Tally New Notes

Configuring has to be done before creating and starting work on the company.
Click F12:
Configure button or press F12, which will bring up the operations configuration menu:
Go to Gateway of Tally > F12:Configure > General
The Configuration settings of Country Details, Style of Names, Style of Dates and Configuration
of Numbers are self-explanatory. Other configuration options are explained.
Show Monthly reports with Graphs
This option is set to Yes by default. The reports are configured to display the Graphs in
accordance with the numeric information. The graphs in reports will not be displayed if this
option is set to No.
Use separate Menu for Final A/c Stmts
By default, this option is set to No. If you set this to No, Tally displays the final statements of
Balance Sheet and Profit & Loss A/c directly on the Gateway of Tally menu. However, if you set
this option to Yes, the final statements of Balance Sheet and Profit & Loss A/c can be accessed
from Gateway of Tally > Final Accounts instead of directly from the Gateway of Tally menu
Ignore errors & continue during data import
By default, this option is set to No. Set this option to Yes, to import even if an error is reported.
Export Base symbol along with Amount
This facilitates the user to export the currency symbol along with the amount while exporting in
XML format.
Show tables with Masters only in Current Language
If this option is set to Yes, Tally displays all the Masters (Default Masters and User Defined) in
the language selected in the L: Language configuration.
Setting this option to No, Tally displays the default list of Masters in English and in any of the
Indian languages selected in the L: Language configuration.
Numeric Symbols
This enables you to set the number styles. The default styles and symbols are specified.
However, you have the option of overwriting them in the respective fields according to your
preference.
For example, change negative sign from (-) to (+).
Accts/ Inventory Info.
Go to Gateway of Tally > F12: Configure > Accts/Inventory Info.

This allows you to configure the details you want in the masters over and above those provided.
You can access the F12: Configure screen from Accounts Masters and Inventory Masters
when required.
Master Configuration
This section allows you to set the multilingual features in the Masters Creation screen.
Allow Aliases along with Names
Set this option to Yes to enter the Alias names in the Master Creation screen.
Allow Language Aliases along with Names
Set this option to Yes to enter the Alias Names in any of the Indic Languages.
Accounts Masters
This section allows you to set the accounting features in the Masters Creation screen.
Allow Advanced Entries in Masters
Set this option to Yes, to enter some of the advanced information in the Ledger Master creation
and the Group Creation screens. This information will reflect in the reports.
Add Notes to Ledger Accounts
Set this option to Yes and a new field to enter Notes appears in the Ledger creation screen. This
field allows you to enter any additional information about the ledger you are creating.
Use Addresses for Ledger Accounts
Set this option to Yes to enter the Mailing Details in the ledger Creation Screen. It is useful if
you are creating a Customer ledger, a Party ledgers or Bank Accounts. Mailing Details like
Name, Address, State, PIN Code and PAN / IT No. is entered in this section.
These details will appear in the reports, when they are printed.
Use Contact Details for Ledger Accounts
Set this option to Yes to specify the details of Contact person (if any) in the ledger creation
screen.
You can specify the details like the Name of the Contact Person, Telephone Number, Fax
Number and the E-Mail Id.
Note: The Contact Details for the ledgers appear only if Use Addresses for Ledger Accounts is
set to Yes
Inventory Masters
This section allows you to specify the required Inventory features in the Masters Creation screen.
Allow Advanced entries in Masters
Set this option to Yes to specify the Behaviour of the Stock Item, in the Stock Item Creation
screen. For further details, please refer the section Stock Items.
Use Part Numbers for Stock Items
Set this option to Yes, to enter the Part Numbers of the Stock Item.
Use Description for Stock Items
Set this option to Yes to enter any Description about the Stock Item in the Stock Item Creation
screen.
Use Remarks for Stock Items
Set this option to Yes to enter your remarks or comments about the stock Item.
Specify Default Ledger Allocation for Invoicing
Set this option to Yes, to Set or Modify Default Ledgers for Invoicing for the Stock Item.
This allows you to allocate default Sales/Purchase Ledgers account which will be credited when
a Stock Item is invoiced.
Use Alternate Units for Stock Items
Set this option to Yes to define an Alternate Unit for the Stock Item.
Allow Std. Rates for Stock Items
Set this option to Yes, to specify the Standard Purchase Cost and Standard Sales Price of the
Stock Item.
Allow Component list details (Bill of Materials)
Set this option to Yes, to define the Components (BOM) for the Stock Item. For further details,
refer to the section Bill of Material.
Use addresses for Godowns
Set this option to Yes, to enter the godown address in the Godown Creation Screen.
Voucher Entry
Go to Gateway of Tally > F12: Configure > Voucher Entry

Configure different features of your voucher entry screen.
Other features of convenience, e.g., Use Payment/Receipt as Contra are enabled to effect
transactions for funds transfer. Tally allows such transactions only through Contra Vouchers.
Take another instance where, you are not permitted to use Journal Vouchers for Cash or Bank
transactions. However, recognising exceptional needs, you can override that restriction by
enabling the facility here.
Invoice/Orders Entry
Configure details for Invoices, Sales and Purchase Order entry.

The options are country specific to International. The options are in the form of questions to
which you need to state Yes or No. They have also been explained in detail at the relevant
invoice entry sections.
For India/SAARC, the options would automatically change to Use Excise Format instead of
Use Intrastat Details provided you have set your General Configuration accordingly.
The option to Use Excise Duty or British Style VAT depends on the General configuration.
Go to F12: Configure > General
Set Use Accounting Terminology of to International to British Style VAT handling apart from
Asian countries.
F11: Features > F2: Inventory will now display the option Prepare and Follow British Style
VAT Returns.
Select India/SAARC in F12: Configure > General for Excise Duty handling.
F11: Features> F3: Statutory & Taxation displays an option Follow Excise Rules for
Invoicing.
For additional information on setting up Excise Duty/British Style VAT refer to Activate
Company Features (F11)
Printing
The printing option allows you to configure the printing of Voucher, Invoice and Statement
layouts before printing.
Go to Gateway of Tally > F12: Configure > Printing
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. These are printed on the top
right corner of the report as a control mechanism. It should not be confused with the date range
of the report.
Note: Vouchers and Invoices are not reports.
Print State and PIN Code with Address
By default, this option is set to No. Set this option to Yes, 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.
Stop printing Vertical Lines/Borders: Set this to Yes to avoid printing of vertical lines and
borders in dot-matrix printer. This helps in faster printing.
Standard Space on Top of pages (Inches): This field is set to 0.5 inch by default. However, you
can change it as per your requirement.
Settings for ‘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 the two fields
under Settings for ‘Quick Format’ to Yes.
Purchase Voucher/Invoice and Purchase Order
Purchase voucher/Invoice, Receipt Note and Purchase Order are printed to maintain
continuity in voucher numbers and to provide a document to record a transaction. To configure,
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 are entered in the same format as Delivery Notes, and if Purchase Orders are
enabled, the details of the order would automatically get filled-up. Further, Purchase Invoices
would also auto-fill with the Receipt Note or Purchase Order details as relevant.
Payment /Receipt/Journal Vouchers, Credit Note/Debit Note

Configure the dimensions and details as per your requirements to print
The above options pertain to Payment Vouchers. The options for Receipt vouchers,
Journal/Contra, Debit/Credit Note are similar.
Amount in words
To print the amount in words on the Payment, Receipt, Journal, Credit Note/ Debit Note
voucher in any language apart from the language selected as User Interface:
• Select the Output Language at the Report Generation screen from the voucher
• Click F12: Configure and set Print Amount in Words to Yes and Print Amount in
Words in English to No for the amount to appear in the selected Output Language
Sales Invoice, POS Invoice, Delivery Note and Sale
Order/Quotation
Printing configuration for all Sales vouchers like Sales Invoices, POS Invoice, Delivery notes
and Sales Orders/Quotations are accessible through Sales Transactions under Printing menu.
Each transaction type can separately configured and selected from the sub-menu.
The different configuration screens are as given:

Sales Invoice
This is the configuration for the Sales invoice. You can change the setting as per your
requirement.
Details of the above configuration options have been discussed in Invoice Entry section.
POS Invoice
The Print Configuration for a POS Invoice displays as shown. You can configure the options as
per your requirement.
Delivery Note
Delivery Note appears similar to Invoices. Fields like Rate and Amount may be required by some
companies to be printed out on Delivery Notes. Select the options as relevant to your company.
Sales Order/Quotation
Sales Orders, if marked Optional, during voucher entry, are printed as Quotations.
Reminder Letters
The Reminder Letters feature in Tally can be used to remind any customer or supplier of their
overdue bills.
Space to leave on top (default 0.5 inch) and Space to leave on left (default 0.5 inch) : These
fields are set to 0.5 inch by default. However, you can change it as per your requirement.
Information in First Paragraph and Information in Second Paragraph: The information
provided in these two fields can be used as such, modified or extended.
Confirmation Statements
Confirmation Statements are not the same as Reminder Letters. They serve to confirm the
account balances with customers, suppliers, lenders and borrowers. This is used mostly at the end
of a period but can be produced at anytime.
Space to leave on top (default 0.5 inch): This field is set to 0.5 inch by default. However, you
can change it as per your requirement.
Titling for ‘Subject’ in Letter: The default text is Confirmation of Accounts. You have the
option of changing it as per your requirement.
Information in First Paragraph and Information in Second Paragraph: The information
provided in these two fields can be used as such or modified or extended.
Sign-off used for the Letter: The default text can be changed in this field also.
Introduction
Go to Gateway of Tally > F12: Configure > Connectivity

The Connectivity menu consists of three options.
• Sync Configuration
• Proxy Configuration
• Auto-dial Configuration
Sync Configuration
This configuration is usually done when data from different locations needs to be synchronized.
For detailed information, refer to Synchronization section.
Proxy Configuration
This configuration is usually done when data from different locations needs to be synchronized
and while activating the License. Proxy 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.
If your computer is on a network and connected to the Internet.

Use HTTP Proxy Server: Select Yes if your computer is connected to a proxy server
URL: Enter the IP address and port number of the proxy server used. Ensure that the IP address
and Port is separated by a colon. For eg. 198.162.2.1:8080
Authentication Required: Set this to Yes if you want authentication. Specify a user name and
password in the respective fields.
Auto-Dial Configuration
Auto Dial configuration feature can be enabled, when you are in need of any of the Internet
Services while working on Tally, like Licensing or Synchronization.
Gateway of Tally> F12: Configure> Connectivity > Auto-Dial Configuration
• Set Use Specific Dial-Up Connection to Yes.

• In the field Dial-Up Connection, select the appropriate Dial-Up Connection from the
List of Dial-Up Connections.
Once when this configuration is enabled, you get connected to the internet spontaneously.
Licensing
This option allows you to activate your Tally License Online or Offline
Go to Gateway of Tally > F12: Configure > Licensing
The screen appears as shown:
List Add-ons allows you to view the additional features enabled in Tally.
Online option allows you to activate Tally License Online. The term online indicates that your
computer is connected to the Internet.
Offline option allows you to activate Tally License Offline. The term Offline indicates that your
computer is not connected to the Internet.
Shop
This option allows you to Shop for Tally Add Ons Online or Offline
Go to Gateway of Tally > F12: Configure > Shop
Company Information
The first step to get started in Tally, is to Create a Company. The initial screen appears as shown:
The Gateway of Tally screen is separated into six sections, namely Title Area, Horizontal
Button Bar, Main Area (Ctrl+M), Calculator Area (Ctrl+N), Button Bar and the Bottom
Pane.
The elements of the Gateway of Tally screen are explained below:
Title Area
Title Area contains the Tally Copyright and Tally website link. You can access the Tally
website directly from the Tally screen. You must have access to the Internet and Internet Explorer
Web browser installed on your computer.
Click on the http://www.tallysolutions.com link on the top frame of the screen to enter our
website. The link appears in all screens of Tally.
Tally logo is displayed at the centre of the Title 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.
Horizontal Button Bar
The Buttons, Print (Alt+P), Export (Alt+E), E-mail (Alt+M), Upload (Alt+O), Language
(Ctrl+L), Keyboard (Ctrl+K) and Help (Alt+H) can be seen in the Horizontal Button Bar.
Bottom Pane
The Bottom Pane contains the 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 the Current
Date (the date configured in the computer). The name of the day, date, month and year is
displayed in DD, MM and YYYY format on the right-hand side.
System time (the time configured in the computer) appears on the lower-right corner in Hour:
Seconds: Minutes (HH/MM/SS) format.
The Path appears in the lower left corner in the Bottom pane.
Close Button
The Close Button in the upper right corner functions similar to the use of ‘Esc’ in Tally. It brings
you to back to the Gateway of Tally from any screen.
Minimise Button
The Minimise button performs the standard Windows Operating System’s 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)
The Main Area is separated into two:
1. Left-hand side area
2. Right-hand side area
The left-hand side provides information on Current Period, Current Date and List of Selected
Companies (Name of the company and the date when last entry has been made).
The right-hand side displays the Company Information menu such as Select a Company, Create
a Company, Backup a Company or Restore a Company and so on.
Hot Keys
Hot keys are capitalized and are red in colour on all the menu screens. Using the Hot Keys in the
Company Info Screen will take you to that particular screen or display the sub - menus within
that Option.
Calculator Area
Press [Ctrl + N] to activate the calculator. Calculator Area is used for calculator functions. Any
type of independent calculation can also be done using the calculator.
Button Bar
The buttons are designed to make the work easier and faster and vary from one screen to another
based on the screen functionality. They appear on the right hand side of the Tally screen and the
inactive buttons are greyed out. You can either click these buttons or press the shortcut keys to
access the relevant screen.
The following are some of the buttons and their functions:
Help (Alt+H) – To access Tally's online context-sensitive help
F1: Select Cmp – To select the company from the List of Companies and access data from other
data directories on the local system or through the network. You can also access the Directory
field by pressing [Backspace].
F12: Configure – To access the configuration settings to manage the information entered in
Tally. For example, you can access the General Configuration to set country specific defaults,
before creating a company.
Buttons where a character or function key is underlined indicates that you have to press
underlined character or the function key along with [ALT] key.
Buttons where a character or function key is double underlined indicates, you have to press the
character or the function key along with [CTRL] key.
• F1: Press the shortcut function key [F1] to select a company
• F1: Press [ALT+F1] to shut a company
• F8: Press [CTRL+F8] to select the Credit Note voucher
• Ctrl+M: Press Ctrl+M to access the Gateway of Tally.
• Ctrl+N: Press Ctrl+N to access the Calculator/ODBC Server frame
Country Specific Configuration
The options available are Country Details, Style of Names, Style of Dates, Configuration of
Numbers and Other Options.
Go to Gateway of Tally > F12:Configure > General
The Configuration settings of Country Details, Style of Names, Style of Dates and Configuration
of Numbers are self-explanatory. The prime differences are in the use of terms like VAT in
Europe and Sales Tax in Asia and America that have to be configured before creating a company.
Refer the section Operations Configuration for details on the other fields.
Creating a Company
Creating a Company involves providing basic information about the company whose books of
accounts are to be maintained in Tally.
Go to Gateway of Tally > (Alt+F3) Company Info. > Create Company
Above is displayed an International Company Creation Screen. Note that the State and PIN
Code fields are not available.
The screen for India/SAARC would be:
A detailed explanation on each field is given:

Directory
The data path where you want the company to be created is specified in the Directory field.
This field is skipped by default when you create the company in the data path given in the
Tally.INI file. If you want to change it, use the backspace key and modify it to the path required.
This is referred to as the TallyAnywhere concept – which is the ability to create/load companies
in separate directories. The Directory field is displayed while selecting 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 to give a
new path and work from 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 displays C:\TALLY\DATA, and
if you wish to work on the data of your branches, press Backspace and enter
C:\TALLY\BRANCHES for the directory name. This displays the companies whose data is
stored in that location in the List of Companies. You can even give the path of a network server
or any other storage device.
Name
Enter the name of the company whose books are being opened. If you are a professional
accountant and are maintaining the books of your clients, give the Client Company's name.
Mailing Name and Address
In addition to the Company Name, Tally provides the facility to enter the Mailing Name field. It
displays the Company Name by default. You may change it as required, if the mailing name is
different from the Company Name. The mailing name and address details are picked up for
inclusion in any report that needs the company name and address as heading. For
example:Balance Sheets, Statement of Accounts, and so on.
Tally's reports print the mailing name and address as given:
Tally does NOT restrict the number of lines for the address details. Tally accommodates all the
entered information and vertically compresses the same.
Note:
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.
Statutory compliance for
Select the Country from the List of Countries. The Statutory Features and Base Currency
Symbol are enabled in accordance with the country selected. For example, if the accounts belong
to a company in India, the base currency would be Indian Rupees. The Base Currency will
appear with respect to the Country selected.
Selecting India from the List of Countries brings up a State, Pin Code and Telephone No.
field.
State
You can select the appropriate state from the predefined list.
PIN Code
Specify the PIN Code (Postal Index Number) of the specified address.
Telephone
Enter the Telephone number.
E-mail Address
Enter the E-mail address that will be used to e-mail documents, reports and data from Tally.
Currency
Currency symbol is the symbol of the base currency, that is, the currency that will be used to
maintain the books of account.
The symbol Rs. appears by default for India/SAARC Companies and the field is left blank for
International Companies.
Maintain
Tally displays a drop down for the Type of Company with two options Accounts only and
Accounts with Inventory
Select Accounts only if you do not have any inventory transactions (suitable for professionals
and corporate offices).
However, at a later date (if required) you can choose to alter the information as Accounts-with-
Inventory. Select Accounts-with-Inventory, to maintain both financial accounts and inventory.
Financial Year From
In most countries, the books of accounts of a company are maintained for a stipulated period
like, 12 months, 15 months, and so on. This stipulated period is referred to as the Financial
Year.
The stipulated period of the financial year is 12 months in most countries. Tally automatically
considers 12 months from the date you give here as the Financial Year.
For example, if you enter April 1, 2005 as the date, the Financial Year will be from April to
March ending with March 31, 2006. If you enter October 1, 2005 as the Financial Year From
then the financial year will be from October 2005 to September 2006 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)
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 field automatically.
The date for Books beginning from can be changed, in case of companies, which are
incorporated in the middle of the year. If your company is new, you can opt 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 as specified by you. 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 as on the last day of the Financial Year.
For example, if your company is established on August 19, 2005, the opening balances for all the
accounts can be given as on August 19, 2005 even though the Financial Year given is April 1,
2005 (April to March financial year). The company's books will begin on August 19, 2005 and
close on March 31, 2006, which ensures smooth transition to the next year.
This concept can be applied even when you are migrating to Tally from any other system or from
a manual accounting system on any day during the Financial Year. 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 involves converting normally accessible Tally information into unrecognisable
information, which can only be reconverted by authorised persons.
Give a password here and repeat the same in the Repeat field. 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 this to Yes, if you want to initiate a password-protected system to control access to Tally data.
Else, set this to No.
If you opt for security control, Tally offers a comprehensive password based access control to
different features of Tally based on authority lists created by the Administrator. (The section on
Security Control under Administer Tally contains details on authority lists)
Name of Administrator, Password, Repeat
Assuming the Tally Vault Password and Use Security Control is set to Yes enter the Name of
Administrator, Password and Repeat in the respective fields.
Use TallyAudit Features
Tally Audit allows the administrator or an auditor profile user to track changes in accounting
information. If you wish to use this facility, select Yes. Tally Audit will be available only to the
administrator/auditor, through Display of Statements of Accounts. It will be discussed in
greater detail under the Security Control section in Administer Tally.
On accepting the company creation screen, if you have specified Tally Vault password, Tally
prompts you to enter the TallyVault password as appears:
Then Tally prompts you to enter the Name of User and Password (if any).
After verification Tally imports the latest statutory masters. Wait till the screen shows that 100%
of import is complete.
This completes the Company Creation process in Tally.

An explanation on the fields on the bottom of the Company creation screen follows:
Base Currency Information
The Base Currency Information is found in the bottom frame of the Company creation Screen.
Base Currency is the currency in which your accounts would be maintained. Financial statements
are prepared in the base currency by default and these are normally required to be submitted to
local statutory authorities. The Base Currency information in Tally varies with the country
selected for Statutory Compliance.
You can record transactions and raise invoices in foreign currency; and also maintain bank
accounts or ledgers in foreign exchange, when required.
Base Currency Symbol

The currency symbol given earlier in the Company Creation screen is displayed here
automatically.
Tally uses this currency symbol in reports, wherever 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 Indian Companies.
Number of decimal places
The number of decimal places for the base currency is set to 2 by default. However, you have the
option of specifying up to 4 decimal places. Indian currency has 2 decimal places whereas
certain other countries require 3 decimal places and so on.
Show Amounts in Millions
This is useful for companies, which require reporting the financial statements in millions. This is
possible only if Allow Multi-Currency is enabled in F11: 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, putting a space between the amount and symbol could give an opportunity for misuse
incase of cheque printing. Hence, the flexibility to turn this option on and off as required is
provided.
Symbol for Decimal Portion
Enter the symbol for decimal portion.
Decimal Places for Printing Amounts in Words
You can specify the number of decimal places for printing the amount in words. This number
should be equal to or lesser than the number specified in Number of Decimal places field in
company creation or currency master screen which will appear in Invoice and Cheque printing
screen.
For example, if the currency is expressed upto 3 decimal places, the numeric to be printed in
words can be restricted to 2 decimal places
Loading a company
A newly created company loads automatically. However, for subsequent working, you must load
or select the company you want to work with from the List of Companies. (Select and Load are
synonymous). A company can be loaded in two ways:
1. Automatically by Tally.
2. Using the Select Company option
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 – 10001,
10002…10009...10020, 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 = 10000
Note: You can specify any number here as per the information available in the data directory
(10000 or 10002 or 10003, etc)
Example of sub-directories created by Tally for different companies:
Loading a Company using the Select Company option
In order to load a company using the Select Company option, disable the default loading of a
company in Tally.ini file. Set Default Companies to No OR place a semi-colon before Load =
0001 (company number - placing a semicolon 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 Info. Menu OR by
using the button F1: Select Cmp (available on the Gateway of Tally screen).
Select Company
Press Enter on Select Company or use 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
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 go to the Gateway of Tally for that company.
Gateway of Tally
Gateway of Tally is the screen that appears on selecting a company. The Gateway of Tally menu
differs based on the type of company selected. An 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 shown below:
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 side of the Main Area gives information on:
1. Current Period – which is the currently loaded company's accounting period.
2. Current Date – This is the date of the last Voucher Entry for the selected company.
3. List of Selected Companies – This displays the name of the loaded company.
The Main Area gives information on:
1. Creation of Accounting Masters and Importing Master information
2. Creation of Accounting Vouchers and Importing transaction information
3. Viewing and printing financial reports using the information given in Masters and
Transactions.
Button Bar
The Button Bar displays the following buttons (keys):
1. Help (Alt + H) – To access Tally's online context-sensitive help
2. F1: Select Cmp – To select a company
3. F1: Shut Cmp – To shut or close the company
4. F2: Date – To change the current date
5. F2: Period – To change the period
6. F3: Company – To select a different company.
7. F3: Cmp Info – To access the Company Info. Menu
8. F11: Features – To access the Company features for a company
9. F12: Configure – To access the configuration settings
Gateway of Tally of an Accounts-with-Inventory Company
The Gateway of Tally menu of an Accounts-with-Inventory company appears as shown below:
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 – The currently loaded or selected company's accounting period.
2. Current Date – 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 – This is for creation of Accounting Masters and Inventory Masters and
Importing Master information.
5. Transactions/Vouchers - This is for creation of Accounting Vouchers and Inventory
Vouchers and Importing transaction information.
6. Reports – This is for viewing and printing financial and inventory reports using the
information given in Masters and Transactions.
Button Bar
The Buttons on this screen and their function:
1. Help (Alt + H) – To access Tally's online context-sensitive help
2. F1: Select Cmp – To select a company
3. F1: Shut Cmp – To shut or close the company
4. F2: Date – To change the current date
5. F2: Period – To change the period
6. F3: Company – To select a different company
7. F3: Cmp Info – To access the Company Information Menu
8. F11: Features – To access the Company features for a company
9. F12: Configure – To access the configuration settings to manage the information in
Tally.
Company Info. Menu
The Company Info.(Information) menu appears as shown below::
The menu options in the Company Info. are as follows

Select Company
Allows you to Select or load a company.
Shut Company
Allows you to shut a company.
Create Company
Allows you to create a Company.
Alter
Allows you to alter a company.
Change TallyVault
Allows you to secure the data by providing a TallyVault password.
Backup
Allows you to take a backup of the company data.
Restore
Allows you to restore a data backup.
Shut a Company
Shut a Company is 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 menu option on the Company Info. Menu.
The screen appears as shown below:
Select the company to be shut from the List of Primary Companies.
Alter a Company
You can modify any information at any time that is set while creating a company.
1. Go to Gateway of Tally
2. Select F3: Cmp Info. (ALT+F3) from the button bar
3. Select Alter and press Enter and the screen appears as shown below:
Make the necessary changes in the required fields. To change the password if Use Security
Control is set to Yes:
4. Enter the Name of Administrator.
5. Enter the new password.
6. Re-enter the password in the Repeat field to confirm.
7. Enter the Old Password and Accept the screen to alter the company.
Delete a Company
To delete a company, you have to load the company first.

1. Select F3: Cmp Info. (ALT+F3) from the Gateway of Tally to proceed to the Company
Information menu.
2. Select Alter and press Enter.
3. Select the company to be deleted. The Company Alteration screen is displayed.
4. Use Alt + D to delete. Tally will prompt for a confirmation on deleting the company.
5. Press enter to delete the company.
Group Company
The books of Account of different companies belonging to the same management or owners are
required to be consolidated to present the financial position of the group of companies as a
whole. This is mandatory in many developed countries and currently shareholders would rather
know the performance of the group as a whole and not the performance of individual constituent
companies.
Tally makes consolidation of accounts a simple task. You can consolidate the accounts of any
number of companies as well as keep them separate. You also have the option of bringing the
companies into the group and separating them at will.
The first step is to create a Group Company, which is simply a name and identity given to the
merged accounts of constituent (member) companies of the group. A group company may also
include other group companies.
Note: Do not confuse the word Group to refer to a member of the group! It simply contains the
consolidated accounts of member companies.
Assume that yours is a global, trans-national organisation (or a 'group') headquartered in the UK
having subsidiary companies in 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 groups according to their line of businesses,
which in turn are grouped accounts of the individual companies around the world.
The accounts structure would look something like this:
Creating a Group Company
A group company can be created only for companies that have already been loaded. The first step
is to load the companies whose accounts are to be grouped. The companies can be loaded
automatically if specified in the Tally.ini file. Alternatively, select the companies using F1:
Select Cmp button, as shown:
Press <ALT>+F3 or click the button [F3: Create Cmp] and select Create Group Company
Enter the name of the Group Company (which is mandatory), address and tax details and select
the members of the group company from List of Companies.
Say, you have selected the two members as shown. Select End of List to complete the selection
process
The Group company Thread will be created and loaded. It also becomes the active company.
Notice that the constituent 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.
Altering a Group Company
Use Alter to change/modify the details of a Group Company.
A Group Company is marked with an asterisk.

You can select or reject members using the Alter Mode. Any change will come in to effect only
on shutting the group company and then reloading it.
• The Group Company must contain at least two members.
• It is possible to combine accounts of different companies.
• Create as many Group companies as you need.
• A constituent company can be a member of more than one group.
• A group company can also be a constituent of another group company.
Note:
* It is advisable not to delete the member company, which belongs to Group Company
* If the member company has a password then without entering the password the Group
Company cannot be opened.
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, as shown.
Security Control
In an ideal company scenario, there will be more than one person working on Tally. In such a
case, not every person needs to be given the full access. The head of the department/
Administrator should be able to create different users and assign their rights to them.
Tally has a very customisable security system. You can set up Security Levels and users who are
placed at these levels. The authority levels or Types of Security decides the rights of the users
while using Tally.
To create Security Levels

1. Go to Gateway of Tally, select F3: Cmp Info. > Create/Alter Company
2. In the Company Creation screen set Use Security Control to Yes.
3. Enter the Name of the Administrator.
4. Enter your Password and reenter the password for verification. The password is not
displayed for security reasons.
5. Accept Yes to save the changes made.
Types of Security (security or authority levels)
Tally has two default Security Levels. One is Owner and the other Data Entry. Owner has full
access and rights to all features 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 levels based on these pre-defined types and allow or restrict
rights as required.
Create a New Security Level
You can create New Security Levels and define task wise access rights. To create New Security
Level:
Go to Gateway of Tally, select F3: Cmp Info. > Security Control> Types of Security
The Security Levels screen is displayed as shown below:
1. Type the New Security Level, e.g. Manager

2. Press [Enter] to display the Level Definition screen
Level:


Level:

Tally Audit provides the capability to the administrator/auditor to track changes in the accounts
following his previous review. Changes of two areas are very important – changes in
Transactions or Vouchers and changes in Ledger Masters. Only changes that affect the
integrity of a transaction are considered. For e.g. a change in the narration does not affect the
integrity of a transaction and will not be considered as a change. Any material change in a
voucher is logged. The name of a ledger account if changed is material and hence it would be
tracked.
Tally Audit feature should be enabled while creating the Company and creating Security levels.
Only a user designated as an auditor or the administrator can view the audit list and act upon it.
To enable Tally Audit:
2. Select F3: Cmp Info. from the button bar
3. In the Company Creation/Alteration screen set Use Tally Audit Features to Yes.
You are not required to make any additional input of data. The authorised user needs to just
display Tally Audit 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 will not be
displayed again.
Viewing Tally Audit Lists
Go to Gateway of Tally > Display > Statements of Accounts >Tally Audit
You can view changes made to Vouchers and Ledgers.

More:
Displaying Audit List for Vouchers
Displaying Audit List for Ledgers
Displaying Audit List for Vouchers
This option tracks changes in vouchers, which are more than 30 days old.
Go to Gateway of Tally > Display > Statements of Accounts > TallyAudit > Vouchers
The Tally Audit Listing screen is displayed as shown below
The three buttons relevant to the audit list.

1. F7: Accept one
2. F7: Accept All
3. F12: Configure
F12: Configure
Select F12: Configure or press [F12] from the Tally Audit Listing screen
Set Show Entered/Altered By to Yes. The listing now incorporates the user's name.
Print the list if necessary. Assess each of the entries for authenticity and accept. To accept the
entries one by one, place the cursor bar on the relevant voucher and press F7: Accept One
button. This accepts the voucher as valid and removes from Tally Audit List. To accept all the
vouchers at a time, press F7: Accept All.
Displaying Audit List for Ledgers
To display the changes made to Ledger Masters:

Go to Gateway of Tally> display> Statements of Accounts> Tally Audit> Ledgers
The Audit Ledgers screen is displayed. The listing here differs from the vouchers by two ways:
1. It allows you to display all Ledger Accounts and toggle between 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 displays user names if available.
(If you activate Tally Audit 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 modification could be in the Name or in the Opening Balance of the Ledger. 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 can identify the
Ledger Account by the ID assigned to each of them. You must first take a print of all the Ledger
Accounts with their original ID with which you can match subsequent audit lists.
Introduction
The security of data, financial or otherwise, has always been a matter of concern. Most business
depend on the confidentiality of information. Tally Vault is an enhanced security system, which
allows for encryption of the company data with the most secure method of encryption being
used.
Tally Vault ensures that under no circumstances, the original information is available in any
form to anyone other than the administrator. 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 and highly advanced mechanisms to validate a
new user without any prior knowledge of the original password. The combination of these
facilities ensures that Tally Vault becomes one of the most secure means of information storage.
Enabling Tally Vault Password for Existing Companies
Tally Vault password can be given in the Company Creation screen at the time of creating a
company. For existing companies, which do not have a Tally Vault password, the procedure is:
1. Load the desired company
2. From Gateway of Tally, select F3: Cmp Info > Change Tally Vault.
3. The Change TallyVault screen is displayed prompting you to select the company from
the List of Simple Companies in the Name field. Select the company from the list.
4. Enter the new Tally Vault password in the New Password field.
5. Re-enter the password in the Repeat New Password field.

6. Once you encrypt the data, the company name no longer becomes visible to anyone and
appears as shown below:
7. Now if you select the company, Tally will prompt you for the Tally Vault password.
8. By following the above procedure, one can ensure that data is kept confidential and is
available only to administrator (initiator of the Tally Vault!).
Changing Tally Vault Password

To change the Tally Vault Password of a company:
Go to Gateway of Tally, select F3: Cmp Info > Change Tally Vault
The procedure is the same as described in Enabling Tally Vault Password for Existing
Companies. An additional field Current Password is displayed. Enter the existing password in
this field. Enter the new password in the Repeat Password and Repeat New Password fields
and save the changes.
Backup
Tally has a flexible backup 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 have to be given and Tally will do as required.
More:
Taking a Backup
Backup Precautions
Taking a Backup
The procedure for taking a backup is as follows

1. Go to Gateway of Tally, select F3: Cmp Info > Backup
2. The Backup Companies on Disk screen is displayed.
3. To change either the Source or the Destination paths, use the [Backspace] key and
change the path as required. Specify the paths of the Source and Destination drives.
Incase we want to take a backup onto another system on the network the Destination path
will be \\machinename\drivename\directoryname. The process of backing up data begins
when at least one company is selected for the same from the List of Companies. To stop
selecting companies, select the option End of List, which appears at the top of the
selection list.
4. The backup file is stored as TBK900.001. If the backup is taken in a medium likely to
extend more than one – for example, floppy, then the extension digits (10001, 10002 and
so on) will be stored accordingly.
The Backup screen appears as:
Backup Precautions
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 regardless of the stability
of the database. 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 of achieving it 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 and so on till Saturday.
Note: Tally backup facility is not limited to the Hard Disk drive alone. You can backup data onto
other storage devices also
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 you 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. The Restore Companies on Disk screen
is displayed as shown below:
Restoring Data
The procedure for restoring data is as follows

1. Go to Gateway of Tally, select F3: Cmp Info > Restore
2. The Restore Companies on Disk screen appears.
3. The Source and Destination paths displayed in the screen are those that were used last.
4. The Source field has to have the appropriate path. It is the path from which you 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.
5. Select as required and restore the data accordingly.
Restore Precautions
It is preferable NOT to restore a backup onto the original data directory primarily to ensure that
No data is overwritten unintentionally.
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
Note: 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 due. 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.
Splitting Financial Years
The procedure for splitting financial years is as follows:

1. Go to Gateway of Tally, select F3: Cmp Info
2. Select Split Company Data.
3. Select the Company whose data is to be split from the List of Simple companies.
4. Tally recommends the split-off date based on the data existing. It is recommended that the
Split from date is set as the beginning of the latest financial year though Tally permits
any date.
5. Splits occur in sets of two periods. Hence, start with the latest. For example to split three
year’s data of a company from 1-1-2003 to 31-12-2005 into three separate 'companies'
each with a financial year select the beginning of the latest financial year (this is what
Tally prompts you to do).
6. On confirming the activity, two new companies will be created – one with data from 1-1-
2003 to 31-12-2004, i.e., two years, and the other for 1-1-2005 to 31-12-2005.
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 the other. 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.
All the companies are full companies in their own right. Data can be entered, displayed and
altered. Please display or print 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.
Activate Company Features (F11: Features)
The different features of a company can be selected or modified by F11: Features button. This
button is available in almost all screens of Tally as you might wish to modify it as your
requirements change. Unlike F12: Configure, F11: 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 Tally
directory and setting configuration for one company will affect other companies in that data
directory.
Note: 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.
Go to Gateway of Tally > F11: Features
The F11: Features menu displays as shown
The menu consists of the following options.

• Accounting Features
• Inventory Features
• Statutory & Taxation
There are various settings available under Accounting Features, Inventory Features and
Statutory & Taxation Features in Company Operations Alteration screen, which determine the
information to be keyed in during transaction entries. A discussion on each of the options
follows.
Accounting Features
This feature enables you to set the various Accounting Features required for the transaction
entries.
Go to Gateway of Tally > F11: Features > F1: Accounts
General
Integrate Accounts and Inventory
This option has a significant effect on the Balance Sheet and Profit & Loss Account. If set to Yes,
it brings the stock/inventory balance figures from the inventory records and provides a drill down
to the Stock registers from the Balance Sheet.
If set to No, it ignores the inventory books figures and picks up manually entered closing stock
balances from the ledger account created. This provides the facility to maintain accounts
separately and inventory separately.
Stock records often contain compensating errors caused by wrong allocation to items and the
like. This feature enables finalisation of financial books without waiting for reconciliation of
stocks that may take time.
Income/Expense Stmt Instead of P & L
Enable this option if you need an Income & Expenditure Statement for Non-Trading accounts.
Profit & Loss statements are generally used for trading accounts.
Allow Multi-Currency
Set this option to Yes, if you want to create multiple currencies. The option Currencies is
displayed in Gateway of Tally > Accounts Info. menu only if you set this option to Yes.
Outstandings Management
Maintain Bill wise Details
The Bill-wise facility is turned on by setting this option to Yes. By activating the Billwise feature
in F11: Features, the ledger masters under Sundry Debtors and Sundry Creditors automatically
displays an additional option called Maintain balances bill-by-bill. On setting this option to
Yes, you get an additional option Default Credit Period.
When you enter details of sales and purchases with Bill-wise turned on, Tally prompts you to
identify the invoice with an appropriate reference number. The reference can then be used to
allocate payments to the correct invoice to maintain an accurate account of outstanding.
• (For Non-Trading A/cs also)
If you want to maintain bill wise details for Non-Trading Accounts also, set this option
to Yes. Bill wise Details for Non-Trading Accounts is useful in those cases where one
needs to track either an installment to be paid or a loan amount to be received over a
certain period of time.
Activate Interest calculation
Set this option to Yes to enable Tally to calculate interest automatically based on the interest rate
and style of calculation specified. Enabling this option allows interest calculation on outstanding
balances for any ledger account or on each invoice for the period it is outstanding completely or
partly.
• Use advanced parameters
The advanced parameters are particularly useful where interest rates change from time
to time. Set this option to Yes to enable this.
Cost/Profit Centres Management
Maintain Cost Centres
A Cost Center can be defined as a unit of an organization to which transactions can be
allocated. When only costs or expenses are allocated to these units, they are referred to as
Cost Centres. The Cost Centre feature is activated by setting this option to Yes.
• Use Cost Center for Job Costing
To track all income and expenses for a project, set this option to Yes.
• More than ONE Cost category
To create more than one Payroll or Cost Category, set this option to Yes.
• Use Pre-defined Cost Centre Allocations during Entry
Set this option to Yes to define Cost Centre Allocations. Refer Set up Cost Centre
Classes for more details
Invoicing
Allow Invoicing
Set this option to Yes, to create Sales and Purchase vouchers in invoice format. The advantage of
using the invoice format for sales invoice entry is that it enables automatic calculations of Duties
and Taxes accounts.
• Enter Purchases in Invoice Format
Set this option to Yes, to make the invoice mode as the default voucher mode for
purchase vouchers.
Use Debit/Credit Notes
The Debit Note and Credit Note voucher types are made available only if this feature is set
to Yes.
• Use Invoice Mode for Credit Notes
Set this option to Yes to create Credit Notes in Invoice Mode.
• Use Invoice Mode for Debit Notes
Set this option to Yes to create Debit Notes in Invoice Mode.
Budgets & Scenario Management
Maintain Budgets and Controls
Set this option to Yes, to create multiple budgets. The Budgets menu option is displayed in
Gateway of Tally > Masters Info. > Accounts Info. menu only if this option is set to Yes.
Use Reversing Journals & Optional Vouchers
Setting this option to Yes displays the Scenario option in Accounts Info menu. You will now
be able to create and alter Scenarios. You can enter the Reversing Journal and make it to
Optional for entries not to affect the books.
Other Features
Enable Cheque Printing
Set this option to Yes, to enable Cheque Printing. Refer Cheque Printing for details.
• Set/Alter Cheque Printing Configuration
Setting this option to Yes, Tally will allow you to Alter the Cheque Printing Configuration
Allow Zero Valued Entries in Vouchers
Set this option to Yes, to allow Zero valued entries in vouchers.
Note: You can toggle between the Accounts, Inventory and the Statutory features screen using
F1, F2 and F3 keys or using the options on the Button Bar respectively.
Inventory Features
This feature enables you to set the Inventory Features required for the transactions.
Go to Gateway of Tally > F11: Features > F2: Inventory
General
Integrate Accounts and Inventory
This field performs the same function as explained in Accounting Features.
Allow Zero Valued Entries in Vouchers
Set this option to Yes, to allow zero valued entries in vouchers.
Storage & Classification
Maintain Multiple Godowns
Set this option to Yes, if you have more than one stock point/storage Locations/ Godowns, and
you want to track stock movement in these Locations. You can create any number of Stock
Locations/Godowns. The Godowns/Locations option is displayed in Gateway of Tally >
Inventory Info. menu only if you set this option to Yes. You will be able to know your stocks at
each location as well as assign stock movement to one or more locations during voucher entry.
Maintain Stock Categories
Set this option to Yes, if you wish to create and maintain Stock Categories. This creates a new
field Category in the Stock Item Creation screen.
Maintain Batch-Wise Details
Set this option to Yes, to maintain batch information pertaining to Stock Items. A new field
Maintain in Batches is displayed in the Stock Item Creation screen.
Note: Batches should be used where they are small in number and remain constant. Do not
use the batch option for tracking of lots through manufacturing processes. If that is done, you
will soon have a large number of batches that are not deleted. You will not be able to assign
costs to particular lots, as may be the intention.
• Set Expiry Dates for Batches
Set this option to Yes, if you want to set expiry dates for the batches. This displays an
additional field Use Expiry Dates in the Stock Item Creation screen.
This is useful for businesses that deal in goods that have expiry dates like medicines,
food and other perishables. During voucher entry, date of manufacture of the product by
default takes the date of the voucher. This date can be changed, but not to a date later
than the voucher date. Expiry date cannot be a date prior to the voucher date.
Use different Actual & Billed Quantity
Set this option to Yes, if you want to specify quantities, that are different from that delivered/
received, when invoicing.
For example, you have delivered goods but some of them are in disagreement. So, your customer
wants to be invoiced only for the undisputed quantity. He/She might consider the rest later and
would then like to be invoiced. On the other hand, the rest might be so bad that it is useless even
for you to take it back. Hence, you can record the fact while raising the invoice without altering
the delivery note or passing a rejection entry.
Order Processing
Allow Purchase Order Processing
Set this option to Yes, to create Purchase Orders.
Allow Sales Order Processing
Set this option to Yes, to create Sales Orders.
Invoicing
Allow Invoicing
• Enter Purchases in Invoice Format
Use Debit/Credit Notes
• Use Invoice Mode for Credit Notes
• Use Invoice Mode for Debit Notes
Separate Discount Column on Invoices
This option is active only if Allow invoicing is set to Yes. Set this option to Yes, if you want a
separate column for discount in invoices.
Purchase Management
Track Additional Costs of Purchase
Set this option to Yes, to obtain a break-up of purchase costs, without the need to separately debit
ledger accounts for expenses. Typically, on purchases, one is interested in total costs and the
breakup is of interest while doing analysis (except for expenses like VAT or Modvat, which can
be claimed). In such cases, passing of accounting entries for expenses will have no consequences
other than lengthening your ledgers.
Example:
Purchases from ABC & Co: 10 Pcs of Widgets@Rs.20 = Rs.200. Expenses incurred= Tax-Rs.20,
Packing charges – Rs.15.40, Total purchase cost – Rs.235.
If you activate Track additional costs, you can pass the entry in any of the following methods:
From an accounting perspective, both entries are identical. The ledger accounts Purchase Tax and
Packing charges are not debited with the amounts. Hence these figures are reflected only as
breakup or analysis figures of Purchases account. The Actuals figure reveals the total cost
incurred on the Purchase and will also affect the stock value.
You may also allocate additional costs on Purchases through subsequent entries or vouchers.
The rules for including subsequent vouchers in purchase costs that Tally follows are:
Basic Cost + Additional costs allocated (if any) + All costs in subsequent vouchers that have zero
quantity, up to the first voucher that has a non-zero quantity.
Sales Management
Use Multiple Price Levels
Set this option to Yes to create Multiple Price Levels. Refer Enable and Create Price Lists for
more details.
Additional Inventory Vouchers
Use Tracking Numbers (Delivery/Receipt Notes)
Set this option to Yes, if you want to use tracking numbers to maintain the relation between
delivery notes and invoices/bills. This is available for both purchases as well as sales. Hence, if
your business is affected by this situation either for goods received or goods sold, set this option
to Yes. If you set it to No, you will not need the facility of separate delivery notes recording, as
your Purchase and Sales Vouchers would double up as delivery notes.
Use Rejection Inward/Outward Notes
Set this option to Yes, if you wish to record rejection of goods separately and not through a
common Debit Note or Credit Note.
Prepare and Follow British Style VAT Returns
If the Country Specific Configuration is set to International in the F12 Configure, then an
additional field Prepare and Follow British Style VAT Returns is displayed.
Set this option to Yes, to follow 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.
The Company VAT Returns screen is displayed.
If you deal with EEC countries, select a group for the fields Group Name under which ‘EEC
Debtors’ are Classified and Group Name under which ‘EEC Creditors’ are classified from the
list.
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 do not deal with EEC countries, Select Not Applicable.
Statutory & Taxation

This feature enables you to set the Statutory Features required for the Company Operations.
This option is enabled only if a country is selected from the list of countries under the field
Statutory Compliance for in the Company Creation screen..
Go to Gateway of Tally > F11: Features > F3: Statutory & Taxation
Note: The different features are available depending on the country you have selected in the
Company Creation screen.
The following features are available on selecting India in the Company Creation screen.
Enable Dealer – Excise (Set/Alter Dealer – Excise Details)
Set these options to Yes, to enable/alter the Excise for Dealers feature. Refer Excise for Dealers
for further information.
Follow Excise rules for Invoicing
Set this option to Yes, to follow Excise rules for invoicing. The Company Excise Details screen
is displayed as shown:
Provide the above Excise information, for it to be printed on invoices and Accept, Yes to save.
Enable Value Added Tax (VAT)
Set/Alter VAT Details
Set these option to Yes, to enable the VAT features for the company. Refer Value Added Tax for
more details.
Enable Service Tax
Set/Alter Service Tax Details
Set these option to Yes to enable the Service Tax features for the company. Refer Service Tax for
further details.
Enable Tax Deducted at Source (TDS)
Set/ Alter TDS Details
Set these option to Yes to enable the TDS features for the company. Refer TDS for further
details.
Enable Tax Collected at Source (TCS)
Set/Alter TCS Details
Set these option to Yes to enable the TCS features for the company. Refer TCS for further
details.
Enable Fringe Benefit Tax (FBT)
Set/Alter FBT Details
Set these option to Yes to enable the FBT features for the company. Refer FBT for further
details.
Tax Information
Set this option to Yes to enter the Tax details of the Company.
Local Sales Tax Number
The Local Sales Tax Number entered during the Company Creation is automatically displayed in
this field.
Inter-State Sales Tax Number
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.
PAN/ Income – Tax Number
The PAN/ Income Tax Number is the number allotted by the Income Tax Authorities. This
number comprises of 10 digits and may be alphanumerical.
The information entered here will appear in Account Confirmation Statements. It is NOT
compulsory to provide this information – this field can also be left blank.
Introduction
Accounts Info menu lists the masters through which you can provide Tally the details of your
company’s accounts.
Go to Gateway of Tally > Accounts Info.
Configuring F12: Configure and Setting F11: Features
F12: Configure and F11: Features > Accounting Features help you to organize the
information and the level of details as per requirement. You can modify/alter the settings in F12:
Configure and F11: Features at any point of time.
F12: Configure
To set F12: Configure for Accounts and Inventory Masters
Go to Gateway of Tally > F12: Configure > Accts/Inv Info.
By default, Accounts/Inventory Masters settings are set to No. You can set the features that you
may require to Yes. Typically, they are additional fields that appear during Masters creation
which enable you to obtain more information and detailed analysis.
Refer Accts/Inv Info Configuration for more details.
F11: Features
There are various settings available under Accounting/Inventory/Statutory Features, which
determine the information that needs to be entered in transaction entries. Refer Activate
Company Features for more details
Main Functions in Masters Menu
Accounts Information contains the masters. Each master has create, alter and display functions.
Single Group option is useful when you wish to work on one Group at a time. Multiple Group
option is very useful when you are working on many sub-groups at a time and saves a lot of time.
Once a sub-group is created, it behaves exactly like a Group.
Create
The Create option is used to create new masters. Any modification to the masters can be done
only through Alter mode.
Display
The Display option is used to view the Master information. Master information cannot be
modified in Display mode.
Alter
The Alter option allows you to view and make the necessary changes to the master information.
This does not allow creation of masters.
Introduction
Tally follows the modern way of managing accounts called 'Single Ledger' concept of
accounting. This is in direct contrast to Subsidiary Ledger Accounting. All financial entries are
made using ledgers or account heads. Ledger accounts are created to identify transactions.
The single ledger concept avoids the need for sub-ledgers and corresponding control accounts in
General Ledger. Tally allows you to group ledger information to generate meaningful reports that
are compliant with laws. Groups in Tally classify and identify account heads according to their
nature. This helps in presenting summarized information.
Gateway of Tally > Accounts Info. > Groups
Classification of Account Heads
Usually, grouping of accounts is done only when reports are needed. This may result in delay in
preparing the reports. Tally allows you set up chart of accounts.
You can group the ledger accounts while creating them. This will enable your reports and
statements to reflect the desired classification at any point. In Tally, you can also re-group the
ledgers (with some minimal restrictions) if re-classification is necessary. Re-grouping becomes
necessary whenever there is a change in the nature of information. However, re-grouping can be
done only by users who have authorised rights.
At the highest level of grouping, accounts are classified into capital or revenue — 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.
Sub-Groups
A Sub-Group behaves exactly like a group and is created under a group.
Concept of Sub-Groups
Groups have a hierarchical structure. The main group of accounts that determine the entire
accounting and their presentation are the asset, liability, income or the expenditure. These main
groups ascertain whether a ledger affects Profit & Loss Account as a revenue item or if it affects
the Balance Sheet.
The Reserved Primary Groups and subgroups are:
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
3. Current Liabilities
a) Duties and Taxes
b) Provisions
c) Sundry Creditors
d) Fixed Assets
4. Investments
5. Loans (Liability)
• Bank OD Accounts [Bank OCC Accounts]
a) Secured Loans
b) Unsecured Loans
6. Suspense Account
7. Miscellaneous Expenses (Asset)
8. Branch/Divisions
9. Sales Account
10. Purchase Account
11. Direct Income [Income Direct]
12. Indirect Income [Income Indirect]
13. Direct Expenses [Expenses Direct]
14. Indirect Expenses [Expenses Indirect]
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 is trading should be opened under any of the
following groups (or sub-groups under them):
• Sundry Debtors
• Sundry Creditors
• Branch/Divisions
Sales and Purchase account groups are meant for revenue accounts and are reflected in the Profit
& Loss Account. If you open party accounts under these groups, it becomes difficult to pass sales
or purchase voucher transactions.
For example, in a sales voucher transaction entry, you must debit an account, which can be
sundry debtor, branch/division or even a sundry creditor. Moreover, other facilities like bill-wise
allocation and tracking will not be available unless the accounts belong to one of these groups.
Opening two accounts of the same party
Tally classifies debtors, creditors and branch/divisions for convenience. This helps in 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. Use the
classification depending on the most natural group for the party.
For example, parties from whom you buy more frequently then you sell them can be placed
under Sundry Creditors, as that is the natural place to look for their 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.
Therefore, you need not open two accounts for the same party - one under Sundry Debtors and
another under Sundry Creditors. Tally restricts opening of two identical ledger accounts. In such
cases, you may decide to circumvent by marking one account as "A & Co - S/Dr" and another "A
& Co - S/Cr". This will allow you to have two accounts of the same party under two groups, but
you will lose the advantage of analysing net position at one place. It is always better to maintain
a single account to obtain best benefits.
Expenditure items are entered under Liabilities group. For example, 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 under ledgers (given in italics) as shown below.
During voucher entry, only the ledger accounts are used and the group structure remains
transparent, irrespective of the use of sub-classification.
The same principle can be applied to Sundry Debtors, Sales Accounts, Purchase Accounts and so
on.
You can classify Debtors and Creditors according to geographical areas as shown below.
You can classify creditors according to their tax status as shown below.
You can create unlimited levels of sub-groups (like branches) or ledgers only if they are two or
more in number. You can simply create ledgers directly under Marketing Expenses as shown
below.
A Discussion on Each of the Reserved Groups

1. Capital Account
This records the Capital and Reserves of the company. The ledgers that belong to Capital
Accounts are Share Capital, Partners' Capital A/c, Proprietor's Capital Account and so on.
Reserves and Surplus [Retained Earnings]
This contains ledgers like Capital Reserve, General Reserve, Reserve for Depreciation and so on.
2. Current Assets
Current Assets record the assets that do not belong to either Bank Accounts or Cash-in-Hand
sub-groups.
Bank Accounts
Current account, savings account, short term deposit accounts and so on.
Cash-in hand
Tally automatically creates Cash A/c in this group. You can open more than one cash account, 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)
Deposits contain Fixed Deposits, Security Deposits or any deposit made by the company (not
received by the company, which is a liability).
Loans & Advances (Asset)
This records all loans given by the company and advances of a non-trading nature (example:
advance against salaries) or even for purchase of Fixed Assets. We do not recommend you to
open Advances to Suppliers’ account under this Group. For further details, please refer to the
section on Common Errors.
Stock-in-hand
This group contains accounts like Raw Materials, Work-in-Progress and Finished Goods. The
balance control depends on whether you have selected Integrated Account-cum-Inventory option
while creating the company. (refer to Company creation section for more details) Let's consider
the options:
Integrated Accounts-cum-Inventory
This option has a significant effect on the Balance Sheet and Profit & Loss Account. If set to Yes,
it brings the stock/inventory balance figures from the inventory records and provides a drill down
to the Stock registers from the Balance Sheet.
You are not allowed to directly change the closing balance of an account under this group. You
are allowed to pass transactions in Inventory records and the account balances are automatically
reflected in the Balance Sheet as Closing Stock.
Non-integrated Accounts-cum-Inventory
If Integrated Account-cum-Inventory option is set to No, it ignores the inventory books figures
and picks up manually entered closing stock balances from the ledger account created. This
provides the facility to maintain accounts separately and inventory separately.
You are not allowed to pass transactions if your accounts that come under this Group. 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 customer accounts refer to common and possible errors in grouping of accounts section.
3. Current Liabilities
Accounts like Outstanding Liabilities, Statutory Liabilities and other minor liabilities can be
created directly under this group. Sub-groups under Current Liabilities are Duties and Taxes,
Provisions and Sundry Creditors
Duties and Taxes
Duties and Taxes contain all tax accounts like VAT, MODVAT, Excise, Sales and other trade
taxes and the total liability (or asset in case of advances paid) and the break-up of individual
items.
Provisions
Accounts like Provision for Taxation, Provision for Depreciation and so on are recorded under
Provisions.
Sundry Creditors
For trade creditors, refer to common and possible errors in grouping of accounts section.
4. Investments
Group your investment accounts like Investment in Shares, Bonds, Govt. securities, long term
Bank deposit accounts and so on. This allows you to view the total investments made by the
company.
5. Loans (Liability)
Loans that a company has borrowed, typically long-terms loans.
Bank OD Accounts [Bank OCC Accounts]
Tally provides you with distinct types of Bank Accounts,
Bank OCC A/c
To record the company's overdraft accounts with banks. For example, Bill Discounted A/cs and
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
Term loans or other long/medium term loans, which are obtained against security of some asset.
Tally does not verify the existence of the security. Typical accounts are Debentures, Term Loans,
and so on.
Unsecured Loans
Loans obtained without any security. Example: Loans from Directors/partners or outside parties.
6. Suspense Account
In modern accounting, many large corporations use Suspense Ledger to track the money paid or
recovered, the nature of which is not yet known. The most common example is money paid for
Traveling Advance whose details will be known only upon submission of the TA bill. Some
companies may prefer to open such accounts under Suspense Account.
Loans and Advances (Asset) group.
The Suspense Account is a Balance Sheet item. Any expense account even if it has 'suspense' in
its name, it should be opened under Revenue group like Indirect Expenses and not under
Suspense Account group.
7. Miscellaneous Expenses (Asset)

This group is typically used for legal disclosure requirements such as 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 remains to an extent that
cannot be written off in Profit & Loss Account. Tally does not show loss, carried forward in the
Profit & Loss Account, under this group. The Profit & Loss Account balance is displayed
separately in the Balance Sheet.
8. Branch/Divisions
This maintains ledger accounts of all your company's branches, divisions, affiliates, sister
concerns, subsidiaries and so on. 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 any other party account. If you wish to maintain the books of a
branch/division on your computer, you must open a separate company. (Tally allows
maintenance of multiple company accounts).
Revenue — Primary Groups
9. Sales Account
You can classify your sales accounts based on Tax slabs or type of sales. This also becomes a
simple mechanism for preparation of Tax returns.
Examples:
• Domestic Sales
• Export Sales
Now under Domestic Sales open the following ledgers:
• Sales (10%)
• Sales (5%)
• Sales (exempt)
You can even open an account as 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).
Note: Do not open customer accounts under this group. For more details, refer to common and
possible errors in grouping of accounts section.
10. Purchase Account

This is similar to sales accounts, except for the type of transactions.
11. Direct Income [Income Direct]
These are Non-trade income accounts that affect Gross Profit. All trade income accounts fall
under Sales Accounts. You may also use this group for accounts like Servicing, Contract Charges
that follow sales of equipment.
For a professional services company, you may not use Sales Account group at all. Instead, open
accounts like Professional Fees under this group.
12. Indirect Income [Income Indirect]

These are miscellaneous non-sale income accounts. Example: Rent Received and Interest
Received.
13. Direct Expenses [Expenses Direct]

These are Manufacturing or direct trading expenses. These accounts determine the Gross Profit
of the company.
14. Indirect Expenses [Expenses Indirect]

All administrative, selling or non-direct expenses.
Profit & Loss Account is a reserved primary account in Tally. You can use this account to pass
adjustment entries through journal vouchers. For example, transfer of profit or loss account to
Capital or Reserve accounts.
Creating a Group
Go to Gateway of Tally > Accounts Info. > Groups > Create (under Single Group)
The Group Creation screen displays
Name of Group
Enter the name of the Group to be created. For example, Administrative Expenses.
Alias
Enter an alias name to allow access to the group using the Alias in addition to its name or leave it
blank. For example, for Administrative expenses, you can enter Office Expense or even an
alphanumeric code, say E001, as an alias
Under
Specify under which existing (Parent) group the sub-classification is required. If it is a new
primary group, select Primary (requirement of a new primary group is very rare, but the option
exists). You can also create a new Parent Group by using Alt+C.
Note: Creation of new Primary Group is not allowed if Allow Advanced entries in Masters is
set to No in F12: Configure.
Additional Information
If a group (e.g Printing) is created under Primary, you must select the appropriate option from
the list whether it is an asset, liability, income or expenses. If you select an income or expenses
you should specify whether it will affect the gross profits or not by suitably setting the option
Does it affect Gross Profits? to Yes/No.
You can use this concept when you wish to segregate your profits into Operative Profit and Net
Profit. This helps you when you want to consider other revenue accounts in addition to Direct
instead of Gross and Net Profit).
Normally, Tally calculates Gross Profit using Opening Stock, Purchase Accounts, Direct
Expenses, Sales Accounts, Direct Incomes and Closing Stock only. To make other accounts
contribute to this, without classifying under these reserved heads, set this option to Yes.
Group behaves like sub-ledger?

This option is applicable to Sundry Debtors group, you can set this to Yes to display Sundry
Debtors without Ledger break-up in statements. Normally, Sundry Debtors will have a large
number of ledger accounts under it and it can be expanded during display to show ledger
balances. To disable this detailed display set this option to No.
Nett Debit/Credit Balances for Reporting?
Setting this option to Yes will display either the net debit or credit balance in the report
(whichever is higher). If this is set to No, both debit and credit balances will displayed in the
report.
Used for Calculation (e.g. taxes, discounts)?
Set this option to Yes if ledgers under this group would have percentages for discounts/taxes to
be used for invoice entry. This gets reflected while passing voucher entry in Invoice mode, it
uses the automatic calculation capability.
Method to allocate when used in purchase invoice
Select the appropriate allocation method from the list. This is used to allocate the expense of the
Item in the ratio of the quantity or value.
Buttons in single group screens

F3: Company
This button helps you to open 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. This feature is not available in Display
mode.
Groups, Ledgers, Cost Categories, Cost Centres, Voucher Types, Currency,
Budgets
This button enables you to switch to the appropriate area without quitting from the current
screen.
F11: Features
This allows you to set or modify the company features.
F12: Configure
This enables you to set or modify configuration of the master screen.
Creating Multiple Groups
In multiple group creation, the sub-groups will automatically inherit the characteristics of their
parent groups.
Go to Gateway of Tally > Accounts Info. > Groups > Create (under Multiple Groups)
Select the parent group under which you want the new groups to be created from the List of
Groups. The group selected is displayed in the Under Group field.
Name of Group
Enter the name of the Group.
Under
If you select any group other than All Items in the Under Group field, then this column is filled
in automatically with the selected Group name and the cursor skips this column. This speeds up
data entry.
If you select All Items in the Under Group field, the cursor does not skip this field and allows
you to enter the parent group of each of them.
Note: To change individual group behaviour created using multiple groups, use 'single
group/alter' option.
Buttons in Multiple mode Group creation

F3: Company
This button helps you to open 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. This feature is not available in Display
mode.
Groups, Ledgers, Cost Categories, Cost Centres, Voucher Types, Currency,
Budgets:
This button enables you to switch to the appropriate area without quitting from the current
screen.
F4: Change Parent
To change parent of the selected group, select the group from 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 altering individual name, you can achieve
this using F4:Chg Parent.
F4: Parent
This allows you to quit from the current screen and modify a different group (relevant in
Alteration/Display mode only). For example, you are currently altering groups classified under
Loans Liability and now wish to ABANDON the current activity and alter groups under Bank
OCC instead
F6: Skip Names/Edit Names
It is used for faster data entry when you need to alter only the Group and the Parent Group, but
not the names. When you skip names, you might change the Group or the Parent Group to one,
which belongs to another Group. Since this violates categorization rules, Tally displays an error
message after you accept the screen.
F7: Skip Parent/Edit Parent
This button is used for faster data entry when there is no need to alter the parent of sub-groups.
F10: Edit Sort/Skip Sort
You can use this button to toggle for altering the Sort Position
F11: Features
This enables you to change any company features.
Creating a Group - Advanced Usage
This section assumes that you have configured all advanced features of the Accounts Master in
F12: Configure and enabled advanced F11: Features. It deals with the additional fields that you
would require while creating a Group.
Note: Use F12: Configure and F11: Feature to add/remove fields and configure the entire setup
according to your preferences.
Go to Gateway of Tally > Accounts Info. > Group > Alter (under Single Group)
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.
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 there is no need to give the index field while creating a group.
All reports are sorted according to the position index in increasing order. This may not be in
alphabetic order. 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.
IF a same index number can be assigned to more than one group, 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. By default, index will be 500.
Using single alteration of the group My Own Group the index can be verified.
Create 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:
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 gets rearranged and you can decide the position of an item in your reports.
Though position indices can be altered, it is not advisable to do this without being absolutely
sure of its effect. Please remember that the change affects all reports. If you do not want the
changed index, you may revert to the default settings through group alteration.
Displaying and Altering Group
You can display and alter the Groups in Single mode or Multiple mode.
Displaying a Single Group

Go to Gateway of Tally > Accounts Info. > Group > Display (under Single Group)
Select the name of the Group from the List of Items. You cannot make any changes in Display
mode.
Altering a Single Group

Go to Gateway of Tally > Accounts Info. > Group > Alter (under Single Group)
Select the Group that you wish to alter from the List of Groups. Make the necessary changes
and click Yes to save the changes.
Displaying Multiple Groups

Go to Gateway of Tally > Accounts Info > Group > Display (under Multiple Group)
Select the Group from the List of Groups to display all the Groups under the selected Group or
select All Items to display all Groups. The Multi Group Display screen lists Groups and the
corresponding details of the Groups.
Altering Multiple Group

Go to Gateway of Tally > Accounts Info. > Group > Alter (under Multi Group)
Select the Group for which you want to alter from the List of Groups. In Multi Group
Alteration screen, make the necessary changes and click Yes to save changes.
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.
Managing Groups in multiple companies
Copy masters from one company to another

Master information is the same for most group companies and it is certainly beneficial to
maintain same group structure and ledgers. This becomes necessary 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.
Gateway of Tally > Select Company A
Gateway of Tally > Accounts Info. > Groups > Single Group > Alter
Select a particular group, for example select Southern Debtors created under Sundry Debtors
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.
Once you accept the screen, you are returned to the source company list of groups. The same
group now exists in the destination company also.
Copy multiple groups from one company to another

1. Click on F1: Select Company to select the source company (Company A)
2. Gateway of Tally > Accounts Info > Groups > Multiple Groups > Alter > Select a
particular Group or All Items from the list
3. Click on F3: Company button or press F3 key to change to the current company i.e
switch over to the destination company > Accept the screen, after making
additions/alterations, if any.
4. Once you accept the screen, you are returned to the source company List of Groups. The
same group now exists in the destination company. The above method of copying masters
is possible only if the books of accounts are maintained on the same computer.
The above methods can be used for copying other masters like ledgers, cost categories and cost
centres.
Introduction
A Ledger is the actual account head to which you identify a transaction. In Tally, you pass all
accounting vouchers using Ledgers. However, all Ledgers have to be classified into Groups.
Hence a thorough understanding of account classification is important for working with Ledgers.
The creation and usage of Groups in Tally has been explained earlier. Now you will learn how
Tally works with Ledgers.
Go to Gateway of Tally > Accounts Info. > Ledgers
Creating a Ledger
Ledgers can be created in single and multiple modes. In multiple mode you can create multiple
ledgers at a time.
Creating a Single Ledger

The creation of Ledger depends on the features you opt for in the F11: Features of your
company and F12: Configure. It is advisable to set F11: Features and configure the F12:
Configure screen before creating any Ledgers. You may configure or set your Ledgers to enable
or disable advanced mode.
Click here for details on Creating Ledgers in Advanced Mode.
Tally automatically creates two Ledger accounts namely, Cash (Under Cash-in- Hand) and
Profit and Loss Account (direct Primary Account). You need to create all other accounts heads.
There are no restrictions in Ledger creation except that you cannot create another Profit & Loss
A/c. Any number of Cash Accounts may be created in any other name like Petty Cash.
Creating a Ledger Account with minimal information:
Go to Gateway of Tally> Accounts Info. > Ledgers> Create (under Single Ledger)
Name
Enter the Name of the account. You can provide the full name of the account. Tally fits it all in.
Press Enter to move to the next field. Tally does not allow entry of duplicate names. The
uniqueness check is made here itself.
Note 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 as same.
Tally converts the first letter of all relevant words to upper case, which helps you; speed up data
entry. You need not bother about changing the case every time it is a different word.
Alias
Enter an alias name if required. You can access the Ledgers using the original name or the alias
name.
Under
All accounts must be classified under their appropriate Groups. Select the Group under which
the Ledger is created from the List of Groups. To create a new Group from this field press [ATL
+ 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, alter a Ledger account to change its group classification at any time. Refer Common
and possible errors in Grouping and account classification for more details in Grouping.
Opening Balance
If yours is an existing company whose books you are entering onto Tally, Opening Balance
would be applicable in circumstances such as when 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. 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 also would suffice.
Creating Multiple Ledgers
You can create multiple Ledgers at a time in this mode. You can first create a Ledger under each
group in single Ledger mode and then the rest of the Ledgers in multiple mode. Tally will set the
settings of the Ledger created as default for other Ledger to be created in multiple mode.
Go to Gateway of Tally> Accounts Info > Ledgers > Create (under Multiple Ledgers)
The Multiple Ledger Creation screen is displayed. A brief description on each of the fields in
the Multiple Ledger Creation screen follows:
Under Group
Select the name of the group under which you want to create the Ledgers 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.
The other fields in the column are:
S.No
This is auto generated.
Name of Ledger
Enter the name of the Ledger.
Under
This field defaults to the parent group selected in Under Group. The selected group in Under
Group gets displayed here automatically and the cursor skips this column. However, if you
select All Items in Under Group field, the cursor does not skip this column and you have the
option to select the group. You can even create a new group from this field by pressing Alt +C.
Opening Balance
This is the balance remaining when you first enter 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.
(Refer Creating a Ledger- Advanced Usage for more details on this)
Dr
Specify whether the Opening Balance is Debit or Credit. Tally follows the normal accounting
principals of accounting. (Refer Creating a Ledger - Advanced Usage for more details on this).
Creating a Ledger - Advanced Usage
The information required for creating Ledgers depends on the features opted by you in the F11:
Features and F12: Configure. The Ledger Creation screen will have additional fields depending
on your feature settings for your company. If you set the field Allow ADVANCED entries in
Masters in F12: Configure as Yes, you can work in Advanced Mode.
Set the company features in F11: Features> F1: Accounts as shown in the screen below to
enable advanced features.
After configuring F12: Configure and enabling F11: Features as described in the above
sections, the Ledger Creation screen will appear with the following additional fields.
An explanation on each of the additional field follows. For explanation on the default fields refer
Creating a Single Ledger
Currency of Ledger
Tally allows you to maintain Ledgers in any currency and the amount will reflect in the selected
currency. But it is strongly advisable that you maintain the currency of the Ledger as the Base
currency.
Only foreign currency bank accounts are maintained in foreign currency and other ledgers are
maintained in Base Currency. Nevertheless you can enter transactions in any other currency.
To create/maintain ledgers in multiple currency, set Allow Multi Currencies to Yes in F11:
Features.
You can always create a new currency from this field by pressing Alt+C
For more information on Currencies, refer Currency
Note: The Advanced Information is applicable ONLY if the ledger is maintained in base
currency. The relevant options should be enabled in the company features.
Maintain Balances Bill-by-Bill
Set this option to Yes, if you wish to give a Bill-by-Bill break-up of the Ledger balance for
Sundry Debtors and Sundry Creditors group including the opening balance. You may allot any
number of bills. 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 in the
Vouchers chapter.
If you set this option to Yes, while entering the opening balance in the Opening Balance field at
the end of Ledger Creation screen and pressing Enter, the Bill-wise Breakup screen of the
Ledger created is displayed.
A brief explanation on each of the fields in the Bill-wise breakup screen follows:
The following information for all pending bills of the previous accounting period would be
required.
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 2006. Change it, if necessary, to the actual date. To end your list of entries, leave
the Date or Name blank.
Name
Enter a Name to which you can later refer when adjusting the bill. Typically, you can enter the
Bill number or Document number. 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)
For the Ledgers under Sundry Debtors and Creditors, give the credit period or the date when the
bill is due. Tally automatically calculates the other.
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 will 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 cover the Opening Balance, the On Account becomes NIL. You may have Bills
totaling beyond the Opening Balance, in which case the On Account will accumulate adversely.
In the screen given below, we have shown two bills 50,000, 25,000. Now, if the balance brought
forward is 1,00,000/- , the On Account amount will reflect 25,000/-. 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.
Inventory values affected

This is applicable only if your accounts are integrated with inventory. Accounts like sales and
purchases would normally affect inventory values in which case set Inventory values affected
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.
Cost Centres are applicable
Tally's concept of Cost Centres allows an additional dimension to a transaction.
This field is displayed in the Ledger Creation screen only if you have enabled Cost-Centres in
F11 > Accounting Features. Set this field to Yes in Ledger creation screen to enable Cost
centres. Tally will presume that you want Cost Centers for Revenue Accounts and not for non-
revenue accounts like Assets and Liabilities.
Activate Interest calculation
Set this option to Yes to enable Tally to calculate interest automatically based on the interest rate
and style of calculation specified.
Use advanced parameters
The advanced parameters are particularly useful where interest rates change from time to time.
Set this option to Yes to enable this.
Statutory Information
This option is available only if you have enabled at least one the options in F11: Features> F3:
Statutory & Taxation. Based on the options enabled in F3: Statutory & Taxation, the
respective fields will appear in the Statutory Information section.
Mailing Details
Mailing Details is applicable only for party accounts like Sundry Debtors, Creditors and
Branch Divisions. This is also available for loan accounts. Enter the party's particulars here.
These are used in mailing outputs like statement of accounts.
Tax Information
The Tax Information consists of the default fields PAN/IT No. and the TIN/SALES Tax No.
Based on the features you enable in F11: Features> F3: Statutory & Taxation, additional fields
will appear under Taxation.
Percentage of Calculation
This field is applicable only for Ledgers created under the Group Duties and Taxes, or for
Ledgers created under any Group for which Used for Calculation is enabled in Group Creation
screen.
The Group Duties and Taxes is used for automatic tax calculation. . You need to specify the rate
of tax e.g. 5, 10, 12.5 etc. as a percentage. Do not give the percent symbol. You may use an
automatic Discount calculation facility by specifying a negative percentage in this field. On
entering a percentage, a new field Method of Calculation is displayed.
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.
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 ledger 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.
Interest Calculations
Tally 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.
Activate Interest Calculations

Interest is a legitimate return on money invested and chargeable in the business world on loans
and also on delayed payments. Interest can be calculated on the basis of Simple or Compound
Interest.
Tally allows you to obtain reports on interest calculated based on the instructions you furnish.
Interest figures are typically desired in the following situations:
• On Outstanding Balance amounts.
• Outstanding Bills /Invoices/Transactions (Receivables and Payables)
The Activate Interest Calculation field is displayed in the Ledger Creation screen only if
Activate Interest Calculations is set to Yes in F11: Features.
Set this field to Yes for each specific ledger account for which interest is to be calculated.
Simple Mode (Where advanced parameters are not

applicable)
To calculate Interest in the Simple Mode:

1. Go to Gateway of Tally> F11: Features > Set Activate Interest Calculation to Yes. >
Set Use Advanced Parameters to No.
2. In the Ledger Creation screen set Activate Interest Calculation to Yes.
3. The Interest Parameters sub screen is displayed. Enter the Rate and select the interest
style from the list.
Interest calculations on outstanding balances

Enter Interest details in Vouchers (only in case of transaction by transaction/Bill-by-bill). View
Interest reports.
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
Let's take an example: Interest calculated on Outstanding Balances.
1. Go to Gateway of Tally> Accounts Info.> Ledgers> Alter (Single)> Bank Ltd (bank
account)
2. Set Activate interest Calculation to Yes.
3. On activation, the Interest Parameters must be set. It is the basis on which interest will
be calculated for this Ledger account.
4. Rate: This is the rate at which the interest has to be calculated. In this case, specify 15%.
5. Interest Style: It is the basis on which the rate is applied. Of the four options, select 365-
Day Year.
6. Accept the screen.
You can now 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.
Go to Gateway of Tally> Display> Statements of Accounts> Interest Calculations> Ledger>
Bank Account
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. For example:
1. Alter a Customer account (under the group Sundry Debtors or one of its sub-groups).
2. Set Activate Interest Calculation to Yes. In the Interest Parameters now you have
three lines to answer.
3. Set Calculate Interest Transaction-by-transaction to Yes.
4. Set Over-ride Parameters for each transaction 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

To view the Interest calculated
CP Ltd
The report is similar to the Bill-wise Outstanding Statement. The last column gives the interest
amount on the transaction. Select the line to be viewed in detail for its calculations.
Advanced Mode
The advanced parameters are particularly useful where interest rates change from time to time.
1. Go to Gateway of Tally> F11: Features > Accounting Features > Set Activate Interest
Calculation to Yes. > Set Use Advanced Parameters to Yes.
2. The Interest Parameters sub-screen is displayed
• For Ledgers created under the Group Sundry Debtors/Sundry Creditors, the
Interest Parameters sub-screen is displayed as shown below:
3. Set Calculate Interest Transaction-by-Transaction to Yes, if you want to calculate

interest for each transaction.
4. Set Override Parameters for each Transaction to Yes, if you want to override the
interest rates and parameters set here during voucher entry.
5. Enter the interest rate in the Rate field.
6. Select the interest rate calculation period from the Interest Style list in the Per field.
7. Select the choice of balances for which the interest has to be calculated from the Interest
Balances list in the On field. The balances are All Balances, Credit Balances only and
Debit balances only. 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.
8. Select the rounding method applicable from the Rounding Methods list. The amount
can be rounded off normally or upward or downward. If you do not want any rounding
method, select Not Applicable.
• For Ledgers created under the Group Bank Accounts, or if the option Calculate Interest
Transaction by Transaction is set to No, then the Interest Parameters sub-screen is
displayed as shown below.
1. Enter the interest rate in the Rate field.

2. Select the interest rate calculation period from the Interest Style list in the Per field.
3. Select the choice of balances for which the interest has to be calculated from the Interest
Balances list in the On field. The balances are All Balances, Credit Balances only and
Debit balances only. 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.
4. Specify the interest rate applicable period from the Applicable From: and To: fields.
5. Select the rounding method applicable from the Rounding Methods list. The amount can
be rounded off normally or upward or downward. If you do not want any rounding
method, select Not Applicable.
Display Report – Interest on Outstanding Balances

To view the report on Outstanding balances:
Go to Gateway of Tally> Display> Statements of Accounts.> Interest Calculations> Ledgers>
Bank Ltd.
Advanced Parameters - Interest calculation transaction by

transaction
Activate and specify interest calculations in ledger masters.
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.
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.
* 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

CP Ltd
Press the button F1: Detailed on the Button bar to see the calculation and the period. Previous
transactions are calculated from Effective date of Transaction as 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.
Display> Statements of Accounts> Interest Calculations> Ledger> CP Ltd
Book Entries and adjustment of interest

We have seen the reports on interest amounts calculated in different ways but these have not been
brought into books! They simply give you the interest implications. You must book them now.
How to enter the calculated interest amounts?
Use Debit Notes and Credit Notes with Voucher Classes
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
Set up Debit Notes. Credit Notes will behave the same way.
Go to Gateway of Tally> Accounts Info.> Voucher Types> Create/Alter
1. Alter the Voucher Type Debit Note.
2. Tab down to the field Class.
3. Type the name of the Class.
4. Type Simple Interest.
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 Gateway of Tally> Accounting Voucher> Voucher Entry
2. Select F7:Journal > Debit Note
3. A Cost Centre Class is also selected if required. Marketing Expenses Class has been
selected here.
4. There are two situations for interest adjustment:-
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 the respective interest bills from the 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 from the list and complete a Debit Note.
Now display Outstandings for CP Ltd
Note the contents:
The Bill references Demo/28/01 and Demo/31/01 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)
Credit Bank 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 F11:
Features and the parameters are set for individual ledger accounts.
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)
You can get a report on the Ledger balances for the interest calculated.
Go to Gateway of Tally> 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 resemble an Income. It only means that it is payable and is a Liability.
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 F1: Detailed to see the calculation.
Go to Gateway of Tally > Display > Statements of Accounts > Interest Calculations > Ledger
Select the ledger Account 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.
and Credit Notes.
Group Interest Calculation
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.
Go to Gateway of Tally> Display > Statements of Accounts > Interest Calculations > Group
Select a Group, Eg. Loans (Liability)
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.
and Credit Notes.
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.
Go to Gateway of Tally> Balance Sheet> Current Assets> Group Summary
(or)
Go to Gateway of Tally>Account Info.> Ledgers> Alter (Single)
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.
Effective Date for Reconciliation (Bank Accounts only)
The Effective Date for Reconciliation is given for accounts falling under the Bank Accounts
Group (or Bank OCC a/c). By default it 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 be the books beginning date.
However, you can import 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.
Position Index in Reports
This is viewed when you press F10: Chg Sort when the ledger is in the alteration mode.
If this is done, it remains so till you deactivate it by pressing F10: Skip Sort. The topic has been
discussed under the chapter "Groups" under Advanced Usage. 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 comprises of
many groups (sub-groups) and ledgers, the position index would determine their position within
the parent group.
For example: 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 > Display> Account Books> Group Summary> 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 General Maintenance to 280 and of Staff Welfare to 900. We now
see General Maintenance at the top, followed by Communication Expenses and Staff Welfare.
Then the rest with 1000 would be in alphabetic order.
You can change the index from the display screen itself by positioning the cursor on the
particular account and pressing Ctrl+Enter to bring up its master to alter.
Indirect Expenses
Displaying and Altering Ledgers
Displaying and Altering Ledgers can be done in Single mode and Multiple mode. The Multiple
mode allows you to display and alter multiple Ledgers at a time.
Displaying and Altering a Single Ledger

You can view the details of the Ledger Masters in Display mode. Display does not permit any
modification. However you can make changes to Ledger Masters in Alter mode.
Displaying a Single Ledger
Go to Gateway of Tally > Accounts Info. > Ledgers > Display (under Single Ledger).
Select the Ledger from the List of Ledgers. The Ledger Display screen is displayed. You will be
able to view the details of the selected Ledger Master.
Altering a Single Ledger
Go to Gateway of Tally > Accounts Info. > Ledgers > Alter (under Single Ledger)
Select the Ledger from the List of Ledgers. The Ledger Alteration screen is displayed.
You are allowed to alter any information. Make the necessary changes and Accept Yes to save.
Specifying Closing Stock Values of a Ledger account under the group Stock in Hand
This is possible only in Ledger alteration mode. 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.
Go to Gateway of Tally>Account Info.> Ledgers> Alter (under Single Ledger)
(Or)
Go to Gateway of Tally> Balance Sheet> Current Assets> Group Summary
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 closing balances on different
dates. You would typically specify Balance Sheet dates so that the Balance Sheet reflects the
amount of that date.
Deleting a Single Ledger

You can delete a Ledger account from the Ledger Alteration screen by pressing ATL + 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.
Displaying and Altering Multiple Ledgers
Displaying Multiple Ledgers

Go to Gateway of Tally > Accounts Info. > Ledgers > Display (under Multiple Ledgers)
Select All Items from the List of Groups to view the details of all the Ledgers in Tally. If you
want to view the details of all the Ledgers created under a Group select the Group from the List
of Groups. The Multiple Ledger Display screen is displayed.
Altering Ledgers in Multiple Mode

Go to Gateway of Tally > Accounts Info. > Ledgers > Alter (under Multiple Ledgers)
Select any Group or All Items from the List of Groups. The Multi Ledger Alteration screen is
displayed. Make the necessary changes and Accept Yes to save.
Note: You are not allowed to delete a ledger from this mode. Select single alter mode to delete.
Explanation on Buttons
F3:Company: To work with a different company. In the creation mode, you can create cost
categories in the other company. In alter mode, you can copy the information by accepting the
screen (<enter> or <Ctrl>+<A>). The old company's information remains. Not available in
Display mode.
F3: New Cmp: To work on the same report of another company. Available only in display mode.
F4: Parent: To move the cursor to the field 'Under Group'
F4: New Parent: To bring up the list of Groups to select a new parent Group.
Zero Op Bal: To nullify (change to zero) all opening balances in this group.
F6: Skip names: For faster data entry when you do not need to the names of ledgers. The cursor
will not go to that column. Toggle to 'Edit names'.
F7:Skip Parent: For faster data entry when you do not need to alter the parent Group. The
cursor will not go to the column 'Under'. Toggle to 'Edit Parent'.
F8:Skip Details: The cursor will not go to the columns Opening Balance and Dr/Cr. Toggle to
'Edit Details'.
F9:Show Closing: Closing Balances replace Opening Balances. This is available only in alter
mode. Closing balance is not alterable and the cursor skips the field.
F10:Chg Sort: To display a column of sorting position indices. Toggle to 'Skip Sort'. You may
change display positions of ledger accounts under the group. (refer to the discussion on the
subject in Advanced Usage).
Groups, Ledgers, Cost Categories, Cost Centres: To enable you to switch to these areas
without having to quit from the current screen.
Credit Limits
Credit Limits can be specified for any account falling under the groups Sundry Debtors and
Sundry Creditors. Accounts under Sundry Creditors are permitted because there can be a two-
way trade with a party even if it is classified as a creditor or debtor. Classification is done on the
basis of the major role.
More:
Setting Credit Limits
Effect of setting credit limits
Exceeding Credit Limits
Setting Credit Limits
If you do not set credit limits, you can still make invoices and give credit periods at the time of
invoicing. However, that may not be desirable, especially in a decentralized environment.
Therefore, to minimise errors during invoicing, you might prefer to set these important terms
beforehand.
To set credit limits:
Go to F11 Features > Accounting Features > Set Maintain Budgets and Controls to Yes
Go to Gateway of Tally> Accounts Info> Ledgers> Credit Limits (under Multiple Ledgers)
Select the group of ledgers from the List of Groups for which to set credit terms. The Multi
Ledger Limit Alteration screen is displayed. The list of ledger accounts is displayed. You can
set credit limits for both amounts and periods here.
Credit Limit
Specify the amount of credit limit against the ledger account in this field. You can set the amount
limits in foreign currency if you wish, for customers who are usually invoiced in foreign
currency.
Credit Period
Credit Periods are in days only and are calculated from the effective date. If a separate effective
date field appears in your voucher, the credit period is from the effective date, which might differ
from the voucher date. If the voucher date is the only date field in the voucher, then it is also the
effective date and the credit period is from this date.
Effect of Setting Credit Limits
The effect of setting credit limits is that during voucher entry (also invoice entry), the credit
terms are filled up by the pre-set figures. If the voucher configuration (through F12: Configure)
is set to disallow modifications of all fields during voucher entry, the cursor skips these fields
and modification is not permitted. However, the configuration is set to permit modifications to
all fields - alteration of the pre-filled fields is allowed.
The current balance and the credit limit of the party are displayed in the order and invoice entry
forms, which is helpful to assess the amount acceptable.
Exceeding Credit Limits
During invoice or order entry, if the credit amount limit is exceeded, the voucher entry does not
proceed further. You have two choices at this stage:
1. Enter a lower value so that the entry can be completed.
2. Abandon the current entry and obtain authorization to increase the credit amount limit in
the Multi Ledger Limit Alteration screen.
This is a controlled activity and will depend on the security permissions for altering credit limits.
Cost Centres
A Cost Centre is any unit of an organisation to which transactions (generally, revenue) can be
allocated. When only costs or expenses are allocated to these units, they are referred to as Cost
Centres. When profits are also allocated to these units, they become Profit Centres. You can now
obtain a Profit and Loss account of each such Profit Centre.
Cost Centre in Tally allows an additional dimension to a transaction where a Ledger account
indicates the nature of the transaction. It does not readily disclose, except in the narration field,
which part of the organisation was involved in the transaction.
By providing Cost Centres, a transaction can be allocated to it, which would then enable
extraction of all transactions for a Cost Centre. Tally gives you the Cost Centre break-up of each
transaction as well as details of transactions for each Cost Centre.
Some examples of Cost Centres are
• Departments of an organisation - Finance, Manufacturing, Marketing, and so on.
• Products of a company.
• Individuals such as Salesman A, Salesman B.
Use of Cost Centres

You can classify Cost Centres just as how you classified Group/Ledger accounts. You can have
Primary Cost Centres and several levels of Cost Centres under each Primary Cost Centre.
Consider the following example.
Primary Cost Centres - Finance, Manufacturing, Marketing.
Under Marketing, classify the company's sales executives as Cost Centres. This will help you
track a sales executive's performance, in terms of cost and revenue generated.
You will then have the following Cost Centre structure (shown here only for the Marketing
Department):
Primary Cost Centre - Marketing
Under Marketing:
Salesman A
Salesman B
Salesman C
Allocate expenditure incurred on sales by the salesmen, as well as the sales generated by them,
directly to their Cost Centres. The allocation is done online at the time of transaction entry. This
prevents allocation problems at the end of the period, when you find a large number of
transactions not allocated.
By allocating expenses and sales transactions to the salesmen, you are setting up a valuable
information system that tracks the performance of your salesmen.
More:
Creating a Single Cost Centres
Altering a Cost Centre
Creating a Single Cost Centre

To create a Cost Centre, set Maintain Cost Centres to Yes in F11: Features. It is advisable not
to set More than ONE Payroll/Cost Category to Yes, unless required.
By default, Tally activates the Cost Centre feature for Ledger accounts under Sales Accounts,
Purchase Accounts, Expense and Income groups.
Go to Gateway of Tally> Accounts Info.> Cost Centres> Create (Single Cost Centre)
The Cost Centre Creation screen displays.
A brief explanation on each of the fields in the Cost Centre Creation screen follows.
Name
Enter the name of the Cost Centre in this field. For example, Bangalore.
alias
Enter an alternative name, if required. For example, the Cost Centre Bangalore can be referred to
as Head Office or by a code number.
Under
Select the parent Cost Centre under which the Cost Centre needs to be created from the List of
Cost Centres. If you want the Cost Centre to be a Primary Cost Centre, select Primary from the
list.
Refer Creating Cost Centres for Job Costing for details on using Cost Centres for Job Costing.
Note: Unlike Groups, you can allocate transactions to Primary Cost Centres. However, you
should do so when you do not have Sub Cost Centres under the Primary Cost Centre. It is
suggested that you allocate transactions to the lowest levels (similar to ledgers).
Displaying a Single Cost Centre

To display the details of Cost Centre masters
Go to Gateway of Tally > Accounts Info. > Cost Centres > Display (under Single Cost Centre)
The Cost Centre Display screen appears. It is not possible to make any modifications to the
Cost Centre master in the Display mode. You can only view the details in this mode.
Altering a Cost Centre
To alter an existing Cost Centre

Go to Gateway of Tally> Accounts Info.> Cost Centres> Alter (under Single Cost Centre)
The Cost Centre Alteration screen appears. Make the necessary changes and Accept to save.
Deleting a Cost Centre

You can delete a Cost Centre from the Cost Centre Alteration screen by pressing ALT+D.
You can delete a Cost Centre only if
• It does not have any Cost Centres created under it.
• It is not used in any transactions.
Explanation on Buttons for Cost Centres in Single Mode

Groups, Ledgers, Voucher Types
It enables you to switch to these areas without having to quit from the current screen.
F11: Features
To change company features. Refer Activate Company Features [F11] for more details.
F12: Configure
To change the configuration of master information.
Creating Multiple Cost Centres
You can create multiple Cost Centres in this mode.

Go to Gateway of Tally> Accounts Info.> Cost Centres> Create (under Multiple Ledgers)
The Multi Cost Centre Creation screen displays.
A brief explanation on each of the fields in the Multi Cost Centre Creation screen follows.
Under Cost Centre

Select a particular Cost Centre as the parent Cost Centre if you wish to create a number of cost
centres under it.
If you do not want to be limited/ restricted to one parent Cost Centre while creating Cost Centres,
choose All Items.
Name of Cost Centre

Enter the name of the Cost Centre to be created. The alias option is not available in this mode.
Select single alter to give aliases to Cost Centres created in multiple mode.
Under
The Parent Cost Centre selected from Under Cost Category field displays automatically. If All
Items is selected from Under Cost Category, you have the option of selecting the Cost Centre
from the List of Cost Centres. Refer Cost Category for further details
Displaying Cost Centres in Multiple Mode

You can display the details of multiple Cost Centres at a time in this mode.
Go to Gateway of Tally> Accounts Info.> Cost Centres> Display (under Multiple Cost Centres)
Select a Cost Centre or All Items to display the details of all the Cost Centres under it. It is not
possible to make changes to any of the fields in the Display mode.
Altering Cost Centres in Multiple Mode
You can alter multiple Cost Centres at a time in this mode.

Go to Gateway of Tally > Accounts Info.> Cost Centres > Alter (under Multiple Cost Centres)
Use <backspace> to move back to the field Under Cost Centre or use the button F4: Parent to
change parent. Make the necessary changes in the respective fields and Accept to save.
Note: You cannot delete a Cost Centre in multiple mode
Explanation on Buttons in Multiple Mode

F4: Parent
It is used to move the cursor to the field Under Cost Centre.
F4: New Parent
It is used to bring up the list of Cost Centres to select a new parent Cost Centre.
F6: Skip Name/Edit Name
It is used for faster data entry when you need to alter only the Category and the Parent Cost
Centre, but not the names. When you skip names, you might change the Category or the parent
Cost Centre to one, which belongs to another Category. Since this violates categorization rules,
Tally displays an error message after you accept the screen.
F7: Skip Parent/Edit Parent
It is used for quicker data entry, when you do not need to alter the parent Cost Centres but only
the name of the Cost Centre. The error, that also occurs with F6: Skip Names, should be avoided
here.
Groups, Ledgers, Cst Cat:
F11: Features:
To change Company features, refer Activate Company Features [F11] for more details.
Cost Category
Cost Categories are useful for organisations that require allocation of resources to parallel sets of
Cost Centres. Such organisations would usually be project oriented.
Most organisations would not need Cost Categories. The proper use of Cost Centres itself would
offer the same benefits. Cost Categories could increase data entry work and make it more
complicated. Hence, before opting for Cost Categories, evaluate whether you actually need this
option. Always attempt to first use Cost Centres.
Use of Cost Categories
By using Cost Categories you may allocate, in parallel, a transaction to more than one set of Cost
Centres. The following example illustrates the use of Cost Categories.
The Primary Cost Centres such as Marketing, Finance and Manufacturing can now belong to a
category - Departments.
The Salesmen A, B and C can be Cost Centres under a Category - Executives.
Similarly, you can create a new Cost Category 'Projects' under which Cost Centres such as
Airport construction, Road construction and Buildings may be created. The classification appears
as in the following matrix.
Specify a Cost Category to allow allocation of only revenue items or items of both revenue and
capital nature. In this example, allow both for Departments and Projects Categories and only
revenue for Executives.
Salesman A incurs conveyance expenses of Rs. 1000. If he has incurred it for marketing, allocate
this amount to the Cost Centre - Marketing and his own Cost Centre - Salesman A. (Allocate this
while entering a payment voucher debiting Conveyance and crediting Cash.) If the salesman now
incurs expense for the project Buildings, allocate to the Cost Centres - Salesman A and
Buildings.
Allocate an expense to one or more Cost Centres. It is not essential to always allocate expenses
to all Cost Centres. If you did not create Cost Categories, you would have been able to allocate
the expense to either the Project Buildings cost centre or Salesman A, not to both.
You can obtain details of conveyance expenses incurred by Salesman A on Marketing as well as
on the Buildings project when you have Cost Categories.
You cannot, however, extract a single report giving details of marketing expenses incurred by
Salesman A on the Project Buildings. These are different Cost Categories and cannot be merged.
If such reports are required, you must create ledgers such as Conveyance - Marketing which will
help you generate the desired report.
By allocating expenses to parallel Cost Centres under different categories, you are simply
assigning the amounts to them; the amount does not increase. In the above example, the
conveyance of Rs. 1000 remains an expense of Rs. 1000 only. Tally performs an automatic
reconciliation on real-time basis, saving you the effort of reconciling Ledgers and Cost Centres.
Creating a Single Cost Category
To create a Cost Category, set Maintain Cost Centres to Yes in F11: Features and then set
More than ONE Payroll/Cost Category to Yes.
By default, it is set to No. Tally creates a single Cost Category called Primary Cost Category
and allocates all Cost Centres created, prior to enabling this feature, to this category. You can
create new cost categories, and alter the existing Cost Centres to allocate them under required
Cost Categories.
To create a Cost Category
Go to Gateway of Tally > Accounts Info. > Cost Categories > Create (under Single Cost
Category)
The Cost Category Creation screen displays.
A brief description on each of the fields in the Cost Category Creation screen follows.
Name
Enter the name of the Cost Category. For example, Products.
Note: There is no sub-classification of Cost Categories and hence you do not find an Under
option. Though there is a Primary Cost Category, it is not a parent of other categories.
(alias)
Enter an alias if you wish to call the Category by another name or even by a code number. This
field displays only if you set Allow ADVANCED entries in Masters in Gateway of Tally
>F12: Configure> Accts/Inv Info. to Yes.
Allocate Revenue Items
Set this option to Yes, to allocate all sales, purchase, expenses and income related transactions to
Cost Centres that you create under the Cost Category. Normally, you would enable this option.
However, should you need to allocate only capital/non-revenue items only to Cost Centres in that
cost category, set this to No.
Allocate Non-Revenue Items
You would, usually, disable this option by setting it to No as most Cost Centres need only
revenue allocation. However, should you wish to allocate items of non-revenue (capital) or
Balance Sheet items, you may set it to Yes. Organisations increasingly require allocation of
capital items to Cost Centres. They wish to monitor the capital expenditure incurred on Cost
Centres and measure them against revenue earned. Recognising this trend, Tally has provided
this option.
Note: Enable either revenue or non-revenue items, or both. Do not disable both. Tally sets Yes,
by default, for revenue items and No for Non-revenue items.
Displaying a Single Cost Category

To view the details of the selected Cost Category masters from this mode
Go to Gateway of Tally> Accounts Info.> Cost Categories> Display (under Single Cost
Category)
Select a Cost Category from the List of Categories. The Cost Category Display screen
displays.
You cannot make any changes to the fields in the Display mode.
Altering a Single Cost Category

To alter an existing Cost Category
Go to Gateway of Tally> Accounts Info.> Cost Categories> Alter (under Single Cost Category)
Select the Cost Category from the List of Categories. The Cost Category Alteration screen
displays. Make the changes in the required fields and Accept to save.
Deleting a Cost Category

You may delete a Cost Category that does not have any cost centre under it from the Cost
Category Alteration screen. Use ALT+D to delete it. Tally does not allow deletion of a Cost
Category that has Cost Centres.
Buttons in Single Cost Category screens

Groups, Ledgers, Vch Types
F11: Features
To change company features. A detailed explanation on features has been given in the earlier
section under Gateway of Tally.
Creating Multiple Cost Categories
You can create multiple Cost Categories at a time using the multiple mode.
Go to Gateway of Tally > Accounts Info. > Cost Categories > Create (under Multiple Cost
categories)
The Multi Cost Category Creation screen displays.
An explanation on each of the fields in Multi Cost Category Creation screen follows.
S. No.
This is an auto-generated serial number.
Name of Category
Enter the name of the Cost Category.
Allocations for
Revenue Items
This is set to Yes, by default. However, you have the option of altering it. This denotes whether
you want to allocate revenue items to Cost Centres under it.
Non-revenue Items
This is set to No, by default. You can alter it if you want to allocate non-revenue items to Cost
Centres under it.
Note: There is no Under field as you cannot sub-classify Cost Categories. Cost Categories have
Cost Centres as their sub-classification.
Displaying Cost Categories in multiple mode

You can display multiple Cost Categories at a time in this mode. To display Cost Categories in
the multiple mode
Go to Gateway of Tally> Accounts Info.> Cost Categories > Display (under Multiple Cost
Categories)
The Multi Cost Category Display screen appears. View the details of all the Cost Categories
created. It is not possible to make any changes in this mode.
Creating Cost Centres under Cost Categories
To create a Cost Centre under a Cost Category, set More than ONE Payroll/Cost Category to
Yes
Go to Gateway of Tally > Accounts Info. > Cost Centre > Create (under Single Cost Centres)
Category
This field appears only when you have opted for More than ONE Payroll/Cost Category in
F11: Features. Else, Tally automatically creates a Primary Cost Category to which all cost
centres are assigned. You will usually not need more than one cost category and should not use it
until you are absolutely sure that the same information is not available in Cost Centres.
Create a primary cost centre, Bangalore.
All the other fields are described in detail in the section Creating Cost Centres in Single mode
Displaying and Altering Cost Centres under Cost Categories in Single mode is similar to
Displaying and Altering Cost Centres in Single mode explained previously. The only additional
field is Category.
Creating Multiple Cost Centres under Cost Categories
Go to Gateway of Tally> Accounts Info.> Cost Centres> Create (under Multiple Cost Centres)
This is a quick way to create a number of Cost Centres at a time.

Under Cost Centre
Select a particular Cost Centre as the parent cost centre if you wish to create a number of Cost
Centres under it. In the above screen, Finance has been selected and the cost centres Taxation,
Management Accounts and Treasury are created under it. If you do not want to be restricted to
one parent cost centre while creating cost centres, choose All Items. The table Under Cost
Centre has the columns Category, Name of Cost Centre and Under. If the parent Cost Centre
(the field 'Under Cost Centre') is not 'All Items', the cursor skips the Under field.
Category
Select the Category under which the Cost Centre will be created from the List of Categories or
create a new category by pressing [Alt+C]
Name of Cost Centre
Enter the name of the new cost centre. The alias facility is not available in this mode. Select
single alter to give aliases to Cost Centres created in multiple mode.
Under
Select the parent Cost Centre from the List of Cost Centres. The list displays only the Cost
Centres that belong to the selected Category.
Displaying and Altering Cost Centres under Cost Categories in Multiple mode is similar to
Displaying and Altering Cost Centres in Multiple mode explained in the respective chapters. The
only additional field is Category.
Error in Categorisation of Cost Centres:
PARENT BELONGS TO ANOTHER CATEGORY!
This error occurs when you try to assign a cost centre to a parent cost centre belonging to a
different category. In most places, Tally prevents you from making this error, by not displaying a
cost centre belonging to a different category.
However, this action is not possible when you are altering a cost centre in multiple mode,
selecting 'All Items' from Under Cost Centre (You may have chosen to skip either or both).
You would have changed the Category without changing the name and the parent. However,
Tally is able to ascertain this error only when you accept the screen.
Budgets
A budget is a plan prepared for the flow of funds in an organisation. It contains financial
guidelines for the future plan of action for a selected period of time.
A budget helps to refine goals and use funds efficiently. It provides accurate information for
evaluation of financial activities, aids in decision making and provides a reference for future
planning.
• Multiple budgets can be created for specific purposes in Tally. Budgets for Banks, Head
offices, Optimistic budgets, Realistic budgets, Pessimistic budgets, and so on can be
created. Departmental budgets like Marketing Budgets, Finance Budgets, and so on, can
also be created. Budget figures can be used in Tally to compare actuals and variances.
In Tally, you can create, alter and delete a budget.
Activating Budgets Feature
To activate the Budgets feature in Tally:
• Select F11: Features > Accounting Features
• Set Maintain Budgets and Controls? to Yes.
• Accept to save.
More:
Creating a Budget
Alter a Budget
Alter a Budget
You can modify a budget, using the alter option.

• Go to Gateway of Tally > Accounts Info > Budgets > Alter
• In the Budget Alteration screen, modify the fields as required. Change the period or
change budgets of Groups, Ledgers and Cost Centres.
Note: Set/Alter Budgets is set to No by default. Set this option to Yes to alter.
Deleting a Budget
To delete a budget
• Go to Gateway of Tally > Accounts Info > Budgets > Alter
• Press Alt+D.
Budget Variance
Trial Balance and Group Summary have a feature called Budget Variance. The Budget Variance
button (Alt+B) is active if Budgets feature is enabled and at least one budget created. Budget
Variance displays Budgets, Actuals with percentage and Variance from the budget with
percentage.
1. Budget Variance can be accessed from:
○ Gateway of Tally > Display > Trial Balance to display the Trial Balance screen.
○ Gateway of Tally > Display > Account Books > Group Summary and select a group
from List of Groups to display the Group Summary screen.
2. Click on Budget Variance (Alt+B) from the toolbar to display the Budget Analysis screen.
3. Select from the List of Budgets for Budgets/Scenario.
4. Three columns display Budget, Actuals and Budget Variance, respectively.
Introduction
A voucher is the primary online document for recording transactions. Transaction recording and
analysis are greatly facilitated by having specific formats for different types of transactions. Tally
provides 16 different predefined voucher formats or what it calls predefined types of vouchers.
These are used for recording various transactions. A payment voucher is used for all types of
payments, a receipt voucher for all types of money receipts, a sales voucher for recording sales
transactions, and so on.
These predefined vouchers fulfil your normal transaction needs. They pertain to both accounting
and inventory. Some of these vouchers can also be used differently according to the situation,
e.g., sales vouchers can be used as invoices, vouchers can be post-dated, etc. Such use can be
decided at the time of voucher entry by selecting the appropriate button.
The predefined voucher types can be displayed as follows:
Gateway of Tally > Display > List of Accounts > <Ctrl>+<V> [Voucher Types]
Tally acknowledges the special requirements of some users for more voucher types. These arise
in cases like when you need the same voucher but in different names or separate series of
numbers.
Examples include Cash Payment Vouchers and Bank Payment vouchers where the relevant
predefined voucher is Payment Voucher. You may have two or more sets of Sales Vouchers for
different kinds of sales transactions e.g. Credit Sales, Cash Sales, etc.
You would need to alter a voucher type to change default settings for different information
appearing in vouchers. Using F12: Configure, you can further configure a voucher.
Alter a predefined voucher type

Even if you do not need extra voucher types, you would normally alter the predefined voucher
types to customise them according to your needs, e.g., to control their numbers.
Display or alter each voucher type (by pressing enter or double clicking) after Gateway of Tally
> Display > List of Accounts > Ctrl+V Voucher Types
We shall create a new voucher type to explain the different features. It would also be applicable
to alteration of voucher types including predefined types.
More:
Create a Voucher Type
Creating a Voucher Type
Go to Gateway of Tally > Accounts Info. > Voucher Type > Create
Note: A new voucher type must assume the functions of a predefined voucher type
The Voucher Type creation screen is divided into three sections depending on the various
settings.
Name
Give the name of the new voucher type, e.g., Sales Invoice.
General
Type of Voucher
The type of voucher should be any one of the predefined voucher types (already listed in
introduction). The new voucher type would inherit the properties of this predefined voucher type.
It would function exactly like the predefined voucher.
Abbreviation
An abbreviation is required particularly for unformatted reports, which do not use compressing
techniques. (Tally allows printing of both formatted and unformatted reports). Even if the
Abbreviation is not specified, Tally automatically sets a default name to the Voucher. In this
example, give ‘Purch’ as the abbreviation. Though there is no restriction on the length of the
abbreviation, it should preferably be five characters or less.
Method of Voucher Numbering
This is, perhaps, one reason for your opting for a new voucher type. There are three methods
available:
None
This will disable numbering of such vouchers. If you select this method, no further information
is required.
Manual
This method will allow you to number vouchers of this type yourself. It does not check for
sequence of the numbers and permits you to specify anything you wish in the voucher number
field. However, you may choose to prevent entry of duplicate numbers. If you do, enable the next
field 'Prevent Duplicates'.
1. Prevention of Duplicates is possible if you enable the option at the time of creation. You may
enable it later (by alteration) only if there are no transactions of this voucher type.
2. If you face difficulty because transactions now exist, simply create another voucher type for
preventing duplicates of subsequent voucher numbers.
No further information is required for manual numbering method.
Automatic
This method is both flexible and exhaustive. Use it carefully to give you your desired numbering
system. Select this option to let Tally number the vouchers automatically for you.
Use Advance Configuration
If the Method of Voucher Numbering is set to Automatic, then an additional field to set the
advanced configuration for the Voucher type appears. Setting this field to Yes, Voucher Type
Creation (Secondary) screen appears. Refer to Use Advance Configuration for more details.
A further discussion on these options is necessary.
Use EFFECTIVE dates for vouchers?
Select Yes if you want to enter effective dates for vouchers. You would opt for this if you have
instances where a transaction under consideration for overdue/ageing analysis is recorded
currently but will take effect from another date. If effective date is entered, the overdue/ageing
will be considered from the effective date and not from voucher date.
Make Optional as Default
Setting this option to Yes, will set your Voucher to Optional Voucher by default. Refer to
Optional Vouchers for further details.
Use common narration?
Select Yes to give a common narration for the entire voucher. Tally vouchers can have multiple
entries. Hence, you may wish to give a common narration for all the entries of the voucher or a
separate narration for each entry or both. Select Yes even when you want both. Select No if you
do not want a common narration.
Example of common narration in a voucher:
Narrations for each entry

Select Yes if you want to give a separate narration for each entry of a voucher. This would be
applicable for a multiple entry voucher where you want separate details for each entry. Select No
if you do not want separate narration for each entry.
Note: The option to create an Excise Voucher type appears in the General section if, the
Excise feature is enabled in F11 features.
Printing
Print after saving voucher?
If you want to print every voucher after entering it, select Yes, else select No. This is suitable for
an online environment where you use the Tally printed voucher as the formal voucher.
Remember, however, that the transaction is already recorded and posted and should you wish to
make corrections to the printed voucher, you must alter the Tally voucher online and print it out
again.
Note: Depending on the Type of Voucher you have selected to create or alter, different
printing features appear in this field.
Name of Class
You can create classes by entering the class name in this section. A detailed discussion on
Voucher class creation is covered in Voucher Classes.
Use Advance Configuration

If the Method of Voucher Numbering is set to Automatic, then an additional field to set the
advanced configuration for the Voucher type appears. Setting this field to Yes, Voucher Type
Creation (Secondary) screen appears.
Starting number
Give the number for the first voucher. Usually it is 1. You can set it to any number you want.
Tally will auto-increment from this number for subsequent vouchers. However, the numbering of
vouchers also depends on other variables supplied by you, which follow hereafter.
Width of Numerical Part
You may leave it blank to let Tally automatically adjust the width according to the number.
However, for more aesthetically aligned look in reports, you may keep a fixed width, e.g., 3.
Prefill with ZERO?
When the width is specified, the digits before the number is blank if 'No' and zeroes if 'Yes'.
E.g. 001 1
010 10
PEU/001/06-07
PEU/1/06-07
PEU/ 1/06-07
Restart Numbering
Voucher Numbering may be restarted with the starting number (as specified) at intervals selected
by you - Daily, Monthly, Never, Weekly or Yearly. You must give the date whence numbering
should restart under the field Applicable from. The date must be the first day of the month. You
may specify more than one Restart dates. For example, should you wish to renumber your
vouchers from 01 June 06 on yearly basis, you must specify it in the next field. This would retain
the numbering system in the prior period. If, however, you want to change the numbers from the
beginning from monthly to yearly basis, simply alter the first field itself.
Prefix Details
If you want the voucher numbers to be prefixed with some fixed information, give the
information here. Examples of prefix details are:
1. month of the voucher as given above- 'April/'
2. company info like 'TSPL/'
3. even fixed number series like '1000'
Note: The numeric portion begins immediately after the prefix information. Therefore, be sure to
give a space or a slash '/' or some such character should you want a separation, e.g. we have
specified April/. The slash would cause the voucher number to appear as April/001, otherwise it
would be April001. This facilitates simple usage for fixed number series appearing as 200100001
where 2001 is the prefix, and 00001 is the starting number with a width of 5, and with leading
zeros.
You can choose different prefix information for different periods or let one continue. The prefix
continues from the date you mention under 'Applicable from' till the next date that you may give
under 'Applicable from'. Hence, we have chosen to change the prefix from April to May when
the month changes. Please note, however, that if we omit to change the prefix for the subsequent
months (i.e. do not give 'Applicable from' date for the month), your voucher numbers for even
June, July etc would contain the prefix 'May/'.
Suffix Details
You can also give fixed suffix information for the voucher number. The same rules and effects as
for Prefix Details apply.
Voucher Classes
Voucher Classes are available for all major voucher types and the Cost Centres can be allocated
if classes are used. Automation of cost centre allocation has met the need of 'percentage
allocation' based on predefined figures.
Cost centre classes affect all voucher types. For further details refer to Cost Centre Classes.
Voucher Classes for Payment, Receipt and Contra Vouchers

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

Groups other than Bank or Cash groups should not be selected. This is used to exclude Cash or
Bank Groups that are not to be used in this class to pay out the money. In our example, we want
to exclude Cash and Credit Cards.
Include these Groups
Groups other than Bank or Cash groups should not be selected. You might exclude a top level
group but include its sub-group.
Ledger Name
Selecting the ledger account that will be used to pay out the money will eliminate the need to
select it during entry. In this case, it is BarcSlays Bank. In a receipt voucher, you will select the
ledger account into which monies will be received. You may even select 'Not Applicable'. The
purpose of selecting 'Not Applicable' will be to permit Single Entry mode and at the same time
retaining the option of selecting the account during entry.
Note: Exclude or Include Groups are irrelevant when you specify a Ledger Name for which the
class is created. They are useful when you select 'Not Applicable' .
In case you do not require split payments, you could create only one class with nothing in
include/exclude Groups and without any ledger Name. A single class does not require class
selection and is a rapid way of using Single Entry mode with full functionality of all ledgers
available.
Accept the class table and the voucher type alteration. You may use [CTRL]+[A] combination.
More:
Payment Voucher Entry with Classes
Purchase Entries in Invoice mode (without classes)
Purchase Voucher Classes
Additional Accounting Entries
Voucher Classes for Journals
Payment Voucher Entry with Classes
Select Voucher Entry at the Gateway of Tally. Press F5:Payment. You have to select a class or
Not Applicable if no class is desired for this entry. If Cost Centre Class has been set, it can be
selected too.
The entries will be made as follows:
The Voucher Class is Barclays Bank Payment. We have selected a Cost Centre Class called
Departments too. That will be discussed later. Note that you do not have to select the bank
account and the entries are not in the regular Dr/Cr format. Data entry in Tally was already very
rapid. It is now faster than before!
Purchase Entries in Invoice mode (without classes)
Purchase Vouchers can now be created in Invoice mode. You can enter the suppliers' invoices in
the same way as they physically appear.
Set-up Invoice Mode entry for Purchase transactions

1. Select F11:Company Features.
2. Select F1: Accounting Features
3. Set the option 'Allow Invoicing' to Yes
4. Enter Purchases in Invoice Format? Set it to Yes
5. Accept the screen using Ctrl+A.
Entry of Purchase vouchers in Invoice mode

Select F9:Purchases. Select As Invoice button or use CTRL+V. This button is a toggle for
Invoice and Voucher modes. You may want to use the voucher mode for more complex entries.
Entries are exactly like sales invoices and hence are not discussed.
The treatment of additional cost of purchases needs elaborating.
Additional Cost of Purchases

If it is desired to add the other purchase expenses like freight and import duty to the cost of the
item, you would have activated the option in F11:Company Features 'Track Additional Costs of
Purchases'. In voucher mode, the additional cost details have to be filled in after the allocation of
each purchase item.
In Invoice mode, the treatment of additional costs on stock items is automated by altering the
parent group master details of the expenses.
In many situations, more than one item is purchased where the expense that is incurred for them
is charged as a lump-sum. However, to give an effective cost including the expense to each
purchased item, you would earlier give additional costs of purchase for each item. That method
though very flexible and practical could be tedious. That process is now automated and
allocation of the expense to stock item can be done on a predefined basis.
The following set-up activity is required to be carried out:
1. Alter the Parent Group of the expense ledger accounts, e.g. Direct Expenses. You will
find a new option - Method to Allocate when used in Purchase Invoice. If you want to
appropriate the ledger accounts under this group to stock items by either Quantity or
value, you must select the option. Select Appropriate by Qty for our example.
Now if freight belongs to the group Direct Expenses, the amount will be apportioned by quantity,
i.e., in the ratio of 1:5. If however, the parent group does not have an allocation method or is set
to No Appropriation or Not Applicable, the amount of freight will not be apportioned to the items
and will simply remain in the financial books as expense.
Purchase Voucher Classes
Purchase Voucher Classes are templates where you can restrict accounts to be used in entries as
well as automate accounting entries for items and expenses.
You can either alter the existing Purchase Voucher Type or create a new voucher type based on it.
From Gateway of Tally > Accounts Info > Voucher Types
The item Name of Class is below Effective Dates for Vouchers and above the Numbering Table.
Give a name to the class by simply typing it, e.g. Imports. You may create more than one class.
The class table is now to be completed.
Exclude and Include Groups have been discussed before and do not require further elaboration.
Default Accounting Allocations
Each Stock Item in the invoice can be allocated to the financial (nominal) account mentioned
here. Hence, all the stock items that will be entered in this class will automatically affect the
Nominal ledger account Purchase – Imports. Of course, the stock item record remains as it is and
can be viewed separately.
The allocation cannot be split up at present but in future releases you will be able to split this to
cater to Tax inclusive prices.
Expenses and other charges like Import Duty, Freight, VAT, Sales Tax can be specified here
which will be calculated automatically on the Type of Calculation and Value basis. For
explanation on each Type of Calculation, refer the Appendix.
We have selected Freight which is an account under the group Direct Expenses.
Type of Calculation
We select User defined value as we would like to input the amount of freight charged on the
invoice.
However, we would like Freight expenses to be apportioned to each stock item based quantity
and we want the apportionment done automatically.
Auto-allocation of Additional Entries to Stock Items Purchased
(This method is not applicable for sales invoices)
The Group Direct Expenses had been altered earlier to allocate by quantity. Hence, the allocation
will be done automatically based on quantity.
Your purchase voucher class has been set-up. You can have more than one additional accounting
entries. You can also have more than one Class.
Voucher Classes for Journals
Classes allow Journals to handle Forex Gain Loss Adjustments for companies having Multi-
Currency Accounts. You would create a 'class' in the normal way (Accounts Info > Voucher
Types > Alter > Journal). And having selected the class during Voucher Entry, will find only
those Ledger Accounts appearing which have a Gain/Loss to be adjusted as of the date of
voucher and auto-calculation of these amounts.
Voucher Classes for Debit Notes and Credit Notes
Voucher classes for Credit Notes are similar to sales invoices except for one important inclusion.
You can set the class for interest entries to enable adjustment of interest payable. If the Interest
option is selected, the other sales invoice-like options will not be available. A separate class may
to be created for entries like Sales Returns. Since Sales and Purchase Invoice classes have
already been dealt with, we shall not elaborate on this behavior anymore.
Debit Note classes can be set for interest entries only. Classes for other entries are not available
as the invoice mode of entry is not possible for Debit Notes.
Classes for interest entries are covered under Interest Calculations.
Voucher Classes for Stock Journal
Stock Journal classes allow you to handle transfers from one location (Godown) to another, for
companies having Multi-Location Inventory and at least two location/Godowns created. Once
the class is selected, you will need to specify the Destination and simply provide the list of items
to be transferred. Through this class all items/batches thus selected will be exactly mirrored to
the destination, including Batch Number, Rate and Value.
Go to Accounts Info > Voucher Types > Create
Select the Stock Journal Voucher from the List of Voucher Types. Enter all the fields as per your
requirement. Refer Creating a Voucher Type for more details.
To create a Stock Journal Voucher Class, enter a name in the Name of Class field. (Eg:
Transfer)
The Class: Transfer screen is displayed. To create a class for inter-godown transfer set the option
Use Class for Inter-Godown Transfer to Yes.
Refer Voucher Classes for Stock Journals in Job Costing for more details.
Cost Centre Classes
The purpose of Cost Centre Classes is to facilitate predetermined allocation of ledger accounts
(like expenses and incomes) to cost centres during voucher entry. Allocation to cost centres can
be made while using voucher classes and the cost centres can be 'classed' too.
How does it work?

Automation of cost centre allocation involves 'percentage allocation' based on predefined figures.
Cost Centre Classes are defined where percentages at which allocation is to be made are given.
Cost centre classes affect all voucher types. In voucher entry, depending upon the cost centre
class, the allocation will be carried out in the background without the allocation screen appearing
at all.
More:
Set up required for Cost Centre Classes
Voucher Entry with Cost Classes
An explanation of 'Types of Calculation'
Set up Required for Cost Centre Classes
Before you select classes, it is advisable to create the cost centre structure. Hence, create your
cost categories and cost centres before creating classes.
Draw out on paper the Classes required and indicate which cost centres will be affected for each
class. For example, You might have the following structure:
Divisions
1. Export
2. Wholesale
3. Retail
Departments -
4. Finance
5. Marketing
Where Divisions and Departments are Cost Categories the others are cost centres.
Now, you want to allocate sales to the following Cost Centre Classes:
6. Export - to allocate 100% of Export sales to the cost centre Export
7. Wholesale - to allocate 100% of wholesale sales to the cost centre Wholesale
8. Retail - to allocate 100% of retail sales to the cost centre Retail
You also want to allocate all the sales to the Marketing Department
You want to allocate Marketing Expenses pro-rata in the following manner :
1. Export – 60%
2. Wholesale – 25%
3. Retail-15%
100% to Marketing Department
With this structure, let us now set up the classes.
Set up Cost Centre Classes

At the Gateway of Tally, select F11: Features > Accounting Features
Set Use Pre-defined Cost Centre Allocations during Entry to Yes
(The other options can remain as previously set and are not discussed here.)
You now bring up the Cost Centre Classes creation screen. Type in the Class names and select
the Categories and the respective cost centres. Specify the percentage of allocation. After entry,
your auto-cost allocation screen will appear as follows :
We have created the Cost Classes as Export, Wholesale, Retail and Marketing Expenses.
Divisions and Departments are cost categories. Export, Wholesale and Retail are cost centres
under Divisions. Marketing Group is a cost centre under Departments.
Although the names of the class and the cost centres are the same in the example, you need not
have them with same names.
Voucher Entry with Cost Classes
Each voucher now contains the Cost Class option at its head. Select Not Applicable in case you
want to allocate manually. Select a cost class to auto-allocate according to the predefined
percentages set in that class.
We will take two examples, sales and payment.
In sales, we will select Export as the Cost Class.
Go to the Voucher Entry Screen
Select F8: Sales
You have the following options:
Your voucher type : Sales. You could select another voucher type if required.
Class
This is the Voucher Class which automates ledger allocation and additional accounting entries
Cost Centre Class
Select one of the classes created earlier, Export in this case.
Now enter the sales invoice as usual. The cost centre allocation sub-screen will not come up and
the allocation will be done automatically in the background.
After accepting the entry, check the cost centre displays to verify whether the allocation was
done correctly.
Similarly, when you press F5:Payment, you are presented with similar options. Select
Marketing Expenses in that case. The cost centre allocation sub-screen will not come up and the
allocation will be done automatically in the background.
Check the cost centre reports for allocation.
You may even use PgUp or alter the voucher to display the allocation made. It would show the
allocation in the voucher.
Example
You could combine Voucher Class and Cost centre class to maximize automation!
An Explanation of Types of Calculation
As Additional Excise
In the Indian sub-continent, a manufacturing tax, or Excise is levied. For some products, a
supplementary levy on the 'Basic Excise Duty' is charged, or 'Additional Excise Duty'. This is a
surcharge calculation. For example, an Additional Excise Duty of 10% on the Basic Duty. While
the calculation method is identical to 'As Surcharge' (see below), the result is to provide a 'Total
Excise Payable' calculation accurately during Invoice printing.
As a Flat Rate
When you wish to specify a standard mark-up/down on an invoice. For example, 100.00 for
every invoice, independent of the qty/value of the invoice.
As Surcharge
When you wish to calculate the value based on the immediately preceding figure. For example, a
Sales Tax of 10% is applicable on an invoice, which would be calculated on the value of goods
sold. On this, a 'Surcharge' of 5% - i.e. 5% of the Sales Tax value is applicable.
As Total Amount Rounding

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

This allows you to specify a value while creating the invoice itself. Normally, you would use this
when the basis of calculation is neither Value nor Qty dependent, and therefore, needs to be
entered every time you create an invoice.
Based on Quantity
In case of calculations based on the 'Total Qty' supplied. For example, you may have Freight or
Forwarding charges as 2.00/Kg, and if the total qty supplied in the invoice is 200.000 Kg, then
the amount should become 400.00. The 'Value Basis' will also need to be provided as '2.00/Kg' or
'0.50/Pc' as the case may be.
On Current Sub Total

In certain environments, taxes are applicable on the Total Goods Value as well as supplementary
charges such as 'Excise Duty', 'Packing Charges' etc. Normally, when the tax calculation method
is specified as 'On Total Sales' (see below), the calculations are based on the Total Goods Value
only. When you wish the supplementary charges to be included, then you would set 'On Current
Sub Total' as the type of calculation.
On Item Rate
Typically used for both VAT as well as Excise Duty style calculations. Here, you would have
specified the Rate of Tax applicable for each Stock Item, and you would want only those items to
be used for calculation purposes which equals this Rate of Tax. The advantage is to be able to
mix multiple Tax Rate products in the same Invoice, and yet get the correct ones picked up for
each Tax bracket.
On Total Sales
The most common basis of Tax Calculation is on the total value of goods/services. This method
would calculate using the sum of Stock Items used in the invoice.
Currencies (Multiple currencies and foreign exchange)
Many Organisations have transactions in more than one currency. Such transactions have to be
recorded either in the base (home) currency or in the foreign currency. If the transactions are
recorded in home currency, the rate at which the foreign currency is exchanged should be
recorded as well. At times you need to record the transaction in the foreign currency itself when
you maintain the balance of the concerned account in foreign currency. Tally uses the term base
currency for the currency in which your account books are kept. Foreign Exchange is used
interchangeably with foreign currency. The base currency is specified while creating the
company.
Tally makes it easy to manage multiple currencies, automatic calculations of exchange rates,
automatic conversion of any currency used to record a transaction to the currency of the account,
etc.
The Balance Sheet and Profit & Loss Account of the company is maintained in the base
currency. Conversion of foreign currency account balances is done as per rules set by you.
More:
Enabling Multiple Currency in Tally
Enabling multiple currency in Tally
Enable Multi-Currency feature to view and enter transactions in multiple currencies.

2. Select F11: Features > Accounting Features > to display the Company Operations
Alteration screen
3. Set Allow Multi-Currency? to Yes
4. Accept to Save.
Multi Currency feature is now enabled.
Currencies menu
View the Currencies menu from Gateway of Tally > Accounts Info > Currencies.
More:
Create a Currency
Alter Currency
Rates of Exchange
Creating a Currency
Use ASCII Special Characters with [Alt] key combination if your keyboard does not have the
symbol. Utilities like Character Map (Start > All Programs > Accessories > System Tools) in
Windows shows the key combination for most symbols. This might be different on some
notebook computers, refer to the computer's user manual or the vendor.
You cannot assign a duplicate currency symbol for a company in Tally.

The Key combinations for a few currency symbols are given below:
1. Alt + 156 –Pound Sterling - £
2. Alt + 0165 – Japanese Yen - ¥
3. Alt + 0128 – Euro - €
4. Use the Dollar and the Rs. Symbol from the keyboard
To create a foreign currency
1. Go to Gateway of Tally > Accounts Info. > Currencies > Create
2. Enter the currency symbol in Symbol. This symbol appears in your reports wherever
applicable.
3. Enter the name of the currency in Formal Name.
A formal name is required to distinguish different currencies with the same symbols. For
e.g. you have created two companies (ABC and PQR) in Tally. ABC and PQR have
different set of currencies. ABC uses symbol $ for Australian Dollars and PQR uses the
symbol $ for U.S. Dollars. The formal name distinguishes two different currencies with
the same symbol when you compare accounts of two companies.
The company that is loaded first retains the original symbol for display purposes. The
other company's currency symbol will be prefixed with the first letter/first few letters (to
make it unique) of the formal name. Here, if ABC is loaded first then the symbol $ is for
Australian Dollars and in PQR (loaded next) the symbol $ is prefixed with the letter U
(first letter of its formal name).
e.g., US Dollars, Pound Sterling, Indian Rupees, Omani Rial, etc.
Note: You cannot assign a duplicate Formal Name for a company in Tally.
4. Enter the number of decimal places for the currency in Number of Decimal Places. E.g.
Currencies with 2 decimal places like paisa and currencies with three decimal places like
dinar. There are currencies that do not have decimal places, e.g., Vietnamese Dong.
5. Tally has two formats for displaying an amount, viz., in millions and in lakhs. 1000000 (one
followed by six zeroes) in millions format would appear as 1,000,000 and lakhs would
appear as 10,00,000.
Selecting No means you want amounts to appear in lakhs.
Note: You can always specify the appearance of numbers in specific reports, e.g. In Profit &
Loss Account display, press [F12]: Configure to change scale factors for values.
6. Set Is Symbol SUFFIXED to Amounts? to Yes for the symbol to appear after the amount.
Set to No for the symbol to be prefixed to the amount.
7. Set Put a SPACE between Amounts and symbol? to Yes to apply a space between amounts
and symbol.
8. Enter the symbol for decimal portion of currency in Symbol for Decimal Portion of
Amount. E.g. Ps. for Paisa.
9. Enter the number of decimal places for printing the amounts in words in Decimal Places for
Printing Amounts in Words. This number should be equal to or lesser than the number
specified in Number of Decimal Places field.
Alter Currency
You can modify or delete a currency master using the Alter option. Rates of Exchange can also
be altered from here.
To alter a currency master:
1. Go to Gateway of Tally > Accounts Info. > Currencies > Alter
2. Select a Currency from the Currencies list (displayed if there is more than 1 currency)
3. In the Currency Alteration screen alter details as required. For details see Creating a
Currency Master
Displaying a Currency
The Currency Display screen displays the details and rates of exchange for a selected currency.
To display the Currency screen:
1. Go to Gateway of Tally > Accounts Info. > Currencies > Display
2. Select a Currency from Currencies list (displayed if there is more than 1 currency)
3. Enter to view the details
Deleting a Currency
To delete a Currency:
1. Go to Gateway of Tally > Accounts Info. > Currencies > Alter
2. Select a currency from the Currencies list (displayed if there is more than 1 currency)
3. Press Alt + D in the Currency Alteration screen to delete
Rates of Exchange
Rates of Exchange is a feature wherein you can enter the rate of foreign currency for a specific
date. Foreign exchange variations occur every day with different selling and buying rates. Rates
of Exchange helps you apply the rate for the given date in your transactions.
To open Rates of Exchange:

1. Go to Gateway of Tally > Accounts Info. > Currencies > Rates of Exchange
2. The Multi-Currency Alteration screen is displayed
3. Enter the date for which the exchange rate is applicable
4. Enter the Standard Rate (optional) which is used to calculate variances from the actual
transaction rates
5. Enter the Selling Rate (your selling rate)
6. Enter the Buying Rate (your buying rate)
7. Accept to Save
Note: Last Voucher Rate is displayed if any voucher has been entered earlier.
Selling Rate – Specified Rate

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

Buying Rate is your buying rate (as opposed to bank's buying rate) used in payment vouchers.
The actual rate at which the currency was last used is displayed and cannot be changed.
The specified rate is used for calculating foreign exchange variances only in case there is no
standard rate.
Inventory Information
The Inventory Info menu lists the masters, through which you can provide Tally the details of
your company’s inventory.
Go to Gateway of Tally > Inventory Info.
Configuring F12:Configure and Setting F11: Features
You can organise the type of information and the level of details that you require, using F12:
Configure and F11: Features. You can enable the desired settings. Tally allows you to alter most
of the settings at any point of time.
F12: Configure
To configure the settings for Inventory Masters
Go to Gateway of Tally > F12: Configure > Accts/Inv Info.
The settings pertaining to Inventory Masters are set to No, by default. If you reset them to Yes,
the features would become available. Typically, they are additional fields that appear during
Masters creation which enable you to obtain more information and detailed analyses. Refer
Accts/Inv Info Configuration for more details.
F11: Features
There are various settings available under Inventory Features, which determine the information
to be entered during transaction entries. Refer Activate Company Features for more details.
Stock Groups
Stock Groups in Inventory are similar to Groups in Accounting Masters. They are helpful in the
classification of Stock Items. Classification is based on some common behaviour. Stock Groups
enable easy identification and reporting of Stock Items in statements.
You can group Stock Items under different Stock Groups to reflect their classification based on
some common functionality. Grouping enables you to locate Stock Items easily and report their
details in statements.
You can group the items of a particular brand to extract stock of all items of that brand.
Consider that the Stock Items in your inventory are Sony 3.5" disks, Maxell 3.5" disks, Sony
tapes, Maxell tapes, and so on. Create Stock Groups, Sony and Maxell, and classify Sony
products under the group Sony and Maxell products under Maxell. You now have ready details
of all Sony and Maxell products, duly classified.
Create sub-groups under Stock Groups for deeper analysis.
Go to Gateway of Tally > Inventory Info. > Stock Groups
More:
Creating a Stock Group
Creating Multiple Stock Groups
Displaying or Altering a Stock Groups
Creating a Stock Group
Go to Gateway of Tally > Inventory Info. > Stock Groups > Create (under Single Stock Group)
The Stock Group Creation screen displays.
A brief description on each of the fields in the Stock Group Creation screen follows.
Name
Enter the name of the Stock Group to be created. For example, Building Materials.
Under
Specify whether it is a primary group or a sub-group of another group, by selecting from the list.
For example, Primary.
Press Alt + C to create a parent group, if you do not have it in the list.
Can quantities of items be ADDED?
This field pertains to information on measuring the units of the Stock Items that you would
categorise under the Stock Group.
The Stock Items categorised under the group should have similar units for them to be added up.
You cannot add quantities in Kgs to quantities in Pcs.
Note: You can always go back and reset this option after assessing the units of the items in the
group.
Buttons in single mode stock group creation
From the Stock Group Creation screen, you can create any of the Masters listed below with a
single click.
○ Category
○ Items
○ Units
○ Godown
○ Vch Types
The buttons. Currency and Budget, are available only if you opted for the same in F11:
Features.
Creating Multiple Stock Groups

Go to Gateway of Tally > Inventory Info. > Stock Groups > Create (under Multiple Stock
Groups)
Select the parent group under which you want the new groups to be created from the List of
Groups. The group selected is displayed in the Under Group field.
A brief description on each of the fields in the Multi Stock Group Creation screen follows.
Name of Stock Group
Enter the name of the Stock Group.
Under
If you select any group other than All Items in the Under Group field, then this column is filled
in automatically with the selected Group name and the cursor skips this column. This speeds up
data entry.
If you select All Items in the Under Group field, the cursor does not skip this field and allows
you to enter the parent group of each of them.
Items are Addable? (Y/N)
This pertains to information on the Stock Items that you would create under this Stock Group.
The Stock Items created under the group should have similar units to be 'addable'.
Buttons specific to Multi Stock Group Creation screen
F4:Parent
To change the parent entered in the field Under Group when you have sub-groups created under
it. The change affects all the sub-groups created under the parent, meaning, they would now
belong to the new parent.
F8:Skip Details
If Items are addable is to remain the default, that is, remain the same as specified for the parent
Stock Group, use this button. The cursor skips that column which speeds up data entry.
From the Multi Stock Group Creation screen, you can create any of the Masters listed below
with a single click.
• Category
• Items
• Godown
More:
Displaying and Altering Stock Groups
Displaying and Altering Stock Groups

You can display and alter Stock Group in Single mode and Multiple mode.
Displaying Single Stock Group

Go to Gateway of Tally > Inventory Info. > Stock Groups > Display (under Single Stock
Group)
Select the Stock Group whose particulars you want to display from the List of Groups. The
Stock Group Display screen is displayed. This gives information only on the Stock Group
Master and not on any of the balances.
Altering Single Stock Group

Go to Gateway of Tally > Inventory Info. > Stock Groups > Alter (under Single Stock Group)
Select the Stock Group from the List of Groups. The Stock Group Alteration screen displays.
Make the necessary changes and accept Yes to save.
You can delete a Stock Group only from the Stock Group Alteration screen. Select a stock
group from the list and press ALT+D to delete it.
Note: You cannot delete a Stock Group if it has any sub groups or Stock Items created under it.
You need to first delete the sub groups and Stock Items to delete the Stock Group.
Displaying Multiple Stock Groups

Go to Gateway of Tally > Inventory Info. > Stock Groups > Display (under Multiple Stock
Groups)
Select the Stock Group from the List of Groups. The Multi Stock Group Display screen
displays. It displays the entire sub groups of the selected Group. If you select All Items from the
List of Groups, all the groups and sub Groups created are displayed.
Altering Multiple Stock Groups

Go to Gateway of Tally > Inventory Info. > Stock Groups > Alter (under Multiple Stock
Groups)
The Multi Stock Group Alteration screen displays. Make the necessary changes and accept Yes
to save.
Note: You cannot delete a Stock Group from multiple mode.
Stock Categories
The concept of Stock Categories is similar to that of Cost Categories. Refer the section on Cost
Categories to understand the similarity/differences.
Note: This option becomes available in the Inventory Info. menu only if you Set Maintain
Stock Categories to Yes in F11: Features.
Stock Categories offers a parallel classification of Stock Items. You can create Stock Categories
like Floppy Disks and Floppy Drives.
Consider the example given in the Stock Groups. You would know how many 3.5" floppies of
Sony and Maxell are in stock. To know the total stock of floppy disks or any alternative item that
could be used, Stock Categories would be the best option to use. Create a Stock Category called
Floppy Disks and classify both Sony 3.5" diskettes as well as Maxell 3.5" diskettes under the
same. Since the items are substitutes of each other, if one is out of stock, you can offer the other
of the same category.
Stock Query option available under Statements of Inventory (Gateway of Tally > Display)
reveals the strength of Stock Categories.
Note: While configuring F12: Configure and setting F11: Features do not enable features that
you do not need.
Go to Gateway of Tally > Inventory Info > Stock Categories
Note: This option is displayed in the Inventory Info. menu only if you set Maintain Cost
Categories to Yes in F11: Features.
More:
Creating a Stock Category
Creating Multiple Stock Categories
Display or Alter a Stock Category
Creating a Stock Category
You can create Stock Categories and sub categories of Stock Categories to organise your
information.
Gateway of Tally > Inventory Info. > Stock Categories > Create (under Single Stock Category)
The Stock Category Creation screen displays.
A brief description on each of the fields in the Stock Category Creation screen follows.
Name
Enter the name of the Stock Category. Eg: Tablets.
Under
Specify whether it is a primary category or a sub-category of another category. Select Primary
from the list, if you do not have a parent group. Use ALT + C to create a parent if you do not
have the required category in the list.
Buttons in single mode stock category creation
○ Groups
○ Items
○ Godown
○ Budget
○ Vch Types
○ Units
○ Currency
From the Stock Categories Creation screen, you can create any of the Masters listed above with a
single click.
Note: The buttons for Currency and Budget, only if you have enabled the respective features in
F11: Features.
Displaying and Altering Stock Categories
Creating Multiple Stock Categories
Go to Gateway of Tally > Inventory Info. > Stock Categories > Create (under Single Stock
Category)
A brief description on each of the fields in the Multi Stock Category Creation screen follows.
Under Category
Select the parent category under which you want the new categories to be created. If you select
any category other than All Items, all the new categories being created will be created under the
selected category. The column Under is filled in automatically with the selected category and the
cursor skips this column, which in turn speeds up data entry.
Selecting All Items gives you the flexibility of specifying the parent of each new category
created.
S No.
The serial number of the stock category is auto generated.
Name of the category
Specify the name of the Stock Category.
Under
If you have selected All Items in Under Category, you must specify a parent category in this
column.
Buttons specific to Multi Stock Category screen
F4:Parent
To change the parent entered in the field Under Category when you have sub-categories created
under it. The change affects all the sub-categories created under the parent, meaning they would
now belong to the new parent.
F8:Skip Details
If the field Under is to remain the same as specified for the parent Stock Category, use this
button. The cursor will skip that column, which speeds up data entry.
From the Multi Stock Category Creation screen, you can create any of the Masters listed below
with a single click.
• Groups
• Items
• Godown
More:
You can display and alter Stock categories from Single and Multiple mode.
Displaying Single Stock Category

Go to Gateway of Tally > Inventory Info. > Stock Categories > Display (under Single Stock
Group)
Select the Category for which you want to view the display details from the List of Categories.
The Stock Category Display screen displays for you to view the details entered in Stock
Category Master.
Altering Single Stock Category

Go to Gateway of Tally > Inventory Info. > Stock Categories > Alter (under Single Stock
Category)
Select the Category for which you want to alter from the List of Categories. The Stock
Category Alteration screen displays. Make the necessary changes and accept Yes to save.
Deleting a Stock Category
You can delete a Stock Category only if it does not have any sub categories or Stock Items under
it.
Select a Stock Category from the list and press ALT + D to delete it.
Displaying Multiple Stock Categories

Go to Gateway of Tally > Inventory Info. > Stock categories > Display (under Multiple Stock
Categories)
Select the Category for which you want to view the details or select All Items to view the details
of all the Categories created, from the List of Categories.
The Multi Stock Category screen displays. You can view the entire details of the Category and
that of sub categories if any, in this screen.
Altering Multiple Stock Categories
Go to Gateway of Tally > Inventory Info. > Stock Categories > Alter (under Multiple Stock
Categories)
Select the Category for which you want to alter from the List of Categories. The Multi Stock
Category Alteration screen displays. You can make changes in the Masters of the selected
Category and also of the sub categories. Select All Item to make changes in any desired
Category Masters as all the Categories created are displayed in this screen.
Note: You cannot delete a Stock Category from multiple mode.
Delete a Stock Category

You can delete a stock category only if it does not have any children under it. The children could
be stock category or stock item or both.
Gateway of Tally > Inventory Info > Stock Categories > Single Alter
Press [ALT]+[D] to delete the stock category
Stock Items
Stock Item refers to goods that you manufacture or trade. It is the primary inventory entity and
the lowest level of information on your inventory. You have to create a Stock Item in Tally for
each inventory item that you want to account for. In other words, you have to create a stock
ledger account for each item and Tally calls it Stock Item.
Go to Gateway of Tally > Inventory Info. > Stock Items
More:
Creating a Stock Item
Creating Multiple Stock Items
Creating a Stock Item - Advanced Usage
Displaying and Altering Stock Items
Creating a Stock Item
If you are creating Stock Items for the first time, it is advisable to configure the F12: Configure
screen before creating any items. You may configure your groups to enable/disable advanced
mode. Click here for details on Creating Stock Items in Advanced Mode.
Go to Gateway of Tally > Inventory Info > Stock Item > Single Create (under Single Stock
Item)
A brief description on each of the fields in the Stock Category Creation screen follows
Name
Specify the name of the Stock Item.
Under
Select the group from the List of Groups. If you do not want to categorise it under any particular
group that you created, choose Primary.
Press Alt + C to create a parent Group from this field.
Units
Give the unit of measurement of the item in this field. You would normally use this unit for
trading this item.
Use Alt + C to create a new unit, if you do not have one in the list. Refer the section on Units for
an explanation on how to create and alter units of measurement.
Opening Balance
If you already have stock of this item at the time of creating its account in Tally, specify its
balance particulars, i.e., quantity, rate and value.
Buttons in single mode stock item creation
F3:Companies
To switch to another loaded company to create Stock Item.
• Groups
• Category
• Godown
• Budget
• Vch Types
• Units
• Currency
You may choose to create any of the masters listed above with a single click of the buttons.
Note: The buttons Category, Currency and Budget are available, only if you opted for the same
in F11: Features.
More:
Displaying and Altering Stock Item
Creating Multiple Stock Items
You can create multiple Stock Items at a time using this option.
Go to Gateway of Tally > Inventory Info > Stock Items > Multi Create (under Multiple Stock
Items)
Under Group
Select the parent group under which you want the new items to be created. If you select any
category other than All Items, then all the new items being created, will be created under this
Group. Selecting All Items gives you the flexibility of specifying the parent of each new item
created.
S No.
The serial number is auto generated.
Name of Item
Specify the name of the stock item. For example, HP Laserjet
Under
If you select All Items in Under Group field, you must specify a parent group here. Use Alt +
C to create a new parent from this field. If you select a Group in Under Group field, that group
displays automatically in this column.
Opening Balance
If you already have stock of this item at the time of creating its account in Tally, specify the
balance particulars, i.e., quantity, rate and value.
Buttons in Multi Stock Item Creation screen
F4:Parent
To change the parent entered in the field Under Group when you have items categorised under
it. The change affects all the items created under the parent, meaning they would now belong to
the new parent.
F8:Skip Details
To avoid the cursor entering the field Opening Qty, use this button. It toggles with Edit Details,
which allows you to enter the opening details.
F9:Skip Category
Use this button to avoid the cursor entering the Category field. It toggles with Edit Category,
which allows entry of Category details.
From the Multi Stock Item Creation screen, choosing to create any of the masters listed below is
just a single click away.
• Groups
• Category (if activated)
• Godown
More:
This section assumes that you have configured all advanced features of the inventory in F12:
Configure and enabled advanced F11: Features. It deals with the additional fields that you
would require while creating a Stock Item.
Note: Use F12: Configure and F11: Features to add/remove fields and configure the entire
setup according to your preferences.
Go to Gateway of Tally > Inventory Info > Stock Items > Create (under Single Stock Item)
A brief description on each of the additional fields in Stock Item Creation screen follows.
Name
Specify the name of the Stock Item.
Alias
You can give aliases for the part number. There may be situations where, the manufacturer
specifies his Part No., but you understand it better by its Bin Card number allotted to it.
Part No.
This is optional. Enter the Part No. of the item being created, for easy identification.
(In certain industries, (e.g. Automobiles), various parts are better identified by their
part numbers). You can alternatively use this field for Bin Card No., Code No., etc.
Description
Enter the description of the Stock Item that would appear in your invoices. This is optional.
Remarks
Remarks help to identify the product and its applications. You can give some particulars of the
Stock Item created. When you post a query for the stock of this item, remarks help to decide if
the item is suitable for a particular requirement.
Set /Modify Default Ledgers for Invoicing
You can define the default ledger (usually the sales account), during alteration or creation of a
Stock Item that will automatically be credited when you invoice the item.
Under
Select the group from the List of Groups. If you do not want to categorize it under any particular
group that you created, choose Primary.
Press Alt + C to create a parent Group from this field.
Units
Give the unit of measurement of the item here. The item would be traded using this unit of
measurement.
Alternate Units
This is another unit, apart from the main unit, which you can use for the Stock Item. This is
particularly useful when you need to handle different units at different times. For example, you
buy Data Cables in pieces but sell in packets of 5 pieces each. For alternate units, you are asked
to give a conversion factor (e.g. 5) so that a link is maintained between the two. What you give
here is simply a conversion factor that comes up as default during voucher entry. You may
specify a different factor during voucher entry.
Maintain in Batches?
Set this option to Yes if you want to maintain the batch information of Stock Items. The batch
does not destroy itself after it is disposed; it remains on records and is quite like a Ledger in
behavior.
For example, Stock Item – Cloth, Batches – red, white, and blue. You can extract all sales of blue
cloth at any given point of time.
Use Components BoM?
This has been dealt with in Bill of Materials section under Voucher Entry. It is however pertinent
to mention here that BoM should be used only for items that have sub-assemblies or are
manufactured.
Set Standard Rates?
Set this to Yes, if you want to specify standard purchase and sales rates for the item. Standard
rates enable the valuation of inventory at standard purchase or standard sales price. Moreover,
these prices come up by default during voucher entry (you may choose to override them if
required). The standards are effective from the specified dates and they continue to be used at
these rates until the next date, where the standard rate changes.
In the screen that appears above set the Standard Cost/Standard Selling Price against the Rate
column and the date in the Applicable From column respectively.
Suppose you value your inventory based on standard cost or the market valuation based on
standard price. For valuation on any date between the specified date, only the rate specified
against Applicable From column is considered. This rate will be brought up by default during
voucher entry on any day during this period.
Use the Standard Selling Price as simple pricelist.
Tax Information
Rate of Duty
Rate of VAT/Duty (Sales Tax/ Duty) (e.g. 17.5 or 5)
Give the rate of tax applicable for the item. The rate specified here would be picked up when
invoicing, if you selected the method of calculation as Tax Based on Item Rate for your
relevant accounting ledger account. Typically, this accounting ledger account would be 'VAT
Account' under the Group Duties & Taxes. In such cases, the VAT or duty in invoice entry will
be automatically calculated.
Specify the rate of duty.
Behaviour
Costing Method
Select the method of valuation for the inventory. Tally provides you with different valuation
methods for different items, from which you can select the appropriate one. You may, of course,
choose to use the market valuation method to value the inventory. It would be interesting to
know the value of your stock, both on cost as well as sale basis.
The different costing methods are:
At Zero Cost
Tally considers at Zero Cost Valuation for this particular item for all sales.
Avg. Cost (Price)
Tally recalculates the value after each purchase or sale.
FIFO (First In First Out)
Tally assumes the sale of the oldest goods first.
Last Purchase Cost / Sale Price
The stock is valued at the latest price.
LIFO Annual (Last In First Out Annual)
Tally assumes the sale of the newest goods, first taking into account the current financial year.
LIFO Perpetual (Last In First Out Perpetual)
This works like LIFO Annual except that the last purchase starts from the previous financial year.
Monthly Avg. Cost
Tally calculates the average price based on the purchase of item in that particular month.
Std. Cost / Price
A pre-determined value which you entered.
Market Valuation Methods
There are four market valuation methods, At Zero Price, Avg. Price, Last Sale Price, Std. Price.
Select whichever is applicable from the Valuation Methods list.
Ignore Diff. due to Physical Counting?
In Tally, you can record the physical stock as counted, using a physical stock voucher. There is,
usually, a difference between physically counted stock and the one appearing in the records. If
you wish to ignore the difference and continue with the stock as per books, set this option to Yes.
It is, however, advisable not to ignore the difference and let Tally consider stocks as per physical
count for subsequent transactions.
Ignore Negative Balances (Y/N)?
If you set this to Yes, Tally ignores the item in the stock reports, in case it has a negative balance.
Treat all Sales as New Manufacture?
Set this to Yes, if you want to avoid the need of passing entries for manufacture of goods and
have them automatically done when goods are sold. This way, you also avoid negative balances
in the stock records. It is particularly useful for smaller manufacturing companies that make
things but do not want the problem of receipting stocks.
Treat all Purchases as Consumed?
This is quite the reverse of the previous option. If you set this to Yes, issues are automatically
raised for all goods purchased. This is particularly useful in case of consumables. The book stock
of this item would always be nil.
Treat all Rejections inward as Scrap?
Set this to Yes, if you do not want to take the rejected goods back into stock. Otherwise, rejected
goods, though recorded separately through a Rejection Note, would be taken back into stock.
You can display and alter Stock Items in Single mode and Multiple mode.
Displaying a Single Stock Item

Go to Gateway of Tally > Inventory Info. > Stock Items > Display (under Single Stock Item)
Select the name of the Stock Item from the List of Items. The Stock Item Display screen
displays. You cannot make any changes in this screen.
Displaying Multiple Stock Items

Go to Gateway of Tally > Inventory Info > Stock Items > Display (under Multiple Stock Items)
Select a Group from the List of Groups to display all the Stock Items under the selected Group,
or select All Items to display all the Stock Items, as the case may be. The Multi Stock Item
Display screen displays, listing the Stock Items and the corresponding details of the Stock Items.
Altering a Single Stock Item

Go to Gateway of Tally > Inventory Info > Stock Items > Alter (under Single Stock Item)
Select the Stock Item you want to alter from the List of Items. The Stock Item Alteration
screen displays. Make the necessary changes and accept Yes to save.
You can delete a Stock Item only if you have not used it in any transaction entry.
Press ALT + D from the Stock Item Alteration screen to delete the Stock Item.
Altering Multiple Stock Items
Go to Gateway of Tally > Inventory Info > Stock Items > Alter (under Single Stock Item)
Select a Group to alter the Stock Item under the selected group. The Multi Stock Item Alteration
screen displays. Make the necessary changes and accept Yes to save.
Note: You cannot delete a Stock Item from multiple mode.
Reorder Levels
Reorder Level signifies the quantity of a Stock Item in hand, after reaching which you must
place orders for your supplies. The importance of Reorder Level arises from the desire to have
sufficient stocks to service customer orders and, at the same time, not to unnecessarily
accumulate stock.
Therefore, the points to be considered while deciding the reorder levels are as follows.
• The lead-time for suppliers to deliver the stock.
• The delivery time specified by the customer.
• The stock-in-hand to satisfy orders in the meantime.
In simple mode, Tally accepts the quantities that you specify. In advanced mode, it considers the
past consumption patterns to suggest reorder levels. You can however, choose to define your own
reorder levels. You may also specify the minimum quantity of the item to be ordered, either in
simple or advanced mode.
The purpose of specifying reorder levels is to obtain a report that indicates the quantity of a
Stock Item that you must order.
More:
Specifying Reorder Levels
Alter Reorder Levels and minimum quantities
Obtain Reorder Status and Quantities to order
Specifying Reorder Levels
Go to Gateway of Tally > Inventory Info > Reorder Levels

Select a group of Stock Items from the List of Groups, to specify Reorder Levels for the Stock
Items in the Specify Reorder Levels screen.
For each item in stock, you can define a Reorder Level and the Minimum Order Quantity. If you
click Simple Reorder button, the consumption alternatives will not be available and hence you
have to input the quantities.
Note: The option Reorder Levels is displayed in the Inventory Info. menu only if Allow
Purchase Order Processing is enabled in F11: Features.
The Reorder level screen appears as follows:
The options that you have while defining Reorder Level and Minimum Order Quantity for
individual stock items are as follows.
Reorder Level/Quantity
Enter the level/quantity in this field.
Advance Parameter for Reorder Level (Consumption for the Last)
This field lets Tally calculate the reorder level/order quantity based on the total consumption in
the past for a chosen period.
Period
The choices for periods are: Days, Weeks, Months and Years. Note that it is not the average
consumption for the period but the total consumption. Enter zero (0), if you do not want Tally to
calculate the reorder level based on the consumption of the item in the past.
Criteria
Choose whether you want the higher/lower of the two, i.e., input/calculated level/quantity.
Rounding Method
Specify whether the calculated level/quantity must be rounded and also the method of
rounding.
Minimum order quantity
You can specify the minimum order quantity required.
Altering Reorder Levels and Minimum Quantities
There are two ways of altering the Reorder Levels and the Minimum Order Quantities defined
earlier.
1. Go to Gateway of Tally > Inventory Info > Reorder Levels
Select the Group of the Stock Items from the List of Groups to display the Specify
Reorder Levels screen. Make the necessary changes and accept Yes to save.
OR
2. Go to Gateway of Tally > Display > Statements of Inventory > Reorder Status
Select the Group of the Stock Items for which you want to make changes to display the
Inventory Reorder Status screen. Drill down the fields Reorder Level/Minimum
Order Quantity to display the Specify Reorder Levels screen. Make the necessary
changes and accept Yes to save.
Obtain Reorder Status and Quantities to Order

Go to Gateway of Tally > Display > Statements of Inventory > Reorder Status
Select a Group of Stock Items from the List of Groups. The Inventory Reorder Status screen
displays.
This report gives you the reorder status of Stock Items categorised under the selected Group.
Click the button A: Reorder Only to remove those items for which there are no orders to be
placed.
Apart from identifying the quantity to be ordered, you can move your cursor on the fields and
drill down for more information.
Name of Item
Press Enter on this field for information on suppliers of this Stock Item and the details of their
previous supplies.
Closing Stock
Drill down for Item Monthly Summary (Inwards and Outwards) and other details.
Purc Orders Pending
Press Enter on this field for details on the pending purchase orders.
Sales Orders Due
Drill down to know the details on the sales orders, which are due, in other words, free stock
available for sale.
Reorder Level
Drill down by pressing [Enter] to display the Reorder Level Specification screen for the Stock
Item.
Short fall
Tally calculates this value.
Min Reorder Quantity
Drill down by pressing [Enter] to display the Reorder Level Specification screen for the Stock
Item.
Locations/Godowns
Locations/Godowns are places where Stock Items are stored. You can specify names where
Stock Items are stored such as warehouse, shelf, and so on. In a business, it always becomes
necessary to distinguish between the stock held onsite and in the warehouse. You can do this by
creating two separate godowns. Tally had a default Godown named Main Location. You may
even alter Tally's default godown and create a new one. Tally permits creating any number of
godowns, which you can group and subgroup to match the structure you need.
Go to Gateway of Tally > Inventory Info. > Locations/Godowns
Note1: The term Locations is displayed in the Inventory Info. menu if International is
selected in Use Accounting Terminology of in Gateway of Tally > F12:Configure screen. If
India/SAARC is selected, the term Godowns displays.
Note2: You can create Locations/Godowns only if Maintain Multiple Godowns is enabled in
F11: Features.
More:
Creating Locations/Godowns
Displaying and Altering Stock Locations/Godowns
Creating Locations/Godowns
You can create Locations/Godowns in Single mode and Multiple mode
Creating a Single Location/Godown

Go to Gateway of Tally > Inventory Info. > Locations/Godowns > Create (under Single
Godown)
The Location/Godown Creation screen displays:
A brief explanation on each of the fields in Location/Godown Creation screen follows.

Name
Specify the name of the Location/Godown.
Alias
Enter an alias name for the Location/Godown name, if required.
Under
Specify the Location/Godown under which the Location/Godown is to be categorised. Use Alt +
C to create the parent Location/Godown if it is not in the list. Select Primary, if it is not a sub
Location/Godown of any Location/Godown.
Allow Storage of Materials
Tally permits you to create a Location/Godown, where you may not store materials but treat it as
a virtual Location/Godown. Virtual Location/Godown is useful in cases like Head Office, which
may have many different stock points under it that store materials. Hence, Head Office acts like a
primary Godown. For instance, designate London as a virtual Godown with Wimbledon
Warehouse, Harrow Warehouse and Brixton Warehouse as sub-Godowns. These sub-Godowns
will allow storage of materials.
Creating Multiple Locations/Godowns
Go to Gateway of Tally > Inventory Info. > Locations/Godowns > Create (under Multiple
Godowns)
The Multi Godown Creation screen displays:
Under
Select the parent group under which you want the new Godowns to be created. If you select any
Godown other than All Items, then all the new Godowns being created, will be created under
this Godown. Selecting All Items gives you the flexibility of specifying the parent of each new
Godown created.
S No.
The serial number is auto generated.
Name
Specify the name of the Godown.
Under
If you select All Items in Under field at the top, you must specify a parent Godown here. Use
Alt + C to create a new parent from this field. If you select a Godown in Under field, that
Godown displays automatically in this column.
Displaying and Altering Stock Locations
You can display/alter the Godowns in single and multiple modes. It is similar to
Displaying/Altering Stock Groups in single and multiple modes. Refer Displaying/Altering
Stock Groups for more details.
To display a single stock Location/Godown
Go to Gateway of Tally > Inventory Info. > Locations/Godowns > Display (under Single
Location/Godown)
To display multiple stock Locations/Godowns at a time
Go to Gateway of Tally > Inventory Info. > Locations/Godowns > Display (under Multiple
Locations/Godowns)
To alter a single stock Location/Godown
Go to Gateway of Tally > Inventory Info. > Locations/Godowns > Alter (under Single
Location/Godown)
To alter multiple stock Locations/Godowns at a time
Go to Gateway of Tally > Inventory Info. > Locations/Godowns > Alter (under Multiple
Locations/Godowns)
You can delete a stock location via Single Location Alter by pressing [Alt]+[D]. However, you
cannot delete a stock location with sub-locations. The lower levels must be deleted first.
Voucher Types
Refer the section on Voucher Types in Accounting Information because the voucher types
available in inventory are similar to the ones in accounting. You may alter the existing inventory
voucher types or create new ones based on the existing ones.
Go to Gateway of Tally > Inventory Info. > Voucher Types > Create/Display/Alter
Note: You can use the Stock Journal voucher type to create a Manufacturing Journal. Refer the
chapter on Bill of Materials for more details.
Units of Measure
Stock Items are purchased or sold on the basis of quantity. The quantity is measured by Units.
Hence, it is necessary to create Units of Measure. You need to create Units of Measure for all the
Stock Items. You can have simple units such as numbers, meters, kilograms, and pieces or
compound units like box, where, say, one box equals ten pieces.
Go to Gateway of Tally > Inventory Info. > Units of Measure
More:
Creating a Unit of Measure
Compound Units
Creating a Unit of Measure
Go to Gateway of Tally > Inventory Info > Units of Measure > Create
The Unit Creation screen displays.
A brief explanation on each of the fields in Unit Creation screen follows.

Type
Symbols are of two types: Simple and Compound.
Simple units are considered as specified by you; Tally just checks for duplication. Tally defaults
to Simple, and if you want to change to Compound, use [Backspace] to go back and select
Compound from the Types of Units list.
Symbol
Define the symbol of the unit, e.g., Nos. This symbol is used in all displays and printouts.
Formal Name
Specify the formal name of the symbol, e.g. Numbers. This explains the symbol, which is also
used during the consolidation of data of different companies, where the symbols might be the
same but are assigned to different units. The formal name will be used to match them.
Number of decimal places
If you want to use the unit in fractions, say for a kilogram you may have to use grams as well,
specify the number of decimal places. For kilograms, you would give three decimal places to
accommodate up to 999 grams. You do not normally want a decimal place for units like numbers;
you can specify 0 in such cases.
Note: You can specify 0 to 4 decimal places. The Unit of Measure cannot be translated or
transliterated but will appear in the Language created.
Compound Units
A Compound Unit is a relation between two Simple Units. Hence, before you create a
Compound Unit, ensure that you have already created two Simple Units. For example, there are
two Simple Units Nos (Numbers) and Doz (Dozen). Now define the relation between Nos and
Doz, as one dozen equals twelve numbers.
Note: Use the Up arrow or Backspace key to highlight the Type field. Select Compound from
the popup menu.
Select Compound from the Types of Units in the Type field. Select Doz in the First Unit from
the Units list. Enter 12 in the Conversion field and select Nos in the Second Unit field. Accept
Yes to save.
More:
Displaying and Altering Units of Measure
Displaying and Altering Units of Measure
To display Units of Measure,

Go to Gateway of Tally > Inventory Info. > Units of Measure > Display
Select the Unit of Measure you would like to view from the Units list. You can select a
compound unit or a simple unit from the list. The Unit Display screen displays. In display mode
it is not possible to make any changes.
To alter Units of Measure
Go to Gateway of Tally > Inventory Info. > Units of Measure > Alter
Select the Unit of Measure you want to alter from the Units list. The Unit Alteration screen
displays. Make the necessary changes and accept Yes to save.
You can delete a Unit of Measure from this screen by pressing Alt + D. However, you cannot
delete a Unit of Measure that is part of a compound measure. You must delete the compound
measure first.
Price List
Price Lists are useful for orders and invoices. An up-to-date price list helps in decision-making
even at the lower levels of the organisation and quickens the sales process. Tally assists in
creating quantity based pricing with complex discount structure. Price Lists are available only for
inventory items and hence the feature is available only if inventory and invoicing are activated
for the company.
You can have one or more price lists. You require more than one price list, when you have
different price structures/levels for different purposes, usually, different groups of customers
requiring different discounts or dealing in different products.
Price Levels
In Tally, you can assign specific price lists called Price Levels to customers, so that only the
relevant prices are used during entry of orders and invoices.
Before you begin to create Price Lists, you should decide whether you want different price
levels. You might want different price levels for various purposes, such as different types of
customers like wholesale customers, retail customers, export customers and so on. Each
customer type could have a different discount structure.
Creating Price Levels

Ensure that you have set the company for Accounts with Inventory.
Set the following fields to Yes in F11: Features > F2: Inventory screen.
1. Allow Invoicing (If you do not set this field to Yes, the options for Price Lists will not
be available.)
2. Set Use Multiple Price Levels to Yes.
3. Type out the price levels, one by one, in the Company Price Levels screen.
4. Press CTRL+A to accept the screen and return to the Company Operations Alteration
screen (F11: Features). Set the other options as required and accept Yes to save.
Alter Price Level names

Follow the same procedure to alter the name of a price level. You can simply overwrite the
names you specified previously and save the changes.
Assigning Ledger Accounts to Price Levels
Creating Price Lists in Tally provides an option in party (debtor and creditor) ledger accounts,
with the help of which you can assign/tag a specific Price Level to the account. You can assign
only one Price Level to an account.
You can choose the Price Level that you want to assign to the Ledger by selecting the Price Level
from the Price Levels list in the Pricing Level Applicable field. Select Not Applicable if you
do not want to assign any Price Levels to the Ledger.
If you want to assign Price Levels to ledgers created earlier, alter the ledger account, tab down to
Pricing Level Applicable field and select the applicable price level from the list.
Tab down to Pricing Level Applicable and select Export. Set the other options required. Accept
Yes to save.
The Pricing Level can be changed to reflect the current circumstances. For this, simply alter the
ledger account and select a different Pricing Level option.
Creating and Using Price Lists
The Price List option appears in the Inventory Info. menu only if you have already created
Price Levels.
Go to Gateway of Tally > Inventory Info > Price List
Select a group from the List of Groups.
Under Group
This is the stock group of the Stock Items for which you want to define the Price Lists.
Price Level
Select a Price Level to assign to the Stock Group.
Applicable From
Specify the date from which the Price List is applicable.
The columns you see are as follows.
Sl. No
This column has auto-generated serial numbers to track the number of items in the Price List.
Name of Item
This column has the name of the Stock Item. You can define the Price List for each item.
Quantities - From & Less Than
These fields are repeated for an item and begin with a blank for 0 items and end with a blank for
any number of items. This is useful for quantity based pricing and discounts. You can create a
staggered quantity price structure, if required.
If you do not require quantity based pricing, leave From and Less Than fields blank.
Rate & Discount (if any)
For each quantity band, give a specific price or maintain the same price for all bands, but define
different discounts. You can use different methods for different items.
Historical Details (Rate and Disc%)
If you have a different Price List on a date before the Applicable From date, Tally displays it
here.
Cost Price
In this column, the Cost Price (based on the Costing Method set for it) of the item is displayed to
help decide the prices.
Price Levels in Voucher Entry - Invoicing
The price levels that you define automate the invoice pricing and help to avoid errors. You can
configure the entry so as to prevent the usage of a different price list than the one that is set.
To configure for preventing changes made to the price level settings in a voucher
Go to Gateway of Tally > F12: Configure > Invoice/Orders Entry
Set Allow modification of ALL fields during entry to No to prevent changes made to prices. If
you set it to Yes, you can override the prices already defined.
Consider the following example
1. Go to Gateway of Tally > Accounting Vouchers > F8: Sales
2. Select As Invoice
During voucher creation, there is an additional field Price Level and it is already set for the
selected party on the basis of assignment made earlier (the cursor skips the field). If you had not
assigned any Price Level for the ledger earlier, the cursor moves to this field, allowing you to
make a choice. On selecting the stock item and the quantity, the price is filled in automatically
and the cursor skips the Rate and Amount fields also.
Voucher Entry
A Voucher is a document that contains details of a financial transaction. For every transaction,
you can use appropriate Tally Voucher to enter the details into the ledgers and update the
financial position of the company.
Mainly there are two types of Voucher Entry:
• Accounting Vouchers
• Inventory Vouchers
You can set the configuration for entry to allow only those features, which you require while
entering vouchers.
In the Voucher entry configuration, Selectively set only those features to Yes. (This is further
explained under advanced usage).
Go to Gateway of Tally > F12: Configure > Voucher Entry
More:
The Voucher Creation screen
Special keys for voucher narration field
Voucher Creation Screen
This screen is divided into three parts

• Main Voucher Entry Area
• Button Bar Area
• Calculator Area
Main Voucher Entry Area

The Main Voucher Entry Area is where you enter all your transactions. This area provides fields
for Date, Ledger Name and Amount as well as additional pop-up screens that are dependent on
your voucher configuration and the nature of transactions you make.
Button Bar Area
The Button Bar area displays buttons that provide quick interaction with Tally. Buttons that are
relevant to the current task are enabled and the other buttons are disabled.
Calculator Area
The Calculator area provides the calculator functions where you can enter any number of
mathematical formulae for complex calculations.
Mouse conventions
Command Action
Click Press the left mouse button
Double-click Press and release the left mouse button twice, without
moving the mouse pointer off the item
Choose Position the mouse pointer on the item and click the left
mouse button.
Select Position the mouse pointer on the item and double-click
the left mouse button.
Press Use the keys on the keyboard in the combination shown.
Switching between Screen Areas

The Main Voucher Entry Area is the active area by default on the Voucher Creation screen.
Press Ctrl+N to navigate to the Calculator Area and press Ctrl+M to toggle back to Main
Voucher Entry Area. A green bar highlights the active area of the screen.
Special Keys for Voucher Narration Field
ALT+R: Recalls the Last narration saved for the first ledger in the voucher, irrespective of the
voucher type.
CTRL+R: Recalls the Last narration saved for a specific voucher type, irrespective of the ledger.
Checking the accuracy of the vouchers

To check the accuracy of the vouchers that you have entered:
1. Go to Gateway of Tally > Display > Day Book
2. Select F2: Period from Button Bar and enter the period for which you want to view Vouchers.
Note: It defaults to the current date only but you may display all the transactions for a particular
period.
3. Select F1: Detailed
You can check the vouchers for correctness. To correct a mistake, position the cursor on the item
where you have found the error and press Enter. Tally displays the voucher details for alteration.
The alteration facility is subject to security and access rights. All alterations are available for
audit.
Types of Vouchers
Tally is pre-programmed with a variety of accounting vouchers, each designed to perform a

different job.
The standard vouchers are:
1. Payment Voucher
2. Receipt Voucher
3. Contra Voucher
4. Sales voucher
• Sales Orders
• Sales Vouchers/Invoices
• Delivery Notes
• Rejection In
5. Purchase Voucher
• Purchase Orders
• Purchase Vouchers
• Goods Receipt Notes
• Rejection Out
6. Journal Voucher
• Credit Notes
• Debit Notes
• Journal
• Memo Voucher
• Reversing Journal
• Stock Journal
• Physical Stock
You can alter these vouchers to suit your requirement and also create new vouchers.
For example, if you wish to distinguish between cash and bank payments you can create
vouchers to do this.
The function of each voucher type is explained.
More:
Contra Entry (F4)
Payment Entry (F5)
Receipt Entry (F6)
Journal Entry (F7)
Sales Entry (F8)
Sales and Purchase Voucher Entry
Unconventional Vouchers
Creating Accounting Vouchers in Tally
Contra Entry (F4)
According to accounting rules, Contra Entry is a transaction indicating transfer of funds from:
• Cash account to Bank account
• Bank account to Cash account
• Bank account to Bank account
To view the Contra Voucher Entry Screen:
1. Go to Gateway of Tally > Accounting Vouchers
2. Select F4: Contra from the button bar or press F4
More:
Contra Entry - Single Entry Mode
Contra Entry - Double Entry Mode
Note:
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!
Contra Entry - Single Entry Mode
Contra Voucher creation screen appears in Single Entry Mode by default. You are prompted to
choose the account, which will receive the amount (the ledger that has to be debited).
To view Contra Voucher creation screen in Single Entry mode
Go to Gateway of Tally > Accounting Vouchers > Select F4: Contra
For example, to transfer funds from Cash Account to Bank Account:
1. Debit the Bank Account
2. Credit the Cash Account
The entry appears as shown.
The ledger selected in Account State Bank of India is the destination ledger and it is debited
Advantages of Single Entry Mode:
1. Faster data entry.
2. Selection of:
○ Multiple Ledgers (to be credited) with a Single Ledger (to be Debited) OR
○ Multiple Ledgers (to be debited) with a Single Ledger (to be Credited) - depending on
the nature of transaction.
Contra Entry - Double Entry Mode
To select multiple Debit and Credit ledgers in the Double entry mode, set Use Single Entry
Mode for Payment/Receipt/Contra to No in F12: Configure.
Entering in Double Entry Mode
2. Select F4: Contra from the Button Bar or press F4.
The entry displayed in Single Mode appears as follows in Double entry mode:
Here cash is transferred from Cash account to Bank account.
Use F2: Date to change the date of the voucher.

If you require Dr/Cr instead of To/By –> as explained in the Configuration section, activate the
required feature in F12: Configure.
1. In the above example, we have changed the date to 2nd April 2001 and we have Dr/Cr
instead of To/By.
2. As the Contra voucher is active, the Buttons of the other voucher types of Payment,
Receipt, Journal, Sales and Purchase are visible.
Payment Entry (F5)
To view the Payment Voucher entry screen:

2. Select F5: Payment from the Button Bar or press F5
By Default, the Payment Entry screen appears in Single Entry Mode (The option Use Single
Entry mode for Pymt/Rcpt/Contra is set to Yes in F12: Configure).
For example, the company settles expenses of conveyance, staff welfare, postage and stationery
through cash all in one voucher. The entry appears as shown below.
You are prompted to choose the cash or bank ledger, which will pay the amount (the credit
ledger).
More:
Payment Entry - Double Mode
Payment Entry – Single Narration
Payment / Receipt as Contra
Warn on Negative Cash Balance
Cheque Printing
How to print Cheques
Trouble-shooting Cheque printing
TDS Payment
Payment Entry - Double Mode
If you want the payment entries to be entered in double entry mode, then set Use Single Entry
Mode for Payment/Receipt/Contra to No in F12: Configure
To enter the payment entry in Double Entry Mode,
Go to Gateway of Tally > Accounting Vouchers > F5: Payment
A Payment entry entered in double entry mode appears as shown,
Advantages of Double Entry Mode

○ You can select any number of ledgers to be debited and credited in the payment voucher.
○ You can view on the screen whether a ledger is debited or credited thus allowing you to
cross-verify.
Payment Entry – Single Narration
If you want the narration details for every ledger you debit or credit (Single narration), you can
configure Tally's Narration details accordingly.
To do so,
1. Go to Gateway of Tally > Accounts Information > Voucher Types > Alter
2. Select the required Voucher Type.
3. Enable the option Narrations for each Entry and accept the details.
4. Return to Accounting Vouchers on Gateway of Tally and enter a payment voucher as
required.
Given below is an example of a Payment transaction with narrations for each entry:
The entry consists of both common narration and narrations for each entry. In case of multiple
debit/credit entries, you can give single line narration separately for every ledger account
selected.
Payment / Receipt as Contra
The Contra Voucher is used to indicate transfer of funds from

• Bank account to Cash account
• Bank account to Bank account
• Cash account to Bank account.
However, for users who wish to use the Payment and Receipt vouchers for this nature of
transaction, Tally has the flexibility of defining Payment and Receipt behaviour as per Contra
voucher.
2. Select F5: Payment from the Button Bar or press F5.
3. Activate the option Use Payment/Receipt as Contra to Yes in F12: Configuration
screen.
4. Accept the screen and save.
The Screen appears as shown.
If Use Payment/Receipt as Contra option is set to No in F12: Configure screen, the cash and
bank accounts will not be displayed.
Warn on Negative Cash Balance

You can configure Tally to prompt you with a warning when the Cash ledger reaches a negative
balance.
To activate Warning on Negative Cash Balance:
2. Activate the option Warn on Negative Cash Balance to Yes on the F12: Configure
screen.
3. Accept the screen to save.
Example:
Let us assume a cash balance of Rs.54000 and you need to make a payment of Rs.55000 towards
advertising expenses. This results in a negative balance.
The entry is displayed as:
Tally prompts you with a box that displays the warning and also the credit cash balance in RED
colour. This will help you decide whether to proceed with the entry or not.
Cheque Printing
You can choose to print cheques directly from Tally. Cheques will be printed while printing a
Payment Voucher.
Enabling Cheque Printing

1. Go to Gateway of Tally > F11: Features > Accounting Features
2. Set Enable Cheque Printing and Set/Alter Cheque Printing Configuration to Yes.
Company Operations Alteration screen appears as shown.
Once the option Set/Alter Cheque Printing Configuration is activated to Yes, you will get the
following screen.
Company Name on Cheque:

To print the company name on the cheque for signature purposes, mention the name of the
Company (for example, ABC Company). If you do not want Tally to print the name, you can
leave it blank. Many banks give cheques with your company name printed.
Name of Banks
Select the Bank from the Bank accounts list.
You will have to fill in the dimensions of the cheque. Tally accepts user defined cheque
dimensions. Take the bank’s cheque book and measure the dimensions of a cheque leaf carefully
in millimeters and fill in the above form. You may need to correct it after trying out a couple of
cheques so that the positioning is accurate. The placing of the cheque in the printer also
determines the printing. To avoid mistakes trial could be made on photocopies of a cheque before
using an actual cheque leaf.
Note: Salutation fields are for signatures and naturally follow the Company name (for example,
Director)
Note: All dimensions must be more than 0 for cheques to be successfully printed.
For ABC & Company
Director
If your cheque has two signatories, both can be specified. Both could be the same salutation or
different. For example, one could be Director, the other could be Secretary.
Give details of whatever you are using currently. Many banks will pre-print both the company
name and the salutation in their cheques, in which case you can leave them blank.
You are now ready to print the cheque. Remember that this option is available only for the banks
for which you have Ledger account.
Printing Cheques
After making the desired settings to print the cheque,

Go to Gateway of Tally > Voucher Entry > F5: Payment
Note: Cheque Printing option is available only from Payment Voucher.
Name on the Cheque
You debit the party and give the bill reference details if any. Credit the bank for which the
cheque dimensions were set up. In this example it is the State Bank of India. The name of the
Debited party account appears next to the field Name on the cheque by default. You can change
the name on the cheque if necessary.
Cross Cheque using
This is filled in by the most common words used - Account payee. You may change it if required.
Enter the Cheque Number (Ch. No.) and save the Voucher. Then, you will get the Cheque
Printing sub-screen appears as shown below:
Select Yes to print the cheque.
Trouble-shooting Cheque Printing
2. Select F11: Features and check the dimensions.
3. Ensure that you have not left any field blank other than the salutation fields.
Trial and error is the only way to get the printing in the right positions. Therefore do not panic if
some words do not get printed in the correct positions. Change the set-up a couple of times to set
it right. This is necessary to be able to print correctly on different cheque styles used by different
banks.
Receipt Entry (F6)
Transactions accounting for money received are entered into Tally through the receipt voucher.
To view the Receipt Entry screen:
2. Select F6: Receipt from the button bar or press F6
Similar to Payment and Contra vouchers, the Single Entry Mode appears for Receipt Entry as
well.
For example, if your company receives money from a customer for an earlier transaction:
• Credit the customer account and debit the Cash account, if you receive cash or
• Debit the Bank account where you need to deposit the money, if you receive cheque.
The entry in double-entry mode is displayed as shown below:
More:
Printing Receipt Voucher and Formal Receipt
Printing Receipt Voucher and Formal Receipt
For example, the company receives a certain amount from the customer against a particular
invoice and a Formal Receipt has to be issued acknowledging receipt for the same.
If you want the Receipt voucher to be printed:
1. Go to Gateway of Tally > Accounts Info > Voucher Types > Alter
2. Select the Voucher Type Receipt
3. Set the option Print after saving voucher to Yes.
The voucher prints as:
Note: The information required can be configured in F12: Configure after giving the Print
Command.
When you enter a receipt voucher, Tally prompts you to print the Formal Receipt (to be issued).
Tally's Formal Receipt printing fulfils this requirement.
To activate this facility:
2. Select the Voucher Type Receipt
3. Set the option Print Formal Receipt after saving to Yes
4. Accept the same
The Formal Receipt prints as
Note: An additional field Name on Receipt appears in the Receipt Voucher screen. The receipt
will be printed either with the Ledger Name or the name given in the Name on Receipt field.
Journal Entry (F7)
Journal entries are used to adjust the debit and credit amounts without involving the cash or bank
accounts. Hence, they are referred to as adjustment entries. To go to the Journal Entry Screen:
2. Click on F7: Journal on the Button Bar or press F7 key
For example, there may be entries made for interest accrued or interest to be paid. If a party is
involved in such a transaction the entry will be:
1. Debit the Party
2. Credit the Interest Account
The entry appears as shown below:
Note: Journal entries are usually used for finalization of accounts.

More:
Cash Accounts in Journals
TDS Deduction in Journals
VAT in Journal
Cash Accounts in Journals
Journals are adjustment entries, which do not involve Cash account and Bank account. However
in many cases companies use journals to account for day-to-day transactions where Cash or Bank
accounts are required.
1. Set Allow Cash Accounts in Journals to Yes in F12: Configuration.
2. Go to Gateway of Tally > Accounting Vouchers > Select F7: Journal
3. Press the spacebar at the Debit or Credit fields.
Note: All Cash accounts and Bank accounts are displayed in the List of Ledger Accounts.
Accordingly the journal entry has to be made.
Sales Entry (F8)
Sales vouchers are used when the company sells some goods to customers.
To view the Sales Voucher Creation Screen:
Go to Gateway of Tally > Accounting Vouchers > Select F8: Sales.
For example, the company sells some software on credit. In this case, the company has to
account for Sales and Sales Tax separately, if tax has been collected on the transaction.
The screen appears as shown below:
When a sales transaction is made, a document detailing the transaction (item name, tax, etc) has
to be given to the buyer or debtor as proof of purchase by him. This document is called "Invoice"
or "Bill" or "Cash Memo". Tally provides the option of creating Invoices.
Enabling Invoicing
1. Set Allow Invoicing to Yes in F11: Features
2. The Sales Voucher Creation Screen appears as Invoice by default.
3. Go to Gateway of Tally > Accounting Vouchers > select F8: Sales
Sales entries can be made in the Voucher as well as Invoice Formats.
Invoicing and sales invoicing are almost the same as sales voucher entry. The advantage of using
the invoice format for sales entry is that it allows automatic calculations of taxes and duties
(ledger accounts classified under the group 'Duties & Taxes').
To enable automatic calculations of taxes and duties:
1. Set Calculate Tax on Current Sub-total to Yes in F12: Configure on the sales invoice
screen
2. Accept the screen to save the voucher.
The default Sales Invoice screen appears as shown below.
When you start entering the voucher, Tally prompts for the Sales Ledger to be allocated.
Any number of stock items or account ledgers can be selected one after another to enable faster
data entry. To activate this:
1. Set Use Common Ledger A/c for Item Allocation to Yes in F12: Configure on the
invoice entry screen.
2. Accept the screen to save the voucher.
Types of Invoice
There are two types of Invoices:
Sales Item Invoice - allows you to select Items for invoicing
Sales Account Invoice - allows you to select Ledgers for invoicing
Sales Item Invoice
Invoicing is generally used for sale of stock where the details of the items sold are listed.
Selecting the Item Invoice allows you to select the stock items that need to be invoiced. Trading
and manufacturing organisations commonly use this format.
On the Sales invoice screen, click on the button Item Invoice which is displayed on the Button
Bar on the right side of the screen and the Sales Item Invoice appears as shown below:
Tally's Item Invoice mode displays the list of stock items, which can be invoiced as required.
Note: The Item Invoice button toggles with Account Invoice.
Sales Account Invoice
Sales Account Invoice is generally used by professionals such as doctors and consultants who
require to invoice for certain services provided such as consultancy charges, professional fees.
Trading and manufacturing organisations also use the Account Invoice for invoicing service
charges.
On the Sales entry screen, click on Acct Invoice button which is displayed on the Button Bar on
the right-hand side of the screen to display the Sales Account Invoice screen as shown.
Tally's Account Invoice mode displays the list of ledger accounts, which can be invoiced as
required. This is unlike Item Invoice where Tally displays the list of stock items.
Note: The Acct Invoice button toggles with Item Invoice.
In Accounts-with-Inventory Companies where Tracking Numbers is NOT

activated
You do not get the voucher types Receipt Note and Delivery Note in the Sales and Purchase
Voucher sub-menus.
In addition to the above particulars that are applicable for all types of vouchers, sales and
purchase vouchers have special inventory considerations for accounts-with inventory companies.
Sales and Purchase ledger accounts must have the option Are Inventory Values Affected set to
Yes for this section. Unless this option is set to Yes in the Ledger creation screen, it is not
possible to make a Sales entry or a Purchase entry.
Similarly, Sales and Purchase accounts affect inventory. Hence, when you enter a Sales or a
Purchase Voucher, an Inventory Allocations for sub-screen pops up as soon as you enter the
ledger requiring you to give inventory item details.
The inventory details that you mention in an accounting voucher (like Sales and Purchase
Voucher), affects stocks by immediately updating them, only if Tracking Numbers are not
activated in [F11]: Features.
The information that you need to give in the inventory allocation sub-screen depends upon the
features enabled for the company.
More:
Inventory allocations
VAT
Inventory items need to be considered in financial vouchers if you are using ledger heads that
have the option Are Inventory Values affected set to Yes.
The inventory details that you give in an accounting voucher (like Sales and Purchase Voucher),
affects stocks by immediately updating them, only if Tracking Numbers are not activated in F11:
Features.
The information that you need to give in the inventory allocation sub-screen depends on the
A typical inventory allocation sub-screen appears as shown.
Name of Item
Select item from the list of items or create a new item by pressing Alt+C
Location
If you have more than one location you must specify the location to which this item relates.
1. Set Maintain Multiple Godowns to Yes in the F11: Features.
2. Specify the Godown, Quantity, Rate and Amount for the item.
You can have different Godown locations.
Quantity
Enable the option Actual and Billed Quantities to Yes. The actual quantity updates stock and
the billed quantity affects the accounts. Give the quantity either in the main unit or the alternate
unit. You may even specify quantities in both units, for example 100 bars=150 Kgs.
Rate
Enter the rate for the Stock Item. If you have entered Standard Rate for the item (Standard Cost
and Standard Selling Price – see Item Master), the voucher will select the relevant standard rate
for that date by default. You can modify it while entering the voucher.
Per
Enter the unit of measure for the quantity of the item here. This can be the main unit or even the
alternate unit.
Amount
The quantity multiplied by the rate per unit is the amount.
End of List
In all multiple allocations or selections, you have to select the option End of List or press Enter
at the first blank field. This would accept the multiple allocations and take you back to the parent
screen. For example, Multiple Locations, Batches or Items.
Batch Wise Details
If you wish to maintain the Inventory in Batches, you need to set the option Maintain Batch-
wise Details to Yes in F11: Features.
If required, you can also set the option Set Expiry Dates for Batches to Yes.
Once you do this, you will see the option Maintain in Batches in the Stock Item Creation
Screen.
If you set this to Yes, you will find the following in the Item Allocation screen:
• Track Date of Mfg
• Use expiry dates
Batch Number
Select a batch number from the list of existing batch numbers, or create a new number for a new
batch.
Mfg. Date
Mfg Date appears only if it is activated. Enter the date of manufacture. This enables you to set
expiry date for the batch as a period from the date of manufacturing. For example, three months
from the date of manufacture.
Expires on
This field appears only if it is activated. Enter the date of expiry or a period from the date of
manufacture. If you have set Allow Use of Expired Batches to Yes for an item, you cannot issue
them after the expiry date.
Manufacturers and traders, who deal in perishable products, need to maintain batch-wise
details of stock items. The manufacturing date and expiry date options are entered in Tally to
maintain batch-wise details.
To ensure that the expired items do not appear in your Stock Journals and Sales Invoices, set
Honor Expiry Dates usage for Batches to Yes in F12: Configure of the Sales Invoice screen.
This keeps track of the batches. If you have two batches of the same product in stock, and one
batch has crossed the date of expiry, the sales invoice will not display the balance amount of the
expired stock, thus honouring the expiry dates which you have set for your stock items.
Refer Activating batch-wise details, Setting manufacturing date and Expiry dates for more
details.
Unconventional Vouchers
Unconventional Vouchers are the special vouchers that are used to record provisional or non-
accounting transactions. Use unconventional vouchers to remove unnecessary entries from the
main books of accounts and make information available. These vouchers enable valuable reports
in terms of provisional accounts and forecasting. Refer to Scenario Management for more
information.
More:
Memo Voucher
Memorandum Voucher Register
Optional Voucher
Optional Vouchers Register
Reversing Journals
Reversing Journal Register
Post-dated Vouchers
Post-dated Vouchers Register
Memo Voucher
This is a non-accounting voucher and the entries made using memo voucher will not affect your
accounts. In other words, Tally does not post these entries to ledgers but stores them in a separate
Memorandum Register.
Uses of Memo Vouchers

Making suspense payments
Consider a company gives its employee cash to buy office supplies, the exact nature and cost of
which are unknown. For this transaction you can enter a voucher for the petty cash advance, a
voucher to record the actual expenditure details when they are known, and another voucher to
record the return of surplus cash.
However, a simpler way of doing it is to enter a Memo voucher when the cash is advanced, and
then turn it into a Payment voucher for the actual amount spent, when the details are known.
Consider the following Example.
The Company pays its employee Rs. 500 as petty cash advance for Office Expenses.
The following entry has to be passed.
1. Enter Date
2. Debit office supplies
Vouchers not verified at the time of entry

If you do not understand the details of a voucher you are entering, you can enter it as a Memo
voucher and amend it later when the details are available.
Items given on approval
Generally completed sales are entered into books. Incase items are given on approval, use a
Memo voucher to track and convert it into a proper Sales voucher. You can delete the memo
voucher if the sale is not made.
Memorandum Voucher Register
To view all the memorandum vouchers:

Go to Gateway of Tally > Display > Exception Reports > Memorandum Vouchers.
Note: You can also view memorandum vouchers from the Day Book.
You can alter and convert a Memo voucher into a regular voucher when you decide to consider
the entry into your books. Use Scenarios to see the effect of Memo entries on reports and
statements.
Optional Voucher
This is also a non-accounting voucher. Unlike a Memo voucher, this is not a separate voucher
type. You can mark an existing voucher (for example, a payment voucher or a receipt voucher) as
Optional. Press CTRL + L or click on Optional from the Button Bar. This button toggles with
Regular. By marking a voucher Optional, the voucher does not get posted anywhere but
remains in the Optional Register.
You can make a voucher type default to Optional if you need to create a new voucher type or
alter an existing voucher type.
Go to Gateway of Tally > Accounts Info > Voucher Types> select a Voucher Type> Set Make
Optional as default to Yes.
Enabling Optional Vouchers

2. Select F11:Features > Accounting Features to display Company Operations
Alteration screen
3. Set Use Rev. Journals & Optional Vouchers? to Yes.
Use of Optional Vouchers

• If you do not want a transaction that is incomplete to affect the accounts, you can mark
this as an Optional Voucher. Once the transaction is complete, modify the voucher and
post it as Regular Voucher. For example, Performa sales invoice. In fact, an optional sales
invoice prints as a Performa Invoice.
• Optional Vouchers allow you to see the impact of transactions without actually posting
them.
• Optional Vouchers can be used to forecast future sales. For example, create a New
Voucher Type - Sales Forecast. Record future sales projections using this voucher type.
Let us consider the following example.
On 30th June you want to view the Balance Sheet as of today but June rent is not due for
payment until the first week of July. This liability is not reflected in the Balance Sheet. To
overcome this, enter an Optional Voucher dated 30th June. The above entry is made as shown
below
1. Enter Date
2. Select Optional from the button bar
3. Debit Rent account
When you view the Balance Sheet, generate a report with the Optional Voucher included. The
Optional Voucher should be already defined as a Scenario (Refer section on Scenario
Management for more details). The voucher affects the report temporarily. Once you quit the
report, Tally does not retain the Scenario details. The next time you view the balance sheet, it
will not include the effect of the Optional Voucher unless you include it.
Note: Use Scenarios to see the effect of Optional voucher entries on reports and statements
Optional Vouchers Register
You can view all optional vouchers in the Optional Vouchers Register
Go to Gateway of Tally > Display > Exception Reports > Optional Vouchers.
Note: You can view them from the Day Book as well.
Reversing Journals
Reversing Journals are special journals that are automatically reversed after a specified date.
They exist only till that date and are effective only when they are included in reports like the
Balance Sheet. These are used in interim reporting in the course of the financial year where
accruals are to be reported. These accruals are usually short term and are cleared in the
subsequent period. However, to get a proper perspective, decision makers require the reports
with full impact of all aspects and transactions.
Activating Reversing Journals

To activate Reversing Journals
2. Select F11: Features > Accounting Features to display Company Operations Alteration
screen
3. Set Yes in Use Rev. Journals & Optional Vouchers?
An example is - the provision for depreciation. Depreciation is usually provided for at the end of
the year. However, including it for monthly reporting would give a more accurate status.
Let us take another example:

On 30th June you want to view the Balance Sheet as of today but June salaries are not paid until
the first week of July. There is, therefore, a large liability, which would not be reflected in the
Balance Sheet. To overcome this, you enter a Reversing Journal Voucher dated 30th June, which
would look like this:
When you view the Balance Sheet, Tally displays the report with the reversing journals included.
The voucher affects the report only for that day, 30th June.
Applicable up to
This is the date up to which the Reversing Journal is available for inclusion in a scenario report.
The Reversing Journal can be created as of a particular date and made Applicable up to a
different date. For example the depreciation entry could be dated October 1, 2005 and applicable
up to October 31, 2005. The journal will be available for inclusion in a scenario for any day from
October 1, 2000 till October 31, 2000. It will not exist before 1st Oct and will be reversed
automatically after 31st Oct and consequently unavailable.
Reversing Journal Register
All vouchers are maintained in a Reversing Journal Register. These are not posted to any books
of accounts and cannot be included in regular reports. They can only be seen through a scenario.
Go to Gateway of Tally> Display> Exception Reports> Reversing Journals
Post-dated Vouchers
While entering vouchers, you can mark them as post dated. Tally will not update the vouchers in
ledgers until the specified date is approached. This is useful to enter transactions that take place
on a regular basis. For example, if you pay for something by installments, you can set up the
payments in advance, and Tally will only enter them in the ledgers as they fall due.
Mark vouchers Post Dated by using CTRL + T or click on Post dated button from the Button
Bar. This button toggles with Current.
Post-dated Vouchers Register
All Post-dated vouchers are maintained in a Post-dated voucher Register.

Go to Gateway of Tally> Display> Exception Reports> Post-Dated Vouchers
Difference in the treatment of Post-dated Vouchers and other Unconventional
Vouchers
The major difference between post dated vouchers and other Unconventional vouchers is that
post dated Vouchers affect regular books of accounts on the date of the voucher. Post-dated
vouchers are not available for selection in Scenarios.
Creating Accounting Vouchers in Tally
To view the Accounting Vouchers screen:

Go to Gateway of Tally > Accounting Vouchers
Note: The Voucher Entry screen display depends on the Voucher Configuration, Company
Features and the Voucher Type settings.
The default voucher entry screen that is displayed is the Payment Voucher screen. To go to the
next voucher screen you can simply switch the vouchers using the buttons from the Button Bar
or by using the Function keys.
Consider a simple payment voucher screen.
More:
Type of Voucher
Voucher Number
Reference
Date of Voucher
Particulars – To /By or Dr/Cr
Narrations
Particulars – Ledger name and amount
Buttons in a typical Voucher Entry screen
Type of Voucher
You need to check whether you are using the right voucher for the transaction. You change the
voucher type by selecting the new type from the Button Bar.
In some cases, Sales, Purchase and Journal, as well as where you have created your own voucher
types. For example, under Payment, Tally will display a List of Vouchers for the type you select,
from which you make a further choice.
Voucher Number
If you have set Method of Voucher Numbering to Automatic in Voucher Type screen, Tally will
automatically enter the voucher number and if you have set Method of Voucher Numbering to
Manual, Tally allows you to enter the voucher number manually.
Reference
You can enter a reference such as Purchase Order Number or Invoice Number in the Ref:
Field.
Note: Reference is not available for receipt and payment vouchers.
Date of Voucher
The date of the voucher you enter is displayed at the top-right of the Voucher Creation screen.
The date is taken initially from the Current Date in the Gateway of Tally. However, you can
change the date to ensure vouchers are entered with the appropriate date using the F2: Date
button.
Note: You change the date using the F2: Date button from the button bar.
Narrations
You can type any comment that is appropriate for the transaction in Narrations. You can
configure Tally's Narration details as per the type of narration for the transaction. The types of
Narrations are:
• Common Narration – Common narration details for the entire Voucher at the end.
• Single Narration – Narration details for every debit or credit transactions made.
Enabling Narrations
Common Narration is enabled by default in Tally.
To activate Narrations on the voucher screen
1. Go to Gateway of Tally > Accounts Information > Voucher Types > Alter
2. Select the required Voucher
3. Set the option Narrations for each Entry to Yes
4. Accept the details.
5. Return to Accounting Vouchers on Gateway of Tally and make a payment voucher
entry as required.
Following examples demonstrate a Payment transaction that has both common narration and
narrations for each entry. The advantage of this being that you can give single line narration
separately for every ledger account selected in case of multiple debit/credit entries.
Particulars To/By or Dr/Cr
To/By or Dr/Cr
By default Tally displays To/By which can be changed to Dr/Cr.
1. Set Use Cr/Dr instead of To/By during entry to Yes in F12:Configure
2. Accept to Save
Each voucher line displays a prompt of Dr/By for debit entries or Cr/To for credits.
Note: Depending on the voucher type, Tally selects either Dr or Cr/ To or By. Thereafter, you
can change the prompt (if required) by typing over it with a D or C / T or B.
Particulars – Ledger name and amount
Ledger name and amount

After To/By or Dr/Cr, you enter the ledger names that are already created and the debit and
credit amounts. To select a ledger, type the first letter of its name and Tally displays a List of
Ledger Accounts. The ledgers starting with the typed letter are highlighted. Only ledgers suitable
for the voucher type are displayed. As you continue typing, the highlights reduce until a match is
found.
The first ledger name prompt depends upon the voucher type.
For example, in a Payment Voucher you have to first debit a personal account like a creditor or a
nominal account like Rent. Hence you are not allowed to enter Cash or Bank as that would
determine money received.
Note: In special case where in you have activated the option Allow Payment/Receipt as Contra
in the Voucher Configuration you are permitted to do so.
Likewise, in a Sales Voucher, you must first debit a personal account name like a customer and
not a nominal account name.
When you select the ledger, the current balance is displayed (only if F12: Configure is
configured). When you enter the amount, the revised current balance is shown. After selecting
the next ledger, Tally suggests the balancing amount as the value to enter, which may be accepted
or typed over. You cannot complete the voucher entry until the debit is equal to the credit.
More:
Buttons in a typical Voucher Entry screen
Buttons in a Typical Voucher Entry screen
F2: Date - You can use this button to change the date of the voucher.
F3: Company - This would allow you to switch to another loaded company and enter a voucher
in it. Therefore, you can, almost simultaneously enter vouchers for more than one company.
Accounting Vouchers
F4: Contra
F5: Payment
F6: Receipt
F7: Journal
F8: Sales
F9: Purchase
F10: Memos
F7: Stock Journal
F10: Phys Stock - This allows recording of physical stock in hand as distinct from computed
stock figures.
Other Buttons
As Voucher/As Invoice: This button is available only for Sales/Purchase Vouchers and invoices.
Post Dated -To mark the current voucher post dated. Toggles with Current
Optional - To mark the current voucher optional. Toggles with Regular
F11: Features - The different features of a company can be selected or modified by using the
F11: Features button. This button is available in almost all screens of Tally. You can modify it as
and when based on the requirements.
F12: Configure - The F12: Configure button allows you define and enable the report-specific
options which are required.
For example, depending on the report that you are viewing, you can specify whether it should be
in horizontal or vertical format, show percentages, show gross profit, show opening and/or
closing balances, change the periodicity, change the sorting method.
Note: To check the accuracy of the vouchers entered, select Day Book from the Display Menu.
Then Select F2: Period from the Button Bar and enter the period of display (it defaults to the
current date only, but you may display all the transactions for a particular period). Select F1:
Detailed. Check the vouchers against what you were asked to do. If you find a mistake, position
the highlight bar over the incorrect item and press Enter for Tally to display the voucher details
for alteration.
Note: The alteration facility is subject to security and access rights. All alterations are available
for audit.
Voucher Classes
Voucher Class is a method of automating accounting allocations during Invoice entry. It is a table
for predefining the entries to make invoice entry a simple task. This is particularly useful in sales
invoicing where the nominal ledger account, to be credited for each item of sale is defined once.
During voucher entry, the accounting credits for items sold are done automatically. Additional
accounting entries like Tax, Freight and other charges can also be predefined to be brought up
during actual invoicing.
This will have restriction on a data entry operator to alter or modify the vouchers. The total
control rests with senior management to set the class parameters. It also reduces chances of
errors during voucher entry. You can still continue to use Tally as before without classes if you
do not require it.
Classes can also be used to automate the rounding off the values. The rounding-off method can
be preset when defining a class for a single line or for the entire voucher or invoice.
Voucher Class permits:
1. Automation of entries to predefined ledger accounts.
2. Automatic rounding off to preset value limits.
Another additional feature is the ability to define default sales ledger account to be affected for
each Stock Item. This capability is available for companies maintaining accounts with inventory.
2. Select the Button F12: Configure
3. Select the option Accts/Inv Info.
4. Set Specify Default Ledgers for Invoicing to Yes
Now, when you alter or create a Stock Item, you can define the nominal ledger account (usually
the sales account), which should automatically be credited when you invoice this item.
Example:
You might have Sales Ledgers broken up as Sale of Finished Goods and Sale of Intermediates.
Let us assume that your finished goods are Computers and intermediate goods are CD ROM
drives. Against the Stock Item Computers, specify Sale of Finished Goods as the default Sales
Ledger account to be affected. Against CD ROM drive specify Sale of Intermediates as the
default Sales Ledger account. These will be the default sales ledger accounts that will be affected
only when invoicing. They can be overridden by the account that you set in the Class table.
The dual facility of ledger allocation with Stock Item and ledger allocation defined in a Class
provides the flexibility to permit allocation of different Stock Items to different sales accounts as
set up in the Class table.
You can either alter the existing Sales Voucher Type or create a new Voucher Type based on
Sales.
2. Select any Voucher Type from the list, say, Sales.
3. Go to the field Name of Class and enter a name
This displays a sub screen where you can define the Default Accounting Allocations for Sales
Invoice and the Default Accounting Allocations for Purchase Invoice. You can specify the
Ledger Name, the Percentage (%) of the amount to go into the ledger and the Rounding
Method and the Rounding Limit if any.
The Type Class screen appears as shown below.
The Class Table is split horizontally for accounting allocations and additional accounting entries.
More:
Type of Calculation
An explanation of 'Types of Calculation'
VAT
Ledger Name
Select the ledger to be credited for each Stock Item sold in the invoice. More than one ledger
may be affected for each item. For example, for Tax-inclusive items, the ledgers to be credited
will be Sales and Tax in a definite proportion. This is where percentage helps.
Percentage %
This is useful in tax-inclusive price cases. You can allocate say 82.5% for the sales ledger
account and the balance can be allocated for Tax account. Normally, for tax-exclusive prices, you
will give 100% for the Sales account. The percentage (%) symbol has to be mentioned.
While creating or altering classes for the Voucher Types Credit Note, Delivery Note, Sales and
Sales order in the Voucher Type Class screen, for the Column Percentage % under Default
Accounting Allocations for each Item in Invoice, the number of decimal places allowed for the
numbers input in this column has been increased from two to three irrespective of the number of
decimal places defined for the company.
Rounding Method
The Rounding Method may be used only where the sales account is NOT 100%. The amounts
that are calculated may be required to be rounded off either under Upward Rounding or
Downward Rounding or Normal Rounding. Normal Rounding is rounding to the number of
decimal places specified for the currency based on the less than 5 and greater than 5 rules. You
can set your own rounding off rule. For example, round off to the next whole number. In such
cases, you can round off Upwards.
Rounding Limit
When any of the rounding method is selected from the list, you can round off
(Upwards/Downwards/Normal). For example: set it to 1 to obtain the amount to the next whole
number. To round off upwards to the nearest 50P, set it to 0.50.
Override using Item Default?
Select Yes or No. Item default refers to the Default Ledger account that you had set for a Stock
Item. For example, Computers – Sale of Finished Goods. If in the Class Table, you mention
Sales –Local, and set No to this question, then Sales –Local will be the account affected and not
Sale of Finished Goods. Setting it to Yes will affect Sale of Finished Goods. The advantage of
this is that you can use different classes to affect different sales accounts.
This part is relevant for Tax and other charges like freight and insurance.
Ledger Name - Select other Additional Ledgers if any, one by one.
Type of Calculation - Select the suitable method of calculation from the drop-down menu. The
Value Basis that you will provide in the next column will calculate using the type of calculation
specified. For more details refer Type of Calculation.
Value Basis - Enter the amount, which is to be used for the Type of Calculation. For percentage,
you can use the symbol %. In the example, 17.5% is specified for Tax on Sales on Item Rate, to
use the rate given in the Stock Item.
Remove if Zero? - Enter Yes for Tally to ignore the account and not to make any entry in it if its
value is zero. If Yes, ensure that Allow 0 valued entries in vouchers in F11: Features is set to
No. On Setting No Tally will record the invoice in the ledger account with nil amounts. Under
normal circumstances, you will probably wish to set this value to Yes. However, in cases such as
'Zero Rated VAT', you may wish to retain the Ledger Account line, even though the calculation
yields a nil amount.
Effect on Cost Centres - Cost Centres will remain un-allocated when Classes are used to
allocate account entries. Cost centres can also be predefined under Cost Centre Classes. Refer to
Cost Centre Classes for further information.
Types of Calculation
As Additional Excise
In the Indian sub-continent, a manufacturing tax or Excise is levied. For some products, a
supplementary levy on the Basic Excise Duty is charged or Additional Excise Duty. This is a
surcharge calculation.
For example, an Additional Excise Duty of 10% on the Basic Duty. While the calculation method
is identical to As Surcharge, the result is to provide a Total Excise Payable calculation
accurately during Invoice printing.
As a Flat Rate
This is helpful when you wish to specify a standard mark-up/down on an invoice - say 100 for
every invoice, independent of the quantity/value of the invoice.
As Surcharge
This helps you to calculate the value based on the immediately preceding figure. For example, a
Sales Tax of 10% is applicable on an invoice, which would be calculated on the value of goods
sold. On this, a 'Surcharge' of 5% - i.e. 5% of the Sales Tax value is applicable.
As Total Amount Rounding
This is the last line in an invoice. You will have to create an account, which would carry the
rounding difference. As the other values of the invoice are calculated, this account would
automatically get adjusted to keep the Total Invoice Value to the desired rounding limits. You
have to mark this invoice as Remove if Zero? Yes so that the account head is not retained in the
invoice printouts if no rounding is applicable.
As User Defined Value
This allows you to specify a value while creating the invoice. You will use this when the basis of
calculation is neither Value nor Quantity dependent and therefore needs to be entered every time
you create an invoice.
Based on Quantity
Use this for calculations that are based on the 'Total Qty' supplied.
For example, you may have Freight or Forwarding charges as 2.00 per Kg, and if the total qty
supplied in the invoice is 200.000 Kg, then the amount should become 400.00. The Value Basis
also needs to be provided as '2.00/Kg' or '0.50/Pc' as the case may be.
On Current Sub Total
In certain environments, taxes are applicable on the Total Goods Value as well as supplementary
charges like Excise Duty, Packing Charges. Normally, when the tax calculation method is
specified as On Total Sales the calculations are based on the Total Goods Value only. If you want
to include supplementary charges, then set On Current Sub Total as the type of calculation.
On Item Rate
This is used for both VAT as well as Excise Duty style calculations. You can specify the Rate of
Tax applicable for each Stock Item. The advantage is that it enables you to combine multiple Tax
Rate products in the same Invoice and yet get the correct ones picked up for each Tax bracket.
On Total Sales
The most common basis of Tax Calculation is on the total value of goods/services. This method
uses the sum of Stock Items used in the invoice for calculations.
Inventory Vouchers
Inventory Vouchers perform the same function in the inventory system just as accounting
vouchers do in the accounting system. Inventory Vouchers are also means of entering
transactions. Inventory vouchers record the receipt and issue of goods/stock, the transfer of
stock between locations and physical stock adjustments.
If you have not integrated accounts with inventory, inventory vouchers will not have any impact
on the Balance Sheet stock figures. They will maintain the stock balances separately.
To view Inventory Vouchers:
Go to Gateway of Tally > Inventory Vouchers
Configuration on Tally
Set the option Integrate Accounts and Inventory to Yes in F11: Features.
You can trace an entire transaction from the beginning i.e., goods transfer stage to the financial
accounting irrespective of integration status.
For example, the purchase of stock can be tracked from the purchase voucher through the receipt
note, through invoice from the supplier and also through eventual payment.
More:
Types of Inventory Vouchers
How to enter pure Inventory Vouchers
How to create a Stock Journal
Types of Inventory Vouchers
Tally is pre-programmed with Inventory Vouchers of various natures, each designed to perform a
different task. The following table displays the standard Accounting Vouchers provided in Tally
and their corresponding activation key combination and buttons. You can either use the key
combination given in the table below or the buttons on the Button Bar.
Key Combination Buttons Voucher Type
ALT+F9 F9: Rcpt Note Receipt Note Voucher
ALT+F8 F8: Dely Note Delivery Note
ALT+F6 F6: Rej.Out Rejections Out
CTRL+F6 F6: Rej.In Rejections In
ALT+F7 F7: Stk Jrnl Stock Journal
Voucher
Alt+F10 F10:Phys Stk Physical Stock
ALT+F5 F5: Sales Order Sales Order
ALT+F4 F4: Purc. Order Purchase Order
Set the option Use Tracking Numbers to Yes in F11: Company Features to activate Goods In
Receipt Note and Goods Out Delivery Note vouchers. Tally will assume that goods are received
along with Purchase Vouchers and Goods are delivered along with Sales Vouchers/Invoices.
Activating Tracking Numbers denote that you may receive goods that are not accompanied by
a Supplier's invoice, i.e. the invoice will arrive separately and that you may not deliver the
goods along with the invoice but will invoice it later.
Note: In a voucher you are allowed to select Not Applicable when the Tracking Number sub-
screen appears. This would update inventory immediately without passing a separate inventory
voucher and vice-versa. For more details refer Advanced voucher entry.
You can alter these vouchers to suit company requirements as well as create new Inventory
Vouchers. For example, if you wish to distinguish between delivery notes for stock delivered
from different locations you can create vouchers to do this.
More:
Receipt note Voucher
Rejections-in Voucher
Delivery note Voucher
Rejections-out Voucher
Stock Journal Voucher
Physical Stock Voucher
Receipt Note Voucher
This voucher type is used for recording goods received.

To view the Receipt Note Voucher:
1. Go to Gateway of Tally > Inventory Vouchers
2. Press the button Alt+F9 or Select the button F9: Rcpt Note from the button bar.
For example, consider the company receives new stock items from a supplier. If a Purchase
Order exists for that Supplier, select the Order Number from the List of Orders pop up menu to
bring up the order particulars automatically.
Receipt Note
Description Records receipt of new stock from suppliers
Details Recorded Reference, Ledger Account, Supplier’s Name, Address and Despatch
Details (If Accept Supplementary Details option is set to Yes in F12:
Configure), Name of Stock Item, Tracking Details, Godown, Quantity, Rate
(Optional), Amount (Optional), Narration
Rejections-In Voucher (Sales Returns)
A Rejections In Voucher is used to record goods that are rejected and returned back by the
customer.
To view the Rejections In Voucher
2. Press the Ctrl+F6
Rejections In Voucher
Description Records return of goods from customers.
Details Recorded Ledger Account, Customer’s Name, Address (If Accept
Supplementary Details option is set to Yes in F12:
Configure), Name of Stock Item, Tracking Details, Order
details, Godown, batch details, Quantity, Rate
(Optional),Amount (Optional), Narration.
Delivery Note Voucher
The Delivery Note voucher is used for recording goods delivered to a customer.
To view the Delivery Note Voucher
2. Press Alt+F8 or select the button F8: Dely Note from the button bar.
For example, the company delivers goods from Stock to a customer. If a Sales Order exists for
that customer, selecting the appropriate Order Number from the List of Orders pop-up menu will
automatically bring up the relevant particulars.
Delivery Note
Description Records the delivery of goods to customers
Details Recorded Reference, Ledger Account, Customer’s Name, Address and
Despatch Details (If Accept Supplementary Details option is
set to Yes in F12: Configure), Name of Stock Item, Tracking
Details, Godown, Quantity, Rate (Optional), Amount
(Optional), Narration
Rejections-Out Voucher (Purchase Returns)
The Rejections Out Voucher records goods that are rejected and returned to a supplier.
To view Rejections Out Voucher:
2. Press Alt+F6 or Select the button F6: Rej. Out from the Button Bar
For example, the company returns items that had previously been taken into stock from the
supplier
Rejections Out Voucher
Description Records return of goods to suppliers
Details Recorded Ledger Account, Supplier’s Name, Address and Despatch (If
Accept Supplementary Details option is set to Yes in
F12:Configure), Name of Stock Item, Tracking Details, Order
details, Godown, Quantity, Rate (Optional), Amount
(Optional), Narration
Stock Journal Voucher is used to record stock transfers from one location to another.
To view the Stock Journal Voucher:
2. Press the buttons Alt + F7 or Select the button F7: Stk Jrnl from the Button Bar
For example, the company transfers items of stock from the warehouse to the shop.
Description Records the transfer of stock from one Location to another
Details Recorded Reference, Name of Source and Destination Locations, Name
of Stock Item, Godown, Batch, Quantity, Rate, Amount,
Narration
More:
How to Create a Stock Journal?
Physical Stock Voucher is used for recording actual stock physically verified or counted.
To view the Physical Stock Voucher
2. Select the button F10: Phys Stk from Button Bar or press Alt+F10
For example, Physical Stock is the stock found on conducting a stock check. It is not unusual
that the company finds a discrepancy between actual stock and computer stock figure. Physical
vouchers will be useful for recording purposes only if you have configured inventory vouchers to
ignore physical stock differences. If you have configured the vouchers so that physical stock
difference is not ignored, then all transactions subsequent to the physical stock voucher will use
the balance as mentioned in that voucher.
Description Records the physical stock count as the new stock balance
Details Recorded Stock Item, Location, Batch details and Quantity.
Entering Pure Inventory Vouchers in Tally
Selecting and Entering the Voucher

There are five kinds of inventory vouchers:
• Receipt Notes and Delivery Notes
• Rejections - in and Rejections - out
• Sales Order and Purchase Order
• Stock journal
• Physical stock
Note: Vouchers involving pop-up screens depend upon configuration settings and it will be
assumed that these settings have been activated.
The basic procedure to enter each voucher is:
1. Go to Gateway of Tally >Inventory Vouchers
2. Change the date if necessary.
3. Select the Voucher type from the Button Bar
Enabling F11: Features

• Set Use Tracking Numbers to Yes to activate Delivery Note and Receipt Note
vouchers.
• Set Use Rejection Notes to Yes to activate Rejections In and Rejections Out vouchers.
• Set Allow Purchase Order Processing and Allow Sales Order Processing to Yes to
activate Purchase Order and Sales Order vouchers.
A typical Receipt Note inventory voucher screen appears as shown below:
The screen is divided into three sections:

1. The Type, Reference and Date of the Voucher.
2. Party's Particulars and Ledger Account.
3. Inventory Item Details.
You can change the voucher type by selecting the required type from the Button Bar.
Note: In some cases such as Receipt Notes (where you have opted for Use rejection notes in
F11) you will see a pop-up screen from which you select the right voucher.
More:
Type of Voucher
Tracking Number
Default Voucher number
Order Details (in case Purchase Order Processing is active)
Type of Voucher
Select the Voucher required form the Button bar.

Prior to making a voucher entry, ensure that you are using the right voucher. You can change the
voucher type by selecting the new type from the Button Bar. In some cases, like receipt notes
(where you have opted for Use Rejection notes in F11: Features) you will see a pop-up screen
from which you can select the appropriate voucher.
Voucher number
Voucher numbering by default is automatic. It can be entered manually by setting it in Voucher
Types.
Reference number
This is optional. You can enter a reference such as Purchase Order Number or Supplier's
Delivery Note Number.
Date of voucher
The date of the voucher you are entering is displayed at the top-right of the Voucher Creation
screen. By default, this will be the Current Date. You can change the date to the transaction date.
Note: You can change the date using the F2: Date button on the Button Bar.
Ledger Account
There are no To/By or Dr/Cr in inventory vouchers.
To select a ledger, type the first letter of its name and Tally will display a List of Ledger
Accounts. As you continue typing, the highlights reduce until a match is found. Here you usually
need a supplier's ledger account.
Supplier's name and address
Enter details of the supplier's name and address. This can be different from the ledger name or
can be the same. This information is useful when printing out the Goods Receipt Note.
Name of the Item
From the pop-up list of Stock Item, select the Stock Item that is being received. If it is not in the
list, create it using ALT+C.
Tracking Number
Set Use Tracking Numbers to Yes in F11: Features > Inventory Features
The Tracking number is used to link the Receipt Note with the Supplier's Invoice that will be
received later. (Supplier's Invoice is recorded through the Purchase Voucher). Hence, select the
number which helps maintain the link. Tally gives the Receipt note number and the Reference
number as default. However; you may opt to give your own number, in which case select New
Number. If you do not wish to give a tracking number at all, select Not Applicable.
Tracking numbers link the different accounting vouchers with the inventory vouchers as follows:
1. Receipt Note/Goods In vouchers are linked to Purchase Vouchers
2. Goods Out /Delivery Note are linked to Sales Voucher/Invoice.
3. Rejections-In is linked to Credit Note
4. Rejections-Out is linked to Debit Note
New number
Enter a new number that is not in the list. You can use this number to reconcile, while making a
Purchase Voucher entry.
Not applicable
You can select Not applicable if you do not want tracking number. This may be resorted in cases
where you want to update stocks immediately with this entry and no goods inward entry is
needed.
If you select Not Applicable in an inventory voucher, it will update stocks and you need not
make a separate accounting/invoice entry.
Uses of the option Not Applicable
• If you need to raise a sales voucher/invoice that accompanies the goods and do not want
to pass Goods Out entry, Not Applicable will update stocks without the Goods Out entry.
• When you record a purchase voucher and wish to update inventory without a separate
Goods In entry, select Not Applicable for the tracking number.
• The same applies to Debit Notes-Rejection Out and Credit Note-Rejection In.
• When you send out samples for approval, where you do not want to raise an invoice.
• When you receive samples, but no invoice will be forthcoming.
Default Voucher number
Reference number
Tally lists the voucher number and the reference number of the current voucher for selection.
Select the one that is easy to track later.
Pending tracking number

If you have a pending tracking number from a previous voucher, it will be listed here together
with details like location, quantity, rate and amount. Select a pending tracking number to adjust
that with the current voucher entry. This could be a Purchase Voucher received and recorded, for
which the goods are now being received.
Order Details (in case Purchase Order Processing is active)
If Purchase Order Processing is activated in F11: Features, an order field will be available. Select
Not Applicable if there are no order particulars to adjust or record.
If the order exists, the fields are automatically filled up once you select the order number from
the pop-up list. These are available for editing (can alternatively be set so that editing is not
permitted through F12: Configure). Otherwise, select a new number to input order details at this
point.
Location
If you have more than one location, you must specify the location to which this item relates. The
List of Locations will pop up to enable you to specify the location quantity, rate and amount for
the item. You can give multiple locations.
Batch Number
If batch number is enabled in F11: Features, the batch number can be given in the locations sub-
screen. Select a batch number from the List of Active batches batch numbers, or give a new
number for a new batch.
Mfg. Date
The Manufacturing Date appears only if it has been activated. Specify the date of manufacture.
This enables you to set expiry date for the batch as a period from the date of manufacture. For
example, three months from the date of manufacture.
Expires on
This field appears only if it is enabled. Enter the date of expiry or a period from the date of
manufacture. If you have disallowed the use of expired goods for the Item, you cannot issue
them after the expiry date.
Quantity
You can set Company Features to allow Actual and Billed Quantities. You have to enter both
quantities here. The actual quantity updates stock and the billed quantity affects the accounts.
Give the quantity either in the main unit or the alternate unit. You may even specify quantities in
both units. For example, 100 bars=150 Kgs.
Rate
Specify the rate for the stock item. If you have entered Standard Rate for the item, the voucher
will pick the relevant standard rate for that date by default. You can modify it while entering the
voucher.
Per
In this field, you can enter the unit of measure for the quantity of the item. This can be the main
unit or even the alternate unit.
Amount
The quantity multiplied by the rate per unit will be the amount.
End of List
In all multiple allocations or selections, you should either select the option End of List or press
Enter at the first blank field. This will accept the multiple allocations and take you back to the
parent screen. For example, Multiple locations, batches or items.
Narration
Here, you can type appropriate information for the transaction.
Creating a Stock Journal
A Stock Journal is used to transfer materials or stock from one location to another location.
Stocks can also be shown as consumed. It can only be produced without consumption and
production. Hence, it is not like other journals where debits and credits match.
You can specify quantities that are moved, their rates and amounts. If standard rates are entered
in the Stock Item masters, they will appear. In the target location, you can specify additional
costs incurred without actually affecting accounting at all. Only the stock value goes up. Hence,
it is technically correct where an expense incurred on production or inward has been accounting
for in the cost of that item.
To create a Stock Journal Voucher
1. Go to Gateway of Tally >Inventory Vouchers
2. Select the button F7: Stk Jrnl from the button bar or press Alt+F7
The Stock Journal Screen has three parts -

1. The part at the top accepts general information.
2. The left-hand side accepts the Source Godown or Consumption Part.
3. The right-hand side accepts the Destination Godown or the Production Part.
You must furnish the common information required in the field that appears at the top. You may
elect to give information for only the left or the right part or both.
More:
Common Information
Common Information
Reference, date and voucher number

Reference field will be displayed if this is option is activated for the voucher. Give a reference
number, if required. Voucher number depends upon the settings in Voucher Type.
Source (Consumption)
Select the name of the Stock Item and the Godown from which it moves or where it is consumed
as well as the Quantity, rate and amount. If the rate is specified in the Stock Item master, it will
be displayed when you indicate the Item name.
Note: The effect of entry in this part is to reduce stock of the Items specified.
Destination (Production)
Mention the name of the item and the Godown to which the item is moved. It is not necessary
that the Item names should match the names in the source part. This is because a totally new Item
could be produced out of the materials consumed. You can specify the rate of the Item, Quantity
and amount. If the rate is specified in the Stock Item master, it will be brought up when you
indicate the Item name.
Note: The effect of entry in the Destination Part is of increasing the stock of the Items specified
in this part.
Additional cost details
This is another interesting facility is available for the Destination Godown (Production). You can
specify what additional costs were incurred in moving goods to the Godown or for producing
them. Though these costs are strictly accounting heads, they do not get posted in the relevant
nominal ledger accounts but add to the cost of the Item. In the target Godown, you can specify
additional costs incurred without actually affecting accounting. Only the stock value goes up.
Hence, it is technically correct where an expense incurred on production or inward has been
accounted for in the cost of that item.
After entering the amount for an Item, the following Additional Cost Details entry box pops up.
You may specify additional costs for transferring or producing the item. The typically additional
costs are wages, power, freight and so on. Ensure that you have ledger accounts opened for the
additional costs. Moreover, additional costs entered for the ledgers, do not reflect in the relevant
ledger with the amount but only add to the cost of the item.
Percentage (%-age)
You can specify the additional cost in percentage of the cost of the item, in which case enter the
number, for example, 2 for 2% of the cost of the item. You may, alternatively, skip the percentage
field and input an amount directly.
Actuals
This displays the total additional cost for the item and the effective cost per unit of item/product
produced.
Bill of Materials
A Bill of Materials is a list of constituent items along with quantity details that can be allotted
towards manufacturing a certain product, by-product or likewise. This facilitates immediate
reduction in stock of the item automatically. This process of listing the items that make up
another item is made possible in Tally by enabling the Bill of Materials Facility.
Enabling Bill of Materials
This is useful for manufacturing organisations and can be set up through F12: Configure. The
Bill of Materials option now appears in the Stock Item Creation screen only after entering a unit
of measure in the Units field.
1. Go to Gateway of Tally > F12: Configure
2. Select Accts/Inv Info from the Configuration Menu
3. Set Allow Component List Details (Bill of Materials) to Yes
A Bill of Material should be available while manufacturing an item. This is done through a stock
journal. It is advisable to create a new voucher type, say, Mfg Journal which is based on Stock
Journal.
More:
Stock Journal as Manufacturing Journal
Creating a new Manufacturing Journal
Creating a Bill of Material
Input fields
Advanced Usage
Stock Journal as Manufacturing Journal
Stock Journal vouchers have an option Use as a Manufacturing Journal, in the Voucher Type
Creation screen which has to be set to Yes.
2. Select Accounts Info. > Voucher Types > Alter
3. Select the Stock Journal Voucher from the Voucher Types
4. Set the option Use as a Manufacturing Journal to Yes
When you use a Stock Journal as a Manufacturing Journal, the Stock Journal voucher entry
screen will be modified to accept Name and Quantity of the product being manufactured, its list
of components and additional costs of manufacture associated with it. For an end-product item, if
you have specified a bill of material that contains the list of components, this list will be brought
up automatically and filled in for the quantity of the end product.
Creating a New Manufacturing Journal
To create a new Manufacturing Journal

2. Select Inventory. Info > Voucher Type > Create
Name
Give a new name to the voucher type, for example, Manufacturing Journal.
Type of Voucher
This must be Stock Journal. Select it from the pop-up list.
Abbr.
Enter a suitable abbreviation. For example, Mfg Jrnl. This is the abbreviation to the voucher type
name.
Use as a Manufacturing Journal
Set this option to Yes.
For more details on voucher type refer Create a Voucher Type.
Creating a Bill of Material
Bill of Material (BoM) is created only for those items that are being assembled in-house. For
trading items, you do not need a BoM. Therefore, you need to specify a BoM at the time of
creating a Stock Item or when altering its master.
Let us create a new Stock Item Television Flatron and specify its BoM.
Go to Gateway of Tally > Inventory Info. > Stock Items > Create
The Stock Item Creation screen is displayed below.
Some information like Batches, Alt. Units etc. depend upon the company features, configuration
and invoicing set-up. For details on fields other than Set Components (BoM) refer to the Stock
Item Creation section under Inventory Information.
The difference for India/SAARC would be in the field Rate of VAT and MRP/Marginal.
• Set the option Allow Component list details (Bill of Materials) to Yes in F12:
Configure.
• A pop-up list for the components appears which has to be entered as shown below.
Unit of Manufacture
Specify the appropriate number of the finished product items that will be made. While
manufacturing and recording through a stock/manufacturing journal, record the item in multiples
of this unit of manufacture. The components are multiplied by the same factor automatically. You
are allowed to alter the components to reflect actual consumption, if there is a change from BoM.
Note: Under certain circumstances, it is better to give a larger unit of manufacture, for example,
per 1000 Pcs of nails, as raw material consumed for 1 piece of nail is insignificant.
Item, Godown (Location) and Quantity
Enter the component name and quantity. If there are multiple Godowns or Locations, specify the
storage location for the item.
Enter the options for all appropriate fields for the stock item and accept the screen.
Manufacturing Journal Entry

2. Select the button F7: Stk. Jrnl or press Alt + F7
If you are creating a new voucher type Manufacturing Journal, a pop-up menu is displayed with
the options default Stock Journal and Manufacturing Journal.
Select Manufacturing Journal and the following screen will be displayed.
Input Fields
Reference Number
Enter a reference number, if required.
Name of Product
Enter the name of the Stock Item to be manufactured.
Location
Enter the location where the Item is manufactured. This location will show the stock.
Qty
Enter the quantity of the item to be manufactured.
Component (Consumption)
The component list for manufacturing the product and the proportionate quantity of each
component (based on the quantity specified for the product in BOM) is produced. For each
component, the default location is given as specified in the BoM. The entire component list can
be altered, components added or removed and locations amended.
Note: Any change made during this entry will not affect the original Bill of Material for this
product. If you want to make permanent change to the Bill of Material, alter the Stock Item
master information of the product.
Cost of components
The base cost of the components are automatically added and displayed on the screen.
Additional cost components
Specify additional costs for producing an item. These are typically wages, power, and freight.
Creating ledger accounts for the additional costs is a must. Moreover, additional costs entered for
the ledgers are not reflected in the relevant ledger with the amount, but these additional costs
only add to the cost of the item.
% age
Additional costs can be entered in terms of percentage of cost of components, for example, 2 for
2% of the cost of components. You can also skip the percentage field and enter an amount
directly.
Total additional cost
This field displays the total additional cost for an Item.
Effective cost
This is the sum of the total cost of components and additional costs.
Effective rate
Effective cost per unit of item/product produced.
Advanced Usage
Stock Journal or Manufacturing Journal can be created directly while creating a sales invoice.
This is very helpful in situations where the manufacture has not been recorded but the invoice is
prepared.
While creating an invoice, place cursor at the quantity field of the Stock Item (manufactured
product), press ALT+V to bring up the Manufacturing Journal screen for the product/item. Once
the details are entered, you are brought back to the next field in the invoice screen. The
manufactured product is invoiced and the corresponding list of components reduced from stock
in a single transaction entry. Thus, the item would be manufactured, its components reduced
from stock, and also invoiced in a single transaction entry.
ALT+V creates a new Stock Journal or Manufacturing Journal transaction voucher and is not to
be used for allocation. If ALT+V is pressed again during alteration of the invoice, one more
Manufacturing/Stock Journal will be created and it will not alter the previous Manufacturing
Journal.
Alteration of Manufacturing/Stock Journal

To alter the Manufacturing/Stock Journal
1. Go to Gateway of Tally > Display
2. Select Inventory Books from the Display Menu
3. Select Stock Item
4. Select the required Manufacturing Journal screen
Or
1. Go to Gateway of Tally > Display
2. Select Statement of Accounts from the Display Menu
3. Select Statistics > Mfg or Stock Journal
4. Select the required Manufacturing Journal screen. Make necessary changes and accept
the screen.
Checking the Vouchers Entered

To check the accuracy of the vouchers entered:
1. Select Day Book from the Display Menu.
2. Select F2: Period from the button bar and enter the period of display
3. Select F1: Detailed from the button bar or press the keys Alt + F1
4. Check the vouchers and if you find any error, position the highlight bar over the error and
press Enter for Tally to display the voucher details for alteration.
Note:
* It defaults to the current date only but you may display all the transactions for a particular
period.
* The alteration facility is subject to security and access rights. All alterations are available for
audit.
Purchase and Sales Orders
Order Processing
Order processing is the placing of orders with suppliers for purchase to be made from them or
receive orders from customers for the purpose of selling. In Tally, Order Processing is linked to
Inventories. This allows tracking of the order position for a Stock Item. Using this you can track
arrival of goods ordered and also whether the ordered Stock Item are delivered on time etc.
You can create Purchase and Sales Orders in Tally. Purchase Orders (PO) can be created, printed
and sent to suppliers. Goods received are linked with the POs and Invoices. Outstanding
Purchase Orders should be monitored. Stock Summary displays order position of any item. The
Purchase Order Book lists out all the Purchase Orders placed.
Likewise, Sales Orders received are recorded in Sales Order Entry screen. These details will be
available during Delivery Note and Invoicing. The order position in the Stock Summary can be
viewed. The Sales Order Book lists all Sales Order received.
Enabling Purchase and Sales Orders

To enable Sales Order and Purchase Order vouchers, activate the following in F11: Features
1. Set Allow Purchase Order Processing and Allow Sales Order Processing to Yes.
2. Enable Use Tracking Numbers
More:
Creating a Purchase Order
Altering a Purchase Order
Creating Sales Orders
Altering a Sales Order
View order position
Creating a Purchase Order
Purchase Order details depend on configuration settings.

To create a Purchase Order:
Go to Gateway of Tally> Inventory Vouchers> F4: Purc. Order
Party's A/c Name

Select the Supplier’s name from the List of Ledger Accounts. Use Alt+C to create a new
account.
Order No
Enter the purchase order number. Configure the voucher type through Accounts Info > Voucher
Types to set prefixes and suffixes for Purchase Orders. This particular Order No. field is an
additional field to record order number if it is different from the voucher number. The voucher
number is automatically displayed here; it is also possible to change this number if needed.
Name of the Item
Select the Stock Item that needs to be purchased from the List of Stock Items. The Item
Allocations sub-screen is displayed. Enter the details as shown below.
Due on
Enter the due date for delivery of the item. This monitors outstanding deliveries. The order can
be split for delivery on different dates. If the order is split, give the due date of the first lot to be
delivered. After selecting the respective Godown and entering the Quantity, Rate and Amount,
specify the due date for the second lot. If the whole lot is delivered at a time, press Enter in the
Due on field to return to the Voucher Creation screen.
The cursor then returns to the Item field once again. Now enter another item. If no other item is
required, press Enter in the blank field to navigate to the next field. Press the space bar to display
the List of Ledger Accounts.
You can also specify other expenses like freight, tax to be charged if any in the Purchase Order.
The Tax and Expense has to exist as a ledger account or it may be created using Alt +C
Location
This field should be entered with required details if multiple-location feature is enabled,
otherwise it does not appear.
Quantity, Rate and Amount
Enter the quantity of the item required and its rate. The amount is calculated, but it can be
modified to enable rounding off.
Additional Cost Details
Enter any additional cost incurred on the item here. This can be either entered as a percentage of
the item cost or a fixed amount. If not, select End of List. Additional costs increase the value of
the item, but they do not appear independently in the nominal ledger account or expense.
Next Item
The cursor comes to the Item field once again and you can enter another item to order. If no other
item is required, press Enter on the blank field to take the cursor to the tax/expense field.
Expense/Tax
Once the item details have been entered, specify tax to be charged and other expenses like
freight, if any. The tax or expense has to exist as a ledger account if they do not exist, create it
using Alt+C. Here, consider tax @ 17.5% that is charged on the item values.
The order entry screen appears as shown below.
Narration
This field is optional. Enter necessary particulars about the order.
Altering a Purchase Order
To alter a Purchase Order

• Go to Gateway of Tally > Display > Day Book
Or
• Go to Gateway of Tally > Display > Inventory Books > Purchase Orders Book
Make the necessary alterations and save.
Delete a Purchase Order

To delete a Purchase Order press Alt+D in the Purchase Order alteration screen.
Creating Sales Orders
Sales order entry is exactly like the Purchase Order Entry. Sales Order details will also depend
on configuration settings.
To create a Sales Order:
Go to Gateway of Tally > Inventory Vouchers > F5: Sales Order
Party's A/c Name
Select the Customer’s name. Press Alt+C to create a new account.
Order No
The voucher number is automatically displayed. You can change this number if required. Enter
the sales order number.
Name of the Item
Select the Item for which the order is to be placed from the List of Stock Items. Here, the Item
Allocations sub-screen is displayed.
Enter the details as shown below.
Due on
Enter the due date for delivery of the item. This enables monitoring of outstanding deliveries.
The order can be split for delivery on different dates. If the order is split, give the due date of the
first lot to be delivered and after selecting the respective Godown and entering the Quantity,
Rate and Amount specify the due date of the second lot. If the whole lot is delivered at a time,
press Enter in the next Due on field to return back to the Voucher Creation screen.
The cursor returns to the Item field once again and you can enter another item to be sold. Press
Enter on the blank field to take the cursor to the next field if no more items are to be entered.
Press the space bar to display the List of Ledger Accounts.
You can specify if there are any other expenses like freight or tax in the Sales Order. The Tax and
Expense has to exist as a ledger account (if not, press Alt+C to create them). Select the
respective ledgers to make the entries and save the voucher.
Location
In case multiple location features are active this field has to be mentioned. Otherwise it does not
appear.
Quantity, Rate and Amount
Enter the quantity of the item required, and also its rate. The amount is calculated and can be
modified to round it off.
Additional Cost Details
There are no additional cost details for sales orders. They exist only for Purchases as the values
are added to the cost price. In case of sales, additional cost needs to be entered below the line
along with tax.
Next Item
After completion of entering the first item, the cursor comes to Item field once again and you can
enter another item to order. If there is no other item, press Enter in the blank field to take the
cursor to the tax/expense field.
Expense/Tax
Once the item details have been entered, specify the tax to be charged and other expenses like
freight, if any. The tax or expense has to exist as a ledger account or it may be created using
Alt+C. Let us consider tax @ 17.5% to be charged on the item values.
The Sales order entry screen appears as shown below.
Narration
This field is optional. You can give some particulars about the order.
Altering a Sales Order
To alter a Sales Order

• Go to Gateway of Tally > Display > Day Book
Or
• Go to Gateway of Tally > Display > Inventory Books >Sales Orders Book
Make the necessary alterations and save.
Deleting a Sales Order
To delete a Sales order press Alt + D in the Sales Order alteration screen.
View Order Position
View the order position in Stock Summary.

2. Select Stock Summary
3. Select the button F1: Detailed from the button bar
The screen shows the Particulars, Quantity, Rate, Value and Period. However, you do not
know how much stock is on order both inward and outward.
1. Press Alt+ N or Auto-Column from the Button bar.
You get the following menu.
2. Select Orders & Stock Details.

Note: Set Remove Rate and Value to No in F12: Configure
3. This will enable all columns to fit in one screen.
4. You may further drill down each column to view further the details.
5. In the Stock Summary screen, you can even bring up a new column using Alt+C.
6. Sales Order Reports can be accessed through Alt+F7 or Alt+C of the stock Summary.
Note: Inventory Reports & Accounting Reports can also be accessed through ALL other reports
by pressing F9 or F10 (Accounting/Inventory Reports).
Invoice Entry
Invoicing or sales invoicing is almost similar to sales voucher entry. You will use the same
voucher but select As Invoice option to turn it into a sales invoice. Purchase invoices are
recorded through normal Purchase Voucher entry and it does not have the provision of being
converted into an invoice format for entry purposes. Similarly, you can print the Purchase
voucher as a Purchase Invoice or even a Purchase Order.
The advantage of using the invoice format for sales and purchase voucher entry is that it enables
automatic calculations of taxes and duties. This is possible for only those groups for which Used
for Calculation is enabled under the group Duties and Taxes. This is also possible for other
groups for which the field Used for Calculation is enabled in the Group Creation screen.
In recording both sales and purchase invoice details, you can adjust accounting and inventory
balances and account for Taxes simultaneously.
The default invoice formats has various configuration options. Use them to print your invoices as
per requirements. It is not necessary to create new invoice formats. It is recommended that you
configure the default invoice as per requirements. You can also design a new invoice using
Tally's Definition Language (TDL) Report Designer. TDL is quite an advanced language with
which you can create new reports and screens. You can even modify existing reports and screens.
Settings for creating Sales and Purchase Invoice

1. Ensure that Allow Invoicing is set to Yes in F11: Features to create sales invoice. This
brings up another option. Set Separate Discount Column on Invoices to Yes if you want
a separate column for discounts in invoices.
2. To create purchase invoices, ensure that Allow Invoicing is set to Yes and also Enter
Purchases in Invoice Format is set to Yes in F11: Features. If you want a separate
column for discounts in invoices, follow the procedure described above.
3. Go to Gateway of Tally > Accounting Vouchers. Select either sales or purchase voucher.
If you set Show Inventory Details to Yes in F12: Configure, all inventory details will be
displayed on voucher screen.
4. While creating Ledgers under the group Sales and Purchase Accounts, ensure that the
option Inventory values are affected is set to Yes.
5. If you want tax accounts (under the group Duties & Taxes) to use automatic calculation,
ensure that the Percentage of Calculation is entered (For example, 17.5) and the
appropriate Method of Calculation is selected from the pop-up menu in the Ledger
Creation screen. If it is to use Tax based on Item Rate, then the Stock Item must have
the rate specified. For more details refer Ledgers.
More:
Configuring the Invoice
Printing Invoices and Vouchers
Configuring the Invoice
Before creating the invoice, you need to configure the invoice.

1. Go to Gateway of Tally > Accounting Vouchers> F8: Sales/F9: Purchases (As Invoice)
2. Select F12: Configure
Set the options as required.

1. Complete Accounting Allocations in Order/Delivery notes? Accounting allocations are
not normally made during order recording or delivery notes. Yet you can set it to Yes if
necessary.
2. Allow modification of ALL fields during entry: Default order/delivery note entries
appearing in the invoice can be changed during invoice entry. Set this to Yes to permit
modification of all fields.
Further, you can configure its printing as follows:
Go to Gateway of Tally > F12: Configure > Printing > Sales Transactions > Sales Invoice
Invoice Printing Configuration appears as shown.
Set the print options as desired. You can configure the invoice as per your requirement. The
options depend on the various F11: Features and F12: Configure options that have been set for
your company and for the voucher either by you or by the administrator.
In the above screen, the options are tuned to International settings. These will change if you opt
for India/SAARC in the basic company settings. The details that you give during invoice entry
depend very much on the configuration settings.
Likewise, the details that you give during invoice entry depend very much on the configuration
settings. Consider a typical invoice entry screen.
During invoice entry, some of the information will be selected from the separate pop-up screens.
The invoice format is different from the normal sales voucher where the accounting information
is the primary information and the stock information is secondary. In the invoice format, stock
information is primary information and accounting information is the secondary.
Sales Voucher number
This number is controlled by the settings in the voucher type masters.
Date
Change date using [F2], when you need to.
Reference
This is an optional field. Give any reference particulars that can be later picked up using the
range or filter mechanism. This has, traditionally, been used for tracking missing tax forms.
Party's A/c name
Select the customer's ledger account. This account will be debited by the total invoice amount.
You may select a party ledger (under the groups Sundry Debtors or Sundry Creditors) or even
Cash or Bank Account (for cash sales).
Party's other details
This information is to be filled up in the secondary screen that pops up.
You may have a different consignee name and address than the buyer (if configured for).
Delivery Note No(s)
Select the Delivery Note number if there was any for the shipment, from the Pop-up List of
Tracking numbers. This way you reconcile goods despatched with the invoice and financial
records. Select Not Applicable if no separate delivery exists. The choice is required only if
Tracking Numbers are active.
More:
Despatch, Order and Buyer Details
VAT
Despatch, Order and Buyer Details
Enter the despatch details. These are printed on the invoice.

Order Details
The order particulars are entered here. If a prior order is recorded for the customer, a pop-up list
of pending orders appears. Select the relevant order or orders. Raise an invoice against a single
order or even multiple orders. Select New Number if no prior order exists for this invoice, but
you want to record the order particulars. Select Not Applicable if not applicable. Select End of
List to move to the next item.
Buyer's Details
The Buyer's Address as per the master records appears as default, but you may alter it. If you
have configured to have the Consignee address as well as Buyer address, these details are also
displayed. Accept or modify them as required.
Note: The location column appears only if Multiple Location is enabled in F11: Features.
Enter the inventory items that need to be invoiced. Once you have selected the first item and the
tracking number and you have multiple locations set up, a secondary screen appears for the
item particulars.
Enter the quantity, rate and unit particulars. You can select more than one location from where
the goods have been despatched. Press Enter at the first blank location field to accept the first
item's allocation of location and other details. You now have to give the accounting ledger that
will be affected for the sale of this item.
Accounting details
Enter this information in the secondary screen that pops up after allocation of each item. Select
the relevant sales account to be debited for the first item.
Where you have more than one Stock Item

Each item will require item allocation and accounting allocation. You must repeat the procedure
till you have completed all the items for that invoice. Press Enter on blank item or select End of
list to complete the cycle.
VAT/Tax or other expenses
These accounts are entered after the total value of stock items. Select relevant ledgers for the list.
These are ledger accounts and will affect accounting ledgers. For accounts like VAT/Sales Tax
that are under the group Duties & Taxes (or are otherwise specified as Calculate in invoice entry
in their masters), the amounts are calculated automatically. Press Enter on blank item or select
End of list when you have completed.
Bill Details
You must give bill-wise particulars, if the feature is activated for this particular party ledger.
After you give the narration, accept the invoice.
Printing Invoices and Vouchers
To print any voucher or invoice, press ALT+P or click on the button Print. You can configure
the voucher type to print automatically after saving the voucher.
Note: You can configure the printing options by selecting the appropriate buttons. You can give
additional information, change titles, print additional pages, change printer settings.
The buttons Pre-Printed and Quick Format toggles for Plain Paper and Neat Format
respectively. These are print specifications that you set. Pre-printed is for pre-printed stationery.
Quick Format does not give fonts or other niceties but is ideal for fast printing. Select copies and
give the number of copies to be printed, by default this is set to one copy. You can set the number
of copies in Invoice Printing Configuration
Go to Gateway of Tally > F12: Configure > Printing
View invoice as voucher and vice-versa
Once you create the invoice, you can view it as a voucher by simply displaying it and clicking on
the toggle button [As invoice] / [As Voucher] or pressing CTRL+V. The same can be done with
a sales voucher to be brought up as an invoice
Display/Alter a Voucher/Invoice
You can display a voucher or alter it (subject to authority), by simply drilling down any display
screen.
For example, from the Balance Sheet, press Enter on the group Sundry Debtors, then on the
particular ledger, which brings up its monthly summary. Continue the selection process till you
see the list of vouchers and then the voucher itself. You may to alter a voucher by going through
the ledger display screen or the Day Book.
Note: If you do not have the authority to alter a voucher, the voucher would be brought up for
display only.
Advanced Voucher Entry
Advanced Accounting Vouchers

Advanced usage in voucher entry involves using more features of Tally. This would mean
entering of data in various pop-up and sub-screens depending on the context and configuration
(both F12 and F11) settings.
Bill-wise details
Bill-wise details are pertinent only for party accounts, viz., ledger accounts classified under
Sundry Debtors, Sundry Creditors and Branch/Divisions. Activate Bill-wise details if you wish to
track each invoice and adjust the bills and payments bill-by-bill.
When you make a sales or purchase voucher with Bill-wise turned on, Tally prompts you to
identify the invoice with an appropriate reference number. The reference can then be used to
allocate payments to the correct invoice to maintain an accurate account of outstanding. Hence,
Bill-wise details sub-screen comes up for party accounts during receipt/payment voucher entry or
purchase/sale voucher entry or debit note/credit note entry.
To activate Bill-wise details:
1. Set Maintain Bill-wise details to Yes in F11: Features
2. Set Maintain Bill-wise details to Yes while creating the respective Ledger Masters.
Setting this option to Yes displays an additional option Default Credit Period. Credit
Period is the number of days allowed to the Sundry Debtor to pay back or assigned to the
Sundry Creditor to remind us of our payables. Specifying the period here is automatically
reflected in the transaction. However it can be altered during Voucher Entry.
Note: Bill-wise details sub-screen does not appear for pure inventory vouchers. It is relevant
only for accounting purposes.
Let us take an example of a Purchase Voucher where we credit the supplier XYZ Supplier with
Rs. 2000. After the amount field, the Bill-wise sub-screen pops up. The sub-screen appears as
shown below.
Type of Ref
Bill reference can be of four types:
1. Advance
2. New Ref
3. Against Ref
4. On account
You must select one or more of these to adjust the amount. The amount can be broken up and
given different Reference Numbers and different Due Dates.
For example, the Rs.2000 can be split into two parts say Rs.500 and Rs.1500. Give Reference
Numbers 5 and 6 respectively and specify Due Date as 31st May and 15th June 2005. Thus you
have the option of adjusting the amounts with different reference numbers and different Due
Dates.
Advance
This is relevant when the money is received or paid in advance. You can adjust this advance
amount while making the sale or purchase entry.
New Reference
You select this for new transactions. For example, for a new bill raised on your customer or
raised on you by your supplier. If you mark the bill as a new reference, it is added to the list of
outstanding. In the field, you can give the voucher number, the reference number, or any
alphanumeric set of characters that would identify the reference and help set it off later using
against reference. You are not allowed to give the same name for two new references. In other
words, new references must be unique.
Against Reference
Select this when adjusting against a previous reference, i.e., adjusting against a bill marked new
reference. Mark a bill as new reference and adjust its payment by marking the payment against
reference. When selecting against reference, a list of pending references (bills) for the party
comes up from which you select. You may adjust the whole bill or part of it. The rest of the bill
remains unadjusted. You can use Against Reference even to adjust advance with an invoice. You
can do this when entering a purchase or sales voucher. If there are no pending bills, the option
will not be available.
On account
On Account is selected when you are unable to mark a payment or a receipt against specific
pending references. You need to do this in cases of lump sum payments where a number of bills
are pending but you are not instructed against which bill the money should be adjusted.
However, the user can alter the payment/receipt voucher and select the relevant Agst references
Name
In this field you can give the voucher number, the reference number, or any alphanumeric set of
characters that would identify the reference and help set it off later using against reference. You
are not allowed to give the same name for two new references. In other words, new references
must be unique.
Due date or credit days
This is applicable for new reference. Give the credit period for the bill or the date when it is due
for payment. Give either one of them and Tally will calculate the other.
Amount
This is the amount for adjustment. The amount given in the voucher automatically appears here.
You can break up the amount and adjust it in several installments giving different references.
Dr/Cr
Specify whether the adjustment is debit or credit.
It is usually Dr for sales New References and Cr for Purchase New references. It is usually the
same as the voucher entry.
Maintaining Bill-wise details helps you to obtain information on Pending Bills, Bills Due,
Overdue Bills etc and reports such as Outstanding Analysis and Ageing Analysis. To get these
reports
Go to Gateway of Tally > Display > Statement of Accounts > Outstandings
Cost centre allocations
Cost centre allocations will be relevant if you have opted for Cost Centres in F11: Features.
To display relevant ledgers
Go to Gateway of Tally > Accounts Info. > Ledgers.
By allocating ledgers to Cost Centres at the time of voucher entry, you do away with the need to
reconcile them. They are reconciled from that very moment. Hence, you save time and effort
when you need to use the information for analysis. Cost Centre analysis is a powerful tool that
enables you to know the performance of the Cost Centres.
To display Cost Centre information
Go to Gateway of Tally > Display > Statement of Accounts > Cost Centres.
More:
Cost Categories
Tracking Number
Default voucher number and reference number
Foreign Exchange transactions
Zero Valued entries in vouchers
Cost Categories
Let us take an example:
1. Create three Cost Categories named Departments, Executives and Projects.
2. Create three Cost Centres named Marketing, Manufacturing and Finance under the Cost
Category Departments. Create three Cost Centres Salesman A, Salesman B and Salesman
C under the Cost Category Executives. Create three Cost Centres Airports, Roads and
Buildings under the Cost Category Projects.
The structure for creating Cost Categories and Cost Centres are shown below:
Cost Categories: Departments Executives Projects
Cost Centres: Marketing Salesman A Airports
Manufacturing Salesman B Roads
Finance Salesman C Buildings
You can specify a Cost Category to allow allocation of only revenue items or items of both
revenue and capital nature. In this example, allow allocation of items of both revenue and capital
in nature for both Departments and Projects categories and items of only revenue in nature for
Executives.
Now, Salesman A incurs conveyance expenses. If he has incurred it for marketing, allocate this
amount to the cost centres Marketing and his own cost centre Salesman A. (You would do it
while entering a payment voucher debiting Conveyance and crediting Cash). If the salesman now
incurs expense for the project Buildings, you would allocate to the Cost Centres Salesman A and
Buildings. You may allocate an expense to one or more Cost Centres and it is not essential to
always allocate to all Cost Centres. An expense can remain unallocated to other Cost Centres.
In case Cost Categories are not enabled, you will be able to allocate the expense to either
Buildings Cost Centre under Projects or Salesman A under Executives and not to both. In such a
case, you would not obtain the third dimension.
You may not have Cost Categories activated if you do not need to. Without Cost Categories, you
will allocate the ledger amount to only one set of Cost Centres, and not to parallel sets. Hence,
you would allocate the conveyance expense to Salesman A only and not to both Salesman A and
Project Buildings. You can allocate the expense partly to Salesman A and partly to Project
Buildings that adds up to the total amount. This information will not enable you to know how
much Salesman A spent for the Project Buildings.
Note: You do not allocate transactions to cost categories you allocate them to cost centres only.
The concept is like group/ledger account classification.
Cost Centre allocations have to be done in pop-up sub-screens in the main voucher entry screen.
The sub-screen pops up after the amount field pertaining to the ledger for which cost centres
have been activated. Hence, the following is the sub-screen for the ledger Conveyance amount in
a payment voucher:
Applying Cost Centres to Ledger Accounts

Activate Cost Centre for the Ledger Accounts that are used in voucher entry.
In this example, make a payment voucher for the amount Rs. 1, 00,500. Hence, enable Cost
Centres for the ledger Conveyance.
2. Select Accounts Info > Ledgers>Alter
3. Select the ledger Conveyance from the List of Ledgers. Set Cost Centres are
Applicable to Yes. If the ledger Conveyance is not available create a new one with Cost
Centres enabled.
Cost Centre Allocation in Voucher Entry

The entire objective of creating Cost Centres is to allocate expenses and revenues to Cost
Centres. Allocation is dynamic and done at one stage only, at the time of making voucher entries.
For example, make a payment voucher for conveyance
Go to Gateway of Tally > Accounting Vouchers > F5: Payment
The voucher entry screen appears. Debit the amount to the Conveyance ledger. Cost Centre
allocations have to be done in pop-up sub-screens in the main voucher entry screen. A sub-screen
pops up after the amount field pertaining to the ledger for which cost centres have been
activated. The sub-screen for the ledger Conveyance and in a payment voucher appears as shown
below.
Inventory items need to be considered in financial vouchers where you use ledger heads that
have the option Are Inventory Values affected? set to Yes. Similarly you will have the accounts
of the type Sales and Purchases affecting inventory. When you enter a voucher (usually a Sales
or a Purchase Voucher) a sub-screen pops up after the concerned ledger head and amount asking
you to enter inventory item details.
The inventory details that you give in an accounting voucher (like Sales and Purchase Voucher)
affects stocks by immediately updating them only if Tracking Numbers are not activated in F11:
Features. Otherwise, the inventory allocation tracks against Goods In or Goods Out notes
through tracking numbers.
The information that you need to give in the inventory allocation sub-screen depends upon the
A typical inventory allocation sub-screen appears as shown below.
Name of Item
Select the item from the list of items or press ALT+C to create a new item.
Tracking Number
The tracking number pop-up list appears after you have entered the name of the item.
A default list will contain the following:
1. New number – Enter a number, which is not in the list. You will use this number to
reconcile, when making goods inward entry.
2. Not applicable – If you do not want a tracking number. This may be resorted to in cases
where you want to update stocks immediately with this entry and no goods inward entry
will be needed. Not Applicable option is important and the cases where you would use it
are:
When you raise a sales voucher/invoice that accompanies the goods and you do not want to pass
Goods Out entry. Not Applicable will update stocks without the Goods Out entry.
When you send out samples for approval, where you do not want to raise an invoice. Likewise
when you receive samples but no invoice will be forthcoming.
Default Voucher Number and Reference Number
The voucher number and the reference number of the current voucher are also listed and
available for selection. Select the one that is easy to track later. By default the reference no. and
the Delivery note number are highlighted in the receipt note and delivery note for tracking.
Pending Tracking Number

If you have a pending tracking number from a previous voucher, it will be listed here together
with details like location, quantity, rate and amount. Select a pending tracking number to adjust
that with the current voucher entry. This helps in the following situations.
1. When you pass a purchase voucher for an invoice that is towards a Goods Receipt Note
that you had previously passed. (You would have given a new tracking number then).
2. Likewise for a sales voucher/invoice.
Location
If there is more than one location, you must specify the location to which the item relates. Hence,
a sub-screen appears after the tracking number, to enable you to specify the location quantity,
rate and amount for the item. You can give multiple locations.
Batch Number
In the locations sub-screen itself, the batch number can be given if batch numbers are activated
in Company Features. Select a batch number from the list of existing batch numbers or give a
new number for a new batch.
Mfg. Date
This appears only if it is activated. Give the date of manufacture. This enables you to set expiry
date for the batch as a period from the date of manufacture such as “three months from the date
of manufacture”.
Expires on
It appears only if it is activated. Give the date of expiry or a period from the date of manufacture.
If, for the item, you had disallowed the use of expired goods; you cannot issue them after the
expiry date.
More:
Quantity
Quantity
You have to enable the option Use different Actual & Billed Qty? to Yes in F11: Features to
allow Actual and Billed Quantities. Then, you have to give both quantities here. The actual
quantity updates stock and the billed quantity affects the accounts. Give the quantity either in the
main unit or the alternate unit. You can even specify quantities in both units. For example, 100
bars=150 Kgs.
Rate
Enter the rate for the stock item. If you have entered Standard Rate for the item (Standard Cost
and Standard Selling Price – see item master), the voucher will pick the relevant standard rate for
that date by default. This can be modified while entering the voucher.
Per
Enter the unit of measure for the quantity of the item here. This can be the main unit or even the
alternate unit.
Amount
The quantity multiplied by the rate per unit is the amount.
End of List
In all multiple allocations or selections, you must either be required to select the option End of
List or press Enter at the first blank field. This would accept the multiple allocations and take
you back to the parent screen. For example, Multiple locations, batches or items.
Foreign Exchange transactions
Enabling Foreign Currency

To enable Foreign Currency
• Set the option Allow Multi-Currency to Yes in F11: Features
Note: Only genuine bank accounts that are maintained in foreign currencies need to have their
currency set up in that foreign currency otherwise all other ledgers should preferably be set to
home/base currency only.
Based on the above settings, consider a Purchase Voucher entry of an import transaction in
foreign exchange and then a payment entry made from a Forex Bank Account.
More:
Example 1: Foreign exchange transaction of an import transaction.
Example 2: Voucher entry of a forex bank payment
Example 1: Foreign Exchange Transaction of an Import

Transaction.
In the purchase voucher

1. Enter the date, voucher number and reference.
2. Ensure that you have created a supplier under Sundry Creditors with the foreign currency
specified in the Currency of the Ledger field.
3. Credit the supplier.
4. In the Amount field, start with the foreign currency symbol to inform Tally that it is a forex
transaction. In this case, type $ (base currency is £) and continue with the amount. $25000.
5. A forex sub-screen displays. Enter the exchange rate as per the bank or as mentioned on the
purchase invoice. (Tally gives the default exchange rate mentioned in the foreign currency
master). You can change the rate, if required. Alternatively, change the amount and the rate
will be adjusted automatically. If you want to give only the base currency, clear the Forex
field and Rate of Exchange field and mention the Value in base currency. The exchange
rate will then be ineffective.
6. In inventory item allocation, consider a purchase of 50 rolls of paper. You can give the rate
of the item in base currency or foreign currency. To mention it in foreign currency, start the
rate entry with the forex symbol. Tally converts it to the base currency at the exchange rate
previously mentioned.
Note: If you want to give only the base currency, clear the forex field and Rate of Exchange field
and simply enter the Value in base currency. The exchange rate would then be ineffective. Of
course, if you do not enter a foreign currency in the amount field, the amount is assumed to be in
home/base currency.
Example 2: Voucher Entry of a Forex Bank Payment
It is assumed that the bank account ledger is maintained in foreign currency.

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

There is no separate section on this. Normal inventory voucher entry includes a discussion on the
advanced issues.
Zero Valued Entries in Vouchers
To use zero values in vouchers,

• Set the option Allow 0 Valued entries in Vouchers to Yes in F11: Company Features >
Inventory Features
There is no point in having a voucher that is totally without value.
Zero values are required in the following situations:
1. One of the entries may not have a value but yet needs to be shown in the records.
Example: Zero-rated VAT or Exempt from Tax Account. You are permitted to make such
an entry. The Exempt Ledger account can be viewed for all Exempt Sales.
2. Zero valued vouchers are possible for sales and purchase vouchers as these permit invoicing
for free samples. A whole Voucher could be of zero value in only sales and purchase
vouchers but this is not possible in receipt, payment vouchers and journal vouchers.
Example 2 - Invoice for Free Samples
Display – Tally's Forte
Tally's Display of information is designed to allow a user get the maximum benefit of the data
that is entered. A user gets a holistic picture of the data and is also able to present information
using different options. The purpose of compiling data is to present it in comprehensible
accounting reports. On entering the vouchers, Tally uses the same data and provides you with the
management control reports in addition to all books and statements.
The display screens of Tally are dynamic and interactive. They are not spooled print files but are
specially designed for the screen. Whatever you see on the screen can be printed as well
depending upon your printer’s capabilities.
To view the Display Menu:
Go to Gateway of Tally > Display
The following screen displays
Gateway of Tally displays only the Balance Sheet and Profit & Loss Account directly as these
statements are considered the most important. All the other Tally reports are classified into two
broad categories, namely. Accounting reports and Inventory reports conforming to the two major
areas of operations. Each area is further grouped into books and statements.
The Cash and Funds Flow display too has not been grouped under Statements of Accounts.
Trial Balance provides you a report on the account balances sorted by groups, for all the accounts
of the selected company. In other words, the Trial balance displays a collection of main groups
and their closing balances.
The Stock Summary is a statement of stock-in-hand on a particular date and gets updated every
transaction so as to provide the current stock position.
The Ratio Analysis Statement is a single sheet report indicating the company’s performance
based on values and key indicators, over a selected period. This report gives a manager an idea of
the company's financial condition and where it is going in the short-term.
The Day Book contains all vouchers for the day, including inventory vouchers. Its purpose is to
show you a day's transactions, though you can display a report for any period using Change
period option.
The List of Accounts gives the tree structure of all your masters, namely, Groups, Ledgers, Stock
items, Cost Centers, Currencies, etc.
Exception Reports are those reports that track unusual transactions or balances.
More:
Basic features of displaying reports
Modifying reports
Basic Features of Displaying Reports
Tally creates the books of accounts and the financial statements based on the vouchers entered
till date. You can then customise the appearance of reports as required.
For example, you can compare different companies, periods of the financial year, groups and
ledgers.
Press Enter after highlighting the item in a report, to navigate to the next level of detail till you
reach an individual voucher. Similarly, you can navigate back to higher levels by pressing Esc.
The special features available for a displayed report are indicated on the button bar, which can be
operated by a single- click of the mouse.
Accessing reports
The Gateway of Tally menu provides access to all the financial reports listed in the Display
Menu.
For example, if you want to view the Sales Register,
Go to Gateway of Tally > Display > Account Books > Sales Register.
Tally will display the report for the currently selected period.
Modifying Reports
On selecting a report, the screen displays. Modify the display to suit your requirements using the
appropriate buttons from the button bar.
If you select the buttons using the keyboard, the conventions are:
F (n): - Press the F (n) key
F (n): - Press Alt + F (n)
F (n): - Press Ctrl + F (n)
Note: Here n is used as an example of a function key (Eg: F1,F2 and so on).
(Alt + F1) F1: - Detailed/Condensed

Adds a further level of detail to the report, or condenses the report.
F2: Period
You can change the period of the report by specifying From/To dates.
F3: Company
If you have more than one company selected, this button enables you to switch among them to
display the new company data in the current screen format.
F4: to F10:
The functions performed by these buttons vary from report to report.
F11: Company Features

This button is not related to displaying reports but to setting the options that affect the voucher
entry.
F12: Configure
This button is very relevant to displaying reports and enables you to define the report-specific
options.
For example, depending on the report displayed you can specify whether it should be in
horizontal or vertical format, show percentages, show gross profit, show opening and/or closing
balances, change the periodicity, change the sorting method, and so on.
For instance, if you want to view graphs with monthly reports:
1. Select the F12: Configure Button while in the Gateway of Tally screen and you will be
taken to the Configuration menu.
2. Select General and by default Show Monthly Reports with Graphs under Other
Options is set to Yes. If this option is No set it to Yes.
(Alt + F12) F12: Range

This button enables you to filter the information displayed based on monetary values.
For example, you can specify that you want Tally to display only Vouchers having Batch Names
greater than $5,000 in a Day Book.
(Ctrl + F12) F12: Value

This button enables you to filter vouchers.
For example, you can specify that you want vouchers having Employee-Attendance Entries with
their Designation containing all the details about the employee.
New Column (Alt + C)

This button enables you to add and display another column in the report to compare information.
Alter Column (Alt + a)

This button enables you to alter the details of a new column added previously, for example, the
date range. Select the column to be altered by positioning the cursor on it.
Del Column (Alt + d)

Use this button to delete the columns, which you no longer wish to have in the report.
Auto Column (Alt + n)

Use this button to add multiple columns to a report.
For example, add columns for each month, or to accommodate other companies if more than one
company has been selected. You can also have a total column.
Report specific options

Report specific options, if any are displayed at the bottom-half of the screen and can be amended
as per requirements.
Display Account Books and Statements
Books of account
Books of account record the transaction details as entered. Although items are posted too many
different ledgers, Tally brings all the transactions of a particular category together into a book of
account for viewing and printing.
For example, Cash Book records all the transactions affecting cash and the Sales Book records
all sales transactions.
Statements of Accounts
These pertain to cost centres and outstanding analysis. The Statements of Accounts are derived
from individual transactions but are not statutory requirements.
Financial Statements
Financial Statements though derived from individual transactions tend to show summary totals,
ratios and statistics, analyzing a company's financial data in a wide variety of ways. Financial
statements include Balance Sheet, Profit & Loss A/c,and Cash Flow Analysis and form part of
the statutory requirements in most countries.
1. All books are displayed as a monthly summary with opening and closing balances.
2. Select a month and press Enter to display all transactions for the month. The opening and
closing balances as well as the total of all transactions are displayed.
3. Select a transaction to bring up the voucher. The voucher displays either in alteration
mode or simply displays depending on your access rights.
Let us see some typical examples of how to display the books of account and financial
statements. You will then be able to experiment with other statements for yourself.
More:
Viewing Cash/Bank Books
Display Balance Sheet
Display Profit & Loss Account
Display Trial Balance
Day Book
Books and Registers
Group Summary
List of Vouchers
Ratio Analysis
Cost Centre Reports
Outstandings and Credit Control
Viewing Cash/Bank Books
To view the Cash/Bank Summary

1. Go to Gateway of Tally > Display > Account Books > Cash/Bank Book(s)
2. If you have more than one bank account, select one bank account. Press Enter to
display the Ledger Monthly Summary.
3. Select F12: Configuration and activate the option Show with Graph to Yes.
4. Highlight a month, press Enter and the Ledger Vouchers screen displays.
5. All the vouchers for the selected month are listed. Press Esc to return to the Ledger
Monthly Summary screen.
6. Select F12: Value to bring up the Value to Calculate in Report screen.
a. Select Voucher Type from the Particulars menu.
b. In the Particulars menu, select Narration.
c. In the Range of Info. Menu select equal to.
d. Type Contra in the next field and press Enter.
e. In the Condition menu select End of List and press Enter twice.
7. In the display of the Ledger Monthly Summary the figures are now reduced as they show
only Contra vouchers. To check this, position the highlight bar over the July figures and
press Enter to display the details.
8. Press Esc until you return to the Gateway of Tally menu.
Display Balance Sheet
The Balance Sheet is a report on the status of the financial affairs of a company at a given date.
To view Balance Sheet:
1. Go to Gateway of Tally > Balance Sheet
2. Press F12: Configuration and set the required parameters to display the Balance Sheet
according to your preferences.
Note: Balance Sheet gets updated instantly with every transaction voucher that is entered and
saved.
Horizontal Form of Balance Sheet
The Balance Sheet screen is displayed in the Horizontal form. See it in a Vertical form by
activating Show Vertical Balance Sheet to Yes in F12: Configuration.
Extract information from the Balance sheet using options available in the Button Bar.
1. Select F1: - Detailed/Condensed to explode the summarized information.
2. Change the date of the Balance Sheet using F2: Period.
3. Add up new columns and
1. Display a Balance Sheet for a different date to compare with current one
2. Display the Balance Sheet in a different currency
3. Display Budget figures and analyse the variances or
4. See the effect of different Stock Valuations on the Balance Sheet.
More:
Configuring the Balance Sheet
Integrate Accounts with Inventory
Configuring the Balance Sheet
Show Vertical Balance Sheet?

Setting this field to Yes displays the Balance Sheet in Vertical form. In the British/Europe
configuration, the Vertical Balance Sheet has Liabilities and Assets, whereas the Indian/Asian
configuration, it displays Sources of Funds and Application of Funds.
Profit or Loss, both as Liability?

Set this to No, to move the Profit & Loss Account to the Asset side of the Balance Sheet.
Note: This is applicable only in the horizontal form.
Show Percentages?
Each line will be expressed as a percentage of the total in the Balance Sheet.
Show Working Capital figures?

Set to Yes, to display Current Assets, less -Current Liabilities as shown
Method of Showing the Balance Sheet
The options are
• Liabilities/Assets
• Assets/Liabilities.
Format of the Balance Sheet:
• For Horizontal Balance Sheet: Left Hand Side/Right Hand Side
• For Vertical Balance Sheet: Top/Bottom.
Vertical Form of Balance Sheet
1. Set Show Vertical Balance Sheet to Yes in F12: Configuration.
2. Go to Gateway of Tally > F12: Configuration > General
1. Set Use accounting terminology of to India/SAARC or International under the
Country Details to Yes.
2. If you have activated India/SAARC the Balance Sheet will display Sources of
Funds and Application of Funds.
3. If you have activated International the Balance Sheet will display Assets and
Liabilities
Columnar Balance Sheets

• Select a Balance Sheet for a different date to compare alongside the current one
• Press New Column on the Button bar or ALT+C and change the period.
The following is a comparison of Balance Sheet dated 1st October and Balance Sheet dated 2nd
October.
• Press New Column on the button bars or ALT+C and change only the currency to
display the Balance Sheet with figures in a different currency.
Show Quarterly Balance Sheet

To view a Quarterly Balance Sheet
• Press Auto-column on the button bar or use the key ALT+N.
• Select Quarterly from the list of periods.
Integrate Accounts with Inventory

Effect on Balance Sheet and Profit & Loss Account
Integrate Accounts with Inventory in F11: Features has a significant effect on the Balance
Sheet and Profit & Loss Account.
• If Accounts with Inventory is set to Yes in F11: Features, it the stock/inventory balance
figures are updated from the inventory records, which in turn enables you to drill down to
the Stock Registers from the Balance Sheet.
• If the option Accounts with Inventory is set to No in F11: Features, the inventory
books figures are ignored and closing stock balances are entered manually.
Note: Stock records often contain compensating errors caused by wrong allocation to items. This
feature of Tally enables the finalisation of financial books without waiting for reconciliation of
stocks that might take time.
Display Profit & Loss Account
The Profit and Loss Account shows the operational results over a given period. It lists out the
Incomes and Expenditures based on the Primary Groups of Tally and the Profit & Loss Account
in Tally is updated instantly with every transaction voucher that is entered and saved.
To view the Profit & Loss Account
Go to Gateway of Tally > Profit & Loss Account
Note: The Profit & Loss Account is displayed according to the configuration set up for it in F12:
Configure.
Horizontal Form of Profit & Loss Account

The sample screen shown is in horizontal form which is the default display. You can also set it up
to display in vertical form.
Using options in the Button Bar

1. Select F1: - Detailed/Condensed to display more information or condense.
2. Change the date of the Profit & Loss Account using F2: Period.
3. Add new columns to
1. Display a Profit & Loss Account for a different period to compare with the
current one
2. Display the Profit & Loss Account in a different currency
3. Display a column with Budget figures and analyse variances
4. See the effect of different Stock Valuations on the Profit/Loss account.
5. Select and compare Profit & Loss of different companies.
More:
Configuring the Profit & Loss Account
Income/Expense Stmt instead of P&L?
Configuring the Profit & Loss Account
Show Vertical Profit & Loss?

• The Profit and Loss Account will be displayed in the Horizontal (default) form if you set
the option Show Vertical Profit & Loss? to No.
• Set to Yes to display in the Vertical form.
The Vertical Form shows the Trading Account and the Income Statements separately.
Show Percentages?
Each line is expressed as a percentage of Sales Accounts, i.e., if you consider Sales Accounts to
be 100%, the rest of the lines would be a percentage of Sales Accounts.
Show With Gross Profit?

If the option Show With Gross Profit? Is set to Yes the Profit & Loss Statement is split to show
Trading Profit, which considers only the Cost of Sales and Direct Expenses., Indirect Expenses
are deducted from the Gross Profit to show the Nett Profit.
Note: This field is applicable only to Horizontal Form of Profit and Loss Account.
Columnar Profit & Loss Account: Some Examples
• Select a column to display the Profit & Loss Account in a different currency.
• Press New Column on the button bar or the keys ALT+C and change only the Currency
and give the closing Exchange Rate.
The Profit & Loss Account figures are converted at this rate.
• Select a column to display the Profit & Loss Account with a different stock valuation
method.
• Press New Column on the button bar or the keys ALT+C and change only the Stock
Valuation Method to Last Purchase Cost.
The Profit and Loss screen will be displayed as shown
Show Quarterly Profit & Loss Account

Press Auto-column on the button bar or the keys ALT+N. Select Quarterly from the list of
periods.
The Profit and Loss screen will be displayed as shown:
Income/Expense Stmt instead of P&L?
Account statements for Non-Trading Organisations

For Non-Trading accounts (e.g. Accounts of Charitable Organizations), the Trading and Profit &
Loss Statement are inappropriate.
In such cases, you may use Income & Expenditure Account by setting Income/Expense Stmt
instead of P&L to Yes in F11:Features.
The Income & Expenditure Statement displays as shown.
Display Trial Balance
Trial Balance is a report of all account balances for the company sorted by groups, i.e., it is
displayed in a grouped form, comprising main groups and their closing balances. You can see
that the debit and credit balances match.
In Tally, the matching of the Trial Balance is a foregone conclusion since all voucher entries are
in Debit - Credit format and must balance at the entry point.
To view the Trial Balance
Go to Gateway of Tally > Display>Trial Balance
Note: As per accounting principles, the Trial Balance does not list Closing Stock.
• Select F1: Detailed to break down the grouped information or simply drill down a Group
for further detail.
The screen appears as shown
• Select F5: Led-wise to list all ledgers and their closing balances.
• Select New Column to bring up the closing balances for another date.
More:
Account Reconciliation Statement
Account Reconciliation Statement
This report shows the flow of the accounts from Opening Balance to the effect of transactions on
Closing Balance.
• Select F12: Configure and set parameters as shown
The Trial Balance Reconciliation Statement is as shown
The Trial Balance can also be configured to show only Opening and Closing Balances.
Day Book
To view the Day Book

Go to Gateway of Tally > Display>Daybook
The Day Book lists all transactions made over a particular day and by default displays the last
voucher entry date of a regular voucher. It could also be set up to list all the transactions made
over a period.
Press F2: Period on the button bar or press the keys Alt+F2.
All the transactions include all financial vouchers, reversing and memorandum journals as well
as inventory vouchers.
Consider an example:
Day Book for current date
Day Book for a period
You can also filter the list so as to display the transactions of a particular voucher type using F4:
Chg Vch button from the button bar.
Books and Registers
The objective of having books and registers in Tally is to pile up similar entries into a single
entity so that they are meaningful, e.g., all cash entries in the Cash Book, all sales entries in the
Sales Day Book (called Sales Register).
The Tally transaction flow
Apart from the subsidiary books, entries are also filed under each Voucher Type. Therefore, there
will be as many registers as there are voucher types.
More:
Journals, Day Books and Registers
Sales Register (Sales Day Book)
Invoice Profitability
Columnar Sales Register
Registers from Statistics
Monthly Summary
Journals, Day Books and Registers
Journal, Sales Register, Purchase Register, Debit Note Register, Credit Note Register, Payment
Register, Receipts Register, etc. are the different kinds of Registers.
There are three ways to view various types of registers:
1. From the Display menu
2. By changing the type of voucher from within a register
3. From the Statistics page
Consider the Sales Register which includes most of the options.
Sales Register (Sales Day Book)
Go to Gateway of Tally > Display >Account books > Sales Register

The following screen displays.
By default, all registers display Monthly Summary with transactions and closing balances. For
Balance Sheet Accounts, opening balance is displayed at the top of the screen.
Select a month and press Enter to see the Sales Voucher Register.
A list of all sales vouchers pertaining to the month you selected displays. You can use the options
in the button bar to change the display according to your preferences. You can change the period
of the report as well as the depth of information.
Use F12: Configure to see the report with some or all of the following information, namely
Narrations, Bill-wise details, Cost Centre details and Inventory details.
Click on F1: Detailed to view the reports in detailed format.
Invoice Profitability
Display the Sales Voucher Register for a period by drilling down a month and change the period
if required.
Select F7: Show Profit or activate the option Show Gross profit estimates to Yes in F12:
Configure
The report now displays each invoice with

Transaction Value - Invoice value including taxes
Gross Revenue – Actual sale value minus taxes
Cost – Book cost of the product
Gross Profit – Amount of profit or loss on the sale
Extract of Sales Register

When you are in the Sales Voucher Register, select F6: Extract from the button bar.
The Extract gives a break-down of the sales vouchers and groups them to provide totals for each
group and ledger used in all sales vouchers for the period. The information is useful, when you
want to know how much each group of customers bought, what is the tax component or what is
the total value of each sales ledger.
Inventory-wise Extract of Sales Register

• In the Sales Voucher Register select F6: Extract from the button bar
• Go to F12: Configure.
• Set Show Inventory-wise Extract to Yes to view the report of the stock items sold along
with the details on quantity and value.
Columnar Sales Register

Select the option F5: Columnar from the button bar, in the Sales Voucher Register screen.
Set the options listed to Yes or No depending on how you want the Sales Register to display
Type of Column
Select the type of column from the screen.
If you select Ledger or Group as Type of Column, you are provided with one more list for
choosing the ledger/group. Your choice is displayed under Name of Account.
All Items (automatic columns)
If this option is set, every ledger account will use a column space
All Item (in one col.)

If this option is set, all the ledger accounts are displayed in one column.
Group
You can also select a group of ledger accounts to be displayed together in one column, e.g., Sales
accounts. For other columns, you can use the additional options, namely Related accounts
(automatic columns) or Related Items (in one col.).
Ledger
Select a specific ledger account e.g., VAT/Sales Tax. All other accounts can be put in one or more
columns.
Related Items (automatic columns or in one column)
Related items means all the ledger accounts used in a voucher. Hence, the report will be similar
to All Items (automatic columns). This option is helpful when used in conjunction with a Group
or a specific ledger account in the first column.
Chg Vch
Use this button to view a different register from within an existing register. E.g. If you are in
Sales Register and want to view the Payment register, press F4: Chg Vch and select Payment.
Payment Register
Registers from Statistics
To access the Voucher registers from the Statistics page:

Go to Gateway of Tally > Display >Statements of Account > Statistics
Drill down a specific type of voucher to view the details.
Monthly Summary
When drilling down from a statement into any Group, Ledger, Stock item or Cost centre the
screen displayed first is the Monthly summary. Monthly Summary can also be accessed from a
voucher level screen with the help of the button Monthly. The monthly summary shows the
opening balance for the year, and then lists each month's total transactions, inclusive of both
debit (inwards for stocks) and credit (outwards for stocks) and finally each month's closing
balance. Below the monthly summary, is a bar chart showing the movement of account.
Use F12: Configure to display the monthly summary according to your requirements.
The options available on the button bar are very useful for configuring managerial reports.
E.g. Use the New Column button to bring up the Monthly Summary of another ledger or object
or the same object in another company.
Press the button F5: Quarterly, to view the summarized quarterly figures.
Use the options in F12: Configure to view the details on percentages, averages and so on.
Ledger Voucher Monthly Summary

The Ledger Voucher Monthly summary screen is displayed as shown.
Cost Category Monthly Summary

The cost category monthly summary is displayed as shown. You can place the cursor on any
particular month, say October and drill down for more details.
Stock Item Monthly Summary

The screen will be displays as follows. If you want to view the details for any particular month
you have to place the cursor on the month and drill down.
Group Summary
Go to Gateway of Tally > Display > Account Books > Group Summary> Group name for e.g.
Duties and Taxes
The Group Summary Statement shows the closing balances of the accounts falling under the
selected group over a period.
Using the buttons provided on the button bar, you can change the view to any of the following:
Detailed, Individual Ledger account listing for the selected group, monthly summary, columnar
display for comparison and analysis.
An example is given below:
Led-wise Display of Group Summary

To view the Led-wise Display of Group Summary select F5: Led-wise from the button. This
toggles with the button Grouped.
List of Vouchers
Vouchers or transactions of a similar nature or type entered over a period are collated and listed
together to present meaningful information. There are different types of voucher lists, e.g., Group
Vouchers, Ledger Vouchers, Stock Vouchers, Godown/Location Vouchers, etc...
More:
Group Vouchers
Ledger Vouchers
Group Vouchers
To view the Group Vouchers

Go to Gateway of Tally > Display >Account Books > Group Vouchers> Group Name e.g.
Current Assets
Group Vouchers is a list of all vouchers having at least one ledger account entry belonging to the
group selected. This statement is useful when you want to list all transactions for a particular
group.
Ledger Vouchers
To view the Ledger Vouchers

Go to Gateway of Tally > Display > Account Books > Ledger > Ledger account e.g. Machinery
account
The list of vouchers for the current month is displayed.
You may also access Ledger Vouchers by drilling down from different statements, such as Group
Summary and Monthly Summary.
Ratio Analysis
The Ratio Analysis Statement is a single sheet performance report for a selected period. It
provides you with important values and key performance indicators. It is one report that top
management needs to look at periodically to assess the company's financial health and where it is
going in the short term.
To view the Ratio Analysis screen
Go to Gateway of Tally> Ratio Analysis
The Ratio Analysis screen is divided into two parts:

• Principal Groups
• Principal Ratios
The Principal Groups are the key figures that give perspective to the ratios.
Principal Ratios relate two pieces of financial data to obtain a comparison that is meaningful.
More:
Principal Groups and key figures
Principal Ratios
Payment Performance of Sundry Debtors
Principal Groups and Key Figures
Working Capital
The Net Working Capital is calculated by subtracting Current Liabilities from Current Assets.
Financial Analysts often consider the total Current Assets as the Working Capital. This serves as
a measure of how far the firm is protected from liquidity problems.
Cash in Hand and Bank Balances
This data presents another perspective on the liquidity position
Sundry Debtors
(due till today)
The total debtors and debtors that are due as on the date of the statement, are displayed
Sundry Creditors
(due till today)
The total creditors and creditors that are due as on the date of the statement are displayed.
Sales and Purchase Accounts
The Sales and Purchase Accounts, which collate the trading activity for the period, are displayed.
Stock in Hand
This field displays the stock in hand as on the date of the report and together with Cash and Bank
Balances and Debtors, complete the Current Assets aspect of the Working Capital.
Nett Profit
This is derived from the Profit & Loss Account and is the profit after direct and indirect
expenses.
Wkg. Capital Turnover
(Sales Accounts/Working Capital)
This is an activity or efficiency ratio that shows the number of times the working capital has been
rolled over during a particular period. It depicts how effectively the firm is using its working
capital.
Inventory Turnover
(Sales Accounts/Closing Stock)
This is an activity or efficiency ratio that shows the number of times the stock has been rolled
over during the period of the report. It depicts how effectively the firm is using its inventories.
Principal Ratios
You can compare Principal Ratios of your company over a period with industry averages as well
as with ratios pertaining to other periods to assess current performance.
Current Ratio
(Current Assets: Current Liabilities)
Known as the liquidity or solvency ratio, this is the most frequently used for assessing the
company’s capability of meeting its short-term obligations. More specifically, it elucidates a
firm's ability to cover its current assets with current liabilities.
Quick Ratio
(Current Assets-Stock in Hand: Current Liabilities)
Known as Acid-Test Ratio it concentrates on the liquid part of the current assets, leaving out the
closing stock. It used to measure a firm's ability to meet its current obligations. Stocks and
inventories are the least liquid of all current assets and if current assets comprise a high
proportion of inventories, a firm may be considered less solvent.
Debt-Equity Ratio
(Loans (Liability): Capital Account + Nett Profit)
This is a gearing ratio that shows the extent to which long-term debt is helpful in financing the
firm and shows the proportion of borrowed funds to owners' equity. The lower the ratio, the
greater the amount of funds invested by the owners. If the ratio is high it indicates that the
borrowed funds are more than the own funds of the firm, which makes the firm less credit-
worthy.
Gross Profit %
This represents the trading profit exclusive of indirect expenses and tax deductions, expressed as
a percentage of total sales. It measures the efficiency of a firm's operations and indicates how
products are priced.
Nett Profit %
This is the profit inclusive of all expenses (direct and indirect) except tax deductions, expressed
as a percentage of total sales. It is a more specific measure of the efficiency of a firm's
operations.
Both Gross Profit % and Nett Profit % put together provide an insight into a firm's operations
and the role played by direct and indirect expenses.
Operating Cost %
(as percentage of Sales Accounts)
This is the total cost inclusive of direct and indirect expenses except for tax deductions,
expressed as a percentage of sales. A high ratio shows that even a slight rise in costs would be
risky and might necessitate increase in price.
Receivable. Turnover in Days

(payment performance of Debtors)
It is an efficiency ratio that measures the quality of a firm's receivables and determines how
successfully the firm collects its debts. Receivable Turnover days is a figure that gives us the
average number of days for which the receivables are outstanding. It must be compared with the
average credit policy of the firm.
Computation of Receivable. Turnover

Recv. Turnover in Days = (Closing Balance of debtors/Total Sales)*Number of Days
Return on Investment %
(Nett Profit/Capital Account+Nett Profit) %
Nett Profit is the profit after all expenses but before deduction of taxes. This is a profitability
ratio that an investor is most interested in. The investor needs to know how much is earned on
each dollar invested. If the investor finds other avenues that give better returns, he will move his
money out of the firm.
Return on Wkg. Capital %

(Nett Profit/Working Capital)%
This is another profitability ratio that ignores sunk costs in Fixed Assets and assesses how
profitably a firm uses its net current assets.
Payment Performance of Sundry Debtors
Payment Performance of Debtors (Receivable Turnover in days) is the average time the
customers take to actually pay their bills irrespective of the outstanding balance on the statement
date. It is quite possible that the receivable turnover is low and the payment performance is high
indicating that the customers cleared their outstandings, but took a long time doing it.
To get group level and customer level performance reports and a detailed position of debt
collection, you have to drill down from the ratios. Use a customer statement that shows both the
receivable turnover in days and the customer's actual payment performance.
The Ledger Payment Performance statement displays the receivable turnover in days as., 66.19.
This is the balance outstanding in relation to the total sales made multiplied by the total number
of days in the period. This ratio should be used in combination with the Average Performance
of actual payments and the payment history of the customer to assess how long he might take to
pay the outstanding balance.
The Actual payment history is given in the table for each invoice that was paid by the customer.
It shows when the invoice was paid, how long it was due and what was the delay in payment. At
the bottom, the customer's average performance is indicated.
Cost Centre Reports
For conceptual information on Cost Centres and Cost Categories, please look up the relevant
chapters under Accounts Information.
Cost Centre Reports are primarily performance reports that throw a different perspective on
transactions. To access Cost Centre Reports
Go to Gateway of Tally> Display > Statement of Accounts> Cost Centres
Note: Set Maintain Cost Centres to Yes in F11: Features. Refer Cost Centres , Cost Categories
and Job Costing for more information.
More:
Cost Category Summary
Cost Centre Vouchers
Cost Centre Break-up
Ledger Break-up of a Cost Centre
Group Break-up of a Cost Centre
Job Work Analysis
Cost Category Summary
Go to Gateway of Tally > Display > Statements of Accounts > Cost centers > Category
Summary
Cost Category Summary displays the information on all cost categories to which you have
allocated the voucher transactions.
You can create any number of cost categories apart from the Primary one, which is the default.
Each Cost Category has cost centres listed under it. The names in italics are cost centres that do
not have any sub-cost centres. The names that are in normal fonts are cost centres that have sub-
cost centres under them.
The debit and credit transaction totals and the closing balance for each cost category are
displayed together with their breakdown consisting of cost centre summaries.
Cost Centre Vouchers
• From the Cost Category Summary, drill down into a cost centre for monthly breakup of
the figures.
• Select a month to display the Cost Centre Vouchers pertaining to that month.
• In the Cost Centre Vouchers use F2: Period to expand the date range if required and F1:
Detailed option to drill down to access the original voucher.
• To display more detailed cost centre vouchers, set the required options in F12:
Configure.
The Cost Centre Vouchers screen is also accessible from all other Cost Centre Reports but the
vouchers displayed are only those that relate to the currently selected cost centre.
Cost Centre Break-up
Cost centre Break-up shows the ledger accounts that are used in vouchers, the cost centre they
were allocated to, their total transaction values and the balance. If you consider only the revenue
accounts, the Cost Centre break-up becomes the Profit or Loss statement of activities for the cost
centre, and hence a powerful performance statement.
To access the Cost Centre Break-up screen
1. Go to Gateway of Tally > Display > Statements of Accounts > Cost Centers > Cost
Center Break-up
2. Select a cost centre, e.g. Octroi & Freight Expense (which belongs to the Primary Cost
Category).
3. Click F1: Detailed to see the ledgers.
The report will look as shown
Use the buttons on the button bar to view the report in the alphabetic order of ledger accounts.
A columnar Cost-centre breakup enables comparison of two or more cost centres and assessment
of their relative performance.
Use New Column to bring up the data of another cost centre for comparison alongside. Drill
down for further details.
Ledger Break-up of a Cost Centre
This provides you with another view of a cost centre report. It enables you to analyse the
distribution of a ledger account across different cost centres.
If you want to know the Conveyance Expenses incurred by different cost centres you need to
view the Ledger wise break up of cost centres.
1. Go to Gateway of Tally > Display > Statement of Accounts > Cost Centers > Ledger
Break-up
2. Select a ledger account, say for e.g. conveyance
The total Conveyance Expenses allocated to different Cost Centres under Primary cost category
are listed. If you have more than one category it will also be listed.
Use the buttons on the button bar to view the report in alphabetic order. The columnar Cost-
Break up of Ledger allows you to compare how different cost centres makes use of two or more
ledgers (e.g. expense accounts).
Use New Column to bring up another ledger account, say, Sales. The report will give you how
much each executive sold and how much he spent on running the motorcar. You will be able to
judge their relative performance or even compare the data with that of another company.
Group Break-up of a Cost Centre
The Group break-up of cost centre gives you another view of a cost centre report by enabling
you to analyse the distribution of a group (of ledger accounts) across different cost centres.
If you want to know how Indirect Expenses were incurred by different cost centres, this is the
report that you need to look at.
1. Go to Gateway of Tally > Display > Statements of Accounts > Cost Centers > Group
Break -up
2. Select a group account, say for e.g. Indirect Expenses
The total Indirect Expenses allocated to different Cost Centres under the Primary cost category is
given. If you have more than one category it will also be listed.
Use the buttons on the button bar to view the report in alphabetic order of group accounts.
The columnar Cost-Break up of group accounts allows you to compare how different cost centres
make use of two or more group accounts (e.g. expense accounts).
Use New Column to bring up another group of ledger account, say, Sales. The report will give
you how much each executive sold and how much was spent on running the motorcar. You will
be able to judge their relative performance or even compare the data with that of another
company.
Outstandings and Credit Control
Receivables and Payables

Receivables and payables are the two key components of any company's working capital as well
as its business activity. Receivables are part of current assets, whereas payables are of current
liabilities. Both influence the short-term liquidity and financing of the company considerably.
Effective control of these outstandings is necessary for the company to be financially sound. To
view the Receivables and Payables screen
Go to Gateway of Tally> Display > Statement of Accounts > Outstandings
More:
Receivables (Bills Receivable)
F12: Configure Bill-wise Outstandings report
Payables (Bills Payable)
Outstandings Report of a Single Ledger Account
Age-wise Analysis of a Single Ledger Account
Outstanding Report for a Group
Age-wise Analysis for a Group
Reminder Letters
Reminder letters to a Group of ledgers
Receivables (Bills Receivable)
To view the Receivables screen

Go to Gateway of Tally > Display > Statements of Accounts > Outstandings > Receivables
This report displays all outstanding receivables invoice by invoice till date. Remember that this
report takes into consideration only those accounts that have Bill-by-Bill option activated.
Date
This is the Effective date of the invoice and not the actual date. Hence, if your invoice date is 15
November but the effective date is 30 November, 30-Nov-05 will be displayed here. Credit
period is calculated from effective date.
Reference Number
This is the Bill reference number that was entered in the Bill-wise Details.
Party's Name
The ledger name appears in this field.
Pending Amount
This is the outstanding balance on a particular invoice. To see the breakup, press SHIFT +
ENTER.
If you want to see the breakup of all the bills, select the F1: Detailed button. This toggles with
the button F1: Condensed.
Due On
This is the due date of the bill (with reference to the Effective date) specified during voucher
entry.
Overdue by days
This is the period in days from the due date to the end date of the report. In the above example,
the end date is 2-Apr-2005.
Drill-down
You can drill down any invoice for further details.
Buttons
Print the report or e-mail it or use other buttons to configure, make a query or change the format
of the report.
F12: Configure Bill-wise Outstandings report
The F12: Configuration screen for Bill-wise Outstanding Report appears as shown below.
Include Post-Dated Transactions?
Post-dated transactions are those, whose voucher dates are after the end date of the period of
display.
If you set this option to Yes, you can have the post-dated transactions listed in the Outstandings
report and learn their effect.
In the above example, note that there is an additional column for Post-Dated Amount.
Show Bills in Foreign Exchange?

If this option is set Yes, the Bills Outstanding report will show only those bills raised in foreign
currency. The bills raised in base currency will be excluded.
Show Over dues using Bill dates?

Set this option to Yes if you want to use the invoice dates instead of due dates for calculating
overdue days.
The Age of Bill in days column shows the age of the invoices in number of days.
Age-wise Analysis
Select F6: Age wise from the button bar in the receivables screen.
Select either the option Ageing by Bill Date or Ageing by Due Date for Methods of Ageing.
Set the age periods required for the report. You can drill down to query the individual invoices.
Age-wise analysis for a ledger account or group of accounts is discussed separately.
Payables (Bills Payable)
To view the Bills Payable screen

Go to Gateway of Tally > Display > Statements of Accounts > Outstandings > Payables
Note: Payables are treated exactly the same way as Receivables.
F4: Payable in the Receivables screen helps you switch to Bills Payable report.
Outstandings Report of a Single Ledger Account
If you want to know the outstanding status of the bills of a particular party account, use the
Ledger Outstandings Report.
To view the Outstanding Ledger Account
1. Go to Gateway of Tally > Display > Statements of accounts > Outstandings > Ledger
2. Select a ledger from the list. The Ledger Outstandings report displays
Detailed functionality available in this report, including F12: Configure and Age-wise Analysis
is the same as that available in Receivables.
You can produce Reminder Letters from the ledger Outstandings report.
Use the Contact button on the button bar to view the address and other contact details.
Age-wise Analysis of a Single Ledger Account
1. Go to Gateway of Tally > Display > Statements of Accounts > Outstandings > Ledger
2. Select the ledger account.
3. Select F6: Age-wise and one of the two methods of Ageing.
1. Ageing by Bill Date
2. Ageing by Due Date
4. Set the age periods required for the report.
The aged bills report is produced accordingly. Drill down for more details on the individual
invoices.
Outstanding Report for a Group
1. Go to Gateway of Tally > Display > Statements of Accounts > Outstandings > Group
2. Select a group from the list, e.g. Sundry Debtors. The report displays the outstandings for
the selected group.
You can tab down further into each account and configure the report using F12: Configure. You
can view net amounts in this case to see the net balance outstanding for each ledger.
For a group that contains sub-groups the button F5: Led-wise is useful.
Note: The button F5: Led-wise toggles with Group-wise.
Age-wise Analysis for a Group
1. Go to Gateway of Tally > Display > Statements of Accounts > Outstandings > Group
2. Select a group, e.g. Sundry Debtors.
3. Select F1: Detailed from the button bar.
4. Click Age-wise and select one of the two Methods of Ageing: Ageing by Bill Date or
Ageing by Due Date. Set the age periods required for the report.
5. The aged bills report is produced accordingly. You can drill down for further details on
the individual invoices.
6. Set the appropriate parameter in F12: Configure to view the Nett Balances.
Note: You cannot print Reminder letters to a group from here. Use Multi-Account Printing
available in Gateway of Tally.
Reminder Letters
2. Select a ledger from the list.
3. Click the buttons Print from the button bar.
Print Reminder Letter

Set this option to Yes. In the Company Ageing Alteration screen that appears set, accept or
modify the ageing period as the case may be.
Show Bills in Foreign Exchange
Here you can type Yes or No and accept.
When you are in the Print screen, press F12: Configure to change the contents of the reminder
letter.
If you want to print Reminder Letters to a group of ledgers, you must use the Multi-account
printing option available in Gateway of Tally.
Reminder letters to a Group of ledgers
Go to Gateway of Tally > Multi-Account Printing > Outstanding Statements > Ledger > Group
of Accounts
Select the group for which reminder letters are required, e.g. Sundry Debtors.
This report is a Bill-wise details report that lists the outstanding bills for each ledger in the group.
Statutory Reports
To view the Statutory Reports:

Go to Gateway of Tally > Display > Statutory Reports
Note: The Statutory Reports menu will appear depending on the Statutory features enabled in
F11:Features > Statutory and Taxation.
Cash and Funds Flow
Cash management is essential for any business. Many companies, as they go into liquidation,
continue to make profits because of insolvency. Businesses shut down because of lack of cash
despite being profitable. Cash and Fund Flow Statements aid in cash management and are an
important component of the management accounts.
More:
Cash Flow
Funds Flow
Cash Flow
Cash Flow Statement is a chronological account of the movement of cash in and out of the
business and includes all cash transactions made with banks also. When used with the Balance
Sheet and Profit & Loss Account, the Cash Flow Statement helps to assess the reasons for the
differences between net income and net cash flow as well as the effect of cash/non-cash investing
and financing transactions.
To access the Cash Flow:
1. Go to Gateway of Tally > Display > Cash/Funds Flow > Cash Flow
2. A Monthly Cash Flow Summary that shows the Cash Movement – inflow and outflow for
each month and the Nett Flow, displays.
3. Select a month and press Enter to drill down. Select the button F1: Detailed from the
button bar to see the cash flow for that month.
For Quarterly Cash Flow:

• Change Period by pressing F2: Period and set the period, e.g., 1-4-05 to 1-12-05.
• Select the option Auto Column from the button bar.
• You can also select Quarterly (or Monthly or any other period) from the list
Columnar Cash Flow Statement
Funds Flow
While Cash Flow Statement is concerned only with cash, Funds Flow takes into account, the
movement of the entire working capital. It includes rise and fall in inventories, creditors and
debtors apart from cash and bank. The statement reveals the Sources of Funds and how they were
applied.
To access the Funds Flow:
1. Go to Gateway of Tally > Display > Cash/Funds Flow > Funds Flow
2. A Monthly Funds Flow Summary with the movement of working capital for each month
displays. It shows the Opening and Closing Balances of each month with a column for
Funds Flow.
3. Select a month and press Enter to drill down.

4. Select F1: Detailed to see the funds flow for the selected month.
5. The bottom of the screen displays the movement in Working Capital.

You can drill down any line for further detail.
For Quarterly Funds Flow:

1. Change the period by pressing F2: Period
2. Set the period e.g., 1.1.04 to 1.5.04.
3. Select the button Auto Column from the button bar.
4. Else Select Quarterly (or Monthly or any other period) from the list
Reconciliation of Bank accounts
Reconciling the company's bank accounts with the banker's statement is a regular task of
accounting. In Tally, Reconciliation of Bank Accounts facilitates the following:
Ability to ‘check back’ the correctness of reconciliation

Tally uses Bank Date to mark against the voucher.
For instance, if you issue a cheque on 8th April and your bank clears it on 19th April, you would
set the Bank Date for the voucher as 19th April. This means that when you need to 'check back'
later, whether the entry made by you is correct, you will only need to verify the bank statement
of the 19th.
Recovering the reconciliation of any date
This is of crucial importance in Auditing. The Bank Reconciliation is one of the pre-requisites of
auditing and verification of the correctness of accounts at the year end. However, it is not a 'real-
time' task, meaning auditors do not do it on the first day of the next year.
For e.g., the reconciliation made on 31st March, should be 'viewable' even in August, by when
almost all the cheques would have subsequently been marked Reconciled. Tally provides you
with a facility of achieving this also.
Bank accounts may have a different Starting Date for reconciliation purposes. When you create
a bank account, you are prompted to give an Effective Date for Reconciliation. Normally, this
would be the Books Beginning from date itself. However, you could have imported data from a
previous version of Tally or from any other system (where the reconciliation process was not
available or was different). In that case, you may not want 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 active. Once you do this, previous entries would not appear for
reconciliation, but would be taken as a reconciled Opening Balance.
A quick experiment with Reconciliation will show you what it all means. Here is how you go
about it:
1. Bring up the monthly summary of any bankbook.
(You can choose a bank book from any of the following: Balance Sheet, Trial Balance, Display >
Account Books > Cash/Bank Books).
2. Bring the cursor to the first month (typically April), and press Enter. This brings up the
vouchers for the month of April. Since this is a bank account, you can see an additional
button F5: Reconcile on the button bar to the right. Press F5.
3. The display goes to the Reconciliation mode, which can be edited. The primary
component of the current screen is the column for Bankers Date.
1. The Reconciliation found at the bottom of the screen shows:
1. Balance as per Company Books
2. Amounts not reflected in Bank
3. Balance as per Bank
The Balance as per Company Books reflects the balance as on the last date (in the example, it
is 30th April).
The Amounts not reflected in Bank are the debit and credit sums of all those vouchers, whose
Bank Date is either BLANK, or LATER than 30-Apr (i.e. these vouchers have not yet been
reflected in the bank statement).
The Balance as per Bank is the net effect of the Book Balance offset by the amounts not
reflected in the Bank – which must equal the balance in the bank statement
Note: Some discrepancies may persist due to entries made in the bank statement, which you have
not yet entered in your books. You would reconcile these manually, and print your reconciliation.
As you mark the individual vouchers by setting the Bank Date, you will notice that the
Reconciliation at the bottom of the screen keeps updating the changes. Once this process is
complete, press Ctrl + A or Enter as many times as necessary to skip over the unmarked
vouchers and accept the screen.
The next time you opt for reconciliation, the screen displays only those vouchers that remain
unreconciled. You can also display vouchers that are already marked as reconciled, in case you
need to edit the marking, by using F12: Configure
Set Show Reconciled Vouchers also to Yes to see the reconciled vouchers.
Note: It is not possible to reconcile opening balance and can be done only with available
physical transactions.
Set Allow back dated Reconciliation to Yes to enter bank dates which are lesser than the
Voucher date.
Press Alt+P or click on the Print button to print your reconciliation report.
Display Inventory Reports & Statements
Inventory in Tally operates in the same way as accounting with regard to displaying, modifying
and printing reports. Tally generates inventory reports based on the vouchers entered to date.
You can use the customised reports to compare inventory data between different companies,
periods of the financial year, and so on.
Highlight the item and press Enter to step down to the next level of detail in a report. Repeat this
process till you reach an individual voucher. Similarly, step back to higher levels by pressing
Esc. The special features available for the currently displayed report are indicated on the button
bar and can be selected with a single click of the mouse.
This section highlights some special inventory screens and illustrates a basic level of
customisation.
More:
Viewing Stock Summary
Viewing stock items
Making a Stock Query
Analysis of Inventory Movements
Godown Summary (Location Summary)
Sales Bills Pending
Purchase Bills Pending
Viewing Stock Summary
Stock Summary is a statement of stock-in-hand as on a particular date. It is updated with every

transaction in real time and provides the current stock position.
The statement can be drilled-down, as with all Tally reports, and configured to enable you to
view different details, for instance, the total flow of stock can be viewed with a single report.
Tally treats Stock Summary as one of the primary statements and makes it accessible directly
from the Gateway of Tally.
To view Stock Summary
1. Go to Gateway of Tally > Stock Summary
2. The default display is of Stock Group balances.
3. Select Detailed to show another level of detail.
The detailed report will include sub-groups or Stock Items (in cases where there are no sub-
groups), displays as shown:
In the above illustration the stock groups Hardware and Software contain stock items and have
closing balances.
The Stock Groups displays total quantities, as the unit of measure is the same for all the stock
items added. A grand total is also available as there is a single unit of measure for all 'addable'
items. If there were different units of measure, then the grand total would not be calculated and
displayed.
More:
Stock Flow (reconciliation)
Gross Profits – (Item and stock group profitability)
Stock Valuation Methods
Stock Group Summary
Stock Category Summary
Viewing Stock Items
1. Go to Gateway of Tally > Display > Inventory Books > Stock Item
You can also use the Stock Summary to view Stock Items. Place the cursor on the item
and press Enter.
2. Select an item from the List of Items.
3. Select F12: Configure. Tab down the Configuration menu to Show with Graph? Type y and
press Enter.
Select Bar and No. The particulars display with a graph of Goods Inwards and Outwards (red
for inwards,
blue for outwards).
Stock Vouchers
1. Go to Gateway of Tally > Display > Inventory Books > Stock Items
2. Select Item.
3. Select and drill-down for any month.
The list of stock vouchers for the current month displays as shown
This list of vouchers for a stock item is the lowest level of collated data. If you drill-down any
further, you can view the actual voucher.
You can also access Stock Vouchers by drilling-down from statements such as Stock Summary.
More:
Stock Vouchers
Stock Query
Stock Query report provides you all the information about a particular item.
To create Stock Query:
1. Go to Gateway of Tally > Display > Statements of Inventory > Stock Query
2. Select an Item from the List of Items. Tally uses the Stock Category to display Items of
the same Category. This feature helps you to ascertain the availability and location of
alternative products to offer your customer.
3. Select F4:Item to switch to another item.
Additional Information:
1. Go to the Group Summary, select Software and press F12: Range to limit the display
to Stock Groups having Closing Balance greater than 3000.
2. Explore the Locations report. Select On-site, click F1: Detailed, change the period: 1-5-
05 to 31-7-05, and use Auto Column to bring up the month-by-month figures.
3. Auto Column feature gives you the facility to check the stock status using different
periods.
4. Bring up the initial display of each report and use Enter and Esc to drill-down through
the levels of detail and back again.
Analysis of Inventory Movements
The Analysis of Inventory Movements is generated for accounted transactions only, unlike Stock
Summaries and other statements, where Goods Received but Bills not Received and Goods
Dispatched but Bills not Raised are also considered. Thus Analysis statements, are used
generally for a comparative study, and not considered authentic for Accounts or Inventory
records.
Go to Gateway of Tally > Display > Inventory Books > Movement Analysis
Analyse stock movements by stock groups, categories, financial group or ledger.

More:
Movement Analysis (Stock Group Analysis)
Item Movement Analysis
Item Voucher Analysis
Stock Category Analysis - Movement Analysis
Ledger Analysis
Transfer Analysis
Godown / Location Summary
The Godown/Location Summary statement displays the Stock Summary for different
Godowns/Locations. While the main Stock Summary shows the stock position for the entire
company on a given date, the Godown/Location Summary is a statement of stock-in-hand at
each location on a particular date.
The Godown/Location Summary is updated with every transaction and it provides the current
stock position for any Godown/Location at any time.
This report can be drilled-down, as with all Tally reports, and configured to view different
details. It is also possible to view the total flow of stock for each location in a single report.
Experiment with the different buttons for this purpose.
1. Go to Gateway of Tally > Display > Statements of Inventory > Godown/Location
2. Select Primary to view the summary for all Godowns/Locations. Alternatively, select a
specific Godown/Location to limit information to that Location/Godown.
3. The default display is that of Godown/Location Group balances. You can have sub-
groups of godowns/locations, quite like sub-groups of stock items.
4. Select Detailed for second level of detail.
Place the cursor on Software and press Shift+Enter to expand the group
More:
Godown/Location Stock Flow/Reconciliation
Godown/Location Vouchers
Batch information in Summary Statements
Aged Stock Analysis (Ageing Analysis)
A very important function of Working Capital management is monitoring stocks. Money locked
up in stocks can adversely affect the liquidity of a company and every company strives or should
strive to reduce stock levels to the optimum. Every business (except perhaps the liquor and
antiques dealers) would prefer to dispose of older stocks as they might deteriorate with time, go
out of fashion, or simply get forgotten. Tally's aged stock analysis or Stock ageing enables you to
know the age of stocks in hand according to when they were received and the purchase value.
More:
How to view Ageing Analysis
How to View Ageing Analysis?
1. Go to Gateway of Tally > Display > Inventory Books > Ageing Analysis
2. Select the Group of Stock Items.
The Ageing Analysis report produces a default ageing period of <45 days, 45-90 days, 90-180
days and >180 days. You can change the setting by using F6. The default report displays stock
values based on Actual Purchase invoice . Use Hide Amount to view the report without values
as has been done above.
As Negative Stocks cannot be aged, they are shown in a separate column.
More:
Item Inward Details
Item Inward Details
Age Analysis is done for stock-in-hand based on when it was purchased. The Item Inwards
details statement provides further information of aged stock such as date of purchase and
supplier, and allows drill-down to the actual transaction voucher.
Go to Gateway of Tally > Display > Inventory Books > Ageing Analysis
Move the cursor to any of the age-wise columns (i.e., < 30 days, 30 to 60 Days, > 60 Days) for
an item and press Enter.
Scenario Management
Scenario management is a management tool that enables different displays of accounts and
inventory related information, by selectively including certain types of vouchers without
affecting the source data. It is useful in generating provisional reports, where entries are not
actually made in the main books. It is also a useful forecasting tool i.e. you can forecast the
expenses using provisional Vouchers and include them in your reports.
The vouchers that are used in Scenario Management are:
Optional Vouchers
Memorandum Vouchers
Reversing Journals
This section shows you how to use the above-mentioned vouchers in Reports. You can create a
number of scenarios each including and/or excluding one or more types of voucher entry.
More:
Create a Scenario
Alter or Display Scenario Information
How to use Scenarios
List of Accounts (Chart of Accounts)
Exception Reports
Creating a Scenario
Set Use Reversing Journals & Optional Vouchers in F11:Company Features to Yes.
Go to Gateway of Tally > Accounts Info. > Scenario > Create
1. Give a suitable name to the scenario. In this case, it is Provisional.

2. Set Include Actuals to Yes
3. Set Exclude Forex Gains/Losses Calculations to Yes if you do not want the Unadjusted
Forex Gain/Loss element to appear in the scenario
4. Set Exclude Inventory Tracking Calculations to Yes if you do not want the Sales/Purchase
Bills Pending element to appear in the scenario
5. Include
From the list of vouchers, include the type of vouchers required. Notice that it picks up the
Voucher Types created for this company. Provisional Vouchers and Regular vouchers that
are marked Optional are permitted for selection.
6. Exclude
Exclude from the list of vouchers already included in the type of vouchers that you do not
want to affect this scenario. This option is used in Alter mode and hence is discussed
under Alter/Display Scenario Information.
7. Accept to create this scenario.
Alter or Display Scenario Information
1. Go to Gateway of Tally > Accounts Info > Scenario > Alter

2. Select the scenario to alter from the List of Scenarios
The information given while creating the scenario displays and you can alter it.
Exclude
Use the Alter mode when you do not want a selected included voucher to affect the scenario,
anymore. It is easier to put the selected voucher in the Exclude List, rather than to remove it from
the Include List.
Using Scenarios
Create a Reversing Journal Entry for the scenario as follows.

1. Go to Gateway of Tally > Accounting Vouchers > F10: Rev Jrnl
2. Select Reversing Journals from the list.
3. Debit Depreciation and enter the amount
4. Credit Provision for Depreciation
5. Enter Narration if any.

6. Accept the Voucher.
More:
Display/Alter a Reversing Journal
Using Scenarios in Statements and Reports
Display/Alter a Reversing Journal
View or alter the reversing journal through the Reversing Journals Book under Exceptional
Reports.
1. Go to Gateway of Tally > Display > Exception Reports > Reversing Journals
2. Select a month to list all the reversing journals for that month. Drill-down to view/alter
the entry.
Using Scenarios in Statements and Reports
You can use scenarios in statements (not registers) that have the New Column button active.
1. Display the Balance Sheet.
2. Select New Column.
3. In the column details, tab down to Types of Values to Show.
4. Select the scenario named Provisional.
The Balance sheet displays as shown with two columns for the same date.
Note the Provision for Depreciation figures in both the columns. The actual column shows –
18250 while the Provisional column shows –33250. This is on account of the reversing journal
entry in the Scenario. To view, go through the Exceptional Reports Display Menu.
Use the same procedure to create another scenario for Sales Forecasts.
1. Create a new Scenario and call it Sales Forecasts.
2. Include Sales Vouchers Optional Only.
3. Create 12 Sales Vouchers, one in each month. Remember to mark them Optional.
4. View the Sales Accounts by drilling-down the Profit & Loss A/c.
5. Bring up New Columns and limit each column date range to the following month.
The Sales forecast figures must display.
Note: You could even use Memorandum Vouchers for this purpose, instead of the Optional
vouchers. Memorandum Vouchers is discussed in the next section.
List of Accounts (Chart of Accounts)
A chart of accounts is created from an Accounts menu. To view an existing chart:

Go to Gateway of Tally > Display > List of Accounts
The List of Ledgers displays in alphabetical order of the main groups. Hence, Branch/Divisions
is listed first, not the account name Anil, which is under the group Capital. Note the indentation
and change in font. The groups are in bold and begin on the extreme left; sub-groups are slightly
indented towards the right and still in bold, while at the lowest level it is the ledger account
which is in italics.
Drill-down a ledger name to alter its details or use Shift+Enter to view the details.
Use the buttons to switch to their respective lists (these are all lists of different Masters):
○ List of Groups
○ List of Cost Categories
○ List of Cost Centres
○ List of Budgets
○ List of Locations
○ List of Stock Groups
○ List of Stock Items
○ List of Currencies
○ List of Units
○ List of Voucher Types
Exception Reports
Exception Reports track unusual transactions or balances.

Go to Gateway of Tally > Display > Exception Reports
The different kinds of Exception Reports are as shown.
More:
Negative Stock
Negative Ledgers
Overdue Receivables
Overdue Payables
List of Memorandum Vouchers
List of Reversing Journals
List of Optional Vouchers
Post-dated Vouchers
TDS Not Deducted
Negative Stock
Go to Gateway of Tally > Display > Exception Reports > Negative Stock
This report displays a list of all stock items that have a negative closing balance at the end of a
specified period.
If a negative balance occurs it is adjusted by a purchase so that the balance is not negative at the
end of the display period.
You can change the period using the Period button or use the auto column button to view the
negative stock items
You can use the drill-down feature or view Stock Item display for further details.
Negative Ledgers
This is a list of ledger accounts that have obverse balances, i.e., balances that are opposite to the
nature of the account. For example, a creditor account with a debit balance and an asset account
with a credit balance.
Go to Gateway of Tally > Display > Exception Reports > Negative Ledgers
Bank of Paris is a Bank account and is expected to have a debit balance. British Telecom is a
Creditor/Supplier account and should normally have a credit balance.
Overdue Receivables
This is a list of all invoices that are overdue as on current date.

Go to Gateway of Tally > Display > Exception Reports > Overdue Receivables
Ageing - use the Age-wise button.

Overdue Payables – use the Payable button.
Overdue Payables
This is a list of all purchase bills that are overdue as on current date
Go to Gateway of Tally > Display > Exception Reports > Overdue Payables
List of Memorandum Vouchers
Go to Gateway of Tally > Display > Exception Reports > Memorandum Vouchers
This is a list of Memorandum Vouchers entered during a period. Change the period as required
List of Reversing Journals
Go to Gateway of Tally > Display > Exception Reports > Reversing Journals
This is a list of Reversing Journals entered during a period. Change the period as required.
List of Optional Vouchers
Go to Gateway of Tally > Display > Exception Reports > Optional Vouchers
This is a list of all types of vouchers marked as 'Optional' during a period.
Post-dated Vouchers
Go to Gateway of Tally > Display > Exception Reports > Post-dated Vouchers
This is a list of all types of vouchers that are marked 'Post-dated' within a given period.
Printing Reports
Reports and documents generated through Tally's extensive display capabilities can also be
printed.
Printing is possible in two ways:
1. Using the Print (Alt + P) button and
2. Multi-Account Printing
Using the Print (Alt + P) button

You can choose to print directly from the screen currently displayed by selecting the button
PRINT (top-most button on the right-hand side of the screen). This brings up the Print
Configuration screen for the report and new button options on the right-hand side of the screen.
You can change and alter the settings in the print configuration screen
Printer – Click Alt + S (Select Printer) to change printer settings. This also displays the default
paper size that you have set for the printer.
No. of Copies – Click Alt + C (Copies) to specify the number of copies to be printed.
Print Language – Set Enable Multilingual Support to Yes in F12: Configure and click Alt +
L (Print Language) to print in the language of your choice.
Method - Click Alt + F (Print Format) to select the print format. A pop-up list displaying the
printing formats available in Tally. The formats provided are, Dot-Matrix Format, Neat
Format and Quick (Draft) Format. Here you can select either the pre-printed or plain paper to
print out your reports
Pre-Printed / Plain Paper:
By default, the Printing Configuration screen is set to print on plain paper. The print-out displays
as shown.
To print on a pre- printed invoice/ report, select Pre-printed (Alt+R) and the Print Preview
screen displays as shown.
Tally enables you to print the company details on the invoice/ report. You can toggle between the
two options to print using either method.
Page Range - Click Alt + G (Page Nos) to select the starting page number and the page number
range.
Paper Type - The paper Type can be set after you select the printer.
Paper Size - By default, the paper size in Tally is set at 8.50 X 10.98 or 216mm X 279mm.
To alter the paper size to your requirements, select Alt+S (Select Printer).
A list of printers displays.
More:
Print Format
Draft Mode Printing (Quick Format)
Printing TDS Form16A
Exporting eTDS Form
Printing TDSForm27A
Print Format
The Print Format button appears on the Print screen (after you press Alt+P or on clicking the
Print button). Click the Print Format button and Tally displays a list of Print formats as shown.
Neat Mode and Quick/Draft print formats are compatible with most printer drivers installed on
the Windows Operating System. Dot Matrix Format in Tally is a special print format that allows
you to print Tally reports in text format using the speed of Dot Matrix printers.
Most GUI-based software’s do not provide Dot Matrix printing capabilities. However, Tally
being a Windows-based software has a print format compatible with dot matrix printers. This
makes printing reports from Tally as quick as its real-time report generation.
Select Dot Matrix Format. The screen displays as shown.
By default, Epson printer drivers are defined. Install Epson Printer drivers in Windows for any
Dot Matrix printer and use this format to print reports quickly.
Note: Any Dot Matrix printer may be used, but ONLY Epson printer drivers (LQ and FX
series) should be used for Dot Matrix Format printing in Tally.
Multi-Account Printing
This option enables the printing of the primary Books of Accounts, like the Cash and Bank
Books, Account Ledgers, Sales and Purchase Registers etc, without having to select the accounts
one at a time and printing them .
Go to Gateway of Tally > Multi Account Printing.
Choose between the options – Account Books, Inventory Books, Day Book and Multi
Voucher Printing.
You can select the date and other selections before printing.
Drill-down to Accounts Books, Outstanding Statements and Inventory Books and select the
appropriate reports to print.
Change the common printing options by selecting the appropriate buttons on the right side of the
screen.
For details , click Printing Reports.

Printing All Accounts
Go to Gateway of Tally > Multi-Account Printing > Outstanding Statements > Ledger > All
Accounts
When Printing the Ledger Outstanding screen, if Show Contact Details is set to Yes, and Start
Fresh Page for each Account is set to No, the Contact Person and the Tel. No. fields are
displayed below each Ledger Account in the same page.
If Show Contact Details is set to Yes, and Start Fresh Page for each Account is also set to Yes,
each Ledger Account displays on a fresh page, with the address appearing below the Ledger
Name.
Note: The Contact Person, Tel. No. and the address should be entered in the Ledger Masters
for them to be displayed.
Draft Mode Printing (Quick Format)
Almost every report (except Cheques) can be printed in Draft Mode. The default behaviour of
Tally is to print in Neat Mode. To alter this, press Alt+F and all subsequent reports will be
printed in Quick Format until Alt+F is pressed again at the Printing screen. (The button
equivalent for this is Quick Format).
Draft Mode imposes additional restrictions in printing, which you will quickly learn by
experimentation. After selecting Draft Mode or Quick Format, click Alt+S to select the option
Print to a File. Specify the name of the File to output the data and select the Printer whose
dimensions are to be used.
Collaborative Tally
Collaborative Technology in Tally extends the ability of a company to manage information

across different software applications, offices, business partners and managers-on-the-move. The
integration of other technologies in Tally gives the user the benefit of exchanging data with other
systems.
Collaboration enables the company to arrive at decisions quickly through faster exchange of data
in a computer network and related environment. A higher profit is one of the advantages of using
such technology in business.
Export of Data
Use Export option to export data (reports and statements) from Tally. The exported data can be
rearranged on a spreadsheet, published on the web or exported to another company using Tally.
Go to a report or a statement and click on the Export button or use ALT+E. The export screen
displays Export? Yes or No.
Press Backspace or No to navigate through the fields and alter the parameters.
Language
This option enables you to export your reports in English or any of the Indian languages.
On selecting Default (All Languages) you can export your reports in any of the Indian
languages. However, the display language has to be set to the respective Indian language.
On Selecting Restricted (ASCII Only) you can export your reports in English.
Note: If you have used the option Restricted (ASCII Only) to export reports of a company
created in any of the Indian language, then the exported data will appear with question marks.
Format
Tally has three formats for export of data from E-mail, Export and Upload options:
○ ASCII
○ HTML
○ XML
By default, the exported file will be saved in the Tally folder on your computer. To export to a
different folder enter the path of the drive and folder in Output File Name. Another program can
be used to import the content from the exported file or used as it is.
More:
Export Master Data
Export Formats
Tally has three formats for export of data from E-mail, Export and Upload options:
• ASCII (Comma-delimited)
• HTML (Web-publishing)
• XML (Data-interchange)
ASCII
American Standard Code for Information Interchange (ASCII) is a plain-text format, without any
special formatting or fonts, in which data is separated using commas. Commonly used for email
and all email programs, ASCII data can also be easily worked upon by other programs.
HTML
Reports in Hyper Text Markup Language (HTML) format retain their formatting and fonts. They
can be read using an HTML-enabled mail program, or using browsers such as Microsoft Internet
Explorer.
Resolution (Only in HTML format)
Resolution is based on the pixels used to format the report. A higher resolution gives a better
quality of output. The Resolution option is available only in HTML format in Tally.
XML
Extensible Markup Language (XML) is an extension of HTML, but the data can be imported by
other XML-aware systems. Using XML, Tally allows the user to exchange information even with
systems that do not run Tally. An XML file from Tally has an XML envelope and is formatted
with XML tags, to enable import into other systems. The destination system requires re-
formatting of XML Style Sheets (XSLT), based on the inherent style used in Tally before
importing the data. When two systems are running different versions of Tally, XML data can be
directly imported using the import menu option, without any re-formatting.
Data from Tally in XML format can be imported by another system with ease in lesser time.
XML is fast emerging as the de facto standard for information exchange all over the world. This
format helps the user to collaborate and share information with others.
By default, the exported file will be saved in the Tally folder on your computer. To export to a
different folder enter the path of the drive and folder in Output File Name. Another program can
be used to import the content from the exported file or used as it is.
Export Master Data
Master Data from Tally can be exported using the export feature to be imported in to another
program.
1. To export Masters from Tally go to Gateway of Tally > Display > List of Accounts
2. Use Alt+E or click on Export from the button bar. This displays the Report Generation
screen. Press Backspace or No to change the default values.
Language
Select the language in which you would like the data exported
1. Format
Select from the three formats available.
○ ASCII
○ HTML
○ XML
Note: Select HTML to publish or display. If a file is to be exported to be imported into another
system select any of the other options.
2. Output File Name
Enter a name for the file to be exported. By default the file will be saved in the Tally folder in
your computer. To export to a different folder enter the path in Output File Name (Example:
C:\differentfolder\).
3. Type of Masters
Select the Masters from the list:
Import of Data
Data can be imported to Tally from other users of Tally. Tally can also be programmed to import
data from other systems to be used as an integrated system.
For example, a Customer Contact Management Program, with details such as status of an order
and last contact established, can be imported to Tally. This imported data can be merged into a
report containing outstanding balances. When data is changed in the other system, the change is
also reflected in Tally.
To import data, Go to Gateway of Tally > Import of Data
More:
Masters
Vouchers
Synchronization
Import Formats
Only the Tally XML format is supported for import of Data in Tally.
Tally (XML) Format

This option imports data in XML format. More on XML.
Import of Masters
Masters from another company can be imported to Tally and merged with the data of the current
company.
Note:
* Load and activate Company before importing data.
* Export the data from another company before importing it.
To import masters,
1. Go to Gateway of Tally > Import Masters.
The Import of Data screen is displayed.
2. Enter the full path of the file in the Import File Name field. Example:
C:\tallyrel1.11\DayBook.xml.
3. Select the appropriate option in the Treatment of entries already existing field from the
Behaviour menu.
1. Combine Opening Balances – Select this to combine the opening balance of the
imported masters with the opening balance of the current company.
2. Ignore Duplicates — Select this to ignore duplicate entries from the imported data.
When imported entries are the exact replicas of entries in the current company, they
are called duplicate entries.
3. Modify with new data — Select this to add new data from the imported master to
the current company data.
4. Enter to Accept.
5. Open Tally.imp file located in the Tally folder in Notepad to view log of import activities.
Import of Vouchers
This feature allows the import of vouchers from earlier versions of Tally and other users of Tally.
Voucher data can be imported from other programs using XML.
To import vouchers,
1. Go to Gateway of Tally > Import Transaction > Vouchers.
Only the Tally XML format is supported for import of Vouchers in Tally.
2. Import File Name – Enter the path of the drive and folder where the file to be imported
exists.
Synchronization
Synchronization is the replication of data between two or more locations that use Tally. Data can
be sent over the Internet, or in a private network system. Tally offers control over the frequency
of replication. Data can be replicated after each transaction or updated at specific intervals.
Synchronization takes place in a Client-Server environment and can be initiated only by the
client. Data from the client is transferred to the server and from the server to the client.
Replicating data is a single-click activity in Tally once Synchronization is set up between a
server and its clients.
More:
• Tally Link Server
• Direct Synchronization
Synchronization Using Tally Link Server
Tally Link Server is a service under Tally Internet Services that allows you to synchronize data
without worrying about the Fixed IP.
In a network environment, The Tally Server instance connects to the Tally Link Server, available
on a public IP on a predefined port. The Tally Client instance connects to the Tally Link Server
and communicates with the target Tally Server instance as long as the Tally server remains
connected to the Tally Link Server
The destination Tally Server instance is identified using its unique TallyLinkId.
Thus, even if you have a dynamic IP on the Tally Server, you don’t need to change anything on
the Client. Just log on to the Tally Link Server and stay connected.
The figure below depicts the complete picture:
Set Up for Synchronization
On Client Computer
1. Open Tally.ini file in the client computer and insert this line: clientserver=client
2. Execute Tally
3. F12: Configure> Connectivity> Sync Configuration.
TallySync Configuration
Ignore Server’s modified Voucher Type Masters?
To modify the client’s Voucher Type Masters during synchronization set this field to Yes.
TallyLink Configuration
Use TallyLink?
The field, Use TallyLink?, is set to No by default. If using the Tally Link Server, set this field to
Yes.
TallyLink ID
Enter TallyLink ID to register against your serial number. This Id is required for the
identification on the TallyLink Server (TallyLink id can be a Tally Serial Number of the client
machine or any name which will be registered against the serial number).
On Server Computer
1. Open Tally.ini file on server computer and insert the following line: clientserver=server
Serverport = 20000 (any port between 1 to 64000, whichever is open. Note that the first
1000 to 1500 ports are standard ports, which must be avoided).
2. Execute Tally.
3. From Gateway of Tally> F12: Configure> Connectivity> Sync Configuration
TallySync Configuration
Ignore Client's modified Voucher Type master?
To modify the server’s Voucher Type Masters by the client after synchronization set this field to
Yes.
Enable Sync Logging (SockReq.log)
To log all requests and responses in a file called sockreq.log set this field to Yes. This will help
when debugging the sync process.
Truncate previous log before Syncing
This field appears only on setting Enable Sync Logging (Sockreq.log) to Yes. Setting Truncate
previous log before Syncing to Yes will delete the previous logs before logging in to the current
session.
TallyLink Configuration
Use TallyLink?
Set to Yes to select Tally Link Server for syncing type
TallyLink ID
Enter TallyLink ID to register against your serial number.
Connect to TallyLink Server
Set to Yes to establish a connection between the TallyLink Server and the remote Tally clients.
(The Connect Button appears in the button bar. On opening the same screen next time use the
Connect Button to connect to TallyLink Server)
Connect on Startup
Set to Yes to connect to the TallyLink server on startup
Accept the Tally Sync Configuration screen. Click on Connect button on the button bar or press
ALT+N to connect to TallyLink server. If TallySync and TallyLink information are found
correct, the following message displays in the calculator pane:
TallyLink ID
For both the server and client, who want to use the Sync feature through Tally Link Server, it is
mandatory that they register a TallyLink ID (Alias name) for their copy of Tally. TallyLink ID is
a unique identifier used by Tally Link Server to identify all the connected Tally instances.
To connect to the Tally Link Server for the first time, specify a TallyLink ID and send it to the
server. The Link Server checks for the TallyLink Id in its database. If available, assigns the
TallyLinkId to that particular Tally instance. This TallyLink ID is stored against the Tally Serial
No. If the TallyLink ID is not available (the specified TallyLink ID has already been assigned to
someone else.), a TallyLink ID already exists message displays.
On all subsequent connections /requests, the TallyLink ID is verified against the Tally Serial No,
authenticated and authorized.
Creating a Rule
Select the company whose vouchers are to be synchronized. Ensure that the company is kept
open on both the client and the server computer. Create a new Client Rule on the client
computer and specify the following:
• Company name on the server,
• Server details
• Synchronization details.
Gateway of Tally > Import of Data > Synchronization > Client Rules > Create
The details of the screen are mentioned below:

Name of Rule
Specifies the name for the client rule. Any name can be entered as long as such rule does not
exist in the company.
Use TallyLinkServer
Specifies if Tally Link Server is used for synchronizing. Type Yes to select Tally Link Server.
Server TallyLink Id
Enter the Server TallyLink Id specified on the server computer.
Type of Rule
This indicates the type of operation to be performed; the available options are Synchronize and
Upload Transaction. If Tally Link Server is selected, this option defaults to Synchronize and
cannot be changed.
Company Name on Server
Enter the name of company on the server computer with whom the sync is to be performed.
Synchronize Altered Transactions
To send altered transactions to remote clients set this option to Yes.
Sync over slow connection
If this option is set to Yes, Tally will send the vouchers in multiple small batches rather than in
one big batch and will not time out if the connectivity is poor. This option must be set to Yes in
most cases.
If this option is set to No, the sync process takes a longer time as data are sent in multiple
batches.
Company GUID on Server (Read-Only)
Displays Company's Globally Unique ID
Current TID (Read-Only)
Displays the creation ID of the last synchronized voucher of the remote company. This id is
generated to identify new transactions created at the remote end.
Altered TID (Read-Only)
Displays the altered ID of the last synchronized voucher of the remote company. This ID is
generated to identify altered transactions at the remote end.
Is Active (Read-Only)
Displays Yes if the Client Rule has been activated by the server.
Remote Alter State (Read-Only)
Specifies whether Synchronize Altered Transactions is Yes or No on the server side for that
particular client rule.
Creating a Server Rule

Go to Gateway of Tally > Import of Data > Synchronization > Synchronize.
A request is sent to the server from the client computer to create a Server Rule corresponding to
the Client Rule. A Server Rule is created implicitly whenever a Client Rule synchronizes with the
server.
Note: You cannot create a Server Rule manually.
You can see the status of synchronization in the Calculator pane in Tally on the client machine. If
you do not receive an error message in this pane, the Server Rule has been created successfully
Note: The Server Rule is in encrypted form.
Activating Server Rule
• Once the Server Rule is created it has to be activated on the server computer.
• Go to Gateway of Tally > Import of Data> Synchronization > Server Rules > Activate
You can now Sync from the client computer to transfer your vouchers.
Altering the Server Rule
• Go to Gateway of Tally > Import of Data > Synchronization > Server Rules > Alter
• A List of Rules is displayed. Select the relevant rule. This will display the Server Rule
Alteration screen.
The fields displayed in this screen will be in a read only mode except for Is Active and
Synchronize Altered Transactions?.
Process of Synchronization
Ensure that the client computer and the server computer are connected to the Internet during the
synchronization process.
On the server computer: Start Tally > select the company (into which vouchers are to be
synchronized from the client machine) > F12: Configuration > Sync configuration > Press the
Connect Button.
On the client computer: Start Tally > Select the company from which vouchers are to be
synchronized > Gateway of Tally > Import of Transactions > Synchronization > Synchronize.
While synchronizing from the client computer the following message displays in the Calculator
panel: Sync. Start at (time) and Sync End at (time). This ensures that the Client Rule has been
synchronized successfully.
Activate server rule on the server computer:
Ensure that the company is kept open in the server computer.
From Gateway of Tally > Import of Transactions > Synchronisation > Server Rules > Activate
This displays the name of the Client Company and link ID. Set Is Activate and Synchronize
Altered Transactions to Yes.
Is Active?
Displays the status of the client rule at the server end.
Synchronize Altered Transaction?
Specifies if synchronization of altered transactions is to be done.
On the client computer: Start Tally > Select the Company (from which vouchers are to be
synchronized to the server machine) > Import of Transactions from Gateway of Tally >
Synchronisation > Synchronize.
On the client computer, a message displays on the Calculator panel: Sync. Start at (time) and
Sync End at (time).
This completes the synchronization process.
View Synchronized Vouchers
To view the synchronized vouchers, select Display > Day Book from Gateway of Tally in both
server and client computers.
Server Computer:
Client Computer:
All the vouchers from the client replicates to the server. Next time, on opting for Sync, the
synchronized vouchers will not be posted. However, the new and the altered vouchers from both
the client and server will get updated on the respective computers.
Ensure that the vouchers are not deleted after synchronisation. In case of deletion, ensure that it
is done on both the sides (i.e., server and client computers).
On canceling the voucher, the change is updated accordingly at both the ends.
Direct Synchronization
Direct Sync is synchronization between a server and a client. Direct Synchronization can be over
a LAN, WAN, the Internet or between two instances of Tally running on the same machine. It is
usually done using a separate server The Tally Link Server is not used for Direct
Synchronization.
To enable this feature contact any of the nearest Tally Offices or send an email to
support@tallysolutions.com
The server version of Tally must be installed on the server computer and client version on the
client computer, before proceeding.
Note: Synchronization can be initiated only by the client.
Direct Synchronization between Client and Server

Direct Synchronization can be between two different entities/organizations or between the head-
office and branches of an organization.
Assume that ABC Company maintains your accounts. You can Transfer data from your company
to ABC Company using Direct Sync, provided ABC Company has a server version of Tally
installed and can connect over a network. Other clients of ABC Company can also connect and
transfer their Tally data. Here, ABC Company is the server and other entities that are
synchronizing their data, are clients.
Direct Synchronization can also be implemented between the Head Office and Branches of an
Organization. Thus, when synchronizing between the Head office and Branches, the Head office
must have a server version of Tally installed and connect over a network to the Branches. The
Branches must have client versions of Tally installed.
Enable Direct Synchronization
To check whether Direct Sync is Enabled?

Go to Gateway of Tally> F12: Configure > Licensing > Add-ons
If you have installed a client copy of Tally and have enabled Direct Sync, then you will see
Direct Client displayed. If you have installed a server copy of Tally then both Direct Client and
Direct Server are displayed.
Configuring Tally.ini file for Direct Sync

• Open the Tally.ini file in notepad from the Tally installed folder.
• For Client:
Enter Clientserver = client in the file and save. This specifies that Tally is to be run in
client mode.
• For Server:
Enter Clientserver = server in the file. This specifies that Tally is to be run in server
mode.
Enter the TCP/IP Port number of the server and save.
Configuring Synchronization
On Client Computer
• Open Tally and select a company.
• Go to Gateway of Tally> F12: Configure > Connectivity> Sync Configuration to
display the Tally Sync Configuration screen.
• Set Yes in Ignore Server’s modified Voucher Type Masters? field if you do not want to
replace the original transaction after synchronization. Set No if you want the transaction
to be replaced by the modified transaction from the server.
• By default, Use TallyLink? field is set to No.
On Server Computer
• Open Tally on the server and select a company.
• Go to Gateway of Tally > F12: Configure > Connectivity> Sync Configuration to
display the Tally Sync Configuration screen.
• Set Yes in Ignore Client’s modified Voucher Type Masters? field if you do not want to
replace the original transaction after synchronization. Set No if you want the transaction
to be replaced by the modified transaction
• By default, Use TallyLink?field is set to No.
Creating a Rule
Creating a Client Rule

• Go to Gateway of Tally> Import of Data > Synchronization > Client Rules > Create
Name of Rule - In this field, enter a name for the rule you are creating. You cannot enter an
existing ClientRule name.
Note: By default, the Use TallyLinkServer ? field is skipped when you use Direct Sync.
Server URL - Enter the uniform resource locator (URL) of the server. This is the IP
address/Name of the Tally server. Example: (192.168.1.206/ Localhost). Enter the TCP/IP port
number of the server preceded by a colon after the URL.
Note: By default, the synchronization port in Tally is 9000. Change the parameters in Tally.ini
file to change the port number
Secure Server? - Enter Yes in this field if you are synchronizing to a secure server. Entering Yes
here gives you the option to enter your user name and password.
User Name - Enter the user name you use to connect to the server.
Password - Enter the password for the specified user name.
Use Compression? - Enter Yes in this field to compress the data that you send to the server. Use
this option to reduce the size of data files which synchronize and transfer data.
Type of Rule - Select Synchronize from the Rule Types menu.
Company Name on Server – Enter the name of the company on the server that you want to
synchronize.
Synchronize Altered Transactions? – Set this option to Yes to synchronize back dated/altered
transactions with the server.
Sync over slow connection? – If you have a slow speed Internet connection like a dial-up
connection, set this option to Yes. The time taken to transfer data could be more but data transfer
will be efficient.
The following fields are Read Only:
Company GUID on Server – When you synchronize, Tally creates a Globally Unique
Identifier (GUID) on the server. This GUID is displayed here.
Current TID – This is the Current Transaction Identifier field and it displays the number of
vouchers transferred.
Altered TID – This is the Altered Transaction Identifier field and it displays the number of
vouchers altered and transferred from the server to the client.
Is Active – This field shows if synchronization is activated on the server.
Remote Alter State – This field displays only if the Synchronize Altered Transactions field is
set to Yes on the server for a particular Client Rule.
Creating a Server Rule

Refer Creating a Server Rule for more details.
Synchronization Completed
• Go to Gateway of Tally > Import Transactions > Synchronization > Synchronize from the
Client machine to start the synchronization process.
The Calculator pane displays Sync. Start at and Sync. End at message.
View Synchronized Vouchers
• You can view the synchronized vouchers from Gateway of Tally > Display > Daybook or
Gateway of Tally >Display > Statements of Accounts > Statistics
• Synchronization transfers vouchers along with the masters from the client computer to
the server computer. Vouchers in the server computer will be replaced by modified
vouchers from the client computer if the Ignore Client’s modified Voucher Type
Masters? field is set to No on the server.
• Vouchers for the company in the server computer will be transferred back to the client
computer in another instance of synchronization by the client.
• Here, the vouchers in the client computer will be replaced by modified vouchers from the
server if the Ignore Client’s modified Voucher Type Masters? field is set to No on the
client machine.
Tally ODBC
Data can be accessed from any application using Open Database Connectivity (ODBC). Tally
uses ODBC to connect to other programs and exchange data dynamically.
Ensure that MS-Query is installed in the system in which you will be installing Tally. This
enables ODBC as soon as Tally is installed.
The ODBC server automatically displays on the Calculator pane.
More:
Outward Connectivity
Inward Connectivity
Outward Connectivity
Outward Connectivity is to connect directly to send data from one program to another, without
any programming. It allows the user to extract data from Tally and send it to other programs such
as Microsoft Word or Excel.
Outward Connectivity features:
• Print labels for greeting cards from ledger addresses stored in Tally.
• Create templates for report and forms such as audit reports and Schedule VI forms and
plug in data from Tally.
• Use popular programs in Tally’s open database, thereby giving you the flexibility to
create your reports with up-to-date data from Tally.
More:
Tally ODBC with Microsoft Word
Tally ODBC with Microsoft Excel
Tally ODBC with Microsoft Word
Consider the following scenario. A company wants to send greeting cards to its customers. It can
use the names and addresses of customers, stored in the Tally database to print labels. The steps
to be followed are:
• Start Tally and keep it open till the Mail Merge process is completed.
• Ensure ODBC Server is displayed on Tally’s calculator pane.
• Open MS Word.
• Click on Tools > Mail Merge from the Menu bar.
• From Main Document, click Create > Mailing Labels.
• Click on Active Window.
• In the Mail Merge Helper dialog box, click on Get Data > Create Data Source. Click
on MS Query …from the Create Data Source dialog box.
• Select TallyODBC from the Microsoft Query screen.
• Query Wizard displays fields from Tally. Select Ledger and click the “>” button to
select fields required in the query.
The screen appears as:
• Use the Filter Data dialog box to limit the data to suit your requirement.
• Sort the data in ascending or descending order in the Sort Order dialog box.
• Click on Finish to complete the Query process.
• Click on Set Up Main Document.
• In Create Label dialog box, click on Insert Merge Field to insert the fields and click
OK.
• Click on Merge from Mail Merge Helper dialog box to create mailing labels in a new
document.
Tally ODBC with Microsoft Excel
Tally ODBC extracts data from Tally and designs the reports in MS Excel. The steps to be
followed are:
• Start Tally and keep it open till the Mail Merge process is completed.
• Ensure ODBC Server is displayed on Tally’s calculator pane.
• Open MS Excel.
• Click on Data > Get External Data > New Database Query from the Menu.
• Select TallyODBC from the Choose Data Source dialog box.
• Query Wizard displays fields from Tally. Select and click the “>” button to select fields
required in your query.
• Use the Filter Data dialog box to limit the data to suit your requirement.
• Sort your data in ascending or descending order in the Sort Order dialog box.
• Click on Finish to complete the Query process.
• Click on OK from the Returning External Data to Microsoft Excel dialog box to
display the selected columns on the Excel sheet.
Inward Connectivity
Inward connectivity integrates other systems with Tally to use data in them. Tally can be
programmed for inward connectivity. This allows using data from other systems in Tally by
creating an integrated system.
For example, a customer contact management program containing details like status of an order
and last contact made can be brought in Tally and merged in a report containing outstanding
balances. Changes in the data in the program is immediately reflected in Tally.
To connect to other programs and use external data in Tally, you can contact any of the nearest
Tally Offices or send an email to support@tallysolutions.com
E-capabilities
Exchange of data in a network is the order of the day in the world today. Import and export of
data over a LAN or the Internet is a common feature in most organizations. E-Capablities is the
ability of a software application/program to exchange data over a network.
Tally has a broad range of E-Capabilites that allows you to E-mail data and publish reports and
documents on the web.
E-Capabilities requirements:
1. An Internet connection. It can be a dial-up, cable, ISDN, DSL or satellite connection.
2. An E-mail account to use the E-mail feature in Tally.
3. A Uniform Resource Locator (URL) address to publish on the web, as well as the rights
to upload files.
More:
E-mail
Web Publishing
E-mail (Electronic mail)
The E-mail is the most widely used facility on the Internet. It saves time and cost of postage. Use
the email feature in Tally to:
○ E-mail any Tally report or document like invoices or purchase orders
○ Post reminder letters and statement of accounts
The following example illustrates the use of this feature in Tally:
E-mail a Reminder Letter

To send a reminder letter to a customer by email:
2. Select the customer’s/company’s ledger from the List of Ledgers
3. Click on Email from the button bar or press Alt+M
4. The fields on the Mailing Ledger Outstanding form are automatically completed if you
have given the required information during creation of the master records. Select No or
press Backspace to change/modify the entries. Select Yes to accept.
5. The E-mail Server field is highlighted next. This is a mandatory field. The first time you
use this feature in Tally, enter the name of your SMTP server, example:
mail.btinternet.com. Subsequently, Tally will automatically display the SMTP server
name. Refer to your Internet Service Provider (ISP) or network administrator for further
queries.
6. The From field displays the name of your company entered in the Company Creation
screen and stored in the Company Information Master records. You can also modify the
default information. Press Enter.
7. The From E-mail Address field displays the e-mail address entered in the Company
Information Master data. Enter your email address, if you have not done so while creating
a company, or if you want to change the id.
8. Enter the user name and password in Authentication User Name (Only if required) and
Password field respectively if the mail server requires authentication.
9. In the Format field a pop-up screen lists the three formats in which you can generate
your email:
1. ASCII (Comma-delimited)
2. HTML (Web-publishing)
 XML (Data-Interchange)
Select the type that suits your recipient.
10. To E-mail Address field is a mandatory field.
It displays the recipient's email address as entered in the Mailing and Related details
during ledger creation. Enter the address if you have not done so while creating the
ledger or if you want to modify the information.
11. Type the email address of another recipient to whom you want to send a carbon copy of
the email in the CC (if any) field.
12. The Subject field is filled by default and displays the subject of your mail. You can
change it to a subject of your choice.
13. Any text you enter in the Additional Text field precedes the report in the recipient’s mail
program. You can use this field to type a message to the recipient.
14. Additional Options provided in the form are:
1. Include Post-Dated Transactions?- Set this option to Yes to include post-
dated transactions.
2. Show overdue using Bill Date?- Set this option to Yes to show bill date
in report.
3. Range of Bills to show:- Select all bills or overdue bills to display.
 Format:- Select condensed or detailed format for your reminder letter.
 Show Qty Info in Detailed Format?- This option is selected for the
detailed format mode and displays quantity.
 Show bills of the following type:- Select the types of bills from all, credit
or debit bills.
Note: Additional Options may vary depending upon the type of report you want to
email.
15. Print Preview: Use the Print Preview screen to view the document before emailing.
This shows how the document appears in the recipient’s email.
Web Publishing
All reports and documents generated in Tally can be published on your website. Tally can create
reports in HTML format and upload the same directly to your website. For example, use this
feature to inform your customers about the new price-range and stocks available for sale on your
website. Tally uses the highest standard of data encryption methods to ensure security of data.
Uploading Reports on the Website

A website is a specific directory space allotted to you on that server. Protocols are set of rules
and specifications on how data and files are transferred over a network. They cover all aspects of
communication between computers including content, formatting and error control.
To publish a report, statement or data generated in Tally, upload it to an Internet Server that has
been configured to accept files in the specific protocols.
Example: To publish your company’s balance sheet on your website:
1. Go to Gateway of Tally > Balance Sheet.
2. Click the Upload button from the button bar or press Alt+O.
3. The first time you upload, you will have to enter the required information on the screen
displayed. The field Upload to has two options:
1. FTP Site
2. Web Page (HTTP/HTTPS)
FTP Site
This site accepts files transfers in File Transfer Protocol (FTP). FTP is a common choice for data or file transfer to a website.
Select this option unless your site accepts HTTP or HTTPS uploads.
Web Page – HTTP/HTTPS
Hyper Text Transfer Protocol (HTTP) is the standard for transferring HTML files over
the Internet. HTTP Servers are pre-programmed to accept HTTP connections. HTTPS
sites are servers configured to accept secure connections. They conform to standard
security protocols (example: SSL and SET) to ensure that your data and files are not
tampered during an upload.
Use this if your server is set up for HTTP/HTTPS or else select FTP.
4. URL: Universal Resource Locator (URL) is the server address where you want to
publish your report. For FTP, you will need to know the FTP server name and directory
path. The FTP server name is the domain name of the Web server (example:
ftp.server.com). The directory path is the folder on the server where the report is stored
(example: /public_html). For a web page, an URL is typically in the form
www.myweb.com/.
5. Secure Server: This option displays when you select Web Page in Upload to field. Use
a secure connection when the data is sensitive and your server is configured for it. A
secure site is one that has alphabet s following http (https) and the URL in the address bar
of your browser displays https://www.______.com.
6. User Name (if any): Enter the user-name you need to access the server for uploading.
7. Password (if any): Enter the password
Note: Internet servers authenticate your identity before you can put data and files on
the site. If you are unsure about your user name, password, or FTP location, contact
your Internet Service Provider (ISP).
1. Format: You can generate your reports in three formats. To know more about these formats,
click on the links given below:
 ASCII (Comma delimited)
 HTML (Web-publishing)
 XML (data interchange)
Select the type that suits your requirement.
9. Destination File: This option displays on selecting an FTP Site in Upload to field. The
default names are displayed. Modify if necessary.
Note: Additional options may vary depending on the type of report you want to
upload.
10. Print Preview: Use the Print Preview screen through the Print option to view the
document before you upload.
Tax Deducted at Source (TDS)
Tax Deducted at Source (TDS) is one of the modes of collecting income tax. The buyer
(Deductor) deducts the tax from the payment made to the seller (Deductee) and remits the tax to
the Income Tax Department within the stipulated time.
The buyers (Corporate and Non-Corporate) make payments (such as Salary, Rent, Interest on
securities, Dividends, Insurance Commission, Professional Fees, Commission on Brokerage,
Commission on Lottery Tickets, etc) to the sellers (Services) and deduct the requisite amount
from such payments towards tax.
The buyer files the TDS returns containing details of the seller and the bank, where the TDS
amount is deposited to the Income Tax Department (ITD).
The Income Tax Department has prescribed the formats for filing these returns electronically,
which the buyer does in a CD/floppy.
For additional details you can visit the Income Tax Website at http://www.incometaxindia.gov.in
Flowchart of TDS
A seller (Deductee) provides services to the buyer (Deductor). The buyer deducts the amount
towards TDS prior to the services or the bills received. The buyer issues Form No.16A to the
Deductee and deposits the deducted amount to the Authorised Bank (Treasury). The buyer files
annual returns electronically to the Income Tax department.
Electronic TDS (e-TDS)
The Income Tax Department has made it mandatory for all Corporate companies like private
limited and public limited to file their TDS returns in electronic media (i.e. e-TDS returns).
However, the Non - Corporate like individuals, proprietary firms and partnership firms can
furnish their returns in physical form to their respective Income Tax Offices. They can also
furnish their returns in electronic form through TIN facilitation centers established by NSDL.
Filing of e-TDS return to Non- Corporate deductors is optional.
Filing of e-TDS Returns
The Buyer (Deductor) has to furnish the TDS returns in electronic form and Form 27A in
physical form along with the e-TDS return CD/floppy.
Form 27A must be furnished separately for each return (Form 24, 26 or 27).
NSDL has developed a utility called File Validation Utility (FVU) to verify whether the e-TDS
return file prepared by the Buyer (deductors) conforms to the prescribed format.
Transaction Flow in Tax Deducted at Source
Example 1: Indirect Expenses (Fees for Professional or

Technical Services (Section 194J)
Manohar is a technical consultant for automobiles. He inspects used cars and prepares a report.
Manohar (seller of the service) receives per car, Rs.500 for inspections. He inspects five cars in
January 2005. So he has to receive Rs.2500 as service charges. Company 'A' pays him Rs.2250
towards service charges and pays Rs.250 to any Bank or IT counter towards TDS.
The following diagram explains the transaction flow in TDS:
TDS in Tally
TDS (Tax Deducted at Source) in Tally provides an easy-to-use and flexible interface. It helps
you to handle intricate cases and calculate the tax payable to the Income Tax Department.
Tally calculates the tax of all parties/ suppliers where TDS deduction is mandatory. It calculates
the TDS automatically and prints Form16A certificates, Forms 26Q, 26, 27 and 27A (Cover
Note) for Quarterly/ Annual Returns as per statutory requirement.
It allows the user to view and print various TDS reports, Challans and TDS Outstanding
statements.
Features of TDS in Tally
The TDS functionality in Tally supports the following features:
1. Simple and user-friendly
2. Quick and easy to set up and use
3. Accounting for tax on partial/full payment of bills
4. Flexibility for auto and manual calculation of TDS
5. Complete tracking of each transaction from deduction to payment
6. Challan management and printing for prompt and accurate filing of tax
7. The Auto allocation feature prevents error-prone data entry and helps track the
transactions faster.
8. Form 16A management:
9. Can be printed for a transaction
10. Can be printed for a period
11. Can be printed yearly
9. Allows multi-party printing
10. Exporting of data in NSDL compliant TDS file format.
11. Electronic format (e-TDS return) with Form 26Q, Form 26 , Form 27 and Form 27A
which will be validated by the utility, provided by the government.
12. Generates Form 16A, TDS Challan, TDS Computation and TDS Payable reports.
Company Creation
Company Creation means providing basic information about the company whose books of
accounts you want to maintain in Tally.
Gateway of Tally > Alt + F3 > Create Company
Statutory Compliance for

Select the Country from the list of countries.
State
Select the appropriate State from the list.
PIN Code
Enter the Postal Index Number, which is numerical and of six digits
Enabling TDS in Tally

To enable TDS in Tally,
Go to Gateway of Tally> F11: Features> Statutory & Taxation
In the Company Operations Alteration screen,
1. Set Enable Tax Deducted at Source and Set/Alter TDS Details to Yes
2. Enter the TDS Deductor details in Company TDS Deductor Details screen
A brief description on the fields that appear in the Company TDS Deductor Details screen is
given below.
Tax Assessment Number
Enter the Tax Assessment Number (TAN) in this field.
The Tax Assessment Number (TAN) is a ten-digit alphanumeric number, issued by the Income
Tax Department (ITD) to the deductors.
One Tax Assessment Number is adequate for different types of deductions. TAN must be quoted
properly on all Challans, Payment for TDS, Returns, All Certificates - Issue in Form No.16/16A,
All Returns and in all documents and other correspondences with Income-tax Department.
Income Tax Circle/Ward (TDS)
Enter the Income Tax Circle/Ward (TDS) issued by the Income Tax Department
Deductor Type
According to the nature of the organisation, select the Deductor Type (Government or Others)
from the list.
Name of person responsible
Enter the name of the person authorised to file the TDS returns of your company.
Note: If Tally has a security feature enabled then this field is automatically filled with the user
name.
Designation
Enter the designation of the authorised person filing the TDS returns.
Statutory Info.
The Statutory Info. comprises Deductee Type and TDS Nature of Pymts reports.
Go to Gateway of Tally > Display > Statutory Info.
The Statutory Info. displays the following options:

1. TDS Nature of Pymt
2. Deductee Type
TDS Nature of Pymt
To view TDS Nature of payment:

Go to Gateway of Tally > Display > Statutory Info. > TDS Nature of Pymt
1. Select any desired type from the list of various nature of payments to go to TDS Nature
of Pymt Display
2. The display window comprises of the fields, Name, Section and Payment Code. There
is also a table, where you have details such as Deductee Type, Applicable from,
Exemption Limit and Rate.
Deductee Type
To view Deductee Types

Go to Gateway of Tally > Display > Statutory Info. > Deductee Types
1. Select the Deductee Type from the List of Deductee Types
2. The Deductee Type Display screen comprises Name of the Deductee Type, Residential
Status and Deductee status. There is also a table for Deductee TDS Details with
columns for Applicable from, Surcharge Exemption Limit, Surcharge, Additional
Surcharge (Cess) and Additional Education (Cess).
Creating TDS Masters
You can create TDS Ledgers under any of these main group heads:
1. Duties and Taxes
2. Sundry Creditors
3. Sundry Debtors
4. All Current Assets (except Bank, Cash-in-hand and Stock-in-hand), Misc. Expenses
(Assets), Loans and Advances (Assets) group or sub groups of these main groups
5. Unsecured Loans
6. Loans (Liability) (except Bank OD A/c, Bank OCC A/c )
7. Secured Loans
8. Unsecured Loans
9. Branches/Division
10. Reserves & Surplus
11. Capital Account
12. Fixed Assets
Note:For ledgers created under Groups besides Duties & Taxes, Sundry Creditors and Sundry
Debtors, to obtain the field Is TDS Applicable, set Maintain Bill-wise Details and For Non-
Trading A/cs in F11: Features to Yes.
Creating a Tax Ledger
Create the Tax ledger under the group Duties and Taxes to calculate TDS at voucher entry
levels. You can specify the Type of Duty/Tax only for Ledgers created under Duties and Taxes.
To create a Tax Ledger for TDS on Rent,
Go to Gateway of Tally> Accounts Info.> Ledgers> Create
1. Enter the Name of the ledger

2. Select Duties & Taxes from the List of Groups in the Under field. On selecting Duties
& Taxes, you will get a field Type of Duty/ Tax
3. Select TDS from the Types of Duty/Tax list
4. Select the appropriate TDS Nature of Payment from the List of TDS Nature of
Payment
5. If the total transaction limit exceeds the actual limit, set Ignore TDS Exemption Limit
to Yes
6. Accept to save the Ledger
Similarly, you can create different Tax Ledgers.
Note: You will find different categories under Tax Deduction. Select the relevant TDS Nature of
Payment from the List of TDS Nature of Payment that applies to your company.
Creating a Party Ledger

To create a Party ledger grouped under Sundry Debtors or Sundry Creditors,
1. Enter the Name of the Ledger
2. Select Sundry Debtors or Sundry Creditors from the List of Groups in the Under
field
3. If required, set Maintain balances bill-by-bill to Yes
4. Set Is TDS Applicable to Yes
In the TDS Details screen:

○ Select the Deductee Type from the List of Deductee Types
○ Set Is Lower/No Deduction Applicable to No if not applicable
○ To ignore the exemption limit for surcharge and to calculate the surcharge on the
amount specified, set Ignore Surcharge Exemption Limit to Yes
1. Enter the Mailing Details and Tax Information
6. Accept to save the Ledger

Note: While creating ledgers under Sundry Creditors or Sundry Debtors, ensure Maintain Bill-
wise Details is set to Yes. If the party is a Non Resident Deductee type, then PIN Code, State and
the Sales Tax Number fields are not applicable.
Creating a Party where Lower/No Deduction is Applicable
To create a TDS Party where Lower/No Deduction is applicable,

1. Enter the Name of the Party
2. Select the Group from the List of Groups at the Under field
3. By default Maintain balances bill by bill is set to Yes
4. Set Is TDS Applicable to Yes
In the TDS Details Screen,

• Select the Deductee Type from the List Of Deductee types
• Set Is Lower/No Deduction Applicable to Yes
• Select the Section number from the list.
○ If 197 is selected, the cursor skips to the TDS Lower Rate field and you can
enter the TDS Lower Rate in this field.
○ If the section number 197A is selected, the cursor skips to Ignore Surcharge
Exemption Limit? in the Ledger Creation screen and the TDS rate is taken as
zero.
5. Enter the Mailing Details and Tax Information

6. Accept to save the ledger
Creating a Journal Voucher to book the TDS Expense
Using the Journal, you can book expenses, deduct the TDS and pay the amount to the party for
their services.
To book TDS expenses,
Go to Gateway of Tally> Accounting Vouchers> Journal Vouchers
1. Debit the ledger Rent grouped under Indirect Expenses from the List of Ledger Accounts
and enter the amount
2. Select Smart Enterprises from the list and the amount to be credited appears in the
Credit column
In the Bill-wise Details for screen:

3. Select New Ref as the Type of Ref
4. Select the TDS ledger from the List of TDS Ledgers and the Amount appears
automatically
5. Enter a Narration if required and Accept to save the journal

Note: Booking the TDS Expense can be done using the Purchase voucher available in Tally.
Deduction of TDS using Journal voucher with TDS Deduction

Button
You can create a Journal using the TDS Deduction button, to record all the TDS deductions for
parties who provide services. The List of Ledger Accounts displays only those ledger accounts
which are enabled for TDS and transaction passed where deduction of due.
Go to Gateway of Tally> Accounting Vouchers> F7: Journal
1. Click the TDS Deduction Button or press ALT+S. You will get a list of TDS
Ledgers for the party selected
2. Select the TDS Party Ledger from the list
3. In the TDS Details for screen, select the TDS Ledger from the list (TDS on Rent).
The system calculates the Net TDS to Deduct amount
4. Select the TDS Applicable Bills from the list
5. Accepting the TDS details sub form will post the Net TDS to Deduct amount in the
Debit column of the Journal Voucher screen
6. Press the Enter key to credit the Tax Ledger (TDS on Rent). You may enter the New
Reference number for identification and accept the screen to save the Journal
Voucher
Creating a Journal Voucher to book the TDS Expense for a

Lower/No Deduction party
To book TDS Expenses for a Lower/No Deduction Party,

Go to Gateway of Tally> Accounting Vouchers> Journal Vouchers
1. Debit the ledger Rent grouped under Indirect Expenses from the List of Ledger
Accounts and enter the amount
2. Select ABB Enterprises from the list and the amount to be credited appears in the Credit
column
In the Bill-wise Details for screen,

3. Select New Ref as the Type of Ref
4. Select the TDS ledger from the List of TDS Ledgers and details in Is Lower/No
Deduction, Section Number and Amount will appear automatically.
If you have created the Party and set Is Lower/No Deduction Applicable to Yes, you can still
override the specified TDS rates and make changes to the percentage of Income Tax at the
voucher entry level by setting Allow Alteration of TDS Rates and Values in F12: Configure to
Yes.
5. Enter a Narration if required and Accept to save the journal
TDS deduction using the TDS Deduction button

Go to Gateway of Tally> Accounting Vouchers> F7: Journal
1. Click the TDS Deduction Button or press ALT+S. You will get a list of TDS Ledgers
for the party selected
2. Select the TDS Party Ledger from the list
3. In the TDS Details for screen, select the TDS Ledger from the list (TDS on Rent). The
system calculates the Net TDS to Deduct amount
4. Select the TDS Applicable Bills from the list
5. Accepting the TDS details sub form will post the Net TDS to Deduct amount in the
Debit column of the Journal Voucher screen
6. Press Enter to credit the Tax Ledger (TDS on Rent). You may enter the New Reference
number for identification and accept the screen to save the Journal Voucher
7. Accept the screen to save the Journal voucher
Payment Voucher
You can pay the TDS pending bills for the selected TDS ledger via the Payment voucher, either
by using the TDS Helper Button or by entering details manually.
○ TDS Challan Payment
○ Payment to the Party ( While Paying the Advance)
Creating a Payment Voucher using the TDS Helper button
The TDS transactions in a payment voucher can be entered for a particular deductee status, using the TDS Helper button.
Go to Gateway of Tally > Accounting Vouchers > Payment Voucher > TDS Helper
1. Press F5 at the Voucher Entry screen and click on TDS Helper button or press ALT+S to make a TDS Challan Payment Voucher
2. This functionality of Tally gives you tremendous flexibility to generate the payment vouchers, for any period and to any deductee.
Note: The TDS Helper button is enabled if Use Single Entry Mode for Pymt/Rcpt/Contra in F12: Configure is set to Yes.
Fields in TDS Filters sub form:

TDS Ledger
Select the TDS Ledger from the list.
Deductee Status
Select the Deductee Status from the list.
To Date
In this field user may enter, the To Date of the period for which the TDS values should be computed and auto-filled.
3. Select the Bank ledger in which the payment to the Tax Ledger is made after the TDS deduction. The Tax amount is automatically
calculated.
4. Accept to save the voucher

5. To print this voucher as a TDS Challan, click on the Print button or press ALT+P
from the payment voucher. It will display the Voucher Printing dialog window. You
can configure the payment voucher as depicted in the screen below. If you wish to
view the challan in a preview mode, click on With Preview button or press ALT+I
6. Set Print as TDS Challan to Yes. Accepting the Voucher Printing sub form will
display the TDS Challan in Print Preview mode. Click Zoom or press Alt+Z to view
the TDS Challan
7. Click on Print to print the TDS Challan
Creating a Payment Voucher
The TDS transactions in a payment voucher can be entered manually.

Go to Gateway of Tally> Accounting Voucher> F5: Payment Voucher
1. Select the Bank from the list in the Account field
2. Select the Party from the list
3. Enter the Amount
4. On entering the amount you will get the Bill wise details sub form. Select the Agst Ref
from the list of pending bills
5. Accepting the Bill-wise Details For sub form will display the screen shown below
6. Accept to save the Payment voucher
Advance to a Party
Assume ABC Company has decided to pay an advance of Rs.1 50 000 to a party (Apt
Advertisement) for their service on advertising for this year. The Total taxable amount on Rs.1
50 000 will be 1% as Tax, 10% as surcharge and 2% as Additional surcharge. After deducting the
TDS from your Total Amount Paid/Payable, the Net TDS to deduct would be Rs.1, 683.00.
Creating a Payment Voucher (To Party Account)
To make a Payment to the Party,

Go to Gateway of Tally > Accounting Vouchers > Payment
1. Select the Bank Account from the list
2. Select the Party from the list and enter the advance amount that you wish to pay to the
party
3. You will get the Bill wise Details sub form, select the type of reference as Advance and
enter a name. Select the appropriate TDS ledger (TDS on Advertisement) from the list.
(If the TDS Ledger is selected as Not Applicable then such transactions are considered as
Payments for which TDS will not be deducted)
4. The amount entered in the debit amount is displayed in the Amount column
5. After entering the Bill-wise Details, the TDS Details for the selected TDS ledger (TDS
on Advertisement) appears. This sub form displays the party, Type of Deductee,
Amount, total taxable amount, income tax, Surcharge and Additional Surcharge.
The total taxable amount is calculated till date in this sub form. Enter the name of the
reference
6. The TDS Details for the selected TDS ledger (TDS on Advertisement) appears. This sub
form displays the party, type of deductee, amount, total taxable amount, income tax,
surcharge and additional surcharge. The total taxable amount is calculated till date in
this sub form. Enter the name of the reference
7. The Net TDS to Deduct on the Tax ledger is calculated according to percentages. Accept
the TDS details sub form. The Taxable amount for TDS on Advertisement appears as
credit in the Payment voucher screen
8. Accept the Payment voucher screen to save the entry
Creating a TDS Challan
The TDS challan payment voucher can be entered using the TDS Helper button available in
Tally.
Go to Gateway of Tally > Accounting Vouchers > F5: Payment Voucher
1. Click the TDS Deduction Button or press ALT+S
2. In the TDS Filters screen, select the TDS Ledger, Deductee Status and enter the To
Date
3. Select the Account (Bank) from the list
4. Accept the Payment voucher screen to save the entry
TDS Challan Reconciliation
Reconciliation of Challan Payments made to Bank for TDS accounts is done in the Ledger
Voucher report.
Go to Gateway of Tally > Display > Accounts Book > Ledger > Select the TDS ledger from
the list
The Ledger Vouchers Report provides a list of vouchers for the current month. You may view
the Ledger Vouchers by drilling down.
1. Click on the F5: Challan Reconcile button or press ALT+F5 to view the Challan
Reconciliation report
2. Enter the Bank Challan Number, Challan Date, Cheque/DD Number, Bank Name
and the Bank Branch Code OR use Set Challan Details (Alt +S) button from the
Toolbar to reconcile challans from the TDS Challan Reconciliation screen for a selected
period which has to be specified in the Ledgers Vouchers screen
3. Enter the Bank Challan Number, Challan Date, Bank Name and BSR Code. Accept
to Save and the details are entered are applicable to the selected vouchers
4. Enter the Cheque/DD number and accept the Challan Reconciliation report to save the
entry
TDS Reports
TDS Reports in Tally display the tax amount of the concerned party/supplier. Tally generates
Form 16A and Form 27A and also provides the printing option to print these forms. You can
export the e-TDS forms (Form 26/Form27/Form 26Q/Form 27Q) from Tally. The exported file
will be saved in the defined path specified in the Output file name.
You can get the e-TDS file validated through NSDL freely downloadable utility, File Validation
Utility (FVU) to verify whether the e-TDS return file prepared by the deductors conform to the
prescribed format.
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports
Click on the TDS Reports option to display the following
Print Form16A
Print Form 16A option provides the facility to preview and print Form 16A.
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Print Form 16A
1. On selecting the TDS Party Ledger from the List Of TDS Party Ledgers, Tally
generates Form 16A report in preview mode
2. Use the buttons from the button bar to set printing options such as selecting the printer,
number of copies, method, page range, paper type, paper size and print area
3. Select TDS ledger from the list and enter the From, To and Challan Till date
4. Select the Type of Copy. Enter the Certificate No, Place and Date
5. Click on Yes to view Form 16A in print preview mode. Click on Zoom or press ALT+Z
from the print preview screen.
6. Click the Print button or press ALT+P to print Form 16A
ETDS Forms
ETDS Forms enable you to export the eTDS Forms for the specific period.
Go to Gateway of Tally > Display > Statutory Reports > ETDS Forms
Format
Tally exports the data in SDF format. NSDL’s File Validation Utility (FVU) accepts only .txt
files. Set the output filename with .txt extension.
Output File Name
Enter a name for the file with .txt extension to be exported. By default the file will be saved as
Tally.txt in the Tally folder in your computer. To export to a different folder enter the path in
Output File Name. For example, C:\differentfolder\eTDS.txt).
Person Responsible Details
The Person Responsible Details will capture the information provided at the time of Company
Creation. But if you wish to modify, press the Backspace key to navigate to any field.
Form Name
Select the required Form (Form 26/Form 27/Form 26Q/Form 27Q) from the Form type pop up.
Other Details
From (blank for beginning)
Enter the From date
To (blank for beginning)
Enter the To date
Challan Till Date
This field is provided to enter the date of the next quarter/next Year depending on the Quarterly
(Form 26Q/Form 27Q) or Annual (Form 26/Form 27) returns.
For example, if the Expense booking & TDS (deduction) vouchers are done in the first quarter
(5.4.2007) and its payment is done on 7.07.2007, then the From date will be 1.4.2007, To Date
will be 30.6.2007 and Challan Till Date will be 7.07.2007.
Upload Type
Upload type has two options - Regular and Corrected Returns
1. Regular: Select Regular upload type if you are filing returns for the first time.
2. Corrected Returns: Select Corrected Returns type if you have made any corrections
from the previous returns.
Is Change in Address of TAN since last Return?
If you have changed your company address in company alteration screen since last return, set
this option to Yes. Else set it to No.
Click on Yes to Export the file (Form 26/Form27/Form 26Q/Form 27Q) from Tally. The
exported file will be saved in the defined path specified in the Output file name.
You can get the file validated through NSDL freely downloadable utility File Validation Utility
(FVU) to verify whether the e-TDS return file prepared by the deductors conform to the
prescribed format.
Note: Depending on From and To date, the return periodicity is set as quarterly or annually. For
example, 01-04-2005 to 30-6-2005 is the First quarter and 01-04-2005 to 31-3-2006, Yearly.
After preparation of the electronic return, entities have to verify the electronic return through the
latest version of File Validation Utility (FVU) provided by NSDL which can be freely
downloaded from the TIN-NSDL web-site.
To upload the file in File Validation Utility, you may refer to this link
http://www.tinnsdl.com/onlineupproc.asp
To view the exported file, open the folder where Tally is installed. The file is created in this
folder by default.
Print Form 27A
Form 27A is a physical form with the summary of TDS return (Form 26/Form27/Form
26Q/Form 27Q), which contains control totals of Amount Paid and Income tax deducted at
source in addition to other basic details along with CD/Floppy containing the e-TDS return data
file. The control totals mentioned on Form 27A should match with the corresponding control
totals in e-TDS return file. It should be submitted along with e-TDS returns.
Clicking TDS Form 27A provides you with the facility to set the report titles and preview Form
27A.
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Print Form 27A
Use the buttons provided on the Button Bar to set the printing option such as to select the printer,
set the number of copies, method, page range, paper type, paper size and print area
Person Responsible Details
The Person Responsible Details will capture the information provided at the time of Company
Creation. But if you wish to modify, press the Backspace key to navigate to any field.
Other Details
1. Enter the From date
2. Enter the To date
3. Enter the Challan Date
4. Select the Form type from the list at the field, Enclosed Form Type
5. Enter the Previous Receipt No if applicable
6. Enter the total number of annexure enclosed.
7. Enter Other Information, if any.
8. Enter the Place and Date
Click Yes to view Form 27A in print preview mode
Click Zoom or press ALT+Z from the print preview screen to display the report as below:
Reconciliation Reports
The Reconciliation reports for TDS are as given below

1. TDS Challan Reconciliation
2. Form 16A Reconciliation
Form16A Reconciliation
This Report helps you to record the issue date of Form 16A
Go to Gateway of Tally > Display > Account Books > Ledger
1. Select the TDS party ledger from the list
2. Click on F5: Form16A Reconcile button to reconcile Form 16A for the selected TDS
party. Enter the Form 16A issue date and accept the screen
Display Reports
To view TDS Statutory Information reports and MIS Reports, click on the links provided
below
1. Statutory Info
2. MIS Reports
MIS Reports
The MIS Reports provide you with the TDS Outstandings.

To view the TDS Outstandings,
Go to Gateway of Tally > Display> Statement of Accounts > TDS Outstandings
TDS Computation
To view the TDS Computation report,

Go to Gateway of Tally > Display > Statements of Accounts > TDS Outstandings >TDS
Computations
1. The Particulars column provides you with the Name of the Party and its TDS ledger
names
2. Amount Paid/Payable Till Date column displays the total amount of the Bills accounted
or payment made to the party
3. The Tax column provides the amount of TDS computed as per the rate specified in the
tax column, which is displayed below the TDS amount
4. Surcharge is the total surcharge value computed as per the rate specified in this column,
which is displayed below the Surcharge amount
5. Addl. Surcharge (Cess) column displays the amount of Education Cess applicable as per
the rate specified in this column, which is displayed below the Education Cess amount
6. Addl. Education Cess column displays the amount of Additional Education Cess @ 1%
as computed
7. Total TDS column displays the total TDS amount including all additional taxes
8. Less: TDS Deducted Till Date column provides the TDS amount deducted till date
9. Net TDS to Deduct column displays the TDS amount yet to be deducted from the bills
accounted or payment made. If TDS is deducted using TDS journal and if the complete
amount of TDS due is deducted. This column will not display any balance. Partial
amount deducted will display the balance amount of TDS to be deducted in this column
Press F12 or click on the F12: Configure button.
In Show Party TDS PAN Number field enter Yes, to display the party’s PAN number in the
report.
Click on the Print button or use ALT+P to print the TDS Computation report. This brings up
the Printing TDS Computation configuration sub-form by which the user can customise the
appearance of the Ledger report.
Accept the TDS Computation configuration sub-form to view the TDS Computations report in
print preview mode.
If the TDS payment is made to the government then such payment will not be displayed in TDS
Computation drill down report.
TDS Payables
TDS Payables report gives you information on the status of TDS payable (pending) amounts for
a particular TDS Ledger account.
Go to Gateway of Tally > Display > Statements of Accounts > TDS Outstanding > TDS
Payables
The TDS Payables report provides the Outstandings for a Tax ledger accounts.
Note: If you wish to know more details on the voucher drill down further by pressing Enter.
1. Date: Date of creation as entered in the Payment/Journal/Purchase voucher
2. Ref No: The payment Reference number
3. TDS Ledger Name displays the TDS Ledgers created under Duties and Taxes
4. Pending Amount: The pending amount that needs to paid by your company to the
bank/party appears in this column
5. Due on: The last date for the payment (Due date).
6. Overdue by days: The number of days passed from the date of payment
Click on the Print button or use ALT+P to print the TDS Payable report. In the Printing TDS
Outstanding screen, you can customise the Condensed or Detailed appearance of the TDS
Payable by using the Backspace key to navigate to the fields.
Accept the sub form to view the report in print preview mode.
TDS Ledger Outstandings
To find out the outstanding status of a particular tax ledger account,

Go to Gateway of Tally > Display > Statements of Accounts > TDS Outstandings > Ledger
Select the Tax ledger created under Duties and Taxes from the List of TDS Ledgers.
1. The selected Tax Ledger name appears at the top left corner of the screen
2. The date of creation appears in the Date column as entered in the
Payment/Journal/Purchase voucher
3. The payment Reference number appears in the Ref No. column
4. The Opening Amount appears in the Opening Amount column, if any
5. The Pending Amount that needs to be paid by your company to the bank/party appears
in the Pending Amount column
6. The last date for the payment appears in the Due on column
7. The number of days passed from the date of payment appears in the Overdue by days
column
TDS Not Deducted
To view the TDS Not Deducted report,

Go to Gateway of Tally > Exception Reports >TDS Not Deducted
Press F12 or click on F12: Configure button
Set the field Show Party TDS PAN Number to Yes to display the PAN number in the report
This report will display only those transactions, for which TDS is not deducted or partially
deducted. This is an exceptional report for non deduction or lesser deduction of TDS for the bills
accounted or payment made.
Click the Print button or use ALT+P to print the TDS Not Deducted report.
Multi-Form16A Printing
Form 16A can be printed for a selected TDS ledger with details of all the parties/suppliers
associated with the selected ledger.
Go to Gateway of Tally > Multi Accounting Printing > Multi-Form 16A Printing
1. Select TDS ledger from the list and enter the From and To date, Place and Date and
accept the screen
2. Click the Print button or press ALT+P to print Multi-Form 16A
TCS Introduction
TCS is the Tax Collected at Source by the seller (collector) from the buyer/ lessee (collectee/
payee). The goods are as specified under section 206C of the Income Tax Act, 1961.
If the purchase value of goods is X, the amount payable by the buyer is X+Y, where Y is the
value of tax at source. The seller deposits Y (tax collected at source) at any designated branch of
banks authorised to receive the payment.
The seller, lessor or licensor, is responsible for the collection of tax from the buyer, lessee or
licensee. The tax is collected for sale of goods, on transactions, receipt of amount from the buyer
in cash or issue of cheque, draft or any other mode, whichever is earlier.
Classification of Seller for TCS
Under TCS, a seller is defined as any of the following:

○ Central Government
○ State Government
○ Any Local Authority
○ Any Statutory Corporation or Authority
○ Any Company
○ Any Partnership Firm
○ Any Co-operative Society
○ Any individual/HUF whose total sales or gross receipts exceed the prescribed
monetary limits as specified under section 44AB during the previous year
Classification of Buyer for TCS
A buyer is classified as a person who obtains goods or the right to receive goods in any sale,
auction, tender or any other mode. The following are not included:
○ Public Sector Companies
○ Central Government
○ State Government
○ Embassy of High Commission, Consulate and other Trade Representation of a
Foreign State
○ Any Club, such as social clubs, sports clubs and the like
Goods and Transactions classified under TCS
Goods and transactions classified under TCS are listed below:

○ Alcoholic liquor for human consumption including Indian Made Foreign Liquor
(IMFL)
○ Tendu leaves
○ Timber obtained under a forest lease
○ Timber obtained by any mode other than under a forest lease
○ Any other forest produce not being Timber or Tendu
○ Scrap (Scrap means waste and scrap from the manufacture or mechanical working
of materials which is usable as such because of breakage, cutting up, wear and
tear and other reasons)
○ Licensing or leasing of Parking Lot, Toll Plaza
○ Mining and quarrying
Note: The rate of surcharge is the same as applicable to TDS
Certificate of TCS
The certificate of collection of tax at source has to be submitted in Form No-27D by persons
collecting tax at source within a week from the last day of the month in which the tax was
collected.
If there is more than one certificate to be issued to a buyer for tax collected at source with respect
to the period ending September 30 and March 31 in the financial year, then the person collecting
the tax on request from the buyer can issue a consolidated certificate within one month from the
end of such period.
If an issued TCS certificate is lost, the person collecting tax at source may issue a duplicate
certificate on plain paper, with necessary details as contained in Form-27D.
The Assessing Officer (AO), before giving credit for the tax collected at source on the basis of
the duplicate certificate, has to get the payment certified and obtain an Indemnity Bond from the
assessee.
TCS Exemptions
TCS can be totally exempted or fixed at a lower rate under some circumstances.
Total Exemption: No TCS Collection

A declaration by the buyer in Form Number 27C (in duplicate) has to be made for total
exemption. The declaration is if the goods listed are to be used for the purpose of manufacturing
or processing and not trading. A copy of the declaration has to be given to the person collecting
tax.
The person collecting this declaration form has to submit the copy to the authorities concerned
on or before the seventh day of the following month.
Lower Rate of TCS
The buyer (Collectee) can apply to the Assessing Officer (AO) for a lower rate, using Form
No.13, subject to the condition that the AO is convinced that the total income of the buyer
(Collectee) justifies the lower rate. The AO may issue a certificate, specifying the rate of
collection.
Payment of TCS to the Government
The tax collected is to be paid to the Central Government within one week of the last day of the
month in which the tax was collected. This payment is made in any branch of Reserve Bank of
India (RBI), State Bank of India (SBI), or any other authorised bank. The payment is made
accompanied by income tax challan 281. If the tax is collected on behalf of the Government, then
the amount can be paid without the income tax challan.
Electronic TCS (e-TCS)
e-TCS is the filing of TCS returns using electronic media. It is mandatory for corporate and
government collectors to furnish TCS returns in electronic form, from financial year 2004-2005.
Collectors (other than government and corporates) may file TCS returns in electronic or physical
form.
NSDL collects the e-TCS returns from the Collectors on behalf of the Income Tax Department.
TCS returns on computer media for e-TCS

TCS returns filed using computers should be in TCS specific form formats and must contain all
the information, details and particulars specified in such forms.
Computer media specifications are as follows (any of these):
• CD ROM of capacity 650 MB or more
• 4mm 2GB/4GB (90M/120M) DAT Cartridge
• 3.5 Inches, 1.44 MB floppy diskette.
The returns must be accompanied by Form No.27B and verified.
Filing of TCS Returns
TCS returns are to be filed quarterly, in addition to annual returns.

• The quarterly returns are to be filed in Form Number 27EQ on or before July 15,
October 15 and January 15, respectively for the first three quarters of the financial year.
For the last quarter, the returns are to be filed on or before April 30.
• Annual returns are to be filed in Form Number 27E on or before June 30 of the following
financial year.
TCS in Tally
Tally supports TCS and is a simple and easy-to-use feature. The complexities of TCS are handled
by Tally making it easier for you to maintain records and file TCS returns.
Tally calculates TCS in transactions, where ever applicable. Tally also generates Print and File
TCS forms and reports (Statutory and MIS).
Features of TCS in Tally

TCS in Tally has the following features:
• Simple and easy-to-use.
• Maintain TCS records.
• Lower/No Collection of TCS and Exemption Limit on Surcharge.
• TCS Helper facility to pay TCS.
• Print TCS Challan from Tally.
• Generate TCS returns automatically from Tally and file.
• E-TCS (electronic format) filing facility provided in Tally.
• Generate Statutory Reports from Tally: Form 27D, E-TCS filing and Form 27B.
• TCS Reconciliation Reports: TCS Challan Reconciliation and Form 27D
Reconciliation
• TCS Display Reports:
○ Statutory Masters: Collectee Types and TCS Nature of Goods
○ MIS Reports: TCS Payables and TCS Ledger Outstandings
Enabling TCS in Tally
To enable TCS in Tally:

2. Press F11 or click F11: Features > Statutory & Taxation to display the Company
Operations Alteration screen.
3. Enter Yes in Enable TCS and Set/Alter TCS Details
4. Enter the Company TCS Collector Details.

5. Enter the Tax Assessment Number. The Tax Assessment Number (TAN) is a 10-digit
alphanumeric number, issued by the Income Tax Department (ITD) to the collectors.
6. Enter the Income Tax Circle/Ward (TCS). This is issued by the Income Tax Department
7. Select the Collector Type from the List of Company Type.
8. Enter the Name of person responsible for filing the TCS returns.
9. Enter the Designation of the person responsible for filing of the TCS returns.
10. Press Enter and Accept to save.
More:
Enabling TDS in Tally
Statutory Info.
TCS Statutory Info. display goods under TCS and Collectee types and related details.
Go to Gateway of Tally > Display > Statutory Info.
• TCS Nature of Goods
• Collectee Types
TCS Nature of Goods
To view TCS Nature of Goods

1. Go to Gateway of Tally > Display > Statutory Info. > TCS Nature of Goods
2. Select from the List of TCS Types to display the TCS Nature of Goods Display
Collectee Types
To view Collectee Types

1. Go to Gateway of Tally > Display > Statutory Info. > Collectee Types
2. Select from the List of Collectee Types to display the Collectee Type Display
Creating Party Ledgers for Sundry Debtors/ Sundry
Creditors
To create Party Ledgers for Sundry Debtors/ Sundry Creditors

1. Go to Gateway of Tally > Accounts Info > Ledgers > Create
2. In the Ledger Creation screen, enter the name of the buyer company in the Name field
3. In the Under field, select Sundry Debtors/Sundry Creditors option from the List of
Groups
4. If required, set Maintain balances bill-by-bill? to Yes. Enter details in the Default
Credit Period, if applicable. By default, the Inventory Values are affected? field is set
to No
5. Set Yes for Is TCS Applicable?
6. Select from the List of Collectee Types for Buyer/Lessee
7. Set Yes in Is Lower/No Collection Applicable? if lower or no collection is applicable.

Press Enter to display the Lower/No Collection Details screen. The existing Section
Number is 206C by default. Enter the TCS Lower Rate (%) and press Enter
8. Set Yes in Ignore Surcharge Exemption Limit? to ignore the exemption limit for
surcharge and calculate surcharge on the amount specified. If Ignore Surcharge
Exemption Limit? is set to No, then surcharge is calculated only if the amount is above
the exemption limit.
Note: Ignore Surcharge Exemption Limit? field is displayed in Party Master if applicable to
categories from the List of Collectee Types in Buyer/Lessee field.
9. Accept Yes to save
Creating Sales Ledgers for TCS
To create ledgers under Sales Accounts group

2. Enter a name for the sales account ledger in the Name field
3. In the Under field, select Sales Accounts from the List of Groups
4. Set the Inventory Values are affected? to Yes if you are maintaining inventory
5. Accept to save
Creating TCS Ledger under Duties and Taxes

To create a TCS Ledger under Duties and Taxes for TCS on Sales
2. In the Ledger Creation screen, enter the name of the TCS ledger in the Name field
3. In the Under field, select the Duties & Taxes from List of Groups
4. Select TCS from Types of Duty/Tax in the Type of Duty/Tax field
5. Select from the List of TCS Types in the Nature of Goods/ Contract/ License/ Lease:
field
6. Set Inventory Values are affected? to No

7. Accept to save
Creating a Sales Voucher
To create Sales Voucher with TCS details

1. Go to Gateway of Tally > Accounting Vouchers > F8: Sales
2. Select As Invoice mode
3. Enter the date and reference
4. Select the Party to be credited from the List of Ledger Accounts and enter Party’s A/c
Name
5. In the Party Details screen, check/ modify details
6. Select Sales Ledger from the List of Ledger Accounts
7. Select the item from the List of Items in Name of Item
Note: To create an Item, refer to the topic, Stock Items
9. Enter the Quantity and the Rate to get the amount in the Amount field
10. Select the TCS ledger (Under Duties & Taxes) for sales
11. By default, the gross amount is displayed in TCS Details in TCS Computations screen.
The gross amount can be changed if required.
12. Enter new reference (New Ref) and Due Date, or Credit Days (By default, 7th of the
following month).
12. Select any other expense ledger, if applicable,from the List of Ledger Accounts
13. Enter narration, if required, and Accept to save
Note:
1. When you create a Credit Note against a sales bill select the respective tax bill (Agst Ref.)
from the List of TCS Payable.
2. When you create a Credit Note against a sales bill, surcharge is considered as applied in the
selected bill.
Creating a Payment Voucher
You can create entries for payment of TCS in a normal payment voucher and manually pay TCS
as shown here or you can create a TCS Payment voucher using the TCS Helper button from the
button bar. This is an automatic feature which allows payment of TCS for all entries from a TCS
ledger.
To create a TCS payment voucher manually
2. In the Accounting Voucher Creation screen select F5: Payment
3. Enter the date
4. Select and debit the TCS Ledger in Particulars from the List of Ledger Accounts and
enter the amount
5. In the Tax Details screen, select from List of TCS Payable and enter the amount
6. Select and credit the Bank authorised to receive TCS in Particulars from the List of
Ledger Accounts and enter the amount
7. Enter Narration, if required,
8. Print the TCS Challan, if required,
9. Accept to save
Creating a Payment Voucher using the TCS Helper button
Create a Payment voucher using the TCS Helper button from the button bar. This is an
automatic feature which allows payment of TCS for all entries from a TCS ledger. You can use
TCS Helper to pay TCS in one shot.
Note: TCS Helper feature is available only if Use Single Entry mode for Pymt/Rcpt/Contra?
from F12: Configure (Voucher Configuration) is set to Yes.
To create a TCS payment voucher using the TCS Helper button
2. In the Accounting Voucher Creation screen select F5: Payment
3. Press [Alt + R] or click the TCS Helper from the button bar to view the TCS Filters
screen
4. Select from the List of TCS Ledgers and enter

5. Select Buyer/Lessee Status from Deductee/Collectee Status and enter. This lets you
prepare separate challans as it is mandatory for different types of Collectees
6. Enter the To Date to select the period for generation of TCS challan
7. Enter the date

8. Select the Bank ledger from the List of Ledger Accounts in Account
9. Select the TCS Ledger in Particulars from the List of Ledger Accounts and enter the
amount
10. In the Tax Details screen, select from List of TCS Payable and enter the amount
11. Enter Narration, if required,
12. Print the TCS Challan, if required,
13. Accept to save
Printing TCS Challan
You can print TCS Challans for a TCS payment voucher created manually or created using the
TCS Helper button.
To Print a TCS Challan
1. Press [Alt + P] or click on Print from the button bar in the Payment Voucher screen to
view the Voucher Printing screen
2. Press Backspace to navigate from Print Yes or No? and move the cursor to Print a TCS
Challan?
3. Set Yes for Print a TCS Challan?
4. Set Yes for TCS Regular Assessment (Raised by I.T. Deptt.): if challans are for
submission to the Income tax department
5. Press Enter and Select Yes to Print
Note: Use the Print Preview [Alt + I] option to preview the challan to be printed.
Print Preview for TCS tax challan
TCS Reports
TCS reports in Tally are extensive. Statutory reports are integrated, making it convenient to print
and file reports in government prescribed formats. Additionally, a wide of range reports such as
reconciliation reports and display reports are available. These reports provide information at a
glance and help in managing TCS issues with ease.
TCS Reports in Tally
There are three types of TCS reports in Tally.
• Statutory Reports
• Reconciliation Reports
• Display Reports
Statutory Reports
Statutory Reports are reports required in government prescribed formats for the purpose of
filing returns. TCS statutory reports in Tally are dynamically generated. Print and file a report. E-
Filing TCS returns is supported using the export feature.
There are three types of TCS Statutory Reports.
• Print Form 27D
• E-TCS Forms
• Print Form 27B
To view Statutory Reports
1. Go to Gateway of Tally > Display > Statutory Reports > TCS Reports
2. TCS Reports menu displays the following options.
TCS Reconciliation Reports
Reconciliation reports are for TCS challan reconciliation and Form 27D reconciliation.
• TCS Challan Reconciliation
• Form 27D Reconciliation
Display Reports
Display reports are to view TCS statutory information reports and MIS Reports.
The types of display reports are as follows.
• Statutory Masters
• MIS Reports
MIS Reports
These reports provide information on TCS outstandings.

To view TCS Outstandings
1. Go to Gateway of Tally > Display > Statements of Accounts > TCS Outstandings
2. Select from
1. TCS Payables
2. Ledger
TCS Payables
To view TCS Payables

1. Go to Gateway of Tally > Display >Statements of Accounts > TCS Outstandings > TCS
Payables
2. TCS Outstanding screen is displayed.
TCS Ledger Outstandings
To view TCS Ledger Outstandings

1. Go to Gateway of Tally > Display > Statements of Accounts > TCS Outstandings >
Ledger
2. Select from the List of TCS Ledgers to display the TCS Ledger Outstanding screen.
Introduction
VAT is a system of indirect taxation, which has been introduced in lieu of sales tax. It is the tax
paid by the producers, manufacturers, retailers or any other dealer who add value to the goods
and that is ultimately passed on to the consumer. VAT has been introduced in India to ensure a
fair and uniform system of taxation. It is an efficient, transparent, revenue-neutral, globally
acceptable and easy to administer taxation system. It benefits the common man (consumer),
businessman and the Government.
VAT enhances competitiveness by removing the cascading effect of taxes on goods and makes
the levy of tax simple and self-regulatory, ensuring flexibility to generate large revenues.
The cascading effect is brought about by the existing structure of taxation where inputs are taxed
before a commodity is produced and the output is taxed after it is produced. This causes an unfair
double-taxation. However, in VAT, a set-off is given for input tax (tax paid on purchases). This
results in the overall tax burden being rationalized and a fall in prices of goods.
VAT makes the tax structure simple, hassle-free and export-oriented. The integration of VAT with
Tally will help you in the smooth functioning of your business and eliminate the complications
that might otherwise arise in VAT.
Concept of VAT
The essence of VAT is in providing set-off for input tax and this is applied through the concept of
input credit/rebate. This input credit in relation to any period means setting off the amount of
input tax by a registered dealer against the amount of his output tax. Value Added Tax (VAT) is
based on the value addition to the goods, and the related VAT liability of the dealer is calculated
by deducting the input credit from the tax collected on sales during the payment period.
This concept is explained with an example, in the Computation of VAT section.
VAT works in two different ways:
1. If VAT-registered business receives more output tax than the taxes paid as input, they will
need to pay the difference to the Commissioner of Taxes (State).
2. If the input tax paid is more than the output tax collected,
○ You can carry forward the Input credit and adjust it against the output tax in the
subsequent months.
○ You can have the Input Credit refunded to you by the Government at the end of
the current or following year.
○ You can receive refunds for Input Credit on exports within a period of three
months.
General terminologies used in VAT
Justification of VAT
VAT was adopted because the Sales Tax system is complex and induces non-compliance. It has
been found to be a hindrance in the economic growth of Industry, State and the Country. This
causes a huge loss of revenue to the government.
VAT also helps in eliminating the dreaded cascading effect of Tax.
For instance, in the existing structure, inputs are taxed before a commodity is produced and the
output is taxed after it is produced. This causes an unfair double taxation with cascading effects.
However, in VAT, as a set-off is given for input tax as well as tax paid on previous purchases,
overall tax burden will be rationalized and prices in general will fall. VAT thus makes the tax
system simple and transparent.
Advantages of VAT over Sales Tax
• As VAT is a multi-point tax with set-off for tax paid on purchases, it prevents repeated
taxation of the same product.
• Simple and Transparent: In the Sales tax system the amount of tax levied on the goods at
all stages is not known. However, in VAT, the amount of tax would be known at each and
every stage of goods sale or purchase.
• VAT has the flexibility to generate large and buoyant revenues, as it levies tax on value
additions.
• Zero rating of tax on exports is possible in case of VAT.
• Fair and Equitable: VAT introduces uniform tax rates across the state so that unfair
advantage cannot be taken while levying the tax.
• Procedure of simplification: Procedures related to filing of returns, payment of tax,
furnishing declaration and assessment are simplified under the VAT system so as to
minimize any interface between the tax payer and the tax collector.
• Ability to provide same revenue to the Government with lower rates of tax.
• Tax does not become a cost of doing business.
VAT Rates
According to the White Paper, there are 550 categories of goods under the VAT system. They are
classified into the following four groups, depending on the VAT rate:
VAT @ 4%
The largest number of goods (270) comprising of basic necessity items such as drugs and
medicines, agricultural and industrial inputs, capital goods and declared goods are under 4% VAT
rate.
Exempted from VAT
There are about 46 commodities under the exempted category. This includes a maximum of 10
commodities that each state would be allowed to select, from a broader approved list for VAT
exemption. The exempted commodities include natural and unprocessed products in
unorganized sector as well as items, which are legally barred from taxation.
VAT @ 1%
This is for a specific category of goods like gold, silver, etc.
VAT@12.5%
The remaining commodities are under the general VAT rate of 12.5%.
Note: The few goods that are outside VAT as a matter of policy would include liquor, lottery
tickets, petroleum products, as the prices of these items are not fully market-determined. These
items will continue to be taxed under the sales tax act of the respective states.
Computation of VAT and Profit
The above diagram depicts computation of (10 %) VAT at each stage of business. Hence, it is not
the manufacturers and retailers but only the consumer who has paid 10% VAT to the
government. The profits for manufacturers and retailers thus remain unaffected.
VAT in Tally
Features of VAT in Tally

VAT is completely integrated with Tally. The VAT functionality in Tally supports the following
features, making it easier for computation:
○ Quick & easy setup
○ Fast & error-free voucher entry
○ Pre-defined list of sales & purchase classifications
○ Complete tracking of each transaction till annual returns
○ Printing of Tax invoice
○ VAT computation report
○ Better VAT-returns management
○ Monthly Return
Enabling VAT
Go to Gateway of Tally> Accounts info. > F11: Features > Statutory & Taxation. Set Enable
Value Added Tax (VAT) and Set/Alter VAT Details to Yes
On enabling Set/Alter VAT Details to Yes, Tally will prompt with VAT Details Screen.
VAT Details
• Select the State name.
• Set Type of Dealer? to Regular
• Enter the Regular VAT Applicable From date
• Accept the screen to save.
Note: All Classifications and Statutory forms shown here are based on the Karnataka State
Model.
Configuring Ledger for VAT Reporting

VAT Classification
The VAT Classification is a list of VAT rates, which describes the nature of the Business Activity
and the type of transaction. These are in-built in the system and will be updated if and when any
statutory changes take place.
Some of the VAT classifications are:
○ Input VAT @ 4%
○ Input VAT @ 1%
○ Input VAT @ 12.5%
○ Output VAT @ 1%
○ Output VAT @ 4%
○ Output VAT @ 12.5%
○ Purchases - Capital Goods
○ Purchases - Exempt
○ Purchases from unregistered dealers
Depending on the type of the business, type of transaction, and the statutory requirements of
your State, you will need to select the appropriate classifications from the list during Ledger
creations, voucher entries, etc.
The Sales and Purchase transactions are segregated based upon the classification selected during
voucher entry and shown in the VAT computation. In the VAT Computation you can view the
classification-wise VAT and Nett Values.
Ledger Masters
The VAT Classification will be displayed as a drop down list in the Ledger Masters. Tally gives
the flexibility to the user, to either have the classification selected in the Ledger Master tagged to
all transactions, Or, select different classifications each time during voucher entries. This is
explained in detail in the Vouchers and Transactions section.
The Ledgers that are affected by VAT are:
○ Purchase Ledger
○ Sales Ledger
○ Duties and Taxes Ledger
○ Direct Expenses/Income
Creating a Purchase Ledger for VAT
The following additional fields pertaining to VAT can be seen in the Ledger entry screen.
Go to Gateway of Tally > Accounts Info > Ledger > Create/Alter
Used in VAT Return
Set this to Yes if you wish to select VAT/Tax class for this Ledger.
Note: Tally gives the flexibility to the user to either have the classification selected in the Ledger
Master tagged to all transactions Or select different classifications each time during voucher
entries. For more details refer Vouchers and Transactions.
The rest of the Ledger creation process is the same as in default Tally.
In the above example we have selected a VAT classification of 4%.
VAT classification - Purchase-Exempt

Let us take an example of a VAT exempted transaction below.
Used in VAT Returns

Set this to Yes and select Purchases - Exempt from VAT/Tax class for this Ledger.
Accept the screen to save.
Creating a Supplier ledger

Create a ledger for the Supplier from whom you are buying the VAT exempted item:
Note: The TIN or Sales Tax number of the creditor whichever applicable needs to be entered in
the Ledger.
If VAT is not enabled for your company, the TIN/Sales Tax No. field will be replaced by Sales
Tax No.
To learn about the actual transaction, refer to Creating Purchase Voucher (As Invoice) for VAT
section.
Creating a Sales Ledger for VAT
Like in the Purchase Ledger screen, select the required VAT/Tax classification in the Sales
Ledger as well.
Go to Gateway of Tally > Accounts Info > Ledger > Create/Alter
Used in VAT Return

Set this to Yes if you wish to select VAT/Tax class for this Ledger.
Note: Tally gives the flexibility to the user to either have the classification selected in the Ledger
Master tagged to all transactions Or select different classifications each time during voucher
entries. For more details refer Vouchers and Transactions.
The rest of the Ledger creation process is the same as in default Tally.
In the above example we have selected a VAT class of 4%.
The rest of the settings are the same as in default Tally.
Creating a VAT Ledger under Duties and Taxes
The ledger for Input VAT is shown below:
Type of Duty/Tax
On the selection of group Duties and Taxes, the list of Tax Types CST, others and VAT, is
displayed. Select VAT for VAT related transactions.
Note: If you have VAT and TDS enabled, the list will also include TDS.
VAT/Tax Class
Like in the Purchase and Sales Ledger, this is a drop down list containing the VAT
classifications. Select the appropriate classification or select Not Applicable if you wish to select
the classifications at the Voucher level.
Percentage of calculation
This field will display the VAT rate that you selected in the VAT/Tax class field.
Method of calculation
This will display On VAT Rate if you have selected VAT under Type of Duty/Tax.
Output VAT
On selection of CST
Type of Duty/Tax
On selection of CST for Type of Duty/Tax, you can select either Inter-State Purchases or Inter-
State Sales for Tax Class. Once you select this, you need to manually enter the Percentage of
Calculation.
Method of Calculation
Once you enter the Percentage of calculation, select the Type of Duty from the drop down list.
Creating a VAT ledger under Direct Expenses/Income

Direct Expenses/Income
The VAT/Tax Classification is selected in the same manner as for the Sales and Purchase Ledger
screen.
The VAT related fields in the Direct Expense ledger is the same as for Purchase and Sales
Ledgers.
The VAT related fields are same for Direct Income Ledger as well.
Vouchers and Transactions
The entire Data entry and Reporting architecture is based upon VAT Classifications selected
The Vouchers that are affected by VAT are as follows:
○ Purchase
○ Sales
○ Debit Note
○ Credit Note
○ Journals
Creating a Purchase Voucher (As Invoice) for VAT
Invoice can be classified into As Item Invoice and As Accounts Invoice. The VAT functionality
though, is the same for both.
Given below are examples of transactions in Item Invoice with implementation of VAT.
As Item Invoice
The selection and display of the VAT classifications in the vouchers differ according to the
settings in the F12: Configuration screen.
F12: Configuration screen
Use Common Ledger A/c for Item Allocation - NO

If you wish to use more than one ledger during a voucher transaction, you have to set this to No.
This way, you need to select a ledger for every item during voucher entry. When you set this to
No, you can see the VAT/Tax Class at the header region of the screen if the Allow Selection of
VAT/Tax Class during entry field is set to Yes.
Allow Selection of VAT/Tax Class during entry?-YES
Once you select Yes, you have the option to select the VAT classifications in the field VAT/Tax
Class which is in header region of the Voucher screen. If it is set to No, the VAT/Tax Class will
not be displayed in the voucher screen and the classifications will be taken from the Ledgers.
Consider the following examples
• Example 1: Purchase@4%
The following is the entry for the purchase of item1 when VAT classification is Purchase @ 4%.
This classification is selected from a drop down list at the header region of the screen as shown
below.
Note: In the VAT/Tax Class field, there is an option called Not Applicable. You can select this
option if you need different classifications for each item during voucher entry.
You will need to select the Duties and Taxes ledger after you are done with the entry of all
items.
It will now calculate the VAT amount and add it to the Amount to give you the total.
F12: Configuration screen
Use Common Ledger A/c for Item Allocation-YES

When you wish to use the same Ledger for all items in a transaction, you can set this to Yes.
Thus, you need not select a Ledger each time you enter an item during the voucher transaction.
The following example to demonstrate the functioning of Assessable Value is shown by setting
this field to Yes.
Assessable Value: It is the value on which VAT is to be calculated. The value is arrived at after
making proper deductions towards Trade discounts if any, and adjustments towards Excise/ED
Cess payable. It is up to the user to calculate this and enter it under the Assessable Value column.
This manual entry gives flexibility to the user to make the calculations as per the local statutory
requirements.
As this example does not include discount or Excise/ED Cess taxes, the Assessable Value will be
Rs. 5000, which is retrieved from the Amount column.
Let us assume we have:
○ A discount of Rs.200 on purchases
○ Excise tax of Rs.800 (16% of 5000)
○ ED Cess of Rs.16 (2% of 800)
1. Subtracting the discount amount: 5000 -200 = 4800
2. Adding the Excise tax amount : 4800+800= 5600
3. Adding the ED Cess amount : 5600+16= 5616
Therefore, our Assessable Value amount is Rs.5616.
VAT is now calculated on this amount automatically on the selection of the tax ledger (Rs.224),
as shown below.
The entries are to be passed similarly for Sales Voucher and Credit/Debit notes.
• Example 2: Purchase-Exempt
This example is to demonstrate the working of Tally in the VAT exempted transactions and also
to show the type and patterns of reports generated for such transactions.
We are passing the following entry for the purchase of the VAT exempted item.
As it is exempt from VAT, this particular transaction does not affect the VAT amount in any way.
Similarly for Inter-state Sales/Purchases.
Note: In the Voucher mode there is no option for selection of the VAT classification at the header
region. Therefore, the VAT classification selected in the Ledgers will apply always.
Creating a Sales Vouchers (As Invoice) for VAT
Functionality of Sales Voucher is similar to that explained in the Purchase Voucher. However, in
order to understand the calculation of VAT, let us take the following example:
Assessable Value: The calculation is similar to that explained in Purchase voucher.
Printing Configuration
The Printing Configuration screen after the addition of new features will appear as follows:
Tax Invoice
You will see the following new sections pertaining to VAT in the Invoice:
Title of Document
This field prints the title entered in the Voucher Type Master.
E-mail
The e-mail address of your Company (as specified in the Company Master) will also be printed
in the Sales Invoice, just below the address.
VAT %
This column can be enabled by setting Print VAT % to Yes in the Printing Configuration
screen. The rate of VAT from the VAT classification selected during voucher entry is printed in
this column.
VAT Analysis
This field prints the VAT amount on the total Net Value. That is, Rate of VAT, Assessable Value
and VAT Amount is printed at the bottom right of the screen.
VAT Amount (In words)
Prints the VAT amount in words.
Company's TIN/LST No.
Prints the Company's TIN or LST number.
Company's CST No.
Prints the CST number entered in the Company master.
Buyer's TIN/Sales Tax No.
Prints the buyer's TIN or Sales Tax number, as the case may be.
Date & Time
The field Print Date & Time in the Printing Configuration screen needs to be set to Yes in order
to print the date. However, in case Excise details are enabled the Date & Time is printed
regardless of the setting in the Printing Configuration screen.
Declaration
The declaration entered in the Sales Voucher type Master will be printed. If it is not entered in
the Sales Voucher type, Tally will print the following line by default:
"We declare that this invoice shows the actual price of the goods described and that all
particulars are true and correct".
If you do not require this, you can set Print declaration to No in the Printing Configuration screen
shown above.
Generated by
By default the Generated by field will display This is a Computer Generated Invoice.
However, you can change it if required. This is printed at the bottom of the Invoice.
Copies of the Invoice
For five or more copies of the Invoice, each copy will be marked as follows:
Original - Original Buyer's Copy
Duplicate - Duplicate Seller's Copy
Triplicate - Triplicate Transporter's Copy
Quadraplicate - Extra copy
Fifth and above - Extra Copy
Creating / Altering Sales Voucher Type Master for VAT

New Fields
The following are the new fields added in the Sales Voucher Type Master.
Go to Gateway of Tally > Accounts Info > Voucher Types > Alter
Default Print Title
You can set the title for the Tax Invoice in the Default Print Title field. This is helpful since you
need not change the title in Print Configuration each time you use different voucher types. For
example, you can set it as Tax Invoice for Local Sales and Bill of Sale for Retail Invoice.
Is Tax Invoice
If Is Tax Invoice is set to Yes and the number of copies to be printed is more than one then the
copy type is printed as follows:
1.Original – Buyer’s Copy
2. Duplicate – Seller’s Copy
3. Triplicate – Transporter’s Copy
4. Quadruplicate – Extra Copy
5. Extra Copy
If Is Tax Invoice is set to No, and the number of copies to be printed is more than one, then the
copy type is printed as follows:
1. Original
2. Duplicate
3. Triplicate
4. Quadruplicate – Extra Copy
5. Extra copy
Declaration
Provision is made to enter the Statutory declaration if applicable. The same will be printed in the
Tax Invoice.
Note: If the declaration field is left blank, Tally's default declaration will get printed in the
Invoice.
Voucher Class
Given here is an example of how a Tax Invoice having items with multiple tax rates can be
generated using Voucher Class.
If you press Enter on Name of Class in the screen displayed above you will see the following
screen:
You can make the entries as required.
Override using Item default
It is possible to enter a Tax Invoice having multiple items with different VAT Rates. Item default
refers to the Sales Ledger account that you may have set for a stock item.
If you set Override using Item default to Yes and specify a Sales Ledger in the Class Table the
sales Ledgers set in the item masters will still be considered.
Setting Sales Ledger in the Item Master
Consider the Item Masters shown below:
Set Set/Modify Default Ledgers for Invoicing to Yes.

If you do not see the field Set/Modify Default Ledgers in the Item Master,
1. Go to Gateway of Tally > F12: Configuration > Accts/Inv Info
2. Set Specify Default Ledger Allocation for Invoicing to Yes
Using the Sales Class in a Sales Invoice

2. Select F8: Sales Invoice
3. Select the Voucher Class Sales Class and make the entries
When entering Sales Invoices with the Voucher class, note that you will not be able to edit
Assessable Value Field. If you have an additional ledger say, Discount Ledger there is a facility
to edit the Assessable Value manually in the sub screen that pops up when you press Enter on
the Output VAT Ledgers.
In the above example, the discount has been deducted from the assessable value.
Payment of VAT in Tally
The Journal and Payment Voucher entries for the payment of VAT can be demonstrated with the
example shown below.
As shown in the screen above, the Output Tax is Rs.700.00 and Input Tax is Rs.424.64. The VAT
payable is Rs.275.36.
Journal entry
Note: The VAT payable Ledger is under the group Duties and Taxes.
Payment Voucher Entry
The VAT payable Rs.275.36 is transferred to the Cash or Bank account.
Creating Debit Note / Credit Note for VAT
Purchase Returns - Debit Note

This is a Purchase Returns entry and you have to use the Debit Note Voucher.
Sales Returns - Credit Note

Let us take the example of a Sales Return. Here you have to use the Credit Note voucher.
Creating a Journal Voucher for VAT
If you need the Journal transactions for VAT Computation (for example, adjustment of Input
credit, output tax, etc) you will need to make the following settings:
Go to Gateway of Tally > Accounts Info > Voucher type > Create/Alter
The following screen is displayed
Name of Class
You have to name the voucher class.
In the above example, we have named it as VAT Adjustment Class. Once you press Enter, the
following screen is displayed.
Use Class for VAT Adjustments

Enable the option Use Class for VAT Adjustments to Yes, if you want the journal entries to be
included in VAT Computation.
Journal Entries
Let us consider a Purchase transaction and then a reverse entry for adjustment of Input credit.
The following screen displays a typical Purchase Transaction.
Typical Purchase transaction
Reversal of Input Credit
1. Go to Journal voucher screen by selecting the button F7: Journal from the button bar,
which is on the right side of the screen or by pressing the F7 key.
2. You will see the following screen where you need to select the Voucher class created
before.
3. Once you select this you can pass the typical reversal entry as displayed below.
Once you have selected this, you can pass the typical reversal entry as shown below:
VAT Computation Report

The VAT Computation report will be displayed as shown below.
Note: Rs.50 of the Input credit is reversed and only the balance of Rs. 50 can be claimed.
Input Credit Adjustment for Capital Goods
Input Credit for capital goods is available over a maximum period of 36 monthly installments
(States have the option to reduce the number of installments).
The entry for the Purchase of Capital Goods is the same as in default Tally.
Let us consider the following example for the adjustment of the Input credit.
Purchase of Capital Goods for Rs. 5,00,000.
The Input Credit is Rs. 20,000, which will be available over a period of 36 monthly installments.
That is, (20,000/36) = 555.56
Hence, Rs. 555.56 can be claimed in the first installment as Input credit.
The Journal entry for this is passed as shown below.
The Drill down report will be displayed as follows.
Further Drill down report will be displayed as follows:
Input Credit Adjustment for Opening Stock
Sales Tax paid on unsold stock at the end of financial year, i.e. prior to commencement of VAT, is
eligible to receive input credit on submission of the required documents by the dealer. For this, a
claim is to be made to the VAT/ sub-VAT officer within 30 days of implementation of the Act.
Once the assessing officer verifies it, the credit may be adjusted or refunded in equal installments
over six months.
Journal Entries
In order to write off the Sales Tax incurred on closing stock in the next financial year, it is
necessary to eliminate the tax charge from the stock value of the current year. Assuming the local
purchases amount to Rs. 57 000 where Purchases @ 4% and Purchases @ 12.5% are Rs. 20 000
and Rs. 37 500 respectively, the transaction can be journalized as follows, selecting VAT
Adjustment Class. (For more details on VAT adjustment class refer Journal)
Debit the Current Assets account Tax Recoverable A/c and credit the purchase accounts.
Following the grant of relief by the Assessing officer, you can pass a journal entry every month
in the next financial (VAT) year, to adjust the sales tax paid in the previous year.
To claim the installment credit at the end of each month, pass a journal entry upon selecting VAT
Adjustment Class.
The amount of Rs. 57 500 is broken into six equal installments of Rs.9 583.33 and claimed at the
end of each month.
Enabling MRP Feature
To enable the Maximum Retail Price (MRP) feature in Tally,

1. Go to Gateway of Tally > F12: Configure > Accts/Inv Info
2. Set the option Calculate VAT on MRP/Marginal to Yes
MRP in Stock Item Master

• Once MRP is enabled, two new fields, MRP and MRP Incl. of VAT will appear in the
Stock Item Master Creation/Alteration.
• If MRP is inclusive of VAT, enter the MRP value in the MRP field and select Yes in the
MRP Incl. of VAT field.
Single Stock Item Creation
Multiple Stock Item Creation
Creating Sales Invoice for VAT on MRP

Given below are few examples to show the calculation of VAT based on MRP (inclusive and
non-inclusive of taxes).
VAT Rate 4%
MRP Inclusive of Tax
Consider the sale of Item 1, which attracts 4% VAT:
Item Item MRP VAT MR QTY VAT On VAT
Name Vatable @ Incl. of % P Amount
% Tax
Item 1 4.0 Yes 3 200 10 2000 76.92
.85
Calculations:
1. As MRP is inclusive of Tax, the actual VAT% is calculated as (100*Rate of VAT)/ (100+Rate
of VAT)
2. VAT amount = (VAT % * VAT On)/100.
3. VAT On = MRP * Qty
MRP not Inclusive of Tax
Consider the sale of Item 2, which also attracts 4% VAT:
Item Item MRP VAT MR QT VAT VAT
Name Vatable @ Incl. of % P Y On Amount
% Tax
Item 2 4.0 No 4 115 10 1150 46
As MRP is not inclusive of tax, VAT is calculated on MRP as (MRP * QTY)/100.
VAT Rate 12.5%

MRP Inclusive of Tax
Consider sale of Item 3, which attracts 12.5% VAT:
Item Item MRP VAT % MRP QTY VAT On VAT
Name Vatable @ Incl. of Amount
% Tax
Item 3 12.5.% Yes 11.11 55 10 550 61.11
Calculations:
1. As MRP is inclusive of Tax, the actual VAT% is calculated as (100*Rate of VAT)/ (100+Rate
of VAT)
2. VAT amount = (VAT % * VAT On)/100.
3. VAT On = MRP * Qty.
MRP not Inclusive of Tax
Consider the sale of Item 4, which also attracts 12.5% VAT.
Item Item MRP VAT % MRP QTY VAT On VAT
Name Vatable @ Incl. of Amount
% Tax
Item 4 12.5 No 12.5 215 10 1075 268.75
As MRP is not inclusive of tax, VAT is calculated on MRP as (MRP * QTY )/100.
Sales Invoice Entry
Calculate VAT on MRP/Marginal Price for Actual and Billed Quantity

If the option Calculate VAT on MRP/Marginal is activated in F12: Configure while creating
Stock Item Masters, VAT is calculated automatically as follows:
Percentage of VAT (MRP x Actual Quantity)
If it is not enabled i.e. MRP=0, VAT is calculated automatically as follows:

Percentage of VAT (MRP x Billed Quantity)
This is in the case when Use Actual & Billed Qty is set to Yes in the F11: Features screen.
Creating Purchase Invoice for VAT on MRP
All calculations are the same as explained in the Sales Invoice.
Tax Invoice with MRP details
Printing Configuration
A new field is included in the Printing Configuration screen called Print MRP/Marginal
Column. Set to Yes in order to have the MRP printed on the Invoice.
The Tax Invoice for the transaction shown:
Note: The VAT Computation screen will show the original Assessable value and the VAT amount
as in the default case.
VAT Reports
As per VAT Act, every registered dealer is required to maintain proper Books of Accounts and
records for all sale, purchase and production. And also VAT account-containing details of Input
and Output tax.
VAT Reports in Tally

VAT reports in Tally
• Statutory Reports
Sales Register
Sales Register reports provides complete information on sales turnover achieved for a specific
period.
To view the Sales Register screen
Go to Gateway of Tally > Display > Account Books > Sales Register
Click on Columnar button or press the F5 key to re-define the columns and set the required
parameters of reports, ledgers or groups to be shown individually or in a common column.
Set Show Partys' Tax Regn. No. to Yes.

The Columnar Sales Register displays as below:
TIN/Sales Tax No.

The TIN Or the Sales Tax No. (Central or Local) of the Party is displayed here. As there is only
a need to enter either the TIN or the Sales Tax No.(Central or Local) at any point of the
transaction, and not both, one single field serves the purpose for all transactions (with or without
VAT) . Thus, the TIN or Sales Tax number, whichever applicable, is entered in the TIN/Sales Tax
No. (Central or Local) field in the Party Ledger Master. This is picked up in the Tax Invoice and
displayed as shown above in the Sales Columnar Register.
If VAT is not enabled for your company, the TIN/Sales Tax No. column will be replaced by
Sales Tax No.
Statutory Reports
Statutory Reports are reports required in government prescribed formats for the purpose of filing
. VAT statutory reports in Tally generates and prints state specific monthly, quarterly or annual
VAT Returns.
There are two types of VAT Statutory Reports.
• Vat Computation
• VAT Forms
To view Statutory Reports
1. Go to Gateway of Tally > Display > Statutory Reports > VAT Reports
1. VAT Reports menu displays the following options
Important: A stat.900 file containing updated statutory VAT Return forms and amendments
made as and when by the respective states, is uploaded on the Tally website. The same can be
downloaded for immediate access.
VAT Computation
VAT Computation report displays various types of Input VAT Tax and Output VAT tax ledgers
employed and transacted during voucher entry.
Tally provides a clear-cut presentation on how VAT is computed for a given period. It also
provides a bird's eye view of all transaction related to VAT.
To view the VAT Computation report

Go to Gateway of Tally > Display > Statutory Reports > VAT Reports > VAT Computation.
VAT Calculations
Let us consider the following that we made, for VAT Computation:
1. Purchased from Creditor-1, 100 quantities of item1 at the rate of Rs.50 each.
The Input VAT@4% for this amount is Rs.200.
2. Purchased from Creditor, 100 quantities of item2 at the rate of Rs.50 each. However we
applied a discount of Rs.200 here. Also, Excise tax of Rs.800 and Educational Cess of Rs.16
were levied on this.
Therefore we applied the InputVAT@4% on the Assessable value of Rs.5616, which is

Rs.224.64.
Therefore total Input VAT = Rs.200 + Rs.224.64 = Rs.424.64
3. Sale of 50 quantities of item1@Rs.300 to Debtor-1 .
OutputVAT@4% = Rs.600.
4. Sale of 100 quantities of item @ Rs.100 each.
Output VAT@1%= 100
Therefore total Output VAT = Rs.600 + Rs.100 = Rs. 700

Therefore VAT Payable-> Output VAT - Input VAT = Rs.275.36
This is calculated automatically by Tally and the VAT Computation screen will be displayed as
shown below.
The Reports for the two Purchases and one Sales transaction is shown below respectively:
For VAT exempted or zero rated transactions

If you have transactions that are exempted from VAT but however want to have it displayed in
the VAT Computation screen, you have to click on the F12: Configure button and set the Show
all VAT classifications to Yes.
For example, in the case of Inter-State Sales, the Tax Amount column will show as NIL in the
Computation screen.
Learn the effect of Purchase and Sales returns transactions in the VAT Computation and VAT
Reports Screens
VAT Computation after Purchase/Sales returns
The following example is demonstrated assuming that you have gone through the VAT
Computation section.
Purchase Returns - Debit Note

Let us consider the following Purchase Returns entry:
Once this is done, the VAT Computation is displayed as shown below.
In the Purchases section, Rs. 500 is reduced from the Assessable Value and Rs. 20 is reduced
from the Tax amount (while comparing with the VAT Computation before Purchase Returns).
Therefore the VAT Payable is now Rs. 295.36
The VAT Computation Report will now show as follows:
Sales Returns - Credit Note
Let us take the example of a Sales Return.
The VAT Computation screen will now show as follows:
The Assessable Value under Sales has reduced from Rs. 25,000 to Rs. 23,500 and the Tax
Amount has reduced to Rs. 640.00. This will show in the Reports as follows:
Therefore the VAT Computation and Reports are updated automatically as you pass the entries.
Back to VAT Computation
VAT Forms
The VAT Forms Report is a statutory report. This report displays the VAT Return Form in the
government prescribed format.
To view the VAT Forms

1. Go to Gateway of Tally > Display > Statutory Reports > VAT Reports >VAT Forms
2. Use the keys Alt + P key or click on Print option to print your report.
This will display the VAT Return Form screen.
Example: Under Karnataka VAT laws, Form No. 100 is the statutory form used for filing
monthly returns by a registered dealer. Form No.100 contains different columns and indicate the
turnover at different rates and the taxes applicable to them as per VAT definitions. Explanation
on each column (i.e. Box)
Additional information:
For explanation on each column in the VAT Form (i.e. Box), Refer to Statutory Help which is
available at www.tallysolutions.com
Introduction
Service tax is an indirect tax levied on certain category of services provided by a person, firm,
agency, etc. The Government of India has marked a set of services as taxable under the service
tax structure. The seller provides a service and the responsibility of paying the service tax to the
government rests with the seller.
Information on service tax
Currently, the rate of service tax on all the taxable services is 12%. Presently, service tax is
applicable on 97 categories of services. A few of the listed services have an abatement facility.
Service tax returns are to be filed to the Commissionerate of Service Tax for the fiscal half-year.
Information on the registration, rules, list of services, rate of service tax, forms, etc can be found
on the official website for service tax-http://www.servicetax.gov.in/
Service Tax Flow
When you buy and sell services?

A person/firm providing a service that comes under the service tax category has to pay service
tax. Service tax is to be shown separately in the invoice and is payable based on the payment
realized and not on the total amount shown in the invoice. Similarly, when you buy a service that
falls under service tax category, you avail service tax credit based on the payment made. So, you
pay service tax on the services that you sell and get credit on the service tax payable when you
buy a service.
Adjusting credit?
While you pay service tax on sale of services that come under the service tax category, you can
adjust service tax credit availed on purchase of services (Buyer). This deduction is called
adjusting credit against service tax. The difference between the service tax that you have to pay
for selling services and the service tax credit on purchases that can be adjusted is the payable
service tax.
Service tax (sales) that is adjustable against service tax credit (purchases) is also called availing
input credit. Let us look at an example.
Adjusting 100% credit & 20% credit
If your input service (Purchase) can be directly related to the output service (Sales) then you can
use 100% credit adjustment on the service tax payable. For example: If you are providing a
consultancy service over the phone, then you can use the input credit from the telephone charges
to adjust against 100% of the service tax payable on your consultancy service. If the input
service is not solely used for the output service, then 20% credit adjustment is applicable.
Input service tax credit can be adjusted to both output service tax and output cess (surcharge on
tax). But input cess credit can be adjusted only towards output cess.
Assessable value
Service tax is calculated on the assessable value. The assessable value is the service charge value
minus abatement and expenses.
Abatement
The government has given a deduction on the value to be considered for service tax on a few
categories of services. For example, some categories of services include material value. A caterer
has to procure materials to prepare food products and sell services. Service tax is charged on the
total amount for the service and does not include the rate of the materials procured. Hence a
deduction is provided. This deduction from the service charges to be considered for service tax is
called abatement. Abatement is either a percentage of the service charges or a lump sum value.
Example:
a. Charge on Service Rs.10, 000/-
b. If an abatement of 30% is applied, then abatement Rs.3, 000/-
c. Here, the assessable value is (a-b) Rs.7, 000/-
Therefore, service tax @ 12 % on Rs.7, 000/- Rs.840/-
Expenses
Expenses can be deducted from the total service charge to get the taxable amount.
E.g. A technical consultant might travel to different locations with respect to work.
The invoice is prepared as ‘consultancy’ and the travel expenses are included in the total service
charges. If supported by records, you can deduct the travel expenses from the total service charge
to derive the assessable value on which service tax is applicable.
Payment of Service Tax
How much do I pay?

A seller provides a service to a buyer and bills the buyer for the service. The bill is inclusive of
the service tax. The seller does not have to pay service tax on the total bill amount but only on
the payment received.
Example:
Charge on service Rs. 10, 000/-
Service tax @ 12% Rs. 1, 200/-
Cess on Service Tax @ 2% Rs. 24/-

Secondary Cess @ 1% Rs. 12/-
Total bill Rs. 11, 236/-
Here, the service-tax calculated turns out to be
Service Tax @ 12% Rs. 1, 200/-

Cess on Service Tax @ 2% Rs. 24/-
Secondary Cess @ 1% Rs. 12/-
Total Rs. 1, 236/-
Assuming, the buyer pays the seller Rs.5, 000/- as part payment, the service-tax payable for the
payment received is calculated as given below.
Charge paid on service (10,000 x 5,000)/11,236 Rs.
4449.98
Service tax on Rs.5000/- is (1,200 x 5,000)/11,236 Rs. 533.99
Cess on service tax is (24 x 5,000)/11,236 Rs. 10.67
Secondary Cess on Service Tax is (12 x 5,000)/11,236 Rs. 533
Hence, service tax is payable only on the value of payment received by the seller and not on the
gross amount charged or billed (invoice value).
Another case is when you receive an advance payment on services to be provided. Service tax is
not applicable on advances paid until it is adjusted against the invoice.
Where do I pay?
The service tax amount is to be paid in Form GAR – 7 Challan in a bank designated by the
Commissionerate of Service Tax. For a particular area there is a Focal bank, with branch and
code. This is the designated bank. Service tax payments will be accepted in all the branches of
the bank, which are connected with the focal branch. The list of the banks and their branches
accepting service tax payments is available with the Commissionerate of Service Tax.
If your company is a corporate company, service tax is payable on a monthly basis by the 5th of
the following month. For example, Service tax has to be paid by 5th January for the month of
December.
Non-corporate like individuals, proprietary firms, partnership firms and so on, have to pay
service tax for the fiscal quarter. The payment is to be made by the 5th day of the month
following the quarter. For example, service tax for the quarter ending 30th June is to be paid by
5th July.
For the corporate and non-corporate bodies, service tax for the month of March is payable by
31st of March.
Filing returns
Corporate and non–corporate organizations have to file service tax half-yearly with details in
Form ST-3 and Input Credit Form (Form 5) to the Commissionerate of Service Tax. The
filing of returns should be within 5 days from the last day of the fiscal half-year. For the fiscal
half-year ending-date of 30th September, the last day for filing service-tax returns is 5th October.
Copies of all GAR – 7 issued during the period must be attached.
Service Tax in Tally
Features of Service Tax in Tally
Service tax integrated in Tally takes care of your service tax transactions. It eliminates error-
prone information, incorrect remittance, penalties, interests, compliance issues, etc. Service Tax
in Tally needs a one-time configuration for service tax features to be activated.
• Tally tracks bill-wise (bill-by-bill) detail and automatically calculates service tax payable
and input credit with the flexibility to make adjustments later.
• Service tax is part of a regular transaction. Information on service tax is maintained and
produced category-wise, which is mandatory in service tax returns.
• Adjusts input credit towards service tax payable.
• Accounts for abatement and expenses.
• Provision for exemption notification details.
• Built-in assessable value feature on which service tax is calculated.
• Transfer earlier pending service tax payable and available service tax input credit in to
Tally
• Reports are generated as per government suggested format. Print and file reports: G.A.R.-
7 Challans, Input Credit Form, ST3 Report and ST3-A Report.
• Management Information Services (MIS) reports: Service Tax Payable Report and Input
Credit Form
Enabling Service Tax in Tally
To enable Service Tax,

Go to Gateway of Tally > F11: Features > Statutory & Taxation
Set Enable Service Tax to Yes
Company Service Tax Details
Service Tax Registration No. – Enter the registration number allotted to you by the Service
Tax Department.
Date of Registration – Enter the date of registration of Service Tax for your service.
Assessee Code- Enter the code given to your company by the Service Tax Department.
Type of Organization – In this field select the type of your organization from the List of
Organisations menu.
Major Service Category Name- Here you will find options for different categories that
come under the service tax net. You might be providing two or more services in a company.
In such a situation, select the service category that is the mainstay or forms the major part of
your business.
Select the relevant option from the List of Service Categories that applies to your company.
Credit Adjustment (%) – By default this field is set to 20. Enter the percentage of credit
adjustment that you would like to avail.
Division
Code- Enter the code of the division in which your company falls.
Name - Enter name of the division under which your company falls.
Range
Code- Enter the code of the range of your company.
Name- Enter the name of the range under which your company falls.
Commissionerate
Code- This is the code of the Commissionerate of Service Tax under which the address of
your registered premise is located.
Name- This is the name of the Commissionerate of Service Tax under whose range the
address of your registered premise falls.
Focal Bank Details
Focal Bank Code-The Commissionerate of Service Tax allots a code to banks nominated for
payment of service tax in a particular area. This code is available with the Commissionerate
of Service Tax.
Focal Bank Name- This is the name of the bank nominated by the Commissionerate of
Service Tax to receive service tax payments in a particular area. This information is available
with the Commissionerate of Service Tax.
Focal Bank Address- Enter the address of the branch of the focal bank.
Display of Service Categories in Statutory Info.
Tally provides you with predefined set of Service Categories. You can view the values of each of
the Service Category.
Go to Gateway of Tally > Display > Statutory Info > Service Categories
Select the service category which you want to view. The Service Category screen has a Name
field showing the category. This is followed by the fields Applicable to Country, Code,
Accounting Code and Category fields.
The Applicable From column displays the period for which the Abatement (%), Service Tax
Rate (%), and Cess Rate (%) and Secondary Cess Rate are applicable.
Note: Any changes to the values will be updated on the Tally website.
Service Tax Reports
Go to Gateway of Tally > Display > Statutory Reports > Service Tax Reports
More:
• Service Tax Payables
• Input Credit Form
• ST3 Report
• ST 3A Report
Introduction
Central Sales Tax (CST) is a tax on sales of goods levied by the Central Government of India.
CST is applicable only in the case of inter-state sales and not on sales made within the state or
import/export of sales.
Inter-state sale is when a sale or purchase constitutes movement of goods from one state to
another. Accordingly, consignments to agents or transfers of goods to branch or other offices is
not a sale as per the CST Act
CST is payable in the state where the goods are sold and movement commences. The tax
collected is retained by the state in which the tax is collected. CST is administered by Sales Tax
authorities of each state. Thus, the State Government Sales Tax officer who assesses and collects
local (state) sales tax also assesses and collects CST.
Inter-state Sale
An inter-state sale takes place when a sale or purchase:

• Leads to movement of goods from one State to another State.
• Is achieved by the transfer of documents of title while the goods are being moved from
one State to another State.
Example 1: “A” in Andhra Pradesh sells and delivers goods to “B” in Karnataka.
Example 2: “A” in Maharashtra delivers goods to “B” in Gujarat. “B” sells it to “C” in Gujrat by
transferring the document of title during the goods movement from Maharashtra to Gujrat.
Note: Goods that are sold within a state, but while transporting travel through another state is not
considered inter-state sales.
Subsequent Sales
Subsequent sale is a Sale of goods after the first time it has been sold through transfer of
documents of title. Under the CST Act, sales tax is levied at a single point only (first sale) and no
sales tax is payable on subsequent sales.
CST Transaction Forms

Dealers have to issue certain declarations in prescribed forms to buyers/sellers. The type of forms
are C, D, E1, E2, F, H and I. Forms C, E1, E2, F and H are printed and supplied by Sales Tax
authorities. Dealers have to issue declarations in these forms printed and supplied by the Sales
Tax authorities. Form D is to be issued by government organization departments making
purchases. These forms are to be prepared in triplicate.
Form C
The sales tax on inter-state sale is 4% or the applicable sales tax rate for sale within the State
whichever is lower if the sale is to a dealer registered under CST and the goods are covered in
the registration certificate of the purchasing dealer. The purchasing dealer is eligible to get these
goods at concessional rate if a declaration in C form is submitted to the selling dealer.
Form D
Sale to government is taxable @ 4% or applicable sales tax rate for sale within the State
whichever is lower. This concession on CST is applicable if Form D is issued by the government
department which purchases the goods.
Form E1
This form is issued by the dealer who makes the first inter-state sale during movement of goods
from one State to another. This enables the purchaser to claim exemption from CST on the
second inter-state sale during the movement of goods by transfer of documents of title.
Form E2
This form is issued by the second or the subsequent seller when the goods move from one state
to another in a series of inter-state sales by transfer of documents of title. This form enables the
purchaser to claim exemption form CST on subsequent sale of goods.
Form F
This form is issued when goods are despatched to another state as a consignment or to the branch
of a dealer in another State. The CST is not payable if there is only inter-state stock transfer and
there is no sale. To claim inter-state movement of goods as “not a sale”, the dealer has to produce
a declaration in Form ‘F’ received from Consignment Agent or Branch Office in another State.
One Form F covering receipts during one calendar month has to be issued.
Form H
This form is issued by an exporter for purchase of goods. The purchase of goods is for an export
order or in pursuance of an export order. These goods are then sold in export and the form
enables seller of the goods to the exporter to claim deduction on the goods sold for export.
Form I
This form is issued by a dealer located in a Special Economic Zone (SEZ). No CST is levied
when sales is made to a dealer located in SEZ.
Rate of CST
• In an inter-state sale to a registered dealer against form C the rate of CST is 4% or local
sales tax rate whichever is lower.
• If under the local sales tax law, sale or purchase is exempt from CST the CST is Nil.
• In an inter-state sale to government against form D the rate of CST is 4% or local sales
tax rate whichever is lower.
• Rate of CST in case of inter-state sale of declared goods without form C or D is twice
the rate of tax applicable to the local sale or purchase of such goods in that state.
• Rate of CST in case of other goods ( i.e. non-declared goods) is 10% or the applicable
local sales tax of that state, which ever is higher.
Filing of CST Returns
CST amount shall be paid and returns to be filed on a monthly/Quarterly basis and as the case
may be. Due date for submitting the return is on or before 15th of the succeeding month or due
date for submitting the local sales tax or VAT return of a particular state whichever is later. CST
Returns shall be submitted to local Commercial Tax Officer.
CST Features in Tally
• State specific CST Returns.

• Tracking of forms:
○ C forms - (Issuable/Issued/Receivable/Received).
○ E1, E2 Forms – Issued against sale of goods in transit by the buyer.
○ F forms - For Consignment sales and Branch Transfer.
○ H Forms – for sale in course of exports.
○ D Forms - For sale to Govt. Organisations.
○ I Forms - For sale to SEZ customers.
• Reminder Letters/Covering letters to customers.
• Auto-Fill option.
Enabling CST in Tally
To enable CST feature in Tally :

• Go to Gateway of Tally> F11: Features > Statutory & Taxation
• In the Company Operations Alteration screen set Enable Value Added Tax and
Set/Alter VAT details to Yes and save.
Note: CST feature is enabled only if Enable Value Added Tax is set to Yes.
Configuring Invoice for CST

To activate the E1 and E2 form in transactions:
• Go to Gateway of Tally > F12: Configuration > Invoice/Orders Entry.
• In the Invoice Configuration screen set Activate ‘E1’ or ‘E2’ Transaction? to Yes.
• Accept to save.
CST Reports
CST Reports display forms to be received and issued. It allows you track pending forms and
reconcile forms.
To view CST Reports:
Go to Gateway of Tally > Display > Statutory Reports > CST Reports
• Forms Receivable
• Forms Issuable

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Configuring has to be done before creating and starting work on the company.

Accts/ Inventory Info.

Go to Gateway of Tally > F12: Configure > Accts/Inventory Info.

Go to Gateway of Tally > F12: Configure > Voucher Entry

Configure details for Invoices, Sales and Purchase Order entry.

This configuration is applicable for all print reports.

Print Date & Time of Report

Purchase Voucher/Invoice and Purchase Order

Payment /Receipt/Journal Vouchers, Credit Note/Debit Note

The different configuration screens are as given:

Go to Gateway of Tally > F12: Configure > Connectivity

If your computer is on a network and connected to the Internet.

• Set Use Specific Dial-Up Connection to Yes.

Country Specific Configuration

A detailed explanation on each field is given:

This completes the Company Creation process in Tally.

Base Currency Symbol

Tally Loading the Company Automatically

Loading a Company using the Select Company option

Gateway of Tally of an Accounts Only Company

Gateway of Tally of an Accounts-with-Inventory Company

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

Company Info. Menu

The Company Info.(Information) menu appears as shown below::

The menu options in the Company Info. are as follows

Select the company to be shut from the List of Primary Companies.

To delete a company, you have to load the company first.

Creating a Group Company

Altering a Group Company

Use Alter to change/modify the details of a Group Company.

A Group Company is marked with an asterisk.

To create Security Levels

Types of Security (security or authority levels)

Create a New Security Level

1. Type the New Security Level, e.g. Manager

Create a New Security Level

1. Type the New Security Level, e.g. Manager

Create a New Security Level

1. Type the New Security Level, e.g. Manager

Viewing Tally Audit Lists

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

You can view changes made to Vouchers and Ledgers.

Displaying Audit List for Vouchers

The three buttons relevant to the audit list.

Displaying Audit List for Ledgers

To display the changes made to Ledger Masters:

Enabling Tally Vault Password for Existing Companies

5. Re-enter the password in the Repeat New Password field.

Changing Tally Vault Password

The procedure for taking a backup is as follows

The procedure for restoring data is as follows

Split Financial Years

Splitting Financial Years

The procedure for splitting financial years is as follows:

The menu consists of the following options.

Statutory & Taxation

Configuring F12: Configure and Setting F11: Features

Refer Accts/Inv Info Configuration for more details.

Main Functions in Masters Menu

Common and Possible Errors in Grouping and Account

A Discussion on Each of the Reserved Groups

7. Miscellaneous Expenses (Asset)

10. Purchase Account

12. Indirect Income [Income Indirect]