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Accounts Information - Introduction Page 1 of 106
Introduction
1. The top bar of the screen contains the product message, system date and time.
2. The left hand side of the screen displays the activity status.
3. The right side contains the menu system and the button bar. The menu Accounts Info. is
the current active menu.
More:
Main functions in Masters menu
Copyright Tally Solutions Pvt Ltd. 1988-2005. All rights reserved.
Main Functions in Masters Menu
Accounts Information contains the masters as listed in the Accounts Info menu . Each master
has to have the following functions, besides others and are consistent in all Masters menus
throughout Tally:
file://C:\Documents and Settings\ACCOUNT\Local Settings\Temp\~hh618B.htm 29/05/2011

Create
This enables creation of new masters. Once a master has been created, any modification to it
must be done through the Alter mode.
Display
Use this mode to view Master information. Changes are not permitted.
Alter
Use this mode to view and change master information. You cannot create a new master. We
shall begin discussion on Accounts Information with how to build Groups and then follow with
other accounts masters.
Introduction
Classification of Account-heads
Tally follows the 'Single Ledger' concept of accounting, which is the modern way of managing
accounts. This is in direct contrast to Subsidiary Ledger Accounting. Thus, all financial entries are
performed using ledgers or account heads. Ledger account heads are created to identify
transactions.
The single ledger concept does away with the need for sub-ledgers and corresponding control
accounts in General Ledger. Ledger balances by themselves do not convey much without some
form of classification. Tally, therefore, gives you a powerful way to group ledger information,
which is meaningful in reports and compliant with laws. Groups, in Tally, serve to both classify
and identify account heads according to their nature and enable presentation of summarised
information.
Traditionally, grouping of accounts is a post-accounting activity that is done only when reports
are needed. This has an inherent drawback of delayed reports that are not available at hand
when required. Tally gives you great flexibility in setting up your chart of accounts.
It allows you to group your ledger accounts right at time of creating your accounts chart. Your
reports and statements will reflect the desired classification at all times. Further, Tally permits
you to re-group your ledgers anytime (with some minimal restrictions), should re-classification
be necessary. We acknowledge that re-grouping is always possible and would, in practice, be
resorted to, when there are changes in the nature of information. However, re-grouping can be
done only by a user account that has requisite authority under the access control list.
At the highest level of grouping, accounts are classified into capital or revenue - more

specifically into assets, liabilities, income and expenditure. Based on mercantile accounting
principles, Tally provides a set of reserved groups and allows you to modify their names or
create sub-groups.
The concept of sub-groups

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

9. Sales Account
10. Purchase Account
11. Direct Income [Income Direct]
12. Indirect Income [Income Indirect]
13. Direct Expenses [Expenses Direct]
14. Indirect Expenses [Expenses Indirect]
More:
A discussion on each of the reserved groups:
Common and possible errors in Grouping and account classification
A Discussion on Each of the Reserved Groups
1. Capital Account
This holds the Capital and Reserves of the company. Examples of ledgers that may be opened
under this group are Share Capital, Partners' Capital A/c, Proprietor's Capital Account.
Reserves and Surplus [Retained Earnings]

Open ledgers like Capital Reserve, General Reserve, Reserve for Depreciation, etc.
2. Current Assets
Directly under Current Assets, you may find place for assets that do not fall under the following
sub-groups:
Bank Accounts
For Current, savings, short term deposit accounts, etc.
Cash-in hand
Tally automatically opens one Cash A/c under this group. You are permitted to open more cash
accounts, if necessary.
Note: An account under Cash-in-hand group or Bank Accounts/Bank OCC A/c group is printed as separate
Cash Book in the traditional Cash Book format and does not form part of the Ledger.

Deposits (Asset)
In essence, a place for Fixed Deposits, Security Deposits, or any deposit made by the company
(not received by the company, which is a liability).
Loans & Advances (Asset)

For all loans given by the company and advances of a non-trading nature, e.g., advance against
salaries, or even for purchase of Fixed Assets. We do not recommend you to open Advances to
Suppliers account under this group. Doing so gives rise to the difficulty in ascertaining advance
position of a particular supplier and to adjust future bills against such advances. For further
details, please refer to the section on Common Errors.
Stock-in-hand
This is a special group. You may wish to open accounts like Raw Materials, Work-in-Progress and
Finished Goods. How the balances are controlled depends on whether you opted to maintain an
integrated account-cum-inventory system in the company features. (refer to Company creation
section for more details) Let's consider the options:
Integrated Accounts-cum-Inventory
You are allowed transactions in Inventory records and the account balances are automatically
reflected in the Balance Sheet as Closing Stock. You are not allowed to directly change the
closing balance of an account under this group.
Non-integrated Accounts-cum-Inventory
Accounts that fall under this group are not permitted any transactions. It allows you to hold
opening and closing balances only. Since no vouchers can be passed for these accounts, they are
the only accounts for which the closing balances can be directly altered (by an authorised user
only)
Sundry Debtors
For your customer accounts. Do not open them under the Sales Account group, which is a
revenue account. For more information on common and possible errors in grouping of accounts,
please refer below to the separate paragraph on the topic.
3. Current Liabilities
You may open accounts like Outstanding Liabilities, Statutory Liabilities and other minor
liabilities directly under this group. Sub-groups under Current Liabilities are Duties and Taxes,
Provisions and Sundry Creditors
Duties and Taxes

For all tax accounts like VAT, MODVAT, Excise, Sales and other trade taxes. A convenient place
to find the total liability (or asset in case of advances paid), as well as the break-up of individual
items.
Provisions
For provision accounts like Provision for Taxation, Provision for Depreciation, etc.

Sundry Creditors
For trade creditors of the company. Do not open your supplier accounts under the Purchases
Account group, which is a revenue account. For more information on common and possible
errors in grouping of accounts, please refer below to the separate paragraph on the topic.
4. Investments
To group your investment accounts like Investment in Shares, Bonds, Govt. securities, long term
Bank deposit accounts, etc. A convenient place to view the total investments made by the
company.
5. Loans (Liability)
For loans, typically long term, taken by the company.
Bank OD Accounts [Bank OCC Accounts]

Tally gives two distinct types of Bank Accounts, The Bank OCC A/c is meant to record the
company's overdraft accounts with banks. e.g., Bill Discounted A/cs, Hypothecation A/cs etc.
Note: An account under Bank OCC A/c group is printed as separate Cash Book in the traditional Cash Book
format and does not form part of the Ledger.
Secured Loans
For term loans and other long/medium term loans that have been obtained against security of
some asset. Tally does not verify the existence of the security. Typical accounts would be
Debentures, Term Loans, etc.
Unsecured Loans
For loans obtained without any security .e.g., Loans from Directors/partners or outside parties.
6. Suspense Account
Theoretically speaking, this group should not exist. However, in modern accounting, many large
corporations use a Suspense Ledger to track moneys paid or recovered, the nature of which is
not yet known. The most common example is money paid for Travelling Advance whose details
would be known only upon submission of the TA bill. Some companies may prefer to open such
accounts under
Loans and Advances (Asset) group.

Please note that Suspense Account is a Balance Sheet item. Any expense account even if it has
'suspense' in its name, should be opened under a Revenue group like Indirect Expenses and not
under Suspense Account group.
7. Miscellaneous Expenses (Asset)
This group is typically used more for legal disclosure requirements, like Schedule VI of the Indian
Companies Act. It should hold incorporation and pre-operative expenses. Companies would write
off a permissible portion of the account every year. A balance would remain to the extent not

written off in Profit & Loss Account. Tally does not, however, show a loss, carried forward in the
Profit & Loss Account, under this group. The Profit & Loss Account balance is shown separately in
the Balance Sheet.
8. Branch/Divisions
This group is provided to keep the ledger accounts of all companies that are your company's
branches, divisions, affiliates, sister concerns, subsidiaries, etc. This is a group of convenience.
You may not wish to utilise it in this manner. Note that Tally permits Sales and Purchase
transactions to take place with accounts opened here. Remember, these are their accounts in
your books and not their books of accounts. Just treat them as you would any party account. If
you wish to maintain the books of that branch/division on you computer, you must open a
separate company. (Tally allows maintenance of multiple company accounts).
Revenue Primary Groups
9. Sales Account
For different sales accounts. The natural segregation of your sales accounts could be based on
Tax slabs or type of sales. This also becomes a simple mechanism for preparation of Tax returns.
An example of such classification may be helpful:
Classify under Sales Accounts the following sub-groups
Domestic Sales
Export Sales
Now under Domestic Sales open the following ledgers:
Sales (10%)
Sales (5%)
Sales (exempt)
You may even open an account Sales Returns under the group Domestic Sales to view your net
sales after returns (or the returns may be directly passed through journal against the specific
sales account).
Please do not open customer accounts under this group. For more details on possible errors in
this regard, please refer to the paragraph given below.
10. Purchase Account
This is similar to sales accounts, except for the purpose of the transaction.
11. Direct Income [Income Direct]
For non-trade income accounts that affect Gross Profit. All trade income accounts would
naturally fall under Sales Accounts. You may wish to use this group for accounts like Servicing
Contract Charges that follow sales of equipment.
If yours is a professional services company, you may not use the Sales Account group at all.

Instead, open accounts like Professional Fees under this group.
12. Indirect Income [Income Indirect]
For miscellaneous non-sale income accounts, e.g., Rent Received and Interest Received.
13. Direct Expenses [Expenses Direct]
For manufacturing or direct trading expenses. These accounts determine the Gross Profit of the
company.
14. Indirect Expenses [Expenses Indirect]
For all other administrative, selling or non-direct expenses.
Tally automatically opens the Profit & Loss Account which is a reserved primary account. You
may use this account to pass adjustment entries through journal vouchers .e.g., transfer of
profit or loss to Capital or Reserve account.
Common and Possible Errors in Grouping and Account Classification
Debtor/Creditor classification
Placing individual party accounts under Sales or Purchase Accounts groups

Accounts of parties with whom your company has trade relationship must be opened under any
of the following groups (or sub-groups under them) only:
Sundry Debtors
Sundry Creditors
Branch/Divisions
Sales and Purchase account groups are meant for revenue accounts and would be reflected in
the Profit &Loss Account. If you open party accounts under these groups, you will find it difficult
to pass sales or purchase voucher transactions. For example, in a sales voucher transaction
entry, you must debit an account which is a sundry debtor, branch/division or even a sundry
creditor (why a creditor? - it will be explained soon). Moreover, other facilities like bill-wise
allocation and tracking would not become available unless the accounts belong to one of these
groups.
Opening two accounts of the same party

Tally has separately classified debtors, creditors and branch/divisions only for convenience.
There is no operational distinction except for the purpose of keeping the accounts of a particular
group together during displays and analysis. Thus you can pass both sales and purchase entries

for a party account placed under Sundry Debtors.
We recommend that you use the classification depending on the most natural group for the
party. For example, parties from whom you buy more frequently then you sell to, could be
placed under Sundry Creditors, as that would be the natural place for you to look for his
account. Tally does not restrict the accounts from having obverse balances. Thus, a Sundry
Debtor can have a credit balance depending on the state of his account.
You would, therefore, note that you need not open two accounts of the same party - one under
Sundry Debtors and another under Sundry Creditors. Remember, Tally restricts you from
opening two identical ledger accounts. Of course, you may decide to circumvent by marking one
account as "A & Co - S/Dr" and another "A & Co - S/Cr". Doing this would allow you to have two
accounts of the same party under two groups, but you would lose the advantage of analysing his
net position in one place. We recommend that you maintain a single account to obtain best
benefits.
Placing expenditure items under a Liabilities group, e.g., the expenditure item 'Rates & Taxes'
under the group 'Duties and Taxes'.
The group Duties and Taxes is specifically meant to handle taxation liabilities of your company.
Rates & Taxes and other statutory expenses should be placed under Indirect Expenses.
Simply adhering to the reserved groups may be sufficient for many organisations. For greater
diversity, Tally allows you to create your own groups, either as sub-groups or primary groups.
Groups can be sub-classified to practically an unlimited level, to give a virtual accounting tree. At
the lowest level, of course, would be the ledger account. An example of sub-groups would help
illustrate the power of this facility:
The group Indirect Expenses can be sub-classified as under (ledgers given in italics):
Remember, that during voucher entry, only the ledger accounts are used, - and the grouping
structure remains transparent, irrespective of the use of sub-classification.
This idea can be easily extended to other areas like Sundry Debtors, Sales Accounts, Purchase
Accounts, etc. For example, Debtors and Creditors are very useful when sub-grouped according
to geographical areas:

You may prefer to classify creditors according to their tax status, e.g.,
You can see that unlimited levels of sub-grouping is a convenience to be used thoughtfully. Use
it to give a never before depth to your presentation of accounting information but take care to
not carry it too far. Too many levels of sub-groups may make their use redundant and their
management unwieldy. A simple guideline could be to create branches of sub-groups or ledgers
only if they are two or more than in number. A situation where you have created groups as
follows should be avoided:

Obviously, you could have done with simply creating ledgers directly under Marketing Expenses.
Note: While it is necessary to assign every ledger to a group/sub-group, it is not essential to have your own
sub-classification of accounts; you may simply use the reserved groups for grouping your ledger accounts.
How to Manage and Operate Groups?
Gateway of Tally > Accounts Info > Groups
You may create, alter, or display a single Group or multiple Groups. Single group option is useful
when you wish to work on one group at a time. Multiple is a time and labour saving option in a
list format and is useful when working on many sub-groups at a time. Once a sub-group is
created, it behaves exactly like a group. Any reference to group would deem to include a sub-
group.
Creating a Group
If you are creating groups for the first time, it is advisable to configure them before you
proceed:

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

F12:Configure: To change configuration of master information.
Note:
1. Configuration changes affect all companies whereas Features changes affect only the current company.
2. Advanced mode allows entry of additional information as follows:
Creation of Primary Group
Control behaviour like sub-ledger
Used for calculation for taxes and discounts in invoices (These are further explained at
the end of the section)
If you have not opted for advanced entries in masters, you will need to enter only the following
information to create a group:
Name of Group
Enter the name of the desired group or sub-group. (e.g., Administrative expenses).
Alias
Give an alias to allow access the group using the Alias in addition to its name; or leave it blank.
(e.g., for Administrative expenses, you can give 'Office
Expenses' or even an alphanumeric code, say 'E001', as an alias)
Under
Specify under which existing (Parent) group the sub-classification is needed. You may create a
new Parent Group by using <Alt>+<C>. The use of <Alt>+<C> is explained in the Annexure
Special Key Combinations.
More:
Advanced mode of master entries for Groups

Advanced Mode of Master Entries for Groups
The following are applicable only when advanced mode is activated.
Under
If it is a new primary group, select Primary (requirement of a new primary group would be
extremely rare but the option exists). Creation of new Primary Group is not allowed if Advanced
entries are not permitted (set to No).
If a new Primary Group is created, you must specify whether it is an asset, liability, income or
expenditure by selecting the appropriate option. If you specify an income or expenditure you
may also determine whether it affects gross profits by suitably answering the question
Does it affect Gross Profits? Yes/No.
(This concept can be used in cases where you would like to segregate your profits into Operative
Profit and Net Profit where you may want to consider other revenue accounts in addition to
Direct instead of Gross and Net Profit). Normally, Tally calculates GP using Opening Stock,
Purchase Accounts, Direct Expenses, Sales Accounts, Direct Incomes and Closing Stock only. To
make other accounts contribute to this, and yet not classified under these reserved heads, you
would set the answer to Yes.
Group behaves like sub-ledger?
To display Sundry Debtors without Ledger break-up in statements. Normally Sundry Debtors
would have a large number of ledger accounts under it and it can be exploded during display to
show ledger balances. To avoid this detailed display, choose Yes.
Used for Calculation (e.g. taxes, discounts)?
Yes if ledgers under this group would have percentages for discounts/taxes to be used for
invoice entry. Remember that only voucher entry in 'invoice' mode uses the automatic
calculation capability (for example, it would be fruitless to specify a group 'Depreciation of
Assets', and created ledgers such as 'Depreciation 10%', 'Depreciation 25%' in the hope of
getting them used for automatic calculation purposes).
Display or Alter a Group
Gateway of Tally > Accounts Info > Groups > Single Display/Alter > select name from
List of Groups

(Since display mode is identical to alter but without the modification capability we would discuss
only alter mode here. Depending upon the access rights available, you may display a master in
simply display mode or in alteration mode.)
From the popup list of groups, select the group you wish to alter. The information in the
alteration/display screen is the same as in 'group creation' with an additional field 'Position Index
in Reports'. This field is displayed or hidden with the toggle key/button[F10]- Change sort/Skip
sort. A discussion on position index follows.
You are allowed to alter any information in the screen except in specific circumstances given
below (these apply to multiple alteration of groups as well):
You cannot change the parent or behavioural attributes of a Reserved group. Exceptions are the
groups Branches/Divisions and Suspense Account, where the 'Asset' or 'Liability' concept is
modifiable. This determines the location of the group in the VERTICAL Balance Sheet only.
Deleting a Group
Gateway of Tally > Accounts Info > Groups > Single/Alter
The Delete function is performed through the single alteration mode. You cannot delete groups
from the multiple alteration mode.
1. Select the group to be deleted.
2. Press <Alt>+<D> to delete.
Note: You will not be allowed to delete a group if: it is a reserved group; or there are sub-groups or ledgers
under it.
Advanced Usage

Position index in reports
Position index is the primary key for sorting groups and ledgers for reports; the group name
being the secondary key. It determines the position of the group in relation to other groups in a
report. It is the default sorting method in most reports. Sorting method can be changed when
viewing lists by changing the configuration [F12].
At the time of its creation, a group is automatically assigned the position of its parent (or 500 if
it is a new primary group) and hence you do not need to give the index field when creating a
group. The default position indices for reserved groups are:
All reports, e.g. Trial Balance, including the above list, will be sorted according to the position
index in increasing order. You will observe that it is not alphabetic. The positions have been
ascribed for the Balance Sheet and Profit & Loss Account, which is based roughly on the liquidity
concept and company law. These indices may be changed to effect a shift in the location of an
account, as illustrated in the following example. The same index number can be assigned to
more than one group in which case they will appear one after another in alphabetic order (sorted
on the secondary key).
Create a Group "My Own Group" under Primary as an Asset. It's sort index would default to 500.
You may verify this using single alteration of the group "My Own Group".

Open a ledger account "My Own Ledger" under this group with opening balance of 10,000. The
group's position in the Balance Sheet would be thus:
Let us now alter the Position Index (sort position) of the group "My Own Group" to 45. (You may
do this quickly by positioning the cursor on 'My Own Group' and pressing <Ctrl>+<Enter>).
The Balance Sheet would now be rearranged as follows:

You are therefore able to decide the position of an item in your reports.
Though position indices can be altered, you are advised not to do so without being absolutely
sure of its effect. Please remember that the change affects all reports. If you have altered the
index but which you now do not wish to adopt, you may revert to the above default settings
through group alteration.
Expert Usage
Multiple Creation of Groups
Gateway of Tally > Accounts Info > Groups > Multiple Create
Explanation on Buttons
F3: Company:
To work with a different company. In the creation mode, you can create groups in the other
company. In alter mode, you can copy the information by accepting the screen (<enter> or

<Ctrl>+<A>). The old company's information remains. Not available in Display mode.
F3: New Cmp:
To work on the same report of another company. Available only in display mode.
F4: Chg Parent:
To change parent of the selected group from popup names of groups list.
For example, you are currently altering groups classified under Loans Liability, and wish them all
to be re-classified under 'Bank OCC A/c'. Instead of individually altering each, name, you may do
so by pressing F4.
F4: New Parent:
To change the parent group. (relevant in Alteration/Display mode only)For example, you are
currently altering groups classified under Loans Liability, and now wish to ABANDON the current
activity, and alter groups under Bank OCC instead.
Skip names: For faster data entry when you need to alter only the parent of many sub-groups but not the name
of the sub-group itself.
F8:Skip Parent:
For faster data entry when you do not need to alter the parent of sub-groups but the sub-group
names and/or position indices.
F10:Chg Sort or Skip Sort:
Toggle for altering the Sort Position
Groups, Ledgers, Cost Categories, Cost Centres, Voucher Types:
F11:Features:
To change company features. A detailed discussion on features has been done in earlier section
under Gateway of Tally.
F12:Configure:
To change configuration of master information.
Note: Configuration changes affect all companies whereas Features changes affect only the current company
Choose multiple creation when you wish to create a number of sub-groups which will
automatically take the parent's advanced mode information.
Under Group
F4:Parent or first letter of existing group
The entry screen allows you to specify the parent group under which the sub-group can be
created in a columnar list. You are allowed to create a new parent using <alt>+<C>. Select [All
Items] if the new sub-groups may have different parent groups.

Below the Parent Group, of the three columns 'Sl. no.', 'Name of Group' and 'Under', Sl. no is
filled up automatically. You must give the new sub-group names in the Group Name column. The
"Under" column defaults to the Parent group name you had specified in 'Under Group'. If you
had selected [All Items], you must specify the Parent Group for each sub-group. When finished,
press <enter> in the blank 'Name of Group' field and <enter> again or yes to accept the list.
In multiple group creation, the sub-groups will automatically adopt the characteristics of their
parent groups including those specified in advanced mode. If you wish to change individual
group behaviour created using multiple groups, use 'single group/alter' option.
Display/Alter Multiple Groups

Gateway of Tally > Accounts Info > Groups > Multiple Display/Alter.
You would normally choose this option when you need to alter names or change parents of many
groups. Select a particular group for altering sub-groups under it or [All Items] to list all groups,
their parents as well as the position indices. Change restrictions as given above in Single Groups
also apply to multiple groups.
Managing Groups in multiple companies
Copy masters from one company to another

Master information is generally similar for most group companies and it is certainly beneficial to
maintain same group structure and ledgers, more so if you have a parent company with
subsidiaries or branches. This ensures uniformity of reports in all companies and proper
consolidation of accounts. To avoid the tedious task of re-creating masters in other companies,
Tally enables you to copy the groups created in one company to another.
The companies must be selected to allow switching of companies.
Gateway of Tally > Select Company A
Gateway of Tally > Select Company B
Copy a single group from one company to another

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

[F1] Select the source company (Company A)
Gateway of Tally > Accounts Info > Groups > Multiple/Alter.

Select the particular group or [All Items] > [F3]:
Change to destination company > Accept the screen, after making additions/alterations, if any.
On accepting the screen, you are returned to the source company 'list of groups'. The same
group now also exists in the destination company. It may be obvious that the above method of
copying masters is possible only if the books of accounts are maintained on the same computer
system.
Note: The alternate mechanism to transfer information between companies is to use the 'Export of Data' and
'Import of Data'. Export/import is more flexible in that it allows incoming information from companies which do
not exist on your system. For example, you could export your Masters and send the resultant files to your
branches for their initial master creation.
Note : The above method can be used for copying other masters like ledgers, cost categories and cost centres.
Introduction
In the previous chapter, the concept of groups, as implemented in Tally, was explained. You
were also given a number of examples of grouping ledger accounts. You will now learn how Tally
is used to work with ledgers. A Ledger is the actual account head to which you identify a
transaction. You pass all accounting voucher entries using ledgers. However, as mentioned in
the introduction to Groups, all ledgers have to be classified into groups. Hence, a thorough
understanding of account classification is important for working with ledgers. We have
reproduced certain portions from the groups chapter here.
How to Manage and Operate Ledgers?
Gateway of Tally > Accounts Info. > Ledgers

Normal users would work with Single Ledger. Hence, we shall discuss the different operations
under Single Ledger here.
Multiple ledger operation is meant for expert users who may refer to the Section 'Expert Usage'
at the end of this Chapter.
Creation of a Ledger Account
The information required for creation of ledgers depends on the features opted by you. If the
setting of the Accounting Features [F:11] of your company is No for all options, your ledger
creation screen would need minimal information.
It should be noted that Tally automatically creates two ledger accounts, viz., Cash (under Cash-
in-hand) and Profit & Loss Account (direct Primary account). It does not make any other
presumptions. You must create all other account
heads. There are no restrictions in ledger creation except that you cannot create another Profit &
Loss A/c (actually an account that behaves like one). You may create any number of Cash
accounts (by another name like "Petty Cash" ).
You will, now, be guided to create a ledger account with minimal information. For discussions on
additional features, please refer to 'Advanced Usage'.
Gateway of Tally > Accounts Info. > Ledgers > Single Create

Name
Feel free to give the full name of the account. Tally fits it all in. Press <enter> to move to the
next field. Tally does not allow duplicate names. The uniqueness check is made here itself
instead of after you have entered all other information.
You will find that punctuation and other non-relevant information are ignored by Tally in its
recognition of a name, Thus, CST, C.S.T. and C. S. T. are all considered identical.
You will now actually experience the small conveniences, which you would soon take for granted.
You notice that Tally converts the first letter of all relevant words to upper case which helps you
speed up your data entry. You need not bother about changing the case every time it is a
different word.
Group
All accounts must be classified in their appropriate groups. (You should go through the Chapter
on Groups now if you not already done so). You must specify which group the ledger falls under.
Note: You may always create a new group by pressing <alt>+<C>.
A Group is not important by itself, but because it controls the usage of ledger accounts. A wrong
classification would affect the treatment of the ledger account in final statements and during
voucher entry. You can, of course, alter a ledger account to change its group classification at any
time.
Note: alter a ledger or a group from any display by <ctrl>+<enter>.
More:
Common and possible errors in Grouping and account classification
Groups - a revisit
Opening Balance

Common and Possible Errors in Grouping and Account Classification
Reproduced below are some very important issues pertaining to groups.
Debtor/Creditor Classification
1. Placing individual party accounts under Sales or Purchase Accounts groups:

Accounts of parties with whom your company has trade relationship must be opened under any
of the following groups (or sub-groups under them) only:
Sundry Debtors
Sundry Creditors
Branch/Divisions
Sales and Purchase account groups are meant for revenue accounts and would be reflected in
the Profit & Loss Account. If you open party accounts under these groups, you will find it difficult
to pass sales or purchase voucher transactions. For example, in a sales voucher transaction
entry, you must debit an account which is a sundry debtor, branch/division or even a sundry
creditor (why a creditor? - it will be explained soon). Moreover, other facilities like bill-wise
allocation and tracking would not become available unless the accounts belong to one of these
groups.
2. Opening two accounts of the same party

Tally has separately classified debtors, creditors and branch/divisions only for convenience.
There is no operational distinction except for the purpose of keeping the accounts of a particular
group together during displays and analysis. Thus you can pass both sales and purchase entries
for a party account placed under Sundry Debtors.
We recommend that you use the classification depending on the most natural group for the
party. For example, parties from whom you buy more frequently then you sell to, could be
placed under Sundry Creditors, as that would be the natural place for you to look for his
account.
Tally does not restrict the accounts from having obverse balances. Thus, a Sundry Debtor can
have a credit balance depending on the state of his account.
Note: You need not open two accounts of the same party - one under Sundry Debtors and another under
Sundry Creditors.
Remember, Tally restricts you from opening two identical ledger accounts. Of course, you may
decide to circumvent by marking one account as "A & Co - S/Dr" and another "A & Co - S/Cr".
Doing this would allow you to have two accounts of the same party under two groups, but you
would lose the advantage of analyzing his net position in one place. We recommend that you
maintain a single account to obtain best benefits.
3. Placing expenditure items under a Liabilities group, e.g., the expenditure item
'Rates & Taxes' under the group 'Duties and Taxes'.

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

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

have your own sub classification of accounts; you may simply use the reserved groups for

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

You are allowed to alter any information of the ledge master with the exception of the Closing
Balance of a ledger account, if any, other than closing balance of accounts under the group
'Stock-in-hand'.
Please refer to 'Advanced Usage' for specifying closing stock values.
Deleting a ledger account
You can delete a ledger from the alteration mode by pressing <Alt>+<D>. Tally does not allow
deletion of accounts that have transactions. Therefore, should you wish to delete an account,
which has transactions, you must first delete all its voucher entries.
Advanced Usage
Assuming that you have set up your configuration and features as below.
[F12] Configure
[F11] Features

…And that you have also activated bill wise details and cost centres in features.
Your ledger creation screen would now require/allow additional information.
(alias)
(unless you have configured not to give this information)
A simple mechanism to call an account head by another name. For example, an account head by
the name Tally Solutions Pvt Ltd. could also be called Tally 7.2. If you need to do so, simply
open Tally Solutions Pvt. Ltd. as 'Name' and under 'alias' give Tally 7.2. Another possible
example is International Business Machines, which is popularly abbreviated as IBM. In such a
case, you might want to use IBM as an alias. For those of you who wish to continue with account
codes, you may use this field to enter your codes. If an 'alias' is given, both 'Name' and 'alias'
are available to you while entering a voucher. You may use either to affect the same account. If
you do not want an alias, simply press <enter> in the blank field.
Tally permits you to create any number of aliases for a ledger name. Therefore, in the above
example screen, you find the account name Tally Solutions Pvt Ltd with two aliases, viz., Tally
7.2, and 001005001.
1. Avoid the temptation to give many aliases just because the facility is available. Use it on
need basis and not to cater to the whims of individuals.
More:
Currency of Ledger
Maintain Balances Bill-by-bill (Yes/No)

Allocate to Cost-Centres (Yes/No)
Method of Calculation
Currency of Ledger
Give the currency in which the ledger will be maintained. Tally allows you to maintain ledgers in
any currency. The account will reflect amounts in the selected currency.
Note:
* You may always create a new currency by pressing <alt>+<C>.
* It is strongly advised that you maintain the currency of ledger as the base currency. Maintain foreign
currency accounts only if you want its balance in that currency. You would normally need to maintain
only foreign currency bank accounts and not other ledgers in foreign currency. When you maintain an
account in base currency, it nevertheless allows you to enter transactions in any other currency. For
details, please refer to the chapter on multiple currency
Advanced Information
(ONLY if the ledger is maintained in base currency). (The relevant options should have been
activated in the company features)
Maintain Balances Bill-by-bill (Yes/No)
Yes, if you wish to give a bill-wise break-up of the ledger balance including the opening balance.
You may give any number of bills here. The option here would also determine the ability to track
transactions according to bill references. The bill-by-bill concept in transactions would be
discussed in detail under the Vouchers chapter.
The following information for all pending bills of the previous accounting period would be
required when entering the Opening Balance:
Date
Since you are giving the break-up of the opening balance, the date of the bill would naturally be
prior to the accounting period. Tally defaults to the last date of your previous accounting period,
e.g., 31 March 2001. Change it, if necessary, to the actual date. To end your list of entries, leave
the Date or Name blank.
Name
Give a name to which you can later refer when adjusting the bill. Typically, you would give the

bill no or document number. Remember, the purpose of the break-up is to enable you to adjust
it later when the relevant transaction is squared off.
Due date (or credit days)
Give the credit period or the date when the bill is due. You may give either. Tally automatically
calculates the other. Another of those small conveniences that make life easier.
Note: During transaction entry, there would be another concept-that of effective date. If you opt for "using
effective dates" instead of "bill dates" the due date would be calculated accordingly.
Amount
For the amount of the bill due.
You would give particulars of all the pending bills one by one. Tally fills in the difference between
your Opening Balance, and the sum of the Bills, and reflects it as 'On Account' at the bottom of
the screen. If all your bills exactly cover the Opening Balance, the On Account becomes NIL. You
may have Bills totalling beyond the opening balance, in which case the On Account will
accumulate aversely. In the example below, we have shown two bills 1000 and 1100 of 5000/-
each. Now if the balance brought forward is 12000/- , the On Account amount will reflect 2000/-
. If you obtain the bill particulars at a later date, you can always alter the ledger to put in the
details, which will nullify the On Account.
Allocate to Cost-Centres (Yes/No)
If you have activated Cost Centres in the Company Features [F11], you will be asked this
information. Tally presumes that you would want Cost Centres for Revenue Accounts but not for
non-revenue accounts like Assets and Liabilities. Hence, in this case you will find it set to No. If
you want cost centre allocation to this account during voucher entry, give Yes. The cost centre
concept is discussed separately.

Inventory values affected?
This is applicable only in case your accounts are integrated with inventory. Accounts like sales
and purchases would normally affect inventory values in which case set this field to Yes. For
other accounts, set it to No. Tally does not restrict you to particular accounts as you may have
the need to affect inventory with accounts like Customs Duty, and perhaps, direct expenses
related to purchases such as Freight Inwards.
Percentage of Tax (e.g. 5)
This is applicable only for ledgers falling under the group Duties and Taxes, or under any group
for which 'Used for Calculation' is enabled. The Group Duties and Taxes is automatically used for
calculation. It is internally set as enabled and will remain so regardless of whether you disable it.
You need to specify the rate of tax e.g. 5, 10, 12.5 etc. as a percentage. Do not give the percent
symbol.
1. You may use an automatic Discount calculation facility by specifying a negative

percentage. The process will involve creating a sub-group (preferably called Discounts),
which has 'Used for Calculation' activated. Typically, this group would be created under
Sales or Expenses. Now, ledger accounts similar to 'Discount 10%', and 'Discount 15%'
may be created giving '-10' and '-15' as the 'Percentage of Tax', and the relevant 'Method
of Calculation' as explained below.
Method of Calculation
There are four methods of calculating a duty.
1. Duty Based on Items – Tax based on Item Rate
2. Additional Duty
3. On Total Sales
4. Surcharge on Tax
Tax or Duty Based on Items Rate (or Excise Duty)
This type of account is suitable in cases where there are differential rates of duty/tax on items.
In India, excise duty accounts would normally adopt this method. In the UK, VAT accounts would
do likewise. When creating your Inventory item masters, you might specify Rate of Duty for each
item. In your account books, you would open a ledger for the duty, possibly by the name VAT
17.5% or Excise Duty 12.5%. You will select this method to instruct Tally to pick up the Rate of
Duty specified in your Inventory item master during invoice entry. If one or more items exist
with the same rate of duty, then the amount is calculated using the total. Otherwise, it is
calculated on total sales. For example,

Your invoice lists:
Item A (Rate 10%) for 10000/-
Item B (Rate 12%) for 15000/-
Item C (Rate 10%) for 18000/-
Duty (VAT or Excise) will be calculated as follows:
10% on 28000/- 2800/- (Item A & C)

12% on 15000/- 1800/- (Item B)
Total Duty 4600/-
Additional Duty
When excise duty is not enabled for invoicing purposes in Company Features [F11] (as
applicable for many products in India), Additional Duty and Surcharge function alike. In case it is
enabled, then Additional Duty is added to the 'Duty Based on Items' in the invoice to reflect the
'Total Duty payable'. Its method of calculation is explained under 'Surcharge'.
On Total Sales
As the type suggests, duty will be calculated on the total of individual values of the items. It
does not consider the Rate of Duty specified for each item in your inventory masters.
It does not calculate duty on the current sub-total unless you have specifically opted for it in the
company features. Hence, the two scenarios could be as follows:
When you have not opted for calculation on current sub-total:
Assuming that there are two items in the invoice:
Item A 10000/-
Item B 15000/-
Tax 2% will be calculated at 2% on total sales of 25000/- = 500/- tax amount following which
you obtain a current sub-total of 25500/-.
If you now add another line, Tax 4%, it will calculate 4% also on 25000/- (on total sales) giving
another 1000/- as tax.
If you opt for calculating on current sub-total:
The above Tax 4% will be calculated on 25500/- (25000+500) giving 1020/- .
Surcharge on Tax
Surcharge and Additional Duty are charged on the immediately preceding entry. A surcharge is
treated as a percentage of the duty levied.Tally expects the preceding line in the invoice to be
the duty on which surcharge is to be calculated.
Hence, in the above example if you have added a line Surcharge 10% it will appear as:
Item A 10000/-
Item B 15000/-
25000/-

Tax 2% 500/-
Surcharge 10% 50/- (10% of 500)
If your invoice is as below:
Item A 10000/-
Item B 15000/-
25000/-
Tax 2% 500/-
Surcharge 10% 50/- (10% of 500)
Addl.Surcharge8% 4/- (8% of 50)
During invoice creation, this figure is used to calculate tax amount based on the method of
calculation as well as specified in invoicing configuration.
( [F12] configure > Invoice Entry > Calculate tax on current sub-total?).
Though invoicing has been discussed separately in greater detail, we shall touch upon relevant
aspects here.
Calculate tax on current sub-total: (Yes/No)
Tax here refers to VAT or sales tax. During voucher entry in Invoicing mode, you may enter
additional ledger accounts after giving the list of items in the invoice. Typically, the ledgers
would pertain to duties, taxes, delivery charges, other charges and discounts. Sales Tax may be
calculated on the total of item values, viz., Inventory sub-total, or you may specify it to calculate
on the immediately preceding sub-total. In the latter case, the immediately preceding sub-total
could include any entry that you may have passed, e.g. Delivery Charges. Tally does not make
any presumptions and would not verify its appropriateness or otherwise.
Normally, you would not answer Yes to this option. The facility of Surcharge being available, the
need to calculate on current sub-total is fulfilled by it. Hence, use it sparingly, maybe only when
you have both Excise Duty and Sales Tax (on Excise Duty) applicable on an item.
UK VAT Analysis
Tally produces the VAT Analysis Report in the British VAT Return Form 100 format with Box 1 to
9. It is automatically produced for a quarter ending the last date of voucher entry and picked
from the sales and purchase voucher entries.
Set-up required to produce the return
The set-up is more detailed if you deal with the European Union.
Where Boxes 2, 8 and 9 are not applicable
(Businesses not trading in Goods or related services with the EEC. – Domestic trade only or
Exports to other countries or supply of services, like consultancy, to EEC. In short, where Boxes
2, 8 and 9 are not applicable.)

1. Activate British Style VAT Returns in F11:Company Features.
Group Name Under which EEC Debtors are classified. Select 'Not Applicable'.
Group Name Under which EEC Creditors are classified. Select 'Not Applicable'.
2. Use Voucher Classes for sales to automate sales invoice entry if required.
3. Ensure that all VAT entries are made through Purchase, Sales, Debit Note and Credit Note
vouchers only. VAT entries made in other voucher types like Payment, will not be included
in the VAT Return.
Note: The set up determines the figures that go into the VAT Analysis Report. Hence, check the figures and
the entries carefully before copying them into your VAT Return. Adjustment items like Fuel scale charges are
typically entered through a journal and would not be reflected in the Report. For this, you might have to adjust
the Report figures.
More:
VAT Analysis Report
Businesses trading in goods with the EEC and not services
VAT Analysis Report
Print VAT Analysis Return and Reports
VAT Analysis Report
The VAT Analysis, in the broad format of Form 100, can be displayed and then statements
printed through the Display option in Gateway of Tally.
Display > VAT Analysis
Drill down to further details in each box. Press <enter> or double click the box.
Box 1
Gives VAT due calculated from the sales vouchers. Double click on the row or press <enter> to
view Output Details.
Output Details
The sales entries are displayed in columns showing break-up of net value of sales on which VAT
is applicable or not. The VAT charged on each invoice is shown in a column. VAT calculated but
not applied is shown for EC Sales information for items on which VAT is charged in the UK. This
is directly relevant for Box 2 purposes. The amount shaded green is brought to the VAT box.
Box 2
Not relevant if there are no inputs from EEC.

The EC VAT calculated but not applied is brought in. It is also included in Box 4, which is the
total VAT Charged and EC VAT Calculated (not applied).
Box 3
It is total VAT due by summing up Box 1 and 2 figures.
Box 4
It is the VAT claimable calculated from Purchase Voucher entries. It includes the Box 2 figure.
Press <enter> to view input details.
Box 5
Net VAT due to be paid or refunded being the difference between Boxes 3 & 4.
Box 6
Total Net Value of sales and other outputs as obtained from the sales voucher entries. Drill down
to see Output Details.
Box 7
Total Net Value of purchases and other inputs as obtained from the purchase voucher entries.
Drill down to see Input Details.
Businesses Trading in Goods with the EEC and Not Services
Where Boxes 2, 8 and 9 are applicable
(If you deal with the EEC, it is advisable to group your EEC Customers separately under a sub
group of Sundry Creditors. Take care to group only VAT registered companies in these groups as
they would affect Box 8 and 9 as well as the EC Sales List. Unregistered companies or individuals
(Distance Sales) should be grouped separately and treated like UK companies.)
Group Name Under which EEC Debtors are classified. Select the group name, e.g. EEC
Customers.
Group Name Under which EEC Creditors are classified. Select the group name, e.g., EEC
Suppliers.
2. Alter the group Sales Accounts to enable Used for Calculation. Set it to Yes.
3. Now create or alter the ledger account used for recording sales of Goods (not services) to
EEC Countries. Activate percentage of calculation and set it to the standard rate of VAT,
e.g. 17.5. Set the method of calculation to any one method.
4. If you have sales for items with different VAT rates, create separate sales accounts for

them and give percentages accordingly.
5. Follow the same steps for EEC Purchases accounts.
7. Ensure that all VAT entries are made through Purchase, Sales, Debit Note and Credit Note
vouchers only. VAT entries made in other voucher types like Payment, will not be included
in the VAT Return.
Businesses providing services to the EEC in addition to Goods as well as exporting to other
countries
(If you deal with the EEC, it is advisable to group your EEC Customers separately under a sub-
group under Sundry Debtors. Likewise, group EEC Suppliers under a separate sub-group of
Sundry Creditors.)
2. Group Name Under which EEC Debtors are classified.

Select the group name, e.g. EEC Customers.
3. Group Name Under which EEC Creditors are classified.

Select the group name, e.g., EEC Suppliers.
4. Alter the group Sales Accounts to enable Used for Calculation Set it to Yes.
For Goods follow the instructions in 2 above.
For sale of services to EEC Countries, do not give any percentage, i.e. give 0.
For export sales, do not give any percentage.
5. Follow the same steps for EEC Purchases accounts.
7. Ensure that all VAT entries are made through Purchase, Sales, and Debit Note and Credit
Note vouchers only. VAT entries made in other voucher types like Payment, will not be
included in the VAT Return.
Note: The set up determines the figures that go into the VAT Analysis Report. Hence, check the figures and
the entries carefully before copying them into your VAT Return.
VAT Analysis Report
The VAT Analysis, in the broad format of Form 100, can be displayed and then statements
printed through the Display option in Gateway of Tally.
Display > VAT Analysis

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

Box 9
This reflects the purchase of goods from EEC Suppliers. The same note of caution as for Box 8
applies.
Print VAT Analysis Return and Reports
Display the Return and click on the Print Button or press <Alt>+<P>. The Print option cycles
through all reports including EC reports.
Example:
Create the following groups:
1. EC Customers under Sundry Debtors
2. EC Suppliers under Sundry Creditors
3. EC Customers for services
4. Export Customers
Note: Alter the Groups Sales Accounts and Purchase Accounts to change the setting for the question Used for
Calculation to Yes.
Create the following Ledger accounts (alter if they already exist).
Under the Group Sales Accounts
EC Sales – Goods : where Inventory Values are affected? is set to Yes and Percentage of
Calculation – 17.5 Method of Calculation – On Total Sales.
EC Sales – Services : where Inventory Values are affected? is set to Yes and Percentage of
Calculation–0.
Export Sales: where Inventory Values are affected? is set to Yes and Percentage of Calculation
– 0.
Sales – UK: where Inventory Values are affected? is set to Yes and Percentage of Calculation –
17.5 Method of Calculation – On Total Sales.
Under the Group Purchase accounts
EC Purchases - where Inventory Values are affected? is set to Yes and Percentage of
Calculation – 17.5. Method of Calculation – On Total Sales.
VAT Accounts under the group Duties and Taxes
1. Output VAT – with percentage of calculation 17.5% Method of calculation – Based on Item

Rate
2. Output VAT – 0%
3. VAT Exempt
4. Input VAT.
Classes (to automate invoice entry)
Alter the Sales Voucher Type and create the following classes:
VAT Sales – Ledger Allocation: Sales – UK 100% Additional ledger allocation: Output VAT Value
Basis 17.5%
EC Sales (Goods) – Ledger Allocation: EC Sales – Goods. Additional ledger allocation: VAT 0%
EC Sales (Services) – Ledger Allocation: EC Sales – Services. Additional ledger allocation: VAT
Exempt
Export – Ledger Allocation: Export Sales. Additional ledger allocation: VAT Exempt
Interest Calculations
Tally ies 7.2 allows you to obtain reports on interest calculated by Tally based on the instructions
you furnish. Interest figures are typically desired in the following situations:
1. On outstanding balance amounts
2. On outstanding bills/invoices/transactions (Receivable and payable)
Tally gives you an exhaustive capability to obtain interest implications on both.
Set-up required
You first need to activate the feature for the Company and then activate it for each specific
ledger account for which interest is to be calculated.
F11: Company Features contains the option to activate Interest Calculations for the Company.
Look at the Accounting Features in this screen. The questions asked of you are:
Activate Interest Calculations? Set it to Yes.
Use Advanced Parameters? Set it to No.
We will discuss Advanced Parameters separately.
More:
Simple Mode - where advanced parameters are not applicable

Advanced Mode
Interest Calculation Reports
Interest calculation on Ledger Balances (e.g. Loans)
Statement of Interest due on invoices
Group Interest Calculation
Simple Mode (Where advanced parameters are not applicable)
Steps required
1. Activate and specify interest calculations in ledger masters.
2. Enter Interest details in Vouchers (only in case of transaction by transaction/Bill-by-bill).
3. View Interest reports.
Interest calculations on outstanding balances
Activate and specify interest calculations in ledger masters
You will have to alter existing ledger accounts to permit interest calculations on them. The same
operation will apply when creating a new ledger account.
Interest calculation on outstanding balances is allowed for any ledger account. You simply
specify the interest rate and style of calculation. Nothing is required to be done for interest
during voucher entry.
You might want to activate this on a Bank Account. Let's take an example:
1. Alter a bank account e.g. Bank Ltd.
2. Tab (or press <ENTER>) down to the option Activate Interest Calculation?
3. Set it to Yes.
4. Now you have to set the Interest Parameters – the basis on which interest will be
calculated for this ledger account.
5. Only two pieces of information have to be given:-
Rate – give a rate say 15%
Style – this the basis on which the rate is applied.
There are 4 options

6. 30-day month
7. 365-day Year
8. Calendar Month
9. Calendar Year
Select the one applicable to you. For this example, select 365-day Year.
Accept the screen.
You are now ready to view the amount of interest that could be charged by the bank.
Report on Interest Calculated on outstanding balances
The Interest Calculations Report can be displayed and printed through the Display option in
Gateway of Tally.
Display > Statements of Accounts > Interest Calculations > Ledger > Bank Ltd
Note that interest is calculated with respect to each change in balance figures. (A report has
been reproduced under the Advanced Parameters section below).
Interest calculation transaction by transaction
Activate and specify interest calculations in ledger masters.
Transaction by transaction or bill-by-bill interest calculation is permitted for 'Party' accounts like
accounts falling under the groups Sundry Debtors and Sundry Creditors.
Take an example to explain this feature:-
1. Alter a customer account, e.g. CP Ltd (under the group Sundry Debtors or one of its sub-
groups)
2. Set Yes to Activate Interest Calculation.
3. The Interest Parameters now have three lines to answer.
4. Calculate Interest Transaction-by-transaction - Set it to Yes
5. Over-ride Parameters for each transaction - Set it to No.

If set to No, you are not allowed to change interest parameters in voucher/invoice entry. If
set to Yes, you can change the interest parameters during entry.
Report on Interest Calculated on outstanding transactions/bills
Display > Statements of Accounts > Interest Calculations > Ledger > CP Ltd
The report is similar to the Bill-wise Outstandings Statement. The last column gives the interest
amount on the transaction. Press Detailed to see the calculation. (A report has been reproduced
under the Advanced Parameters section ).

Advanced Mode
Set Use Advanced Parameters to Yes in F11:Company Features.
Advanced Parameters - Interest Calculations on outstanding balances
Follow the steps given in Simple Parameters.
The following extra options now become available:
1. You can now have multiple rates of interest.
2. Choice of balances – All Balances, Credit Balances only, Debit Balances only.
3. Applicability period – when is the interest applicable from and to which date.
4. Choice of methods for Rounding off of interest amounts.
A brief explanation on each is called for:
Balances
Interest can be calculated on all outstanding balances whether debit or credit. You would like to
select only credit balances in case of accounts like Bank accounts if you want to know the
interest that the bank might charge on overdrawn balances.
Applicable from
The date from which the rate is applicable to a specific date. If left blank then it is up to the last
date.
Rounding off
Whether the amount is to be rounded off normally or upward or downward. You need to give the
rounded to amount. e.g. round off upwards to the nearest 10.
The advanced parameters are particularly useful where interest rates change from time to time.
You may want to set your Bank Ltd interest parameters as follows:

Display Report – Interest on Outstanding Balances
Display > Statements of Accounts > Interest Calculations > Ledger > Bank Ltd
Advanced Parameters - Interest calculation transaction by transaction
Activate and specify interest calculations in ledger masters.
Follow the steps given in Simple Parameters.
The following extra options now become available:
1. You can now have multiple rates of interest.
2. You can override advanced parameters during voucher entry. Hence, each entry could
have different parameters.
3. Choice of balances – All Balances, Credit Balances only, Debit Balances only.
4. Applicability - This actually applies to the viewing of the statement and not the levy of
interest.
5. Calculate from - You can decide whether interest is to be levied from the Due Date or from

the Effective Date of the transaction (or the voucher date if effective date is not activated)
or even date ranges specified during voucher entry.
6. Choice of methods for Rounding off of interest amounts.
Set up the Interest Parameters for CP Ltd, a customer as follows:
Note:
* To obtain the option 'Calculate From Date Specified during Entry', you must have Override advanced
parameters set to Yes. The option is required if you want to specify interest to be calculated at different rates
for different periods.
* In case any of the other two options are selected, viz, Due Date of Invoice/Ref or Eff. Date of Transaction,
you will not have variable rates for different periods but for the same period. Hence, it could be useful as a
surcharge or penalty for past due dates for example.
* If you choose to override parameters then information would be asked during voucher/invoice entry. The
interest information is required after the bill-wise details have been entered.
Report on Interest Calculated on outstanding transactions/bills
Press Detailed to see the calculation and the period. Previous transactions are calculated from
Effective date of Transaction as a default. Date Specified During Entry has not been used.
Note: Part monies received have been accounted for and interest calculated on the balance.

A look at 'Calculate From Dates Specified during Voucher Entry
You have set up the Interest Parameters for CP Ltd to calculate on Dates specified during
Voucher Entry.
We will take one invoice and put in the interest information.
On 28-2-99, the Interest Report will display the calculation as below:
Book Entries and adjustment of interest

We have seen the reports on interest amounts calculated in different ways but these have not
been brought into books! They simply give you the interest implications. You must book them
now.
How to enter the calculated interest amounts?
You must use Debit Notes and Credit Notes with Voucher Classes
You will use Debit notes for Interest receivable and Credit Notes for Interest payable.
Interest is calculated on Simple or Compound basis and separate classes should be used for
them.
Set-up Debit/Credit Note Classes for interest entries
We will set up Debit Notes. Credit Notes will behave the same way. Alter the Voucher Type Debit
Note. Tab down to the field Class.
Simply type the name of the Class. Type Simple Interest.
Set the other options as above.
Likewise, create a Class – Compound Interest and set Yes to Amounts to be treated as
Compound Interest.
Accept the Voucher Type and return to the Gateway of Tally. Create a ledger account Interest
Received under Group Indirect Income.
Voucher Entry for booking Interest
1. Go to Voucher Entry
2. Select F7:Journal Debit Note Class – Simple Interest
3. A Cost Centre Class is also selected if required. Marketing Expenses Class has been
selected here.
There are two situations for interest adjustment:-
4. Billwise interest
Simple Interest – Interest amounts are not debited onto the same bills. Create a fresh
reference for it.
Compound Interest – Amounts are auto-debited to the selected bills. Bill-wise details will
not appear in this case.
5. Interest on balances only
Bill-wise interest entry
Debit CP Ltd
Credit Interest Received

When you debit the party account, a list of bills for which interest is applicable pops up. Select
the bills to adjust. Note that even cleared bills appear.
Select Demo/45/98 and Demo/6/98. Select <end of list> . The debit amount is filled up with the
total. Select New Ref in the bill-wise allocation. In the interest sub-screen, ensure that the rate
of interest is 0. Now Credit Interest Received. The amount is already filled in.
Your voucher will resemble the one below:
Entries for compound interest are exactly the same as for Simple Interest where all you do is
select the Voucher Class Compound Interest. Also the Bill-wise details popup sub-screen does
not come up as the amounts are added onto the bills.
Select Demo/28/98 and Demo/31/98 from the list and complete a Debit Note.
Now display Outstandings for CP Ltd
Note the contents:

The Bill references Demo/28/98 and Demo/31/98 are invoices onto which interest has been
compounded.
A new Reference no 2 has been created for Simple Interest due from CP Ltd.
Entries for Interest on Balances only

Again, the issues are Simple and Compound Interest
Compound Interest
Make the following entries in a Debit note with Compound Interest Voucher Class
Debit Bank Ltd
the amount is automatically filled up with the calculated interest
Credit Interest Received
And nothing needs to be done! The Bank Account has been increased by the amount of interest
due and the Income account of Interest Received also credited.
Simple Interest
Make the same entry as above.
However, since it has the effect of increasing the Bank Ltd account with the amount due
(compound effect), you must make a journal entry to reverse it. The reversal entry would be
something like this:
Debit Interest Receivable (a current asset account)
CreditBank Ltd
Use a normal Journal voucher for this entry.
We have to necessary go this route to take advantage of the auto filling of the interest amount
which can appear only when we use the Bank Ltd account in Debit Note in the first place.

Interest Calculation Reports
Interest Calculation reports are automatically produced if the feature is activated In Company
Features and the parameters are set for individual ledger accounts. (See Interest Calculations
for details on activating and setting up Interest Calculations).
There are two types of reports, one pertaining to interest on balances of accounts like loans, and
the other interest on overdue invoices.
Interest reports are available for individual ledger accounts as well as for Groups.
Interest calculation on Ledger Balances (e.g. Loans)
Display > Statements of Accounts > Interest Calculations > Ledger
Select Account, e.g., Bank Loan Account
Interest is re-calculated with every change in balance outstanding. The Cr in the interest amount
should not be confused to mean an Income. It only means that it is payable and is a liability.
The figure is illustrative only and you will need to account for the interest expense and liability
through a journal entry.
To ease interest recording, Tally has an interest template, a special voucher class in Debit Note
and Credit Notes.
The interest screen will appear similar to the one below:
Interest calculation on Bank Loan account

Statement of Interest Due on Invoices
You can calculate interest on each invoice for the period it is outstanding wholly or partly.
Transaction by transaction or bill-by-bill interest calculation is permitted for 'Party' accounts like
accounts falling under the groups Sundry Debtors and Sundry Creditors. Bill-wise details should
be active for the company and the party.
The report is similar to the Bill-wise Outstandings Statement. The last column gives the interest
amount on the transaction. Press Detailed to see the calculation.
Gateway of Tally > Display > Statements of Accounts > Interest Calculations > Ledger
Select Account, e.g., Peutronics Bangalore
Interest is re-calculated with every change in balance outstanding. The Cr in the interest amount
should not be confused to mean an Income. It only means that it is payable and is a liability.
The figure is illustrative only and you will need to account for the interest expense and liability
through a journal entry.
and Credit Notes.
Group Interest Calculation
Gateway of Tally > Display > Interest Calculations > Group

Select a Group,e.g., Loans (Liability)
The Group Interest Calculation statement is a list of all accounts and sub-groups belonging to
the selected group that displays the current balance in each account or sub-group and the total
interest.
The Cr in the interest amount should not be confused to mean an Income. It only means that it
is payable and is a liability. The figure is illustrative only and you will need to account for the
interest expense and liability through a journal entry.
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. Assuming that
you had a ledger account 'Stock ' under the group Stock-in-hand the information would be as
follows

You are allowed to alter the opening balance as well as specify/alter closing balances on different
dates. You would typically specify Balance Sheet dates so that the Balance Sheet reflects the
amount of that date. Hence, your Balance Sheet of 31th October 97 (or of any date up to 30
May 2001) would report Closing Stock worth 127983. The Balance Sheet as on 31st March 2002
(or any day between 1st July 2001 to 31st March 2002) would report the stock value of 15000.
Effective Date for Reconciliation (Bank Accounts only)
To be given for accounts falling under the Bank Accounts Group (or Bank OCC a/c). Default is
the books beginning date.
This is the date from which you can reconcile your bank account in your books with the bank
statements. Normally, it would the beginning date itself. However, you could have imported data
from a previous version of Tally or from any other system (where the reconciliation process was
not available or was different). In that case, you may not need to reconcile the bank account
with your bank statements from the very beginning. Give the date from which you want the
reconciliation facility to be activated. Then, previous entries will not appear for reconciliation.
Mailing & Related Details

Applicable basically for party accounts like Sundry Debtors, Creditors and Branch Divisions. This
is also available for loan accounts. You are to give the party's particulars here. These are used in
mailing outputs like statement of accounts.
Position Index in Reports
This is viewed when you press [F10]:Chg Sort when in alteration mode.
If this done once, it remains so till you deactivate it by pressing [F10]:Skip Sort.)
The topic has been discussed under the chapter "Groups" under Advanced Usage. Please refer
that Chapter for the concept. The default setting is 1000 for all ledgers. Please note that the
index is relative to other ledgers and groups within a parent group. Hence, the position of a
ledger may be changed within the Group to which it belongs, by changing the number 1000.
Any change would not position the ledger outside the parent group. If a group has children
comprising of many groups (sub-groups) and ledgers, the position index of the children would
determine their position within the parent group. An example is given below:
Prior to any change in their indices, the ledgers and the sole group 'Communication Expenses'
under the group 'Indirect Expenses' are displayed as below. (Ledgers are directly under the
group Indirect Expenses and not under Communication Expenses sub-group):
Gateway of Tally > Group Summary > Indirect Expenses
Indirect Expenses
The position index of Communication Expenses (it is a group as indicated by its bold font) is 290
and all ledgers 1000. You would notice that because of this, Communication Expenses is at the
top, and the others sorted alphabetically as they have the same index of 1000.

We now change the index of Motor Car Expenses to 280 and of Staff Welfare to 900. We now see
Motor Car Expenses at the top, followed by Communication Expenses and Staff Welfare. Then
the rest with 1000 would be in alphabetic order.
1. You can change the index from the display screen itself by positioning the cursor on the
particular account and pressing <control>+<enter> to bring up its master to alter.
Indirect Expenses
Expert Usage
Multiple ledgers
Create ledgers in multiple mode
1. Default values are inserted for Cost Centres and Inventory values are affected options. The
defaults are : Cost Centres – for revenue accounts – Yes, for non-revenue accounts – No.
Inventory Values are affected – Yes for Sales and Purchase Accounts, No for others.
2. However, you are encouraged to first create a ledger under each group in single mode and
then the rest of the ledgers in multiple mode. Tally will set the settings of that ledger as
default for other ledgers created in multiple mode. Gateway of Tally > Accounts Info >
Ledgers > Multiple Creation

Under Group
Give the name of the group under which you want to create the ledgers. Here, we have selected
Bank Accounts from the List of Groups.
Below this field, the other fields are arranged in a table. The cursor rests at the field Name of
Ledger.
Name of Ledger
Type in the ledger name.
Under
This field defaults to the parent group selected for 'Under Group' e.g. Bank Accounts. All entries
in this column would be the same. Your cursor skips this column. However, in case the 'Under
Group' field is 'All Items', this column is not skipped and you may specify the group. You are
then allowed to even create a new group.

Opening Balance
For the opening balance of the ledger account. This is the balance remaining when you first put
your books on Tally, i.e., the date of beginning of books. If you have opted to maintain balances
bill-by-bill, you must give the bill details. (for more on this refer to the explanation given above
under single mode ledger creation)
Dr
Specify whether the Opening Balance is Debit or Credit. Tally follows the normal accounting
principals of accounting. (For details, refer to the explanation under single mode ledger
creation).
More:
Alter Ledgers in multiple mode
Alter Ledgers in Multiple Mode
Gateway of Tally > Accounts Info > Ledgers > Multiple Alter > Select Group
The screen is exactly similar to the multi-mode creation screen. You are allowed to alter any
field.
Delete ledgers in multiple mode
You are not allowed to delete a ledger from this mode. Select single alter mode to delete.
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:
F11:Features:To change company features. A detailed discussion on features has been done in
F12:Configure:To change configuration of master information.
Note: Configuration changes affect all companies whereas Features changes affect on the current company
Credit Limits
Credit limits can be specified for any party account, viz, any account falling under the groups
Sundry Debtors and Sundry Creditors. Accounts under sundry creditors are permitted because
there can be a two-way trade with a party even if it is classified as a creditor or debtor.
Classification is done on the basis of the major role.
More:
How to set Credit Limits
Effect of setting credit limits
Exceeding Credit Limits
How to Set Credit Limits?

Credit amount limits and credit periods
If you do not set credit limits, you can still make invoices and give credit periods at the time of
invoicing. However, that may not be desirable, especially in a decentralised environment.
Therefore, to minimise errors during invoicing, you might prefer to set these important terms
beforehand.
Gateway of Tally > Accounts Info > Ledgers > Credit Limits
Select the group of ledgers for which to set credit terms
You set credit limits for both amounts and periods here.
You can set the amount limits in foreign currency if you wish for customers who are usually
invoiced in foreign currency.
Credit Periods are in days only and are calculated from the effective date. If a separate effective
date field appears in your voucher, the credit period is from the effective date, which might differ
from the voucher date. If the voucher date is the only date field in the voucher, then it is also
the effective date and the credit period is from this date.
Effect of Setting Credit Limits
The effect of setting credit limits is that during voucher entry (also invoice entry), the credit
terms are filled up by the pre-set figures. If the voucher configuration (through F12) is set to
disallow modifications of all fields during voucher entry, the cursor skips these fields and
modification is not permitted. However, the configuration is set to permit modifications to all
fields, alteration of the pre-filled fields is allowed.
The current balance and the credit limit of the party are displayed in the order and invoice entry
forms, which is helpful to assess the amount acceptable.
Exceeding Credit Limits

During invoice or order entry, if the credit amount limit is exceeded, the voucher entry does not
proceed further. You have two choices at this stage:
1. Enter a lower value so that the entry can be completed.
2. Abandon the current entry and obtain authorization to increase the credit amount limit in
the Credit Limits set-up screen. This is controlled activity and will depend on the security
permissions for altering credit limits.
Introduction
Cost Centres
Tally's concept of Cost Centres allows an additional dimension to a transaction. While a ledger
account would indicate the nature of a transaction, it would not readily disclose, except in the
narration, which part of an organization was involved.
By providing cost centres, a transaction can be allocated to it which would then enable extraction
of all transactions for a cost centre. Hence, a cost centre can be said to be any unit of an
organisation to which transactions (generally revenue) can be allocated. When only costs or
expenses are allocated to these units, they are referred to as cost centres.
Tally gives you the cost centre break-up of each transaction as well as details of transactions for
each cost centre. When you also allocate income to the units, they become Profit Centres. You
can now obtain a Profit and Loss account of each such Profit Centre. For your purposes, the
terms Cost Centre and Profit Centre are interchangeable.
Examples of cost centres:
1. Departments of an organisation, e.g., Finance, Manufacturing, Marketing, etc.
2. Products of a company, e.g., Tally dss 4.5, Tally eis 5.4,Tally ees 6.3, Tally ies 7.2 etc.
3. Even individuals like, Salesman A, Salesman B, etc.
Use of Cost Centres

Quite like the Groups/Ledger classification of accounts, you can classify your cost centres too.
Hence, you may have Primary Cost Centres and several layers of cost centres under each
Primary Cost Centre. e.g.
Primary cost centres = Finance, Manufacturing, Marketing
Under Marketing, you may wish to create the company's sales executives as cost centres. This
would be so, if you need to keep track of a sales executive's performance - cost and revenue
generated. Hence, you would have the following cost centre structure (shown only for Marketing

Department):
Primary cost centre - Marketing
Under marketing:
Salesman A
Salesman B
Salesman C
You may allocate expenditure incurred on sales by the salesmen, as well as the sales generated
by them, directly to their cost centres. The allocation is done online at the time of transaction
entry itself. This prevents period end allocation problems when you find a large number of
transactions not allocated.
Of course, you would by now have assumed, Tally allows modification of wrong allocations at
any time by alteration of entries. (Facility available to authorised users only). By allocating your
expense and sales transactions to the salesmen you have set up a valuable information system
to know the efficiency and effectiveness of the salesmen.
Your actual screens would appear thus:
More:
Cost Categories (For advanced usage only)
How to manage and operate Cost Centres
Alter a Cost Centre
Cost Categories (For advanced usage only)
Cost Categories have been introduced for organisations requiring allocation of resources to
parallel sets of cost centres. Such organisations would usually be project oriented.
1. Most organisations would not need cost categories at all. Proper use of Cost Centres itself
would give you the same benefits. Cost categories would increase your data entry work as
well as complexity. Hence, before opting for it, please evaluate carefully whether you
actually need cost categories. Always attempt to first use cost centres alone.

Use of Cost Categories

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

Cost Centres: Marketing Salesman A Airports cont.
Manufacturing Salesman B Roads const.
Finance Salesman C Buildings
You may specify a cost category to allow allocation of only revenue items or items of both
revenue and capital nature. In this example, we would allow both for Departments and Projects
categories and only revenue for Executives.
Now, Salesman A incurs conveyance expenses of 1000/- . If he has incurred it for marketing,
allocate this amount to the cost centres Marketing and his own cost centre Salesman A. (You
would do it while entering a payment voucher debiting Conveyance and credit Cash. If the
salesman now incurs expense for the project Buildings, you would allocate to the cost centres
Salesman A and Buildings.
You may allocate an expense to one or more cost centres and it is not essential to always
allocate to all cost centres. An expense can remain unallocated to other cost centres.
If you did not have cost categories, you would have been able to allocate the expense to either
the Project Buildings cost centre or Salesman A and not to both. In such a case, you would not
obtain the third dimension.
Hence, you are able to obtain details of conveyance incurred by Salesman A on Marketing as well
as on Buildings project when you have cost categories. You cannot, however, extract a single
report giving details of marketing expenses incurred by Salesman A on Project Buildings. These
are different cost categories and cannot be merged. If such reports are required, you must
create ledgers like Conveyance - marketing which will help generate the desired report.
By allocating to parallel cost centres under different categories, you are simply assigning the
amount to them; it does not increase the amount. In the above example, the conveyance of
1000/- remains an expense of 1000/- only. Tally performs an automatic reconciliation on real-
time basis and you do not need to worry about reconciling ledgers and cost centres.
Note: You do not allocate transactions to cost categories you allocate them to cost centres only. The concept
is not unlike group/ledger account classification
How to Manage and Operate Cost Centres?

In the introduction to this chapter, the concept and use of cost centres were explained. You
should go through them now if you have not already done it.
Create a Cost Centre
Gateway of Tally > Accounts Info. > Cost Centre > Single Create
Category
This field appears only when you have opted for 'more than ONE Cost Category'. Otherwise,
Tally automatically creates a 'Primary Cost Category' to which all cost centres are assigned. This
default Primary Cost Category is transparent to you and you need not worry about it till you
want more than one cost category. (Cost categories have been explained above and under
Advanced usage).
You will normally not need more than one category and should not use it till you are absolutely
sure that the same information is not available with cost centres alone. We shall create a
primary cost centre Bangalore.
Name
The name of the Cost Centre. We create the Cost Centre 'Bangalore' here.
alias
We can call the Cost Centre Bangalore with another name, say Head Office, or even a code
number.
Under
This field is for the parent cost centre of the cost centre Bangalore under creation. You had
already created a Primary Cost Centre Departments with cost centre Marketing, Salesman A,
Salesman B and Salesman C. You may put the cost centre Bangalore under any one of these.
However, since it would not be suitable you may have it as a primary cost centre. Assign
Bangalore to Primary and accept the screen. You may go on to create a new Cost Centre
'Finance' under 'Departments' as an exercise.
Note: Unlike groups, you may allocate transactions to primary cost centres too. However, you should do so
when you do not have sub-cost centres under the primary. Allocation to a higher level cost centre is often
unnecessary and your information is more meaningful if you allocate to the lowest levels (similar to ledgers).

Alter a Cost Centre
Gateway of Tally > Accounts Info. > Cost Centres > Single Alter > List of Cost Centres
The screen is exactly the same as the creation screen and is, therefore, not reproduced here.
Name and alias
Change them if you need to do so.
Under
You may change the parent to any other cost centre.
Explanation on Buttons for cost centres in single mode
Display mode.
Groups, Ledgers, Cost Centres, Voucher Types
Note: Configuration changes affect all companies whereas Features changes affect on the current company.
Expert Usage
Create Multiple Cost Centres
Gateway of Tally > Accounts Info. > Cost Centres > Multiple Create

This is a quick way to create a number of cost centres at a time.
Under Cost Centre
You would select a particular cost centre as the parent cost centre if you wish to create a
number of cost centres under it. In the above screen, we have selected Finance as we would like
to create the cost centres Taxation, Management Accounts and Financial Management under it.
If you do not want to be restricted to one parent cost centre while creating cost centres, choose
'All Items'.
All Items
In case the parent cost centre is 'All Items', you will have to fill up all the columns. The table
below 'Under Cost Centre' has the columns Name of Cost Centre and Under (Parent cost centre).
If your parent cost centre (the field 'Under Cost Centre') is not 'All Items', your cursor would
only go the column Name of Cost Centre. This is obviously because the information is already
known.
Name of Cost Centre
Give the name of the new cost centre. In the above screen, rapidly create cost centres Taxation,
Management Accounts and Financial Management. The alias facility is not available in this mode.
Select single alter to give aliases to cost centres being created in multiple mode. To accept the
screen and end entry select End of List from the List of Cost Centres.
You are not permitted to accept a blank table.
Under
Give the parent cost centre here. You may not create a parent here - the ubiquitous <alt>+<C>
is not available for this field.
More:
Alter Cost Centres in multiple mode
Alter Cost Centres in Multiple Mode
Gateway of Tally > Accounts Info. > Cost Centres > Multiple Cost Centres Alter >
Select from List of Cost Centres

Under Cost Centre
Since you selected Finance from the pop-up List of Cost Centres, it fills up this field and the
cursor goes to the field Name of Cost Centre. In case you had selected 'All Items' from the pop-
up List of Cost Centres, the cursor would go to the field Name of Cost Centre in the table. You
are allowed to use <backspace> to move back to the field 'Under Cost Centre' or use the button
F4 to Change Parent.
Name of Cost Centre
You may alter the name of the cost centre
Under
Select from the available list of Cost Centres under the specified category. Observe that other
cost centres are available for selection as a parent.
Delete Cost Centre in multiple mode
You cannot delete a cost centre here. IF you need to delete, go through the Single Alter mode.
screen (<ENTER>or<Ctrl>+<A>). The old company's information remains. Not available in
Display mode.
F3: New Comp: To work on the same report of another company. Available only in display
mode.
F4: Parent: To move the cursor to the field 'Under Cost Centre'
F4: New Parent: To bring up the list of cost centres to select a new parent cost centre.
F6: Skip names: For faster data entry when you need to alter only the Category and the Parent
Cost Centre but not the names. When you skip names, you might change the category or the
parent cost centre to one which belongs to another category. Since this violates categorization
rules, Tally complains after you accept the screen. (The error message is reproduced after the
explanation on buttons.
F7: Skip Parent: For faster data entry when you do not need to alter the parent cost centres
but only the name of the cost centre. The same error as is possible with Skip names should be
avoided.
Groups, Ledgers, Cost Centres:
F11: Features:To change company features. A detailed discussion on features has been done in

Advanced Usage
How to manage and operate Cost Categories
To use Cost Categories, you must activate the option 'More than One Cost Category' in [F11]
Company Accounting Features.
The default is No for 'more than ONE Cost Category'. In this state, Tally creates a single Cost
Category called 'Primary Cost Category'. All cost centres created, prior to enabling this feature,
go into this category. Now after activating it, you would need to create the new cost categories,
and alter the existing cost centres to bring them under respective cost categories.
Create a Cost Category
Gateway of Tally > Accounts Info. > Cost Categories > Single Create
Name
The name of the cost category, e.g., Products. Earlier, we had created Departments, Branches
and Executives.
Note: There is no sub-classification of cost categories and hence you do not find an 'Under' option. Though
there is a primary cost category, it is not a parent of other categories.
Alias
You may call the category by another name or even a code number. The following information is
additionally available when you have opted for Advanced Information in [F12] Accounts
Configuration.

Allocate Revenue Items (Yes/No)
Enable this option to allocate all sales, purchase, expenses and income related transactions to
cost centres that you will create under cost categories. Normally, you would enable this option.
However, should you need to allocate only capital/non-revenue items only to cost centres in this
cost category, disable it by selecting 'No'.
Allocate Non-Revenue Items (Yes/No)
You would, normally, disable this option as most cost centres need only revenue allocation.
However, should you wish to allocate items of non-revenue (capital) or Balance Sheet items, you
may select 'Yes'. Organisations are increasingly requiring allocation of capital items to cost
centres. They wish to monitor the capital expenditure incurred on cost centres and measure
them against revenue earned. Hence, recognising this trend, Tally has provided this facility.
Note: Remember that you must enable either revenue or non-revenue item or both. You may not disable both.
Tally sets a default of Yes for revenue items and No for Non-revenue.
Alter a cost category
Gateway of Tally > Accounts Info. > Cost Categories > Single Alter >List of Categories
Simply alter any detail in the cost category. The display option is exactly like alter but without
the ability to modify anything in the screen.
Delete a cost category
Gateway of Tally > Accounts Info. > Cost Categories > Single Alter >List of Categories
You may delete a cost category that does not have any cost centre under it. Use <alt>+<D> to
delete. Tally does not allow deletion of a cost category which has cost centres.
Buttons in single cost category screens
F3:Company:
To work with a different company. In the creation mode, you can create cost categories in the
other company. In alter mode, you can copy the information by accepting the screen (<enter>
or <Ctrl>+<A>). The old company's information remains. Not available in Display mode.
F3: New Comp:
To work on the same report of another company. Available only in display mode.
Groups, Ledgers, Cost Categories, Cost Centres,Voucher Types:
F11:Features:
To change company features. A detailed discussion on features has been done in earlier section
under Gateway of Tally.
F12:Configure:

To change configuration of master information.
Expert Usage for Cost Categories
Create Multiple Cost Categories
Gateway of Tally > Accounts Info. > Cost Categories > Multiple Cost Category Create
This is a quick way to create a number of cost categories in one sitting. Give the name of the
cost category and whether you need to allocate revenue and/or non-revenue items to cost
centres under it. In the above screen, we have entered two cost categories, Processes and
Machines. We wish to allocate both revenue and non-revenue items to Processes and only
revenue to Machines. Once the list is completed, press <enter> on the first blank Name of
Category field to accept the screen and exit.
Note: There is no 'Under' field. You cannot sub-classify cost categories. Cost categories have cost centres as
their sub-classification.
Alter Cost Categories in multiple mode
Gateway of Tally > Accounts Info. > Cost Categories > Multiple Cost Category Alter
You may alter name or allocation particulars without any restriction.
Delete Cost Category in multiple mode
You cannot delete a cost category here. IF you need to delete, go through the Single Alter mode.

Display mode.
mode.
F6: Skip names: For faster data entry when you need to alter only the Allocation details but not
the names of the cost categories.
F8:Skip Details: For faster data entry when you do not need to alter the Allocation (Revenue
and Non- revenue) details. You need to give only the names and the default allocations of Yes
for Revenue and No for Non-revenue would be automatically inserted when you are creating cost
categories. If you are in alter mode, whatever allocation you had opted for, when creating the
categories, would be retained.
Groups, Ledgers, Cost Categories, Cost Centres:
F12:Configure: To change configuration of master information.
More:
How to manage and operate Cost Centres under Cost Categories
How to Manage and Operate Cost Centres under Cost Categories?
In the introduction to this chapter, the concept and use of cost centres were explained. You
should go through them now if you have not already done it.
Create a Cost Centre
Gateway of Tally > Accounts Info. > Cost Centre > Single Create

Category
This field appears only when you have opted for 'more than ONE Cost Category'. Otherwise,
Tally automatically creates a 'Primary Cost Category' to which all cost centres are assigned. This
default Primary Cost Category is transparent to you and you need not worry about it till you
want more than one cost category. (Cost categories have been explained above). We had
already created the cost category Branches. We shall now create Cost Centres under this
category. Select Category from the List of Categories or create one using <alt>+<C>. If your
cursor goes straight to the next field Name, press <backspace> if you wish to go back to
Category.
Name
The name of the Cost Centre. We create the Cost Centre 'Bangalore' here.
alias
We can call the Cost Centre Bangalore with another name, say Head Office, or even a code
number.
Under
This field is for the parent cost centre of the cost centre Bangalore under creation. The parent
must belong to the same Cost Category -Branches. Since you do not have any other cost centre
under Branches cost category, you will find only Primary as the available parent in the popup list
of Cost Centres. Assign Bangalore to Primary and accept the screen.
Note: Unlike groups, you may allocate transactions to primary cost centres too. However, you should do so
when you do not have sub-cost centres under the primary. Allocation to a higher level cost centre is often
unnecessary and your information is more meaningful if you allocate to the lowest levels (similar to ledgers).
Alter a Cost Centre
Gateway of Tally > Accounts Info. > Cost Centres > Single Alter > List of Cost Centres
The screen is exactly the same as the creation screen and is, therefore, not reproduced here.
Category
Though your cursor does not come to it right away, you are allowed to change the Cost Category
of the cost centre. Press <backspace> to go to Category.
Name and alias
Change them if you need to do so.

Under
You may change the parent to any other cost centre under the Category.
Buttons for cost centre single mode
F3: Company: To work with a different company. In the creation mode, you can create cost
Display mode.
Groups, Ledgers, Cost Categories, Cost Centres, Voucher Types:
F11: Features: To change company features. A detailed discussion on features has been done
in earlier under Gateway of Tally.
F12: Configure: To change configuration of master information.
Configuration changes affect all companies where as Features changes affect on the current
company.
Expert Usage for Cost Centres under Cost Categories
Create Multiple Cost Centres under Cost Categories
Gateway of Tally > Accounts Info. > Cost Centres > Multiple Create
This is a quick way to create a number of cost centres at a time.
Under Cost Centre
You would select a particular cost centre as the parent cost centre if you wish to create a
number of cost centres under it. In the above screen, we have selected Finance as we would like
to create the cost centres Taxation, Management Accounts and Financial Management under it.
If you do not want to be restricted to one parent cost centre while creating cost centres, choose
'All Items'.
The table below Under Cost Centre has the columns Category, Name of Cost Centre and Under
(Parent cost centre). If your parent cost centre (the field 'Under Cost Centre') is not 'All Items',

your cursor would only go the column Name of Cost Centre. This is obviously because the
information of the other fields is already known. In the above screen, rapidly create cost centres
Taxation, Management Accounts and Financial Accounts. Select End of List to accept and quit.
All Items
In case the parent cost centre is 'All Items', you will have to fill up all the columns. The cursor
will wait at the first Category field.
Category
For the category under which the cost centre will be created. Select from List of Categories or
create a new category using <Alt>+<C>.
To accept the screen and end entry select End of List from the List of Categories. You are not
permitted to accept a blank table.
Name of Cost Centre
Give the name of the new cost centre. The alias facility is not available in this mode. Select
single alter to give aliases to cost centres being created in multiple mode.
Under
Give the parent cost centre here. The pop-up List of Cost Centres will allow you to select only
those cost centres that belong to the category. For example, while creating the cost centre
Management Accounts, the List of Cost Centres for the field Under would contain only the
Departments Finance, Manufacturing and Marketing. Other cost centres will be excluded. You
may not create a parent here - the ubiquitous <alt>+<C> is not available for this field.
More:
Alter CostCentres (under cost categories)in multiple mode
Explanation on Buttons in multiple mode
Alter Cost Centres (under cost categories) in Multiple Mode
Gateway of Tally > Accounts Info. > Cost Centres > Multiple Cost Centres Alter >
Select from List of Cost Centres
All fields may be altered for a given Cost Centre.

Under Cost Centre
Since you selected Finance from the pop up List of Cost Centres, it fills up this field and the
cursor goes to the field Name of Cost Centre. The Category is automatically filled up. In case you
had selected 'All Items' from the pop up List of Cost Centres, the cursor would go to the field
Category. You are allowed to use <backspace> to move back to the field 'Under Cost Centre' or
use the button F4 to Change Parent.
Category
You may change the category or create a new one.
Name of Cost Centre
You may alter the name of the cost centre
Under
Select from the available list of Cost Centres under the specified category. Observe that even
Taxation is available as a parent.
Delete Cost Centre (under cost categories) in multiple mode
You cannot delete a cost centre here. IF you need to delete, go through the Single Alter mode.
Explanation on Buttons in Multiple Mode
Display mode.
mode.
F4: Parent:To move the cursor to the field 'Under Cost Centre'
F4: New Parent:To bring up the list of cost centres to select a new parent cost centre.
F6: Skip names:For faster data entry when you need to alter only the Category and the Parent
Cost Centre but not the names. When you skip names, you might change the category or the
parent cost centre to one which belongs to another category. Since this violates categorization
rules, Tally complains after you accept the screen. (The error message is reproduced after the
explanation on buttons.
F8:Skip Parent: For faster data entry when you do not need to alter the parent cost centres but
only the name of the cost centre. The same error as is possible with Skip names should be

avoided.
Groups, Ledgers, Cost Categories, Cost Centres: To enable you to switch to these areas
without having to quit from the current screen.
F11:Features:To change company features. A detailed discussion on features has been done in
Note: Configuration changes affect all companies where as Features changes affect on the current company.
Error in categorisation of cost centres
PARENT BELONGS TO ANOTHER CATEGORY!
This error occurs when you have attempted to assign a cost centre to a parent cost centre
belonging to a different category. In most places, Tally prevents you from making this error by
not even displaying a cost centre belonging to a different category. However, this prevention is
not possible when you are altering a cost centre in multiple mode - selecting 'All Items' in Under
Cost Centre (You may chosen to skip either or both). You would first have changed the
Category, but not changed the name and the parent. Since the parent could have belonged to a
different category, Tally complains. However, Tally is able to ascertain this error only when you
accept the screen.
Budgets
Tally allows you to create multiple budgets. There could be a budget for specific purposes, e.g.,
for the bank, for the head office, optimistic budget, realistic budget, pessimistic budget, etc.
Departmental Budgets can also be created, e.g., Marketing Budget, Finance Budget, etc.
As usual, you first create budgets. You can of course alter them.
Budget figures are used to compare against actuals and to display variances. This is done by
bringing up a new column when displaying a statement and selecting the appropriate budget.
We shall now go through the creation and alteration of budgets.
Gateway of Tally > Accounts Info > Budgets

More:
How to manage and operate Budgets
Alter a Budget
How to Manage and Operate Budgets?
Gateway of Tally > Accounts Info > Budgets Create
Name
Give the budget a name, in this case, Corporate Budget. As you may have other budgets as well,
the name distinguishes them.
Under
In the true Tally tradition, you can have a hierarchical budget set-up. At the top level is the
Primary Budget. You can set up more than one Primary Budget. Under each Primary Budget,
sub-budgets can be created.
Period of Budget
Specify the period of the budget. The period could be a month, a year or any period starting
from any date to any date.

Set/Alter Budgets of
You may want to set the budget for groups of ledger accounts or for ledger accounts individually
or for cost centres or all of them. We shall take up budget for group only. Follow the same
process for setting budgets for individual ledgers and cost centres.
More:
Budget for Groups
Budget for Ledger accounts
Budgets for Cost Centres
Budget for Groups
Yes, if you want to set budgets for a group or groups of ledgers.
If yes, fill in the fields in the Group Budget sub-screen:
Account Name
Give the names of the groups for which the budget is being set.
Cost Centre
For each group name, a cost centre may be earmarked, i.e., Indirect Expenses for a particular
cost centre or a group of cost centres only. If you select 'Not Applicable', then the budget is not
for any particular cost centre but the company as whole.
Type of Budget
Budgets could be of two types:
On Nett Transactions – where transaction amounts are to be monitored and not the balances.
Nett is net of debits and credits for the specified period. Hence, nett transactions for Indirect
Expenses would mean the debit amount for the specified period after reducing the credits for the
same period. Opening and closing balances not withstanding.
On Closing Balance – where you wish to monitor the balance of the accounts and are not too
keen on the transactions., e.g., balances of Bank Accounts, balances of debtors.

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

travel will always have debit entries only unless there is a reversal due to error or charge to a
customer.
Caution
When using Nett Transactions, the Budget Closing Balances actually get adjusted even if you
have not selected this type. The figures in the Profit & Loss Account will reflect the Closing
Balance figures.
Note: For comparing closing balance figures in final statements, especially the Balance Sheet items, viz.,
assets and liabilities, choose Closing Balances.
For comparing transactions against budgets, especially revenue income and expenses, choose
On Nett Transactions.
Apportionment of budget specified for periods longer than a month
Ledger Budgets are apportioned for each month on the basis of number of days.
Group Budgets do not get apportioned. Hence Budget for Current Assets will not
automatically flow to sub-groups.
Closing Balances Budget: Each month will have the same budget value except that the
actual Opening Balance is also taken into account.
Nett transactions Budgets specified for a period get equally apportioned over the period.
Enter the budget amount for the specific ledger.
You can Budget as many ledger accounts as needed and finally accept the screen.
Ledger Budget
Budget figures are available for comparison with actuals in most statements through the use of
Columns and Variance options.
Budgets for Cost Centres
The main purpose of Budgeting is to control the expenditure. Tally allows you to create multiple
budgets. There could be budget for specific purposes, e.g. for the Bank, for the Head Office,
Marketing Budget, Finance Budget etc.

Name for the Budget
Give the name of Budget
E.g. Corporate Budget under Primary Budget.
Specify the period of the Budget.
The period could be a Month, a Year or any period starting from any date to any date.
Under Set/Alter Budgets of, you may set the budget for different entities, viz., groups of
ledger accounts or for ledger accounts individually or for cost centres or all of them.
We shall take up Budget for Cost Centres here.
Hence, set Yes under Cost Centres and let others remain No.
Select the Cost Centres for which you wish to set the Budget.
Cost Centre Budget
Budget figures may be given for Expenses, Income and Closing Balance for each selected cost
centre. These figures will be available for comparison with Actuals in Cost Centre Display
reports.
Alter a Budget
Accts Info. > Budgets > Select the budget to alter
If you select to alter the Corporate Budget of Groups of ledger accounts, say Yes to 'Set / Alter
Budgets of Groups'. The default is No.

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

How to Manage and Operate Voucher Types?
Tally acknowledges the special requirements of some users for more voucher types. These arise
in cases like when you need the same voucher but in different names or separate series of
numbers.
Examples include Cash Payment Vouchers and Bank Payment vouchers where the relevant
predefined voucher is Payment Voucher. You may have two or more sets of Sales Vouchers for
different kinds of sales transactions e.g. Credit Sales, Cash Sales, etc.
You would need to alter a voucher type to change default settings for different information
appearing in vouchers. Using [F12] can further configure a voucher.
Alter a predefined voucher type
Even if you do not need extra voucher types, you would normally alter the predefined voucher
types to customise them according to your needs, e.g., to control their numbers.
Display or alter each voucher type (by pressing <enter> or double clicking) after Gateway of
Tally > Display > List of Accounts > <Ctrl>+<V> [Voucher Types]
We shall create a new voucher type to explain the different features. It would also be applicable
to alteration of voucher types including predefined types.
More:
Create a Voucher Type

Create a Voucher Type
Create a new voucher type
Gateway of Tally > Accounts Info. > Voucher Type > Create
Note: a new voucher type must assume the functions of a predefined voucher type
Name
Give the name of the new voucher type, e.g., Bank Payment Voucher.
Type of Voucher
The type of voucher should be any one of the predefined voucher types (already listed in
introduction). The new voucher type would inherit the properties of this predefined voucher type.
It would function exactly like the predefined voucher.
Abbreviation
An abbreviation is required particularly for unformatted reports, which do not use compressing
techniques. (Tally allows printing of both formatted and unformatted reports). In this example,
give 'BPymt' as the abbreviation. Though there is no restriction on the length of the
abbreviation, it should preferably be five characters or less.
Method of Voucher Numbering
This is, perhaps, one reason for your opting for a new voucher type. There are three methods

available:
Automatic - instructs Tally to number the vouchers of this type incrementing automatically.
Manual - if you wish to number the vouchers yourself.
None - if you do not want any voucher numbers for vouchers of this type.
Advanced Usage
A further discussion on these options is necessary:
None
This will disable numbering of such vouchers. If you select this method, no further information is
required.
Manual
This method will allow you to number vouchers of this type yourself. It does not check for
sequence of the numbers and permits you to specify anything you wish in the voucher number
field. However, you may choose to prevent entry of duplicate numbers. If you do, enable the
next field 'Prevent Duplicates'.
1. Prevention of Duplicates is possible if you enable the option at the time of creation. You
may enable it later (by alteration) only if there are no transactions of this voucher type.
2. If you face difficulty because transactions now exist, simply create another voucher type
for preventing duplicates of subsequent voucher numbers.
No further information is required for manual numbering method.
Automatic
This method is both flexible and exhaustive. Use it carefully to give you your desired numbering
system. Select this option to let Tally number the vouchers automatically for you. You must give
the following additional information:
Starting number
Give the number for the first voucher. Usually it is 1. You can set it to any number you want.
Tally will auto-increment from this number for subsequent vouchers. However, the numbering of
vouchers also depends on other variables supplied by you, which follow hereafter.
Width of Numerical Part
You may leave it blank to let Tally automatically adjust the width according to the number.
However, for more aesthetically aligned look in reports, you may keep a fixed width, e.g., 3.
Advanced Usage

Prefill with ZERO?
When the width is specified, the digits before the number is blank if 'No' and zeroes if 'Yes'.
E.g. 001 1
010 10
PEU/001/96-97
PEU/1/96-97
PEU/ 1/96-97
Use common narration?
Select Yes to give a common narration for the entire voucher. Tally vouchers can have multiple
entries. Hence, you may wish to give a common narration for all the entries of the voucher or a
separate narration for each entry or both. Select Yes even when you want both. Select No if you
do not want a common narration.
Example of common narration in a voucher:
Select Yes if you want to give a separate narration for each entry of a voucher. This would be
applicable for a multiple entry voucher where you want separate details for each entry. Select
No if you do not want separate narration for each entry.
Example of separate narration for each entry: -
Print after saving voucher?
If you want to print every voucher after entering it, select Yes, else select No. This is suitable
for an online environment where you use the Tally printed voucher as the formal voucher.
Remember, however, that the

transaction is already recorded and posted and should you wish to make corrections to the
printed voucher, you must alter the Tally voucher online and print it out again.
Use EFFECTIVE dates for vouchers?
Select Yes if you want to enter effective dates for vouchers. You would opt for this if you have
instances where a transaction under consideration for overdue/ageing analysis is recorded
currently but will take effect from another date. If effective date is entered, the overdue/ageing
will be considered from the effective date and not from voucher date.
Restart Numbering
Voucher Numbering may be restarted with the starting number (as specified) at intervals
selected by you - Monthly, Yearly or Never. You must give the date whence numbering should
restart under the field Applicable from. The date must be the first day of the month. You may
specify more than one Restart dates. For example, should you wish to renumber your vouchers
from 01 June 96 on yearly basis, you must specify it in the next field. This would retain the
numbering system in the prior period. If, however, you want to change the numbers from the
beginning from monthly to yearly basis, simply alter the first field itself.
Prefix Details
If you want the voucher numbers to be prefixed with some fixed information, give the
information here. Examples of prefix details are:
1. month of the voucher as given above- 'April/'
2. company info like 'TSPL/'
3. even fixed number series like '1000'
Note: The numeric portion begins immediately after the prefix information. Therefore, be sure to give a space
or a slash '/' or some such character should you want a separation, e.g. we have specified April/. The slash
would cause the voucher number to appear as April/001, otherwise it would be April001. This facilitates simple
usage for fixed number series appearing as 200100001 where 2001 is the prefix, and 00001 is the starting
number with a width of 5, and with leading zeros.
You can choose different prefix information for different periods or let one continue. The prefix

continues from the date you mention under 'Applicable from' till the next date that you may give
under 'Applicable from'. Hence, we have chosen to change the prefix from April to May when the
month changes. Please note, however, that if we omit to change the prefix for the subsequent
months (i.e. do not give 'Applicable from' date for the month), your voucher numbers for even
June, July etc would contain the prefix 'May/'.
Suffix Details
You can also give fixed suffix information for the voucher number. The same rules and effects as
for Prefix Details apply.
Voucher Classes
Voucher Classes are available for all major voucher types. However, Cost Centres could not be
allocated if classes were used. Now, cost centres too can be 'classed'. Automation of cost centre
allocation has met the need of 'percentage allocation' based on predefined figures.
Cost centre classes affect all voucher types and will be taken up separately.
Voucher Classes for Payment, Receipt and Contra Vouchers
The primary intention of using classes for payment, receipt and contra vouchers is to enable
data input in 'single entry' or list mode rather than in Tally's traditional double entry mode. You
can also use it to have a separate form for each cash and bank account.
Let us take an example of a Payment Voucher.
You can either alter the existing Payment Voucher Type or create a new voucher type based on
it.
(From Gateway of Tally > Accounts Info > Voucher Types)
The item Name of Class is below Effective Dates for Vouchers and above the Numbering Table.
Give a name to the class by simply typing it, e.g. Barclays Bank Payment. You may create more
than one class. Hence, you might want to have one more for Cash Payment.
The Class Table

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

Purchase Invoice Entry with Voucher Classes
Voucher Classes for Journals
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. Set the option 'Allow Invoicing' to Yes.
3. Enter Purchases in Invoice Format? Set it to Yes .
4. Accept the screen using Ctrl+A.
Entry of Purchase vouchers in Invoice mode
Select F9:Purchases. Select As Invoice button or use CTRL+[V]. This button is a toggle for
Invoice and Voucher modes. You may want to use the voucher mode for more complex entries.
Entries are exactly like sales invoices and hence are not discussed.
The treatment of additional cost of purchases needs elaborating.
Additional Cost of Purchases
If it is desired to add the other purchase expenses like freight and import duty to the cost of the

item, you would have activated the option in F11:Company Features 'Track Additional Costs of
Purchases'. In voucher mode, the additional cost details have to be filled in after the allocation of
each purchase item.
In Invoice mode, the treatment of additional costs on stock items is automated by altering the
parent group master details of the expenses.
In many situations, more than one item is purchased where the expense that is incurred for
them is charged as a lump-sum. However, to give an effective cost including the expense to
each purchased item, you would earlier give additional costs of purchase for each item. That
method though very flexible and practical could be tedious. That process is now automated and
allocation of the expense to stock item can be done on a predefined basis.
The following set-up activity is required to be carried out:
1. Alter the Parent Group of the expense ledger accounts, e.g. Direct Expenses. You will find
a new option - Method to Allocate when used in Purchase Invoice. If you want to
appropriate the ledger accounts under this group to stock items by either Quantity or
value, you must select the option. Select Appropriate by Qty for our example.
Now if freight belongs to the group Direct Expenses, the amount will be apportioned by quantity,
i.e., in the ratio of 1:5. If however, the parent group does not have an allocation method or is
set to No Appropriation or Not Applicable, the amount of freight will not be apportioned to the
items and will simply remain in the financial books as expense.
Note: In Invoice mode, Purchases can be allocated to Cost Centres only when Cost Centre classes are used,
i.e., you have to auto-allocate purchases to cost centres if you are using the Invoice mode of entry. Using the
voucher mode of entry for purchases allows manual allocation of purchases to cost centres.
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.

Additional Accounting Entries
Expenses and other charges like Import Duty, Freight, VAT, Sales Tax can be specified here
which will be calculated automatically on the Type of Calculation and Value basis. For
explanation on each Type of Calculation, refer the Appendix.
We have selected Freight which is an account under the group Direct Expenses.
Type of Calculation
We select User defined value as we would like to input the amount of freight charged on the
invoice.
However, we would like Freight expenses to be apportioned to each stock item based quantity
and we want the apportionment done automatically.
Auto-allocation of Additional Entries to Stock Items Purchased
(This method is not applicable for sales invoices)
The Group Direct Expenses had been altered earlier to allocate by quantity. Hence, the allocation
will be done automatically based on quantity.
Your purchase voucher class has been set-up. You can have more than one additional accounting
entries. You can also have more than one Class.
Purchase Invoice Entry with Voucher Classes
Your Purchase Entry would look like this:

You have bought 10 Pcs of Item A and 90 Pcs of Item B. The Freight spent in total is 1000. What
should the apportionment be? 10:90. Movement Analysis shows the additional cost factor
charged to the stock item in this proportion.
Stock Items can be given 'default' ledger accounts for both Sales and Purchase Invoices, which
will further simplify entry of data through the Voucher Class mechanism for Sales/Purchase.
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 Journals
Stock Journals classes allow you to handle transfers from one location (Godown) to another, for
companies having Multi-Location Inventory and at least two location/Godowns created. Once the
class is selected, you will need to specify the Destination and simply provide the list of items to
be transferred. Through this class all items/batches thus selected will be exactly mirrored to the
destination, including Batch Number, Rate and Value.
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: Company Features
Tab down to or simply click on No of the last option 'Set/Alter other Company Features?'
Set it to Yes.

You bring up the Advanced Features one of which is Use Pre-defined Cost Centre Allocations
during Entry – Cost Centre Classes.
Set this option to Yes.
(The other options can remain as previously set and are not discussed here.)
You now bring up the Cost Centre Class creation screen. Type in the Class names and select the
Categories and the respective cost centres. Specify the percentage of allocation. After entry,
your auto-cost allocation screen will appear as follows :
We have created the Cost Classes as Export, Wholesale, Retail and Marketing Expenses.
Divisions and Departments are cost categories. Export, Wholesale and Retail are cost centres
under Divisions. Marketing Group is a cost centre under Departments.
Although the names of the class and the cost centres are the same in the example, you need not
have them with same names.

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)
Introduction
For many organisations, globalization of business has necessitated working with more than one
currency. Transactions are often made in currencies other than the home currency. Such
transactions have to be recorded either in the home currency or in the foreign currency. If they
are recorded in home currency, the rate at which the foreign currency is exchanged for the
home currency should be recorded as well. Sometimes you need to record the transaction in
foreign currency itself. This would arise when you maintain the balance of the concerned account
in foreign currency. Tally uses the term base currency for the currency in which your account
books is kept (typically in home currency). Foreign Exchange is used interchangeably with
foreign currency.
You had, of course, specified your base currency while creating the company.
Tally has attempted to make the complex task of handling multiple currencies very easy for you.
You would find some new ways of working with multiple currencies, automatic calculations of
exchange rates, automatic conversion of any currency used to record a transaction to the
currency of the account, etc.
The Balance Sheet and Profit & Loss Account of the company will always be maintained in the
base currency. Conversion of foreign currency account balances will be done as per rules set by
you. An explanation on the rules will be given below.
Note: You must assess the need for using multiple currencies. Quite often, all you need is conversion of
foreign currencies to base currency at the time of recording a transaction. This may easily be obtained with the
calculator. If you experience foreign exchange gains or losses, or have a foreign currency bank account or
need to maintain accounts in different currencies, then by all means take advantage of Tally's comprehensive
forex management features.
More:
Managing and operating multiple Currencies
Managing and Operating Multiple Currencies
You must first activate multi-currency capabilities.
Gateway of Tally > [F11]:Features
Now, let us work with currencies.
Gateway of Tally > Accounts Info. > Currencies

The Currencies menu has the usual create, display and alter options. There is an additional
option, Rates of Exchange. We shall examine each option in greater detail.
More:
Create a foreign currency master
Alter Currency
Rates of Exchange
Create a Foreign Currency Master
You will now need to create the foreign currencies that would be used.
Gateway of Tally > Accounts Info. > Currencies > Create
Symbol
Give the Currency symbol, as it should appear in all reports. If your keyboard does not have the
symbol, you may use ASCII special characters with [Alt] key combination. Utilities like Character
Map in Windows will give the key combination for most symbols. Some notebook computers may

not easily allow input of special characters through [Alt] key combination. Consult the
computer's user manual or ask the vendor.
Tally prevents you from having duplicate symbols.
Formal Name
This is meant for the name of the currency, e.g., U.S. Dollars, Pound Sterling, Indian Rupees,
etc. You are not allowed duplicates.
Advanced users would be interested in the main reason for requiring a formal name.
Suppose you have two companies, viz., Tally Demo & Company and Tally Demo. Each company
would have its own set of currencies. In one you may have used the symbol $ for Australian
Dollars and in the other the symbol $ may be for U.S. Dollars. You might have occasion to
compare an account in the two companies (by using New Column in displays). For proper
comparison, you would want the accounts in the same currency. Since the symbol is the same
but refer to two different currencies, The Formal Name is used to distinguish them. How does it
do it?
The company that has been loaded first will retain the original symbol for display purposes. The
other company's currency symbol will be prefixed with the first letter of the formal name (or as
many letters as necessary to make it unique). E.g., If Tally Demo is loaded first and then Tally
Demo & Company, the symbol $ will remain for Australian Dollars in Tally Demo. In Tally Demo
and Company, the symbol $ will be prefixed with the letter U which is the first letter of its formal
name. Though you may not appreciate the significance when working within one single
company, it will be quite apparent when you wish to compare data with another company.
Number of Decimal places
Give the number of decimal places for the currency. You cannot specify the name for loose
change e.g. pence, cents, paisa etc.Hence, you must specify decimal places. Some currencies
have 2 decimal places, e.g. paisa; some have 3, e.g., Dinar. Still some others do not have any
decimal places at all, e.g., Vietnamese Dong.
You are not permitted to change the number of decimal places once you have used the currency
in entry of transactions.
Show amounts in millions? (Yes/No)
Tally has two formats for displaying an amount, viz., in millions and in lakhs. 1000000 (one
followed by six zeroes) in millions format would appear 1,000,000 and in lakhs 10,00,000.
Selecting 'No' would mean you want amounts to appear in lakhs.
Note for advanced users: You can always specify the appearance of numbers in specific reports, e.g., when
displaying the Profit & Loss Account press [F12]:Configure

Here the default is either millions or lakhs selected by you for the base currency.
Is symbol suffixed to amounts? (Yes/No)
Normally currency symbols are prefixed. However, if you want it to appear after the amount,
select Yes.
Put a space between amount and symbol? (Yes/No)
This is purely for aesthetics. Select Yes for amounts to appear like $ 100/, No for $100/-.
If you put a '.' after a prefixed symbol, do not opt for a space. This could be found suitable for
currencies like Rs. where amounts would appear Rs.100/-
Display
The Display screen is identical to the create screen. Use it to display the particulars for a
currency.
Alter Currency
If you do not have multiple currencies, the Alter screen is identical to the Display screen. When
you have more than one currency,
Select the currency whose details are to be altered

Change any of the particulars. You may even delete the currency here by using [Alt][D],
provided you have not used it in any voucher.
The specified rates of Exchange can also be altered. Specified rates are those input by you
through the Rates of Exchange menu (discussed below) or may even be input now. Specified
rates are usually the rates quoted in the newspapers or obtained from banks. The actual
transaction rate may vary depending on the fluctuation in the exchange rate.
Rates of Exchange
The screen always comes up in Alter mode:
Date for Rates of Exchange
Rates of Exchange operate on day-to-day basis. Hence, you can specify the rates of different
currencies for a day.
Note: the date column in the previous Alter screen.
Standard Rate
The standard rate is used to calculate variances from the actual transaction rates. You may
choose to leave it blank.
Selling Rate – Specified Rate

This is the rate obtained from the daily newspaper or your banker. If you input this rate before
any transaction entry, while entering a foreign exchange transaction, this rate will be brought up
by default. (You may still change the actual rate). Selling rate is your selling rate (as opposed to
bank's selling rate. Banks will buy currency from you in this case) used for receipt voucher entry
where you receive foreign exchange. This foreign exchange would be sold to your bank (which
buys it at its buying rate).
The actual rate at which the currency was last used is displayed and cannot be changed.
The specified rate is used for calculating foreign exchange variances only in case there is no
standard rate.
Buying rate – specified rate
This is the rate at which you would buy the foreign currency (as opposed to bank's buying rate.
Banks will sell currency to you in this case). Hence, it is used in payment vouchers.
The actual rate at which the currency was last used is displayed and cannot be changed.
Tally calculates Gain or Loss in foreign exchange transactions automatically using the standard
rates, specified rates and actual transaction rates. In the chapter under Voucher Entry, we shall
examine how to handle foreign exchange transactions

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Accounts Information - Introduction Page 1 of 106

Main functions in Masters menu

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

Main Functions in Masters Menu

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

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The concept of sub-groups

Aliases for the groups are given in square brackets [ ].

Primary Groups of capital nature

a. Reserves and Surplus [Retained Earnings]

d. Loans & Advances (Asset)

a. Duties and Taxes

a. Bank OD Accounts [Bank OCC Accounts]

7. Miscellaneous Expenses (Asset)

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10. Purchase Account

11. Direct Income [Income Direct]

12. Indirect Income [Income Indirect]

13. Direct Expenses [Expenses Direct]

14. Indirect Expenses [Expenses Indirect]

A discussion on each of the reserved groups:

Common and possible errors in Grouping and account classification

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

A Discussion on Each of the Reserved Groups

Reserves and Surplus [Retained Earnings]

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Loans & Advances (Asset)

Duties and Taxes

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For loans, typically long term, taken by the company.

Bank OD Accounts [Bank OCC Accounts]

Loans and Advances (Asset) group.

7. Miscellaneous Expenses (Asset)

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Revenue Primary Groups

An example of such classification may be helpful:

Classify under Sales Accounts the following sub-groups

Now under Domestic Sales open the following ledgers:

10. Purchase Account

11. Direct Income [Income Direct]

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Instead, open accounts like Professional Fees under this group.

12. Indirect Income [Income Indirect]

13. Direct Expenses [Expenses Direct]

14. Indirect Expenses [Expenses Indirect]

For all other administrative, selling or non-direct expenses.

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

Common and Possible Errors in Grouping and Account Classification

Placing individual party accounts under Sales or Purchase Accounts groups

Opening two accounts of the same party

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for a party account placed under Sundry Debtors.

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

How to Manage and Operate Groups?

Gateway of Tally > Accounts Info > Groups

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

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You may configure your groups to enable/disable advanced mode.

[F12] > Acct/Inv info > Accounts masters