offline. However, you can use the same Tally license
on another computer, by surrendering the license activated on the first and reactivating it
on the other. If you are an Offline user, you can take a request file to a computer, which
has Internet connectivity and activate your copy of Tally easily.
TallyGold for Multi-User

The multi-user Licensing feature facilitates the use of Tally on ANY NUMBER of
computers connected to a local area network (LAN) with a provision of activating the
license Online or Offline. However, the method of activation is no different from the one
followed in Single User Licensing system.
After the successful installation of multi-user license on the License server, you can have
Tally start when Windows starts and run as a service in the background. The License
clients may install and use Tally later on.
Note:
1. The activation of the license needs to be done only twice, not monthly.
2. When the multi-user licensing system is deployed across the network, enough care
must be taken to set the parameter 'TallyLicenseServer’ in the configuration file of
Tally (Tally.ini) on the License Clients.
3. In multi-user licensing, if you work on Windows XP and have a firewall installed,
ensure that the firewall allows access to the Server Port.
Activation Form
The first time you run Tally after installation, the Activation Form dialog window will be
displayed in both Single User and Multi User licensing systems.
Enter your Serial, Key and E-mail Id (If you are connected to Internet). Else, press Esc or
Ctrl+Q to quit this form.
Licensing Menu
To view the licensing menu, follow this path: Gateway of
Tally > F12: Configure > Licensing
Single-User
The screen given below displays the options available in
License menu:
Functions/Features
This option allows you to view the Functions/Features enabled in Tally.
Menu Path: Gateway of Tally > F12: Configure > Licensing > Functions and
Features
Products
This option displays the information on the TCP (Tally Compliant Product), which is
available for that particular instance of Tally. Here is an example:
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.
Quit
This option enables you to quit the licensing menu.
Multi-User
In multi-user system, the License menu on the License
server displays all the options that are available for single-
user system.
However, on the License client computers, the options
Online and Offline do not exist, which is obvious from the
screen shown below:
Activating TallySilver for Single-User
The single-user Licensing allows the use of Tally on ONLY ONE computer with an
option of activating it Online or Offline. The following sections explain how you can
activate Tally for Single user, both Online and Offline.
For Users Connected to the Internet

You can activate your license by using the Online option available in F12: Configure >
Licensing > Online.
Follow the steps to activate your license:

1. Click the Tally icon to start Tally in Educational mode.
2. Tally displays Online Activation Form dialog window with three fields.
3. Press the Enter key to proceed.
4. Tally installed on your computer, will connect to the Tally Internet Services
Server and validates your registration information.
5. On entering the correct Serial and Key, a pop-up box will display a message
indicating that your license is activated.
Once your license is activated, you will be provided with the Online Menu. To view the
Online Menu press F12: Configure > Licensing > Online.
The Online menu has two options:

• Update
This option helps you to update new features of Tally

• Surrender
This option enables you to surrender the Tally License
For Users not Connected to the Internet

If your computer does not have an Internet connection, you can activate your Tally
license using Offline option.
Follow these steps to activate your license:

1. When you start Tally, an Activation Form dialog window will be displayed. As
you do not have an Internet connection, press Esc or Ctrl+Q to quit this form.
2. Press F12: Configure > Licensing > Offline
3. Tally displays the Offline Activate Form dialog window with three fields
4. Press the Enter key to proceed.
5. If your Serial, Key and Email Id are found correct, you will get a pop-up box that
indicates your tally_req.slk file is successfully generated.
6. The tally_req.slk file is stored in the Tally folder. You need to copy the
tally_req.slk file on a floppy/CD and take it to any computer with Internet
connectivity and has Tally installed on it.
7. Copy the tally_req.slk file to the Tally folder on this computer, start Tally and go
to F12: Configure > Licensing > Offline.
8. Click on the Send External Request option to send the request to Tally Internet
Services server. The response will be saved in a new file called tally_resp.slk,
which will be generated in the Tally folder.
9. Copy the tally_resp.slk file into a floppy or CD, from the Internet connected
computer and copy the same file into the Tally folder of your computer.
10. You are now ready to use Tally.
Activating TallyGold for Multi-User
If your company runs on a local area network (LAN) and requires that Tally be installed
on all the computers connected to the network then you need to activate multi-user
licensing of Tally. In this process, one computer is designated as the License Server and
all others as License clients. The license is installed on the License Server.
Tally License Server

During the installation of Tally, select the Run Tally License Server at Windows
Startup (For TallyGold Users) check box. This will enable the user to have Tally start
when Windows starts and run as a service in the background on the server machine. The
figure shown below displays the new installation screen.
Here is an alternative method of accomplishing this:
1. Double-click TallyLicServer.exe found in Tally directory
2. A dialog box appears which comprises the following elements:
1. Install
To install the multi-user license on the server, press Install button
o Uninstall
To uninstall the multi-user license previously installed, if any, press Uninstall

button
Parameters to be set in Tally.ini file on the License Clients:

On successful installation of Tally on the client, open Tally.ini file found in Tally
directory and set the following parameters:
TallyLicenseServer = Name of the License Server Computer or IP Address of the
Server.
Note: On the License Server computer, there are few significant parameters set by default
in Tally.ini file viz., TallyLicense = Connect & ServerPort = 9000
Note: On the License Server computer, there are few significant parameters set by default
in Tally.ini file viz., TallyLicense = Connect & ServerPort = 9000
If you do not have an Internet connection
After you activate Tally Offline, go to a computer connected to the Internet and register
Tally through the Internet by clicking on the Register Tally link at
www.tallysolutions.com.
Follow these steps:

1. The Login screen will be displayed. Enter the Serial number and Key/ID in their
respective fields. Now, click the Login button.
2. The Registration screen will be displayed. Enter your details in the form.
3. Click on the Save button.
4. You will get a message, confirming your registration.
Note: The Offline user needs to work on a computer connected to the Internet to Register
Tally
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 SHIFT key.
Buttons with a character or function key double underlined means you have to press
character or the function key along with CTRL key.
o F1: Press the shortcut function key to select a company
o F1: Press SHIFT+F1 to shut a company
o F8: Press CTRL+F8 to select the Credit Note voucher
o Ctrl+M: Press Ctrl + M to access the Gateway of Tally.
o 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.
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
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.
Calculator Area
Using [Ctrl+N] – you can access the

Calculator – You can specify any mathematical formula and get your answers
immediately!
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.
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.
Create a Company
Gateway of Tally > Company Info. > Create
This would be the screen for Britain/Europe.

The screen for India/Asia would, however, be:
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).
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!
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.
State
You can select the appropriate state from the predefined list.
PIN Code
This option allows you to specify the PIN Code (Postal Index Number) of the specified
address.
E-mail Address
Give the e-mail address that will be used to e-mail documents, reports and data from
Tally.
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.
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.
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.
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.
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-with-Inventory – 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.
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.
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 1 st 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.
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.
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.
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.
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.
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)
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:
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
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
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.
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):
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
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!
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):
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
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.
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.
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:
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:
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.
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.
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:
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.
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.
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 ().
`
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.
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.
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.
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.
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 sub-group 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.
Activate Excise Duty

Follow Excise Rules during invoicing – YES
Give the following excise information that will be printed on invoices.
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.
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.
a sub-group 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
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.
Gateway of Tally.
Printing Configuration
To configure voucher layouts for print output. Printing of vouchers, invoices and
statements are configurable through this menu.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 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.
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)
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]
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
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.
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.
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.
How to View Tally Audit Lists?
Gateway of Tally > Display > Statements of Accounts >Tally Audit
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 Tally Audit, 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.
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.
Tally Vat :
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.
How to Use Tally Vault?
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!).
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:
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.
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.
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:
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.
Restore Precautions
It is preferable NOT to restore a backup on the original data directory – primarily to

ensure that No data is unintentionally overwritten.
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.
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.
Account Information :
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.
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.
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. Reserves and Surplus [Retained Earnings]
2. Current Assets
a.Bank Accounts
b.Cash-in hand
c.Deposits (Asset)
d.Loans & Advances (Asset)
e.Stock-in-hand
f.Sundry Debtors
2. Current Liabilities
a.Duties and Taxes
b.Provisions
c.Sundry Creditors
d.Fixed Assets
3. Investments
4. Loans (Liability)
a.Bank OD Accounts [Bank OCC Accounts]
b.Secured Loans
c.Unsecured Loans
5. Suspense Account
6. Miscellaneous Expenses (Asset)
7. Branch/Divisions
8. Sales Account
9. Purchase Account
10. Direct Income [Income Direct]
11. Indirect Income [Income Indirect]
12. Direct Expenses [Expenses Direct]
13. Indirect Expenses [Expenses Indirect]
A Discussion on Each of the Reserved Groups
1. Capital Account
This holds the Capital and Reserves of the company. Examples of ledgers that may be
opened under this group are Share Capital, Partners' Capital A/c, Proprietor's Capital
Account.
Reserves and Surplus [Retained Earnings]

Open ledgers like Capital Reserve, General Reserve, Reserve for Depreciation, etc.
2. Current Assets
Directly under Current Assets, you may find place for assets that do not fall under the
following sub-groups:
Bank Accounts
For Current, savings, short term deposit accounts, etc.
Cash-in hand
Tally automatically opens one Cash A/c under this group. You are permitted to open more
cash accounts, if necessary.
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
o Domestic Sales
o Export Sales
o Now under Domestic Sales open the following ledgers:
o Sales (10%)
o Sales (5%)
o 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.
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:
o Sundry Debtors
o Sundry Creditors
o 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 sub-classification of accounts; you may simply use the reserved groups
for grouping your ledger accounts.
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.
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:
o Creation of Primary Group
o Control behaviour like sub-ledger
o 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.
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).
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.
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.
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.
Ledgers :
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.
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.
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-in-hand) and Profit & Loss Account (direct Primary account). It does not make
any other presumptions. You must create all other account
heads. There are no restrictions in ledger creation except that you cannot create another
Profit & Loss A/c (actually an account that behaves like one). You may create any
number of Cash accounts (by another name like "Petty Cash" ).
You will, now, be guided to create a ledger account with minimal information. For
discussions on additional features, please refer to 'Advanced Usage'.
Gateway of Tally > 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>.
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:
o Sundry Debtors
o Sundry Creditors
o 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.
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
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.
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 'Stock-in-hand'.
Please refer to 'Advanced Usage' for specifying closing stock values.
Deleting a ledger account

You can delete a ledger from the alteration mode by pressing <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.
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.
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)
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.
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.
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/- 2800/- (Item A & C)
12% on 15000/- 1800/- (Item B)
Total Duty 4600/-
Additional Duty
When excise duty is not enabled for invoicing purposes in Company Features [F11] (as
applicable for many products in India), Additional Duty and Surcharge function alike. In
case it is enabled, then Additional Duty is added to the 'Duty Based on Items' in the
invoice to reflect the 'Total Duty payable'. Its method of calculation is explained under
'Surcharge'.
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 10000/-
Item B 15000/-
25000/-
Tax 2% 500/-
Surcharge 10% 50/- (10% of 500)
If your invoice is as below:

Item A 10000/-
Item B 15000/-
25000/-
Tax 2% 500/-
Surcharge 10% 50/- (10% of 500)
Addl.Surcharge8% 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.
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.
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.
Businesses Trading in Goods with the EEC and Not

Services
Where Boxes 2, 8 and 9 are applicable

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
UK companies.)
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.
7. Ensure that all VAT entries are made through Purchase, Sales, Debit Note and
Businesses providing services to the EEC in addition to Goods as well as exporting to
other countries
a sub-group under Sundry Debtors. Likewise, group EEC Suppliers under a separate sub-
group of Sundry Creditors.)
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.
7. Ensure that all VAT entries are made through Purchase, Sales, and Debit Note and
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.
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.
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
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.
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 sub-groups)
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 ).
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
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:

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  Debit Note Class – 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.
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.
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
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.
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.
Drill down to the Ledger level Interest report.
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.
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.
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
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).

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The Complete Business Solution

Integrated Enterprise Solution

New Features & Corrections

Provision for providing the Starting Number under "Restart

Proxy Configuration support for SoftLock Version:

Maintain Balances Bill-by-bill and Inventory Values are affected for a

New Features & Corrections enabled in Release 2.11

Tally Link Server

Ability to Import any XML files of any size

Option to compress data during Synchronisation

Minor Facilities & Corrections:

Profit and Loss A/c

F12 - Configuration Menu

Proxy Configuration – Sample Screen

Rejection In and Rejection Out

Voucher register exported in HTML

Additional description for stock items in credit/debit notes

Date and time of removal in Sales Invoice

The purchase order details are not printed in Receipt Note

Sync does not work if Proxy Authentication is required at the client

Printing documents (invoice, vouchers etc) with currency decimal place

Printing documents (invoice, vouchers etc) with currency decimal place

Optional Vouchers by default

Item Invoice & Account Invoice

Common Ledger A/c for Item Allocation

Credit Period details in Ledger Master

Use Defaults for Bill Allocation

Accept Supplementary Details

Single Entry Mode for Payment / Receipt / Contra

o Multi User Licensing

TallySilver for Single-User

TallyGold for Multi-User

Activating TallySilver for Single-User

For Users Connected to the Internet

Follow the steps to activate your license:

The Online menu has two options:

This option helps you to update new features of Tally

This option enables you to surrender the Tally License

For Users not Connected to the Internet

Follow these steps to activate your license:

Activating TallyGold for Multi-User

Tally License Server

To uninstall the multi-user license previously installed, if any, press Uninstall

Parameters to be set in Tally.ini file on the License Clients:

If you do not have an Internet connection

Follow these steps:

Main Area (Gateway of Tally)

o F1: Press SHIFT+F1 to shut a company

o F8: Press CTRL+F8 to select the Credit Note voucher

o Ctrl+M: Press Ctrl + M to access the Gateway of Tally.

o Ctrl+N: Press Ctrl + N to access the Calculator/ODBC Server frame

This area displays:

The Main Area

Using [Ctrl+N] – you can access the

Web Browser (Alt + W)

F1: Select Cmp

Country Specific Configuration

Gateway of Tally > F12:Configure > General

Show Monthly reports with Graphs

Use separate Menu for Final A/c Stmts

Gateway of Tally > Company Info. > Create