Tally ERP 9 Guide

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Lesson 1: Basics of Accounting
Lesson Objectives
On completion of this lesson, you will be able to understand Principles and concepts of Accounting Double Entry System of Accounting Financial Statements
1.1 Introduction
Accounting is a process of identifying, recording, summarising and reporting economic information to decision makers in the form of financial statements. Financial statements will be useful to the following parties: Suppliers Customers Employees Banks Suppliers of equipments, buildings and other assets Lenders Owners
1.1.1 Types of Accounts

There are basically three types of Accounts maintained for transactions : Real Accounts Personal Accounts Nominal Accounts
Basics of Accounting
Real Accounts Real Accounts are Accounts relating to properties and assets, which are owned by the business concern. Real accounts include tangible and intangible accounts. For example, Land Building Goodwill Purchases Cash Personal Accounts Personal Accounts are Accounts which relate to persons. Personal Accounts include the following. Suppliers Customers Lenders Nominal accounts Nominal Accounts are Accounts which relate to incomes and expenses and gains and losses of a business concern. For example, Salary Account Dividend Account Sales Accounts can be broadly classified under the following four groups. Assets Liabilities Income Expenses The above classification is the basis for generating various financial statements viz., Balance Sheet, Profit & Loss A/c and other MIS reports. The Assets and liabilities are taken to Balance sheet and the Income and Expenses accounts are posted to Profit and Loss Account.
1.1.2 Golden Rules of Accounting

Real Accounts Debit Credit What Comes in What Goes out Personal Accounts The Receiver The Giver Nominal Accounts Expenses and Losses Incomes and Gains
1.1.3 Accounting Principles, Concepts and Conventions

The Accounting Principles, concepts and conventions form the basis for how business transactions are recorded. A number of principles, concepts and conventions are developed to ensure that accounting information is presented accurately and consistently. Some of these concepts are briefly described in the following sections. Revenue Realisation According to Revenue Realisation concept, revenue is considered as the income earned on the date, when it is realised. As per this concept, unearned or unrealised revenue is not taken into account. This concept is vital for determining income pertaining to an accounting period. It reduces the possibilities of inflating incomes and profits. Matching Concept As per this concept, Matching of the revenues earned during an accounting period with the cost associated with the respective period to ascertain the result of the business concern is carried out. This concept serves as the basis for finding accurate profit for a period which can be distributed to the owners. Accrual Under Accrual method of accounting, the transactions are recorded when earned or incurred rather when collected or paid i.e., transactions are recorded on the basis of income earned or expense incurred irrespective of actual receipt or payment. For example, a seller bills the buyer at the time of sale and treats the bill amount as revenue, even though the payment may be received later.
The cash basis of accounting is a method wherein revenue is recognised when it is actually received, rather than when it is earned. Expenses are booked when they are actually paid, rather than when incurred. This method is usually not considered to be in conformity with accounting principles and is, therefore, used only in select situations such as for very small businesses.
Going Concern As per this assumption, the business will exist for a long period and transactions are recorded from this point of view.
Accounting Period The users of financial statements required periodical reports to ascertain the operational and the financial position of the business concern. Thus, it is essential to close the accounts at regular intervals. viz., 365 days or 52 weeks or 1 year is considered as the accounting period. Accounting Entity According to this assumption, a business is considered as a unit or entity apart from its owners, creditors and others. For example, in case of a Sole Proprietor concern, the proprietor is treated to be separate and distinct from the business, which he controls. The proprietor is treated as a creditor to the extent of his capital and all the business transactions are recorded in the books of accounts from the business stand point. Money Measurement In accounting, only business transactions and events of financial nature are recorded. Only transactions that can be expressed in terms of money are recorded.
1.1.4 Double Entry System of Book Keeping

As per Double Entry System of book-keeping, all the business transactions recorded in accounts have two aspects - Debit aspect (receiving) and Credit aspect (giving). For example, when a business acquires an asset (receiving) and pays cash (giving) for it. This accounting technique records each transaction as debit and credit, where every debit has a corresponding credit and vice versa. Features of Double Entry System of Book Keeping The Double entry system of book keeping comprises of the following features : Every business transaction affects two accounts Each transaction has two aspects, i.e., debit and credit Maintains a complete record of all business transactions Helps to check the accuracy of the accounting transactions, by preparation of trial balance Helps ascertaining profit earned or loss occured during a period, by preparation of Profit & Loss Account Helps ascertaining financial position of the concern at the end of each period, by preparation of Balance Sheet Helps timely decision making based on sufficient information Minimises the possibilities of fraud due to its systematic and scientific recording of business transactions
The following chart explains the way in which accounting transactions are recorded in the Double Entry system and financial statements are prepared.
Figure 1.1 Double Entry System
1.1.5 Mode of Accounting

Accounting process begins with identifying and recording the transactions in the books of accounts i.e., the first step in the Accounting Process is recording of transactions in the books of accounts. Accounting identifies only those transactions and events which involves money and is sorted based on various source documents. The following are the most common source documents. Cash Memo Invoice or Bill Vouchers Receipt Debit Note Credit Note
Voucher A voucher is a document in support of a business transaction, containing the details of such transaction. Receipt When a trader receives cash from a customer against goods sold by him, issues a receipt containing the name of such customer, details of amount received with date. Invoice or Bill When a trader sells goods to a buyer, he prepares a sales invoice containing the details of name and address of buyer, name of goods, amount and terms of payments and so on. Similarly, when the trader purchases goods on credit receives a Invoice/bill from the supplier of such goods. Journals and Ledgers A journal is a record in which all business transactions are entered in a chronological order. A record of a single business transaction is called a journal entry. Every journal entry is supported by a voucher, evidencing the related transaction. Account An account is a statement of transactions affecting any particular asset, liability, expense or income. Ledger A Ledger is a book which contains all the accounts whether personal, real or nominal, which are entered in journal or subsidiary books. Chart of Accounts A chart of accounts is a list of all accounts used by an organisation. The chart of accounts also displays the categorisation and grouping of its accounts. Posting Posting is the process of transferring the entries recorded in the journal or subsidiary books to the respective accounts opened in the ledger i.e., grouping of all the transactions relating to a particular account to a single place. Accounting Period Generally, the financial statements are generated for a regular period such as a quarter or a year, for timely and accurate ascertainment of operating and financial position of the organisation. Trial Balance Trial balance is a statement which shows debit balances and credit balances of all Ledger accounts. As per the rules of double entry system, every debit should have a corresponding
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credit, the total of the debit balances and credit balances should agree. A detailed trial balance has columns for Account name Debit balance Credit balance
1.1.6 Financial Statements

Financial statements are final result of accounting work done during the accounting period. Financial statement serves a significant purpose to users of accounting information in knowing about the profitability and financial position of the organisation. Financial statements normally include Trading Profit and Loss Account Balance Sheet
Trading Account Trading refers to buying and selling of goods. The trading account displays the transactions pertaining to buying and selling of goods. The difference between the two sides of the Trading Account indicates either Gross Profit or Gross Loss. If the credit side total is in excess of the debit side total, the difference represents Gross Profit. On the other hand, if the total of the debit side is in excess of the credit side total, the difference represents Gross Loss. Such Gross Profit / Gross Loss is transferred to Profit & Loss Account. The Gross Profit is expressed as : Gross Profit = Net Sales Cost of Sales
Profit and Loss Account The profit and loss account helps to ascertain the net profit earned or net loss suffered during a particular period. after considering all other incomes and expenses incurred over a period. This helps the company to monitor and control the costs incurred and improve its efficiency. In other words, the profit and loss statement shows the performance of the company in terms of profits or losses over a specified period. The Net Profit is expressed as : Net Profit = (Gross Profit + Other Income) (Selling and Administrative Expenses + Depreciation + Interest + Taxes + Other Expenses) A key element of the Profit and Loss Account, and one that distinguishes it from a balance sheet, is that the amounts shown on the statement represent transactions over a period of time, while the items represented on the balance sheet show information as on a specific date.
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All revenue and expense accounts are closed once the profit and loss account is prepared. The Revenue and Expenses accounts will not have an opening balance for the next accounting period. Balance Sheet The balance sheet is a statement that summarises the assets and liabilities of a business. The excess of assets over liabilities is the net worth of a business. The balance sheet provides information that helps in assessing A companys Long-term financial strength A companys Efficient day-to-day working capital management A companys Asset portfolio A companys Sustainable long-term performance The balances of all the real, personal and nominal (capital in nature) accounts are transferred from trial balance to balance sheet and grouped under the major heads of assets and liabilities. The balance sheet is complete when the net profit/ loss is transferred from the Profit and Loss account.
1.1.7 Transactions
A transaction is a financial event that takes places in the course or furtherance of business and effects the financial position of the company. For example, when you deposit cash in the bank, your cash balance reduces and bank balance increases or when you sell goods for cash, your cash balance increases and your stock reduces. Transactions can be classified as follows : Receipts cash or bank Payments cash or bank Purchases Sales
1.1.8 Recording Transactions

The important aspect of accounting is to record transactions promptly and correctly to ascertain the financial status of a company as on a particular date. Generally, the business transactions may be of the folowing nature : Purchase of goods either as raw materials for processing or as finished goods for resale Payment of expenses incurred towards business Sale of goods or services Receipts (in Cash or by Cheques) Payments (in Cash or Cheques)
The Accounting information is useful to various interested parties, both internal and external viz., Suppliers, who supply goods and services for cash or on credit Customers, who buy goods or services for cash or on credit Employees, who provide services in exchange of salaries and wages. Banks, with whom accounts are maintained Suppliers of equipment, buildings and other assets needed to carry on the business. Lenders from whom, you borrow money to finance your business Owners, who hold a share in the capital of your business
Figure 1.2 Parties dealt with in a business process
Points to Remember
Accounting is a comprehensive system to collect, analyse and communicate financial information. Double Entry accounting is a system of recording transactions in a way that maintains the equality of the accounting equation. The three types of accounts maintained for transactions are real accounts, personal accounts and nominal accounts. Entity is the organisational unit for which accounting records are maintained. Journal entry is a record of a single business transaction. Voucher is a document evidencing the details of a financial transaction. Ledger is a book in which accounts are maintained. Trial balance is a list of the balances of all the ledger accounts. Profit and loss statement shows the performance of the company in terms of profits or losses made by it over a specified period. Balance sheet gives an overview of the financial position of a company as on a specific date.
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Lesson 2: Fundamentals of Tally.ERP 9
Lesson Objectives
On completion of this lesson, you will be able to understand Salient Features of Tally.ERP 9 Key Components of Tally.ERP 9 How to start and exit Tally.ERP 9 Setting up a company in Tally.ERP 9 Working with companies in Tally.ERP 9
2.1 Introduction
Tally.ERP 9 is the world's fastest and most powerful concurrent Multi-lingual business Accounting and Inventory Management software. Tally.ERP 9, designed exclusively to meet the needs of small and medium businesses, is a fully integrated, affordable and highly reliable software. Tally.ERP 9 is easy to buy, quick to install, and easy to learn and use. Tally.ERP 9 is designed to automate and integrate all your business operations, such as sales, finance, purchasing, inventory, and manufacturing. With Tally.ERP 9, accurate, up-todate business information is literally at your fingertips anywhere. The powerful new features and blazing speed and power of Tally.ERP 9 combined with enhanced MIS, Multi-lingual, Data Synchronization and Remote capabilities help you simplify all your business processes easily and cost-effectively.
2.1.1 Salient Features of Tally.ERP 9

A leading accounting package: The first version of Tally was released in 1988 and, through continuous development, is now recognised as one of the leading accounting packages across the world, with over a quarter million customers. Tallys market share is more than 90%. No accounting codes: Unlike other computerised accounting packages which require numeric codes, Tally.ERP 9 pioneered the no accounting codes concept. Tally.ERP 9 users have the freedom to allocate meaningful names in plain English to their data items in the system.
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Fundamentals of Tally.ERP 9
Complete business solution: Tally.ERP 9 provides a comprehensive solution to the accounting and inventory needs of a business. The package comprises financial accounting, book-keeping and inventory accounting. It also has various tools to extract, interpret and present data. Integrated/ Non-integrated accounting and inventory: With Tally.ERP 9, the user is able to choose between accounting and accounting with inventory. If accounting with inventory is opted for, the user can choose whether it should be integrated or not. Flexible and easy to use: Tally.ERP 9 is very flexible. It mimics the human thought process, which means that Tally.ERP 9 can adapt to any business need. Tally.ERP 9 users need not change the way their business is run to adapt to the package. Speed : Tally.ERP 9 provides the capability to generate instant and accurate reports, which assists the management to take timely and correct decisions for the overall productivity and growth of the company. Power : Tally.ERP 9 allows the user to maintain multiple companies and with unlimited levels of classification & grouping capabilities. It also allows drill downfacility from report level to transaction level. Flexibility : Tally.ERP 9 provides flexiblity to generate instant reports for any given period (month/year) or at any point of time besides providing the facility to toggle between Accounting & Inventory reports of the same company or between companies. Concurrent multi-lingual capability : Tally.ERP 9 offers you the exclusive capability of maintaining your accounts in any Indian language, viewing them in another language and printing them in yet another Indian language. Real time processing : Immediate posting & updation of books of accounts as soon as the transactions are entered, thereby facilitating instant statements & Reports. It also faciliaties real-time multi-user environment. Versatility: Tally.ERP 9 is suitable for a range of organisations, from small grocery stores to large corporations with international locations and operations. Multi-platform availability: Tally.ERP 9 is available on Windows 95, 98, ME, 2000 and NT. It runs on a single PC or on a network. On a network, it supports access via any combination of platforms. Online Help : The Tally.ERP 9 Online Help (Alt+H) provides instant assistance on basic and advanced features or any other relevant topics of Tally.ERP 9. Tally.NET : is an enabling framework which establishes a connection through which the remote user can access the Client's data without copying / transferring the data. Remote Access : Tally.ERP 9 provides remote capabilities to access the data from anywhere and anytime. Control Centre : works as an interface between the user and Tally.ERP 9 installed at different sites and enables the user to centrally configure and administer Site/User belonging to an account. Support Centre : allows a user to directly post his support queries on the functional and technical aspects of the Product.
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Auditor's Edition : Tally.ERP 9 offers a special Auditors' Edition of Tally.ERP 9, which provides auditing and compliance capabilities exclusively for Chartered Accountants.
2.1.2 Functional Features of Tally.ERP 9

BASIC ACCOUNTING Complete book-keeping Books, registers and statements of accounts General ledgers Accounts receivable and accounts payable Flexible voucher numbering Flexible classification of account heads Panoramic view Drill-down display BASIC INVENTORY Stock categories Stock query by stock group, or stock category Multiple godowns Stock transfers to godowns and branches Multiple stock valuation methods Batch-wise/ Lot-wise, including expiry date handling Alternate units of measure and tail units. Tracking through receipt notes/ delivery notes/ rejections inwards/ rejections outwards Additional costs incurred on purchase Movement/ Profitability analysis Partywise/ Item-wise/ Stock Group-wise Customisable sales invoices using price lists with multiple prices Sales and purchase order processing
Database reporting Voucher and cheque printing Columnar reports Bank reconciliation
ADVANCED ACCOUNTING Multiple companies Multi-currency Multiple financial years Comparison of data using multi-columnar reporting. Memo vouchers Post-dated vouchers User-defined voucher types Sales and purchase extracts Cash flow statement
ADVANCED INVENTORY Stock items classified as raw materials, work-in-process, finished goods Bill of Material with auto-adjustment of stocks Job-working concepts, including sub-contracting Additional cost of manufacturing with notional value and percentage CENVAT support Reorder levels Stock ageing analysis Batch related stock reports Point of Sale (POS)
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Daily balances and transaction values/ Interest calculations Percentage-based reporting Ratio analysis Value Added Tax (VAT) Service Tax (ST) Fringe Benefit Tax (FBT) Tax Deducted at Source (TDS) Tax Collected at Source (TCS) Excise Payroll
Excise/ VAT/ Central Sales Tax (CST)/ Tax Collected at Source (TCS) related Inventory transactions and reports
2.1.3 Technology Advantages

Simple and rapid installation: Tally.ERP 9 has a simple, menu-driven installation procedure. The user can install the program files on any drive if the hard disk has partitions. The user can also specify the name and directory location of the program files. Tally.ERP 9 uses minimum hard disk space in the local drive. Its installation on the local disk takes just a few seconds. Unlimited multi-user support: A multi-user version of Tally.ERP 9 can be installed on a network, having any number of computers with different operating systems such as Win 95, 98, NT, 2000, XP and Linux. Internal backup/ restore: Tally.ERP 9 has an in-built, user-friendly backup and restore option. It helps the user to take a backup of one or more companies or all companies, in a single directory, in the local hard disk, or in any external media. Data reliability: Tally.ERP 9 offers reliable data. It uses a flexi-field, flexi-length, selfindexed, weighted file structure for an extremely compact and fast database. Tally.ERP 9 is robust and even if there is a power failure or the computer is incorrectly shut down, data is not lost. Tally.ERP 9 uses signalling quality data integrity checks, at regular levels, to ensure the complete reliability of data. User-defined security levels: Tally.ERP 9 offers high levels of security. Users can define multiple levels of security according to their requirements. Every authorised user in the company can have an individual password, with rights to use specific features only. The user with the administrator level password will have full access and can set controls for other users. Data security: Tally.ERP 9s data integrity checks ensure that there are no external changes to the data. Tally.ERP 9 also uses a binary encoding format of storage to prevent devious grouping of information. Tally audit: The Tally.ERP 9 audit feature provides the user with administrator rights and the capability to check the entries made by the authorised users and alter these entries, if necessary. Once the entries are audited, Tally.ERP 9 displays the altered entries, if any,
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along with the name of the user, who has altered the entry, and the date and time of the alteration. TallyVault: Tally.ERP 9 offers a data encryption option called TallyVault. Without the valid TallyVault password, the data cannot be accessed. Tally.ERP 9 follows the DES (Data Encryption Standard) encryption method to safeguard the data. Removal of data into a separate company: Tally.ERP 9 allows users to maintain a company for any number of financial years. Once the books of accounts have been completed for the earlier financial years, the user can split the company data into multiple companies as per financial periods required. Tally.ERP 9 also has a feature to split company data. The user can specify the date from which the company has to be split and Tally.ERP 9 will split the company to form two companies as per periods specified. Once the data has been split, the closing balance of the first period (first company) becomes the opening balance for the next period (second company). Multi-directory for company management: The user can create multiple directories to store data. The data stored in these directories can be accessed directly in Tally.ERP 9, by specifying the path. Import/ Export of data: Any transaction can be exported and imported to other software after suitably altering the current structures to accept the Tally.ERP 9 data structure. Data can also be imported to Tally.ERP 9 by writing a TDL program. The data which is to be exported from Tally.ERP 9 can be in XML, HTML or ASCII format. Tally.ERP 9 Synchronization: Synchronization is the process of exchanging Tally.ERP 9 data between two or more locations. This process enables a branch office to send its data to the head office, over the Internet or a private network. Graphical analysis of data: Tally.ERP 9 provides graphical analysis of data which helps the user to perform deeper analysis. The user can generate graphical analysis reports such as Sales register, Purchase register, Ledgers, Funds flow, Cash flow, Stock Item registers and so on. This helps the management to quickly judge performance and be better prepared for difficult times. ODBC (Open Database Connectivity) compliance: It allows other programs to use data from Tally.ERP 9, directly. Thus, any program such as MS-Excel or Oracle, which is ODBC compliant, can use data from Tally.ERP 9. Data connectivity is dynamic, which means that any update in Tally.ERP 9 is reflected in real time in other ODBC compliant software. The user can also extract data from Tally.ERP 9 and design his/ her own report formats in other ODBC compliant software. Protocol support: Tally.ERP 9 provides protocol support for HTTP, HTTPS, FTP, SMTP, ODBC and raw sockets with data interchange formats such as XML, HTML with XML islands, SOAP and related formats. Protocol refers to a mechanism by which information (data) can be put into or taken from Tally.ERP 9. Formats refer to the standard for information to be generated from Tally.ERP 9 or from other applications which can exchange data with Tally.ERP 9. Direct web browser access: While working on Tally.ERP 9, the user can directly log on to the Tally website, provided he/ she has access to the Internet. The website lists details of all the facilities offered by Tally.ERP 9. The user can also download the latest release of
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Tally.ERP 9 as and when it is available. The Tally website also offers Tally Chat, by which a user can communicate with a Tally representative and get required information. Ability to preview and publish reports and documents on the Internet: Companies which want to publish reports and price lists on their website can do so directly from Tally.ERP 9. E-mail Facility: Tally.ERP 9 facilitates the mailing of any Tally.ERP 9 report or document. Multilingual capability: Tally is the world's first accounting and inventory software with multilingual capability. Currently, Tally.ERP 9s multilingual capability extends to 12 languages which include nine Indian languages (Hindi, Gujarati, Punjabi, Tamil, Telugu, Marathi, Kannada, Malayalam and Bengali), Bahasa Melayu and Bahasa Indonesia. Tally.ERP 9 enables you to enter data in one language and have it transliterated into different languages. You can generate invoices, purchase orders or delivery notes in the language of your choice after entering data for the same in any of the nine specified languages. Also, the phonetic keyboard allows you to spell the term phonetically based on how it sounds and Tally.ERP 9 displays the data in the language selected after transliteration. Point of Sale (POS) : POS is an acronym for Point of sale. Point of Sale can be a retail outlet, a check out counter ina shop, or any other location where a sales transaction takes place. It is a computorised cash register which adds up the sales totals, calcutates the balance to be returned to buyer and automatically adjusts the inventory level to reflect the quantity sold. The equipment required for POS to work effectively are cash registers, card readers, bar-code scanners and so on.
2.1.4 Payroll
Tally.ERP 9 Payroll is integrated with Accounting and benefits the user by simplifying Payroll processing and accounting. Tally.ERP 9 Payroll enables users to set up and implement salary structures, ranging from simple to complex, as per the organisations requirements. The user can also align and automate payroll processes and directly integrate them with main stream accounting applications. Tally.ERP 9 Payroll also supports configurable formats for payslip printing; flexible salary/wage, attendance, leave and overtime registers; gratuity and expat reports.
2.1.5 Data Migration Capability

Tally.ERP 9 has the ideal solution for those who have their data in Tally 7.2 and now want to use Tally.ERP 9. Tally.ERP 9 provides a migration tool which helps the user to migrate the data easily to the latest version and continue with day-to-day transactions. Tally 6.3 users can also use the migration tool which will rewrite the version to Tally 7.2 and then migrate the data to Tally.ERP 9. Tally 8.1 users and Tally 9 Release 2.14 users can rewrite the version of their data to Tally.ERP 9.
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2.1.6 Features pertaining to Duties and Taxes

The all-new package provides statutory reporting capability for VAT (Value Added Tax), Composite VAT, CST (Central Sales Tax), TDS (Tax Deducted at Source), ST (Service tax), TCS (Tax Collected at Source), FBT (Fringe Benefit Tax). State-specific statutory VAT returns and Annexures Various CST related reports Returns and challans for Service Tax TCS enabled with e-TCS capability, with facility for printing certificates/ challans Composition Monthly VAT Return Quarterly Return Form II, in the case of Excise Dealer Periodic FBT Challans and Returns
2.2 Getting Functional with Tally.ERP 9

2.2.1 Tally.ERP 9 Start-up
Tally.ERP 9 can be started in any of the following ways : Click on Start > Programs > Tally.ERP 9 > Tally.ERP 9 or double click on the Tally.ERP 9 icon on your desktop The welcome screen Tally.ERP 9 Power of Simplicity appears while the software loads. You will be ready to explore Tally.ERP 9, the moment the Tally.ERP 9 start up screen appears. The Tally.ERP 9 Start-up Screen appears as shown below:
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Figure 2.1 Tally.ERP 9 Start - up screen
2.2.2 Tally.ERP 9 Screen Components

Title bar: Displays the Tally.ERP 9 version number. Horizontal button bar: Selection of Language key, Keyboard Language and Tally.ERP 9 Help. Close button: Performs the standard Windows Operating Systems function (Windows 95 onwards), allowing you to minimise Tally.ERP 9 and work on other applications. To restore Tally.ERP 9, click the Tally.ERP 9 icon on the taskbar.
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Gateway of Tally: Displays menus, screens, reports and accepts the choices and options which you select to view data as required. Buttons toolbar: Displays buttons which provide quick interaction with Tally.ERP 9. Only buttons relevant to the current task are visible. Calculator Area: Used for Calculator functions. Info Panel: Displays Version number, License details, Configuration details.
2.2.3 Mouse/ Keyboard Conventions

While working with Tally.ERP 9, use the following conventions. MOUSE/ KEYBOARD CONVENTIONS Action Click Double-click Choose Select Press Fn Fn Fn Particulars Press the left mouse button. Press and release the left mouse button twice, without moving the mouse pointer off the item. Position the mouse pointer on the item and click the left mouse button. Position the mouse pointer on the item and doubleclick the left mouse button. Use the keys on the keyboard in the combination shown. Press the function key. Press ALT + function key. Press CTRL + function key.
2.2.4 Switching between Screen Areas

When Tally.ERP 9 first loads, the Gateway of Tally screen displays. To toggle between this screen and the Calculator/ ODBC server area at the bottom of the screen, press Ctrl+N or Ctrl+M as indicated on the screen. A green bar highlights the active area of the screen.
2.2.5 Quitting Tally.ERP 9

You can exit the program from any Tally.ERP 9 screen, but Tally.ERP 9 requires all screens to be closed before it shuts down. To quit working on Tally.ERP 9, Press Esc until you see the message Quit? Yes or No ? Press Enter or Y, or click Yes to quit Tally.ERP 9. Alternatively, to exit without confirmation, press Ctrl+Q from Gateway of Tally. You can also press Enter while the option Quit is selected from Gateway of Tally.
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2.3 Creation/ Setting up of Company in Tally.ERP 9

The first step towards understanding Tally.ERP 9 is to create a company in Tally.ERP 9. Create a company using the Company Creation screen.
2.3.1 Creation of a Company

Go to Gateway of Tally > Company Info. > Create Company The Company Creation screen displays as shown.
Figure 2.2 Company Creation screen
Each field in the Company Creation screen is explained below. To navigate between the fields, use the enter key or the tab key or arrow keys or the mouse. Fields Directory Description Tally.ERP 9 assumes that the company is to be created in the data path given in the Tally.INI file, which is displayed by default. This field is skipped by default. However, you can change this path, if you want to, by using the backspace key, so that Tally.ERP 9 saves the data to a different directory specified by you.
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Name
This specifies the name of the company as it appears in Tally.ERP 9. If you have several companies to create with similar names, you will have to distinguish between them to provide a unique name for Tally.ERP 9. The company name given in the Name field automatically appears in this field. This can be changed according to your requirements. The correct name of the company for mailing purposes should be entered. The address of the company (The mailing name and address details are picked from here for any report such as balance sheet and statement of accounts). Select India from the list of countries. Select the appropriate State from the list of States. Enter the PIN code of the specified address. Enter the telephone number of the company. E-mail address will be used to e-mail documents, reports and data from Tally.ERP 9. Enter the mobile number of the company. This refers to the currency symbol Tally.ERP 9 will use for monetary values. By default, Tally.ERP 9 displays Rs. Select the nature of the company i.e, Accounts only or Accounts with Inventory. Specify the Financial Year (FY) for the company. Tally.ERP 9 considers 12 months from the date you give here as the Financial Year. For example, if you give 1st April 2009, your FY will be April to March - in this case, ending with 31st March 2010. The date given for Financial Year From is automatically displayed. However, we can specify the actual date on which the books of accounts start. In case our accounts are opened mid-way during the financial year specified, we can enter the required date and start the books of accounts accordingly. TallyVault is an enhanced security feature utilised to protect company data in an encrypted form by means of a Password. The TallyVault password entered ensures that the data is maintained permanently in an encrypted form without retaining information of the password used. Data is not accessible without the TallyVault password. Remember to keep this password private and known only to those who need to know. If the password is lost, your data cannot be recovered. Tally.ERP 9 has a range of security controls, which can define the authority of various users to access the information and to enter/ alter/delete the vouchers.
Mailing Name
Address
Statutory Compliance for State Pin Code Telephone No. E- Mail Mobile No. Currency Symbol Maintain Financial Year From
Books Beginning From
TallyVault Password
Use Security Control
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Tally.ERP 9 will automatically adjust the spacing between the characters and lines entered to ensure that the details fit the space available. Accounts Only: Financial Accounts of the company only Accounts-with-Inventory: Both Financial Accounts and Inventory of the company. Tally.ERP 9 recognises a wide range of date formats, e.g. 1-4-09, 01/ 04/09, 1 Apr 2009, and will convert what you enter, to a standard format.
2.3.2 Base Currency Information

Tally.ERP 9 needs to know the default currency for the company and how the amounts should be shown on the screen and in the reports. BASE CURRENCY INFORMATION Fields Base currency symbol Formal name Number of decimal places Is symbol suffixed to amounts? Description Pre-set as a default currency Rs. (as specified earlier). Complete name for the currency symbol. By default, this is set to Indian Rupees. By default, this is set to 2. By default, this is set to No. For example, in India, we place the Rs symbol in front of amounts. Enter the decimal portion for the currency mentioned. Enter Paise. Tally.ERP 9 caters to currencies where the different parts of large amounts are called by special names. By default, this is set to No. By default, this is set to Yes. You can specify the number of decimal places to print the amount in words. This number should be equal to or lesser than the number specified in Number of Decimal places field.
Symbol for Decimal Portion Show amounts in millions?
Put a space between amounts and symbol? Decimal Places for Printing Amounts in words
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Base Currency Information is set to the default values as given in the Table. However, if the Multi-currency feature of Tally.ERP 9 is activated - then Tally.ERP 9 allows the user to alter the Base Currency Information as required.
Let us create a company in Tally.ERP 9 taking the example of National Traders who purchases computer equipments, components and softwares and sells it to other companies and to the direct customers. Create a Company as per information provided below : Go to the Gateway of Tally > Company Info. > Create Company Enter the following information to create a company: Field Directory Name Mailing Name Address Data to be entered Accept what is displayed on the screen National Traders National Traders No 24, Phase 1, Peenya Industrial Area Bangalore Statutory Compliance for State Pin Code Telephone No Mobile No. E-mail Currency Symbol Maintain Financial year from Books beginning from TallyVault Password (if any) Use security control Formal name Number of decimal places India Karnataka 560089 080 - 41237890 9845293752 [email protected] Rs. Accounts with Inventory 1 April 2009 1 April 2009 Skip the Field don't enter any details. No Indian Rupees 2
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Show amounts in millions? Is symbol suffixed to amounts? Put a space between amounts and symbol?
No No Yes
The completed company creation screen is displayed as shown below:
Figure 2.3 Completed Company Creation screen National Traders
Press Y or Enter to accept the screen. The Gateway of Tally screen will appear as shown below:
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Figure 2.4 Gateway of Tally
2.3.3 Working with Multiple Companies

For a group of companies, you can maintain the details of each company separately. You can select the company to work with and close the company when it is not required. However, you can also open many companies at the same time and switch between companies without closing the application.
2.3.4 Exercise to Create another Company

Before looking at how to view and amend company details, let us create another company to experiment with. Name your company as Indus Enterprises, Financial Year as 1 April 2009 & Book beginning from 1 April 2009 and you may enter the company details as you like, To create Indus Enterprises follow this procedure: 1. From the buttons bar select Alt + F3: Create Cmp or simply press Alt + F3 to bring up the Company Info. Menu. 2. Select Create Company from the menu to bring up the Company Creation screen. 3. Enter Indus Enterprises in the Name field and experiment with entering other data of your choice (for example, the address details). 4. When you have finished, Press Y or Enter to accept the screen
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The Gateway of Tally screen will now appear as shown below:
Figure 2.5 Gateway of Tally with the New Company Indus Enterprises
Notice that Indus Enterprises is highlighted. This indicates that it is the currently selected company from the list of open companies. You can now practice selecting, closing and altering company information.
While working with Tally.ERP 9, you can press Esc to exit from any screen before the changes you have made take effect.
Practice Exercise 1. Select a Company 2. Shut a Company 3. Alter a Company
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To Select a Company 1. Go to the Gateway of Tally > Alt + F3 > Company Info. > Select Company OR Press F1. Tally.ERP 9 displays the List of Companies screen. All the companies created are displayed in an alphabetical order. Select the company name from the list given. 2. In case two or more companies are loaded (like National Traders and Indus Enterprises), click on the company which you need to work on so that the selected company will be highlighted and will appear on top of the list. To Shut a Company Go to the Gateway of Tally > Alt + F3 > Company Info. > Shut Company. Select the Company which you need to shut from the List of Companies. You can also use Alt + F1 to shut a Company from the Gateway of Tally screen. To Alter Company Details Go to the Gateway of Tally > Alt + F3 > Company Info. > Alter. Select the company which you need to alter from the List of Companies and press Enter to view the Company Alteration screen. Alter the company details as required and accept the screen.
You can also access these functions, by selecting the appropriate button from the button bar.
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Points to Remember
Tally.ERP 9 pioneered the no accounting codes concept. Tally.ERP 9 mimics the human thought process. Tally.ERP 9 is multi-platform compatible and supports multi-user accessibility. Tally.ERP 9 has multilingual capability and new features such as Payroll and Point of Sale. Tally.ERP 9 is ODBC compliant.
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Lesson 3: Creating Accounting Masters in Tally.ERP 9
Lesson Objectives
On completion of this lesson, you will be able to understand The basic functions of Tally.ERP 9 F11: Features & F12: Configurations Creating and Maintaining Chart of Accounts Entering the opening balances for Ledgers
After creating a Company with the required information, you can now enable/ modify Accounting & Inventory features and configurations.
3.1 F11:Features
The F11: Features are Company-specific and the F12: Configurations are applicable to all the companies in a data directory. The F11: Features is divided into the following major categories: Accounting Features Inventory Features Statutory & Taxation Tally.NET Features You can press F11 (functional key) from any screen of Tally.ERP 9 or you may also click on the F11: Features button available in the button bar, to enable the required features. The F11: Features are specific only to the company currently in use (for which the said feature is enabled), thereby allowing flexibility of independently enabling different features for each of the company. Go to Gateway of Tally > press F11: Features
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Creating Accounting Masters in Tally.ERP 9
The Company Features screen is displayed as shown.
Figure 3.1 F11: Features Menu
There are various settings available under Accounting Features, Inventory Features and Statutory & Taxation Features, which facilitates the additional information to be entered during voucher entry. F1: Accounting Features The Accounting Features consists of configurations/ functionalities, which generally affects Accounting transactions and reports. The Accounting features is further sub-divided into six sections, namely : General Oustandings Management Cost/ Profit Centres Management Invoicing Budgets/ Scenario Management Other Features Go to Gateway of Tally > F11: Features > Accounting Features or click on F1: Accounts
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The Accounting Feature screen is displayed as shown.
Figure 3.2 F11: Accounting Features Screen
Enable the required features Press Enter to accept F2: Inventory Features The Inventory features comprises of configurations/ functionalities pertaining to Inventory transactions and reports. The Inventory features is further sub-divided into seven sections, namely : General Storage & Classification Order Processing Invoicing Purchase Management Sales Management Additional Inventory Vouchers
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Go to Gateway of Tally > F11: Features > Inventory Features or click on F2 : Inventory The Inventory Feature screen is displayed as shown.
Figure 3.3 F11: Inventory Features Screen
Enable the required features Press Enter to accept F3 : Statutory & Taxation The Statutory & Taxation features comprises of configurations/ functionalities pertaining to statutory compliances available in Tally.ERP 9. The Statutory features are country specific and strictly depends upon the Country selected in the Company Creation screen. The following features are available, when India is selected in the Statutory Compliance for field in the Company Creation screen. Excise Value Added Tax Service Tax Tax Deducted at Source Tax Collected at Source Fringe Benefits Tax
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Payroll Go to Gateway of Tally > F11: Features > Statutory & Taxation or click on F3 : Statutory The Statutory & Taxation screen is displayed as shown.
Figure 3.4 F11: Statutory & Taxation Features Screen
Enable the required features Press Enter to accept F4: Tally.NET Features The Tally.NET Features screen comprises of Registration and Remote Access of company data on Tally.NET. The Tally.NET features will be available only when, Use Security Control is set to Yes in Company master. Go to Gateway of Tally > F11: Features > Tally.NET Features or click on F4 : Tally.NET
3.2 F12 : Configurations
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In Tally.ERP 9, the F12: Configurations are provided for Accounting, Inventory & printing options and are user-definable as per your requirements. The F12: Configurations are applicable to all the companies residing in that Tally.ERP 9 Data Directory. The F12: Configuration options vary depending upon the menu display. i.e., if you press F12: configure from Voucher entry screen, the respective F12: Configurations screen is displayed. Go to Gateway of Tally > press F12: Configure The Configuration screen is displayed as shown.
Figure 3.5 F12: Configuration Menu
There are numerous settings available under various menus in the F12: Configurations screen, which may be configured for any additional information required to be entered during master creations, voucher entry and printing.
3.2.1 General
You can configure Country Details, Style of Names, Dates and Numbers in the General configuration screen.
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Figure 3.6 General Configuration screen
3.2.2 Numeric Symbols

You can configure Number Styles and Symbols used to represent Positive Numbers, Negative Numbers, Debit Amounts and Credit Amounts by using Numeric Symbols. This is displayed on the Number Styles configuration screen.
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Figure 3.7 Number Styles Configuration screen
3.2.3 Accts / Inventory Info.

The fields pertaining to both Accounting and Inventory Info. can be configured from this menu.
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Figure 3.8 Accts / Inventory Info. screen
Master Configuration Additional information can be configured by setting the options to Yes which will accordingly appear in the masters. Allow ALIASES along with names: This configuration helps in identifying an account by another name. Allow Language ALIASES along with names: This configuration helps the user to give an alias in any local language. Accounts Masters Allow ADVANCED entries in Masters: This configuration displays the additional fields in the Accounting Masters such as: Group behaves like a Sub-Ledger ? Set to Yes, the group behaves like a Control Account for the ledgers it contains, wherein only the group balance is displayed. This is useful while working on groups like the Sundry Debtors and Sundry Creditors (pre-set to Yes), where the ledger items are numerous. Nett Debit/Credit Balances for Reporting? Set to Yes, this configuration displays the amount as a net figure instead of separate debit and credit balances as shown in the reports.
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Use ADDRESSES for Ledger Accounts: This Field can be used for giving the address and Income Tax Number of the ledger accounts. Use CONTACT DETAILS for Ledger Accounts: This Configuration gives the user an opportunity to fill details like Contact person, Telephone, Fax, E-Mail etc. Add NOTES for Ledger accounts: This field helps the user to add the additional notes for ledger accounts. Inventory Masters Allow ADVANCED entries in Masters: This Configuration will display additional field in Inventory masters. Use PART NUMBERS for Stock Items: You can enter the Part Number of the item being created for easy identification. (In certain industries, such as automobiles, their part numbers identifies various parts). You can alternatively use this field for the Bin Card Number, Code Number etc. Use Description for Stock Items: You can enter the description of the Stock Item that would appear in your invoices. Use REMARKS for Stock Items: This helps to identify the product and its applications. You can give some particulars of the Stock Item created. This will help you later when you post a query for the stock of this item, while you decide whether the item is suitable for a particular requirement or not. Use ALTERNATE UNITS for Stock Items: This is another unit, apart from the main unit, which you can use instead of the Stock Item. This is particularly useful when you need to handle different units at different times. For example, you buy Data Cables in pieces but sell them in packets of 5 pieces each. For alternate units, you are asked to give a conversion factor (e.g. 5) so that a link is maintained between the two. What you give here is simply a conversion factor that comes up as default during a voucher entry. You may specify a different factor during voucher entry. Allow Std. Rates for Stock Items: Standard rates enable the valuation of an inventory at standard purchase or standard sales prices. Moreover, these prices come up by default during voucher entry (you may choose to override them if required). The standards are effective from the specified dates and they continue to be used at these rates until the next date, where the standard rate changes. Specify Default Ledger Allocation for Invoicing: This configuration allows the user to allocate the ledgers to be used for Purchase and Sales Invoice. Allow component list details (Bill of Materials): The Bill of Materials contains a list of items that are required to make up another item. In other words, it is a list of constituent items. Use ADDRESSES for Godowns: This configuration enables the user to give the address for locations.
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3.2.4 Voucher Entry

Both the Accounting and Inventory Vouchers can be configured from this menu for additional information.
Figure 3.9 Voucher Configuration screen
Accounting Vouchers Skip Date field in Create Mode (faster entry!): Set to Yes, the Tally.ERP 9 cursor goes directly to the Dr or Cr field depending on the voucher type. However, if set to No, the Tally.ERP 9 cursor goes to the Date field. It is advantageous to set this option to Yes for a faster entry if there are many entries to be made on the same date.
Use Single Entry mode for Pymt/ Rcpt/Contra: This configuration helps in selecting multiple
debits or credits depending on the type of entry. Use Payment/Receipt as Contra: To indicate the transfer of funds from bank to cash, bank to bank and cash to bank, Tally.ERP 9 provides a voucher type called Contra. This configuration is activated while using payment and receipt vouchers for a Contra transaction. Use Cr/Dr instead of To/By during Entry: This configuration gives the flexibility to use Cr/ Dr or To/By in Vouchers as per the requirement or the understanding of the user. Warn on Negative Cash Balance: This option in Tally.ERP 9 displays a warning if the cash balance is NIL.
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Pre-Allocate Bills for Payment/Receipt: This Configuration enables the user to select the bills first before the total amount can be updated in the amount field. This option is extremely useful while Cheque Printing. Allow Cash Accounts In Journals: Journals are adjustment entries. However, in many cases companies require journals to account for day-to-day transactions involving cash or bank accounts. Allow Expenses/Fixed Assets in Purchase Vouchers: This configuration helps the user to enter the details of purchase of fixed assets in the Purchase Voucher. Allow Income Accounts in Sales Vouchers: This configuration helps the user to allocate the income accounts in the sales voucher. Show Inventory Details: This configuration when set to Yes shows the name of the stock item, quantity, rate and value details. Show Table of Bills Details for Selection: This configuration displays a table which lists out the references of the pending bills Show Bill-wise Details: This configuration enables the user to view the bill-wise details in the voucher. Expand into multiple lines: This configuration displays the due date of repayment based on the credit days given. Show Ledger Current Balances: This configuration displays the current balance of the ledger selected while an entry is made. This is a convenient feature to use since it helps to get the information without referring to the report. Show Balances as on Voucher Date: Set to Yes, a voucher that is viewed in the alteration mode displays the ledger balances on the voucher screen based on the voucher date. Inventory Vouchers Use Ref. Number in Stock Journal: This configuration provides an additional field called Ref. in the Stock journal, where the user can enter the reference number. Warn on Negative Stock Balance: This configuration warns the user in cases where the item selected reaches a negative balance in the Invoice mode. Honor Expiry Dates usage for Batches: This configuration hides the batch details that are redundant and have expired. Show Balances as on Voucher Date: This configuration enables the user to view the inventory balances according to the voucher date Show Godownwise Details : This configuration enables the user to view Godown details. Show Batchwise Details : This configuration enables the user to view Batch details.
3.2.5 Invoice / Orders Entry

The Invoice entry and Order entry screens can be configured for additional information such as export details, shipping details, etc.
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3.2.6 Printing
This configuration helps the user to configure the printing screens for the reports and transactions.
3.2.7 Data Configuration

This configuration helps the user to define location of Language Files, Tally Configuration File, Export Files, Data Files and details of the companies to be loaded on startup.
3.2.8 TDL Configuration

This screen provides details regarding TDL Configuration viz., Local TDLs, Account TDLs & Remote TDLs enabled for the product.
3.2.9 Advanced Configuration

This configuration helps the user to specify Client/Server Configuration, Connection configuration and Proxy configuration for ODBC connectivity and Synchronisation of Data.
3.2.10 Licensing
This configuration helps the user to update, surrender, reset license and also configure existing License.
3.3 Setting up Account Heads

Tally.ERP 9 allows you to create Account heads and groups as per your requirements. The flexibility and ease of creating user-defined Account Heads and groups (Chart of Accounts) as per nature of business or business practice makes Tally.ERP 9 suitable for businesses across industries, verticals and geographies, without changing the way they do their business.
3.3.1 Chart of Accounts

Tally.ERP 9 follows the Double Entry system of Accounting. It records accounting information by debiting and crediting different Ledger Accounts using different voucher types depending upon the nature of transaction. It automatically collates the debit and credit amounts and arrives at the closing balance of each ledger / group / report.
3.3.2 Pre-defined Groups of Accounts

There are 28 predefined groups in Tally.ERP 9, which are widely used in the Chart of Accounts of many trading organizations. Out of these, 15 groups are Primary Groups and the remaining 13 are Sub-Groups.
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Among the 15 predefined groups, 9 Groups are Balance Sheet items and the remaining 6 groups are Profit & Loss A/c items. However, you may also alter the nomenclature of these predefined 28 Groups The List of Accounts screen is displayed as shown 1. Capital Account Reserves & Surplus [Retained Earnings] 2. Current Assets Bank Accounts Cash-in-hand Deposits (Asset) Loans & Advances (Asset) Stock-in-hand Sundry Debtors 3. Current Liabilities Duties & Taxes Provisions Sundry Creditors 4. Fixed Assets 5. Investments 6. Loans (Liability) Bank OD A/c [Bank OCC A/c] Secured Loans Unsecured Loans 7. Suspense A/c 8. Misc. Expenses (Asset) 9. Branch/Divisions Out of the 15 pre-defined primary groups, the following are the six pre-defined groups that appear in the Profit & Loss Account. 1. 2. 3. 4. 5. 6. Sales Accounts Purchase Accounts Direct Incomes [Income (Direct)] Indirect Incomes [Income (Indirect)] Direct Expenses [Expenses (Direct)] Indirect Expenses [Expenses (Indirect)]
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The Items in square brackets are aliases for the Group Names. This is another powerful feature of Tally.ERP 9, which allows you to refer to the same item under several different names.
3.3.3 Groups and Ledgers

Group is a collection of Ledgers of the same nature. In a business, expenditures like telephone expenses, electricity charges, conveyance etc., are commonly incurred. Ledgers based on these expenditures are created to be used while accounting vouchers are entered. To know the total of such expenses for any period (a week or a month), similar natured expense ledgers are grouped.
Make sure all the options in the F12: Configure (Master configuration) are set to No. The function of each option will be explained as and when the topic is covered.
Ledger account heads are the actual account heads with which we identify the transactions. All voucher entries have to be passed using ledgers. To Understand the concept of Groups and Ledgers, let us create Ledgers and Groups in Indus Enterprises. 1. Proprietor's Capital Account under Capital Account with an opening balance of Rs.25000. 2. Land & Building under Fixed Assets with an opening balance of Rs.60000. 3. Milton & Co under Sundry Debtors because we have sold some goods to them with an opening balance of Rs.15000. 4. Kaltronic Ltd under Sundry Creditors because we have purchased some goods from them with opening balance of Rs. 85000. 5. Local Sales under Sales Account with no opening balance. 6. Local Purchases under Purchase Account with no opening balance. 7. State Bank of India under Bank Accounts with an opening balance of Rs. 35000. 8. Conveyance under Indirect Expenses with no opening balance. 9. Bank Interest under Indirect Income with no opening balance. Notice that we have mentioned ledger names under groups i.e., under Capital Account, under Sundry Debtor, etc. which are referred to as GROUP names. Ledgers are created in the following manner: Go to the Gateway of Tally > Accounts Info. > Ledgers > Create. The Ledger Creation screen appears as shown below:
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Figure 3.10 Ledger Creation screen
Practice Exercise Two of the nine ledger accounts will be created by us. As a practice exercise you will be creating the remaining seven ledgers. 1. Proprietor's Capital Account under Capital Account with an opening balance of Rs. 25000. Enter Name as Proprietor's Capital Account. Select Capital Account from the List of Groups. Enter 25000 in the Opening Balance (on 1-Apr-2009) field.
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Figure 3.11 Ledger Creation screen Proprietors Capital Account
Press Y or Enter to accept the screen. Notice that Tally.ERP 9 automatically capitalises the first letter for you. 2. Land & Building under Fixed Assets with an opening balance of Rs.60000. Enter Name as Land & Building. Select Fixed Assets from the List of Groups. Enter 60,000 in the Opening Balance (on 1-Apr-2009) field.
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Figure 3.12 Ledger Creation Land & Building
Press Y or Enter to accept the screen. Tally.ERP 9 displays the total debit and credit opening balances while the ledgers are being created in the Ledger Creation screen. This is to avoid differences in the opening balance. So far, we have used the default groups provided in Tally.ERP 9, but Tally.ERP 9 does allow us to create our own groups. To know how to do so, let us explore the options available under the creation of Groups using Tally.ERP 9's pre-defined groups. Groups can be created in the following manner: Go to the Gateway of Tally > Accounts Info. > Groups. The Groups menu appears as shown below:
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Figure 3.13 Groups Menu
You can create one group at a time by pressing Enter on Create under Single Group menu. In case, you want to create multiple groups simultaneously, you can create them by pressing Enter on Create under Multiple Groups.
Create the following Sundry Debtors Ledger accounts : Groups - North Delhi Debtors and Bhopal Debtors under North India Debtors. Mysore Debtors and Secundrabad Debtors under South India Debtors. Renison & Co and Milton & Co grouped under North Delhi Debtors. Solution The solution is to first create two sub-groups North India Debtors and South India Debtors under Sundry Debtors. Go to the Gateway of Tally > Accounts Info. > Groups > Create. Enter Name as North India Debtors Against the field Under select Sundry Debtors from the List of Groups The Group Creation screen appears as shown below :
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Figure 3.14 Group Creation North India Debtors
Press Y or Enter to accept the screen. Similarly create the following Groups: South India Debtors under Sundry Debtors. Mysore Debtors and Secundrabad Debtors under South India Debtors. North Delhi Debtors and Bhopal Debtors under North India Debtors. Tally.ERP 9 allows you to create any number of groups under all the default groups. We have now created two sub-groups under Sundry Debtors viz. North India Debtors and South India Debtors. Additionally, we have created two sub-groups each under North India Debtors and South India Debtors as per the requirements. Let us now create the ledgers for Renison & Co and Milton & Co under North Delhi Debtors. Go to the Gateway of Tally > Accounts Info. >Ledgers > Create (Multiple Ledgers). Create Renison & Co and Milton & Co under North Delhi Debtors. Select North Delhi Debtors from List of Groups. Enter Renison & Co in the Name of Ledger field.
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Enter Milton & Co in the Name of Ledger field.
Figure 3.15 Multi-Ledger Creation
North Delhi Debtors is automatically prefilled in the Under field, press Enter to accept Press Enter to accept the screen. We have learnt to create ledgers in both the single and multiple mode under Tally.ERP 9's default pre-defined groups. We have also created our own sub-groups under Tally.ERP 9's predefined groups. Return to the Gateway of Tally and shut Indus Enterprises and select National Traders.
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Given below is the Trial Balance of National Traders extracted from the Books of Accounts at the close of business on March 31, 2009. Trial Balance Particulars Bank account Deposit Account Petty Cash Opening Stock Sundry Debtors (Total) Compu Care Systems Data Link Technologies Spectrum Computers Supreme Computers Buildings Buildings Accum Deprn Office Equipment Office Equip Accum Deprn Tax Deducted at Source Sales tax Sundry Creditors (Total) Challenger Systems Horizon Enterprises Silverplus Computers Mutual Trust Loan Equity Capital Profit & Loss A/c Total 518950 65650 44750 45600 50000 250000 32070 518950 25000 4500 4780 13600 156000 5400 26000 12400 13500 75000 8000 Debit 35000 40000 500 286150 57300 Credit
The Chart of Accounts to be prepared is based on the above Trial Balance of National Traders. This is to assist you in understanding the classification of ledgers. To help you, each account has been marked as : P - Pre-defined Tally.ERP 9 Group (no action) L - Ledger account required NG - New Group required NPG - New Primary Group required
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3.3.4 Chart of Accounts of National Traders

1. Capital Accounts as appearing in the Balance Sheet:
Figure 3.16 Chart of Accounts in Balance Sheet Assets
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Figure 3.17 Chart of Accounts in Balance Sheet Liabilities
2. Revenue Accounts appearing in the Profit & Loss Account
Figure 3.18 Chart of Accounts in Profit & Loss account Incomes
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Figure 3.19 Chart of Accounts in Profit & Loss account Expenses
Tally.ERP 9 Walk-through to Create Group Names for National Traders. Check the following: 1. Check whether the Current Date is April 1, 2009. To change the Current Date, click F2: Date on the button bar. Note that Tally.ERP 9 increments the date assuming that you want to change to the next day. You can accept it or change it. Type 1-4-2009 and press Enter to accept. 2. Press Esc, if you do not have the Gateway of Tally menu displayed. Let us now get familiar with Tally.ERP 9's Display functions. Displaying groups in Single Group and Multiple Group in the chart of accounts Go to the Gateway of Tally > Accounts Info. > Groups > Display (Single Group) > Select Bank Accounts.
Figure 3.20 Group Display Bank Account
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You can now use the Page Up and Page Down keys to view different groups.
The Groups in Tally.ERP 9, serve to both classify and identify account heads (ledger accounts) according to their nature. This enables a presentation of summarised information. The Groups have a hierarchical organisation. At the top of the hierarchy are Primary Groups where accounts are classified into capital or revenue, more specifically into assets, liabilities, income and expenditure to 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. Tally.ERP 9 provides a set of reserved groups, based on mercantile accounting principles, and allows you to modify their names or create sub-groups and primary groups.
Let us now view the List of Groups in the Multiple Display Mode. Go to the Gateway of Tally > Accounts Info. > Groups > Display (Multiple Groups) > Select All Items
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Figure 3.21 Multi-Group Display screen
Adding groups to the chart of accounts Depreciation under Primary Group Buildings and Office Equipment under Fixed Assets
Use Multiple Groups Creation to create Buildings and Office Equipment. Use Single Group Creation to create Depreciation.
In the F12: Group Configuration, Allow ADVANCED entries in Masters when set to Yes, displays Primary as an option in addition to the other predefined Groups.
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We can access all the configuration options for the Masters from the Gateway of Tally > F12: Configure > Accts / Inventory Info. Go to the Gateway of Tally > Accounts Info. > Groups > Create (Single Group). Click on F12: Configure button and set Yes to: Allow ALIASES along with Names Allow Language ALIASES along with Names. Allow ADVANCED entries in Masters. Accept the configuration screen and Tally.ERP 9 displays the Group Creation Screen in which you will notice additional information like: 1. Alias This is a simple mechanism of identifying an account by another name. 2. Group behaves like a Sub-Ledger The group behaves like a Control Account for the ledgers it contains when set to Yes. Only the group balance will be displayed, not the individual ledger balances. It is useful for groups such as Sundry Debtors and Sundry Creditors (which are pre-set to Yes) where there can be numerous ledger items. 3. Nett Debit/Credit Balances for Reporting By setting this to Yes, amounts will be displayed as a net figure instead of separate debit and credit balances in reports. Create Group 1. Name: Depreciation 2. (alias): Type Deprn and press Enter. This allows you to refer to the group by either name. You will notice that there is a field to enter a second alias if required. If you enter a name here, another alias field will be displayed, and so on. Tally uses the main name on all displays and reports, but this multiple alias facility is extremely useful for data entry. 3. Under: Select Primary from the list of Groups 4. Nature of Group: Select Expenses
Nature of Group is displayed when the new Group is created under a Primary Group. It helps to distinguish whether the group is a part of assets, liabilities, income or expenses, to identify the correct group for the Balance Sheet or Profit & Loss A/c.
5. Does it affect Gross Profits?: No Since these are Expenses (and the same is true for Income) which affect the Profit & Loss A/c, Tally.ERP 9 needs to know if the group affects the gross profit. This field will not appear if you are adding a group to an existing group.
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For Primary Income and Expenses Groups, the field Does it affect Gross Profit? tells Tally.ERP 9 whether the item is above or below the line in the Profit & Loss A/c in terms of its effect on the gross or net profit. Direct items are pre-set to Yes and indirect items to No.
6. 7. 8. 9.
Group behaves like a Sub-Ledger: No Nett Debit/Credit Balances for Reporting: No. Used for Calculation (eg. Taxes, Discounts): No Method to Allocate when used in Purchase Invoice: Not Applicable
The Group Creation Screen appears as shown below :
Figure 3.22 Group Creation Depreciation
10. Press Y or Enter to accept the screen. Altering Groups Once created, groups can be altered by selecting the Alter option for single or multiple groups. The procedure is the same as used earlier to display groups, except that, here the data can be altered.
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Deleting Groups You can delete a group via the Group Alteration (Single Mode) screen by pressing Alt+D. However, you cannot delete Tally.ERP 9s pre-defined groups, or groups with sub-groups or groups containing ledgers. The lowest level must be deleted first. Tally.ERP 9 walkthrough to create National Traders ledgers with opening balances. Go to the Gateway of Tally > Accounts Info. > Ledgers > Create. Adding Single Ledgers 1. 2. 3. 4. 5. Name: Mutual Trust Loan Alias: Skip this field Under: Secured Loans Inventory values are affected ?: No Opening Balance (on 1-April-2009): 50000 Cr
Figure 3.23 Ledger Creation Mutual Trust Loan
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Tally.ERP 9 automatically assumes this to be a credit balance (Cr) however, you can change it to debit (Dr) if required. Also note that Tally.ERP 9 currently displays a running total of the difference in the Opening Balance. This difference should be zero when all the balances have been entered.
6. Press Y or Enter to accept the screen. Adding Multiple Ledgers Under Group: Sundry Debtor Name of Ledger: Data Link Technologies Opening Balance: 26000 Dr Name of Ledger: Spectrum Computers Opening Balance: 12400 Dr Name of Ledger: Supreme Computers Opening Balance: 13500 Dr Press Y or Enter to accept the screen. Altering and Displaying Ledgers The procedures for altering and displaying ledgers are similar to those of groups. Now try this out on National Traders by altering the Tally.ERP 9 pre-defined ledger for Cash to Petty Cash and entering the opening balance: Select Alter from the Single Ledger option. Select Cash from the List of Ledgers. Change the Name from Cash to Petty Cash. Enter the Opening Balance of 500 Dr. Press Y or Enter to accept the screen. If you use Display in Single Ledger now, you will see that the List of Ledgers shows Petty Cash instead of Cash. Deleting Ledgers You can delete a ledger, by pressing Alt+D in the Ledger Alteration screen. You will not be able to delete a ledger, once the financial transactions (vouchers) have been entered (excluding the Opening Balance). If there is a need to delete a ledger with any financial transactions the lowest level must be deleted first by pressing Alt+D.
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Create other Ledgers given in the Trial Balance 1. Remember, you have already input the ledger details for the two Sundry Debtors, the Mutual Trust Loan and Petty Cash. 2. Work from the Trial Balance, referring to the Chart of Accounts for the group to select, and create the ledgers using the single or multiple options, depending on the number of ledgers you create. 3. For the ledgers under Sales Accounts and Purchase Accounts, set Inventory values are affected? to No. Reset it to Yes when you start Inventory Vouchers. 4. Please enter on the ledger names as per the Trial Balance. 5. Sundry Creditors should be set up using the multiple options in the same way as the Sundry Debtors, except that the opening balances will be credits. 6. Watch the debits and credits on the two accumulated depreciation ledgers as, Tally.ERP 9 assumes it to be a debit balance (Dr). You need to change this to Cr. 7. Create a ledger for Bank Interest even though its balance is zero. Verify the Ledgers and Opening Balances In practical situations, that is all you have, the Chart of Accounts and the Trial Balance. You need to match the Trial Balance ledger accounts with the Chart of Accounts. You might put the opening balance figures in the chart of accounts itself. Tally.ERP 9 needs to know the Group under which each account falls at the time you are creating the ledger account. To ease your walk-through, the following Multi Ledger Alteration screen is taken from Tally.ERP 9 after entering the data. You can use them to verify your ledger accounts: Go to the Gateway of Tally > Accounts Info. > Ledgers > Multiple Alteration > Select All Items.
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Figure 3.24 Multi-Ledger Alteration screen
Press Y or Enter to accept the screen.
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Points to Remember
F11: Features are company-specific. You are allowed to specify options that are specific to the selected company only. The Accounting Features helps the user to create Budgets & Scenarios, Currencies, Cost Centres, Cost Categories etc. in addition to Groups and Ledgers. The Inventory Features helps the user to create Stock categories, Multiple Godowns, Use Tracking Numbers, Order Processing, Price levels etc. in addition to Stock Groups, Stock Items and Units of Measure. The Statutory & Taxation Features helps the user to enable Value Added Tax (VAT), Excise, Service Tax, Tax deducted at Source(TDS), Tax Collected at Source (TCS), Excise Duty along with Tax information such as Local Sales Tax Number, Inter-state Sales Tax Number, PAN/ Income - Tax Number. F12: Configuration options are applicable to all the companies in the same data directory. All financial entries are performed using ledgers or account heads. Group is a collection of Ledgers of the same nature. You can delete a ledger by pressing Alt+D in the Ledger Alteration screen.
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Lesson 4: Creating Inventory Masters in Tally.ERP 9
Lesson Objectives
On completion of this lesson, you will be able to understand The basic functions of the Tally.ERP 9 Inventory System Creating and maintaining Inventory Masters Creating and maintaining stock details Creating stock items and entering opening balances
Inventory accounting includes recording of stock details like the purchase of stock, the sale of stock, stock movement between storage locations or godowns and providing information on stock availability. Tally.ERP 9 makes it possible to integrate the inventory and accounting systems so that the financial statements reflect the closing stock value from the Inventory system. The inventory system operates in much the same way as the accounting system. First you set up the inventory details, which is a similar operation to creating the chart of accounts although, in this case, there are no pre-defined set of stock groups. Second, you create the individual stock items, which is similar to setting up the ledgers. In a newly created company the Inventory Info. menu comprises of four types of Masters, viz. Stock Groups, Stock Items, Units of Measure and Voucher Types. Go to the Gateway of Tally > Inventory Info. The Inventory info. menu is displayed as shown:
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Creating Inventory Masters in Tally.ERP 9
Figure 4.1 Inventory Info. Menu
The above Inventory Masters types are explained in detailed in the following sections. Units of Measure Let us take the example of Indus Enterprises that sells Televisions and Music Systems. Given below is the structure of items being sold. Group A Televisions A1 Sony A2 Philips A3 Videocon A1a Sony 29 inches TV A1b Sony 25 inches TV A2a Philips 29 inches TV A2b Philips 25 inches TV A3a Videocon 29 inches TV A3b Videocon 25 inches TV
Group B Music Systems B1 Sony B2 Videocon B1a Sony Tape-Recorder B1b Sony CD Player B2a Videocon Tape-Recorder B2b Videocon CD Player The televisions are sold in numbers. Hence, the Unit of Measure will be Nos.
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Indus Enterprises has two Godowns, the Bangalore Godown and the Mumbai Godown. The grouping structure in Tally.ERP 9 is as follows: Stock Group 1. Televisions (main stock group) Sony TV stock group under Televisons Philips TV stock group under Televisons Videocon TV stock group under Televisons 2. Music Systems (main stock group) Sony Music Systems Stock Group under Music Systems Videocon Music Systems Stock Group under Music Systems Under the stock group Televisions, let us create stock groups based on the different brands being sold viz. Sony, Philips and Videocon. This helps to find the total sales of a particular brand of televisions at any given point of time. In order to compare the total sales of the 29 and 25 inches televisions respectively, Tally.ERP 9's feature of Stock Categories for parallel classification can be used. Experiment Creation of Inventory Masters in Indus Enterprises.
4.1 Stock Groups

Stock Groups are provided to help in the classification of stock items. Classification is done based on some common behaviour. Grouping stock items makes it easy to identify and report them in the statements. For example, items of a particular brand can be grouped together so that you can get the inventory details of all the items of that brand.
4.1.1 Creating Stock Group

i. Create the Stock Group Television under Primary. Go to the Gateway of Tally > Inventory Info. > Stock Groups > Create (under the Single Stock Group). Ensure that the screen appears as shown below:
Figure 4.2 Stock Group Creation Television
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Press Y or Enter to accept the screen. Similarly, create Music Systems under Primary. ii. Create Sony TV under Televisions. The screen is displayed as shown below:
Figure 4.3 Stock Group Creation Sony TV
Press Y or Enter to accept the screen. Practice Exercise Create the following Stock Groups in the similar manner Name Under Can Quantities of items be ADDED Yes Yes Yes Yes
Philips TV Videocon TV Sony Music Systems Videocon Music Systems
Televisions Televisions Music Systems Music Systems
4.2 Stock Categories

This is a feature, which offers a parallel classification of stock items. Like Stock Groups, Stock categories are also classified based on some similar behaviour. The advantage of using Tally.ERP 9 lies in categorising Stock items together, (based on functionality) across different stock groups. This enables you to obtain reports for alternatives or substitutes of a stock item. Set Yes to Maintain Stock Categories in F11: Features (F2: Inventory Features) to get an additional option Stock Categories under Inventory Info.
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4.2.1 Creating Stock Category

Go to the Gateway of Tally > Inventory Info. > Stock Categories > Create. i. Create Stock Category 29 inches TV Under Primary
Figure 4.4 Stock Category Creation 29 inches TV
Press Y or Enter to accept the screen. Similarly , create Stock Category 25 inches TV under Primary.
4.3 Godowns / Locations

A place where stock items are stored is referred to as Godowns. You can specify where the stock items are kept. For example: A warehouse, shelf or rack etc, and obtain stock reports for each Godown and account for the movement of stock between locations/Godowns. Set Yes to Maintain Multiple Godowns in F11: Features (F2: Inventory Features) to get additional option like Stock Categories under Inventory Info.
4.3.1 Creating a Godown

Go to the Gateway of Tally > Inventory Info. > Godowns > Create. i. Create a Godown Bangalore under Primary. Ensure that the screen is displayed as shown below:
Figure 4.5 Godown Creation Bangalore
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Godowns have a main location, by default because of which the options Display and Alter are functional even before you create a godown.
Similarly create the godown Mumbai under Primary.
4.4 Units of Measure

Stock Items are mainly purchased and sold on the basis of quantity. The quantity inturn is measured by units. In such cases, it is necessary to create the Unit of Measure. The Units of Measure can either be simple or compound. Examples of simple units are: nos., metres, kilograms, pieces etc. Examples for compound units are: a box of 10 pieces etc. Create the Units of Measure before creating the Stock Items.
4.4.1 Creating Units of Measure

Go to the Gateway of Tally > Inventory Info. > Units of Measure > Create. The Unit Creation Screen appears as shown below:
Figure 4.6 Units of Measure Creation screen
Type Tally.ERP 9 has the option to create simple units as well as compound units. Examples: box, nos, pcs, etc. A Compound Unit is a combination of two simple units of measure. Example: A box of 10 pcs is a compound unit of measure. Symbol It is the abbreviated form by which a stock item is identified. For example, the abbreviation pcs indicates pieces.
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Formal Name This represents the complete or formal name of a symbol used while creating a unit. Different companies use different symbols to represent the same units. Formal names help you to match the symbols with their respective units. For example, the symbol for numbers (formal name) can be nos or num. Number of Decimal Places A unit can be expressed as fractions. For example, a 3.15 Kg refers to 3Kg and 150 grams. The number of digits expressed in grams after the decimal places are three. Likewise, fractions up to four decimal places can be expressed in the same manner. For expressing numbers, without a decimal place, specify 0 in this option. Let us create the unit Nos. 1. 2. 3. 4. Type: Simple Symbol: Nos Formal Name: Numbers Number of Decimal Places: 0
The Unit Creation screen is displayed as shown below:
Figure 4.7 Units of Measure Creation Nos
5. Press Y or Enter to accept the screen.
4.5 Stock Items

Stock items are goods that you manufacture or trade (sell and purchase). It is the primary inventory entity. Stock Items in the Inventory transactions are similar to ledgers being used in accounting transactions. Therefore, Stock Items are important in an inventory just as ledgers are important in accounting.
4.5.1 Creating a Stock Item

Go to Gateway of Tally > Inventory Info. > Stock Items > Create.
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The Stock Item Creation Screen appears as shown below:
Figure 4.8 Stock Item Creation screen
Enter the following details: Name: The name of the stock item. Under: The stock group under which you want to classify the stock item. Category: The stock category you want to classify the stock item for parallel classification. Units: The unit of measure for the stock item being created. Rate of Duty: Enter the rate of duty charged on the item. Opening Balance: The opening balance of a stock item, refers to the stock available with us. Godowns that have already been created, must have the opening balance quantity and the location specified.
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i. Create a Stock Item Sony 29 inches TV, under the Group Sony TV. Ensure that the details appear as shown below:
Figure 4.9 Stock Item Creation Sony 29 inches TV
Practice Exercise Similarly, create the following Stock Items under Televisions Name Sony 25 inches TV Philips 29 inches TV Philips 25 inches TV Videocon 29 inches TV Videocon 25 inches TV Under Sony TV Philips TV Philips TV Videocon TV Videocon TV Category 25 inches TV 29 inches TV 25 inches TV 29 inches TV 25 inches TV Units Nos Nos Nos Nos Nos
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Similarly, create the following Stock Items under Music Systems. Name Sony Tape - Recorder Sony CD - Player Videocon Tape - Recorder Videocon CD - Player Under Sony Music Systems Sony Music Systems Videocon Music Systems Videocon Music Systems Category Not Applicable Not Applicable Not Applicable Not Applicable Units Nos Nos Nos Nos
4.6 Creating Inventory Masters for National Traders

Before you start to create the inventory data for National Traders, there are some important functions of housekeeping that are to be taken care of. Make sure your screen displays the main menu of the Gateway of Tally and ensure that only National Traders is loaded. Set Tally.ERP 9s Current Date to April 1, 2009 select F2: Date at the Gateway of Tally. You also need to check whether the following features in Tally.ERP 9 are enabled for this module i. In the F11: Features (F2: Inventory Features) set Yes to: Maintain Stock Categories Maintain Multiple Godowns ii. In the F12: Configure > Accts/Inventory Info. set Yes to: Allow ALIASES along with Names Allow Language ALIASES along with Names Allow ADVANCED entries in Masters (Accounts) Use ADDRESSES for Ledger Accounts Use CONTACT DETAILS for Ledger Accounts Allow ADVANCED entries in Masters (Inventory) Allow Std. Rates for Stock Items Let us now use Tally.ERP 9 to set up the basic inventory details for National Traders that sells computers, Printers and Peripherals. Create the stock groups and sub-groups as shown: Stock Group Computers Printers Peripherals Accessories Components Under Primary Primary Primary Peripherals Peripherals
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4.6.1 Create Stock Groups

You will now set up the stock groups using both the single and multiple create options. i. Creating single stock groups Go to the Gateway of Tally > Inventory Info. > Stock Groups > Create. Create a Stock Group - Computers 1. 2. 3. 4. Name: Computers Aliases: Skip the field Under: Primary Can quantities of items be ADDED?: Yes
Figure 4.10 Stock Group Creation Systems
The field Can quantities of items be added? in the stock group creation screen pertains to information on measuring the units of the Stock Items that have been categorised under the Stock Group. The Stock Items categorised under the group should have similar units for them to be added up. You cannot add quantities in Kgs to quantities in Pcs.
5. Press Y or Enter to accept the screen. Similarly, create the following Stock Groups . Name Peripherals Printers ii. Creating Multiple Stock Groups Go to the Gateway of Tally > Inventory Info. > Stock Groups > Create. Under Primary Primary Can Quantities of items be ADDED Yes No
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Create Accessories and Components under Peripherals. Ensure that the Multi Stock Group Creation screen is displayed as shown below:
Figure 4.11 Multiple Sock Group Creation
4.6.2 Displaying and Altering Stock Groups

Once created, stock groups can be displayed and altered in both the single and multiple mode. You can delete a stock group by using the option Alter under the Single Stock Group by pressing Alt+D. However, you cannot delete a stock group with sub-groups or stock items. The lower levels must be deleted first.
4.6.3 Creating Single Stock Categories

Go to the Gateway of Tally > Inventory Info. > Stock Categories > Create. Name National Under Primary
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4.6.4 Creating Multiple Stock Categories

Go to the Gateway of Tally > Inventory Info. > Stock Categories > Create. Under Category Primary Primary Primary Primary Name of Category HCL IBM HP Samsung
4.6.5 Displaying and Altering Stock Categories

Once created, stock categories can be displayed and altered in single and multiple mode. You can delete a stock category via Single Stock Category > Alter by pressing Alt+D. However, you cannot delete a stock category with sub-categories. The lower levels must be deleted first.

Go to the Gateway of Tally > Inventory Info. > Units of Measure > Create. Type Simple Simple Symbol Nos Box Formal Name Number Of Boxes Number of Decimal Places 0 0
4.6.7 Creating Compound Units of Measure

Go to the Gateway of Tally > Inventory Info. > Units of Measure > Create. 1. 2. 3. 4. Type: Compound (press Backspace) First Unit: Select Box Conversion: Type 100 Second Unit: Select Nos
Figure 4.12 Compound Units of Measure Creation
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4.6.8 Displaying and Altering Units of Measure

Once created, the units of measure can be displayed and altered. You can delete a unit of measure in the alteration screen by pressing Alt+D. However, you cannot delete a unit of measure that is part of a compound measure. The compound measure must be deleted first.
4.6.9 Creating Godowns

Ensure that Maintain Multiple Godowns is set to Yes in the F11: Features (F2: Inventory Features). The concept of Godowns is essentially to store the inventory and can be used as a location, warehouse, department, sub-contractor locations etc. Tally.ERP 9 permits any number of godowns that can be grouped and sub-grouped to match the structure you need. To Create a Godown, go to the Gateway of Tally > Inventory Info. > Godowns > Create. 1. 2. 3. 4. Name: Warehouse alias: Skip the field Under: Primary Allow Storage of materials: Yes
Similarly, create On-Site as Godown under Primary. 1. 2. 3. 4. Name: On - Site alias: Skip the field Under: Primary Allow Storage of materials: Yes
4.6.10 Displaying and Altering Stock Godowns

Once created stock Godowns can be displayed and altered in single and multiple mode. Go to the Gateway of Tally > Inventory Info. > Godowns > Alter. You can delete a stock Godown via Single Godown > Alter by pressing Alt+D. However, you cannot delete a stock Godown with sub-godowns. The lower levels must be deleted first.
4.6.11 Create Stock Items

Go to the Gateway of Tally > Inventory Info. > Stock items > Create.
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Create the stock items as on 1-4-2009, with the information provided below: Stock COMPUTERS HCL PIV IBM PIV PERIPHERALS Accessories CD ROM Disks 100s Dust Covers USB Pen Drives 64MB Wireless Keyboard Wireless Mouse Printers HP Laserjet 1010 Series Samsung Laserjet 1500 8,200 8,100 0 0 7 5 7 Nos 5 Nos Total 57,400 40,500 2,86,150 9,500 9,850 450 35 1,250 490 250 0 2 0 10 10 5 8 10 15 10 5 Box 10 Nos 10 Nos 25 Nos 20 Nos 2,250 350 12,500 12,250 5,000 500 40 1,600 700 430 17,500 17,100 1 0 4 4 5 Nos 4 Nos 87,500 68,400 21,500 24,785 Cost Warehouse On Site Total Qty Total Value Retail Price
Ensure that Allow ADVANCED entries in Masters is set to Yes in the F12: Stock Item Configuration. Create the stock item HCL PIV with the following details: 1. 2. 3. 4. 5. 6. 7. Name: HCL PIV alias: Skip this field Under: Computers Category: HCL Units: Nos Alter Standard Rates?: Yes Enter the details in the Standard Rate screen as shown below:
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Figure 4.13 Standard Rate screen for Stock Item HCL PIV
8. Enter other details as given in the table: Rate Of Duty Cost Method Market Valuation Method Ignore Diff due to Physical Counting? Ignore Negative Balances? Treat all Sales as New Manufacture? Treat all Purchases as consumed? Treat all Rejection Inward as scrap? Opening Balance: Quantity Opening Balance: Rate 9. Allocate the items as shown below: 0 Avg Cost Last Sale Price No No No No No 5 Nos 17,500
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Figure 4.14 Allocation of: HCL PIV
10. The Stock Item Creation screen for HCL PIV appears as shown below:
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Figure 4.15 Completed Item Creation screen
11. Press Y or Enter to accept. Explanation for Behaviour Costing Method: This is the method by which stocks are valued. The value arrived at will be the stock value in the books. This method considers Purchase costs only. Market Valuation Method: This method considers the Sale price only for the valuation of stocks. The method selected, is not however, used for standard reporting. Ignore Diff. due to Physical Counting?: This requires you to enter information on whether Tally.ERP 9 should automatically account for stock difference by passing an appropriate entry or not. Ignore Negative Balances?: This requires you to enter information on whether Tally.ERP 9 should warn you if there is a negative balance. This however does not prevent you from entering vouchers. Treat all Sales as New Manufacture?: This requires you to enter information on whether on entering a sale voucher, the item will automatically be manufactured and brought in stock. Treat all Purchases as Consumed?: This requires you to enter information on whether on entering a purchase, the item is automatically issued from stock. Treat all Rejections inward as Scrap?: This requires you to enter information on whether the goods rejected and taken into stock should be shown as issued and hence valued nil. Similarly, Create other Stock Items.
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Once you have entered all the stock items, return to the main Gateway of Tally menu and select the Stock Summary. This should show a grand total of 2,86,150, the break-up of which is, Computers - Rs. 1,55,900, Peripherals - Rs. 32,350, Printers - 97,900 = Rs. 2,86,150. Ensure that the Stock Summary appears as shown :
Figure 4.16 Stock Summary from April 1, 2009 to May 1, 2009
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Points to Remember
Inventory accounting includes recording stock details like the purchase of stock, the sale of stock, stock movement between storage locations or godowns and providing information on stock availability. Stock Groups are provided for the purpose of classification of stock items. Stock Items refers to goods that you manufacture or trade. Godowns/Location are places where stock items are stored.
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Lesson 5:
Voucher Entry in Tally.ERP 9
Lesson Objectives
On completion of this lesson, you will be able to Describe the purpose of the Tally.ERP 9 Accounting Vouchers Create and alter Accounting Vouchers Use vouchers to enter Accounting transactions Describe the use of Non-Accounting Vouchers Describe the purpose of the Tally.ERP 9 Inventory vouchers Create and alter Inventory Vouchers Using vouchers to enter Inventory transactions
In accounting terms, a voucher is a document containing the details of a financial transaction. For example, a purchase invoice, a sales receipt, a petty cash docket, a bank interest statement, and so on. For every such transaction made, a voucher is used to enter the details into the ledgers to update the financial position of the company. This feature of Tally.ERP 9 will be used most often. Tally.ERP 9 follows the Golden Rule of Accounting : Real Accounts Debit Credit What Comes in What Goes out Personal Accounts The Receiver The Giver Nominal Accounts Expenses and Losses Incomes and Gains
5.1 Accounting Vouchers

Tally.ERP 9 is pre-programmed with a variety of accounting vouchers, each designed to perform a different job. The standard Accounting Vouchers are: Contra Voucher (F4) Payment Voucher (F5)
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Receipt Voucher (F6) Journal Voucher (F7) Sales Voucher /Invoice (F8) Credit Note Voucher (CTRL+ F8) Purchase Voucher (F9) Debit Note Voucher (CTRL+ F9) Reversing Journals (F10) Memo voucher (CTRL+ F10)
Optional Voucher: All the available vouchers in Tally.ERP 9 (except non-accounting vouchers) can be marked optional, if required. Post-dated voucher: All the available vouchers in Tally.ERP 9 can be marked post-dated, if required.
You can alter these vouchers to suit your company, and also create new ones. Read ahead to understand the function of each voucher type. The following exercises are sample enteries for understanding Voucher entry in Tally.ERP 9, do not make these entries.
5.1.1 Contra Voucher (F4)

For example: withdrawing money from the bank for petty cash.
Contra Voucher
Description Voucher Entry
Records funds transfer between cash and bank accounts Account State Bank of India (Bank Accounts) Petty Cash (Cash-in-hand) Debit Amount Amount Credit
Use a Contra Voucher to record the entry. Setup : In Voucher entry mode, press F12: Contra Configuration and set the following to Yes: Skip the Date field in Create Mode (faster entry!) Use Cr/Dr instead of To/By during entry Warn on Negative Cash Balance Show Ledger Current Balances Show Balances as on Voucher Date
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Go to the Gateway of Tally > Accounting Vouchers > F4: Contra.
Figure 5.1 Contra Voucher
5.1.2 Payment Voucher (F5)

For example, a company settles a creditor's bill by cheque.
Payment Voucher Description Voucher Entry Records all bank and cash payments Account Ledger account paid Kaltronic Ltd. (Sundry Creditors) Bank or cash account State Bank of India (Bank Account) Amount Debit Amount
Credit
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Use a Payment Voucher to record the entry. Go to the Gateway of Tally > Accounting Vouchers > F5: Payment.
Figure 5.2 Payment Voucher
Press Y or Enter to accept the screen. Payment in Single Entry Mode In Voucher entry mode, use F12: Payment Configuration and set Use Single Entry mode for Pymt/Rcpt/Contra to Yes. Payment Voucher Description Voucher Entry Records all bank and cash payments Account Ledger account paid Conveyance Postage (Indirect Expenses) Bank or cash account Petty Cash (Bank Account) Amount Debit Amount
Credit
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The entry made in the single entry mode appears as shown below:
Figure 5.3 Payment Voucher with Single Entry Mode
Press Y or Enter to accept the screen. The advantage of a single entry mode is that you can select multiple debits or credits depending on the type of entry. Similarly the transactions can be recorded in single entry mode even in Receipt and Contra vouchers. Warn on Negative Cash Balance Tally.ERP 9 displays a warning if the cash balance is NIL when Warn on Negative Cash Balance is set to Yes in the F12: Payment Configuration. For example, a cash ledger account has no balance. A payment of Rs. 4,500 towards Telephone expenses is to be made. In the process of making the payment, Tally.ERP 9 displays a warning at the time of accepting the entry. The entry made appears as shown below:
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Figure 5.4 Payment Voucher with Warning on Negative Cash
In addition to the warning, Tally.ERP 9 also displays the negative balance amount in Red.
5.1.3 Receipt Voucher (F6)

For example, the company receives a bank advice that the interest has been credited to its deposit account. Receipt Voucher Description Voucher Entry Records all receipts into bank or cash accounts Account Ledger account receiving Bank Interest (Indirect Incomes) Bank or cash account Deposit Account Debit Amount Amount Credit
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Use a Receipt Voucher to record the entry. Ensure in F12: Payment Configuration, Use Single Entry mode for Pymt/Rcpt/Contra is set to No. Go to the Gateway of Tally > Accounting Vouchers > F6: Receipt. The entry made appears as shown below:
Figure 5.5 Receipt Voucher
5.1.4 Journal Voucher (F7)

For example, the company has entered some expenditure on advertising as general office costs, rather than recording the transaction in the separate ledger for advertising. Journal Voucher Description Voucher Entry Records adjustments between ledger accounts Account Advertising (Indirect Expenses) Office Costs (Indirect Expenses) Amount Debit Credit Amount
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Use the Journal Voucher to adjust the two accounts. Go to the Gateway of Tally > Accounting Vouchers > F7: Journal. The entry made appears as shown below:
Figure 5.6 Journal Voucher
5.1.5 Sales Voucher (F8)

For example, a company sells software on credit. Sales Voucher Description Voucher Entry Records all sales Account Buyers ledger account Milton & Co. (Sundry Debtors) Sales Accounts (Local Sales) Amount Debit Amount
Credit
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Use a Sales Voucher for making this entry. Go to the Gateway of Tally > Accounting Vouchers > F8: Sales. The entry made appears as shown below:
Figure 5.7 Sales Voucher
5.1.6 Credit Note Voucher (Ctrl + F8)

This voucher type is made available when the option Use Debit/Credit Note to is set to Yes in the F11: Features (F1: Accounting features). For example: A customer returns stock that was incorrectly supplied. Credit Note Voucher Description Voucher entry Records credit note entry for sales returns or Customer overcharging Account Buyers ledger account Milton & Co (Sundry Debtors) Sales Accounts Local Sales Debit
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Amount
Amount Credit
Use a Credit note to record this entry. Go to the Gateway of Tally > Accounting Vouchers > F8: Credit Note. The entry made appears as shown below:
Figure 5.8 Credit Note Voucher
5.1.7 Purchase Voucher (F9)

A company buys computer parts on credit. Purchase Voucher Description Voucher Entry Records all purchases Account Suppliers ledger account Beltron Ltd (Sundry Creditor) Purchase Accounts (Local Purchases) Debit Amount Amount Credit
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Use a Purchase Voucher to record this entry. Go to the Gateway of Tally > Accounting Vouchers > F9: Purchase. The entry made appears as shown below:
Figure 5.9 Purchase Voucher
5.1.8 Debit Note Voucher (Ctrl + F9)

This voucher type is made available when the option Use Debit/Credit Notes is set to Yes in the F11: Features (F1: Accounting Features). For example, a company returns damaged goods to a supplier. Debit Note Voucher Description Records debit note entry for purchase returns or over-charging by a supplier
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Voucher Entry
Account Suppliers ledger account Beltron Ltd (Sundry Creditor) Purchase Accounts (Local Purchases)
Amount Debit
Amount
Credit
Use a Debit Note to record this entry. Go to the Gateway of Tally > Accounting Vouchers > F9: Debit Note. The entry made appears as shown below:
Figure 5.10 Debit Note Voucher
5.1.9 Reversing Journal Voucher (F10)

Reversing Journals are special journals that are automatically reversed after the date of the journal. They exist only for a day and are effective on the date of the reversing journal. This voucher type is available only if the feature Use Reversing Journals & Optional Vouchers is set to Yes in the F11: Features (F1: Accounting Features).
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The entry made for this, is as follows: Reversing Journal Voucher Description Voucher entry Records the voucher entries in a Reversing Journal Register, without affecting the ledger accounts and financial statements Account Ledger account Ledger account Amount Debit Credit Amount
Go to the Gateway of Tally > Accounting Vouchers > F10: Reversing Journal.
Reversing Journals are useful in Scenario Management.
5.1.10 Memo Voucher (Ctrl + F10)

Memo Voucher is a non-accounting voucher and the entries made using it will not affect your accounts. In other words, Tally.ERP 9 does not post these entries to ledgers but stores them in a separate Memo Register. You can alter and convert a Memo voucher into a regular voucher when you decide to bring the entry into your books. Memo vouchers are used for the following purposes : 1. Making suspense payments For example, the company gives an employee cash to buy office supplies, the exact nature and cost of which are unknown. You could have entered a voucher stating petty cash advance, a voucher to record the actual expenditure details when they are known, and another voucher to record the return of surplus cash. However, a simpler way is to enter a Memo voucher when the cash is advanced, and then turn it into a Payment voucher for the actual amount spent, when known. 2. Vouchers not verified at the time of entry Sometimes it so happens that you do not understand the details of a voucher you are entering. In such cases, enter it as a Memo voucher and amend it when you get the details. 3. Items given on approval Usually, entries are made into the books only after a sales transaction is completed. Items given on approval, can be tracked by using a Memo voucher. It can either be converted into a proper Sales voucher or be deleted depending on the outcome.
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Memo Voucher Description Voucher Entry Records the voucher entries in a memo register, without affecting the ledger accounts and financial statements Account Ledger account Ledger account Amount Debit Credit Amount
5.1.11 Optional Voucher

This is another non-accounting voucher which is available only if the feature Use Reversing Journals & Optional Vouchers is set to Yes in the F11: Features (F1: Accounting Features). It differs from the Memo voucher in two respects: It is not a voucher type, since all the other voucher types can be marked as Optional during a voucher entry. You have the option to bring this voucher into your accounts temporarily and see its effect on financial reports. Any voucher type (except non-accounting voucher) can be designated as an Optional voucher. Optional Voucher Description Voucher Entry Records voucher entries temporarily, to help visualise the effect on reports, without affecting the ledgers Account Ledger account Ledger account Amount Debit Credit Amount
5.1.12 Post-dated Vouchers

Post-dated Vouchers are ignored by Tally.ERP 9 until the date in question. This is useful for entering transactions that take place on a regular basis. For example, if you pay for something by instalments, you can set-up the payments in advance, and Tally.ERP 9 will only enter them in the ledgers as and when they fall due. A voucher is marked as Post-dated while creating or altering it.
5.1.13 Creating a New Voucher Type

National Traders wants to record bank and petty cash payments differently and needs two new voucher types to replace the pre-defined Payment voucher. Inorder to do this: Create a Bank Payment voucher
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Go to the Gateway of Tally > Accounts Info. > Voucher Types > Create. 1. Name: Bank Payment 2. Type of Voucher: Payment (Specify the default Tally.ERP 9 voucher, whose functions the new voucher should copy). 3. Abbr.: Bank Pymt (Specify the abbreviation to denote this new voucher in reports) 4. Method of Voucher Numbering: Automatic You can choose one of the following methods for numbering from the pop-up: Method of Numbering Automatic Manual None Purpose For Tally.ERP 9 to do it for you. You do it. You can also specify if you wish to prevent duplicates. To disable numbering for this voucher type.
5. Use Advance Configuration: No 6. Use EFFECTIVE Dates for Vouchers: No 7. Make Optional as default: No (This is to set the voucher type as an Optional voucher, by default) 8. Use Common Narration: Yes 9. Narrations for each entry: No 10. Print after saving Voucher: No 11. Name of Class: Skip.
The voucher date is taken from the current date mentioned at the Gateway of Tally.ERP 9. However, the effective date for the voucher may be different. For example, entering a post-dated cheque. Tally.ERP 9 displays the narration field which applies to the whole voucher. By setting Use Common Narration option to No, we can have separate narration fields for each line on the voucher. Reversing Journals are used for Scenario Management. The Name of Class field enables creation of Voucher Classes for the respective voucher types. (The Voucher class is a template to customise voucher data entry).
A Bank Payment Voucher Type Creation screen appears as shown below:
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Figure 5.11 Voucher Type Creation Screen Bank Payment
5.1.14 Displaying and Altering a Voucher Type

Observe the menu, you will notice that you can also display and alter voucher types. Selecting these options brings up a List of Voucher Types, from which you can select the one you want to view or work on. Apart from the heading, the Voucher Type Display/Alter screens are identical to the Creation screen. Practice Exercise Create a Petty Cash Payment Voucher Type Ensure that the details in the Voucher Type Creation screen are as shown below:
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Figure 5.12 Voucher Type Creation Petty Cash

The above exercises are sample enteries for understanding Voucher entry in Tally.ERP 9, do not make these entries.
5.1.15 Recording Accounting Transactions

Let us record the following business transactions of National Traders for the month of April 2009 : National Traders Business Transactions Date 1-4-09 1-4-09 2-4-09 5-4-09 6-4-09 6-4-09 7-4-09 Transaction Details Paid Rs 500 to Challenger Systems by cheque Bought office supplies for Rs 150 with Petty Cash Wages of Rs 600 paid to employees by cheque Banked a cheque for Rs 5000 received from Data Link Technologies Sold 1 IBM Pentium IV to Spectrum Computers for Rs 24,785. Withdrew Rs 200 from Bank Account for Petty Cash Bought 1 Laserjet 1500 from Silver Plus computers on credit for Rs 8,100
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The basic steps to be followed while entering each voucher are: Check if the date is correct and use F2: Date to change it if necessary. Select the voucher type from the button bar and make a further selection from the supplementary list that Tally.ERP 9 displays, if necessary. Enter the appropriate reference for the Purchase and Sales vouchers. Select the ledgers and enter the amounts. Type the narration and check whether all the data is correct before accepting. Create the following Accounting Vouchers in the books of National Traders : Date 1-4-09 1-4-09 2-4-09 5-4-09 6-4-09 6-4-09 7-4-09 Voucher Type F5:Payment Bank Payment F5: Payment Petty Cash F5: Payment Bank Payment F6: Receipt F8: Sales F4: Contra F9:Purchase Ledgers to be Selected Dr - Challenger Systems Cr - Bank Account Dr - Office Costs Cr - Petty Cash Dr - Wages Cr - Bank Account Cr - Data Link Technologies Dr - Bank Account Dr - Spectrum Computers Cr - Computer Sales Cr - Bank Account Dr - Petty Cash Cr - Silverplus Computers Dr - Printer Purchases 5000.00 24,785.00 24,785.00 200.00 200.00 8,100.00 8,100.00 150.00 150.00 600.00 600.00 5000.00 Debit 500.00 500.00 Credit
In the Purchase/Sales Ledger Masters, set Inventory Values are affected to No and proceed with the above transactions. Enable the option to Yes in the Inventory Transactions section.
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A Voucher Entry screen comprises of the following : Type of voucher It is essential to check if you are using the right voucher for the transaction. You can change the voucher type by selecting a new type from the button bar, if required. For example on the selection of a payment voucher, Tally.ERP 9 automatically displays the List of Voucher types you have created. You can select the voucher type required. Voucher number Tally.ERP 9 automatically sets the voucher number for you. You can change the voucher number manually, if required. Reference You can enter a reference of your choice. A Purchase order number or an Invoice Number can be entered as a reference. Date of voucher The date of the voucher you enter is displayed at the top-right of the Voucher Creation screen. The date is taken initially from the Gateway of Tally - Current Date and you may need to change it frequently to ensure that the vouchers are dated as you want. Effective date A voucher type can be configured to allow for an Effective date. The line below the Date of voucher displays the date when the voucher will be effective. Particulars This is where you enter the ledger names and the debit and credit amounts. Each line displays a prompt of Dr or By for debit entries and Cr or To for credit entries. Depending on the voucher type, Tally.ERP 9 selects either Dr or Cr for the first prompt, which you cannot change. Thereafter, you can change the prompt (if necessary) by typing over it with a D or a C. To select a ledger, type the first letter of its name. Tally.ERP 9 then displays a List of Ledger Accounts beginning with the letter highlighted. Only ledgers suitable for the voucher type are displayed. As you continue typing, the highlights reduce until a match is found.The current balance is displayed when you select the ledger, (if this option has been configured). The revised current balance is shown after the amount is entered. On selecting the next ledger, Tally.ERP 9 suggests the balancing amount as the value to be entered, which may be accepted or typed over. The voucher entry cannot be completed until the debits equal the credits.
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Narration Here you type whatever appropriately describes the transaction. Remember, you can have a separate narration for each line of particulars, if you configure the voucher type in that way. For Payment Vouchers, where a bank account has been credited, Tally.ERP 9 pre-sets the narration to Ch.No. expecting a cheque number to be entered. This can be over written if required. Once the narration is complete, press Enter to bring up the Accept? box. Once you accept the data, Tally.ERP 9 presents another data entry screen.
5.1.16 Trial Balance for April 2009

Go to the Gateway of Tally > Display > Trial Balance. After making the above emtries, the Trial Balance of National Traders will appear as shown :
Figure 5.13 Trial Balance From April 1, 2009 to April 7, 2009

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Enter further transactions for National Traders. Business Transactions for the months of May and June 2009 are as follows: National Traders Business Transactions Date 10-5-09 11-5-09 13-5-09 19-5-09 24-5-09 30-5-09 01-6-09 01-6-09 09-6-09 15-6-09 22-6-09 22-6-09 Transaction Details Bank Advice received for bank interest of Rs.500 credited to the deposit account. Electricity bill (Office costs) for Rs.400 received from Horizon Enterprises. (Note: Use a Journal Voucher) Sold 1 HP Laserjet 1010 Series for Rs 9,500 to a cash customer, retaining the money as Petty Cash. Salaries of Rs 2,500. Amount paid through Bank Account. Sold 1 HCL Pentium IV for Rs. 21,500 to Supreme Computers. Purchased 5 USB Pen Drives 64MB @ Rs. 1,250 each from Challenger Systems on credit. Paid freight charges of Rs 200 from petty Cash Paid Challenger Systems Rs. 11,500 by cheque Transferred Rs 6,000 from Bank Account to Deposit Account. Cheque for Rs 15,000 received from Spectrum Computers Purchased 4 IBM Pentium IVs for Rs. 17,100 each from a new supplier and paid by cheque Sold 2 IBM Pentium IVs for Rs. 24,785 to a customer who paid by cheque
In the Purchase/Sales Ledger Masters, set Inventory Values are affected to No and proceed with the above transactions. Enable the option to Yes in the Inventory Transactions section.
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5.1.17 Trial Balance for June 2009

Go to the Gateway of Tally > Display > Trial Balance
Figure 5.14 Trial Balance From April 1, 2009 to June 30, 2009
5.2 Inventory Vouchers

Tally.ERP 9 inventory vouchers perform the same function in the inventory system as accounting vouchers do. They are the means by which you enter transactions relating to the Inventory. The vouchers record transactions relating to the issue and receipt of stock, the transfer of stock between godowns, and physical stock adjustments. The following inventory vouchers are available in Tally.ERP 9 : Purchase Order (Alt+F4) Sales Order (Alt+F5) Rejections Out (Alt+F6) Rejections In (Ctrl+ F6) Stock Journal (Alt+F7) Delivery Note (Alt+F8) Receipt Note (Alt+F9) Physical Stock (Alt+F10)
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5.2.1 Purchase Order

A Purchase order entry has to be made in the books of the company to assist them in checking whether the goods have been received or not. The Purchase Order number can be used as a reference. For example, the company wishes to place an order with the supplier for some goods. Purchase Order Description Details recorded Records placing an order for stock items to suppliers. Supplier's Ledger account, Name and address, Order details, name of stock item, Due on, Godown, Quantity, Rate, Amount, Narration.
5.2.2 Sales Order

A Sales Order entry has to be made to record this. The Sales Order number can be used as a reference. For example, a customer places an order with the company for purchasing some goods. Sales Order Description Details recorded Records order details for stock items received from customers. Customer's Ledger account, Name and address, Order details, name of stock item, Due on, Godown, Quantity, Rate, Amount, Narration.
5.2.3 Rejections Out

A Rejections Out entry is passed to record the rejected goods. This is a pure inventory voucher. For example: We have purchased some goods and have rejected a part of it. Rejections Out (Purchase Returns) Description Details recorded Records rejected stock details returned to suppliers. Ledger Account, Suppliers name and address, stock item, Tracking details, Order details, Godown, Quantity, Rate, Amount, Narration.
5.2.4 Rejections In
A Rejections In entry is passed to record the rejected goods. The Rejections In entry is a pure inventory voucher. For example a customer has rejected goods that was sold earlier. Rejections In (Sales Returns) Description Details recorded Records rejected stock details received from customers Ledger account, Customer's name and address, stock item, tracking details, order details, Godown, Quantity, Rate, Amount, Narration.
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5.2.5 Stock Journal

To record the consumption of goods there is no need for entries on both sides of the voucher. Such entries can be entered in a stock journal voucher. For example: the company transfers items of stock from the warehouse to the shop. Stock Journal Description Details recorded Essentially records the transfer of stock from one Godown to another. Names of from and to godowns, name of stock item, quantity, rate, amount, narration.
5.2.6 Delivery Note

Goods that are being delivered to a customer are recorded in a Delivery Note voucher. Delivery Note Description Details recorded Records delivery of new stock to customers Reference, ledger account, suppliers (if supplementary details are set to yes in F12: Delivery Note Configuration) then, name and address, Order & dispatch details, name of stock item, Tracking details, Order details, Godown, Quantity, Rate(optional), Amount(optional), narration.
5.2.7 Receipt Note

Goods that are received from the supplier are recorded in a Receipt Note (Goods Receipt Note GRN) voucher. Receipt Note Description Details recorded Records receipt of new stock from suppliers Reference, ledger account, (If supplementary details are set to yes in F12: Receipt Note Configuration) then, Order details, Suppliers name and address, name of stock item, Tracking details, Order details, Godown, Quantity, Rate (optional), Amount (optional), narration.
5.2.8 Physical Stock Voucher

Tally.ERP 9 considers the stock available based on the entry made in a physical stock voucher. For example, on conducting a stock-check, the company finds a discrepancy between the actual stock and the recorded stock figure. Physical Stock Voucher Description Details recorded Records the physical stock count as the new stock balance Name of stock item, Godown, Physical stock quantity.
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5.2.9 Pure Inventory Transactions

Pure inventory Transactions (vouchers) are those that do not affect financial records. They affect only the stocks. There will be a rise or fall in the stock when such vouchers are entered. The different pure inventory vouchers are: Rejections Out (Alt+F6) Rejections In (Ctrl+F6) Stock Journal (Alt+F7) Delivery Note (Alt+F8) Receipt Note (Alt+F9) Physical Stock (Alt+F10) Setup : To enable Delivery Note and Receipt Note, set Yes to Use Tracking Numbers and Use Rejection Notes in F11: Features (F2: Inventory Features). Go to the Gateway of Tally > F12: Configuration > Invoice/Orders Entry Set Complete Accounting Allocations in Order/Delivery Note to Yes. Make sure that Inventory Values are affected? is set to Yes in all ledger accounts under the groups Sales Accounts and Purchase Accounts. An entry made in a purchase voucher can update the stocks. It is not necessary to make a separate entry in a Goods Receipt Note. This holds true for the goods delivered and recorded in the Sales Voucher itself. We shall now learn how to enter pure inventory vouchers.
5.2.10 Recording Inventory Transactions

The inventory transactions of National Traders for April 2009 are: National Traders Inventory Transactions Date Transaction Details 6-4-09 Delivered 1 HCL PIV from On-Site to Spectrum Computers. 7-4-09 Received delivery of 2 HP Laserjet 1010 Series from Silver Plus Computers and stored in On-Site Godown. 9-4-09 Transferred 2 HCL PIV from On Site to Warehouse. 13-4-09 Returned 1 HP Laserjet 1010 Series (Faulty) to Silver Plus Computers. 15-4-09 Supreme Computers returned 1 HCL Pentium IV which was ordered incorrectly 16-4-09 Stock check reveals physical stock of 3 Boxes of CD ROM Disks 100s in On-Site Godown.
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In the Purchase/Sales Ledger Masters, set Inventory Values are affected to Yes and proceed with the above transactions. Tracking numbers must be activated and disabled after the exercise is completed. (Tracking numbers will be discussed later.)
Go to the Gateway of Tally > Inventory Vouchers. The basic steps to enter the vouchers are: Change the date if necessary. Select the voucher type from the button bar menu. Type the details and check whether they are correct before accepting. Accept the default rates of items that appear according to the standard cost and standard selling price given in the workbook.
Practice Exercise Create the following transactions in the books of National Traders. Field Voucher 1 Voucher type Current date Ref: Ledger account Order details Name of item Tracking Number Godown Quantity Rate Amount In Accounting Details Screen Narration Accept? Yes or No Alt +F8: Delivery Note 6-4-2009 ABC/DN/00654 Spectrum Computers Accept the default HCL PIV Not Applicable On-Site 1 21,500 / Nos 21,500 Computer Sales Computer delivery Yes Details to be entered
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Voucher 2 Voucher type Current date Ref: Ledger Account Order Details Name of item Tracking Number Godown Quantity Rate Amount In Accounting Details Screen Narration Accept? Yes or No Voucher type Current date Source (Consumption) Name of item Godown Quantity Rate Amount Destination (Production) Name of item Godown Quantity Rate Amount Narration Accept? Yes or No Voucher type Current date HCL PIV Warehouse 2 17,500 / Nos 35,000 Transfer of stock Yes Voucher 4 Alt +F6: Rejection Out 13-4-2009 HCL PIV On-site 2 17,500 / Nos 35,000 Alt +F9: Receipt Note 7-4-2009 USC/12089/Del Silver Plus Computers Accept the default HP Laserjet 1010 Series Not Applicable On-site 2 8,200 / Nos 16,400 Printer Purchase Printer received Yes Voucher 3 Alt +F7: Stock Journal 9-4-2009
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Ledger Account Suppliers Name and Address Name of item Tracking Number Godown Quantity Rate Amount Narration Accept? Yes or No Voucher type Current date Ledger account Customers Name and Address Name of item Tracking Number Godown Quantity Rate Amount Narration Accept? Yes or No Current date Voucher type Name of item Godown Quantity Narration Accept? Yes or No
Silver Plus Computers Silver Plus Computers HP Laserjet 1010 Series Not Applicable On-site 1 8,200 / Nos 8,200 Rejected goods out Yes Voucher 5 Ctrl+F6: Rejection In 15-4-2009 Supreme Computers Supreme Computers HCL PIV Not Applicable On-site 1 Nos 21,500 / Nos 21,500 Rejected goods in Yes Voucher 6 16-4-2009 Alt +F10: Physical stock CD ROM Disks 100s On-site 3 Box Stock check adjustment Yes
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5.2.11 Stock Summary for April 2009

Go to the Gateway of Tally > Stock Summary.
Figure 5.15 Stock Summary from April 1, 2009 to April 30, 2009
Enter further inventory transactions for National Traders. The sample inventory transactions of the company for the months of May and June 2009 are as follows: National Traders Inventory Transactions Date 9-5-09 No 1 Transaction Details Delivered 2 Nos of HCL PIV from warehouse to Spectrum Computers (Ref: ABC/DN/00654 Hint: Select Computer Sales. Received 5 Boxes of CDROM Disks 100s from Silver Plus Computers (Ref: USC/13049/Del). Returned 1 Box of CDROM Disks 100s (damaged) to Silver Plus Computers.
17-5-09 18-5-09
2 3
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1-6-09 15-6-09
4 5
Received 5 Nos of Wireless Keyboards from Silver Plus Comptuers (Ref:USC/13420/Del). Delivered 2 Nos IBM pentium IV from On-site to Supreme Computers (Ref: ABC/DN/00721) Hint: Select Computer Sales Stock check reveals physical stock HP Laserjet 1010 Series as 5 Nos. Spectrum Computers returned 1 Nos HCL PIV. Transferred 2 Nos of IBM PIV from warehouse to onsite.
24-6-09 29-6-09 30-6-09
6 7 8
Accept the default rates that appear for each item, as specified in the Standard Cost and Standard Selling Price of the Stock Item. If the godown has not been specified in the table above, select On Site.
5.2.12 Stock Summary for June 2009

Go to the Gateway of Tally > Stock Summary.
Figure 5.16 Stock Summary from April 1, 2009 to June 30, 2009
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The Total Stock value should be 2,35,350 made up of Computers - 1,03,800, Peripherals 41,950 and Printers - 89,600.
5.2.13 Entering Inventory Details in Accounting Vouchers

Assume that the inventories have to be updated at the same time as entering the accounting vouchers. This is particularly useful for organisations that send and receive goods with a bill or invoice only. In other words, they do not want to update stocks with only a delivery note neither do they want to with a Goods Receipt Note. Tally.ERP 9 permits stock movement along with invoice. Therefore, you need to select the stock items that come in or move out at the time of purchase or sales voucher entry. Apart from the Sales and Purchase Vouchers that record the inventory movements, the following vouchers are used to record the stock movements. Debit Note for Goods rejected and returned to supplier. Credit Note for Goods rejected and returned by customer. Debit Notes and Credit Notes are used to record the return of goods and the corresponding reversal of sales and purchases. Given below are examples of Purchase, Sales, Debit Note and Credit Note vouchers with inventory details : Purchase voucher For example: the company receives new stock from a supplier. Purchase Voucher Description Details recorded Records receipt of new stock with invoice from suppliers. Reference, ledger account, suppliers name and address, name of stock item, godown, quantity, rate, amount, purchase ledger, other ledgers (if required), narration.
Sales voucher For example: the company delivers goods from its stock to a customer. Sales Voucher Description Details recorded Records the delivery of goods and invoice to customers. Reference, ledger account, customers name and address, name of stock item, godown, quantity, rate, amount, sales ledger, sales tax ledger (if required), narration.
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Debit Note For example: the company rejects and returns goods to the supplier. Debit Note Description Details recorded Records the delivery of goods and debit note to supplier. Reference, ledger account, suppliers name and address, name of stock item, godown, quantity, rate, amount, purchase ledger, other ledgers (if required), narration.
Credit Note For example: the company receives rejected goods from a customer. Credit Note Description Details recorded Records receipt of rejected goods with advice from customer. Company issues credit note. Reference, ledger account, customers name and address, name of stock item, godown, quantity, rate, amount, sales ledger, sales tax ledger (if required), narration.
Tally.ERP 9 permits the entries of these vouchers in Voucher Mode as well as in invoice mode. In this section, you will learn how to enter them in Voucher Mode. Set up : Set Yes to Use Debit/Credit Notes in F11: Features (F1: Accounting Features). Do not activate the invoice mode. Make sure that Inventory Values are affected? is set to Yes in all ledger accounts under the groups Sales Accounts and Purchase Accounts. Set Use Tracking Numbers to No in F11: Features (F2: Inventory Features).
Go to the Gateway of Tally > Accounting Vouchers. Ensure that in F11: Features (F1: Accounting Features) Allow Invoicing is set to No. Create the following Accounting Vouchers with Inventory details.
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i. Sales voucher Select F8: Sales from the button bar and enter. Field Date Ref: Dr Debit Amount Cr Inventory Allocation 1-7-2009 Blank Supreme Computers 21,500 Computer Sales Name of Item - HCL PIV Godown - On-site Quantity - 1 Rate -21,500 21500 Sales made Yes Details
Credit Amount Narration Accept? Yes or No ii. Purchase voucher
Select F9: Purchase from the button bar and enter: Fields Date Ref: Cr Credit Amount Dr Inventory Allocation 1-7-2009 Blank Silver Plus Computers 1,500 Purchases Name of Item - Wireless Mouse Godown - On-site Quantity - 6 Rate -250 1,500 Purchases made Yes Details
Debit Amount Narration Accept? Yes or No
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iii. Payment voucher Select F5: Payment from the button bar, Petty Cash, and enter: Fields Date Dr Debit Amount Cr Credit Amount Narration Accept? Yes or No 1-7-2009 Office Costs 85 Petty Cash 85 Office cost paid Yes Details
Ensure that in the F12: Payment Configuration, Use Single Entry mode for Pymt/Rcpt/Contra is set to No.
5.3 Invoicing
Tally.ERP 9 has an in-built system to create and print sales invoices. You will now record sales and purchase invoice details, adjust accounting and inventory balances. To enable the option of invoicing, set Yes to Allow Invoicing, Enter Purchases in Invoice Format and Separate Discount Column in invoices in F11: Features (Accounting Features/ Inventory Features). Ensure that the Inventory values are affected? is set to Yes in Purchases Ledger. Ensure that the Inventory values are affected? is set to Yes in Parts Sales, Software Sales and Computer Sales. Make the following entry of Sales in Voucher Mode. Go to the Gateway of Tally > Accounting Vouchers > F8: Sales. Ensure the button above the Post-Dated option reads As Invoice. This button enables you to toggle between the voucher and invoice format for data entry. The button visible is the format NOT in use.
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Enter the following data as on 1-7-2009 to record the sale of 2 Nos of USB Pen Drives 64 MB to Supreme Computers. (at the standard price) and update the accounting and stock records: Field Ref: Dr Debit Amount Cr Name of item Godown Quantity Rate Per Amount Narration Accept? Yes or No Supreme Computers. 3,200 Component Sales USB Pen Drives 64 MB On-site 2 Nos 1,600 (accept) Nos (accept) 3,200.00 Yes Details
Make the following entry of Sales in Invoice Mode: 1. 2. 3. 4. 5. Date: 2-7-2009. Voucher Type: Sales Click on the Toggle Button As Invoice (so it reads As Voucher) Click on the Toggle Button Item invoice (so it reads Acct Invoice) Enter the following to record the sale of two nos of USB Pen Drives 64 MB to Supreme Computers. (at the standard price) and update the accounting and stock records: Fields Ref: Partys A/c Name Despatch Details Address Name of item Godown Quantity Rate Per Discount Supreme Computers. Accept the default Ctrl+A to accept all USB Pen Drives 64 MB On-site 2 Nos 1,600 (accept) Nos (accept) 10% Details
In Item Allocation for: USB Pen Drives 64 MB Screen
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Amount
2,880.00 (accept then keep pressing Enter until the accounting details screen appears) Component Sales 2,880.00 (accept) Yes
Particulars (Accounting allocation subform) Amount Narration Accept? Yes or No
5.3.1 Item Invoice and Account Invoice

Tally.ERP 9 gives you an option called Account Invoice where you can select the ledgers instead of the stock items. An Item Invoice on the other hand, allows you to select stock items instead of ledgers. Businesses that require an invoice raised with the item details, can select the Item Invoice option. Businesses that want to raise invoices for services rendered, can do so by selecting the Account Invoice. At this point, it is understood that you already know how to enter an Item Invoice, by selecting items and entering their quantity, rate, discount, etc.
5.3.2 Walk-through to create an Item Invoice

1. 2. 3. 4. Ensure that you are at the Gateway of Tally of Indus Enterprises. Ensure Allow Invoicing option in F11: Features (F1: Acounting Features) is set to Yes. Go to the Gateway of Tally > Accounting Vouchers > F8: Sales. The invoice screen must display the columns - Name of Item, Quantity, Rate, per, Amount, etc. 5. Party's A/c Name: Customer One (create one, if it is not displayed in the list of ledgers). 6. Press Enter till you reach the Name of Item field and press the spacebar to view the List of Stock Items. 7. The different stock items with their balances are displayed as follows:.
Figure 5.17 Sales Voucher In Item Invoice Mode
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You already know how to enter an item invoice. Now, let us go to the Gateway of Tally to learn how Account Invoices are entered.
5.3.3 Walk-through to create an Account Invoice

Go to the Gateway of Tally > Accounting Vouchers > F8: Sales.
1. The invoice screen must display the following columns: Name of Item, Quantity, Rate, per and Amount. 2. Click on the Acct Invoice button. You will notice that Tally.ERP 9 now displays the columns as Particulars, Rate, per and Amount. 3. Select the Party's A/c Name as Customer One. 4. Press Enter till you reach the Particulars field. Press the Space Bar and Tally.ERP 9 displays the List of Ledgers.
Figure 5.18 Sales Voucher In Accounting Invoice Mode
5. Select the Consulting Fees (create one if it is not displayed under Direct Income). 6. Specify the amount as Rs. 45000 and press Enter.
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Points to Remember
A voucher is a document containing the details of a financial transaction. As per accounting rules, any transaction indicating the transfer of funds from cash account to bank account; bank account to cash account and bank account to bank account is referred to as a Contra Entry. Reversing Journals are special journals that are automatically reversed after the date of the journal. A Memo Register is a non-accounting voucher and the entries made using it will not affect your accounts. An Optional voucher is not a voucher type. All other voucher types (except non-accounting vouchers) can be marked Optional during voucher entry. Inventory vouchers perform the same function in the inventory system as accounting vouchers in Tally.ERP 9. Tally.ERP 9 allows to create and print sales invoices.
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Lesson 6: Advanced Accounting in Tally.ERP 9
Lesson Objectives
On completion of this lesson, you will be able to Maintain Bill-wise Details Create and maintain Cost Centres Create and maintain Multiple Currencies Configure and compute Interest Calculations Create and maintain Budgets and Scenarios Generate and print various reports
6.1 Bill-wise Details

The details of all the sales and purchase transactions made with the debtors and creditors have to be maintained at the invoice level. In order to maintain these details Tally.ERP 9 provides a feature called as Bill-wise details for bill-wise accounting. In this section you will learn to: Maintain details of bills. Specify credit periods. Obtain receivable and payable reports. Relate every entry with the relevant transaction.
6.1.1 Activating Bill-wise Details

Go to Gateway of Tally > select National Traders and shut Indus Enterprises Press F11: Features (Accounting Features). Type Yes for Maintain Bill-wise Details. Retain No for Non - Trading A/cs also.
Advanced Accounting in Tally.ERP 9
Accept the settings, by pressing Ctrl+A. On activation of this feature, all the ledgers previously created under the Groups Sundry Debtors and Sundry Creditors will automatically have their Bill-wise details set to Yes. Let us view the ledger master of Supreme Computers.
Figure 6.1 Ledger Creation
1. In the above ledger alteration screen, the option Maintain balances bill-by-bill is displayed. This option helps to maintain details of our debtors and creditors at the invoice level. 2. An additional option termed Default Credit Period is displayed when the option Maintain balances bill-by-bill is set to Yes. This allows us to keep a track of the credit period allowed to sundry debtors and reminds us of our payables to the sundry creditors. In the process of recording transactions when the bill-wise details is set to Yes, Tally.ERP 9 prompts you to enter any of the following methods of adjustments: New Ref - This is selected for new financial transactions. Advance - This is selected when you receive or pay money in advance. Typically, when a bill is raised, part of the bill is adjusted against the advance (using Agst Ref) and the balance amount is carried as New Ref while making the sale or purchase entry. Against Ref - This is selected to set-off payments against the previously entered New Ref. On Account - This is used when you are not instructed about the bill against which the money should be adjusted. Let us make a purchase entry for a new stock item HP - 27 Printer Cartridges and then a sales entry to sell the same. This will be purchased from a new supplier named Power Line Computers and sold to a new customer FirstCom Solutions.
6.1.2 New Reference

Entering Bill-wise details for a Purchase Voucher (New Reference) On 13-07-2009 received a goods invoice numbered PLC for 10 Nos HP - 27 Printer Cartridges from Power Line Computers at Rs. 850. The goods were stored in On-site godown. Setup : Create a new supplier account Power Line Computers under Sundry Creditors with Maintain balances bill-by-bill set to Yes. Create a new stock item with the following details: Name HP - 27 Printer Cartridges Under Printers Category Not Applicable Units Nos Standard Cost 850 Standard Price 1150
Accept default settings for other fields. Create Purchase Voucher : Go to Gateway of Tally > Accounting Vouchers > F9: Purchase. 1. 2. 3. 4. 5. Select As Voucher mode. Enter PLC in the Reference field below the Purchase voucher number. The Bill-wise details have to be given when Power Line Computers are credited. On selecting New Ref, PLC is displayed automatically in the field and not the voucher number. In the Credit period field enter 15, which is 15 days from the effective date of the invoice.
The Bill-wise Details screen in the Purchase voucher is displayed as shown below:
Figure 6.2 Bill-wise Details Power Line Computers
6. Accept the bill-wise details screen. 7. Click on the button F12: Configure and set Yes to the following options: Show Inventory Details Show Bill-wise Details Show Ledger Current balances Show Balances as on Voucher Date. 8. Accept the amount as the total amount due. The completed Purchase Voucher appears as shown below:
9. At the Narration field, type in the details of the transactions. 10.Press Y or Enter to accept the voucher. The details regarding the reference, name of the stock item, quantity, rate and value helps us to know what is being entered. These details can be printed, as per your requirements. Entering Billwise details for Sales Invoice (New Reference) On 14-07-2009, sold 5 pcs of HP - 27 Printer Cartridges to FirstCom Solutions @ Rs. 1,150 from On-Site godown. Setup : Create new customer FirstCom Solutions (Under Sundry Debtors with Maintain balances bill-by-bill set to Yes and set Default Credit Period as 7). In F12: Configure and set Yes to Accept Supplementary details to view despatch details, buyer details etc.
Create Sales Voucher : Go to Gateway of Tally > Accounting Vouchers > F8: Sales 1. 2. 3. 4. Select As Invoice. Select a party ledger account FirstCom Solutions. Tally.ERP 9 immediately displays a screen showing Despatch details, Buyer details. In the Bill wise details screen enter the following details:
Figure 6.4 Bill-wise Details FirstCom Solutions
5. In the Credit period field, notice that 7 days appears automatically (this is 7 days from the effective date of the invoice) as we have specified the same in the ledger master. 6. Accept the bill-wise allocation, and type the details of the transaction in the Narration field. 7. Press Y or Enter to accept the voucher.
Set Inventory Values are affected to Yes in the Sales Printer ledger and then specify Inventory allocations.
Practice Exercise Let us now create one purchase and one sales voucher with the following data: 1. On 15-07-09, purchased 5 nos HP - 27 Printer Cartridges @ Rs. 850 from Power Line Computers with the invoice number - PLC1. Credit period allowed - 30 days. 2. On 16-07-09 sold 4 nos HP - 27 Printer Cartridges to FirstCom Solutions @ Rs. 1,150. Credit period allowed - 45 days, select New Ref and enter FC 2 in Name field of Bill wise details screen. Allocate to Sales - Printer.
During an invoice entry, to alter the credit period go to Gateway of Tally > Accounting Vouchers > F8: Sales (in invoice mode) > click on F12: Configure and set Allow modification of ALL fields during entry to Yes and then make the entry. Select On-Site wherever godown details are not specified.
Power Line Computers now has two outstanding purchase invoices and FirstCom Solutions has two outstanding sales invoices. This data can be viewed in Ledger outstanding statement. Go to Gateway of Tally > Display > Statements of Accounts > Outstandings > Ledger Select Power Line Computers from List of Ledgers to show the outstanding purchase invoices. Press Alt + F1 or F1: Detailed to show the Ledger outstandings in detail.
Figure 6.5 Ledger Outstandings
Press F4: Ledger and change to FirstCom Solutions to view the outstanding sales invoices.
6.1.3 Against Reference

Entering a Bill-wise payment - Against Reference On 22-07-09, you pay Power Line Computers the full amount for their invoice numbered PLC. Setup : Click on F12: Configure. Set Show Table of Bills for selection (to view the list of pending bill references) and Use Single Entry mode for Pymt/Rcpt/Contra to Yes Go to Gateway of Tally > Accounting Vouchers > F5: Payment > select Bank Payment. 1. In the Account field, select Bank Account (note that we are crediting Bank Account) 2. Under Particulars, select Power Line Computers. 3. Enter Rs. 8,500 in the amount column.
4. In the Bill-wise details screen, select Agst Ref and press Enter 5. Tally.ERP 9 displays list of pending bills. The screen appears as shown below:
Figure 6.6 Bill-wise Details Power Line Computers
6. Select PLC and keep pressing Enter until the Narration field is highlighted. 7. In the Narration field, type Ch. No. 1234. The Bank payment voucher appears as shown below:
Figure 6.7 Bank Payment Voucher
8. Press Y or Enter to accept the voucher.

The Invoice References created during invoice entry are listed now at the time of payment entry for adjustments. Using the Agst Ref option in Tally.ERP 9, you can adjust the outstanding amounts.
To ensure that the payment has been recorded against the correct invoice, Go to Gateway of Tally > Display > Statements of Accounts > Outstandings > Ledger > Power Line Computers. You will see that there is only one entry. In order to view the history of settled invoices, press F12: Configure and tab down to Range of Bills to show and select All Bills. Select Detailed in the button bar. Return to the Gateway of Tally main menu.
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Practice Exercise Delete the bank payment entry of 22-07-09 and make the same entry. In F12: Configure, set Yes to Pre-allocate Bills for payment, you will notice that the list of pending bills is displayed immediately after selecting Power Line Computers. Select PLC in bill-wise details and accept the entry (This feature is useful for cheque printing). Now, after completing the above entry, set the option Pre-allocate Bills for payment to No. Entering a Receipt Voucher with Bill-wise details FirstCom Solutions pays the full amount of their first invoice on 22-07-09. Setup : In F12: Configure, set Use Single Entry mode for Pymt/Rcpt/Contra to No. Create Receipt Voucher Go to Gateway of Tally > Accounting Vouchers > F6: Receipt 1. In the Voucher Creation screen, credit FirstCom Solutions for Rs. 5,750 2. In the Bill-wise Details screen, select Agst Ref and adjust the receipt against the first entry in the list. 3. Keep pressing Enter until the next Particulars field is highlighted. 4. Select Bank Account. 5. Accept the entry and return to the Gateway of Tally main menu.
A detailed Ledger Outstanding screen of FirstCom Solutions with a history of all bills appears as shown below :
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Display Age-Wise Outstanding Statements Go to Gateway of Tally > Display > Statements of Accounts > Outstandings > Ledger > Power Line Computers. 1. 2. 3. 4. 5. The invoice due to them is displayed with due dates and overdue days, if any. Change period of display from 1-4-09 to 22-07-09. Press F6: Age-wise and Select By Bill-date. In the credit period sub-screen, enter 0 to 7, 7 to 15, 15 to 45, 45 to 0. Note that the age of the invoices is segregated by the credit period.
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Figure 6.9 Company Ageing Alteration
6. Press Alt+F1 and view the Age-wise Analysis for Power Line Computers in Detailed mode. 7. Press F12: Configure and set the option Show Qty Info in Detailed Format to Yes and Range of Bills to Show as All Bills. The Age-wise Analysis for Power Line Computers for the period 1-4-09 to 22-07-09 appears as shown below :

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Practice Exercise Display Outstandings - Receivables for different periods to see the changes. View the Age-wise Analysis for receivables, payables and ledger.
6.1.4 Advance
On 01-07-2009, make a Bank Payment (State Bank of India Account) for Rs. 15,000 against a purchase order PO/001/2009-10 raised on New Stocker. Go to Gateway of Tally > shut National Traders and select Indus Enterprises Setup : Create New Stockers Ledger under Sundry Creditors and set the option, Maintain balances bill-by-bill to Yes. Create Purchase Account under Purchase Accounts and set Inventory Values are Affected to Yes. Step 1 : Create Bank Payment Voucher In the Bill-wise details screen, Select Advance as the Type of Ref Enter PO/001/2009-10 as reference. Step 2 : Create Purchase Voucher Record a Purchase voucher entry on 1-07-2009 for Rs. 45,000 In the Bill-wise Details screen, select Agst Ref to adjust the advance of Rs. 15000. Accept the purchase entry. Display Ledger Outstanding Statement Go to Gateway of Tally > Display > Statement of Accounts > Outstandings > Ledger > New Stockers > F1: Detailed. The Ledger Outstanding Statement of New Stocker appears as shown below:
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The advance appears next to the entry for easy identification.
To view all bills including settled bills, select All Bills as Range of Bills to show in F12: Configuration.
6.1.5 On Account
On 1-07-2009, raise a sales invoice on New Buyer for 1 Nos of New Stock Item @ Rs. 1,000 vide Bill/001. Go to Gateway of Tally > shut National Traders and select Indus Enterprises
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Set up : Create a ledger New Buyer under Sundry Debtor; Set Yes to Maintain balances bill-bybill; Credit Period - leave it blank. Create an item New Stock Item under Primary Stock Group with an opening balance of 100 Nos and rate Rs. 500 stored in the Bangalore godown. Step 1 : Create Sales Invoice 1. Raise a sales invoice on 1-07-2009 on New Buyer for Rs. 1,000 Select New Stock Item - 1 Nos @ Rs. 1,000. Type bill reference as New Ref - Bill/001. Create Sales ledger, if not created. 2. Similarly, create 3 sales invoices on New Buyer On 2nd December for Rs. 8,000 (Bill reference - Bill/002) On 3rd December for Rs. 14,000 (Bill reference - Bill/003) On 6th December for Rs. 4,000 (Bill reference - Bill/004) Stock Item will be New Stock Item and quantity for the above 3 sales bills will be 8 Nos, 14 Nos and 4 Nos respectively Step 2 : Create Receipt Voucher 1. Make a Receipt entry on 7th July for Rs. 15,000 received by cheque. (This is to indicate money received from New Buyer). 2. In the Bill-wise details screen, select On Account as the details of the sales bills to be cleared are not provided.
6.1.6 Bill-wise Outstandings Report

After creating the sales and receipt entries, to display the Billwise outstandings report of New Buyer, Go to Gateway of Tally > Display > Account Books > Ledger > select New Buyer. Select the Bill-Wise button to view the bill-wise details of the customer. The Billwise Outstandings Report of the New Buyer appears as shown below :
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The ledger outstandings report shows the details of four sales bills marked with a bill-wise reference and one receipt entry marked as On Account (On Account is displayed as we have not received details of the bill against which the payment has been received). To print statements of accounts, press P: Print button from the display screen.
6.1.7 Payment Performance of Debtors

To view Payment Performance of Debtors report, Go to Gateway of Tally > select National Traders and shut Indus Enterprises The Ratio Analysis appears as shown below:
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Figure 6.13 Ratio Analysis
Select Recv. Turnover in days (It shows the amount of sales locked up with debtors in terms of sale days). Press Enter to view the list of sundry debtors. Select FirstCom Solutions to view the Ledger Payment Performance report. The details are shown as below :
Figure 6.14 Ledger Payment Performance
The ledger payment performance report gives the details of all invoices raised on the debtor and the dates when the payments were made, with the analysis of delays.
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6.1.8 Bill-wise Details for Non-trading Accounts

Tally.ERP 9 has the option of maintaining bill-wise details for accounts other than Sundry Debtors and Sundry Creditors i.e., Non - trading accounts. This is useful to track instalment to be paid or loan amount to be received over a certain period of time.
6.2 Cost Centres and Cost Categories

6.2.1 Cost Centre
A cost centre is a unit of an organisation to which transactions can be allocated. Cost Centres are units to which costs or expenses are allocated and Profit Centres are units to which incomes are allocated. Tally.ERP 9's cost centres allow a dimensional analysis of financial information. Tally.ERP 9 gives you the cost centre break-up of each transaction as well as details of transactions for each cost centre.
6.2.2 Cost Categories

Cost Categories have been introduced specially for project oriented organisations as they require allocation of resources to parallel sets of cost centres. For example, the project is to construct an airport. The airport is the cost centre. For this project certain expenses are incurred by the project head. A simultaneous allocation of the amount has to be made for both the project and the project head. This requirement can be achieved using Tally.ERP 9's Cost Category feature. Any number of parallel allocations can be done as per requirements.
6.2.3 Activating Cost Category and Cost Centre

Ensure that you are at the Gateway of Tally of National Traders. To activate the cost centre and cost category, Set Yes to the following in the F11: Features (Accounting Features): Maintain Cost Centres More than ONE Cost Category
6.2.4 Creating Cost Categories

Go to Gateway of Tally > Accounts Info. > Cost Categories > Create. Name: Projects & Assignments Allocate Revenue Items: Yes Allocate Non-Revenue Items: No
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Figure 6.15 Cost Category Creation
Press Y or Enter to accept the screen. Similarly, create Salesmen as a Cost Category .
Allocate Revenue Items: Enable this option to allocate all sales, purchase, expenses and income related transactions to cost centres and cost categories. Allocate Non-Revenue Items: Enable this option to allocate capital items to cost centres. This helps in monitoring the capital expenditure incurred on cost centres and measuring them against the revenue earned.
6.2.5 Creating Cost Centre

Go to Gateway of Tally > Accounts Info. > Cost Centres > Create. Category: Select Projects & Assignments. Name: Projects. Under: Primary.
Figure 6.16 Cost Centre Creation
Similarly create the following Cost Centres, Buildings, Roads and Airports, by selecting Projects and Assignments as Cost Category and Projects for Under. Amar and Barry, by selecting Salesmen as Cost Category and Primary for Under.
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6.2.6 Applying Cost Centres to Ledger Accounts

Create the following Ledger accounts, Conveyance and Postage under Indirect Expenses Consulting Fees under Direct Incomes.
By default, Tally.ERP 9 activates Cost Centre feature for ledgers created under Sales Accounts and Purchase Accounts groups.
Create Payment Voucher : Go to Gateway of Tally > Accounting Vouchers > F5: Payment > Select Petty Cash from List of Types 1. Date: 13-07-09 2. You will notice that Tally.ERP 9 displays the Dr field. This is because the option Use Single Entry mode for Pymt/Rcpt/Contra is set to No in F12: Configuration, while making the billwise receipt entry. 3. Debit Conveyance Rs. 20 and press Enter. 4. The Cost Centre Allocation sub-screen appears on entering the amount. Select the Category as Projects & Assignments. Allocate the expense to Buildings. Press Enter for the entire amount of 20.00 for Buildings. 5. Since you have completed the allocation of the full amount, the cursor moves back to the main voucher screen. 6. Credit Petty Cash 20 7. Type the Narration as Paid to Amar for travelling to Brigade Road for the Buildings Project. 8. Accept the voucher. The completed Payment Voucher Creation will appear as shown :
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Figure 6.17 Petty Cash Voucher
Now, create one more Payment Voucher. Go to the Gateway of Tally > Accounting Vouchers > F5: Payment > Select Petty cash. 1. Date: 17-07-09 2. Debit Conveyance: Rs. 50.00. 3. The Cost Centre Allocation sub-screen appears after you enter the amount Select Projects & Assignments as Cost Category. Allocate Rs. 30 to Buildings and Rs. 20.00 to Roads. Press Enter to accept The cursor moves to the Cost Category field, select Salesmen (Cost Category) > Amar and enter the amount as Rs. 50 Press Enter to accept
Tally.ERP 9 displays only Amar and Barry (Cost centres under Salesmen Cost Category) to faciliate error free selection during Voucher Entry.
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The cursor moves to the Cost Category field, press Enter and the Voucher screen appears. 4. Credit Petty Cash Rs. 50 5. Type the Narration as Paid to Amar for travel to Brigade Road for the Buildings Project. 6. Before accepting the voucher, press F12: Configure and ensure that the option Show Cost Centre Details is set to Yes. The completed Payment Voucher Creation screen appears as shown below:
Figure 6.18 Petty Cash Voucher
7. Press Y or Enter to accept the screen. Create Receipt Voucher : Go to the Gateway of Tally > Accounting Vouchers > F6: Receipt 1. Select Receipt Voucher (Petty Cash) and change the date to 13-07-09. 2. Credit Consulting Fees Rs. 1,000 3. In the Cost Centre Allocation for Consulting Fees, Select Projects and Assignments as cost category Select Buildings as cost centre and allocate the entire amount to it. 4. Debit Petty Cash Rs. 1000
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5. Type the Narration as Received cash for work done by Amar on the Buildings project. The Screen appears as shown:
Press Y or Enter to accept the screen. Practice Exercise 1. On 16-07-09, purchased for Projects, 2,50,000 worth Cement from Navketan Cement to be shared equally between Roads and Buildings on credit for 30 days. 2. On 20-07-09, purchased for Projects, 3,50,000 worth Steel from Monnet Steels. Allocate 50,000 to Roads and the rest to Buildings. Credit received for 45 days. 3. On 20-08-09, project sales of Buildings were made to WinLab Technologies for Rs. 9,00,000. 10% receivable after 5 days and balance after 15 days. 4. The next day, Roads project was completed and an invoice was raised on Civic Centre Association for Rs. 15,00,000. Credit period allowed - 25% with 7 days and the balance after 60 days of the date of the invoice. Setup : Create ledgers Project Sales under Sales Account and Project Purchases under Purchase Accounts. Set the options as shown below for both the accounts: Set Cost Centres are applicable to Yes.
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Set Inventory Values are affected to No. Create the following Suppliers/ Buyers with Bill-wise details activated and default credit period left blank. Cost Centres are Not Applicable. Navketan Cement under Sundry Creditors Monnet Steels under Sundry Creditors WinLab Technologies under Sundry Debtors Civic Centre Association under Sundry Debtors Parvathi Stockers under Sundry Creditors
Select New Ref. in the Bill-wise details screen Allocate purchases to Project Purchases ledger and sales to Project Sales ledger. In the narration field type Barry as these transactions are carried by him. You may give different references (for e.g., WT/1, WT/2) while accounting for bill-wise details based on the credit periods. For dynamic cost centre allocation, pass the entry in Voucher mode. The Invoice mode is used for inventory items where Cost centre allocation is either pre-classified through Cost Centre Classes or is not required.
Advanced Practice Exercises Enter the following transactions in voucher mode: 1. On 20-09-09, purchased Cement from Navketan Cement for Rs. 4,00,000 (200 bags at Rs. 2,000 per bag). Half of it is for Roads and the other half for Buildings. Entire lot was stored in On-site. Received credit of 30 days. 2. On 20-09-09, purchased 20 Tons of Steel from Monnet Steels @ Rs. 4,000 per ton and was stored in Warehouse. It was equally divided between Roads and Buildings. Received credit of 30 days. 3. One month later on 20-10-09, Project Sales of Buildings for Rs. 4,50,000 were made to WinLab Technologies. A credit of 60 days was given since they are old buyers. 4. On the same date (i.e., 20-10-09), Project Sales of Buildings for Rs. 7,65,000 were made to Civic Centre Association. A credit of 60 days was given. At the same time, they took over the Roads built for them at Rs. 2,35,000 with a credit period of 20 days. Only one invoice was prepared for Civic Centre Association for both Buildings and Roads. Setup : Ensure that in F12: Accts/Inventory Info. Configuration, Allow Advanced Entries in Masters is set to Yes.
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Create Building Material as a Stock group. Create the following Stock Items under Stock Group Building Materials. Cement with Unit of measurement - Bags Steel with Unit of measurement - Tons. For both items, set Yes to Treat all Purchases as Consumed (This option is useful in case of consumable items) Accept the rest as set by default. Alter the Project Purchase accounts to affect Inventory items.
6.2.7 Display Cost Centre Reports

Go to Gateway of Tally > Display > Statements of Accounts > Cost Centres. The Cost Centres Menu comprises of the following sub menus : Category Summary Cost Centre Break-up Ledger Break-up Group Break-up Category Summary This report displays the summarised position of the cost centres. You can drill down to the list of vouchers. In the above exercises while entering the vouchers, we held 'Amar' responsible for some of the expenses and incomes and 'Barry' for some. The purpose of mentioning their names in the Narration was to record their performance for later analysis and possible bonus payments. The Cost Category Summary report for the period 1-4-2009 to 20-10-2009 appears as shown below:
Figure 6.20 Cost Category Summary
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Select Buildings and press Enter. You are now drilling down into the Month-wise Cost Centre Statement of Buildings. You have the option to add a new column, select another cost centre, access F12: Configure and view the configured details. Press Enter on any month (select December here) and you will get the Cost Centre Vouchers report. This displays the list of vouchers pertaining to a cost centre for the selected month.
Click on F12: Value and filter the information by using vouchers having narrations containing Amar. Similarly give the filter condition Voucher having narration containing Barry. Experiment with the different button options, such as New Column, Auto Column, and F12: Configure.
Cost Centre Break-up This report displays a summarised information on Ledgers and Groups for the selected cost centre. You can drill down to the list of vouchers. Now, go back to the Display Cost Centres menu > select Cost Centre Break-up Select Buildings, from the list of Cost Centres Press F2 and change the period from 1-4-2009 to 20-10-2009. The screen appears as shown below :
Figure 6.21 Breakup of Cost Centre

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In this report we shall display the net profits made by the selected Cost Centre Buildings. Click on F1: Detailed button or [Shift]+[Enter] keys on Indirect expenses to explode the group. Now click on New Column button to bring up data for Roads alongside Buildings. With your cursor on Indirect Expenses under the Particulars column, drill down to view further details. Are the columns retained? Ledger Break-up This report displays the summarised information of all Cost Centres for the selected Ledger. You can drill down to the list of vouchers. Now, go back to the Display Cost Centres menu Select Ledger Break-up Select Conveyance Ledger. The screen appears as shown below:
Figure 6.22 Cost Breakup of Ledger
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From the above report, you can press Alt+C, to insert a new column and display the cost centre details for Consulting Fees. Group Break-up This report displays the summarised information of all Cost Centres for the selected Group. You can drill down to the list of vouchers. Similar to Ledger Break-up explore the Group Break-up of Cost Centres. Practice Exercises 1. Alter the conveyance and consulting fees vouchers created for cost centre allocation. Allocate to the relevant salesmen mentioned in the voucher narration. 2. Display the Category Summary. 3. Display the Cost Centre Break up and see the individual Salesmen performance. 4. Can you bring up each salesman's figures side by side to see who is performing better?
6.3 Voucher Class and Cost Centre Class

6.3.1 Voucher Class
Voucher class is a novel way of automating accounting allocations during transactions. This is particularly useful in sales invoice where the nominal ledger account, to be credited for each item of sale, is defined once. During voucher entry, the accounting credits for items sold are done automatically. Additional accounting entries like tax, freight, and other charges can be predefined to be carried out during actual invoicing. Voucher class permits: Automation of entries to predefined ledger accounts. Automatic rounding off to preset value limits. Voucher Classes can be created for the following voucher types. Contra Payment Receipt Journal Sales Credit Note Purchases Debit Note Sales Order Purchase Order Delivery Note
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Receipt Note Stock Journal Setup : Go to Gateway of Tally > select Indus Enterprises and shut National Traders. In the F11: Features (Accounting Features), activate Invoicing for both sales and purchase vouchers (for Indus Enterprises). In the F11: Features (Inventory Features) set Maintain Multiple Godowns to Yes. In the Local Sales ledger, set Inventory Values are affected to Yes. Create Bangalore godown under Primary and set Yes to the field Allow Storage of materials. Press F12: Accts / Inventory Info and set Specify Default Ledger Allocation for Invoicing to Yes. Create the following stock items with unit of measure as Nos and Cost Category as Not Applicable: Name Opening balance Godown Rate Set/Modify Default Ledgers for Invoicing No No Yes
Monitor Keyboard CPU
10 Nos 10 Nos 10 nos
Bangalore Bangalore Bangalore
5000 1250 15000
Specify the details for stock item CPU in the Stock Default screen as shown below :
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Figure 6.23 Accounting Allocation for Sales Item
Press Y or Enter to accept the screen. Step 1 : Create a voucher class for Sales Voucher Type Return to the Gateway of Tally > Accounts Info. > Voucher Types > Alter. 1. Select Sales Voucher 2. Press Enter till you reach the Name of Class field. 3. Type the name as Sales Class.
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Figure 6.24 Voucher Class Creation
4. Press Enter after typing Sales Class and the class screen appears. 5. The Voucher class table of Sales voucher type comprises of three sections. Restriction of groups for which Class can be used. Default accounting allocation for each item in invoice. Additional accounting entries.
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Figure 6.25 Voucher Type - Sales Class
Voucher Class screen comprises of the following three sections : . I. Restriction of groups for which Class can be used Exclude these Groups and Include these Groups: This section means that while making the invoice entry and selecting the voucher class the parameters given in the class will be applicable only for those ledger accounts under the selected groups. For example, if we have 10 sub-groups (region-wise) under one group, say Sundry Debtors group and we want the voucher class to be applicable only for 9 sub-groups of Sundry Debtors. It is easier to include the entire Sundry Debtors group and exclude the one sub-group that we do not require instead of selecting 9 sub-groups one-by-one. In this example in Indus Enterprises select End of List under Exclude these Groups since there are no sub-groups and Sundry Debtors under Include these Groups.
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II. Default accounting allocations for each item in Invoice Under this section, there are five sub-sections which are as follows: Ledger Name Press the spacebar to view the list of ledgers. Since we are viewing the class in Sales voucher type, Tally.ERP 9 displays only the ledgers under Sales Accounts group. Select Sales Account (Press Alt+C to create it under Sales Accounts, if it doesnt exist). On selecting Sales Account, Tally.ERP 9 prompts for details regarding the percentage of allocation. This is because more than one ledger can be affected for each item. For example, in case of tax inclusive items, the ledgers to be credited will be sales and tax in a definite proportion. Percentage This is useful in cases where tax is inclusive of the price. You can specify the sales ledger account as, say 82.5%, and in the next line, the tax account with the balance as 17.5%. Normally, for tax exclusive prices, you will give 100% for the sales account. The percentage symbol is required to be mentioned. Rounding Method This may be used only where the Percentage allocated to the Sales ledger is not 100%. Calculated amounts may be required to be rounded-off by either using upwards, downwards or normal rounding method. You can set your own rounding-off rule. Rounding Limit The limit for rounding off the amount can be specified to the next whole number after selecting the rounding method. For example, to round-off upwards to the nearest 50P, set it to 0.50. If selected as 100% it will skip this field. Override using Item Default This is a question which is to be answered as Yes or No. Let us take the example of the stock item CPU for which Set/Modify Default Ledgers for Invoicing is set to Yes. Override using Item Default when set to Yes, the Sales accounts gets overriden by Local Sales account for CPU (Default Accounting Allocation is set as Local Sales in the Stock Item Master). Hence the Local sales account will be selected in the voucher class as credit. Override using Item Default when set to NO, results in the sales account being selected in the voucher class as credit. This is irrespective of whether the item has default ledger allocation or not since we are not defining it to be overridden. III. Additional Accounting Entries This part is relevant for tax and other charges like freight etc. Ledger Name This is self-explanatory. You can create any number of ledgers. Select VAT on sales. (Create VAT on sales ledger under duties and taxes ledger, if not created). Type of Calculation Different calculation methods are provided. Select the one suitable. The value basis that you will provide in the next column will be calculated using the type of calculation specified.
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Value Basis Give the amount, which is to be used for the Type of Calculation. For percentage, you must use the symbol %. Rounding Method and Rounding Limit Rounding method and Rounding Limit have been explained already. Remove if Zero This is a question to be answered as Yes or No, essentially to permit Tally.ERP 9 to ignore the account and not make any entry if its value is Zero. Select Yes.
6. Enter the details as displayed below in the Sales Class screen
Figure 6.26 Voucher Type Sales
7. Accept the voucher class and press Enter to accept the voucher type screen.
Effect of Voucher Class on Cost Centres The manual allocation of an entry to a cost centre is not possible, if a voucher class is used. Let us now make an invoice entry with voucher class.
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6.3.2 Invoice Entry using Voucher Class

Go to Gateway of Tally > Accounting Vouchers > F8: Sales. 1. 2. 3. 4. Tally.ERP 9 prompts for voucher class selection, select Sales Class. Enter the date of the voucher as 2-5-2009. You will notice that the Ledger account VAT is already displayed. Create XYZ Ltd under Sundry Debtors (do not activate bill wise details) and select the same in the Party's A/c Name. 5. Accept the address details and despatch details screen. 6. From the list of items, select CPU, Monitor and Keyboard one after the other. Quantity 1 nos for each and the rates Rs. 22,500, Rs. 7,500 and Rs. 2,500 respectively. 7. Select the godown as Bangalore.
The completed Sales voucher appears as shown below :
Figure 6.27 Sales Invoice
8. Type the narration and press Enter to accept the screen.
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The Sales Account ledger is automatically credited in the voucher for Monitor and Keyboard. To display the Sales Account ledger: Go to Gateway of Tally > Display > Account Books > Ledger > Sales Account. The Sales Account Ledger appears as shown below:
Figure 6.28 Sales Account Ledger
Total Sales Account allocation in the invoice is Rs. 10,000 (Monitor Rs. 7500 + Keyboard Rs. 2,500).
Use Alt+R keys to hide the other entries, if required from the screen
The Local Sales ledger appears as shown below:
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Figure 6.29 Local Sales Ledger
The total Local Sales allocation in the invoice is Rs. 22,500 (CPU Rs. 22,500). This is the advantage of setting Override using Item Default to Yes. A different sales ledger had to be credited only for one item out of 3. The balance of Rs. 3,250 (Rs. 35,750 - Rs. 32,500) will appear in the VAT ledger. The VAT ledger appears as shown below:
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Figure 6.30 VAT on Sales Ledger
The Voucher Class layout for Purchase Voucher Type is similar to Sales. Record a purchase entry in Indus Enterprises, with additional accounting entries. Choose the stock items to be purchased and view the reports.
6.3.3 Payment Voucher using Voucher Class

Step 1: Create Payment Voucher Class Let us now create a voucher class for Payment Voucher type. Go to Gateway of Tally > Accounts Info. > Voucher Types > Alter > Payment. 1. Specify Class name as Payment Voucher Class. 2. Press Enter and the Payment Voucher Class screen appears. 3. Enter the details as shown below:
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Figure 6.31 Payment Voucher Class
4. Accept the Voucher Class and the Voucher Type screen by pressing Enter. Step 2: Create Payment Entry using Voucher Class On 2-5-09, make a payment entry for freight charges (create the ledger freight charges under indirect expenses if not present) of Rs. 4,500. The Payment Voucher screen looks similar to Payment Voucher in Single Entry Mode. Make a payment of Rs. 4,500 towards Freight charges. The Payment voucher screen with Voucher Class appears as shown below :
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The Voucher Class for Receipt and Contra voucher types is similar to the Payment voucher type. Explore with more entries.
6.3.4 Stock Journal using Voucher Class

Step 1 : Create Stock Journal Voucher Class To create a Voucher Class for Stock Journal voucher type, Go to Gateway of Tally > Accounts Info. > Voucher Type > Alter > Stock Journal > 1. In Name of Class, type Stk Jrnl Voucher Class 2. Press Enter and the screen appears as shown below:
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Figure 6.33 Voucher Type Class
To get the Voucher Class facility for Stock Journal, ensure that you have atleast 2 godowns. In this above case, create a new godown as Delhi. Voucher class for Stock Journal voucher type is available only for the purpose of an Inter-godown Transfer.
3. Accept the voucher class for Stock Journal. Step 2 : Create Stock Journal with Voucher Class Make a transfer entry for 2 Nos of CPU, Monitor and Keyboard from Bangalore to Delhi. 1. Create a Stock Journal without Voucher class, the screen appears as shown below:
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Figure 6.34 Stock Journal
2. Accept the entry and re-enter the same using voucher class. 3. Reselect the Stock Journal voucher type 4. Tally.ERP 9 prompts for the voucher class selection, select Stk Jrnl Voucher class The completed Stock Journal Voucher with voucher class appears as shown below:
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Figure 6.35 Stock Journal
With Voucher Class, the destination godown is selected only once. But whereas in the default Stock Journal without Voucher class, you have the option to select different source godowns (godowns from where we are transferring the stock).
We are still in Indus Enterprises - DO NOT MAKE entries in National Traders.
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6.3.5 Cost Centre Class

Cost Centre Classes are used to automate Cost Centre allocations in transactions. On creating a cost centre class, you need to select it in the voucher screen before making the entry. You can also use cost centre classes when Voucher Classes are being used. Setup : Activate the Cost Centre feature in the F11: Features (Accounting Features). Step 1 : Create Cost Centre Class 1. 2. 3. 4. 5. Activate Use Predefined Cost Centre allocations during Entry. Press Enter to view the Auto Cost Allocation screen. Type Cost Class in the Class Name. Press Enter and specify the details Select Cost Category as Primary Cost Category and set Cost Centre - Marketing - 45%; Finance - 35% and Administration - 20%. (Create the Cost centres if they do not exist, by using Alt+C.) The Cost Centre Class appears as shown :
Figure 6.36 Auto Cost Allocations
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Once a portion of expenses is allocated to Marketing, while selecting Finance, Tally.ERP 9 does not display Marketing cost centre again to avoid errorneous selection of same cost centre twice.
6. Press Enter to accept the allocations and go to Gateway of Tally after accepting the F11: Features (Accounting Features) screen. Step 2 : Create Cash Payment using Cost Centre Class Make a cash payment entry on 16-5-09 for Rs. 4,500 towards Stationery expenses. 1. Debit the ledger Stationery expenses (create it under Indirect Expenses with Cost Centre applicable set to Yes) for Rs. 4500 and credit Cash ledger for Rs. 4500. 2. Select Voucher class as Payment voucher class 3. Select Cost centre class as Cost Class.
Remember that the above entry is made in Indus Enterprises.
Step 3 : Display Cost Category Summary To view the Category Summary, Go to Gateway of Tally > Display > Statement of Accounts > Cost Centres > Category Summary Press F2 and change the period from 1-4-2009 to 16-5-2009.The report appears as shown
Figure 6.37 Cost Category Summary
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The cost centres are allocated automatically in the percentage of 45%, 35% and 20% for Marketing, Finance and Administration respectively. Practice Exercises Go to Gateway of Tally > Shut Indus Enterprises and select National Traders Make an Invoice Entry on 21-11-2009 with voucher class selected for FirstCom Solutions for sale of HP - 27 Printer Cartridges - 1 nos at Rs. 300. Select godown as On-site. Setup : In National Traders, create a sales ledger New Sales with Inventory values are affected and Cost Centres are applicable set to Yes. Create a Voucher Class NewSales for Sales Voucher Type and select New Sales ledger for Default Accounting allocations. The cost centres to be allocated to are AMAR and BARRY - 45% and 55% (of the sales amount) respectively.
6.4 Multiple Currencies

Due to the globalisation of business, many organisations have found the necessity to work with more than one currency. Transactions are often made in currencies other than the home currency. Tally.ERP 9's multi-currency feature is very powerful and allows you to : Record transactions with different currencies by allowing you to specify and change the currency rate of exchange. Maintain the balance of the specified account in a foreign currency. Tally.ERP 9 uses the term base currency for the currency in which your account books are maintained (typically in the home currency). Foreign Exchange is used interchangeably with foreign currency.
6.4.1 Creating Foreign Currencies

All amounts in your books are maintained in the base currency which is specified during company creation to facilitate easy analysis of data. Hence, whenever you record a transaction in a currency other than the base currency, Tally.ERP 9 prompts for an exchange rate and then displays the information in the base currency. Setup : Ensure that you are at the Gateway of Tally of National Traders. Activate the feature Allow Multi-Currency in F11: Features (Accounting Features).
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Step 1 : Create Foreign Currency Go to Gateway of Tally > Accounts Info. > Currencies > Create. 1. 2. 3. 4. 5. 6. 7. 8. Symbol: $. Formal name: US Dollars. Number of Decimal Places: 2 Show Amounts in Millions: No. Is symbol SUFFIXED to Amounts: No. Put a SPACE between Amount and Symbol: Yes. Symbol for Decimal Portion of Amount: Cents. Press Y or Enter to accept the screen.
Similarly, create the following currencies: Pounds Sterling by using Alt+156 = Yen symbol by using Alt + 0165 = Euro symbol by using Alt + 0128 =
6.4.2 Altering Currencies

Go to Gateway of Tally > Accounts Info. > Currencies > Alter > Select $, you find a different screen with many fields (You can alter input dates and the relevant exchange rate of currency). Enter the following exchange rates for 1-12-09 and accept the screen. Standard Rs. 45/$ Selling Rs. 46/$ Buying Rs. 43/$
Standard Rate is the current rate of exchange. Selling Rate is the rate at which your bank will buy Dollars from you. It is used when invoicing or receiving money. Buying Rate is the rate at which you will buy dollars from the Bank. It is used when purchasing or paying money in foreign currency. During voucher entry, the rates predefined in the currency masters are prefilled automatically.
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6.4.3 Deleting Currencies

Use the key combination Alt + D in the alteration screen to delete. However, you will not able to delete a currency that has been used in any transaction.
6.4.4 Creating Bank Ledger

Go to Gateway of Tally > Accounts Info. > Ledgers > Create 1. 2. 3. 4. Name: Bank Account Under: Bank Accounts Currency: Rs. Accept the screen.
6.4.5 Voucher Entry using Foreign Currency

Setup : Create following two ledger accounts in Base currency without Cost centres and set Billwise to Yes. Prism Fabrication under Sundry Debtors group Mirage Systems Pvt Ltd. under Sundry Creditors group Create the Stock Item as Wheat with the following information Stock Group - Foodstuffs Stock Category - Cereals Unit - Bags Create Export Sales under Sales Account and activate Inventory values and cost centre options Step 1: Create Sales Voucher Go to Gateway of Tally > Accounting Vouchers > F8: Sales. 1. 2. 3. 4. 5. 6. 7. 8. Date: 15-12-09. Select As Invoice from the buttons bar. Party's A/c Name: Prism Fabrication, accept the Name and address as default. Name of Item: Wheat Godown: Warehouse. Quantity: 100 Bags. Rate: $25 per Bag (Prefix the foreign currency symbol) Rate of Exchange: Accept the default selling rate which is Rs. 46/$.
The Stock Item Allocations screen appears as shown :
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Figure 6.38 Stock Item Allocations
9. Accept the Item Allocation screen. 10. In Accounting Allocation, select Export Sales 11. Select Amar in Cost Centre Allocation 12. In Bill-wise details screen, Enter New Ref as Type of Reference Type Export/1 in Name Type 7 days in Credit Days Enter $2500 (Prefix the Foreign Currency Symbol) 13. Accept the screen
While entering the amount in foreign currency, use the Currency Symbol. Any amount without a symbol will be assumed to be in the base currency.
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6.4.6 Displaying Forex Gain/Loss

Go to Gateway of Tally > Balance Sheet. Press Enter on the Unadjusted Forex Gain/ Loss field and drill down to the Ledger Forex Gain/ Loss Screen. This screen gives you the bill-wise information of the reference Export/1 and difference amount of US$ 2500 The Gain/Loss is calculated because the transacted rate is Rs.46/$ whereas the current standard rate is Rs. 45/$. The difference between the transaction rate and the current standard rate is Re.1/$ i.e., Rs. 2500. [$2500 X (46 -45)] = 2500 X 1 =Rs. 2500 Cr.]
6.4.7 Adjusting Forex Gain/Loss

Prism Fabrication pays you $2500 which is deposited in the Bank Account. The Bank charges were $50. Setup : Before making the receipt entry, ensure that the cost centre option is disabled in Bank Charges ledger. Go to Gateway of Tally > Accounts Info. > Currencies > Alter > Select $ and change the rate to Rs. 48/$ on 15-12-09 Step 1 : Create Receipt Voucher Go to Gateway of Tally > Accounting Vouchers > F6: Receipt 1. 2. 3. 4. 5. Date: 15-12-09. Credit Prism fabrication: $2500. Bill-wise: Agst Ref. Export/1 $2500. Debit Bank Account: $2450. Rate of Exchange: Rs. 48/$. Debit Bank Charges: $50 with the same rate of exchange.
Now, display the foreign exchange gain/loss again as explained earlier. The Unadjusted Gain/ Loss in the Balance Sheet is 5,000 (Dr) Press Enter and you will see Current Assets with 5,000 in the credit column. Drill down on Current Assets and the screen appears as shown below:
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Figure 6.39 Forex Gain/ Loss Statement
Press Enter on Sundry Debtors to display Prism fabrication. Drill down one level and press Alt+F1 to view the Ledger Forex Gain/ Loss report as shown below:
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Figure 6.40 Ledger Forex Gain/Loss
We first raised a sales invoice for $2500 @ Rs. 46/$ and received $2500 @ Rs. 48/$ against it. The difference of Rs. 2/$ (48-46) is a gain. The calculation is done as: $2500 x Rs. 2/$ = Rs. 5000 Dr. Therefore, the unadjusted forex gain/ loss for the ledger at this point is Rs. 5,000 Dr.
Step 2 : Adjust Forex Gain or Loss The forex gain or loss must be adjusted depending on standard rates of exchange. A journal entry must be made at the end of the accounting period for writing-off the gain/loss to Profit & Loss account. Setup : Create a ledger account Forex Gain/Loss under the group Indirect Expenses (do not activate Cost Centres)
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Step 1 : Create Forex Class Go to Gateway of Tally > Accounts Info. > Voucher Types > Alter > Journal. 1. Tab down to the Name of Class field, type Forex Gain/Loss and press Enter 2. Type Yes in the Use Class for Forex Gain/Loss Adjustments? field 3. Under Ledger Name, select Forex Gain/ Loss (this is the account that will be used for adjustments) The Forex Voucher Type Class screen appears as shown :
Figure 6.41 Journal Voucher - Forex Class
4. Press Enter to go back to Voucher Type Alteration screen 5. Press Enter to accept. Step 2: Create Journal Voucher Go to Gateway of Tally > Accounting Vouchers > Press F7: Journal. 1. You now get Voucher Type and Voucher Class List where you select Journal and Forex Gain/Loss respectively for the automatic adjustment of forex gain/loss 2. Change the date to 31-12-09. 3. Select Prism Fabrication from the list of ledgers.
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4. In the Bill-wise details screen, Select the invoice Export/1 (only those invoices involved in foreign exchange gain/loss will be displayed). The amount displayed will be the gain/loss amount. Accept the amount 5. Press Enter until you reach the narration field. 6. In Narration field, type Party's accounts adjusted for exchange gain and loss in the Narration field. The completed Forex Gain / Loss Adjustment entry using Voucher Class appears as shown below :
Figure 6.42 Journal Voucher - Forex Gain/Loss
7.
Press Y or Enter to accept the voucher.
Practice Exercise 1. On 12-12-09, purchased 200 bags of wheat from Mirage Systems Pvt Ltd. @ 5 /bag. The Rupee was being traded @ Rs. 82/.
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2. On 21-12-09, paid Mirage Systems Pvt Ltd., 1000 at the rate of Rs. 83/. The bank charges incurred were Rs. 2,000. Adjust the outstanding bill 'Wheat' with the payment from your Bank Account. Setup : In the currency alteration screen for Pound, enter these rates as on 1-12-09: Standard rate - Rs. 80/ Selling Rate - Rs. 81/ Buying Rate - Rs. 82/
For Purchase Voucher on 12-12-09 : Select the Godown as Warehouse In Accounting allocation, select Purchases, New Ref as Wheat Type Credit period as 15 days For Payment Voucher on 21-12-09 : Enter Forex amount as 1000 = Rs. 83,000 in the amount field.
The completed Bank Payment voucher appears as shown below:

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Type the narration and press Y or Enter to accept the screen.

You will note an Unadjusted forex Gain / Loss of Rs. 1,000 in the Balance Sheet. Since, we first passed a purchase invoice for 1000 at Rs. 82/ and paid 1000 at Rs. 83/ against it. The difference of Rs. 1/ (83-82) is a loss. The calculation is done as: 1000 x Rs. 1/ = Rs. 1000 Cr.
Practice Exercise To adjust Forex Gain/Loss, make a Forex Gain/ Loss adjustment entry using a voucher class on December 31, 2009.
6.5 Bank Reconciliation

Reconciling the Company's Bank Accounts with the Bank Statement is a fundamental and regular task of accounting. This process is referred to as Bank Reconciliation. In this section, you will learn to reconcile the company's bank accounts with your banker's statement.
6.5.1 Reconciling Bank Accounts

The bank where you hold a current account has sent you a bank statement for the week ended April 7, 2009 showing the following entries: Bank Statement of National Traders - Bank Account for April 2009 Date 1-4-09 1-4-09 2-4-09 7-4-09 Balance b/f Cheque 12789 ref Employee Wages Cheque 12790 ref Challenger Systems. Balance c/f 600.00 500.00 Particulars Deposits Withdrawals Balance 38,700.00 34,400.00 33,900.00 33,900.00
To view and reconcile the transactions relating to Bank Account for the month of April 2009 : Go to Gateway of Tally > Display > Account Books > Cash/Bank Book(s) > Bank Account 1. Select April 2009. 2. Press F12: Configure and activate Show Narration to view the cheque numbers and other details of all the transactions of April 2009. 3. Click F5: Reconcile (In Bank Account ledger display, an additional button F5: Reconcile will be available on the button bar). 4. The display now becomes an Edit screen in the reconciliation mode. The primary components are:
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A column for the Banker's Date. The Reconciliation at the bottom of the screen, showing: Balance as per Company Books, Amounts not reflected in Bank and Balance as per bank. 5. Enter the Bank date for the two payment vouchers of Rs. 500 and Rs. 600. (As the dates are entered, you will find the Bank Balance as per Company books is effected). The Bank Reconciliation screen appears as shown below :
Figure 6.44 Bank Reconciliation
6. Leave the dates blank for other vouchers and press Enter till you accept the screen. 7. To view the reconciled vouchers, press F12: Configure and activate Show reconciled vouchers also.
When you view the Bank Reconciliation again, only the vouchers which are unreconciled will appear.
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Practice Exercises The following is the Bank Statement of National Traders received for the period 1-05-09 to 3105-09: Bank Account for May 2009 : Date 1-5-09 9-5-09 9-5-09 19-5-09 Particulars Balance b/f Data Link Technologies Petty Cash Salaries 5,000.00 200.00 2,500.00 Deposits Withdrawals Balance 36,700.00 38,900.00 38,700.00 36,200.00
Reconcile your bank book as per the Bank Statement.
6.6 Interest Calculations

Interest is a legitimate return on money invested and chargeable in the business world on loans and also on delayed payments. Interest can be calculated on the basis of simple interest or compound interest. In Tally.ERP 9 you can calculate interest in two ways : Simple Mode Advanced Mode Setup : Ensure that you have selected National Traders and set Activate Interest Calculation to Yes in F11: Features (Accounting Features). Do NOT activate use advanced parameters (under Interest Calculations), accept the changes and return to the Gateway of Tally.
6.6.1 Calculating Interest in Simple Mode

Interest Calculation on Outstanding Balances Interest can be calculated on outstanding balances for any ledger account by specifying the interest rate and style of calculation in ledger master. The interest will be calculated automatically during voucher entry.
Simple Parameters is different from Simple Interest calculation. The latter is a commonly used method to calculate interest and Simple Parameters are the parameters defined in Tally.ERP 9 for the purpose of calculating interest.
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Setup : In National Traders, Go to Gateway of Tally > Accounts Info. > Ledgers > Alter (Single mode) > Bank Account. Set Activate Interest Calculation? to Yes and press Enter. Now you have to set the Interest Parameters, on the basis of which interest will be calculated for this ledger account. The screen appears as shown below:
Figure 6.45 Interest Parameters screen
Rate - This is the rate at which the interest has to be calculated. Specify a rate of 15%. Interest Style - Select 365-day Year and accept the screen (This is the basis at which the rate is applied).
Tally.ERP 9 comprises of the following 4 Interest Styles : 30-day month - Interest will be calculated assuming that all months have 30 days. For example: Month Feb 2001; Amount - 1000; Rate of interest - 2%; Period of interest - 5 days. Interest amount will be 1000x5/30x2%=3.33 365-day Year - Interest will be calculated assuming 365 days in a year. Calendar Month - Based on the calendar with 28/29 days for Feb and 30/31 days for other months. For example: Month - Feb 2001; Amount - 1000; Rate of interest - 2%; Period of interest - 5 days. Interest amount will be 1000x5/28x2%=3.57 Calendar Year - Based on the calender year i.e., 365 days or 366 days Interest amount will be calcualted.
Step 1 : Display Interest Calculation Reports To view Interest Calculated on Bank Account, Go to Gateway of Tally > Display > Statements of Accounts > Interest Calculations > Ledger > Bank Account. Change the period from 1-4-09 to 30-6-09. The Ledger Interest screen appears as shown below:
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Figure 6.46 Ledger Interest
Experiment by changing the period of the above report and notice the difference. Tally.ERP 9 automatically calculates the interest amount! (Remember that the interest is calculated with respect to changes made in the balance figures). Practice Exercise 1. Set up interest calculation for Mutual Trust Loan Account @ 2% per 30-day month. View the interest for the period 1-4-09 to 30-6-09.
6.6.2 Booking Interest to Ledgers

We have set the interest parameters for ledger accounts. The calculated interest amounts must be recorded using Debit Notes and Credit Notes with Voucher Classes. Debit notes are used for Interest receivable and Credit Notes for Interest payable. In Tally.ERP 9, interest is calculated on a Simple or Compound basis and hence separate classes should be used for them.
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Let us now create Voucher Class for Interest Entries. Setup : Create class for Debit Notes Voucher Type, go to Gateway of Tally > Accounts Info. > Voucher Types > Alter > Debit Note Tab down to Name of Class field. Type Simple Interest and press Enter.
Figure 6.47 Simple Interest Class
In the Class screen, set the other options as shown in the figure above. You will return to the the Debit Note Voucher Type Alteration screen. Type Compound Interest for the second class and press Enter In the Class screen, set Yes to both Use Class for Interest Accounting and Amounts to be treated as Compound Interest. Accept the Voucher Type and return to the Gateway of Tally. Create two classes, Simple Interest and Compound Interest for Credit Notes. Create the following ledger accounts by setting Cost Centres, Inventory and Interest calculation to No Interest Accrued under Group Indirect Income. Interest Due under Group Indirect Expenses. Interest Receivable under Group Current Assets. Interest Payable under Group Current Liabilities. Step 1 : Create Debit Note Voucher To book Compound Interest on Balances, Go to Gateway of Tally > Accounting Vouchers > press Ctrl+F9 > Debit Note > Class > Compound Interest. 1. Date: 30-6-09 2. Debit Bank Account (the amount is automatically filled up with the calculated interest) - Rs. 1,241.07. 3. Credit Interest Accrued - Rs. 1241.07. 4. In the Narration field, type Interest accrued upto 30th June 2009 on balances. 5. Accept the voucher.
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Transactions involving simple interest can be recorded using the Simple Interest voucher class.
Practice Exercise 1. Make an entry for booking the compound interest of Rs. 3,033.33, due to Mutual Trust Loan account upto 30-6-09.
6.6.3 Calculating Interest on Invoices

The outstanding interest for every invoice can be calculated for each transaction during a particular period if the bill-wise details is activated for the company and the party. Setup : For calculating Interest Transaction-by-Transaction (bill-by-bill), Go to Gateway of Tally > Accounts Info. > Ledgers > Alter > FirstCom Solutions. Set Activate Interest Calculation to Yes. In the Interest parameters screen, set Calculate Interest Transaction-by-Transaction to Yes. Set Override Parameters for each Transaction to No (This option when set to No does not allow you to change interest parameters in voucher/ invoice entry. You can change the interest parameters during an entry when it is set to Yes. Any vouchers entered before activating the feature of interest calculation will not be considered unless they are modified).. Specify Rate as 1% per 30-Day Month. The Interest parameters screen appears as shown below:
Figure 6.48 Interest Parameters
Accept the change and return to the Gateway of Tally.
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Step 1 : Display Interest Calculation Report Go to Gateway of Tally > Display > Statements of Accounts > Interest Calculations > Ledger > FirstCom Solutions.
This report is similar to the Bill-wise Outstandings Statement. The last column gives the interest amount on the transaction. Press Alt+F1 to view the calculations in detailed mode. Practice Exercise 1. Book Interest entries (Transaction-by-Transaction) for Power Line Computers from 13-7-09 to 31-12-09.
Alter the supplier account of Power Line Computers to activate Interest Calculations. Set the calculation for transaction-by-transaction and override parameters to Yes. Set the rate of interest to 1% per 30day month. Display Interest Calculations for Power Line Computers upto 31-1209.
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Reaccept the Purchase Voucher dated 13-07-09 for Rs. 8,500 from Power Line Computers. and accept all information including interest fields, by pressing Enter at each field (this is required since the Interest calculation is activated after passing the entry). Now display the interest calculations again for Power Line Computers upto 31-12-09. Do you notice anything? Adjust the interest amount by entering a Credit Note for Compound Interest on 31-12-09.
The completed Credit Note Voucher for adjusting the interest amount appears as shown below :
Figure 6.50 Credit Note
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6.6.4 Calculating Interest in Advanced Mode

The advanced parameters are particularly useful where interest rates change from time to time. In this section, you will be shown the use of advanced mode. Setup : In the F11: Features (Accounting Features) of National Traders Set Use Advanced Parameters to Yes Accept the settings and return to the Gateway of Tally. Step 1 : Alter Ledger account of Supreme Computers Set Activate Interest Calculations to Yes Set No to Calculate Interest Transaction-by-Transaction to calculate interest based on the rate specified in the ledger master on the cumulative amount (If this option is set to Yes, the interest will be calculated for all the transactions individually based on the parameters defined in the master). Specify the Rate as 10% on 365-day year and accept the ledger alteration screen. Step 2 : Display Interest Calculation Report Go to Gateway of Tally > Display > Statement of Accounts > Interest Calculations > Ledger > Data Link Technologies. The Ledger Interest screen as on 31-12-09 appears as shown below :

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The opening balance of the debtor Data Link Technologies is Rs. 26,000. The interest is calculated for 5 days (31-3-2009 to 4-4-2009) because we received Rs. 5,000 (on 5-4-2009) and the resultant balance became Rs. 21000. Interest on Rs. 26,000 is displayed as Rs. 35.62 Dr (to be received by us from our debtor) ' (26000 * 5/365 * 10/100). Likewise, the interest is calculated for the rest of the transactions based on the parameters given in the ledger master. We have viewed the interest calculation reports in National Traders. Let us now shut National Traders and select Indus Enterprises. 1. Make a receipt entry on 5-4-2009 for Rs. 5,000 received by cheque against the opening balance (of Rs. 15,000 vide Bill No. OB New Consumer). 2. As on 10-4-09, sold 3 nos of Computer-PIII @ Rs. 30,000 each to New Consumer (vide Bill No. NB/001, Credit Period - Nil). 3. As on 16-4-09, sold for 4 nos of Computer-PIII @ Rs.30,000 each to New Consumer (vide Bill No. NB/002, Credit Period - Nil). Setup : Create a debtor account New Consumer. Ensure that Maintain balances bill-by-bill is set to Yes Enter the opening balance as Rs. 15,000 Dr Enter the bill-wise reference name as OB New Consumer and accept the screen. Create a Stock item with the following details: Item Name Computer-PIII Stock Group Primary Category Not applicable Units Nos Quantity 10 Nos Rate 25,000 Godown Bangalore
Alter Ledger Account of New Consumer in Indus Enterprises Set Activate Interest Calculations and (use advanced parameters) to Yes Set Calculate interest Transaction-by-Transaction to No Set Rate as 10% per 365-day year on All Balances and accept the master. Create a Receipt Entry on 5-4-09 for Rs. 5,000 Create a Sales Invoice on 10-4-09 for 3 Nos of Computer - PIII @ Rs.30,000 each Create a Sales Invoice on 16-4-09 for 4 nos of Computer-PIII @ Rs.30,000 each
Select Second Sales in the Sales Ledger field (Create the ledger using Alt+C, if does not exist).
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Step 1 : Display Interest Calculation Report Go to Gateway of Tally > Display > Statement of Accounts > Interest Calculations > Ledger > New Consumer.
Now, in order to calculate Interest using advanced parameters, go to Gateway of Tally and alter the ledger of New Consumer Set Calculate interest Transaction-by-Transaction to Yes Set Override Parameters for each Transaction to No Enter Rate as 10% per 365-day year on All balances Select Due date of Invoice/Ref in Calculate From field
Figure 6.53 Interest Calculation screen
Accept the screen Go to Gateway of Tally > Display > Statement of Accounts > Interest Calculations > Ledger > New Consumer. Use Alt+F1 to view the interest calculation report in detailed mode for the period 1-4-2009 to 17-4-2009.
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The interest in this report is reflected separately for every transaction for the specified period. This is because we have defined that the interest has to be calculated transaction-by-transaction in the debtor Master. To view Interest calculations using Override Advanced Parameters, Go to Gateway of Tally > Display > Statement of Accounts > Interest Calculations > Ledger > New Consumer. Set Override Advanced Parameters to Yes (When Override Advanced Parameters option is set to Yes, it allows you to redefine the interest rate for every transaction. The interest amount is then calculated based on the rate defined while entering the transaction. This overrides the rate defined in the master). Accept the the advanced interest parameters and accept the master Re-accept the 2 Sales Entries and 1 Receipt entry passed earlier. View the Ledger Interest Calculation report for the New Consumer.
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Explanations for Advanced Interest Parameters: Interest Balances You can choose to calculate interest on All balances or Debit Balances or Credit Balances. Why is this required? In case of ledgers grouped under Sundry Debtors to whom we primarily sell but occasionally purchase, we would like to set the interest parameters only for the debit balances and NOT for the credit balances. However, in case of a Bank OD (over draft) account, we can set the interest parameters only on the Credit balances. Applicability This is an advanced parameter. There are two options Always and Past Due Always - To calculate the interest from the date of entry (for Bank Accounts) Past Due Date - To calculate the interest after the credit period ( for Sundry Debtors) Calculate From Tally.ERP 9 displays the following four options in accordance to the screen shown below: Date of Applicability: Tally.ERP 9 calculates the interest from the date of entry and allows you to enter the To date which is, the date till when the specified rate of interest is valid. For example, you can specify 15% for one month and 18% thereafter. Date Specified During Entry: This option allows you to define the interest parameters for any specified period. You can give both FROM and TO dates - that is, the date range from which the specified rate of interest will be calculated AND till the date the same rate of interest is valid. For example, you can specify 15% for one month and the subsequent 2 months at 18% and 22% thereafter. Due Date of Invoice / Ref: The interest is calculated from the Due Date specified in the bill-by-bill details. You will be able to define variable rates for the same period. For example, the surcharge or penalty can be calcuated for past due dates. Effective Date of Transaction: This is similar to the Date of Applicability. Rounding Choose upward, normal or downward rounding as required.
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Practice Exercise 1. On 21-08-2009, a Sales Invoices for 15,00,000 Project Sales with two reference namely, CCA for Rs. 3,75,000 and CA1 for Rs. 11,25,000. Calculate Interest from Dates Specified during Voucher Entry. Setup : Go to Gateway of Tally, select National Traders and shut Indus Enterprises Go to Ledger alteration screen of Civic Centre Association (Customer Account) and set Activate Interest Calculation to Yes Set up the Interest Parameters (ensure that the advanced parameters are activated in F11: Features (Accounting Features) as shown below:
In the Calculate From field to obtain the option Date Specified during Entry, set Override advanced parameters to Yes. This option is used when the interest is to be calculated at different rates for different periods. Options to Override parameters when set to Yes during voucher/ invoice entry, results in the information on interest being provided after the bill-wise details have been entered.
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Step 1 : Create/Alter Sales Invoice In the Interest Parameters subscreen, enter the following details In the Interest parameters subscreen, Set the interest parameters for New Ref. CCA of Rs. 3,75,000 as shown below:
Set the interest parameters for New Ref. CA1 of Rs. 1125000 as shown below:
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Step 2 : Display Interest Calculation Report Go to Gateway of Tally > Display > Statements of Accounts > Interest Calculations > Ledger > Civic Centre Association. Press F1: Detailed to view the calculation and the period details
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Practice Exercise 1. Make an entry on 21-09-09 in debit note voucher to adjust the interest accrued from Civic Centre Association (Compound Interest).
6.7 Budgets & Controls

The main purpose of Budgeting is to control the expenditure. This is possible by creating budgets and comparing the budgeted figures against the actual figures. You can generate reports based on this need and view the variances or differences between the actual and budgeted figures. Tally.ERP 9 allows you to create multiple budgets and also maintain budgets for specific purposes, e.g. for the Bank, for the Head Office, Marketing Budget, Finance Budget etc. Setup : To activate Budgets, In F11: Features (Accounting Features), set Maintain Budgets and Controls to Yes
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In Tally.ERP 9, you can create Budgets for Groups of ledger accounts or for Ledger accounts individually or for Cost centres or all of them
6.7.1 Creating a Group Budget

Go to Gateway of Tally > Accounts Info. > Budgets
Figure 6.59 Budgets Menu
1. Press Enter on Create and give the Name as Corporate Budget. 2. Press Enter and select Primary. The screen appears as shown below:
Figure 6.60 Corporate Budget
3. Specify the period of the Budget as 1-4-2009 to 31-3-2010 (The period could be a Month, a Year or any period starting from one date to the other). 4. Under the column Set/ Alter Budgets of, type Yes under Groups.
You can create budgets under budgets i.e sub - budgets under each Primary budget.
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5. Press Enter, the Group Budget subscreen appears,
Figure 6.61 Group Budget Subscreen
6. In Group Budget subscreen, Select Indirect Expenses in the Account Name field Select Not Applicable in Cost Centre field Select On Closing Balance in Type of Budget field Enter the budget amount as Rs. 20,000. The screen appears as shown below :
Figure 6.62 Group Budgets
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The Group Budget screen comprises of the following : Account Name: It is compulsory to select Groups for which the budget is being defined. You can select any number of groups. Cost Centres: Tally.ERP 9 displays the list of Cost Centres available. Select the required Cost Centre. However, if you select Not Applicable then the budget will not be applicable to any particular cost centre but for the company as a whole. Type of Budget: Under the Type of Budget a pop-up of two different kinds of Budgets appear, namely On Closing Balance and On Nett Transactions. On Closing Balance: This is used for comparing the closing balance figures in the final statements. On Nett Transactions: This is used for comparing transactions against budgets.
7. Press Enter repeatedly and accept the budget creation screen. Practice Exercise 1. Create another Budget with the following Details Budget Name - New Corporate Budget Group - Indirect Expenses Group Type of Budget - On Nett Transactions Period - 1-4-2009 to 31-3-2010 Budget Amount - Rs. 500. Set/Alter Budgets of Ledgers and Cost Centres to No.
6.7.2 Display Budgets and Variances for Group Budget

Budgets can be displayed in new columns in most financial statements like the Balance Sheet and Profit & Loss Account. The Trial Balance and Group Summaries have a Budget Variance button Alt+B that is activated even when there is a single budget set up for the company. In the earlier section, we have created Corporate Budget. Let us now view the report displaying the Budget values and the variances (difference between actual transactional valules and the budgeted figures) for that Budget.
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Before displaying the New Corporate Budget in the Trial Balance, press F12: Configure and set Show Transactions, Show Nett transactions only to Yes and Show Closing Balance to No, as the type of budget selected is On Nett Transactions.
Go to Gateway of Tally > Display > Trial Balance Press Alt+B (or Budget Variance button from the button bar) Tally.ERP 9 displays the Budget Analysis screen and the list of Budgets that have been created, select Corporate Budget The Report appears as shown below :
Figure 6.63 Trial Balance with Budget Figures
The Budget amount is Rs.20,000 and Actuals is Rs. 6,722.83 (which is 33.61% of budgeted amount). The variance (difference) is also displayed i.e Rs.13,277.17 which is 66.38% below the budgeted amount.
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Apportionment of budget specified for periods longer than a month: Group Budgets do not get apportioned. Hence Budget for Current Assets will not automatically flow to the sub-groups. Ledger Budgets get apportioned for each month. In 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.
6.7.3 Altering a Budget

Like any other master in Tally.ERP 9, budget can also be viewed in alteration mode. Go to Gateway of Tally > Account Info. > Budget > Alter Select New Corporate Budget from the List of Budgets Press Enter on the required field and make necessary changes
6.7.4 Deleting a Budget

To delete a Budget, Go to Gateway of Tally > Account Info. > Budget > Alter Select the required Budget from the List of Budgets Press Alt+D to delete it.
6.7.5 Creating a Ledger Budget

Create a new Budget Corporate Budget (Ledger) for the period 1-4-2009 to 31-3-2010 To create a Budget for Ledger Accounts, Go to Gateway of Tally > Accounts Info. > Budgets > Create 1. Type Corporate Budget (Ledger) in the Name field 2. Select Primary in Under field 3. Specify the period of the Budget as 1-4-2009 to 31-3-2010 4. Under the column Set/ Alter Budgets of, type Yes under Ledgers 5. Enter the budget details for ledgers as shown below:
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Figure 6.64 Corporate Budget (Ledger)
6. Accept the Budget for Ledgers.
6.7.6 Display Budgets and Variances for Ledger Budget

Go to Gateway of Tally > Display > Account Books > Group Summary Select Indirect Expenses Press Budget Variance or Alt + B and select Corporate Budget (Ledger) and press Enter The Corporate Budget (Ledger) with Variances will appear as shown below:
Figure 6.65 Corporate Budget (Ledger) Variance
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The Budget amount for Office Costs is Rs. 250, Closing Balance and the Actuals is Rs. 635 (which is 254% of budgeted amount of Rs. 250 - [(254/100) x 250]). The variance (difference) is also displayed i.e Rs. 385 which is 154% in excess of the Budgeted amount of Rs. 250. Practice Exercise 1. Create an Office budget under Primary Budget. Specify the period of the Budget as 1-4-09 to 31-12-09. Select Yes for Groups. Enter the details as given below: Group Capital Account Loans (Liability) Fixed Assets Current Assets Cost Centre Not Applicable Not Applicable Not Applicable Not Applicable Type of Budget On Closing Balances On Closing Balances On Closing Balances On Closing Balances Amount 1,50,000 50,000 1,00,000 1,00,000
Press Enter on the next blank field and accept the settings for Groups. Select Yes for Ledgers and enter the details as given below: Ledger Salaries Wages Conveyance Office Costs Profit & Loss A/c Cost Centre Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Type of Budget On Nett Transactions On Nett Transactions On Nett Transactions On Nett Transactions On Closing Balance Amount 25000 10000 4500 12000 50000
2. Displaying Budgets and Variances Go to Gateway of Tally > Balance Sheet, specify Date as 31-12-09 Select the New Column Button and Enter the details as given below: From: 1-4-09 To: 31-12-09 Currency: Base Currency Method of Stock Valuation: Default Type of Value to show: Office Budget Show Variances: No The Balance Sheet with the Office Budget column appears as shown below:
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Figure 6.66 Balance Sheet with Budget Figures
Alternatively, you can view the above budget from Trial Balance also, Go to Gateway of Tally > Display >Trial Balance (National Traders) Specify the period as 31-12-09. Select Indirect Expenses and press Enter. Press F12: Configure and set Opening and Closing Balances to No Transactions and Nett transactions to Yes Set Show Percentage to No Use Alt+R to hide the ledgers which are not appearing as per this screen (Advertising, Bank charges, Forex Gain/Loss and Interest due). Use the Budget Variance button to see the Office budget figures and the variances. The Transaction Budgets for Indirect Expenses appears as shown below:
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Figure 6.67 Office Budget Variance
From this report we can understand that the budget for conveyance is Rs. 4,500 on Nett Transactions while our Actuals is Rs. 70. Therefore, we have a balance of Rs. 4,430. 3. Alter Office Budget and change the amount for Conveyance ledger to Rs. 50 and view the report.
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Figure 6.68 Budget Variance
You will find that Rs. 20 is over-spent, which is 40% in excess of our budgeted amount. Display the Group Summary of Indirect Expenses and bring up the budget variance. Experiment by drilling down each account. 4. Create a new budget named as Office Balances Budget for the period 1-4-2009 to 31-122009. Budget figures for groups: Group Capital Account Loans (Liability) Fixed Assets Current Assets Cost Centre Not Applicable Not Applicable Not Applicable Not Applicable Type of Budget On Closing Balance On Closing Balance On Closing Balance On Closing Balance Amount 2,50,000 1,50,000 1,50,000 1,20,000
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Budget figures for Ledgers: Ledger Salaries Wages Conveyance Office Cost Profit & Loss Account Cost Centre Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Type of Budget On Closing Balance On Closing Balance On Closing Balance On Closing Balance On Closing Balance Amount 20,000 10,000 4,500 15,000 50,000
5. Display the Balance Sheet as on 31-12-09 with a new column for Office Balances Budget. 6. Display variances for Indirect Expenses from the Office Balances Budget.
6.8 Scenario Management

A scenario can be understood as an imagined sequence of events. In other words, if some action is carried out, we can forsee the result of carrying out that action. In today's context of managing businesses, Tally.ERP 9's Scenario Management is an effective management tool that enables comparison of actual as well as projected provisional figures of accounts related information. Advantage of using Scenarios Scenario Management is useful for generating reports with provisional figures as the entries are actually not passed through the main books of accounts. It is also useful for forecasting by entering forecast figures in provisional vouchers and including them to get forecasted figures. For example, it is 30th June and you want to view the Balance Sheet as of today but the salaries for the month of June are not paid until the first week in July. There is, therefore, a large liability, which would not be reflected in the Balance Sheet as on 30th June. Through Tally.ERP 9s scenario, you can make the required provisional entry and retain it even after printing the generated report because the entry will not reflect in your books of accounts. In order to explore the Scenario Management tool you need to first make entries which will not affect the books of accounts. Tally.ERP 9 provides the vouchers: Reversing Journal, Memorandum Voucher and Optional vouchers for this purpose. You have to then create a scenario for the vouchers to be used and finally, generate the required report. For example, Balance Sheet, Trial Balance, etc. You have to use the New Column facility to generate a new column with the Scenario details.
6.8.1 Creating a Scenario

Setup : Ensure that you are in National Traders In F11: Features (Accounting Features) set Use Rev. Journals and Optional Vouchers to Yes
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Reversing Journals Reversing Journal is a separate voucher type - like a journal voucher. Reversing Journal, similar to journal, is an adjustment entry, but unlike a journal it reverses its effect in the books of accounts after one day (Tally.ERP 9 allows you to specify the date of applicability at the time of entry as per your requirements (any number of days, or weeks, etc.). By default, Reversing Journal entries do NOT affect your books of accounts. They are non-accounting vouchers. Tally.ERP 9 does not post these entries to ledgers. It stores them in a separate register called Reversing Journal Register. For example, you make a reversing journal debiting a customer account and crediting miscellaneous income. This entry will not appear in both the ledgers. It is recorded in the Reversing Journal Register. Reversing journals are special journals which are effective only when called for in reports, like the Balance Sheet, Trial Balance, etc. Applicability is specified during the entry and they affect the reports only till that specified date. Reversing Journals are used in interim reporting in the course of the financial year where accruals are required to be reported. These accruals are usually short term and are cleared in the subsequent period. However, to get a proper perspective, decision makers require the reports with full impact of all aspects and transactions. Another example is the provision for depreciation. Depreciation is usually provided for at the end of the year. However, for monthly reporting, including it would give a more accurate status. In order to include Reversing Journals in Reports, you need to create Scenarios. Memorandum Vouchers Like Reversing Journal, Memorandum is a separate voucher type which is a non-accounting voucher. The entries made using it will not affect your books of accounts. Tally.ERP 9 does not post these entries to ledgers but stores them in a separate Memo Register. You can alter and convert a Memo voucher into a regular voucher type when you decide to pass an entry in your books. However, if you wish to include these entries temporarily, you can do so, by creating Scenarios. Optional Vouchers Optional voucher is NOT a separate Voucher Type. Several voucher types in Tally.ERP 9 (Payment, Receipt, Sales, etc.) can be marked optional. Optional vouchers are non-accounting vouchers, i.e, the entries made using it will not affect your books of accounts. Tally.ERP 9 does not post these entries to ledgers but stores them in a separate Optional Register. You can alter and convert an Optional voucher into a regular voucher when you decide to bring the entry into your books. However, if you wish to include these entries temporarily, you can do so by creating Scenarios.
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Let us now create a Scenario. We have a liability of Salaries - Rs. 45,000, to be accounted for as on February 7, 2010. However, we need to generate a report as on January 31, 2010. Since the entry of 7th February will not reflect in our books of accounts as on 31-1-2010, we will be making an incorrect analysis. To temporarily include the entry of 7th February 2010 we have to create a scenario. To create a scenario, Go to Gateway of Tally > Accounts Info. > Scenarios > Create and enter the following details: 1. Name: New Scenario 2. Include Actuals: Yes 3. Exclude Forex Gain / Loss Calculations: No (this appears if Multi-currency is activated and Unadjusted Forex Gain/Loss appears in the reports) 4. INCLUDE: Select Bank Payment (Optional Vouchers only), Only provisional vouchers are available for selection. 5. EXCLUDE: Select End of List (displays the list of vouchers that you DO NOT want to affect this scenario) and press Enter. 6. Accept the screen. The screen appears as shown below:
Figure 6.69 Scenario Creation
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The completed Scenario creation screen appears as shown :
Figure 6.70 Completed Scenario creation screen
7. Press Y or Enter to accept the screen and return to the Gateway of Tally. Proceed to create an optional bank payment voucher with cost centre class - not applicable on January 31, 2010. Debit Salaries ledger account (press Ctrl+Enter on salaries ledger to ensure that cost centre option is activated) Type Amount as Rs. 45,000 Dr Credit Deposit Account ledger for Rs. 45,000 Cr Allocate the amount to Cost Centre - Amar. The completed Bank Payment Voucher appears as shown below :
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The procedure to enter a payment voucher does not change, you can mark it as optional by clicking on the Optional button or use of Ctrl + L keys. Accept the entry and return to the Gateway of Tally. Now, verify whether the payment entry is appearing in the ledger Salaries or not. Go to Gateway of Tally > Display > Account Books > Ledger > Salaries Press Alt + F2 to view the entries for the entire year 1-4-2009 to 31-3-2010. There should be only one entry for Rs. 2,500 in the month of June i.e., the optional vouchers do not affect the books of accounts and are displayed only in Day Book as Optional Vouchers. To view Day Book, Go to Gateway of Tally > Display > Day Book Press Alt + F1 to view in detailed mode, you will find the Optional vouchers are displayed in italics as shown below:
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Figure 6.72 Day Book
This voucher is stored in the Optional Voucher Register. To view Optional Voucher Register, go to Gateway of Tally > Display > Exception Reports > Optional Vouchers. Now let us learn how to temporarily include this optional voucher transaction in our books for generating provisional reports. Since we have credited the deposit ledger account, proceed to view the Cash/Bank Books statement. Go to Gateway of Tally > Display > Account Books > Cash/Bank Book(s) and the report displays these values as on 31-1-2010. 1. Petty Cash Rs. 10,695 Dr. 2. Bank Account Rs.1,39,961.07 Dr 3. Deposit Account Rs.46,000 Dr Press Alt+C (New Column) and specify the details as shown below:
Figure 6.73 Column Details
Accept the settings for the new column and the Cash/Bank Summary appears as shown below.
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Figure 6.74 Cash/Bank Summary
The Deposit Account shows a debit balance of Rs. 46,000 excluding the Optional Voucher. On the inclusion of the Optional Bank Payment entry of Rs. 45,000, there is a debit balance of Rs. 1,000 (46,000 Dr - 45,000 Dr = Rs. 1,000 Dr).
6.8.2 Alterating a Scenario

To alter a scenario, go to Gateway of Tally > Account Info. > Scenario > Alter Select New Scenario from the List of Scenarios Under Include, reselect Payment (Optional Vouchers only), select Receipt (Optional Vouchers only) and accept the screen.
6.8.3 Deleting a Scenario

To delete a Scenario, go to Gateway of Tally > Account Info. > Scenario > Alter Select New Scenario and press Alt+D Practice Exercise 1. Create Scenarios in Indus Enterprises using Memorandum Vouchers, Reversing Journals and other Optional Vouchers and experiment !
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Points to Remember
Bill-wise details are specified while creating vouchers to allocate payments to invoices. The Outstandings Statements can be generated using bill-wise details. A Cost centre is a unit of an organisation to which expenses as well as incomes are allocated. Cost categories are used when the organisations have to allocate resources to parallel sets of cost centres. Accounting ledgers can be automatically allocated to transactions with the help of Voucher Class facility. The voucher class also enables intergodown transfer of stocks, adjustment of forex gain / loss, interest calculations etc. The Cost centre class enables automatic allocation of cost centres, while recording transactions. Tally.ERP 9s multi-currency feature allows the recording of transactions involving more than one currency and also helps in adjusting the foreign exchange gain/ loss. Bank reconciliation refers to the reconciliation of companys bank accounts with the bank statement. In Tally.ERP 9 the vouchers can be reconciled by just entering the appropriate dates in the reconciliation screen. In Tally.ERP 9, the interest can be calculated by specifying the interest parameters in the ledgers masters, which can be altered while entering the transactions. The interest can be recorded using debit / credit notes with the help of relevant voucher classes. Budgets are used to control the expenditure. In Tally.ERP 9 budgets can be created for any account group, ledger and cost centre to generate a budget variance statement. Scenario reports are used for the comparison of actual as well as projected provisional figures of accounts related information.
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Lesson 7: Advanced Inventory in Tally.ERP 9
Lesson Objectives
On completion of this lesson, you will be able to Record orders placed/received Make a reorder analysis of inventory Create and maintain batch wise details, bill of materials and price lists Display reports on various stock valuation methods and inventory ageing analysis Record zero valued entries Record transactions using different actual and billed quantities
7.1 Order Processing

Order Processing refers to placing orders with suppliers for purchasing from them or receiving orders from customers for the purpose of selling. In Tally.ERP 9, Order Processing is linked to Inventories. Using Order processing you can: Track the order position of a stock item; Know whether the goods ordered have arrived or not; Know whether the orders have been delivered on time and thNational Traderse reasons for the delay if any. In this lesson, you will learn the method of recording and linking purchase orders to purchase invoice and sales orders to sales invoices. You will also learn how to display outstanding orders and the effect of orders on stocks.
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Advanced Inventory in Tally.ERP 9
Setup : Ensure that you are at the Gateway of Tally of National Traders. In the F11: Features (Inventory Features), activate the following features: Allow Purchase Order Processing. Allow Sales Order Processing. Use Tracking Numbers (Delivery / Receipt Notes)
Orders do not affect financial records nor do they update inventories. In this section, set the Tracking Numbers to Not Applicable.
7.1.1 Purchase Order Processing

Raise a Purchase Order on 15-12-2009 on Navketan Bricks (vide Order No. 1) for 5,000 pcs of Bricks @ Rs.3 /brick. (Godown - Warehouse). The due date is 26-12-2009 and addtional Freight charges @ 3% is applicable. Setup: Create a Supplier - Navketan Bricks Under Sundry Creditors with Maintain Balances bill-by-bill set to Yes. Create a Stock Item - Bricks under Building Materials Stock Group, and select Not Applicable for the Stock category and specify the unit of measure as Pcs (If not listed create using Alt+C). Press F12: Purchase Order Configuration and ensure that: Accept Supplementary Details is set to No. Complete Accounting Allocations in Order/Delivery Note is set to Yes. Use Common Ledger for Item allocation is set to No. Step 1: Create Purchase Order Go to Gateway of Tally > Inventory Vouchers > F4: Purc. Order. 1. Date: 15-12-09. 2. Party's A/c Name: Navketan Bricks 3. Order No: 1 This particular Order No. field is an additional field to record the order number if different from the voucher number. 4. Name of the item: Bricks. Press Enter and the Item allocation sub-screen appears. Due on: 26-12-09 (It is the due date for the delivery of the item. This will enable the monitoring of outstanding deliveries. The order can be split for delivery on different dates). Location: Warehouse. (Only when the multiple location feature is active, this field is required to be given, else it does not appear.)
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Quantity, Rate and Amount - 5,000 Pcs @ 3 per Pcs (The amount is calculated automatically but is modifiable to enable rounding off) The completed Stock Item Allocation sub-screen appears as shown below :
Figure 7.1 Item Allocation for Bricks
5. Press Enter until you reach the Accounting Details screen. Allocate the amount to Purchases ledger and return to the Purchase Order screen. Press Enter on the blank field to take the cursor to the tax/ expense field. 6. Select Freight Charges at 3% on the item value. 7. Narration: Optional.
7.1.2 Altering a Purchase Order

To Alter a Purchase Order, Go to Gateway of Tally > Display > Day Book > F4: Chg Vch and select Purchase Orders or Go to Gateway of Tally > Display > Inventory Books > Purchase Order Book.
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7.1.3 Sales Order Processing

Enter a Sales Order on 16-12-2009 on WinLab Technologies (vide Order No. WT/5) for 4,000 pcs (godown - Warehouse) of Bricks @ Rs. 5 /brick. The due date is 27-12-2009 and tax @ 17.5% is applicable. Step1: Create Sales Order Go to Gateway of Tally > Inventory Vouchers > F5: Sales Order. 1. Date: 16-12-09. 2. Party's A/c Name: WinLab Technologies 3. Order No: Enter WT/5 - The voucher number is automatically displayed here but you are allowed to change it, because this particular Order No. field is for the customer's order number which is most likely to be different from the voucher number. 4. Name of the item: Bricks. Press Enter and the Item allocation sub-screen appears. Due on: 27-12-09. The due date for delivery of the item. This will enable monitoring of outstanding deliveries. The order can be split for delivery on different dates. Location: Warehouse. Quantity, Rate and Amount 4000 Pcs @ 5 per Pc allocate to Sales Account (create it if not present) 5. Press Enter on the blank field to take the cursor to the tax/ expense field. 6. Select Tax @ 17.5% (Create it under Duties & taxes to be charged on the total sales). 7. Type the narration as Sales Order entry as on 16th December 2009. The completed Sales Order appears as shown below :
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Figure 7.2 Sales Order Entry
8. Press Y or Enter to accept the screen and return to the Gateway of Tally.
7.1.4 Altering a Sales Order

To Alter a Sales Order, Go to Gateway of Tally > Display > Day Book > F4: Chg Vch and select Sales Orders or Go to Gateway of Tally > Display > Inventory Books > Sales Order Book.
7.1.5 Display Order Position

Now that we have raised one purchase order and one sales order, let us view the order position to know the amount of stock that is in the process of order both inward and outward: Go to Gateway of Tally > Stock Summary. Press the F7: Orders button or press Alt + F7. Select Sales Orders Outstanding, set No to Use Due orders only?.
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Select Building Materials field and drill down to the Order Details screen, by pressing enter twice. In the Sales Order Outstanding screen. Press Alt+F1 to view the report in detailed format. The Order Details screen appears as shown below :
Figure 7.3 Order Details screen
The Order Details report is generated as on December 20, 2009. Change the period to a different month and observe what happens. You will discover that the entry appears in the report based on the due date given in the order. Press F12: Configure and set Yes to all the fields. The report now shows the Outstanding positions of the Sales and Purchase Orders for the stock item Bricks.
Figure 7.4 Order Details screen
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The Sales Order Outstanding screen, by default will show the report as on last date of the voucher entry. Hence, change the period to view the report of the desired period The value and magnitude of information changes online depending on the date filter you use. This is Tally.ERP 9's Power of Real Time Report Generation.
7.1.6 Display Columnar Orders & Stock Details

To view Columnar Order Position, return to the Stock Summary screen. Press F1: Detailed and view the report as on 31-12-2009. Press Alt + N or Auto-Column Button, select Orders & Stock Details. Remove Rate and Value from display, by configuring it in F12: Configuration (This will enable all the columns to fit in one screen). The screen appears as shown below :
Figure 7.5 Stock Summary
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You may further drill down each column to view it in detail. In the Stock Summary screen, you can even bring up a new column using the New Column button and get more options for more details. Experiment with the different Types of Values to get familiar with them and Return to the Gateway of Tally.
7.1.7 Adjusting Orders

Orders are adjusted at the time of raising delivery notes and invoices. Step 1: Create Purchase Invoice Go to Gateway of Tally > Accounting Vouchers > F9: Purchase > select As Invoice. 1. 2. 3. 4. 5. In the Supplier Invoice No. field enter NB/6. Date: 26-12-09. Press F12: Configure and set Accept Supplementary Details to Yes. Party's A/c Name: Navketan Bricks. Press Enter to view the Receipt Details screen as shown below:
Figure 7.6 Receipt Details screen
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6. In the Receipt Details screen, select 1 from the List of Orders in the Order No(s) field and accept the screen. 7. The stock item Bricks appears automatically. Press Enter and the Item Allocations subscreen is displayed with the quantity details. 8. Tracking number: Not Applicable (as goods are accompanying the bill) and re-accept the order number. 9. Select Purchases in the Accounting Allocation screen. 10.Select Freight at 3% on the item values. 11.Enter the rest of the details and accept the screen. Practice Exercise 1. Enter a sales invoice on 27-12-2009 and link it to the sales order of 16-12-2009 and view the Orders position (including the cleared orders). 2. Raise a Purchase Order on 20-12-2009 on Navketan Bricks with the order number - PO/001. Give the due date as 28-12-2009 and quantity as 4500 pcs (godown - Warehouse) @ Rs. 4 per brick piece. Add Freight charges @ 3%. 3. Enter another Purchase Order on 26-12-2009 on Navketan Bricks with the order number as PO/002, due date as 31-12-2009 and quantity as 5500 pcs (godown - Warehouse) @ Rs. 4 per Pc. Add Freight charges @ 3%. 4. On 22-12-2009 and 27-12-2009 raise two Sales Orders on WinLab Technologies (WT/001 and WT/002). Give the due date as 29-12-2009 and 3-1-2010 and quantity as 3000 pcs and 4,250 pcs respectively @ Rs. 6 per Pc. Tax @ 17.5% for both orders. 5. View the Order Position and then return to the Gateway of Tally.
7.2 Reorder Levels

Reorder level is the level on reaching which an order has to be placed for a stock item. The importance of a reorder level arises from the desire to have sufficient stocks to service customer orders and at the same time not to have unnecessarily high stocks. Therefore, the points to be considered in deciding reorder levels are: Lead time for suppliers to deliver stock Delivery time specified by the customer The stock in hand to satisfy orders in the meantime.
7.2.1 Defining Reorder Levels

Reorder Levels can be defined in either Simple Mode or Advanced Mode. Go to Gateway of Tally > Inventory Info. > Reorder Levels Select Building Materials and press Enter The Specify Reorder Levels screen appears where all the Stock Items (Bricks, Cement and Steel) under the Stock Group (Building Materials) are displayed.
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The Simple Reorder Level appears as shown:
Figure 7.7 Simple Reorder Level screen
The Reorder Level screen appears based on the books beginning from and the date of last entry.
Click Alt+R : Adv Reorder button Click Alt+M :Adv Min Qty button
The following buttons are used in Reordering: Ctrl + F4: New Parent (to change the Stock Group). Alt + R : Simple Reorder (toggles with Advanced Reorder). Alt + M: Simple Minimum Quantity (toggles with Advanced Minimum Quantity). The latter two buttons allow you to define the reorder levels using either simple parameters or advanced parameters.
The Advanced Reorder Level screen appears as shown below :
Figure 7.8 Advanced Reorder Level screen
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The Advanced parameters allow you to specify the quantities for the Reorder level and the minimum order quantity. The reorder and minimum order quantity is defined based on consumption patterns. Consumption patterns are decided based on a stipulated time period. Tally.ERP 9 allows you to choose from the time parameters of Days, Weeks, Months and even Years.
Set the Reorder Level and Minimum Order Quantity for the stock item Bricks using advanced partameters as shown below :
Figure 7.9 Reorder Level screen
Set the Reorder level at 4,500 pcs (user-defined) or you may also consider the consumption pattern for the last 5 Days and accept the value computed as the Reorder Level. Press Ctrl+A to accept the screen and return to the Gateway of Tally.
Consumption patterns can be given only if you specify a user-defined quantity as the Reorder level and Minimum Order quantity. Tally.ERP 9 then compares the two values and considers the lower or higher of the two figures as per our specifications.
7.2.2 Display Reorder Status

We have so far defined the Reorder Levels. However, since the actual analysis is possible only through the Reorder Status report, let us view the same. Go to Gateway of Tally > Display > Statements of Inventory > Reorder Status Select Building Materials Press F2 and change the period from 1-4-2009 to 30-1-2010
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The Inventory Reorder Status screen appears as shown below :
Figure 7.10 Inventory Reorder Status
Click the A: Reorder Only button (A: Reorder Only button toggles with the A: Show All button).
Figure 7.11 Inventory Reorder Status
A report is displayed giving the details of only Bricks, since the report is configured to display only those items which are below the reorder level. To analysis the Inventory Reorder Status Report, place the cursor on any of the details given in the above report and press Enter. You can view the details to verify its correctness.
i. Name of Item The list of stock items are displayed which are grouped under the selected stock group. Highlight the required item and press Enter to arrive at the Movement Inward details. This gives us the details of the stock items in terms of the quantity, rate and value. You can drill down to the last level of voucher details.
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ii. Closing Stock Remember, in the section on Order Processing we first raised a Purchase Order for 5000 pcs which we then purchased. After that, we raised a Sales Order for 4000 pcs which we subsequently sold - this resulted in a closing quantity of 1000 pcs. The column next to the name of the item displays the closing quantity as per the date specified in the report. Press Enter on the value shown under closing stock and you will get a monthly inward-outward-closing balance report of the selected stock item. iii. Purchase Orders Pending This quantity is arrived at on the basis of the total purchase orders pending. Remember we raised 2 Purchase Orders for 4500 pcs and 5500 pcs. The total of 10000 pcs appears in the Purchase Orders Pending column. Press Enter on the value shown under Purchase Orders Pending and you will get a report displaying outstanding purchase orders. iv. Sales Orders Due This quantity is arrived at on the basis of the total sales orders due. Remember, we raised 2 Sales Orders for 3000 pcs and 4250 pcs. The total of 7250 pcs appears in the Sales Orders Due column. Press Enter on the value shown under Sales Orders Due and you will get a report of the outstanding sales orders. v. Nett Available The quantity given here is arrived at based on the formula: Closing Quantity + Purchase Orders Pending - Sales Orders Due i.e., 1000 + 10000 7250 = 3750 pcs. vi. Reorder Level As per our definition, if we select the greater of 4500 pcs or the level of Consumption over the last 5 days then the reorder level will be displayed as 4500. To define consumption pattern as lower, highlight the Reorder Level column and press Enter to view the Specify Reorder Level screen. vii. Shortfall Shortfall is displayed as on 31-1-2010 with the specifications: Reorder level being 4500 pcs or consumption of last 5 days whichever is higher. Minimum order quantity of 1500 pcs or consumption of last 5 days whichever is higher. The quantity is arrived at based on 4500 (reorder level) - 3750 (nett available) = 750 pcs shortfall. The reorder level if more than the nett available, the difference will be shown as Shortfall.
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viii. Minimum Order Quantity The minimum order quantity is the level below which when the quantity of stock falls, an order has to be placed. Press Enter on Minimum Order Quantity to view the reorder level and minimum order quantity definition screen of the selected stock item. ix. Order to be Placed The amount is arrived at based on the following interpretations: Shortfall > Minimum Order Quantity. The quantity displayed in Shortfall column will be displayed in the column Order to be Placed or Shortfall < Minimum Order Quantity. The quantity displayed in Minimum Order Quantity column will be displayed in the column Order to be Placed. In our example, Shortfall (750 pcs) is less than Minimum Order Quantity (1500 pcs) hence, minimum order quantity of 1500 pcs is the order to be placed as on 31-1-2010.
Practice Exercise 1. In Indus Enterprises experiment by giving your own values for reorder level and minimum order quantity and observe the report as on various dates (depending on the entry dates). Discover and analyse the stock status.
7.3 Tracking Numbers

Many businesses deliver stock with a delivery note or a challan and the bill is raised later. There may be a situation where you raise a bill first and then deliver the goods against the bill raised or receive the goods against a purchase bill. In such cases, it is important to 'Track' the delivery or receipt of inventory against the bill. Tally.ERP 9 has a feature called Tracking Numbers to achieve the same. 'Tracking' the delivery or receipt of inventory, is purely an inventory-related activity. Tally.ERP 9 helps in bringing such entries into the accounting statements to help the user in ascertaining the profit or loss for a stipulated period. In case sales bills are to be raised an additional element in the detailed Profit & Loss statement appears as Sales bills pending and for Purchases the same will appear as Purchase Bills pending.
7.3.1 Using Tracking Numbers

On 28-12-09 Ref GRN/NB - 1,000 Pcs of Bricks received from Navketan Bricks @ Rs. 4 /Pc at the warehouse. In the earlier sections, we have recorded two Purchase Orders on 20-12-2009 and 25-12-2009 with due dates 28-12-2009 and 31-12-2009 respectively. The above receipt of 1,000 pcs is received against the ordered quantity of 4,500 pcs.
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Let us raise a Receipt Note for the PO/001 raised on 20-12-2009 with due date 28-12-2009. Setup: In the F11: Features (Inventory Features), activate Use Tracking Numbers to enable the Receipt Note (Goods Receipt Note) and Delivery Note (Delivery Challan). Use Rejection Notes to enter Rejections In vouchers and Rejections Out vouchers. Step 1: Create Receipt Note Go to Gateway of Tally > Inventory Vouchers >F9: Receipt Note. Date: 28-12-09 Party's A/c Name: Navketan Bricks Purchase Ledger : Project Purchases Name of the item: Bricks In Item Allocations for screen, Select Tracking No. as GRN/NB, Order No. as PO/001 and Due on: 28-12-09 6. In the main voucher screen, enter 3% for Freight charges and the value gets calculated automatically. 7. Enter the remaining details and accept the voucher. 1. 2. 3. 4. 5.
7.3.2 Display Purchase Bill Pending

Go to Gateway of Tally > Display > Statements of Inventory > Purchase Bills Pending > Press Alt + F1 for a detailed view. The Purchase Bills Pending report appears as shown below :
Figure 7.12 Purchase Bills Pending
Tally.ERP 9 tracks down the details of goods received for which bills have not been received. To view effect of above report, Go to Gateway of Tally > Profit & Loss Account and view the Purchase Accounts. You will find that the value of goods received (recorded through Receipt Note) are included in the Purchase Accounts under Purchase Bills to come, for ascertaining the profits accurately. Also
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view Sundry Creditors from Balance Sheet, you will find that liability is created under Purchase Bills to come.
Ensure that in F11: Features (Accounting Features), Integerate Accounts with Inventory is set to Yes. For details on Original Quantity, drill down the Purchase Bills pending and activate the option Show Original Quantity in F12: Configure. You will get an additional field called Initial Quantity.
On 28-12-09, you receive the purchase Bill No. NB/15 from Navketan Bricks for their Delivery Note No. GRN/NB for 1,000 Pcs of Bricks @ Rs.4 /Pc. A credit of 30 days is allowed. Setup : Activate Cost Centre for Freight charges Ledger Step 1: Create Purchase Voucher Go to Gateway of Tally> Accounting Vouchers > F9: Purchase 1. 2. 3. 4. 5. 6. 7. 8. Ref: NB/15 Credit Navketan Bricks: Rs. 4,120 Bill-wise Details: NB/15 30 days 4,120 Debit Purchases: Rs. 4,000 Tracking Number: Select GRN/NB and give the required inventory allocation. Debit Freight Charges: Rs. 120 Select Projects and Assignments Category and Buildings Cost centre Accept the Purchase voucher.
After completing the above entry, view Purchase Bills Pending. Practice Exercise Make the following voucher entries: 1. On 1-2-2010, you received an order from FirstCom Solutions for 25 Nos of HP - 27 Printer Cartridges to be delivered on 15-2-2010 @ Rs. 250 each. Order number FCS/9. You propose to deliver from On-Site, allocate to Sales-Printer, Cost Centre Amar. 2. On 13-2-2010, received 22 Nos of HP - 27 Printer Cartridges @ Rs. 200 from Power Line Computers and stored in On-Site. The invoice PLC12 was also received. Credit period was 30 days. 3. On 15-2-2010, National Traders delivered 20 Nos of HP - 27 Printer Cartridges from On-Site to FirstCom Solutions against their Order FCS/9. Since you will raise the invoice later, give a new tracking number as Ex1.
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The terms are Credit period of 45 days from the date of invoice. The sale price is Rs. 250 each. No interest is to be charged. 4. On 17-2-2010, FirstCom Solutions returned 2 defective pcs of HP - 27 Printer Cartridges, track it against Ex1. 5. On 1-3-2010, National Traders raised the invoice for the 18 pcs of goods retained by FirstCom Solutions. Link the invoice with the delivery note. Display Sales Bills Pending on 28-2-2010. and view Profit & Loss A/c on 28-2-2010 to view changes in Sales Bills to make. Change the date to 2-3-2010 and check, are there any Sales Bills to Make 6. Prepare a Purchase invoice on 13-2-2010 and track it against the receipt note dated 13-22010.
Activate Rejection Notes in the F11: Features (Inventory features), if not activated. Create a Receipt Note for Exercise 2, and give the tracking number as PLC12. For Exercise 4, create Rejections In Voucher For Exercise 5, raise a Invoice for 18 Pcs only. After completing the above practical exercises, return to Gateway of Tally and disable tracking numbers in the F11: Features (Inventory Features).
Once entries are recorded using Rejections In and Rejections Out Notes, the option Use Rejection Inward/Outward Notes in F11: Features (Inventory Features) cannot be set to No.
7.4 Batch-wise Details

Batch details are used to identify the movement of inventory in batches or lots. Although this is a requirement primarily of the pharmaceutical industry, the same can be used by other industries that maintain or manufacture perishable goods. Many organisations also purchase in batches in order to monitor the result of the batch purchased individually. Hence, Tally.ERP 9 has used the term Batch/Lot. Batches/Lots are also often used to monitor the date of manufacture, date of receipt or the date of expected time when it cannot be further used (perished or expired). Tally.ERP 9 makes provisions to enter both the manufacturing date and the expiry date to take decisions as required. In this section the following topics are discussed : Activate Batch-wise Details and enter vouchers using them.
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Set Manufacturing Date & Expiry Date for Batches.
Manufacturing Date & Expiry Date for Batches is useful for businesses that deal in goods that have expiry dates like medicines, food and other perishables. During Voucher entry, the date of manufacture of the product, by default takes the date of the voucher, this can however be changed subject to Date of Manufacture is not later than the Voucher Date. Expiry Date is not earlier than the Date of Manufacture.
7.4.1 Activating Batch-wise Details

Batch-wise details are given for maintaining batch information pertaining to stock items. The Manufacturing date and expiry date can also be set for batch wise details. To activate Batchwise Details, Go to Gateway of Tally > press F11: Features (Inventory Features). Set Maintain Batch-wise details and set Expiry Dates for Batches to Yes.
7.4.2 Using Batch-wise Details in Purchase Invoice

On 15-12-09, purchased Saridon - 250 nos from GetWell Pharmacy @ 5.50 each with batch number ST/101 having Manufacturing date as 15-8-2009 and Expiry Date as 14-8-2010. Setup: Create GetWell Pharmacy Ledger under Sundry Creditors Create the following Stock Item Name: Saridon Under: Medicines (create the group under primary) Category: Pain Killers (create the category under primary). Maintain in Batches: Yes. Track date of Mfg: Yes Use expiry dates: Yes Alter Standard Rates: No Rate of Duty: 5 Retain all the other fields as default and accept the stock item creation screen. Return to the Gateway of Tally.
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During Voucher entry, press F12: Purchase Invoice Configuration and set Honor Expiry Dates usage for Batches to Yes. Step 1: Create Purchase Voucher Go to Gateway of Tally > Accounting Vouchers > F9: Purchase 1. Enter the item as per the transaction details. 2. After you enter Saridon, an Item Allocation screen will appears, Enter the batch no. as ST/101 having manufacturing date as 15-8-09 and Expiry Date as 14-8-10. 3. Select Onsite in Godown field. The Batch details appears as shown below :
Figure 7.13 Item Allocations for Saridon
4. Allocate it to Purchase account (not project purchases). Purchase invoice number NM. Credit period 60 days. 5. Press Enter and accept the voucher.
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Go to Gateway of Tally > Stock Summary > Medicines > press F1: Detailed as on 15-12-2009. You will see the batch details of Saridon 250 nos with the rate and the total closing value.
7.4.3 Using Batch-wise Details in Sales Invoice

On 27-12-09 , raise a Cash Sales Invoice for 200 nos of Saridon @ Rs. 7.50 from the above Batch No.ST/101. Setup : Create Cash Ledger under Cash-in-Hand group Activate Cost Centre for Export Saes Ledger Step 1: Create Sales Voucher Go to Gateway of Tally > Accounting Vouchers > F8: Sales 1. 2. 3. 4. 5. Enter the item as per the transaction details. Select the Batch as ST/101 Select Godown as Onsite Select the Sales Ledger as Export Sales Allocate the Sales to Cost Centre : Amar
Step 2 : View Stock Sumary Go to Gateway of Tally > Stock Summary > Medicines Specify the date as 27-12-2009 Press F1: Detailed, you will find that the stock balance is 50 nos. Practice Exercise 1. On 28-12-09, raise another purchase invoice on GetWell Pharmacy with the following details Batch No. : ST/102 Quantity : 300 nos Rate : Rs. 6 per nos Godown : On-site Manufacture date : 15-8-09 Expiry date : 31-12-09 Purchase Ledger : Purchases
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Total Invoice Value : Rs. 1,800 2. On 1-1-10, make a Cash Sales Invoice for Saridon - 50 nos from batch ST101 and 200 nos from batch ST102 @ Rs. 7.50 each.
Figure 7.14 Item Allocation for Saridon
You may not be able to display the batch ST/102, use backspace key and go back to the invoice screen and change the invoice date to 31-12-2009. Tally.ERP 9 displays the batch ST/102 as shown below :
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Figure 7.15 Item Allocation screen
Tally.ERP 9 does not display batch ST/102 when we make the entry on 1-1-2010 because the expiry date of ST/102 was 31-12-2009. But when we changed the entry date to 31-12-2009 the batch is displayed! This is because the option Honor Expiry Dates usage for Batches is set to Yes in the F12: Configuration.
When Honor Expiry Dates usage for Batches is set to Yes in the F12: Configuration, Tally.ERP 9 does not allow selection of expired batches during voucher entry (i.e., Batches for which, the expiry dates falls before the voucher date).
7.5 Additional Cost Details

The cost of an item is the rate at which the item is purchased. However, there are other expenses like Packing charges, Freight charges, Cartage incurred, etc. which add to the cost of purchasing the item. Thus, the additional cost details are required to be added to the actual cost of purchase. Let us now see how Tally.ERP 9 handles this requirement.
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7.5.1 Activating Additional Cost Details

Ensure that you are at the Gateway of Tally of National Traders. Press F11: Features (Inventory Features), set Track Additional Costs of Purchases to Yes.
7.5.2 Creating Purchase Voucher with Additional Cost Details

Setup : Create a ledger Stationery House under Sundry Creditors with only the bill-wise details set to Yes. Create the following stock items: Name of Item Stapler Stapler Pins Under Primary Primary Category Not Applicable Not Applicable Units Nos Nos Maintain in Batches No No
Create a new group Expenses on Purchases under the default group Purchase Accounts and select Not Applicable for Method to Allocate when used in Purchase Invoice.
The option Method to Allocate, when used in Purchase Invoice will not appear, if the feature Enter Purchases in Invoice format is set to No in F11: Features (Accounting Features).
Create the following ledgers under the newly created group Expenses on Purchases with the option Inventory Values are Affected and Maintain Cost centres set to No. Packing Charges on Purchases Cartage Charges Step 1:Create Purchase Voucher Go to Gateway of Tally > Accounting Vouchers > F9: Purchase 1. 2. 3. 4. 5. 6. 7. Press Ctrl+V for Voucher Mode Date: 1-3-2010 Credit Stationery House: Rs. 7,500 Debit Purchases: Rs. 7,500 and press Enter Tally.ERP 9 prompts for the Item details (as Inventory values are affected is set to Yes) Select item Stapler and press Enter In the Item allocation screen,
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Order number: Not Applicable Godown: On-Site Quantity: 100 nos Rate: Rs. 20 each 8. Press Enter till you reach the additional cost details screen 9. Select Packing Charges on Purchases and type Rs. 110 (The total packing charges of Rs. 290 is incurred for both items). 10.Now select the ledger Cartage Charges and type Rs. 90 (The total cartage charges of Rs. 210 is incurred for both items). The Additional Cost Details screen appears as shown below :
Figure 7.16 Additional Cost Details for Stapler
11.Press Enter, Tally.ERP 9 prompts for the tracking number details 12.Select End of List. The Inventory Allocations for: Purchases appears as shown below :
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Figure 7.17 Inventory Allocations for Purchases
13.Select the Item Stapler Pins in the Item Allocation screen and Order number: Not Applicable Godown: On-Site Quantity: 200 nos Rate: Rs. 25 each Press Enter till you reach the additional cost details screen. 14.Select Packing Charges on Purchases and enter the balance amount of Rs. 180. 15.Select the ledger Cartage Charges and enter the balance amount of Rs. 120. 16.Press Enter till you reach the narration field.
In the invoice, we have incurred the total packing charges of Rs. 290 for both items. Out of which Rs. 110 is already specified the previous stock item Stapler. Hence, Rs. 180 is entered for Stapler Pins. (In the invoice, we have incurred a total of Rs. 210 as cartage charges for both items. Out of which Rs. 90 is entered for the previous stock item Stapler. Hence, Rs. 120 is entered for Stapler Pins. Ensure that the option Show Inventory Details is set to Yes in the F12: Configuration.
The completed Purchase voucher appears as shown below:
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Figure 7.18 Purchases Voucher
You will notice an additional line displaying the actual value of the item. The item value appearing here will also be appearing in the stock reports. 17.Press Y or Enter to accept the screen and return to the Gateway of Tally. Display Stock Summary Report Go to Gateway of Tally > Stock Summary Highlight the item Stapler, you will find closing balance of 100 nos @ Rs. 22 each worth Rs. 2,200. Return to the Gateway of Tally. Display Stock Voucher Report Cross verify the stock details of stock summary with the Stock Vouchers report as shown below : Go to Gateway of Tally > Display > Inventory Books > Stock Item Select Stapler and press Enter till you reach a report displaying the list of vouchers as shown below:
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Figure 7.19 Stock Vouchers
Purchased Stapler 100 nos at Rs. 20/no., total being Rs. 2000.Additional expenses of Rs. 200 i.e., Packing Charges - Rs. 110 Cartage Charges - Rs. 90 The total Purchase Cost is arrived as shown below : Purchase total + Additional Expenses total (Rs. 2,000 + Rs. 200) = Rs. 2,200. This is divided by quantity of 100 nos > Rs. 2,200/100 nos = Rs. 22/ nos. The Additional Cost details option will be available only in the Purchase Voucher and not in Purchase Invoice.
7.5.3 Creating Purchase Invoice with Additional Cost Details

Setup: Ensure that Enter Purchases in Invoice Format in F11: Features (Accounting Features) is set to Yes Step 1:Create Purchase Invoice Go to Gateway of Tally > Accounting Vouchers > F9: Purchase 1. Select As Invoice 2. Change the date to 3-3-2010 and make the entry as per the purchase voucher details dated 13-2010. The purchase invoice appears as shown below:
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Figure 7.20 Purchase Invoice
3. Press Y or Enter to accept the screen and return to the Gateway of Tally. Display Stock Voucher Report Let us see the rate that is displayed in the stock item voucher report. Go to Gateway of Tally > Display > Inventory Books > Stock Item > Select Stapler Press Enter till you reach the Stock Vouchers screen as shown below:
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7.5.4 Appropriate Addtional Costs

In the entry dated 1-3-2010, we gave the additional cost details for each item (Stapler and Stapler Pins). This additional cost was calculated and added to the cost of the item. The additional costs are not added to the cost of the items, when the entry is made in the invoice format. To appropriate the additional costs to purchase invoice of 3-3-2010, Go to Gateway of Tally > Accounts Info. > Groups > Single > Alter Select Expenses on Purchases The screen appears as shown below:
Figure 7.22 Group Alteration
The option Method to Allocate when used in Purchase Invoice allows you to apportion or appropriate or allocate additional cost details entered in Invoice mode, based on the purchase value or purchase quantity.
Select Appropriate by Qty from the Allocation Methods list. Accept the screen and return to the Gateway of Tally Similarly, select the option Appropriate by Qty in the Purchase Accounts group also.
To use the Appropriate by Qty option, ensure that the items in the purchase invoice have the same unit of measure.
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Display Stock Voucher Report Go to Gateway of Tally > Display > Inventory Books > Stock Item Select Stapler Press Enter till you reach the stock voucher screen Select the purchase voucher dated 3-3-2010 and re-accept the voucher for the additional cost to take effect The Stock Vouchers with additional cost details for Stapler appears as shown below :
Figure 7.23 Stock Vouchers Report
In the entry dated 3-3-2010: i. ii. Total Additional Cost = Rs. 500 (290 + 210) Total Quantity = 300 nos (Stapler 100 nos+ Stapler Pins 200 nos)
iii. Cost per Unit (Nos) = Rs. 500 / 300 Nos - Rs. 1.67 iv. Stapler rate for 1 nos = Rs. 20 + Rs. 1.67 = Rs. 21.67
Use F4: Item button and select Stapler Pins The Stock Vouchers with additional cost details for Stapler Pins appears as shown below:
Figure 7.24 Stock Vouchers Report
In the entry dated 3-3-2010: i. ii. Total Additional Cost = Rs. 500 (290 + 210) Total Quantity = 300 nos (Stapler 100 nos+ Stapler Pins 200 nos)
iii. Cost per Unit (Nos) = Rs. 500 / 300 Nos - Rs. 1.67 iv. Stapler Pins rate for 1 nos = Rs. 25 + Rs. 1.67 = Rs. 26.67
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7.5.5 Additional Costs incurred after Purchases

Setup : Create the following stock item: Name of Item Under Category Units Maintain in Batches Yes Track Date of Mfg Yes Use expiry dates Yes
Batch Additional Cost Item
Primary
Not Applicable
Nos
Alter the ledger Packing Charges on Purchases and set the option Inventory Values are Affected to Yes. Step 1: Create Purchase Invoice On 1-3-10, make a purchase entry for 10 nos of Batch Additional Cost Item (Batch/ 001) @ Rs. 100 from Stationery House. Go to Gateway of Tally > Accounting Vouchers > F9: Purchases 1. Select Party as Stationery House 2. Select Stock item as Batch Additional Cost Item 3. Select Godown as Onsite and select the Batch details as shown below
Figure 7.25 Item Allocations for Batch Additional Cost Item
4. Enter the Qty and Rate and allocate it to Purchases ledger. 5. Enter the required bill-wise details and accept the entry. Step 2: Create Purchase Invoice On 2-3-10, make a purchase entry for 20 nos of Batch Additional Cost Item (Batch/ 002) @ Rs. 200 from Stationery House. Go to Gateway of Tally > Accounting Vouchers > F9: Purchases 1. Select Party as Stationery House 2. Select Stock item as Batch Additional Cost Item 3. Select Godown as Onsite and select the Batch details as shown below
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Figure 7.26 Item Allocations for Batch Additional Cost Item
Step 3 : Create Payment Voucher On 3-3-10, make a Bank Payment entry for payment of Rs. 900 (Rs. 300 for Batch/001 and Rs. 600 for Batch/002) towards Packing charges on Purchases. Go to Gateway of Tally > Accounting Vouchers > F5: Payment 1. Debit the ledger Packing Charges on Purchases. 2. Select the item Batch Additional Cost Item 3. In Item Allocations for screen, Select Batch/001 and enter 300 in Amount field Select Batch/002 and enter 600 in Amount field. The screen appears as shown below :
Figure 7.27 Item Allocations for Batch Additional Item
4. Credit Bank Account for the same amount (Rs. 900) and accept the entry. Step 4 : Display Stock Summary Go to Gateway of Tally > Stock Summary Press F12: Range and specify details as shown below :
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Figure 7.28 Range details
Accept the Range of information to return to the Stock Summary screen. The report now displays only one stock item Batch Additional Cost Item, press Shift + Enter to view the batch details. The batch details will be displayed as shown below :
The figures have been calculated as follows: Batch/001 - 10 nos i. Purchased 10 nos at Rs.100 = Rs.1000 + Additional Cost Rs.300 = Rs.1,300 ii. Rs.1,300 / 10 nos = Rs.130 Batch/002 - 20 nos i. Purchased 20 nos at Rs 200 = Rs.4000 + Additional Cost Rs.600 = Rs.4,600 ii. Rs. 4,600 / 20 nos = Rs. 230
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Practice Exercise Ensure that you are in Indus Enterprises, 1. Enter a purchase invoice on 15-10-2009 for 10 Nos of Item One @ Rs. 100 each and 20 nos of Item Two - @ Rs. 200 each from the Supplier. Setup : Create two stock items Item One and Item Two with the unit of measure as nos. Create the ledgers - Supplier (Sundry Creditors), Delivery Charges on Purchases and Tax on Purchases (under Purchase Accounts). Alter the group Purchase Accounts and select Appropriate by Value as the method of appropriation.
Enter a purchase invoice on 15-10-2009, select party as Supplier and select Item One - 10 nos at Rs. 100 each and Item Two - 20 nos at Rs. 200 each. Select Delivery Charges on Purchases and Tax on Purchases ledgers and enter the amounts as Rs. 50 and Rs. 250 respectively and accept the entry. View the Stock Item report.
After completing the above exercise, in F11: Features (Inventory Features) disable the option Track Additional Cost of Purchases.
7.6 Bill of Materials (BoM)

A Bill is termed as an authenticated document for the materials which are taken out from the stock either for sale or for transfer to other godowns or for manufacturing, etc. In order to avoid this continuous process of issuing a bill at every stage, a system has been evolved wherein the items with their quantity details can be allotted towards manufacturing a certain product or by-product. This facilitates the immediate reduction in stock of the item automatically. This process of listing the items that make up another item is termed as the Bill of Materials (BoM).
7.6.1 Creating Bill of Materials

You can create a Bill of Material (BoM) for any stock item. Typically, a BoM can be created at the time of manufacturing/ assembling the item. You may specify a BoM at the time of creating a stock item or altering its master. National Traders is engaged also in the business of assembling and manufacturing Televisions.
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To enable Bill of Materials feature, Setup: Ensure that you are in National Traders, Go to Gateway of Tally > F12: Configure > Accts / Inventory Info. set Allow Component list details (Bill of Materials) to Yes Step 1 : Creating Bill of Materials Create the following stock item (Final Goods) : Name of Item Under Category Units Maintain in Batches No Set Components (BoM) Yes
Television Flatoron
Home Electronics
Not Applicable
Nos
In the Components of: Television Flatoron, enter the Unit of manufacture (the number of items to be manufactured) as 1. In the Item details section, create these items without any opening balances. Select 1 unit of these items and store them in the On-site godown. Name of the Item Stock Group Standard Cost (in Rs.) Applicable from 1-12-2009 2,000 3,750 5,000 500 300 Units of Measure Nos Nos Nos Nos Nos
VDU Picture Tube IC Chips Sound card Aerial
Television Flatron Television Flatron Television Flatron Television Flatron Television Flatron
The Bill of Material component screen of Television Flatoron appears as shown below :
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Figure 7.30 Stock Item Components (BoM)
Accept the above settings for the item Television Flatoron. The purpose of creating a bill of material is to enable the consumption of the materials in the ratio specified, when the product is manufactured. Tally.ERP 9 allows us to use a Manufacturing Journal to enter the goods manufactured with the bill of materials.
7.6.2 Creating a Manufacturing Journal

To create a new Manufacturing Journal, Go to Gateway of Tally > Accounts Info. > Voucher Type > Create 1. 2. 3. 4. Type Manufacturing Journal as the Name Under Voucher Types, select Stock Journal Type Mfg Jrnl for abbreviation and select automatic voucher numbering Select Yes for Use as Manufacturing Journal and accept the screen
The Manufacturing Journal voucher type creation screen appears as shown
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Figure 7.31 Voucher Type Creation Manufacturing Journal
5. Press Ctrl+A to accept the above screen and return to the Gateway of Tally.
The Manufacturing journal is a variant of the Stock Journal, where the Bill of Material comes up automatically. Hence, the manufacturing journal should be used where a BoM situation exists.
7.6.3 Using Bill of Materials

On 21-12-09, bought 10 pcs of each of the following items from Star Electronics @ standard cost as mentioned below : Name of the Item Standard Cost (in Rs.) Applicable from 1-12-2009 2,000 3,750 5,000 500 300
VDU Picture Tube IC Chips Sound card Aerial
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The total purchase invoice value amounted to Rs. 1,15,500. The above goods are stored in OnSite. A Cheque was paid from Bank Account immediately. On the same day, 5 Nos of Television Flatoron is manufactured in On Site godown. Additional expenses of Rs. 3,000 and Rs. 2,000 was incurred towards Wages and Power respectively. Step 1: Create Purchase Invoice Go to Gateway of Tally > Inventory Vouchers > F9: Purchase 1. 2. 3. 4. 5. Select the Party as Star Electronics Allocate to Purchases Account Select the items with the quantity and standard rates as given in the table above Select the Godown as Onsite Accept the entry
Step 2: Create Manufacturing Journal Go to Gateway of Tally > Inventory Vouchers > Alt+F7: Stock Journal. 1. Select the Manufacturing Journal and ensure that the date is 21-12-2009. 2. Under the Name of Product to be manufactured, type Television Flatoron (you will notice the items given in the master as Bill of Materials appear automatically). 3. Manufacture it in On-Site. 4. Quantity to be manufactured - 5 (you will notice the rates of the items appear automatically).
Under Components (consumption) the items to be used in proportionate quantity for manufacturing Television Flatoron is picked up automatically from the stock item master. The default location as specified in the BoM is also given for each component. The standard cost is picked up for each item. Tally.ERP 9 also allows you to alter these details.
5. Under Additional Cost Components, specify additional cost of Wages - 3,000 and Power 2,000 (If the ledger accounts for these expenses do not exist, create them under Direct Expenses).
The additional costs entered for the ledgers, do not reflect in the relevant ledgers with the amount but only add to the cost of the item.
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The completed Manufacturing Journal as shown below
Figure 7.32 Manufacturing Journal
6. Type the narration and press Y or Enter to accept the screen. 7. Return to the Gateway of Tally. Display Stock Summary Go to Gateway of Tally > Stock Summary Press Enter on Home Electronics You will find that the closing quantity, rate and value details for the stock item - Television Flatoron. Practice Exercise Load Indus Enterprises, make the following entries 1. Create a Manufacturing Journal for manufacturing 1 Nos of Computer from the following components :
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Name of the Item Hard Disk Drive Floppy Disk Drive CPU Monitor Keyboard Mouse Setup :
Qty 1 Nos 1 Nos 1 Nos 1 Nos 1 Nos 1 Nos
Create a BOM for stock item Computer which requires the following items. Hard Disk Drive - 1 Nos Floppy Disk Drive - 1 Nos CPU - 1 Nos Monitor - 1 Nos Keyboard - 1 Nos Mouse - 1 Nos Store them in the Bangalore godown.
Enter a manufacturing journal to indicate the consumption of goods at the time of manufacture.
7.7 Price Levels and Price Lists

A Price List refers to a list of items maintained by an organisation along with their price details. A price list is generally used by organisations which deal in multiple products. Price Lists are maintained in various structures for different types of buyers (customers), viz., Wholesalers, Dealers, Retailers, etc. The price list is structured based on the classification of buyers and is referred to at the time of making sales. Whenever the sale prices change (on the basis of time), the changes reflect in the Price List also. In case of bulk sales, discounts can also be given to the buyers. Let us now see how Tally.ERP 9 handles such a situation through the Price List feature.
7.7.1 Activating Price Lists and Defining Price Levels

Setup: Go to Gateway of Tally > F11: Features (Inventory Features) Set Use Multiple Price Levels for Invoicing to Yes. (This will appear only if the feature Allow Invoicing is set to Yes.)
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Tally.ERP 9 takes you to the Company Price Levels screen, type different price levels for National Traders as Retail Sales Export Sales Wholesale Accept the screen and return to the Gateway of Tally. Step 1: Creating a Price List Go to Gateway of Tally > Inventory Info. > Price List 1. Select the Group Components (you will notice that all the items grouped under Components appear automatically). 2. Select Retail Sales as Price Level and specify 1-1-2010 in the Applicable From field 3. For USB Pen Drives 100MB give the details as follows: Less than - 10 nos - Rs.1,250/- and no discount From 10 nos and Less than 25 nos - Rs.1,250/- and 5% discount From 25 nos onwards - Rs.1,250/- and 7.5% discount 4. Specify the price details for other items as it appears in the Price List screen below :
Figure 7.33 Price List
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The explanation of the fields appearing in the Price List is given below: Under Group The screen displays the name of the selected Stock Group (Components) whose stock items are being displayed. Price Level Tally.ERP 9 displays a pop-up list displaying the price levels defined in the F11: Features (Inventory Features). The price levels displayed are Export Sales, Retail Sales and Whole Sale. We have selected Retail Sales. Applicable From The date from which the defined Price List is applicable. For example, we have designed two Price Lists - one as on 1-32010 and the second as on 15-3-2010. The Invoices raised during the period 1-3-2010 to 14-3-2010 will reflect the price list details of 1-32010. Similarly, the invoices raised on or after 15-3-2010 will reflect the price list details of 15-3-2010. Any number of Price Lists can be defined for any of the stock items. Quantities There are two columns: From and Less Than. Here you can define the quantity range of the items as per your requirements. Rate The Rate for the item based on the quantity range given. Discount % (if any) You can define a discount percentage in the Price List which will be taken automatically in the sales invoice. Historical Details There are two columns: Rate and Disc %. Tally.ERP 9 provides the historical details of the sale rate and discount percentage of any previously created Price Lists. Therefore, you can define the current price details based on the information given in the Historical details. Cost price In this column, Tally.ERP 9 displays the cost price of the item calculated based on the stock valuation method given in the item master. This has been provided to assist the user in giving the appropriate sale price. By viewing the historical price details of an item, we can accordingly define the sale price for the new Price List.
For the discount percentage to be taken in the Price List, you should activate the feature Separate Discount Column on Invoices in the F11: Features (Inventory Features).
5. Accept the Price List Details 6. Similarly, create another Retail Sales Price List as on 3-1-2010 with the following rates: USB Pen Drives 100MB - Rs.1,500
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Wireless Keyboard - Rs.500 Wireless Mouse - Rs. 300 7. The Quantity and Discount details are similar to the price list screen given previously. Ensure the price details are as shown below :
Figure 7.34 Price List
8. Press Y or Enter to accept the Price List.
7.7.2 Using Price Lists

On 2-1-10 raise a sales Invoice on Beltron Computers for the following Items : Name of the Item USB Pen Drives 100MB Sound Card Qty 30 Nos 10 Nos
The Invoice amounted to Rs. 35,687.50.
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Setup: Create a New customer called Beltron Computers with the following details. Pricing Level Applicable Maintain balances bill-by-bill Yes Cost Centres are applicable No Activate Interest Calculation No
Retail Sales
In the F11: Features (Inventory Features) activate Separate discount column on invoices. Step 1: Create Sales Invoice 1. 2. 3. 4. On 2-1-10 raise a sales Invoice on Beltron Computers Select the stock item USB Pen Drives 100MB from On-site Specify quantity as 30 nos. Rate and discount automatically appears as Rs. 1,250 and 7.5% respectively (as the required price level is selected in the ledger master of Beltron Computers). 5. Ignore negative stock and allocate to Sales- Components 6. Select Amar as Cost Centre. 7. Now, select another item - Sound Card 8. Type the quantity as 10 nos (here in this case, the cursor prompts in the Rate field since price lists is not defined for this item) 9. Specify Rs. 100 as Rate 10.Press Enter to skip the discount field 11.Allocate to Sales- Components and select Amar as Cost Centre. 12.Give the bill-wise details as required and accept the entry
Tally.ERP 9 provides you flexibilty to select items with and without the Price List in the same invoice. For example, in the above case, for the item which had the Price List defined, Tally.ERP 9 took the details automatically. Whereas for the stock item which did not have a Price List defined, Tally.ERP 9 prompted for the same.
Step 2: Create Sales Invoice On 5-1-10 raise a sales Invoice on Beltron Computers for the following Items : Name of the Item USB Pen Drives 100MB Sound Card The Invoice amounted to Rs. 41,500. 1. Similar to invoice dated 2-1-10 select the item USB Pen Drives 100MB
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Qty 30 Nos 10 Nos
2. Specify quantity as 30 nos. 3. Rate as Rs. 1,500 and discount of 10% appears automatically (as we have defined it in the Price List dated 3-1-10)
Tally.ERP 9 automatically applies the Price list for the specific period. For example, when we entered the invoice as on 2-1-10, Tally.ERP 9 displayed the discount percentage as 7.5% and as on 5-1-10, 10% is displayed.
4. 5. 6. 7. 8.
Ignore the negative stock and allocate to Sales- Components. Select Amar as Cost Centre. Accept the quantity details of the USB Pen Drives 100MB stock item Select another item, Sound Card and give the quantity as 10 nos Specify Rs.100 as the Rate. Tally.ERP 9 prompts for the discount information. Let us leave it blank (you already know that you can specify as required or simply leave it blank). 9. Allocate to Sales- Components ledger 10.Give the bill-wise details as required. 11.Accept the entry
The party details, item details, and quantity details provided are the same, different rates have been taken automatically by only changing the date of the invoice. After completing the above exercise, go to Gateway of Tally > F11: Features (Inventory Features) and set Separate Discount column on Invoices to No.
7.8 Stock Valuation

As per accounting rules, the final results of a company's working depend on the valuation of inventory (stocks). As per norms, there are many concepts of evaluating the company's stock. Tally.ERP 9 goes one step ahead, by providing all the required stock valuation methods for you to choose from. In addition, Tally.ERP 9 allows you to choose different valuation methods for different items.
7.8.1 Stock Valuation Methods

The Stock Valuation / Costing Methods provided in Tally.ERP 9 are:
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Average Cost At Zero Cost First In First Out (FIFO) Last Purchase Cost LIFO Annual (Last In First Out Annual) LIFO Perpetual (Last In First Out Perpetual) Monthly Avg. Cost Standard Cost
The selection of an appropriate stock valuation/ costing method is essential as this helps in knowing the value of the closing stock for a specified date range based on the purchase rates/ cost.
In addition, Tally.ERP 9 provides the following Market Valuation Methods: At Zero Price Average price Last Sale Price Std. Price Depending on the Market Valuation Method defined in the stock item master, Tally.ERP 9 displays the rate/ price automatically at the time of Invoice entry. The Market Valuation Method is set as Average Price by default. The Average Price displays the average of all the sales prices given in the previous sales entries, as the selling rate/ price while the current sales entry is being made.
The valuation of Closing Stock is done based on the Costing / Stock Valuation Methods and is not based on the Market Valuation Methods.
Let us now examine the result of the different stock valuation methods.
7.8.2 Display Stock Summary

Setup :
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Go to Gateway of Tally > F12: Configure > Accts / Inventory Info. Set Allow Advanced Entries in Masters in Inventory Masters to Yes. Go to Gateway of Tally > Inventory Info. > Stock Item > Alter, Select HP - 27 Printer Cartridges, you will find that the details of Costing Method and Market Valuation Method under Behaviour Select Average Cost and Average price respectively Accept the master information. Go to Gateway of Tally > Stock Summary, Select Printers Stock Group Press F2: Period and change the period from 1-07-2009 to 31-07-2009. Click Auto Column (Alt + N) button and select Stock Valuation Methods. The closing balance of stock as per Default and FIFO stock valuation methods are shown below :
Alt+R This is a special key combination in Tally.ERP 9 used for hiding the line (row). Alt+U This is a special key combination which brings back the THE LAST hidden line (row) which was hidden using Alt+R. Alt+S This special key combination brings back ALL the hidden lines (rows) which were hidden using Alt+R.
Tally.ERP 9 displays the closing stock of 6 nos of HP - 27 Printer Cartridges as per different stock valuation methods. Since there are 11 columns in the report the same is displayed in six screens as shown below:
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The closing balance of stock as per LIFO Perpetual and LIFO Annual stock valuation methods are shown below:
The closing balance of stock as per Std. Cost and Avg. Cost stock valuation methods are shown below :
The closing balance of stock as per Last Purchase Cost and the Std. Price stock valuation methods are shown below:
The closing balance of stock as per Avg. Price and the Monthly Avg. Cost stock valuation methods are shown below:
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The closing balance of stock as per Monthly Avg. Cost and the Last Sale Price (Monthly Avg. Cost is repeated) stock valuation methods are shown below:
Let us now discover how the above figures are calculated. To analyse the same, press Enter on the Default column till you reach the report displaying the vouchers. The screen appears as shown below :
We have a purchase entry first, followed by a sale and again another purchase and a sales entry as given below: Purchased 10 nos HP - 27 Printer Cartridges @ Rs. 850 = Rs. 8,500 Sold 5 nos HP - 27 Printer Cartridges @ Rs. 1,150 = Rs. 5,750 Purchased 5 nos HP - 27 Printer Cartridges @ Rs. 850 = Rs. 4,250 Sold 4 nos HP - 27 Printer Cartridges at Rs. 1150= Rs. 4600
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We have purchased a total of 15 nos for Rs. 12750. The average now is Rs. 12,750 / 15 = Rs. 850 with a closing balance of 6 nos x 850 = Rs. 5,100 (Average cost method of valuation)
FIFO FIFO Stands for First-In-First-Out. This is one of the systems of costing where the value is calculated after an outward (consumption or sale) is made for the first purchase entry. The outwards consumption is taken from the stock that is purchased first. LIFO Perpetual & LIFO Annual LIFO stands for Last-In-First-Out which means that the outwards (consumption or sale) quantity is taken out from the stock that is purchased last. LIFO Annual: All the entries of the current financial or specified year are considered. LIFO Perpetual: All the entries of the company i.e from the books beginning date specified while the creation of a company are considered. For example: Suppose a company's books begin on 1-4-2009 and the data is present till 31-3-2010. LIFO Perpetual considers the entries from 1-42009 onwards, whereas LIFO Annual considers the entries for the year selected/ current year. Average Cost & Average Price Average Cost is calculated after each purchase or sale entry for whole year. Total Inward Value/Total Inward Quantity = Average Cost Average Price is the average of all the outward entries which are displayed at the time of recording a new sales entry. At Zero Cost The stock is valued at zero cost. Last Purchase Cost / Sale Price Last Purchase Cost: The stock is valued based on the last purchase cost given in the Purchase entry. Last Sale price: The stock is valued based on the last sales price given in the Sales entry. Monthly Avg. Cost This is the Average Cost where the period is month-wise. Tally.ERP 9 calculates the average value after each purchase or sale for the whole month. Standard Cost Standard Cost is a pre-determined cost, based on which you would like to value your closing stock. The standard cost details have to be given in the stock item master.
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You can decide which method of stock valuation is most appropriate for your business and accordingly define that in the item master. FIFO (First In First Out) and Average Cost are the most popular stock valuation methods used in todays business.
7.9 Zero Valued Entries

Zero valued entries in vouchers are required when, for example: you need to despatch inventory as free samples or free replacements, etc. You can make an entry of issue with the required quantity details but enter the value as zero. This is done so that the entry is reflected only in the Inventory books and not in the Accounting books.
7.9.1 Creating Zero Valued Entries

On 28-02-10, make a Sales invoice on Prism fabrication for 1 Nos of Television Flatoron without value. Setup: In National Traders, Activate the feature Allow Zero valued entries in the F11: Features (Inventory Features) and accept the other settings. Create a ledger account Samples under the group Sales Accounts and set Cost Centres are applicable to No and Inventory values are affected to Yes. Create Sales Invoice 1. Raise a sales invoice dated 28-02-10 on Prism fabrication for 1 Television Flatoron with no value. 2. Price levels is to be set as Not applicable 3. Allocate it to Samples After passing the above zero valued entries, if you display the Sales Register you may not find this entry. But however, if you display the Television Flatoron Stock Item, you will find the quantity sold.
Zero valued entries do not reflect in accounting books but affect only our inventory books.
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7.10 Inventory Ageing Analysis

A very important function of Working Capital Management is the monitoring of stocks. Money locked up in stocks can adversely affect the liquidity of a company. Every company strives or should strive to reduce stock levels to the optimum. Most businesses would prefer to dispose off older stocks as they might deteriorate with time, go out of fashion, or simply get forgotten. Tally.ERP 9's Stock Ageing analysis enables you to know the age of stocks in hand according to when they were received and their purchase value.
7.10.1 View Inventory Ageing Report

Go to Gateway of Tally > Display > Inventory Books > Ageing Analysis Select Medicines Press Enter and change the date to 3-3-2010 Saridon with batch number ST-102 and expiry date is displayed Click on the button Expired Batches to view only those items which have expired (The button All Batches appears when the expired batches are on display) Press the button Hide Amounts, which toggles with Show Amounts to view the report with or without values Set ageing style as By Expiry Date and the screen appears as shown below :
Figure 7.42 Stock Ageing Analysis
You will find that the Ageing Periods are displayed as <45 days, 45-90 days, 90-180 days and >180 days. These are the ageing period that Tally.ERP 9 displays by default. However, you change the ageing period by using F6: Ageing Periods.
The Ageing period for Negative Stock Items cannot be determined and are shown in separate column.
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You can view Inventory ageing report based on the following Ageing Styles : By Date of Purchase By Expiry Date By Mfg. Date To Be Expired Monthwise Inward/Outwad Quantity Report : Press Enter on Total Quantity to view the month-wise inward, outward and closing quantity report. Item Inward Details : Press Enter on any of the Ageing Period columns to view the Item Inward Details. This report shows the inward movement of the item for the date range calculated from the age period. Ageing Analysis is done for the stock-in-hand based on when they were purchased. Hence, while viewing the Ageing Analysis Report, the Item Inwards details statement is very useful and relevant. It provides further information of aged stock like date of purchase and supplier. It also provides a drill down facility to the actual transaction voucher.
Experiment by choosing different ageing styles and observe the changes in the report. Practice Exercise 1. Select By Mfg. Date as Ageing Style and view the report as on 31-12-2009.
7.11 Different Actual and Billed Quantities

The need for different actual and billed quantities may arise in several instances. For example if an extra inventory is sent to cover up for any stock that reaches in a damaged condition or Inventory sent as extra samples or the Stock is despatched to the customer as quantity discount. Setup: Ensure that you are in the Gateway of Tally of National Traders. Go to F11: Features (Inventory Features) and set Use Different Actual & Billed Qty to Yes.
7.11.1 Using different Actual and Billed Quantities

Go to Gateway of Tally > Accounting Vouchers > F8: Sales. You will notice that the Quantities column is divided into two columns, viz. Actual and Billed.
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On 3-3-2010, make a purchase invoice from Parvathi Stockers for the following items : Name of the Item Rice Wheat Actual Qty 100 Kgs 50 Kgs Billed Qty 90 Kgs 50 Kgs Rate (in Rs.) 10 100
Setup : Create a new stock item as Rice with the following details : Group it under stock group Foodstuffs. Stock category - Not Applicable Unit of Measure - kgs (kilos) with decimal places - 3 (create if not present). Accept the master creation without any opening balance and return to the Gateway of Tally. Step 1 : Create Purchase Invoice 1. 2. 3. 4. 5. 6. 7. Enter a Purchase invoice on 3-3-2010 on Parvathi stockers. Price level - Not Applicable Select Rice under Name of Item Order number - Not Applicable Select the godown as Onsite Type Actual Quantity as 100 kgs and Billed Quantity as 90 kgs Specify the Rate as Rs. 10 and the value appears as Rs. 900 (billed quantity * rate). The screen appears as shown below :
Figure 7.43 Item Allocations for Rice
8. Allocate to Purchases ledger and press Enter. Select another item Wheat and enter the following details
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Tracking number and Order number - Not Applicable Select Godown as Onsite Type Actual and Billed quantity - 50 bags Specify Rate as Rs. 100, the amount is defaulted as Rs. 5,000 9. Press Enter and accept the purchase invoice with the default bill-wise details.The Purchase invoice amounts to Rs. 5,900 (Rice - Rs. 900 and Wheat - Rs. 5,000). Step 3 : Display Stock Summary Go to Gateway of Tally > Stock Summary Select Foodstuffs as stock group and press Enter
Tally.ERP 9 displays 100 kgs of Rice stock item because this is the quantity that we have actually received from the party. In case of Wheat the quantity appears as 150 kgs. Go to Gateway of Tally > Display > Account Books > Purchase Register Select March month Press F12: Value button, Specify the range as Voucher - Having - Ledgers - With - Name - Containing - Parvathi stockers (party name in purchase entry of 5-3-2010) Press Enter. Press Alt+F1 to display the stock summary in detailed format Press F12: Configure and activate the option Show Inventory Details also Tally.ERP 9 displays Voucher Register as shown below :
Figure 7.45 Voucher Register
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The inventory details display 90 kgs for the stock item Rice, because this is the quantity that the party has billed us for. (We have received 100 kgs of Rice i.e, the actual quantity. We will be making the payment for only 90 kgs i.e., the billed quantity). Therefore, the actual quantity affects the inventory books while the billed quantity reflects in the accounting books.
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Points to Remember
Order processing includes purchase and sales order processing. Here the details of purchase orders placed and sales orders received can be obtained. Reorder level and order processing are linked to each other. The purchase orders are placed and sales orders are accepted based on the reorder level specified. Tracking numbers are used to track the delivery or receipt of inventory against the sales and purchase bills respectively. Tracking numbers are required to know the status of pending sales and purchase bills. Batch-wise details are maintained mainly for perishable goods. The manufacturing and expiry dates can be set for batch-wise details. Tally.ERP 9 has an option to display only those batches which have not expired and hide the expired batches. The additional costs which add to the cost of the actual cost of purchase of an item can be recorded in Tally.ERP 9. Hence, the additional costs on purchases can be apportioned based on the purchase value as well as on the purchase quantity. Additional cost details can be specified even for goods which require batch-wise details. Bill-of-Material is a term generally associated with the manufacturing of goods. Tally.ERP 9s Manufacturing journal records the item manufactured with the use of bill-of-material and enables an automatic reduction in the quantity of stock items consumed. Price list is generally used by organisations which deal in multiple products. It can be created for different dates and can be maintained for different kinds of buyers. Tally.ERP 9 facilitates the setting of different price levels while creating price lists for multiple stock items. For the valuation of inventory, Tally.ERP 9 provides various stock valuation methods. It values stocks based on the costing methods. The rate/ price of the item will be displayed depending on the market valuation method defined in the stock item master. Inventory ageing analysis is an important aspect of working capital management. It helps in knowing the age of stocks. Tally.ERP 9 displays stock ageing analysis for items with respect to the date of purchase, expiry date, manufacture date and stocks to be expired. Tally.ERP 9s feature of recording transactions with different actual and billed quantities updates the accounting books based on the value of invoice and inventory books based on the actual quantity purchased or sold.
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Lesson 8: Value Added Tax (VAT)
Lesson Objectives
On completion of this lesson, you will be able to understand How to activate VAT, Composite VAT in Tally.ERP 9. Create ledgers and vouchers using different classifications relating to VAT, Composite VAT. Record transactions relating to purchase/ sales returns, inter-state trade, inter-state branch transfers and account for input credit on capital goods. Generate and print VAT as well as Composite VAT Computation report.
Value Added Tax (VAT) is an indirect tax on goods, introduced in lieu of sales tax, to ensure transparency and greater compliance. The basic premise of VAT is to levy tax on the true value added to the goods, at each stage in the transaction chain. This ultimately reduces: Tax paid to the government. Cost/ tax passed on to the consumer. VAT is a multi-point tax as against sales tax, which is a single-point tax. Under the sales tax regime, the value of goods to be taxed at each stage is computed as basic cost + profit margin + sales tax paid at the earlier stage. The advantages of implementing VAT are: Enhancement of competitiveness by the removal of the cascading effect of taxes. Simplifying the process of taxation. Self-regulatory mechanism ensuring greater compliance.
8.1 Configuring VAT in Tally.ERP 9

Let us create a new company called Universal Traders, a dealer of electrical items, to enter VAT related transactions.
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Value Added Tax (VAT)
8.1.1 Company Setup

Enter the details as shown below in the company creation screen:
Figure 8.1 Company Creation Universal Traders
Press Enter twice to accept the company creation screen.
8.1.2 Enabling Value Added Tax (VAT)

To enable VAT, press F11: Features (Statutory & Taxation Features) and Set Yes to Enable Value Added Tax (VAT) The VAT classifications are different for each State in India. In order to activate and view the various VAT classifications, set the option Set / Alter VAT details to Yes. On activating Set / Alter VAT details the screen appears as shown below:
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Figure 8.2 VAT Details
In this screen you have to select the State, the type of dealer and specify the date of applicability to view the VAT classifications of the required specifications. In F11: Features (Accounting Features), set Maintain Bill-wise details to Yes.
8.1.3 VAT Classifications

It is a list of VAT rates which describes the nature of the business activity and the type of transaction. These classifications are in-built in the system and will be updated as and when any statutory changes take place. Some of the classifications are: Input VAT @ 4% Input VAT @1% Input VAT @ 12.5% Output VAT @ 1% Output VAT @ 4% Output VAT @ 12.5% Purchases - Capital Goods @ 4%
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Purchases - Exempt Purchases from Composition Dealers Purchases - From Unregistered Dealers Inter-state Purchases Depending on the type of business, type of transaction, and statutory requirements of your state, you need to select the appropriate classifications from the list. You can define your classification: At the time of ledger creation. At the time of voucher entry.
Input VAT: This is a tax paid on purchases Output VAT: This is a tax paid on sales. VAT Rates: According to the White Paper, there are 550 categories of goods under the VAT system. They are classified into VAT @ 4%, VAT @ 12.5%, VAT @ 1% and those exempted from VAT, depending on the VAT Rate.
8.2 Creating Masters

The ledgers that are affected by VAT are: Purchase Ledger Sales Ledger Input VAT Ledger Output VAT Ledger Party Ledger
8.2.1 Creating Purchase Ledger

Go to Gateway of Tally > Accounts Info. > Ledger > Create. Ledger Purchase @ 4% Under Purchase Accounts Inventory values are affected Yes Used in VAT Returns Yes VAT/Tax Class Purchases @ 4%
Select the VAT/Tax class as Purchases @ 4% as shown below:
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Figure 8.3 Default VAT/Tax Class
Retain the other fields as default and accept the screen.

The drop down list in the VAT/Tax Class of purchase ledgers consists of the purchase classifications pertaining to your state. If you do not wish to select a classification at the ledger level, you can set this field to Not Applicable.
Practice Exercise Create the following purchase ledger Ledger Under Inventory values are affected Yes Used in VAT Returns Yes VAT/Tax Class
Purchase @ 12.5%
Purchase Accounts
Purchases @ 12.5%
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8.2.2 Creating Sales Ledger

Create the following Sales Ledgers Ledger Name Sales @ 4% Sales @ 12.5% Under Sales Account Sales Account Inventory values are affected Yes Yes VAT/Tax Class Sales @ 4% Sales @ 12.5% Used in VAT Returns Yes Yes
8.2.3 Creating Input VAT Ledger

Go to Gateway of Tally > Accounts Info. > Ledger. Create the ledger Input VAT @ 4% under Duties and Taxes. Select Input VAT @ 4% from the drop down list of VAT classification The ledger Input VAT @ 4% appears as shown below :
Figure 8.4 Ledger Creation Input VAT @ 4%
The Percentage of Calculation field displays the VAT rate that you have selected in the VAT/Tax Class field and the Method of Calculation displays On VAT Rate if you have selected VAT under Type of Duty/Tax. After entering the details as displayed in the above ledger creation screen, press Ctrl+A to accept the screen.
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On enabling TDS and Service Tax in the F11: Features (Statutory & Taxation Features), the list will also include TDS and Service Tax.
Practice Exercise Create the following ledgers: 1. Input VAT @ 12.5% Name: Input Vat @ 12.5% Under: Duties & Taxes Type of Duty/Tax: VAT VAT/Tax Class: Input VAT @ 12.5% Percentage of Calculation: 12.5% Method of Calculation: On VAT Rate Inventory values are affected: No 2. Output VAT @ 4% Name: Output Vat @ 4% Under: Duties & Taxes Type of Duty/Tax: VAT VAT/Tax Class: Output VAT @ 4% Percentage of Calculation: 4% Method of Calculation: On VAT Rate Inventory values are affected: No 3. Output VAT @ 12.5% Name: Output Vat @ 12.5% Under: Duties & Taxes Type of Duty/Tax: VAT VAT/Tax Class: Output VAT @ 12.5% Percentage of Calculation: 12.5% Method of Calculation: On VAT Rate Inventory values are affected: No
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8.2.4 Creating Party Ledger

Create the following party ledgers: Ledger Sujan Ltd. Chahak Traders Somi Telicomm Under Sundry Creditors Sundry Debtors Sundry Debtors Maintain balances bill-by-bill Yes Yes Yes
8.2.5 Creating Stock Items

Create a stock item Surya Lamps as shown below :
Figure 8.5 Stock Item Surya Lamps

Create a Stock group Bulbs under Primary. Create Nos with formal name as Numbers under simple Unit of Measure. The value entered in the field Rate of VAT will be picked up when invoicing if you have selected the Method of Calculation as Tax Based on the Item Rate in your relevant accounting ledger.
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Practice Exercise Create the following Stock Items under the stock group Bulbs with units of measure as Nos.: Philips Lamps with a VAT rate of 4%. GE Lamps with a VAT rate of 12.5%. Bajaj Lamps with a VAT rate of 4%.
8.3 Entering Transactions

8.3.1 Creating Purchase Voucher without Inventory
On 1-6-09, Universal Traders purchased from Sujan Ltd., Bangalore, Surya Lamps 20 nos at Rs. 300 each & Philips lamps 30 nos at Rs. 500 each. (Input VAT - 840.) Enter the details of the transaction in voucher mode (without Inventory) Go to Gateway of Tally > Accounting Vouchers > F9: Purchase. 1. Date: 1-6-2009. 2. Credit Sujan Ltd.: Rs. 21840 (Purchase + VAT amount). 3. In the bill-wise details give the new reference as S/01. 4. Debit Purchase @ 4%. Select End of List in the Inventory Allocation screen as you will not be entering any inventory details. A sub screen asks for VAT/Tax Class. Select Purchase @ 4%. Total amount of Purchases is Rs. 21000. 5. Select the Input VAT Ledger and in the sub screen that appears, select Input VAT @ 4% in VAT/Tax Class. Enter the total cost Rs. 21000, in Assessable Value and press Enter to return to the voucher. 6. Tally.ERP 9 displays the Input VAT amount as Rs. 840 (4% of Rs. 21000) by default. You can also choose to enter this amount.
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The completed Purchase voucher appears as shown below:
7. Type the narration and press Y or Enter to accept the screen.
8.3.2 Creating Purchase Invoice with default VAT Class

On 3-6-09, Universal Traders purchased from Sujan Ltd. Bangalore, Surya Lamps 30 Nos. at Rs. 300 each. VAT @ 4% was charged additionally. Setup : Select As Invoice and press F12: Configure button to set the options as under: Accept Supplementary Details No. Use Common Ledger A/c for Item Allocation No. Allow selection of VAT/Tax Class during entry No. Enter the details of the transaction in the purchase invoice Go to Gateway of Tally > Accounting Vouchers > F9: Purchase. 1. In the Accounting Allocation screen, select Purchase @ 4% and the VAT Classification entered in the Purchase Ledger is displayed. 2. On selecting Input VAT @ 4%, the VAT amount will be calculated automatically.
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The completed Purchase Invoice screen appears as shown below:
8.3.3 Creating Purchase Invoice with Selection of VAT Class during Entry
On 3-6-09, Universal Traders purchased from Sujan Ltd. Bangalore, Philips lamps 10 Nos. at Rs. 300 each. VAT @ 4% was charged additionally. Setup : Click on Item Invoice button and change the following settings in the F12: Configure screen: Use Common Ledger A/c for Item allocation Yes. Allow selection of VAT/ Tax class during entry Yes. Enter the details of the transaction in the purchase invoice Go to Gateway of Tally > Accounting Vouchers > F9: Purchase.
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The completed Purchase Invoice will appear as shown :
8.3.4 Creating Purchase Invoice with Multiple VAT Rates

On 5-6-09, Universal Traders purchased the following lamps from Sujan Ltd. Item GE Lamp Bajaj Lamp Setup : Click on Item Invoice button and change the following settings in F12: Configuration. Use Common Ledger A/c for Item allocation No. Allow selection of VAT/Tax class during entry No. Enter the details of the transaction in the purchase invoice Go to Gateway of Tally > Accounting Vouchers > F9: Purchase. Quantity 15 Nos 5 Nos Rate 100 150 VAT % 12.5 4
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In the Accounting Details screen of GE Lamps, select Purchase 12.5% under Particulars. Purchase @ 12.5% will be selected automatically in the VAT/Tax Class. In the Accounting Details screen of Bajaj Lamps, select Purchase @ 4% under Particulars. Purchase @ 4% will be selected automatically in the VAT/Tax Class. Select the ledgers Input VAT @ 12.5% and Input VAT @ 4%. The Input VAT amount would be automatically calculated and displayed in the amount columns. The completed Purchase Invoice appears as shown :
8.3.5 Creating Sales Voucher without Inventory

On 8-6-09, Universal Traders sold to Chahak Traders, Bangalore, Surya lamps 10 Nos. at Rs.350 each. VAT @ 4% was charged additionally. Enter the details of the transaction in a sales voucher (voucher mode) Go to Gateway of Tally > Accounting Vouchers > F8: Sales. 1. Date: 8-6-2009. 2. Debit Chahak Traders: Rs. 3640 (Total sales + Output VAT). 3. Credit Sales account: Rs. 3,000 and select Sales @ 4% in VAT/Tax class.
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4. Select End of List in the Inventory Allocation screen since you will not be entering any inventory details. 5. On selecting the Output VAT Ledger, you will see a screen with pre-filled VAT/Tax class as Output VAT @ 4% (the VAT/ Tax Class may be manually modified by selecting other options from the pop-up window). Select the same and enter the Assessable Value as Rs. 3500. 6. The Amount column will automatically display the Output VAT amount as Rs. 140. (4% of 3500). However, this may also be modified manually. The completed sales voucher appears as shown below :
8.3.6 Creating Sales Invoice with default VAT Class

On 15-6-09, Universal Traders sold to Somi Telicomm, Bangalore, Surya lamps 8 Nos. at Rs. 350 each and Philips lamps 5 Nos. at Rs. 550 each. VAT @ 4% was charged additionally. Enter the details of the transaction in a sales invoice. Go to Gateway of Tally > Accounting Vouchers > F8: Sales.
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1. In the Accounting Details screen of Surya Lamps and Philips Lamps, select Sales @ 4% under Particulars. VAT/Tax classification entered in the Sales Ledger is displayed. 2. Select the ledger Output VAT @ 4%. The screen VAT/Tax Class appears. Select Output VAT @ 4% in the VAT/Tax Class. The Sales Invoice will appear as shown below :
8.3.7 Printing Sales Invoice

Press Pg Up from the above screen Press Alt+P from the voucher screen to Go to Printing Configuration. In the Voucher Printing screen, click on T: Titling button on the button bar to change the title of the report.
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Figure 8.12 Report Title
Click on F12: Configure to change the following settings: Print VAT Analysis of Items? Set this field to Yes to display the VAT Amount on the Total Net Value. Print VAT% Column? Set this field to Yes to display VAT rate in invoices. The Invoice Printing Configuration screen appears as shown below :
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Figure 8.13 Invoice Printing Configuration
Press Y or Enter to print.

On configuring the settings, the following new sections appear in all the VAT invoices: i. VAT Amount (in words) ii. Company's VAT TIN No. iii. Company's CST No. iv. Buyer's TIN/Sales Tax No.
The printed VAT Tax Invoice appears as shown below:
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Figure 8.14 Tax Invoice
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8.3.8 Creating Sales Invoice with Selection of VAT Class during Entry
On 16-6-09, Universal Traders sold to Chahak Traders, Bangalore, Philips lamps 3 Nos. at Rs. 550 each. VAT @ 4% was charged additionally. Enter the details of the transaction in a sales invoice. Go to Gateway of Tally > Accounting Vouchers > F8: Sales. The completed sales invoice appears as shown below:
Type the narration and accept the screen.
8.3.9 Creating Sales Invoice with Multiple VAT Rates

Universal Traders sells the following lamps to Somi Telicomm on 19-6-09. Sales Item GE Lamp Bajaj Lamp Quantity 10 Nos 5 Nos Rate 150 150 VAT % 12.5 4
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You can use multiple ledgers pre-defined with a different VAT rate, or choose to select each rate at the time of voucher entry. Setup : Press F12: Configure and change the following settings: Use Common Ledger A/c for Item allocation No. Allow selection of VAT/Tax class during entry No. Enter the details of the transaction in a sales invoice. Go to Gateway of Tally > Accounting Vouchers > F8: Sales. 1. In the Accounting Details screen of GE Lamps, select Sales @ 12.5% under Particulars. The Sales @ 12.5% will be selected in the VAT/Tax Class. 2. In the Accounting Details screen of Bajaj Lamps, select Sales @ 4% under Particulars. The Sales @ 4% will be selected in the VAT/Tax Class. 3. Select the ledgers Output VAT @ 4% and Output VAT @ 12.5%. The Output VAT amount would be automatically calculated and displayed in the amount columns. The completed sales invoice appears as shown below :
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8.3.10 Creating Sales Invoice using Voucher Class

On 20-6-09, Universal Traders sold 1 Surya lamp at Rs. 350 to Chahak Traders. The goods are taxable @ 4% VAT. Tally.ERP 9 provides 16 different, specific, predefined voucher formats to facilitate an easy recording and analysis of transactions. Step 1: Create Voucher Class Sales @ 4% for sales voucher. Go to Gateway of Tally > Accounts Info. > Voucher Types > Alter > Select Sales. 1. Type Sales @ 4% under Name of Class (the rest of the fields will be complete as the voucher is in alteration mode). 2. Press Enter. 3. Enter the details in the Voucher Type Class screen as shown below:
Figure 8.17 Sales @ 4% Class
4. Press Enter to accept the Voucher Type Class screen. 5. Press Ctrl+A to accept the voucher type alteration screen.
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Step 2 : Enter the details of the transaction in a Sales Invoice Go to Gateway of Tally > Accounting Vouchers > F8: Sales. Select Sales @ 4% in Voucher Class List. The completed sales invoice appears as shown below:
Figure 8.18 Sales Voucher Creation
8.4 VAT Reports

In Tally.ERP 9, you can generate VAT Reports & statutory returns in prescribed format. In this lesson, we will discuss about the books of accounts, reports and registers related to VAT.
8.4.1 VAT Computation Report

Depending on the Input VAT paid during purchases and the output VAT availed on sales, VAT Refundable or Payable is calculated in this section by Tally.ERP 9. The difference between Input VAT and Output VAT = VAT Refundable.
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Go to Gateway of Tally > Display > Statutory Reports > VAT Reports > VAT Computation. The VAT Computation report appears as shown below:
Figure 8.19 VAT Computation
The VAT Computation screen is divided into two sections: Output and Input Tax. Each section is further subdivided into VAT Classifications: Output VAT @12.5%, Output VAT @ 4%, Input VAT @12.5% and Input VAT @ 4%. Here the Input VAT is Rs. 1,537.50 and the Output VAT is Rs. 659.50. Therefore, Rs. 878 is the VAT Refundable/ Carried Forward.
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8.4.2 VAT Returns

To view a VAT Form, Go to Gateway of Tally > Display > Statutory Reports > VAT Reports > VAT Forms > VAT Return Forms > Form VAT 100.
Figure 8.20 Print Configuration
Accept the screen to view the printed VAT Form 100 for the quarter ending 30th June 2009 as shown below :
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Figure 8.21 Form VAT 100 (Page 1)
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Figure 8.24 Form VAT 100 Page 4
8.5 Accounting for Return of Goods

In a business, customers may return goods due to numerous reasons such defectiveness, expired or short delivered and so on. Similarly, even the defective goods may also be returned to the vendors. In this section, we will look into the entries of such transactions through Credit Notes and Debit Notes. Setup : To enable Debit/Credit, set the following fields to Yes in F11: Features (Accounting Features) screen: Use Debit/Credit Notes Use Invoice Mode for credit note Use Invoice Mode for debit note
8.5.1 Sales Returns

On 20-6-09, Somi Telicomm returned 1 No. Surya Lamp to Universal Traders. Enter the details of the transaction in Credit Note Go to Gateway of Tally > Accounting Vouchers > F8: Credit Note. Enter the details of the transaction as shown below in a credit note voucher.
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In the Accounting Details screen of Surya Lamps, select Sales @ 4% under Particulars. The Sales @ 4% will be selected in the VAT/Tax Class. Press Y or Enter to accept the screen.
8.5.2 Purchase Returns

Universal Traders returns 1 No. Surya Lamps to Sujan Ltd. from the earlier purchases made from them. Enter the details of the transaction in Debit Note voucher Go to Gateway of Tally > Accounting Vouchers > F9: Debit Note.
The completed Debit Note is shown below :
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Figure 8.26 Debit Note
In the Accounting Details screen of Surya Lamps, select Purchases @ 4% under Particulars. The Purchases @ 4% will be selected in the VAT/Tax Class. Press Y or Enter to accept the screen.
8.5.3 Display VAT Computation Report

Go to Gateway of Tally > Display > Statutory Reports > VAT Reports > VAT Computation. The VAT Computation report appears as shown below:
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Sales Returns Entry The Assessable Value reduces by Rs. 350 (the price of the returned item) and the Output VAT by Rs. 14 (4% of Rs. 350). Therefore Output VAT is now Rs. 645.5 (659.5 - 14) and the Assessable Value is Rs. 12,950 (13,300-350). Purchase Returns Entry The Assessable value reduces by Rs. 300 (the price of the returned item) and the Output VAT by Rs. 12 (4% of 300). Therefore the Input VAT is now Rs. 1,525.5 (1,537.5 - 12) and Assessable Value is Rs. 34,950 (35,250 -300).
The VAT Refundable is Rs. 880, press Enter on Input VAT @ 4% in the VAT Computation report. The VAT Classification Vouchers screen with Input VAT @ 4% appears as shown below:
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Figure 8.28 VAT Classification Vouchers
Return to the VAT Computation report. Press Enter on Output VAT @ 4% in the VAT Computation report. The VAT Classification Vouchers screen with Output VAT @ 4% appears as shown below:
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8.6 Rate Difference in Purchase / Sales

In course of business, price variations may arise in respect of the prices of commodities due to inflation or deflation in the market or competition, proper accounting of such transactions is essential for accurate computation of tax liability and outstanding receivables or payables from the customer / vendors respectively. Debit/ Credit Notes can be used in case of changes in rates after the purchase and sales transactions.
8.6.1 Rate Differences in Purchases

On 21-6-09, Sujan Ltd. allowed a rate difference on lamps purchased by Universal Traders for the stock available at Rs. 50. VAT @ 4% was charged additionally. Universal Traders raised a Debit Note as shown below:
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Figure 8.30 Debit Note
8.6.2 Rate Differences in Sales

Universal Traders allowed a discount to Somi Telicomm on 22-6-09 for 8 nos. of Surya Lamps at Rs.50. VAT @ 4% was charged additionally. Universal Traders prepared a Credit Note as shown below:
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Go to Gateway of Tally > Display >Statutory Reports > VAT Reports > VAT Computation. The VAT Computation Report appears as shown :
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Rate Difference Purchase: The Assessable Value reduces by Rs. 50 (the rate difference allowed) and the Output VAT by Rs. 2 (4% of 50). Therefore, the Input VAT is now Rs. 1,523.5 (1525.5 - 2) and Assessable Value is Rs. 34,900 (34,950 - 50). Rate Difference Sales: The Assessable Value reduces by Rs. 400 (the rate difference allowed) and the Output VAT by Rs. 16 (4% of 400). Therefore, the Output VAT is now Rs. 629.5 (645.5 - 16) and the Assessable Value is Rs. 12,550 (12,950 - 400).
The VAT Refundable is Rs. 894 Select Output VAT @ 4% and press Enter. The drill-down report appears as shown below:
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Return to VAT Computation report Select Input VAT @ 4% and press Enter. The drill-down report appears as shown below:
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8.7 Accounting for Interstate Transactions

8.7.1 Inter-state Purchases
Inter-state Purchases attract Central Sales Tax (CST), which is not set-off against Output VAT on sales within the state or Output CST in inter-state sales. The CST paid is treated as a part of procurement cost. Create the following purchase voucher for the Inter-state Purchase transaction Date 24-06-09 Party Saarthak Enterprises (Kerala) Item Surya Lamps Quantity 50 Nos Rate 200 Tax CST 4%
Setup : Create the following Ledgers :
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i. Inter-state Purchase ledger Name Under Inventory values are affected Yes Used in VAT Returns Yes VAT/Tax Class
Inter-state Purchase ii. Purchase Ledger Name
Purchase Accounts
Inter-state Purchase
Under
Inventory values are affected Yes
Percentage of Calculation 4%
Method of Calculation On Total Sales
Used in VAT Returns Yes
VAT/Tax Class Inter-state Purchases
Input CST
Purchase Accounts (Under this group, set Used for Calculation Yes).
The Input CST ledger is grouped under Purchase account since it is treated as purchase cost.
iii. Party Ledger Name Saarthak Enterprises Under Sundry Creditors Inventory Values are affected No
Enter the details of the transaction in the Purchase Invoice Go to Gateway of Tally > Accounting Vouchers > F9: Purchase The completed Purchase Invoice appears as shown :
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In the Accounting Details Screen, select the Inter-state Purchase ledger with the InterState Purchase as the VAT/Tax Class. Press Y or Enter to accept the screen.
8.7.2 Inter-state Sales

In the case of Inter-state Sales, Input VAT can be adjusted against Output CST. Place the Output CST Ledger under the group Duties & Taxes and classify as CST for auto-computation. Create the following Sales voucher for the Inter-state Sales transaction Date 26-6-09 Setup : Create the following ledgers. Party Business Automation Item Surya Lamps Quantity 25 Nos Rate 350 Tax CST 4%
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i. Sales Ledger Name Inter-State Sales ii. Tax Ledger Name Output CST Under Duties and Taxes Type of Duty CST VAT/Tax Class Inter-state Sales Percentage of Calculation 4% Method of Calculation On Total Sales Under Sales Accounts Inventory Values are affected Yes Used in VAT Returns Yes VAT/Tax Class Inter-State Sales
iii. Party Ledger: Name Business Automation Under Sundry Debtors Inventory Values are affected No
Enter the details of the transaction in the Sales Invoice Go to Gateway of Tally > Accounting Vouchers > F8: Sales Select the ledger Inter-State sales for accounting allocation. The completed Sales Invoice appears as shown below:
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Go to Gateway of Tally > Display >Statutory Reports > VAT Reports > VAT Computation. In the F12: Configuration of the VAT computation report, set Show All VAT Classifications to Yes. The VAT Computation report appears as shown below:
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You will find that the Tax Amount column is nil in Interstate Purchases but Rs. 350 is seen under the heading Inter-state Sales.
8.8 Exempt Transactions under VAT

Under the VAT Act, few commodities comprising of natural and unprocessed products, which are produced in the unorganized sectors, and legally barred from taxation, are placed under the Exempted goods list. Transactions for these items do not carry any VAT charge. The list of exempt goods vary from state to state.
8.8.1 Exempted Purchases

Consider the following transaction of Universal Traders: Date 27-6-09 Party Anil Book Depot Books World of Cutting Tools World Book Encyclopedia Quantity 8 Nos 25 Nos Rate 480 50
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Setup : Create the following ledgers, i. Purchase Ledger Name Under Inventory values are affected Yes Used in VAT Returns Yes VAT/Tax Class Purchases Exempt
Purchase Exempt ii. Party Ledger
Purchase Accounts
Name Anil Book Depot
Under Sundry Creditors
Inventory Values are affected No
iii. Create the following Stock Items under Primary group with units of measure as Nos.: World of Cutting Tools. World Book Encyclopedia.
Enter the details of the transaction in a Purchase Invoice Go to Gateway of Tally > Accounting Vouchers > F9: Purchase In F12: Configuration, set Use Common Ledger A/c for Item Allocation to Yes. The completed Purchase Invoice appears as shown :
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8.8.2 Exempted Sales

Consider the following sales transaction of Universal Traders. Date 27-06-09 Setup : Create the following ledgers: i. Sales Ledger Name Sales-Exempt Under Sales Accounts Inventory Values are affected Yes Used in VAT Returns Yes VAT/Tax Class Other Exempt Sales Party J.K. Associates Books World of Cutting Tools Quantity 5 Nos Rate 500
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ii. Party Ledger Name J.K. Associates Under Sundry Debtors Inventory Values are affected No
Enter the details of the transaction in a Sales Invoice as shown below:
8.8.3 Display VAT Computation

Go to Gateway of Tally > Display >Statutory Reports > VAT Reports > VAT Computation. Press F12: Configure and set Show All VAT Classifications to Yes. The VAT Computation report appears as shown below:
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In the VAT Computation screen, the value of exempted Purchases and Sales will appear under Others (VAT not applicable) column. It will not form part of the taxable turnover in VAT Computation.
8.9 Purchases from Unregistered Dealers

A dealer whose turnover is below a certain threshold can be called as an unregistered dealer. Unregistered dealers cannot issue a Tax Invoice required for claiming the Input Credit. Thus, purchases from unregistered dealers, are not entitled for input credit and have to be recorded separately. Consider the following transaction: On 29-6-09, Universal Traders purchased Surya Lamps, 10 nos. at Rs.150 each from an unregistered dealer Payal Travels.
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Setup : Create the following ledgers : i. Purchase Ledger Name Under Inventory values are affected Yes Used in VAT Returns Yes VAT/Tax Class
Purchase from Unregistered Dealers ii. Party Ledger Name
Purchase Accounts
Purchases - From Unregistered Dealers
Inventory Values are affected No
Payal Travels
Enter the details of the transaction in a Purchase Invoice as shown below:
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The Purchase transaction from unregistered dealer appears under VAT not applicable and no Input Credit is allowed on it.
8.10 Claiming ITC on Capital Goods

Under VAT laws, the Input Tax Credit is allowed on capital goods from the date of its commercial production. The extent of credit is at the discretion of the Assessing Officer and is deferred over 12 months. Consider the following transaction: On 29-6-09, Universal Traders purchased a Laser marking machine at Rs. 15,00,000 + VAT @ 4% from Pandit Engineering. On 30-6-09 the Tax authorities allowed a tax credit of Rs. 30000 to be set-off in 12 monthly instalments. Setup : In the F11: Features (Accounting Features) set: Maintain Bill-wise Details to Yes. for Non-trading A/cs also (under Maintain Bill-wise Details.) to Yes. Create the following ledgers: i. Fixed Asset Ledger Name Laser Marking M/c Under Fixed Assets Maintain balances bill-by-bill No Inventory Values are affected No Used in VAT Returns No
ii. Current Assets Ledger Name Tax Paid on Capital Goods Under Current Assets Maintain balances bill-by-bill Yes Inventory Values are affected No
This ledger is used to record the tax set aside for future amortization.
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iii. Tax Ledger Name Under Type of Duty/Tax VAT VAT/Tax Class Maintain balances bill-by-bill No Inventory Values are affected No
Input VAT on Capital Goods
Duties & Taxes
Purchases - Capital Goods @ 4%
This ledger is created and used for the purpose of debiting monthly instalments of input credit allowed on Capital goods, over a period of 12 months.
iv. Party Ledger Name Pandit Engineering Under Sundry Creditors Maintain balances bill-by-bill Yes Inventory Values are affected No
Follow the steps given below: Create a Purchase Voucher to capitalise the full value of the capital goods purchased. For the Input Credit allowed by the Assessing Officer, pass a journal entry to account for it. Pass a journal entry for claiming the instalment of credit for the month. Create a Voucher Class, so that the journal entry affects the final VAT computation.
Step1: Create Purchase Voucher Go to Gateway of Tally > Accounting Vouchers > F9: Purchase 1. 2. 3. 4. Press Ctrl+V if the screen appears in the Invoice mode. Date: 29-6-09. Credit Pandit Engineering: Rs. 15,60,000. Debit Laser Marking M/c: Rs. 15,60,000 (If you don't find this ledger account in the drop down list, press F12: Configure and set the feature Allow Expenses/Fixed Assets in Purchase Vouchers to Yes).
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The completed Purchase Voucher appears as shown below:
5. Press Y or Enter to accept the screen. Step 2: Create Journal Voucher (to record the installment amount to be claimed as input credit) 1. Go to Journal voucher. 2. Date: 30-6-09. 3. Debit Tax paid on Capital Goods: Rs. 30,000 (amount allowed as credit by the tax authorities). 4. In the Bill-wise Details screen, Select New Ref under Type of Ref, Instalment Number under Name Enter Rs. 2,500 (i.e. 30,000/12) under Amount. 5. Similarly, create 12 new references for the monthly installments. 6. Credit Laser Marking M/c: Rs. 30000. The completed Journal Voucher appears as shown below:
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7. Press Y or Enter to accept the screen. Step 3: Journal entry (for claiming the installment of credit) Setup : Create the Voucher class for the journal entry. Go to Gateway of Tally > Accounts Info. > Voucher type > Alter > Select Journal. Most of the fields are already completed as the voucher type is in the alteration mode. Hence tab down to the field Name of Class. Enter VAT Adjustment Class under the Name of Class field and press Enter. In the voucher type class screen, set Use Class for VAT Adjustments to Yes.
Figure 8.44 VAT adjustment Class
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As mentioned before, you will need to do this if the Journal entry is to be considered in VAT Computation. Press Enter and return to the Voucher class screen and save it. Create Journal Voucher Go to Gateway of Tally > Accounting Vouchers > F7: Journal 1. 2. 3. 4. Select VAT Adjustment class. Press F2 and change the date to 30-6-09. Debit Input VAT on Capital Goods. Enter Purchases-Capital Goods @ 4% and 1560000 respectively, in the screen prompting for the VAT/ Tax Class and Assessable value. 5. Return to the voucher screen and enter 2500 in the Amount column. 6. Credit Tax Paid on Capital Goods: Rs. 2500. 7. In the Bill-wise details, select Agst-Ref in Type of Ref and 1 as Name of Reference. The amount will appear automatically. (Ensure that Show Table of Bill Details for Selection is set to Yes in the F12: Voucher Configuration).
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Display VAT Computation Report Go to Gateway of Tally > Display >Statutory Reports > VAT Reports > VAT Computation. Press F12: Configure and set Show All VAT Classifications to Yes.
8.11 Inter-State Branch Transfers

Inter-state Branch transfers do not attract any tax. The Input Credit on stocks transferred outside the state is allowed only to the manufacturers. However, to put stock transfers and inter-state trade broadly on the same competitive level, 4% of the Input Credit on stock transfer is disallowed. Branch Transfer transactions can be both Transfer Inwards and Transfer Outwards. Tally.ERP 9 provides specific VAT classes for these transactions.
8.11.1 Branch Transfer Outwards

On 30-6-2009 a local purchase was made 10 Bajaj Lamps were purchased at Rs. 150 each from Sujan Ltd. and Input VAT of 12.5% was paid on the items. These goods were transferred to a branch outside the state i.e. to the Mumbai Branch.
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Setup : Create the following Ledgers i. Branch Ledger Name Universal Traders Mumbai Branch Universal Traders Hyderabad Branch ii. Sales Ledger Name Under Maintain balances bill-by-bill No Inventory values are affected Yes Used in VAT Returns Yes VAT/Tax Class Under Branch / Division Branch / Divisions Inventory values are affected No No Maintain balances bill-by-bill Yes Yes
Transfer Out
Sales
Consignment/ Branch Transfer Outward
iii. Purchase Ledger Name Under Maintain balances bill-by-bill No Inventory values are affected Yes Used in VAT Returns Yes VAT/Tax Class
Transfer In
Purchase Accounts
Consignment/ Branch Transfer Inward
iv. Direct Expenses Ledger Name Tax paid on Purchases Under Direct Expenses Maintain balances bill-by-bill No Inventory values are affected No Used in VAT Returns No
Create a purchase voucher for the purchases made from Sujan Ltd.
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Enter the details of the transaction in a sales invoice. Go to Gateway of Tally > Accounting Vouchers > F8: Sales. 1. Party's A/c Name: Universal Traders Mumbai Branch 2. Sales Ledger - Transfer Out. The Consignment/ Branch Transfer Outward will be automatically selected. 3. Select the stock item as per the transaction details. The completed Sales Invoice appears as shown below :
8.11.2 Adjustment of ITC on Branch Transfers

Input Credit on stocks transferred outside the state is allowed for manufacturers, except for 4% credit, which is disallowed. The disallowed amount has to be transferred to either the Purchase Accounts or into a separate ledger under Direct Expenses. After passing the Sales Transfer Out entry, pass the journal entry illustrated below to account for the disallowed amount:
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Go to Gateway of Tally > Accounting Vouchers > F7: Journal and select VAT Adjustment Class. 1. 2. 3. 4. Change the date to 30-6-09. Select Others in the field Used for. Debit Tax paid on purchases: Rs. 60 (1,500 * 4%). Credit Input VAT @ 12.5%. Select Input VAT @12.5% in the VAT/Tax Class column. Enter the amount as Rs. 60 in the credit column.
The completed Journal voucher appears as shown below:
8.11.3 Branch Transfer Inwards

A separate ledger account called Transfer In is used to account for the stock received from the Branch Office. Purchase Invoices for the same are created using this ledger. On 30-6-09 consider the transfer of 5 Surya Lamps @ Rs. 300 per No. from Universal Traders - Hyderabad Branch.
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Enter the details of the transaction in Purchase Voucher Go to Gateway of Tally > Accounting Vouchers > F9: Purchase. 1. Party's A/c Name: Universal Traders Hyderabad Branch 2. Purchase Ledger: Transfer In. The Consignment/Branch Transfer Inward will be automatically selected. 3. Select the stock item as per the transaction details. The completed Purchase Invoice appears as shown below:

Go to Gateway of Tally > Display > Statutory Reports > VAT Reports > VAT Computation. Press F12: Configure and set Show All VAT Classifications to Yes. The VAT Computation screen appears as shown below:
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Only the total value will be shown in both the Transfer Outward and Transfer Inward fields.
8.12 VAT Reports

8.12.1 VAT Returns
To view a VAT Form, Go to Gateway of Tally > Display > Statutory Reports > VAT Reports > VAT Forms > VAT Return Forms > Form VAT 100 The print preview of VAT Form 100 apears as shown :
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Figure 8.51 Print Preview of Form VAT 100 (Page 1)
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8.12.2 eVAT Returns

The term e-Filing of Returns refers to the process of electronically filing your tax returns through the Internet. The salient features of efiling are: Reduces compliance cost for deductors Offers convenience of time & place to tax payers Reduces interface between assessee and tax officials Helps to correlate deduction of taxes against deposit of the deducted tax in the Government A/c Helps to correlate deduction of tax by the deductors with the corresponding credits claimed by the deductees To export eVAT Annexures, Go to Gateway of Tally > Display > Statutory Reports > VAT Reports > E-VAT Annexures > EVAT Purchases
Figure 8.55 eVAT Purchases Exporting screen
The exported file will be saved in the path specified in the output file name. Similarly, you can export other annexures required for efiling.
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8.12.3 Other Related Reports

Sales Columnar Register Go to Gateway of Tally > Display > Account Books > Sales Register. The registers display the Monthly Summary with Transactions and Closing Balances. Select a month and press Enter to view the Sales Voucher Register which displays a summary of sales transactions for the particular month. Press F5: Columnar register to view the columnar details. The Voucher Register appears as shown below:
Figure 8.56 Sales Columnar Register
Purchase Columnar Register Go to Gateway of Tally > Display > Account Books > Purchase Register. The registers display the Monthly Summary with Transactions and Closing Balances. Select a month and press Enter to view the Purchase Voucher Register which displays a summary of Purchase transactions for the particular month. Press F5: Columnar register to view the columnar details.
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Figure 8.57 Purchase Columnar Register
Practice Exercise Create a new company called Aman Motors, an Automobile dealer and also a manufacturer of Automobile Spare parts. Create the following masters and VAT related transactions: i. Party Ledgers Ledger Under Maintain balances bill-by-bill Yes Yes Yes Yes No No Inventory values are affected No No No No Yes Yes Used in VAT Returns No No No No Yes Yes
Jyoti Automobiles Joy Autos Susmit & Son's Impact Automation Purchases @ 4% Sales @ 4%
Sundry Creditors Sundry Creditors Sundry Creditors Sundry Debtors Purchase Accounts Sales Accounts
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ii. VAT Ledgers Ledger Input VAT @ 4% Output VAT @ 4% Input VAT @ 12.5% iii. Stock Items Item Honda Bikes Honda Moped Honda Engine Crank Vertical Honing machine Under Two Wheelers Two Wheelers Two Wheelers Assets Units Nos Nos Nos Nos Opening Balance 2 nos 4 nos 5 nos Nil Rate 50000 30000 4000 Nil Rate of VAT (%) 4 4 12.5 4 Under Duties & Taxes Duties & Taxes Duties & Taxes Type of Duty/Tax VAT VAT VAT VAT/Tax Class Input VAT @ 4% Output VAT @ 4% Input VAT @ 12.5%
Enter the following Transactions S.No 1. Date 5-6-09 Particulars Purchased from Jyoti Automobiles Bangalore. Vide bill no. JA-001, Honda Bikes 10 nos at Rs. 65000 each & Honda Moped 20 nos at Rs. 32000 each, VAT @ 4% was charged additionally. Sold to Impact Automation Bangalore, Honda Bikes 2 nos at Rs. 75000 & Honda Moped 4 nos at Rs. 45000, all items attract 4% VAT. Jyoti Automobiles returned 1 no. Honda Bike to Aman Motors Purchased Honda moped 15 nos. at Rs. 30000 each from Unregistered dealer Joy Autos vide Bill No. JY-005 Aman Motors purchased Vertical Honing Machine at Rs. 1872000 (VAT @ 4%) from Susmit & Son's. Vide bill no. SS-022. On 26-5-09 Tax authorities allowed a tax credit of Rs. 60000 to be set-off in 12 monthly instalments. Hint: Enter the above entry in three transactions, first capitalize the full value in purchase voucher then pass a journal entry for the input credit allowed and finally pass a journal entry for claiming the instalment for the month.
2. 3. 4. 5.
7-6-09 12-6-09 19-6-09 26-6-09
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S.No 6.
Date 30-6-09
Particulars Local Purchases of 10 nos Honda Engine crank at Rs. 4000 each from Somitel Motors and Input VAT of 12.5% was applicable. Vide bill no. SM033 These goods were transferred to a branch outside the state i.e to the Raipur Branch. (Remember being a manufacturing company upto 4% of Input VAT is disallowed) Hint: Enter the above entry in three transactions, first pass a local purchase voucher then enter a sales invoice for Branch Transfer and finally pass the journal entry for Adjustment of Input credit on Transfers Outward Pass the VAT Adjustment Entry.
7.
30-6-09
8.13 VAT for Composite Dealers

All dealers with gross annual turnover above the prescribed limit (e.g. Rs. 5 lakh) are required to be registered under the VAT Act of their respective State. All existing dealers are automatically registered under the VAT Act, while a new dealer is allowed thirty days from the date of liability to get registered. Small dealers with gross annual turnover not exceeding the prescribed limit (e.g. Rs. 5 lakh) are not liable to pay VAT. This limit may vary from State to State. Dealers with an annual gross turnover not exceeding a prescribed limit (e.g. Rs. 50 lakh) who are otherwise liable to pay VAT, can opt for a Composition Scheme with the payment of tax at a small percentage of gross turnover. Dealers opting for this scheme are not entitled to Input Tax Credit and are required to submit their VAT Returns in a separate format.
8.13.1 Enabling VAT for Composite Dealers

Tally.ERP 9 offers a VAT facility for regular registered dealers as well for dealers registered under the composition scheme of VAT. Using this unit, you can print VAT Composite Returns for any State that has implemented VAT. Tally.ERP 9 recognises the Composite rate of VAT based on the turnover automatically. The tax payable is calculated and displayed by default in the Return Form. Consider the example of United Traders, a confectionery retailer. Assume that the turnover in the preceding financial year was below the threshold limit of Rs. 50 lakh and has opted for the composition scheme of VAT.
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1. Enter the details in the company creation screen for United Traders as shown below :
Figure 8.58 Company Creation United Traders
2. Press Y or Enter to accept the company creation screen. 3. Press F11: Features (Statutory & Taxation Features) and enter the following settings: Set Enable Value Added Tax (VAT) to Yes. Set Enable Set /Alter VAT Details to Yes and press Enter. In the VAT details screen that is displayed, select the relevant State (the State by default is selected as Karnataka, as it is defined during company creation. The same can be also configured) and press Enter. Select the Type of VAT Dealer as Composition from the list. In the Composition Scheme Applicable From field, specify the date of registration as 14-2009 under the composition scheme of VAT. Enter the Additional Information Press Enter to accept the screen and return to the Company Operations Alteration screen. Tab down and specify the Tax Payer's Identification No. in the VAT TIN (Composition) field. Tally.ERP 9 automatically skips VAT TIN (Regular) and Local Sales Tax Number field. Specify the Inter-state Sales Tax Number and the PAN / Income - Tax No. details of the company. The completed F11: Features (Statutory & Taxation Features) screen appears as shown below:
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Figure 8.59 F11: Features
Press Y or Enter to accept the screen. .

If the turnover exceeds the threshold limit of Rs. 5 lakh in the current financial year, in that case the dealer is automatically registered as a regular VAT dealer. In such cases, specify the date of application in the Regular VAT Applicable From field and the new TIN number in the VAT TIN (Regular) field.
8.13.2 Composite VAT Classifications

The statutory masters for both Composite and regular VAT dealers get automatically loaded into Tally.ERP 9 when a company is enabled for VAT. VAT Classifications are pre-defined, based on the tax rate. They are categorised on the basis of nature of the business and the type of transaction and are built into the system. The Tally.ERP 9 system-generated VAT Classifications for the Composite VAT enabled company, United Traders situated in Karnataka, are listed below. The Sales and Purchase transactions are segregated based on the classification selected during ledger creation or voucher entry. The proper selection of VAT class in transactions is vital to accurately ascertain the tax and classification-wise turnover.
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Go to Gateway of Tally > Display > Statutory Info. > VAT Classifications. Classification for Purchases Name Rate Is Sales Type of Tax Used in Composite Returns Yes
Purchase from URDs - Taxable Goods (Composition)
0%
No
Exempt
The Purchase from URDs - Taxable Goods (Composition) screen appears as shown below:
Figure 8.60 VAT Classification Display
Classification for Sales Some of the classifications of sales are shown below: Name Rate Is Sales Type of Tax VAT VAT VAT VAT Exempt VAT Used in Composite Return Yes Yes Yes Yes Yes Yes
Sales - Composition tax @ 1% Sales - Imported Goods (Composition) @ 12.5% Sales - Purc from other State (Composition) @ 12.5% Sales - Traded Goods (Composition) @ 4% Sub Work Contract Works Contract - Composition Tax @ 4%
1% 12.5% 12.5% 4% 0% 4%
Yes Yes Yes Yes Yes Yes
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The Sales - Composition Tax @ 1% screen appears as shown below :
Figure 8.61 VAT Classification Display
Only when Composition VAT is enabled in the F11: Features (Statutory & Taxation Features) and Used in Composite Return is set to Yes in the VAT Classifications, can the classifications be assigned to the ledgers.
8.13.3 Creating Masters

i. Purchases Ledger Ledger Purchases Under Purchases Accounts Inventory Values are affected Yes Used in VAT Returns Yes VAT/Tax Class Not Applicable
On setting Used in VAT Returns to Yes, only VAT Classifications pertaining to the composition scheme is displayed in the VAT/Tax Class list.
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Figure 8.62 VAT/Tax Class
Press Enter to accept the VAT/Tax class and then press Ctrl+A to accept the Purchase ledger.
In case of purchases from unregistered dealers, select the VAT Classification as Purchase from URDs Taxable Goods (composition). Tally.ERP 9 also allows you to select the VAT classification during a voucher entry.
ii. Sales Ledger Create the Sales Ledger with the details given below: Ledger Under Inventory values are Affected Yes Used in VAT Returns Yes VAT/Tax Class
Sales iii. VAT Ledgers
Sales Accounts
Sales Composition Tax @ 1%
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For Composite dealers, the VAT charged on purchases is generally grouped under direct Expenses or Purchases as they are not allowed Input Credit on their purchases. Hence, it is appropriated to the purchases cost. Ultimately, a Composite Tax on Sales ledger has to be created under the Indirect Expenses group for the composite tax payable on the total sales turnover. iv. Expense ledger Ledger Composite Tax on Sales Ledger v. Stock Item Name of Item Cadburys Hazelnut - 150g vi. Party Ledgers Ledger Galaxy Confectioneries Mars Bakery Products Under Sundry Creditors Sundry Debtors Maintain balances bill-by-bill Yes Yes Under Primary Units Nos Under Indirect Expenses Inventory values are Affected No
8.13.4 Creating Purchases

As per VAT rules, a dealer opting for composition of tax is not allowed to claim input tax on purchases made. Hence, as discussed earlier, the tax paid on purchases is added to the purchase cost and the VAT charge is not separately shown in the Invoice. The following illustration explains the purchase and Sales transactions of a VAT Composite dealer. On 5-4-2009, United Traders purchased the following items from Galaxy Confectioneries vide B.No. 586. Item Description Cadburys Hazelnut - 150g The rates are inclusive of 4% VAT. Enter the details of the transaction in a Purchase Invoice. Quantity 100 Nos Rate 35
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Setup : In F12: Configuration, set Use common ledger A/c for Item Allocation to Yes. Create Purchase Invoice Go to Gateway of Tally > Accounting Vouchers > F9: Purchase 1. 2. 3. 4. 5. 6. 7. 8. Date: 5-4-09. Party's A/c Name: Galaxy Confectioneries Press Enter to accept the Supplier Details screen. Purchase Ledger: Purchases VAT/Tax Class: Not Applicable Name of Item: Cadburys Hazelnut - 150g Specify the Quantity as 100 and Rate as 35. In the Bill-wise Details for: Galaxy Confectioneries screen: Select New Ref as the Type of Ref and Name as 586 Accept the bill-wise details screen. 9. Type the details of the transaction in the Narration field. 10. Press Enter to accept the Purchase invoice.
8.13.5 Creating Sales

On 7-4-2009, United Traders sold the following items to Mars Bakery Products, Bangalore. Item Description Cadburys Hazelnut - 150g Quantity 45 Nos Rate 40
Enter the details of the transaction in a Sales Invoice. 1. Date: 7-4-09 2. Party's A/c Name: Mars Bakery Products and press Enter to accept the Despatch Details screen. 3. Sales Ledger: Sales and press Enter. 4. VAT/Tax Class: Sales - Composition Tax @ 1%. 5. Name of Item: Cadburys Hazelnut - 150g and press Enter. 6. Specify the Quantity as 45 and Rate as 40. 7. In the Bill-wise Details screen accept the default bill allocations.
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8.13.6 Purchases from Unregistered Dealers

The transaction is treated as exempt from VAT when a VAT composite dealer purchases from an unregistered dealer. The VAT composite dealer has to report this in the VAT return form under Karnataka VAT rules. Consider the following transaction: On 8-4-2009, United Traders purchased the following items from M/s. Arvind Food Products, an unregistered dealer vide B.No. 422. Item Description Cadburys Fruit & Nut - 200g Quantity 100 Nos Rate 19
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Setup : Create the following masters : i. Stock Item Item Description Cadburys Fruit & Nut - 200g ii. Party Ledger Ledger Arvind Food Products Under Sundry creditors Maintain Balances bill-by-bill Yes Group Primary Units Nos
Step 1 : Enter the details of the transation in Purchase Invoice. In F12: Configure, set Allow selection of VAT/Tax class during entry to Yes. Go to Gateway of Tally > Accounting Vouchers > F9: Purchase The completed Purchase Invoice appears as shown below :
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Type narration and press Y or Enter to accept the screen.

In the bill-wise allocation screen select New Ref as the type of reference and type the name as 422.
Step 2 : Enter the details of the transaction in a Sales Invoice On 10-4-2009, United Traders sold the following items to Mars Bakery Products, Bangalore. Item Description Cadburys Fruit & Nut - 200g Quantity 65 Nos Rate 24
In F12: Configuration, set Allow selection of VAT / Tax class during entry to Yes. Go to Gateway of Tally > Accounting Vouchers > F8: Sales The completed Sales Invoice appears as shown below:
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Type the details of the transaction in the Narration field and accept the screen.
In the bill-wise allocation screen select New Ref as the type of reference and type the Name as 423.
8.13.7 VAT Reports

Tally.ERP 9 helps the assessee to generate and print VAT Computation Reports and Statespecific VAT Composition forms, as prescribed under VAT rules. VAT Composition Computation Report The VAT Computation Report provides the aggregate of taxable and exempt turnover of the dealer and computes composite tax at the prescribed rate. Go to Gateway of Tally > Display > Statutory Reports > VAT Composition Reports > VAT Composition Computation. Press F12: Configure and Set Show Purchase VAT Classifications to Yes to view purchases from unregistered dealers. The VAT Composition Computation Report of M/s. United Traders for April 2009, appears as shown below :
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Figure 8.66 VAT Composition Computation
You will find that the computation report shows the Sales turnover taxable at various rates under composition scheme of VAT. In this case, the total sales turnover taxable @ composition 1% and 4% amounts to Rs. 1800 and Rs. 1560 respectively. The composite tax at 1% & 4% is automatically computed on the respective turnover and reported in the tax amount column (i.e. Rs. 18 and Rs. 62.40 respectively). The computation report also displays other items which are non-taxable under the composition scheme i.e purchases made from unregistered dealers during the given period. The report provides a drill down facility for each item right down to the voucher level. The VAT Classification Vouchers for Sales Composition tax @ 1% appears as shown below:
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To print the computation report, press Alt+P. You can further drill down to the voucher level in the alteration mode by pressing Enter on the required voucher listing. VAT Composition Returns In Tally.ERP 9, you can generate and print State-specific monthly, quarterly or annual VAT Composite Returns. In Karnataka, Form VAT 120 is the statutory form used for filing monthly returns by a registered Composite dealer. For VAT Composition Forms in Tally.ERP 9, Go to Gateway of Tally > Display > Statutory Reports > VAT Composition Reports > VAT Composition Return. In the VAT Composition Return print configuration screen: Type the period of the return as 1-4-09 to 30-4-09. Enter the name of the person responsible for filing the return. Specify the Status/ Designation of the person. Specify the name of the place. Enter the date of filing of the return.
Press Enter to accept and print monthly returns. The Composition Monthly Return Form VAT 120 of M/s. United Traders for April 2009 appears as shown below:
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231
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8.13.8 Payment of Composite VAT

Use a Payment Voucher to record the payment of Composite VAT for April 2009 Create Payment Voucher Press F12: Configure and set Use Single Entry Mode for Pymt/Rcpt/Contra to Yes.
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Go to Gateway of Tally > Accounting Vouchers > F5: Payment 1. 2. 3. 4. 5. Press F2 and change the date to 20-5-09. Select HDFC Bank in the Account field and press Enter. (Create ledgers if not present). Select Composite Tax on Sales ledger in the Particulars field. Specify 80 as amount (as shown in the VAT Return Form). Specify the cheque details in the Narration field.
The completed Payment Voucher appears as shown below:
Practice Exercise Create a Company Alokmala Agency a famous Tea House in Ooty who is a dealer of Tea and Coffee products. Create the following masters and pass the following transactions for a VAT Composite Dealer:
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i. Party Ledgers Ledger Under Maintain balances bill-by-bill Yes Yes Yes Yes No No No No Inventory values are affected No No No No No Yes Yes No VAT/Tax Class
Darjeling Plantation BEC Foods Chanchal Tea House Chennai Tea Hubs HDFC Bank Purchases Sales Composite Tax on Sales ii. Stock Items Item Tea Bags Coffee Tin iii. Transactions S.No 1. 2. 3. Date 6-4-09 8-4-09 12-4-09
Sundry Creditors Sundry Creditors Sundry Debtors Sundry Debtors Bank Account Purchase Accounts Sales Accounts Indirect Expense
Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable Sales - Composition Tax @ 1% Not Applicable
Under Beverages Beverages
Units Nos Nos
Opening Balance 60 Nos 100 Nos
Rate 55 219
Particulars Purchased Tea Bags 100 nos at Rs. 55 each (inclusive of VAT) from Darjeling Plantation vide Bill .No. 786. Sold Tea Bags 50 nos at Rs. 75 each to Chanchal Tea House, VAT/Tax class as Sales-Composition Tax @1%. Purchased Coffee Tin 200 nos at Rs. 219 each from m/s BEC Foods (an Unregistered Dealers) vide bill no.BEC009 Vat/Tax Class as Purchase from URDs-taxable goods (Composition) Sold Coffee Tin 165 nos to Chennai Tea Hubs at Rs. 254 each (inclusive of VAT), VAT/Tax class as Sales-Composition Tax @4% Payment of Composite VAT through HDFC bank vide cheque no.20414263
4. 5.
21-4-09 29-5-09
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Points to Remember
Value Added Tax (VAT) is an indirect tax on goods, introduced in lieu of sales tax. Tally.ERP 9 provides State specific classification as per VAT Act for all sales and purchase transactions. You can select the classification at the time of ledger creation or at the time of voucher entry. Interstate purchases attract Central Sales Tax (CST), which is not set off against Output VAT on sales within the state or Output CST in interstate sales. The CST paid is treated as a part of procurement cost. Branch transfer transactions can be both Transfer Inwards and Transfer Outwards. Tally.ERP 9 provides specific VAT classes for these transactions. Tally.ERP 9 calculates VAT Refundable or Payable depending on the Input VAT paid during purchases and the output VAT availed on sales. The dealer whose gross annual turnover does not exceed the prescribed limit can opt for the Composition Scheme of VAT. VAT Composite dealers are not entitled to input tax credit. Tally.ERP 9 provides State specific classifications in VAT Composition scheme for dealers. The VAT Composition computation report as well as VAT Composition Returns Form can be generated and printed in Tally.ERP 9.
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Lesson 9: Central Sales Tax (CST)
Lesson Objectives
On completion of this lesson, you will be able to understand How to activate CST in Tally.ERP 9. Create ledgers and vouchers using different classifications relating to CST. Record transactions relating to inter-state trade Generate and print reports on the Forms Receivable and Forms Issuable for CST transactions.
Sales Tax is a tax levied on the sale of goods. In India, the law for levying sales tax is provided in the Central Sales Tax Act of 1956 which applies to the entire country. Generally, the CST Act does not deal with intra-state or import or export sales. However, with respect to certain declared goods such as oil seeds, sugar, pulses, crude oil etc., the CST Act imposes restrictions on the powers of state governments to levy sales tax even in the case of intra-state sales. Accordingly, sales can broadly be classified into three categories. Intra-State sales, i.e, sales within the state. Sales during import and export. Inter-State sales. The Act also provides for the levy, collection and distribution of taxes on sale of goods in the course of inter-state trade or commerce.
9.1 Basics of Central Sales Tax (CST)

It is important to understand the meaning of certain terms used in the CST Act.
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Central Sales Tax (CST)
Inter-State Sale Inter-state sale is deemed to take place if there is: (i) Movement of goods from one state to another or (ii) Transfer of documents of title to the goods during their movement from one State to another. The above two modes are mutually exclusive. Declared Goods Declared Goods means goods declared under Section 14 to be of special importance in interstate trade or commerce. Some of the important items are cereals, iron and steel, jute, oil seeds, pulses, man-made fabrics etc. Registration under CST Act Every dealer who carries out the inter-state sales is liable to pay Central Sales Tax. As per the CST Act, every dealer who carries out inter-state sales has to be registered with the Sales Tax Authority. Intermediaries like agents and transporters are not required to be registered, since they do not affect sales. Registered dealers can purchase goods at concessional rates by issuing the C Form. Rate of Central Sales Tax Different rates are prescribed depending upon the nature of inter-state sale such as: a. Sale to registered dealers. b. Sale to unregistered dealers. (i) Sale of declared goods to unregistered dealers. (ii) Sale of goods other than declared goods to unregistered dealers. CST rates to various categories are discussed below: a. Sale to Registered Dealers Sale to registered dealer is @ 4% or sales tax rate for sale within the State, whichever is lower, if the goods are eligible and are specified in the Registration Certificate issued to the purchasing dealer. The Purchasing dealer has to submit the declaration in the prescribed C Form to the selling dealer. b. Sale to Unregistered Dealers The rate is twice the rate applicable to sale or purchase of such goods within the State with regard to declared goods. In case of goods other than declared goods, the rate applicable for sale within the state or 10%, whichever is higher. The purchaser is not required to give any declaration as he is not a registered dealer.
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Forms for Declarations under CST Scheme A registered dealer has to issue certain declarations in prescribed forms to buyers/ sellers. The Dealer has to issue declarations in the forms such as C, E-I, E-II, F and H which are printed and supplied by the Sales Tax Authorities. These forms are generally in triplicate.
Figure 9.1 Chart Showing Incidence of Various Forms in the Course of Inter-state Trade
Form C As per CST Act, sales tax on inter-state sales is 4% or sales tax rate for sale within the state, whichever is lower, is applicable, when the sale is made to a registered dealer and the goods are covered in the registration certificate of the purchasing dealer. Otherwise, the tax is higher, i.e 10% or tax leviable on sale of goods inside the state, whichever is higher. This concessional rate is applicable only if the purchasing dealer submits a declaration in prescribed C Form. One C Form covers all the transactions in a whole financial year, irrespective of the total amount or value of transactions during the year. However, for transactions exceeding one financial year separate C Form is required for each financial year. Forms E1 and E2 According to Section 6(2) of the CST Act, only the first inter-state sale is taxable and the subsequent sale during movement of goods by transfer of documents is exempt from tax, if the purchasing dealer is a registered dealer. Usually, the transfer of a document refers to the document of title to goods which is endorsed and transferred in favour of the purchaser and is duly signed by the endorser. The document can be further transferred by subsequent endorsements.
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The subsequent sellers have to obtain a declaration in C Form from the dealers who sold them the goods. The selling dealer has to make a declaration in E1 Form in case of the first sale and E2 Form in case of subsequent sales. Form F Under CST Act, F Form is used for Branch transfers and Consignment transfers. Goods when transferred from one place to another under the same principal, is known as Branch Transfer and when it is transferred to agents, it is termed as Consignment Sale. Here the dealer has to furnish a declaration in F Form received from the consignment agent or branch office in another state to prove that the interstate movement of goods is not a sale. One F Form covers all transactions in one month, irrespective of the number of transactions and the total amount. Form H A sale during the course of export is exempt from CST and also the penultimate sale is deemed to be in course of exempt from CST under the CST Act. The dealer exporting the goods must have documents in proof of export such as an airway bill, bill of lading, shipping bill, customs documents, bank certificate etc. However, if the penultimate seller is not having any proof evidencing that the sale is exempt, the actual exporter is required to issue a certificate in H Form to the penultimate seller. Form I Special Economic Zone (SEZ) is a specifically delineated duty free enclave and shall be deemed to be foreign territory for the purposes of trade operations, duties and tariffs. Under the CST Act, supplies made by a registered dealer to a unit in the Special Economic Zone (SEZ) will not be subject to CST, provided such unit furnishes a declaration in I Form.
9.2 Enabling CST in Tally.ERP 9

Central Sales Tax integrated in Tally.ERP 9 takes care of your inter-state transactions. It eliminates error-prone information and comments on appropriate forms to be issued/ received at the end of the month or a financial year or at any point of time. It takes a one-time configuration in Tally.ERP 9 for Central Sales Tax features to be activated.
9.2.1 Company Setup

Create a new company - Oriental Traders to understand the CST Feature of Tally.ERP 9. Oriental Traders is a registered dealer under the CST Act and is one of the leading all India distributors of industrial powder paints. It purchases various shades of powder paints from Unique Paints (P) Ltd. Margao, Goa and supplies to registered dealers outside the State on submission of the prescribed formats. Enter the details in the Company Creation screen as shown below:
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Figure 9.2 Company Creation Oriental Traders
Press Y or Enter to accept the company creation screen. Enable VAT, by activating Enable Value Added Tax (VAT) and Set/Alter VAT details in the F11: Features (Statutory and Taxation Features). Once VAT is enabled, Statutory Masters related to VAT and CST are also automatically loaded in Tally.ERP 9.
The CST feature will be available only when VAT is activated.
9.2.2 Creating Masters

i. Purchases and Sales Ledgers Ledger Under Inventory values are affected Yes Yes Used in VAT returns Yes Yes VAT/Tax Class Inter-State Sales Inter-State Purchase
CST Sales CST Purchases
Sales Accounts Purchase Accounts
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ii. Party Ledgers Ledger Under Maintain balances bill-by-bill Yes Yes Inventory values are affected No No
Sunrise Industries Unique Paints (P) Ltd. iii. Output CST Ledger Ledger Under Type of Duty/Tax CST
Sundry Debtors Sundry Creditors
VAT/Tax Class Inter-State Sales
Inventory values are affected No
Percentage of calculation 4
Method of calculation On Total Sales
CST @ 4%
Duties and taxes
iv. Input CST ledger Ledger Under Inventory values are affected Yes Used in VAT Returns Yes VAT/Tax Class Not applicable
Input CST v. Stock Items
Purchase accounts
Name of Item Black Matt Golden Yellow Metallic Blue
Under Primary Primary Primary
Units of measure Kgs Kgs Kgs
9.3 Recording Interstate Transactions in Tally.ERP 9

As discussed earlier, in the course of inter-state trade or commerce the dealers have to issue/ submit certain declarations in prescribed forms to buyers/ sellers in order to avail concessional rates when: Sale or Purchase takes place outside a State. Sale or Purchase takes place in the course of imports into India or exports from India.
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9.3.1 Inter-State Purchases

On 5-4-2009, M/s. Oriental Traders purchased the following items from M/s. Unique Paints (P) Ltd. Goa, vide Invoice No. 2458/08-09, amounting to Rs. 148500. Product Description Black Matt Golden Yellow Metallic Blue Quantity 500 Kgs 100 Kgs 100 Kgs Rate 190 285 250
Enter the details of the transaction in a Purchase Invoice. Setup : In the F12: Configuration, set Use common ledger A/c for item allocation to Yes. The completed Purchase Invoice appears as shown below:
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In the bill-wise details screen select New Ref and type 2458/08-09. The above Purchase Invoice can also be recorded in Double Entry mode.
You can also fill the Form No. during the Voucher Entry, if the forms are issued at the time of purchase. But usually, they are submitted at the end of the year covering all the transactions from that dealer during the year.
9.3.2 Inter-State Sales against C Form

On 7-4-2009, M/s. Oriental Traders sold the following items to M/s. Sunrise Industries, Delhi against C Form. The freight charges of Rs. 750 were included in the Invoice. Product Description Black Matt Golden Yellow Metallic Blue Quantity 100 Kgs 20 Kgs 10 Kgs Rate 240 365 290
Enter the details of the transaction in a sales invoice Setup : Create a ledger Freight charges under indirect expenses. The completed Sales Invoice appears as shown below:
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Press Y or Enter to accept the sales invoice.

Accept the default bill allocations in the Bill-wise Details screen You can fill the Form Number during a Voucher Entry, if the forms are received at the time of sales. But usually, they are submitted at the end of the year covering all the transactions from that dealer during the year.
9.3.3 Transit Sales against E1 and E2 Forms

According to Section 6(2) of the CST Act, the first inter-state sale is taxable and the subsequent sale during movement of goods by transfer of documents is exempt from tax, if the sale is made to a registered dealer. Let us consider the following example : On 13-4-2009, M/s. Oriental Traders despatched the following goods to M/s. Star Power Controls, Orissa and raised an Invoice on M/s. Swastik Associates in Madhya Pradesh and charged 4% CST against C Form.
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Product Description Black Matt Chocolate Brown P.O. Red
Quantity 300 Kgs 50 Kgs 50 Kgs
Rate 240 270 245
During the movement of goods, Swastik Associates subsequently sold the goods to M/s. Rainbow Colours in West Bengal and Rainbow Colours ultimately sold the goods to M/s. Star Power Controls in Orissa. On the same day, Oriental Traders received C Form vide No. TC-2K-15023 dt. 13-4-09 from Swastik Associates and issued E1 Form vide no. TE-1Q-0130 dt. 13-4-09. In this case, sale from Swastik Associates to Rainbow Colours and Rainbow Colours to Star Power Controls is by way of transfer of documents. Oriental Traders has to receive C Form from Swastik Associates and will issue an E1 Form to Swastik Associates. Later, Swastik Associates will issue E2 Form to Rainbow Colours and receive C Form. Finally, Rainbow Colours will issue E2 Form to Star Power Controls and receive the C Form. Chart showing movement of goods under E1 and E2 :
Figure 9.5 Chart Representing Movement of Goods
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Create the following Party Ledger Ledger Under Maintain balances bill-by-bill Yes Inventory values are affected No
Swastik Associates
Sundry Debtors
The entries to be made in the books of M/s. Oriental Traders with regard to the above transaction are given in the following pages. Enter the details of the trasaction in a Sales Invoice Setup : Press F12: Configure and set Yes to Allow separate Buyer Consignee names Activate E1 or E2 Transaction
The option Activate E1 or E2 Transaction is activated as this transaction amounts to the movement of goods by the transfer of documents.
Go to Gateway of Tally > Accounting Vouchers > F8: Sales. Change the date to 13-4-09. Select Swastik Associates in the Party's A/c Name and press Enter to view the supplementary details screen. In the Buyer details section enter the following details and accept the screen Consignee: Star Power Controls Address: B-3/114, Bhusan Vihar, Bubaneshwar, Orissa Buyer: Swastik Associates Address: 603, Marvel Complex, Madhya Pradesh Enter the details of the transaction in a Sales invoice and accept the default bill allocations in the Bill-wise Details screen. The completed Sales Invoice appears as shown below:
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In the books of Swastik Traders, the C Form received from Rainbow Colours has to be entered and E2 Form needs to be selected. This must be issued since it is a subsequent inter-state sales by transfer of documents of title. Generally, blank forms are received at the beginning of the year or on the commencement of an inter-state transaction with the respective dealer. However, Tally.ERP 9 gives you the flexibility to update Form Nos. and Date in the Reports Menu.
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9.3.4 Branch Transfers/ Consignment Sales against F Form

On 15-4-2009, M/s. Oriental Traders despatches the following goods to their Branch in Uttar Pradesh. Product Description Golden Yellow Metallic Blue Setup : In F11: Features (Accounting Features) set (for Non-Trading A/cs also) under Maintain Bill-wise details to Yes. Create the following Masters Branch Ledger Ledger Under Maintain balances bill-by-bill Yes Inventory values are affected No Quantity 20 Kgs 30 Kgs Rate 285 250
Oriental Traders - U.P Sales Ledger Ledger
Branch/Division
Under
Used in VAT returns Yes
VAT/Tax class
Branch Transfers Outward
Sales Accounts
Consignments / Branch Transfer Outward
Do not activate bill-wise details for the ledger Branch Transfers Outward.
Enter the details of the transaction in a Sales invoice Go to Gateway of Tally > Accounting Vouchers > F8: Sales. Accept the default bill allocations in the Bill-wise Details screen. The completed Sales Invoice for Branch Transfer appears as shown below:
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In the case of consignment sales made to agents, F Form has to be selected.
9.3.5 Exports against H Form

On 18-4-2009, M/s. Oriental Traders supplied 100 Kgs of Black Matt at Rs. 240 per Kg to M/ s. Surya Exports against the submission of H Form vide bill No. 102504 dt. 18-4-09. Setup : i. Create Party Ledger Ledger Surya Exports Under Sundry Debtors Maintain balances bill-by-bill Yes Inventory values are affected No
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ii. Create Sales Ledger Ledger Under Inventory values are affected Yes Used in VAT Returns Yes VAT/Tax Class Not Applicable
Sales deemed Exports
Sales Accounts
Enter the details of the transaction in a Sales invoice Go to Gateway of Tally > Accounting Vouchers > F8: Sales. Accept the default bill allocations in the Bill-wise Details screen. The completed Sale Invoice appears as shown below:
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9.3.6 Sales to SEZ Units against I Form

On 20-4-2009, M/s. Oriental Traders supplied 50 Kgs of Metallic Blue at Rs. 290 per Kg to M/ s. Track Innovations (P) Ltd. a unit in SEZ located at Chennai, against the submission of the I Form. Setup : i. Party Ledger Ledger Under Maintain balances bill-by-bill Yes Inventory values are affected No
Track Innovations (P) Ltd. ii. Sales Account Ledger Sales - SEZ Under
Sundry Debtors
VAT/Tax Class Not Applicable
Sales Accounts
Enter the details of the transaction in a Sales invoice Go to Gateway of Tally > Accounting Vouchers > F8: Sales. Accept the default bill allocations in the Bill-wise Details screen. The completed Sale Invoice appears as shown below:
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9.4 Payment of CST

Central Sales Tax is payable in the State from which the goods are sold. The tax so collected is retained by the state in which it is collected. The State Government Sales Tax Officer who assesses and collects local State Sales Tax also assesses and collects Central Sales Tax. The returns under General Sales Tax of the appropriate State has to be submitted within the due date. The CST payable should be rounded off to the nearest rupee. On 20-5-2009, M/s. Oriental Traders paid an amount of Rs. 7,308 towards CST payable of April 2009 vide Cheque No. 015630 dt. 20-5-09. Create a payment voucher: Go to Gateway of Tally> Accounting Vouchers > F5: Payment Date: 20-5-2009. Account: HDFC Bank Ltd. (Create using Alt+C if it does not exist.)
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Select CST @ 4% and specify amount as 7308. Type Cheque No. 015630 in the Narration field and press Enter. Press Y or Enter to accept.
9.5 CST Reports

Tally.ERP 9 facilitates the generation of CST related reports i.e Forms Receivable and Forms Issuable Reports for any period of time. It also offers the facility of auto-filling the form number for transactions related to the same dealer during the year, which hastens voucher entry and reduces the possibility of errors.
9.5.1 Forms Receivable Report

In Tally.ERP 9, you can generate the Forms Receivable Report ledger-wise. This report comments on various forms to be received from the dealer at any time. It displays the date of transaction, CST Sales ledger employed, gross amount inclusive of CST, form types and also contains two additional fields: Form Number and Date. These have to be filled when the prescribed forms are received from the purchasing dealer or the customer. Usually, this report is generated at the end of a financial year or month end (in specific cases). However, Tally.ERP 9 facilitates the generation of this report at any point of time. Go to Gateway of Tally > Display > Statutory Reports > CST Reports > Forms Receivable > Ledger > Sunrise Industries > press Enter. The Forms Receivable Report of M/s. Sunrise Industries appears as shown below:
Figure 9.10 Forms Receivable
The above report shows that the C Form is to be received from the said customer for the supplies made during the respective period. In this report, you can fill the Form No. and Date when received. View M/s. Surya Exports ledger for the forms to be received from them. You will notice that the report appears blank as the prescribed declaration in H Form was received at the time of sale and entered in the sales invoice during the voucher entry. However, you can view the vouchers for which forms have been received in advance or at the time of transaction. To view all vouchers, press F12: Configure and change the following setting:
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Set Show All Vouchers to Yes. Select H Form in the Show Vouchers field - This feature allows you to view different Forms Receivable from the same dealer, if any. When set to Not Applicable, whatever forms are due from the dealer will be displayed.
Figure 9.11 CST Reports Configuration
The Forms Receivable report appears as shown below:
Figure 9.12 Forms Receivable
Press Alt+P to print the report.

Press Alt+F5, if there are many transactions and type the Form No. and Date to auto-fill the same in all the transactions pertaining to the related form.
In the same manner, you can view other Forms Receivable from the rest of the dealers during the required period.
9.5.2 Forms Issuable Report

In Tally.ERP 9, you can generate the Forms Issuable Report ledger-wise. This report comments on various forms to be issued to the dealer for any given period of time. It displays the date of transaction, CST Purchases ledger employed, gross amount inclusive of CST, form types and also contains two additional fields: Form Number and Date, which can be filled when the prescribed forms are issued to the selling dealer or supplier. Similar to the Forms Receivable Report, this report is also generated at the end of a financial year or month end (in specific cases) and can be generated at any point of time in Tally.ERP 9.
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Go to Gateway of Tally > Display > Statutory Reports > CST Reports > Forms Issuable > Ledger > Unique Paints (P) Ltd > press Enter. The Forms Issuable Report of M/s Unique Paints (P) Ltd. appears as shown below:
Figure 9.13 Forms Issuable
As discussed earlier, fill the Form No. and Date. View the Forms Issuable report of M/s. Swastik Associates ledger, where the movement of goods affected the transfer of documents. Go to Gateway of Tally > Display > Statutory Reports > CST Reports > Forms Issuable > Ledger > Swastik Associates > press Enter. Press F12: Configure and change the following settings: Set Show All Vouchers to Yes. Select E1 Form in the Show Vouchers of field and press Enter. The Forms Issuable report appears as shown:
Figure 9.14 Forms Issuable
Even though the C Form has been received and the transaction has been reflected in the Forms Receivable Report, as per the rules the declaration in Form E1 must be furnished. This is therefore, shown in the Form Issuable report.
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Practice Exercise M/s Jaykanth Agency is a registered dealer under the CST Act and is one of the leading distributors of refractory materials. Create the following masters and pass the following transactions as per the CST Act: i. Party Ledgers Ledger M/s Bhim Traders Kirti Engineering M/s Shobha Fabrication Ltd. M/s Virendra Exports HDFC Bank Freight Charges Under Sundry Creditors Sundry Debtors Sundry Debtors Sundry Debtors Bank Accounts Indirect Expense Maintain balances bill-by-bill Yes Yes Yes Yes No No Inventory values are affected No No No No No No
ii. Sales Account and Purchase Account Ledger CST Sales CST Purchases Under Sales Accounts Purchase Accounts Used in VAT returns Yes Yes VAT/Tax Class Inter-State Sales Inter-State Purchases Inventory values are affected Yes Yes
iii. CST Ledgers Ledger Under Type of Duty/ Tax CST VAT/Tax Class InterState Sales Inventory values are affected No Percentage of Calculation 4 Method of Calculation On Total Sales
CST @ 4%
Duties & Taxes
Ledger Input CST
Under Purchase Accounts
VAT/Tax Class Not Applicable
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iv. Stock Items Item Electrodes Moulding Sand Foundry Oil Steel Scrap Under Consumables Consumables Consumables Consumables Units of measures Pkt Kgs Ltrs Tons Opening Balance 25 Pkt 150 Kgs 1,500 Ltrs 20 tons Rate 900 120 210 2,210
Enter the following transactions: S No. 1. Date 4-5-09 Particulars Purchased Electrodes 60 Pkt at Rs. 900/pkt from M/s Bhim Traders vide Invoice. No. 226/09. Input CST paid @ 4%, Vat/Tax Class as Inter-State Purchase. Sold Electrodes 45 pkt at Rs. 1200/pkt to Kirti Engineering against C Form, CST @ 4% will be calculated automatically, Freight charges of Rs. 400 to be paid extra. M/s. Jaykanth Agency sold Moulding Sand 100 Kgs at Rs. 140/kgs to M/s. Shobha Fabrication Ltd Bihar, against CST Form, CST paid @ 4% extra. M/s. Jaykanth Agency despatches 1000 litres of Foundry Oil at Rs. 240/litre to their Branch in Bihar regarding Branch Transfers/ Consignment Sales against F Form. Supplied 10 tons of Steel Scrap at Rs. 2500/ton to M/s. Virendra Exports against submission of H Form vide No. 302538 dt. 27-5-09. M/s. Jaykanth Agency paid an amount of Rs. 2720 towards CST payable of April 2009 vide HDFC Cheque No. 065611 dt. 31-5-09.
2.
11-5-09
3.
15-5-09
4.
20-5-09
5. 6.
27-5-09 31-5-09
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Points to Remember
CST is levied on inter-state sales transactions. Various CST Forms are issued/ received in the course of inter-state trade which are mandatory to be produced while paying tax. Tally.ERP 9 facilitates the creation of invoice for inter-state purchase and sales with an additional field for specifying the type of Forms to be issued/ received while recording transactions. The Forms Receivable and Forms Issuable reports relating to CST for any period can be generated and printed in Tally.ERP 9.
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Lesson 10: Point of Sale (PoS)
Lesson Objectives
On completion of this lesson, you will be able to understand Configure Tally.ERP 9 to create POS Invoice Create POS invoice with / without voucher class Generate POS Invoice for single and multi-mode payment Enter zero valued entries in POS invoice Record batch-wise details in a POS Invoice Print the POS Invoice Generate and print POS Register
POS or PoS is an acronym for point-of-sale. Point of Sale can be a retail outlet, a checkout counter in a shop, or any other location where a sale transaction takes place. POS system is a computerised cash register which adds up the sales totals, calculates the balance to be returned to buyer and automatically adjusts the inventory levels to reflect the quantity sold. The equipment required for POS to work effectively are cash registers, card readers, bar-code scanners and so on. The Advantages of a Point of Sale system are : It helps to calculate sales and manage the cash drawer. It manages inventory and facilitates the barcode scanner operations. It offers a flexible and simpler way of querying your inventory and sales database. It helps you track product movement and the cost to push certain brands over others. It tracks and records the date and time of every sale made at your point of sale.
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10.1 Features of Point of Sale (PoS) in Tally.ERP 9

The Salient features Point of Sale (PoS) in Tally.ERP 9 are as follows : Generates POS Invoice with date and time of the transaction. Generates POS related reports such as Cash Registers, Sales Registers and Inventory reports. Ensures management of gift cards, vouchers, admissions, discounts and so on. Allows multiple mode of payment for a single invoice. Eases Cash and Credit/Debit transactions and tracks balances to be tendered to buyers. Provides quantified tracking of sales and promotions. Allows for real time updation of inventory and the option of quickly matching inventory with floor counts. Helps in identifying consumer-purchasing patterns. Facilitates bar-code scanning of Stock Keeping Units (SKUs) or items. Ensures multi-level security control of cash and Inventory. Increases efficiency and productivity at the point of sale. Tally.ERP 9s point of sale application can search your inventory database not only on item description or SKU but also by alias name, part number, keywords and so on. Stock summary reports can be used for viewing group-wise, category-wise, godown-wise, batch-wise and supplier-wise details of the stock items.
10.2 Configuring Point of Sale in Tally.ERP 9

Tally.ERP 9s Point of Sale module makes it easy to streamline your retail operations by automating the Check out process for your customers. It takes a one-time configuration in Tally.ERP 9 for POS features to be activated. Illustration for POS Consider M/s. City Super Market, a leading retail chain, which deals in grocery products. Create a new company City Super Market in Tally.ERP 9, maintaining Accounts with Inventory. The completed Company Creation screen appears as shown in figure.
10.2.1 Company Setup

Go to Company Info. > Create Company Create the company with the following detaills :
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Point of Sale (PoS)
Figure 10.1 Company Creation City Super Market
Press Y or Enter to accept.
10.2.2 Creating POS Voucher Type

The first step to enable POS Invoicing in Tally.ERP 9 is to create a POS Invoice Voucher Type. Using Voucher class, you can pre-define accounts, limit the list of ledgers for selection during voucher entry, automate ledger posting associated with stock items and create auto selection for duties, discounts and rounding off. Go to Gateway of Tally > Accounts Info. > Voucher Types > Create In the Voucher Creation screen, 1. 2. 3. 4. 5. 6. 7. 8. 9. Type the Name of Voucher Type as POS Invoice. Select the Voucher Type as Sales from the list of voucher types. Type the Abbreviation as POS. Method of Voucher Numbering is set by default to Automatic, but can be set to Manual or None. Set Use Advance Configuration to Yes. Tally.ERP 9 displays the Secondary Voucher Type Creation screen. Accept the default screen. Set Use EFFECTIVE Dates for Vouchers to No. Set Make Optional as Default to No. Set Use Common narration and Narration for each entry to No. Set Print after saving Voucher to Yes.
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10.Set Use for POS Invoicing to Yes and press Enter. 11.You will find two additional fields for messages and can use them as per your requirements. Type Thank You and Visit Again in the Print Message 1 and Print Message 2 fields respectively. 12.Specify the Default Print Title as INVOICE. 13.Under Declaration, you can enter the statutory declaration if applicable. The same will be printed in the Tax Invoice. For this exercise, leave it blank. 14.The Name of Class field is left blank as the Voucher Type is created without voucher class. The completed POS Invoice Voucher Type screen appears as shown.
Figure 10.2 Voucher Type Creation POS Invoice
15.Press Y or Enter to Accept.
10.2.3 Creating Leders

Create sales and purchases ledgers in the books of M/s. City Super Market. Go to Gateway of Tally > Accounts Info. > Ledgers > Create Ledger Purchases Sales Under Group Purchase Accounts Sales Accounts Inventory Values are Affected Yes Yes
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i. Creating Stock Items Create stock items with standard price. To set standard rates for stock items, set Allow Std. Rates for Stock Items to Yes in F12: Configure Accts/Inventory Info. Go to Gateway of Tally > Inventory Info. > Stock Items > Create 1. Name: Olive Oil 2. Under: FMCG. (Press ALT+C to create stock group FMCG under primary) 3. Units: Bottle. (Press ALT+C to create a simple unit of measure Bottle) 4. Set Standard Rates?: Yes. Tally.ERP 9 displays a screen where the standard rates can be specified. Applicable from: 1-4-2009. Under Standard Cost, specify the rate as 125 and under Standard Selling Price specify the rate as 150. The Standard Rates screen appears as shown :
Figure 10.3 Setting Standard Rates
5. Press Y or Enter to accept the standard rate settings. The completed Stock Item creation screen displays as shown.
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Figure 10.4 Stock Item Creation Olive Oil
Press Y or Enter to accept the stock item creation screen.

To view the field Set Standard Rates, set Allow Standard Rates for Stock Items to Yes in F12: Configure. In the alias column, the bar code details can be captured by simply scanning the bar code of the stock item using a bar code reader.
10.3 Entering POS Transactions

Let us consider the following transactions to illustrate Point of Sale in Tally.ERP 9.
10.3.1 Creating Purchase Invoice

On 1-4-2009, City Super Market purchased the following item. Name of Item Olive Oil Quantity 100 Rate 125 Amount 12,500
i. Make an entry of the transaction in a purchase voucher.

In F11: Features (Inventory Features), set Maintain Multiple Godowns to Yes.
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6. Name of item: Olive Oil, Tally.ERP 9 displays the Item Allocation for Olive Oil screen Enter the details as shown in the table. Name of Item Olive Oil Quantity 100 Rate 125 Per Bottle Amount 12,500
7. Press Enter, Tally.ERP 9 displays the Accounting Details for Olive Oil screen 8. Accept the default screen. The completed Purchase Voucher creation screen displays as shown.
Figure 10.5 Purchase Voucher creation Completed
9. Press Y or Enter to accept.
10.3.2 Creating POS Invoice with Single Payment Mode

On 6-4-2009, City Super Market sold the following item : Name of Item Olive Oil The customer pays Rs. 1,500 by cash. Quantity 9 Rate 150 Amount 1,350
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i. Make an entry of the transaction in a sales voucher. Go to Gateway of Tally > Accounting Vouchers > F8: Sales 1. Select the voucher type as POS Invoice. 2. Click on the button Single Mode Payment on the vertical button bar.
By default, for the first time, the POS Invoice screen will appear in Single Mode Payment.
3. Press F2 and change the date to 6-4-2009. 4. Enter the POS Invoice No. 5. Select the Godown as Main Location.
Set Allow Party Details in POS Invoice to No in POS Invoice Configuration
6. Select the sales ledger as Sales. 7. Select the Name of Item as Olive Oil. 8. (Alternatively, the bar code on the stock item can be scanned with the help of the bar code reader and all the details are captured automatically. This is useful when there are numerous stock items and manual entry of each item proves to be a time consuming task.) 9. By default, Tally.ERP 9 displays the rate and amount for one unit of the stock item selected. To change the quantity, use the backspace key to shift the cursor on to the quantity column. Type 9 and press Enter to update the rate and amount details.
If Set Standard Rates is activated, Tally.ERP 9 does not allow manual entry of rate for stock items.
10. In the columns pertaining to payment details, Tally.ERP 9 shows the amount receivable, 1,350. In the field Cash Tendered, enter the cash tendered by the customer, which is 1,500. Tally.ERP 9 automatically calculates and displays the balance amount to be refunded as 150 in the Balance field. 11. Enter the narration if required.
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The completed POS Invoice screen displays as shown.
Figure 10.6 POS Invoice Single Mode Payment
12.Press Y or Enter to accept the screen. 13.On saving the voucher, Tally.ERP 9 asks for a confirmation to print the invoice. 14.Press N or ESC to reject
10.3.3 Creating POS Invoice with Multiple Payment Mode

On 9-4-2009, City Super Market sold the following item. Name of Item Olive Oil Quantity 12 Rate 150 Amount 1,800
The customer pays Rs.900 by credit card, Rs.750 by cheque and Rs.150 by cash i. Make an entry of the transaction in a sales voucher. Go to Gateway of Tally > Accounting Vouchers > F8: Sales 1. Select the voucher type as POS Invoice. 2. Press F2 and change the date to 9-4-2009. 3. Enter the POS Invoice No.
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Point of Sale (PoS)
4. 5. 6. 7. 8. 9. 10.
Select the Godown as Main Location. Click on the button Multi Mode Payment on the vertical button bar. Select the sales ledger as Sales. Select the Name of Item as Olive Oil. Quantity: 12 Bottles Tally.ERP 9 calculates and displays the rate and amount details. In the columns pertaining to payment details make the following entries. Gift Vouchers: Payment received through gift vouchers is entered here. Select Not Applicable. Credit/Debit Card Payment: Select the name of the bank with which you have the arrangement for collecting the card receivables. Select HDFC Bank. (Press ALT+C to create the ledger HDFC Bank - under Bank Accounts). The amount is automatically filled with the amount of the invoice 1,800, type 900. This will prompt you to enter the card number. Type 5425051703594662 and press Enter. Cheque: Enter the name of the bank in which you deposit the cheques. Select HDFC Bank. The amount column is automatically filled with the balance amount receivable, Type 750 and press Enter. This will take you to the column Bank Name. Enter the name of the bank on which the cheque has been drawn. Type Citibank.Tally.ERP 9 prompts you to fill in the cheque no. Type 653114 and press Enter. Cash: Select the ledger Cash (pre-defined). Tally.ERP 9 automatically fills the balance amount receivable, 150. Enter the cash tendered by the customer, which is 200. Tally.ERP 9 automatically calculates and displays the balance amount to be refunded as 50. 11. Skip the narration field by pressing Enter. The completed POS Invoice screen displays as shown.
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Point of Sale (PoS)
Figure 10.7 POS Invoice Sales
12. Press Y or Enter to accept the screen. 13. On saving the voucher, Tally.ERP 9 asks for a confirmation to print the invoice. 14. Click With Preview button to see a preview of the invoice and press Enter. The printed POS Invoice will appear as shown.
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Figure 10.8 POS Invoice
You can configure the printer to alter paper dimensions. The standard paper size for a POS invoice is 4 inches by 11 inches. To accelerate the process of recording the sales invoice entries, create a voucher class by specifying the default ledger allocations for the payment details. If voucher classes are defined, Tally.ERP 9 will automatically display the ledger accounts for gift vouchers/ card/ bank/ cash in the POS Invoice.
10.3.4 Creating POS Invoice using Voucher Class

On 18-4-2009, City Super Market sold the following item : Name of Item Milk 500ML Qty 10 Rate 95 VAT 12.5% Amount 1,068.75
The customer submits Sodexo Gift Voucher worth Rs.250, pays Rs. 600 by credit card and Rs.218.75 by cash
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Point of Sale (PoS)
In Tally.ERP 9, you can create a voucher type with voucher class as shown :
In F11: Statutory and Taxation Features, Set Enable Value Added Tax (VAT) to Yes Set Set/Alter VAT Details to Yes In the Company VAT Details screen, Select State as Karnataka Type of Dealer as Regular Regular VAT Applicable from 1-4-2009 Fill in the Tax Information as applicable.
i. Create Voucher Type POS Invoice with Class Go to Gateway of Tally > Accounts Info. > Voucher Types > Create 1. Type the name of the Voucher Type as POS Invoice with Class. 2. Select the Voucher Type as Sales from the List of Voucher Types. 3. Type the Abbreviation as POS. 4. Method of Voucher Numbering is set by default to Automatic, but can be set to Manual or None. 5. Set Use Advance Configuration to No. 6. Set Use EFFECTIVE Dates for Voucher to No. 7. Set Make Optional as Default to No. 8. Set Use Common narration and Narration for each entry to No. 9. Set Print after saving Voucher to Yes. 10. Set Use for POS Invoicing to Yes and press Enter. 11. You will find two additional fields for messages and can use them as per your requirements. Type Thank You and Visit Again in the Print Message 1 and Print Message 2 fields respectively. 12. Specify the Default Print Title as INVOICE. 13. Under Declaration, you can enter the statutory declaration if applicable. The same will be printed in the Tax Invoice. 14. Mention the Name of Class as POS Invoice and press Enter to view the Voucher Class screen.
The options to enable various Multi-mode Payment Ledgers are set to Yes by default. But you need to create necessary ledger as applicable. The ledgers Sodexo Gift Coupons and Citibank have not been created before. You need to create the ledgers Sodexo Gift Coupons under Sundry Debtors and Citibank under Bank Accounts in secondary ledger creation mode.
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Point of Sale (PoS)
15.Enter the details as given in the table Default Ledger Accounts for POS Invoice Gift Vouchers Credit/Debit Card Payment Cheque/DD Cash Enable Yes Yes Yes Yes Ledger Name Sodexo Gift Coupons Citibank HDFC Bank Cash
16. Under Default Accounting Allocations for each Item in Invoice enter the following details. Ledger Name: Create Ledger Sales @ 12.5% under Sales Account by selecting the appropriate VAT/Tax Class. VAT/Tax Class: Sales @ 12.5% Percentage %: 100 The options Rounding Method and Rounding Limit are automatically skipped. Override using Item Default: No 17. Under Additional Accounting Entries to be added in Invoice, enter the following details. Ledger Name: Create ledger Output VAT @ 12.5% under Duties and Taxes. Select the Type of Duty/Tax as VAT and VAT/Tax Class as Output VAT @ 12.5%. Type of Calculation: On VAT Rate Value Basis:12.5% Rounding Method: Not Applicable Rounding Limit: Automatically Skipped Remove if Zero: Yes
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Point of Sale (PoS)
The resultant screen displays as shown.
Figure 10.9 Voucher Type Class
18. Accept to save the Voucher Type Class creation screen. 19. Press Y or Enter to accept the Voucher Type creation screen. ii. Create Stock Item Milk 500ML under FMCG with opening balance of 50 Nos. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Name: Milk 500ML alias: Leave it blank Under: FMCG Units: Nos Alter Standard Rates ?: Yes The Standard Rates screen for Milk 500ML displays. Set the Standard Cost as Rs.75 per Nos and Standard Selling Price as Rs.95 per Nos, all applicable from April 2009. Under Tax Information, enter the Rate of VAT(%) as 12.50 Enter the quantity as 50. Tally.ERP 9 displays the Stock Item Allocation of: Milk 500ML. Select the Godown as Main Location and Quantity as 50 Nos. Leave the other fields blank. Accept the screen to complete stock item creation.
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Point of Sale (PoS)
iii. Make an entry of the transaction in a Sales Voucher. Go to Gateway of Tally > Accounting Vouchers > F8: Sales Voucher 1. Select the voucher type as POS Invoice with Class. 2. Select Voucher Class as POS INVOICE The screen displays as shown.
Figure 10.10 Selection of Voucher Class
3. Press F2 and change the date to 18.4.2009 4. Tally.ERP 9 displays the Godown as Main Location. 5. Name of Item: Milk 500ML 6. Quantity: 10 Nos Tally.ERP 9 automatically calculates and displays the Rate, Amount and VAT details. 7. Enter the payment details as follows : Ledger Sodexo Gift Coupons Citibank HDFC Bank Cash Amount 250 600 ----218.75 Other Details Card No.: 5712854711219030 ----Cash Tendered: 300 (Tally.ERP 9 calculates and displays the balance amount 81.25)
The completed POS Invoice with class screen displays as shown.
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Point of Sale (PoS)
Figure 10.11 POS Invoice with Voucher Class
8. Press Y or Enter to accept the screen. Tally.ERP 9 takes you to the Voucher Printing screen. Click on the With Preview button and press Enter. The printed POS Invoice displays as shown.
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Point of Sale (PoS)
Figure 10.12 POS Invoice with VAT Details Printed
10.4 POS Reports

10.4.1 POS Register
POS Register provides the list of Invoices. These Vouchers are collated and listed together for a period to give meaningful information. Each POS Invoice is further drilled down to obtain the lowest level of information. To view the list of POS Invoice Statement, Go to Gateway of Tally > Display > Accounts Books > POS Register Click F1: Detailed
POS Register option will appear, only if the option Use for POS Invoicing is activated in Voucher Type and at least one entry has been made.
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Point of Sale (PoS)
The POS Register displays as shown.
Figure 10.13 POS Register - Detailed
You can also view the inventory details in POS Register by setting Show Inventory Details also to Yes in F12: Configure.
To print the POS Register, press Alt+P. The printed POS Register displays as shown.
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Point of Sale (PoS)
Figure 10.14 POS Register Printed
POS Invoicing can also be used for billing Pharmaceutical products in the following manner. Set Use Security Control to Yes in Company Creation/Alteration screen and create the user login name using the security feature in Tally.ERP 9. The user who logs in to Tally.ERP 9 with the name of the user and password can print the POS Invoice with the user name. Set Maintain Batch-wise Details and Set Expiry Dates for Batches to Yes in the F11:Features screen. Set Use different Actual & Billed Quantities to Yes in F11: Features screen to specify the free items. Set Separate Discount column on Invoices to Yes to specify the discount on any items while making a POS sales invoice.
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Points to Remember
POS, an abbreviation for Point-of-Sale can mean a retail shop, a checkout counter in a shop, or a variable location where a sales transaction occurs. Tally allows the generation of POS Invoice with / without the use of a voucher class. In single-mode payment, the POS invoice will consist of only fields petaining to cash. In multi-mode payment, any number of modes can be created for recording the amount received from the customer. The POS invoice will display the amount allowed as a discount with a negative sign. The POS invoice will display the rate as 0 when the items are given free of cost to the customer. When items with batch details are sold the same is displayed in the POS invoice.
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Lesson 11: Job Costing
Lesson Objectives
On completion of this lesson, you will be able to Enable and capture job costing details in Tally.ERP 9 Record the consumption of materials for each job Generate the report for jobs carried out in multiple godowns Compare and analyse jobs done
Job Costing applies to specific jobs undertaken according to customer requirements and specifications. Tally.ERP 9 enables the tracking of cost and revenue information down to the smallest detail. In order to determine the actual costs incurred, every job is assigned a job number or a job name. Job costing systems determine the costs separately for each product or service, based on the jobs undertaken. In a typical job costing environment: Many non-standard (customised) products/ service are produced/ rendered. Orders are executed based on customer requirements. Cost records are maintained for each distinct job. Costs are traced or allocated to jobs. The advantages of Job Costing are as follows. Costs can be alloted to each element while the job is in progress. On the completion of a job, each element of cost, selling price and profit can be compared with estimates made earlier and other similar jobs. Suitable methods can be used to determine the price on a cost plus contract basis.
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11.1 Configuring Job Costing In Tally.ERP 9

Let us consider Computer Associates to understand the Job Costing feature of Tally.ERP 9. Computer Associates supplies computers configured as per customer requirements and upgrades old computers.

Create a company called Computer Associates as shown below : The completed Company Creation screen appears as shown below:
Press Y or Enter to accept the company creation screen. Computer Associates received two orders from SimplyC Solutions to upgrade existing systems and deliver new systems. The order details are given in the table. S.No 1. 2. Order Description Servicing and Upgrading of existing machines. Installing new systems as per specifications Terms of Contract Lump sum contract, inclusive of replacement of parts Rate contract based on requirement of systems Amount 3,75,000 20,000
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Job Costing
Other Details The company has given the servicing and upgrading job collectively to Raj and Archana. The Service Charges amounts to Rs. 62,500 and Travel Expenses for visits made onsite are Rs. 25,000 The company has given the job of installing new systems job to Rajesh Service Charge Rs. 62,500 and Travel Expenses for visits made onsite-Rs. 25,000 The company has a stores godown and regularly purchases items from Reliable Computers.
11.1.2 Enabling Job Costing in Tally.ERP 9

In the F11: Features (Accounting Features), Set Maintain Cost Centres to Yes. Set Use Cost Centre for Job Costing to Yes. The Accounting Features screen appears as shown below:
Figure 11.2 Accounting Features screen
Press F2: Inventory Features and Set Maintain Multiple Godowns to Yes.
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Job Costing
Set Track Additional Costs of Purchase to Yes. Set Use Tracking Numbers to Yes. The Inventory Features screen appears as shown below:
Figure 11.3 Inventory Features screen
Press Y or Enter to accept the Inventory Features screen.
11.2 Creating Masters for Job Costing

The masters required for Job costing are as follows: Cost centres used for job costing. Sales or direct income accounts related to job revenue. Direct and Indirect expenses related to job costs. Suppliers, vendors and other party account. Godowns dedicated to specific jobs necessary to assess stock consumption. Stock items. Voucher types and classes for stock transfer, consumption.
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Job Costing
11.2.1 Creating Jobs as Job Cost Centres

Each job is identified with a name or number and this is used while creating the cost centre for the job. Create Upgrading Job as a Job Cost Centre under Primary. Go to Gateway of Tally > Accounts Info. > Cost Centres > Single Cost Centre > Create 1. Name: Upgrading Job 2. (alias): Skip field 3. Under: Select Primary from List of Cost Centres 4. Use for Job Costing: Yes The completed Cost Centre Creation screen appears as shown below:
Figure 11.4 Cost Centre Creation Upgrading Job
5. Press Y or Enter to accept the screen Similarly, create the following Cost Centres Name New Systems Job Retail Trade Alias Skip Field Skip Field Under Primary Primary Use for Job Costing Yes No
The Parallel allocation of cost to regular cost centres takes place when more than one cost category is enabled.
11.2.2 Creating Ledgers

Create the following ledger, Name Under Inventory values are affected Yes Cost Centres are applicable Yes
Purchase
Purchase Accounts
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Job Costing
The completed ledger creation screen appears as shown below:
Figure 11.5 Ledger Creation Purchases
Press Y or Enter to accept the screen. Similarly, create the following ledgers: Name Under Maintain balances bill-by-bill Yes Inventory values are affected Yes No No No Cost Centres are applicable Yes Yes Yes No
Sales Service Charges Travel Expenses Reliable Computers
Sales Accounts Direct Expenses Indirect Expenses Sundry Creditors
Create a Capital Account under the Capital Account group and enter Rs.10,00,000 as the Opening Balance for the Capital and alter the Cash account to a opening balance of Rs. 10,00,000.
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11.2.3 Creating Godowns dedicated to jobs

Godowns are geographical locations or persons responsible for stock handling. Whereas, Dedicated Godowns are created to keep track of stocks transferred, consumed and manufactured for each job.
In this lesson, godowns have been created in the names of persons responsible for stock handling.
Create a Dedicated Godown allotted to holding stocks for a default job and a normal Godown, used regularly and not assigned to any particular job. Create Stores godown Go to Gateway of Tally > Inventory Info. > Godowns > Create 1. 2. 3. 4. 5. Name: Stores (alias): Skip field Under: Primary Allow Storage of materials: Yes Set Job/Project Name for Job Costing: Not Applicable
Figure 11.6 Godown Creation Stores
6. Press Enter twice to accept the screen. Similarly, create the following Godowns with the details given below: Godown Name Raj Archana Rajesh Under Primary Primary Primary Allow Storage of materials Yes Yes Yes Default Job Name Upgrading Job Upgrading Job New Systems Job
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Job Costing

A Unit of Measure is created to measure the stock items. Create Units of Measure as Numbers Go to Gateway of Tally > Inventory Info. > Units of Measure > Create Ensure that the details are as shown in the following screen:
Figure 11.7 Unit Creation Numbers
11.2.5 Creating Stock Item

i.Create stock item as Mother Board Go to Gateway of Tally > Inventory Info. > Stock Items > Create 1. 2. 3. 4. 5. 6. Name: Mother Board (alias): Skip field Under: Select Primary from List of Groups Units: Select Nos from Units list Rate of Duty: Skip Field Opening Balance: Do not enter any details
The completed stock item creation screen appears as shown below :
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Job Costing
Figure 11.8 Stock Item Creation Mother Boards
7. Press Y or Enter to accept the screen. ii. Similarly, create the following Stock Items. Stock Item Hard Disk Monitor CPU Keyboard Mouse Under Primary Primary Primary Primary Primary Units Nos Nos Nos Nos Nos
iii. Creating Stock Item with Bill of Materials Go to Gateway of Tally > Inventory Info. > Stock Items > Create 1. Name: Computers 2. Press F12: Stock Item Configuration, Set Allow Component list details (Bill of Materials) to Yes The F12: Stock Item Configuration screen appears as shown below :
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Figure 11.9 F12: Configuration
Accept the screen. 3. 4. 5. 6. 7. Under: Select Primary from the List of Groups Units: Select Nos from the Units list Set Components (BoM) to Yes Rate of Duty: Skip Field In the List of Components screen, Define the Unit of Manufacture as 1 Type the name of the components and godown details as given in the following table: Item Monitor CPU Keyboard Mouse Godown Rajesh Rajesh Rajesh Rajesh Qty (Nos) 1 1 1 1
The Components details screen appears as shown below :
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Figure 11.10 Components List
New systems jobs are despatched from the Rajesh Godown.
8. Rate of Duty: Skip Field The completed stock item creation screen appears as shown below:
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Figure 11.11 Stock Item Creation Computers
11.2.6 Creating Voucher Type with Voucher Class

In Tally.ERP 9, stock journals are used for the following purposes: To record the stages in the manufacturing process. To record the transfer of materials between godowns. To record the consumption of materials for Job Costing. Create one new Voucher Type and two Voucher Classes to deal with the scenarios in a manufacturing as well as non-manufacturing environment. i. Create Manufacturing Journal Voucher Type Go to Gateway of Tally > Inventory Info. > Voucher Types > Create 1. 2. 3. 4. 5. 6. Enter Manufacturing Journal as Name of the Voucher Type. Select the Type of Voucher as Stock Journal from the list of voucher types. Type the Abbr. as Mfg. Select the Method of Voucher Numbering as Automatic. By default Use Common narration is set to Yes. Set Use as a Manufacturing Journal to Yes.
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Job Costing
The completed Voucher Type creation screen appears as shown below:
Figure 11.12 Voucher Type Creation Manufacturing Journal
7. Press Y or Enter to accept the screen. ii. Create Transfer Journal Voucher Type with Voucher Class Go to Gateway of Tally > Inventory Info. > Voucher Types > Create 1. 2. 3. 4. 5. 6. 7. Enter Transfer Journal as Name of the Voucher Type. Select the Type of Voucher as Stock Journal from the list of voucher types. Type the Abbr. as Transfer. Select the Method of Voucher Numbering as Automatic. By default Use Common Narration is set to Yes. Set Use as a Manufacturing Journal to No. Type the Name of Class as Transfer
Voucher classes are available when stock journals are not used as manufacturing journals. The options available are as follows: Use class for inter Godown transfers : Create this class to record transfer of materials from one godown to another. Use class for Job Costing consumption : Create this class to record the consumption of materials at godown level.
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Job Costing
8. Press Enter and set Use Class for Inter-Godown Transfers to Yes.
Figure 11.13 Transfer Class
The completed Voucher Type Creation screen appears as shown below:
Figure 11.14 Voucher Type Creation Transfer Journal
9. Press Y or Enter to accept the screen. iii. Create Consumption Journal Voucher Type Go to Gateway of Tally > Inventory Info. > Voucher Types > Create 1. 2. 3. 4. 5. 6. 7. Enter Consumption Journal as Name of the Voucher Type. Select the Type of Voucher as Stock Journal from the list of voucher types. Type the Abbr. as Consumption. Select the Method of Voucher Numbering as Automatic. By default Use Common Narration is set to Yes. Set Use as a Manufacturing Journal to No. Type the Name of Class as Consumption.
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Job Costing
8. Press Enter. Set Use Class for Inter-Godown Transfers to No and set Use Class for Job Costing Consumption to Yes.
Figure 11.15 Consumption Class
The completed Voucher Type Creation screen appears as shown below :
Figure 11.16 Voucher Type Creation Consumption Journal
11.3 Recording Transactions

On the receipt of orders from SimplyC Solutions, Computer Associates planned to buy and store the components required for the execution of jobs.
11.3.1 Creating Receipt Note

On 1-4-09, Computer Associates, placed an order with Reliable Computers for the following items :
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Job Costing
Name of Item Mother Boards Hard Disk Mointors CPU Keyboard Mouse i. Create Receipt Note
Quantity 12 12 22 22 27 27
Rate per Unit 3,000 4,500 7,500 2,750 725 250
Value 36,000 54,000 1,65,000 60,500 19,575 6,750
In the F11: Inventory Features, set Yes to Use Tracking Numbers (Delivery/Receipt Notes) and Use Rejection Inward/ Outward Notes.
Go to Gateway of Tally > Inventory Vouchers > Alt + F9 to view Receipt Note entry screen 1. Press F2 to change voucher date. Type 1-4-2009. 2. In the Partys A/c Name select Reliable Computers from the List of Ledgers Accounts. 3. Press Enter to view the order details screen and accept the default screen. 4. In the Purchase Ledger field, select Purchases from the List of Ledger Accounts. 5. Select Mother Boards from List of Items. 6. The Item Allocation screen appears. Enter the details as shown below: Tracking No Select 1 (from List of Tracking Numbers) Godowns Stores Quantity 12 Nos Rate 3,000 Amount 36,000
Tracking Numbers Many businesses deliver stock with a delivery note or a challan and the bill is raised later. There may be a situation where a bill is raised first and the goods are delivered against it or the goods are received later against a purchase bill. In either case, it is important to track the delivery or receipt of inventory against the bill. Tally.ERP 9 provides a facility called Tracking Numbers to achieve the same.
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Job Costing
The completed Receipt Note appears as shown below :
Figure 11.17 Receipt Note April 1, 2009
7. Press Y or Enter to accept the screen

On 2-4-09, received a purchase bill from Reliable Computers for the supply booked. Create Purchase Invoice Go to Gateway of Tally > Accounting Vouchers > F9: Purchase 1. 2. 3. 4. 5. 6. Press F2 and change the date to 2-4-2009. Enter the Supplier Invoice No. and Date. In the Partys A/c Name select Reliable Computers from the List of Ledgers Accounts. In the Receipt Details screen, select 1 from the List of Tracking Numbers. In the Purchase Ledger field select Purchases from the List of Ledgers Accounts. In the Bill-Wise Details screen, Select New Ref Type the name as RC1 Enter the amount as Rs. 341825
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Job Costing
The completed Purchase Invoice appears as shown below:
Figure 11.18 Purchase Invoice April 2, 2009
If the Bill-wise Allocation screen does not appear then in F12: Configuration set Use Defaults Bill for Allocations to No.
7. Press Y or Enter to accept the screen. View Godown Summary Go to Gateway of Tally > Display > Statements of Inventory > Godowns Select Primary Press Alt+F1 to view the Godown Summary of Stocks. The Godown Summary appears as shown below:
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Figure 11.19 Godown Summary
11.3.3 Creating Transfer Journal

Computer Associates has employed Raj and Archana. The following components have been issued to them on 4-4-2009 for the upgrading job. Details of Stock issued to Raj : Name of Item Mother Boards Hard Disk Godown Stores Stores Quantity 6 6 Rate 3,000 4,500 Value 18,000 27,000
Details of Stock issued to Archana : Name of Item Mother Boards Hard Disk Godown Stores Stores Quantity 6 6 Rate 3,000 4,500 Value 18,000 27,000
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Job Costing
Create Transfer Journal Go to Gateway of Tally > Inventory Vouchers > press Alt + F7 1. The Voucher Type subscreen appears as shown:
Figure 11.20 Voucher Type Transfer Journal
2. 3. 4. 5.
Select Transfer Journal as Voucher Type and Class as Transfer Press F2 and change the date to 4-4-2009. Select Raj as the Destination Godown Enter the details as shown below : Name of Item Mother Boards Hard Disk Godown Stores Stores Quantity 6 6 Rate 3,000 4,500 Value 18,000 27,000
The completed Transfer Journal appears as shown below :
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Figure 11.21 Transfer Journal April 3, 2009
6. The Rate and Amount are automatically displayed. 7. Press Y or Enter to accept the screen. Similarly, make an entry in a Transfer Journal, selecting Archana as the Destination Godown and ensure that the date is 4-4-2009.
11.3.4 Creating Consumption Journal

On 5-4-2009, Raj and Archana found that 8 Systems needed a replacement of Mother Boards and Hard Disk. The respective consumption has to be recorded as a job cost. Name of the Item Mother Boards Mother Boards Hard Disk Hard Disk Create Consumption Journal
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Godown Raj Archana Raj Archana
Quantity 4 4 4 4
Rate 3,000 3,000 1,000 1,000
Value 12,000 12,000 4,000 4,000
Job Costing
Go to Gateway of Tally > Inventory Vouchers > press Alt + F7 1. Select Consumption Journal as Voucher Type 2. Select Consumption as Voucher Class 3. Press F2 to change the voucher date. Type 5-4-2009. Ensure that the screen is displayed as shown:
Figure 11.22 Consumption Journal April 5, 2009
On recording the above entry, the stock available in the godowns decrease. This value is considered for the consumption of materials during a job work analysis. A Manufacturing Journal can also be used to obtain the same result, but in this, a voucher class cannot be used and the voucher should not have any output.
Both direct and indirect expenses can be recorded through accounting vouchers by assigning them to job cost centres.
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Job Costing
11.3.5 Creating Payment Voucher

On 6-4-09, Computer Associates made a cash payment of Rs. 31,250 as Service Charges and Rs. 20,000 as Travel Expenses, collectively to Raj and Archana. The costs were assigned to Upgrading Job. Create Payment Voucher Go to Gateway of Tally > Accounting Vouchers > F5: Payment
In F12 : Configuration, set Use Single Entry Mode for Pymt/Rcpt/Contra to Yes.
1. 2. 3. 4. 5.
Select Cash in the Account field. Select Service Charges from List of Ledger Accounts. Enter 31,250 in the Amount field Press Enter to view the Cost Allocations screen Select Upgrading Job from List of Cost Centres
Figure 11.23 Cost Allocations for Service Charges
6. Select Travel Expenses from List of Ledger Accounts, enter 20000 in the Amount field and press Enter to view the Cost Allocations screen. 7. Select Upgrading Job from List of Cost Centres. 8. Press Y or Enter to accept the screen. View Godown Summary Go to Gateway of Tally > Display > Statement of Inventory > Godowns >
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Job Costing
Select Primary Press Alt+F1 to view the Godown summary in detailed format. In the F12: Configuration, set Show All Items (incl. zero balance) to Yes.
Figure 11.24 Godown Summary
11.3.6 Creating Sales Invoice

On 6-4-2009, Raj and Archana successfully completed the upgrading job at SimplyC Solutions. Computer Associates raised an invoice on 6-4-2009 for the upgrading job. Create Sales Invoice : Go to Gateway of Tally > Accounting Vouchers > F8: Sales
In the F12: Configuration, set Use Common Ledger A/c for Item Allocation to No.
1. In the Partys A/c Name select SimplyC Solutions from the List of Ledger Accounts. 2. Press Enter to view the Despatch Details screen and accept the default screen.
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Job Costing
3. Select Sales from List of Ledger Accounts, enter 3,75,000 in the Amount field and press Enter once to view Cost Allocations for the Sales screen. 4. Select Upgrading Job from List of Cost Centres. 5. In the Bill-Wise Details for SimplyC Solutions, Select New Ref Type the Name as SS-1 Enter the amount as Rs. 4,25,000 6. Press Y or Enter to accept the screen.
11.3.7 Creating Stock Journal for Returns of Materials

On 6-4-2009, Raj and Archana return the remaining components to the stores having completed the job. Name of the Item Mother Boards Hard Disk Mother Boards Hard Disk Create Stock Journal Ensure that the Voucher Type is Transfer Journal and the Voucher Class is Transfer. Enter the details as shown Godown Raj Raj Archana Archana Quantity 2 2 2 2 Rate 3,000 4,500 3,000 4,500 Amount 6,000 9,000 6,000 9,000
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Job Costing
Figure 11.25 Transfer Journal April 6, 2009

i. The stock value remains the same, since there is no consumption involved in the process of transfer of material. T ii. he job work analysis will indicate a reduction of stock in the Godown from which the transfer was made.
View Godown Summary Go to Gateway of Tally > Display > Statements of Inventory > Godowns Select Primary Press Alt+F1 to view the Godown summary in detailed format. In F12: Configuration set Show All Items (incl. zero balance) to Yes.
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Figure 11.26 Godown Summary at the end of Upgrading Job
Practice Exercise Similarly, let us record transactions for New Systems Job. 1. On 7-4-2009, the following components are issued to Rajesh from the stores. This is for the installation of New Systems for SimplyC Solutions. The details of Stock issued to Rajesh are given below: Name of the Item CPU Monitor Keyboard Mouse Godown Stores Stores Stores Stores Quantity 15 15 15 15 Rate 2,750 7,500 725 250 Value 41,250 1,12,500 10,875 3,750
i. Make an entry of the following transaction in Stock Journal.
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Job Costing
Ensure that the Voucher Type is a Transfer Journal and the Voucher Class is Transfer.
Select the Destination Godown as Rajesh. Ensure the entry is as shown in the following table: Name of the Item CPU Monitor Keyboard Mouse Godown Stores Stores Stores Stores Quantity 15 15 15 15 Rate 2,750 7,500 725 250 Value 41,250 1,12,500 10,875 3,750
2. Using the above components, Rajesh produced 15 computer systems on 8-4-2009. A manufacturing entry was passed when the components were converted into fully assembled computer systems for the job.
Once the entry is passed: The quantities of components get reduced from one godown while the quantity of assembled product increases in another. The aggregate value of the consumed components from each Godown will be taken as the consumption value for job work analysis. The value of the finished product (assembled computer systems) is considered as inward.
i. Make an entry of the transaction in a Manufacturing Journal. Go to Gateway of Tally > Inventory Vouchers > Alt + F7: Select the Voucher Type as Manufacturing Journal Enter the details as shown below:
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Job Costing
Figure 11.27 Manufacturing Stock Journal April 8, 2009
Press Y or Enter to accept the screen. ii. View Godown Summary Go to Gateway of Tally > Display > Statements of Inventory > Godowns > Primary Press Alt+F1 to view the report in detailed format.
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Job Costing
Figure 11.28 Godown Summary after Manufacturing of Systems
3. On 8-4-2009, Computer Associates paid Rajesh Service charges of Rs. 31,250 and Travel Expenses of Rs. 20000. i. Make an entry of the transaction in Payment Voucher Select Cash in the Account field. Select Service Charges and enter the amount as Rs. 31250. Press Enter once to view Cost Allocation for the Service Charges screen. Select New Systems Job from List of Cost Centres and press Enter once. Select Travel Expenses and enter the amount as Rs. 20000 and press Enter once to view Cost Allocation for the Travel Expenses screen. Select New Systems Job from List of Cost Centres. Press Y or Enter to accept the screen.
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Job Costing
4. On 8-4-2009, Rajesh delivered 15 new systems to SimplyC Solutions. The agreed price was Rs. 20000 per system. i. Make an entry of the following transaction in Delivery Note Go to Gateway of Tally > Inventory Vouchers > Alt + F8: Delivery Note
In the F12: Configuration, set Use Common Ledger A/c for Item Allocation to Yes.
In the Partys A/c Name select SimplyC Solutions from the List of Ledger Accounts. Press Enter to view the Order Details screen and accept the default screen. Select Computers from List of Items and press Enter once to view the Item Allocation screen for computers. Select Tracking No: 1 and accept the Item Allocation screen. Ensure that the Item Allocation screen for computers is as shown: Godown Rajesh Quantity 15 Nos Rate 20,000 Amount 3,00,000
Select Sales in the Sales Ledger field. Press Y or Enter to Accept the Delivery Note. 5. On 8-4-2009, Computer Associates raises a sales invoice of Rs. 3,00,000 at the rate of Rs. 20,000 per system for 15 New systems delivered by Rajesh. i. Make an entry of the transaction in a sales item invoice.
In the F12: Configuration, set Common Ledger A/c for Item Allocation to No.
In the Partys A/c Name select SimplyC Solutions from the List of Ledger Accounts. In the Despatch Details screen, select Delivery Note No. 1 and accept the default details. The Item, Quantity, Rate and Amount fields are updated automatically. Accept the default Item Allocation screen. In the Accounting details screen select Sales from List of Ledger Accounts.
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Job Costing
In the Cost Allocation for Sales screen, select New Systems Job. In the Bill-Wise Details screen, select the New Ref and enter the Name as SS-2. Enter the amount as Rs. 300000. Press Y or Enter to accept the screen. ii. View Godown Summary Go to Gateway of Tally > Display > Statements of Inventory > Godowns Select Primary Press Alt+F1 to view the report in detailed format.
Figure 11.29 Godown Summary after completion of New Systems Job
11.4 Job Costing Reports

Job Work Analysis can be viewed for jobs resulting in deliverable products in the same way as for jobs resulting in deliverable services. Tally.ERP 9 povides following Job work related reports to analyse cost and revenue accumulated for any particular job at any given stage viz., Job Work Analysis Report Material Consumption Summary
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Job Costing
11.4.1 Job Work Analysis Report

Go to Gateway of Tally > Display > Statement of Accounts > Job Work Analysis Select the Upgrading Job to view the Job Work Analysis report for Upgrading Job The Job Work Analysis report of Upgrading Job appears as shown :
Figure 11.30 Job Work Analysis Upgrading Job
11.4.2 Material Consumption Summary

A Material consumption summary is a report that reflects the total material consumed from a godown alloted for a job. To arrive at the Material Consumption Summary Go to Gateway of Tally > Display > Statement of Accounts > Job Work Analysis Press Enter on Consumption The Material Consumption Summary is displayed as shown below:
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Figure 11.31 Material Consumption Summary
11.4.3 Godown Summary

To view Godown summary, press Enter on the required Godown
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Job Costing
Figure 11.32 Godown Summary Archana
The Godown Summary viewed through the menu, displays all godowns whereas the Godown Summary viewed by drilling down from Job Work Analysis report, displays only the godowns specific to the job.
To view Job Work Analysis report of New Systems Job, Go to Gateway of Tally > Display > Statement of Accounts > Job Work Analysis Select New Systems Job The Job Work Analysis report of New Systems Job appears as shown :
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Job Costing
Figure 11.33 Job Work Analysis New Systems Job
Similar to the Upgrading Job, the Material Consumption Summary and the Godown Summary can be viewed, by drilling down the report.
11.4.4 Comparative Job Work Analysis

Computer Associates would like to compare the total jobs executed by them for SimplyC Solutions. Go to Gateway of Tally > Display > Statement of Accounts > Job Work Analysis > New Systems Job > Select New Column from the Buttons bar and select the Upgrading Job. Select any number of jobs as required. Press F12: Configuration and change the settings as shown below:
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Job Costing
Figure 11.34 Configuration
Accept the Configuration screen to view the summary of Jobs performed for SimplyC Solutions.
Figure 11.35 Summary of Jobs Performed for SimplyC Solutions
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Job Costing
Points to Remember
Job Costing is evaluating the cost of each specific job order. Tally.ERP 9 permits you to create a Godown / Location where you need not store materials but treat it as a virtual godown. Tally.ERP 9 allows a stock journal voucher type to be used as a manufacturing and as a non-manufacturing journal. A Manufacturing journal voucher type is used to track the list of components used, its value and the additional cost of manufacture associated with each product. A stock journal voucher type that is not used as a manufacturing journal, can be used to create voucher classes for the purpose of intergodown transfers and for job costing consumption records. There are two levels of reports generated in job costing viz., Job Work Analysis and Material Summary Report A Godown summary displays consumption and other transfer details of all the godowns.
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Lesson 12: Multilingual Capabilities
Lesson Objectives
On completion of this lesson, you will be able to understand The Multilingual capabilities of Tally.ERP 9 How to change the Interface for different languages Generating reports and invoices in different languages
The multilingual functionality of Tally.ERP 9, allows you to interact with the software in the language of your choice. It offers you tremendous freedom in communication. You can maintain your accounts in an Indian language, view them in another and print them in yet another Indian language. All Indic languages are unicode. They are presently supported only on Windows ME/ Windows NT/ Windows 2000 and Windows XP operating systems. You can enable Indic languages support at the operating system level or at the time of installing Tally.ERP 9. Salient features of Multilingual Tally.ERP 9 Tally.ERP 9 has the following salient features which makes it the most popular accounting software: Is user-friendly. Is fast and reliable. Offers concurrent multilingual support. Allows a dynamic selection of scripts. Supports flexible data input in the language of the users choice. Has easy to use keyboards layouts inscript as well as phonetic. Captures language specific aliases for all masters.
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Multilingual Capabilities
Supports user interface in about 10 languages. Provides the facility to switch to the multilingual user interface quickly. Allows effortless transliteration from one Indian language to another within the Indic family of languages. Supports the translation of masters based on predefined aliases. Inbuilt dictionaries provide appropriate language conversion during runtime. Supports Discrete and Combinatorial type uni-directional scripts. Enables comprehensive localised accounting and financial reporting. Allows you to display and print bills, vouchers, invoices, receipts, reports and ledgers in the language of your choice. Generates MIS reports such as confirmation letters, reminder letters in multiple languages. Allows you to cut or copy multilingual text from other applications such as Microsoft Word, WordPad, Instant Messenger, Outlook Express. Press Ctrl+C to copy and Ctrl+Alt+V to paste in Tally.ERP 9.
12.1 Configuring Tally.ERP 9 for Multilingual Capabilities

Tally.ERP 9 provides you with the facility to maintain your books of accounts in any Indian language while the data is accepted, sorted, maintained, displayed and printed in another Indian language. Follow the steps given below to experience the multilingual capabilities of Tally.ERP 9.
12.1.1 Creating a Company

Let us consider Allgrains Traders, which is engaged in trading of Groceries for understanding Tally.ERP 9s multilingual capabilities. Create a new company as Allgrains Traders The completed Company Creation screen appears as shown below:
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Figure 12.1 Completed Company Creation screen
Press Y or Enter to accept the company creation screen.
12.1.2 Defining User Interface Language

The user interface language is by default the same as the initial start-up language selected during Tally.ERP 9 installation. However, Tally.ERP 9 allows you to configure the user interface language before or after the creation of a company. Presently, Tally.ERP 9 supports nine Indian languages and Hinglish (colloquial Hindi). Hindi Marathi Gujarati Bengali Kannada Tamil Telugu Malayalam Punjabi
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To define user Interface language, Go to Gateway of Tally > press Alt+G (Language). Select Hindi from the list of languages. The Language Configuration screen appears as shown below:
Figure 12.2 Language Configuration
Tally.ERP 9 automatically loads the relevant dictionary for the configured language and the interface (menus and prompts) is accordingly translated into the selected language. The Gateway of Tally screen in Hindi appears as shown below:
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Figure 12.3 Gateway of Tally Hindi
The Name of the company, the Unit of Measure and the Currency are neither translated nor transliterated, but are displayed in the language in which they were created.
Press Alt+G (Language) and select English.
12.1.3 Enabling Multilingual Support

Go to Gateway of Tally Press F12: Configure Select General and press Enter Set Show tables with Masters only in Current Language to Yes
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Figure 12.4 F12: Configuration General
Show tables with Masters only in Current Language when set to Yes, displays the pre-defined and user-defined masters only in the language selected. Otherwise, the pre-defined and userdefined masters are displayed in English or in the selected language along with defined aliases of other languages, if any.
When Show tables with Masters only in Current Language is set to Yes, displays the pre-defined and user-defined masters only in the language selected. Otherwise, the pre-defined and user-defined masters are displayed in English or in the selected language along with defined aliases of other languages, if any.

Tally.ERP 9 gives you the flexibility to create ledgers/ stock items using phonetic as well as inscript (Operating System) keyboard.
12.2.1 Using Phonetic Keyboard Layouts

Generally, a phonetic keyboard is useful for those who speak the language, but cannot type in it. All Indian languages share a common phonetic base which allows a direct comparison of scripts. In a phonetic keyboard, the alphabets are assigned keys on the Standard English keyboard,
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based on their nearest phonetic equivalents. Spell the word in English for Tally.ERP 9 to display it in the selected language. By using Tally.ERP 9, you can now enter data in any Indian language using a phonetic keyboard to generate bills, vouchers, invoices, receipts, reports and ledgers, confirmation letters, reminder letters and so on.These reports are displayed in the language selected after transliteration. Examples: English Word Keys to be used for phonetic representation in Indic languages Parachej Sels AiiTam invenTrii Kanveyans Selarii posTej end Teligram Kamiishan DiskaunT DeTars kreDiiTars KaipiTal lejar rAmajiilAl Kaish ShyAmalAl GoDAun Branch lon kasTamar SaplAyar
Purchase Sales Item Inventory Conveyance Salary Postage & Telegram Commission Discount Debtors Creditors Capital Ledger Ramjilal Cash Shyamlal Godown Branch Loan Customer Supplier
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Company Accounts
Kampanii ekaauMTs
Go to Gateway of Tally > F12: Configure > Accts/Inventory Info. Set Allow Language ALIASES along with Names to Yes.
This allows you to create ledger masters and stock items with their respective aliases in Indic languages.
12.2.2 Creating Stock Item

Create a stock item Rice in Hindi and provide aliases for it in different languages. Press Alt+G (Language) and Select Hindi. Go to Gateway of Tally > Inventory Info. > Stock Item > Create. 1. Name of the Item: Type as chaaval and press Enter (Tally.ERP 9 automatically interprets the name in Hindi).
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Figure 12.6 Stock Item Name in Hindi Rice
2. Select Kannada as the second language and press Enter 3. Type the Name of the Item as akki and press Enter.
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Figure 12.7 Stock Item Name in Kannada Rice
4. Select English as the third language and press Enter 5. Type the Name of the Item as Rice and press Enter 6. Select End of list and press Enter The User Interface when configured in any Indian language, results in the phonetic keyboard to automatically use that language. However, you can define the phonetic keyboard by pressing Alt+K and selecting the phonetic keyboard as shown below:
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Figure 12.8 Phonetic Key Board
7. Press Alt+C in the Unit of Measurement field 8. Create the Units of Measure sMkhyA and press Enter. The completed Unit of Measurement screen appears as shown below:
Figure 12.9 Units of Measure
9. Press Enter to accept the screen. The completed Stock Item Creation screen appears as shown below:
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Figure 12.10 Completed Stock Item Creation Rice
10.Press Enter to accept the screen. Similarly, create the stock item Soap: 1. Hindi - saabun 2. Kannada - sOpu 3. English - Soap The completed Stock Item Soap screen is displayed as shown:
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Figure 12.11 Completed Stock Item Creation Soap
4. Press Enter to accept the screen.

Create the following ledgers using their regional language aliases, with the help of the phonetic keyboard. Ledger Name Suma Traders Arun Traders Sales Purchases Creating Party Ledgers i. Suma Traders Ledger Go to Gateway of Tally > Accounts Info. > Ledgers > Create 1. In the Ledger Creation screen, Type Sumaa TreDrs as the Ledger Name.
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Under Group Sundry Creditors Sundry Debtors Sales Accounts Purchase Accounts
Inventory Values are affected No No Yes Yes
Select Kannada as the second language and type Suma TrEDrs as Ledger Name. Select English as the third language and type Suma Traders as Ledger Name. Select End of list and press Enter. 2. Under: Sundry Creditors. The completed Suma Traders Ledger is displayed as shown below :
Figure 12.12 Completed Ledger CreationSuma Traders
3. Press Enter to accept. ii. Arun Traders Ledger Go to Gateway of Tally > Accounts Info. > Ledgers > Create 1. In the Ledger creation screen: Type AruN TreDrs in the Ledger Name. Select Kannada as the second language and type aruN TrEDrs Select End of list and press Enter. 2. Under: Sundry Debtors. The completed Arun Traders ledger appears as shown below: as Ledger Name. Select English as the third Language and type Arun Traders as Ledger Name.
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Figure 12.13 Ledger Creation Arun Traders
3. Press Enter to accept the screen. Creating Purchases & Sales Ledgers i. Sales Account Go to Gateway of Tally > Accounts Info. > Ledgers > Create 1. In Name Field: Type Sels for Hindi 2. In Kannada type maaraaTa 3. In English type Sales The completed Sales Account appears as shown below:
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Figure 12.14 Ledger Creation Sales Account
ii. Purchase Account Go to Gateway of Tally > Accounts Info. > Ledgers > Create 1. In the Name Field: Type Parachej for Hindi 2. Type kray for kannada 3. Type Purchase for English The completed Purchase Account appears as shown below:
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Figure 12.15 Ledger Creation Purchase Account
12.3 Entering Transactions in Multiple Languages

Tally.ERP 9 presently supports 11 uni-directional scripts. Using Tally.ERP 9, you can maintain your accounts in Hindi; send invoices in Marathi to your customers in Bombay; and place purchase orders with suppliers in Tamil Nadu and Kolkatta in Tamil and Bengali, respectively.

On April 1, 2009, Allgrains Traders purchased the following goods from Suma Traders : Item Description Rice Soap Create Purchase Voucher : Go to Gateway of Tally > Accounting Vouchers > F9: purchase 1. Press F2 and change the Date to 1-4-09 2. Select Suma Traders in Party's Name field and press Enter
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Qty 25 500
Rate 425 20
3. Select Purchases ledger 4. Select Rice as the first Stock Item, and specify the Quantity and Rate and press Enter 5. Select Soap as the second item, and specify the Quantity and Rate and press Enter The completed Purchase Voucher appears as shown below :
6. Press Enter to accept.

All the numbers entered in Tally.ERP 9 will appear in English only (i.e., 1, 2, 3).

On April 15, 2009, Allgrains Traders sells the following goods to Arun Traders : Item Description Rice Soap
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Quantity 15 200
Rate 600 30
Create Sales Invoice : Go to Gateway of Tally > Accounting Vouchers > F8: Sales 1. 2. 3. 4. 5. Press F2 and change the Date to 15-4-09 Select Arun Traders in the Party's Name field and press Enter Select Sales ledger Select Chaavaal as the first stock item, specify Quantity and Rate and press Enter Select Saabun as the second item, specify Quantity and Rate and press Enter
The completed Sales Voucher appears as shown below:
12.3.3 Printing Sales Invoice

Press Page Up from the above screen Press Alt+P to print
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Press Enter to print the Sales Invoice. The Print Preview of the Sales Invoice in Hindi is displayed as shown below:
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Figure 12.19 Print Preview of Sales Invoice
To Print the invoice in any other language, Press Alt+L from the Printing Configuration screen Select the required language for printing
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Figure 12.20 Printing Configuration Selection of Print Language
Select Kannada as the language for printing Press Enter to view the Print Preview of the Sales Invoice in Kannada The Print Preview of the Sales Invoice in Kannada is displayed as shown below :
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Figure 12.21 Print Preview of Sales Invoice Kannada
The Name of the company, the Unit of Measure and the Currency are neither translated nor transliterated, but appear in the language in which they were created.
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12.4 Transliteration
In Tally.ERP 9, the masters created with aliases in more than one Indic language can be dynamically converted or transliterated. Transliteration is based on the phonetic behaviour of Indian languages. Tally.ERP 9 permits the transliteration of strings across all Indian scripts. However, such transliteration is possible because of the in-built Language Precedence feature in Tally.ERP 9. The order of Language Precedence in Tally.ERP 9 is as follows: 1. 2. 3. 4. 5. 6. 7. 8. English Hindi Gurumukhi (Punjabi) Gujarati Tamil Kannada Malayalam Marathi
For instance, if a master is created in Hindi, with aliases in Kannada, the resultant report displayed will be in the language selected. However, if you want to view the report in another Indic language, then the transliteration of the Name of the Master is in the script selected. The pronunciation is Hindi-based since Hindi precedes Kannada in the language precedence order. Go to Gateway of Tally > Display > Day Book
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Figure 12.22 Day Book Hindi
Press Alt+G from display Day Book and select Tamil as the language.
The Day Book ledger is displayed in Tamil as shown below:
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Figure 12.23 Day Book Tamil
In the report, the ledger names in Hindi are transliterated into Tamil because Hindi comes before Kannada in the language precedence order.
12.5 Generating Reports

You can send outstanding reports, statements and other documents to your suppliers, customers and business associates in their language, while maintaining your accounts in the language of your choice.
12.5.1 Display Stock Summary

Go to Gateway of Tally > Stock Summary
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Figure 12.24 Stock Summary Hindi
You can view the Stock Summary displayed above in the language of your choice, by pressing Alt+G and selecting the required language from the list of languages. Select Kannada The Stock Summary report in Kannada appears as shown below :
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Figure 12.25 Stock Summary Kannada
Masters and Ledgers (i.e., the Stock Item names) are automatically translated into Kannada based on the predefined language alias in the masters.
12.5.2 Display Profit & Loss Account

Go to Gateway of Tally > Profit & Loss Account
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Figure 12.26 Profit & Loss Account
12.5.3 Printing Confirmation Letters in Multiple Languages

Tally.ERP 9 allows you to print Confirmation Letters and Reminder Letters in the language of your choice. Go to Gateway of Tally > Display > Account Books > Ledger > Select Arun Traders ledger Press Alt+P to print. Press Backspace Select the Confirmation Letter in the Type of Report.
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Figure 12.27 Confirmation Letter Configuration
Press Enter to print the Confirmation Letter The Printed Confirmation Letter of Allgrains Traders appears as shown below:
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Figure 12.28 Print Preview of Confirmation Letter
You can print the above Confirmation Letter in the language of your choice, by defining the print language at the time of printing.
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Points to Remember
You can maintain your accounts in any one of the Indian languages that Tally.ERP 9 supports, view them in another and print the same data in yet another Indian language. Tally.ERP 9 permits the transliteration of strings across all Indian scripts.
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Lesson 13: Technological Advantages of Tally.ERP 9
Lesson Objectives
On completion of this lesson, you will be able to understand TallyVault a Company Activate Security Control for a Company Create Security Levels and Assign Passwords Activate TallyAudit and View the TallyAudit list of Vouchers/Ledgers Backup and Restore Tally.ERP 9 Data Split Company Data Export and Import Data and Vouchers Export Reports using ODBC Use Web-Enabled, Print Preview and Online Help Features Print Reports and Cheques Tally.NET Features Control Centre Capabilities Advantages of Support Centre
13.1 TallyVault
The Security of Data, is always a matter of concern for businesses since most organisations depend on the confidentiality of information. The Tally Vault feature is an enhanced security system which allows for encryption of the company data. TallyVault ensures that the original information is under no circumstances made available to another user. This technique is similar to encryption-decryption, and the decrypted form of data is never stored in the system. Apart from this, it uses the non-stored password mechanism. This is done by using highly advanced mechanisms to validate a new user who does not have a prior
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Technological Advantages of Tally.ERP 9
knowledge of the original password. The combination of all these facilities makes, TallyVault one of the most secure means of information storage.
13.1.1 Using TallyVault Feature

Tally.ERP 9 allows you to encrypt your company data either at the time of creation of the company or in the alteration mode. Let us first encrypt National Traders. Ensure that you are at the Gateway of Tally screen is as shown below:
Press Alt+F3 to view the Company info. menu, highlight Change TallyVault and press Enter.
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Figure 13.2 Company Info. Menu
The Change TallyVault screen appears. Select the company once again (this is done when you have loaded multiple companies). The screen appears as shown below:
Figure 13.3 Change TallyVault
Enter the Password as NTC (all in capitals) in the New password field and repeat the same in the Repeat New Password field. Press Enter to accept. Tally.ERP 9 prompts change Yes or No. Press Enter once again and Tally.ERP 9 displays the Information screen as shown below:
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Figure 13.4 Information screen
After TallyVaulting a company, Tally.ERP 9 retains the original company and creates a new encrypted company to allow you to decide whether you want to retain the encrypted company or not. The number 10000 is displayed to help you identify your company. This differs based on the number of companies already existing in the data directory. Accept by pressing any key. Tally.ERP 9 brings you back to the Company Info. menu. Use Alt+F1 to Shut the Company and press Enter on Select Company and the screen appears as shown below
Figure 13.5 List of Companies
You cannot see the name of the encrypted or TallyVaulted company. This ensures that nobody has access to your data. Press Enter and select the company 10000. Tally.ERP 9 prompts for the TallyVault Password as shown below :
Figure 13.6 TallyVault Password

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Enter the password as VCC to open National Traders.

Do not forget your TallyVault password because the data once lost cannot be retrieved.
13.2 Security Control

Security Control is required in an environment where many people work on accounts using the same computer at different times or the same set of accounts on a network. Tally.ERP 9 has a variety of management reports that are flexible in nature allowing you to create, alter, display and print any information. The Security Control system of Tally.ERP 9 is used to set the authority rights of the user or user groups. This prevents other users from using the system to create, alter, display and print any data. Tally.ERP 9 has a customised security system where the authority levels are set for users at different levels. Tally.ERP 9 has two security types, one for the Owner by default and the other for Data Entry. Other security types can be created based on these predefined types. The Owner has full access and rights to Tally.ERP 9, except for Tally Audit, which is reserved for the administrator alone. Data Entry has restricted rights. Security control can be activated during company creation or by company alteration. Once this is activated, Tally.ERP 9 asks you to enter the name of the user and the password.
13.2.1 Activate Security Control

Go to Gateway of Tally of National Traders > press Alt+F3 > Select Alter > press Enter and reselect National Traders to view the Company Alteration screen. Set Yes to Use Security Control. An additional field appears asking for the name of the administrator, type Admin. In the Password field type Admin and repeat the password. An option Use Tally Audit Features appears, set this to Yes. An additional option Disallow opening in Educational mode appears, set this to No. Accept the screen and return to the Company Info menu. Shut the company and select National Traders once again (Do not select the TallyVaulted company). Tally.ERP 9 prompts the user for the user name and password as shown below:
Figure 13.7 User and Password screen
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Give the details according to what you had entered in the Company Alteration screen and accept. Tally.ERP 9 loads the company and displays the Gateway of Tally on entering the correct user name and password. Now that we have activated the Security Control for National Traders, let us create the Security Levels.
The password is case sensitive. Any variation in the case will not allow you to login to Tally.ERP 9.
13.2.2 Create Security Levels

Go to Gateway of Tally > Press Alt+F3 and view the Company Info. menu. Press Enter on Security Control and a sub-menu appears as shown below:
Figure 13.8 Security Control Menu
The menu allows you to define the security level under the field Types of Security. The user name and password for that access level is defined under the field Users and Passwords. Press Enter on Types of Security.
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Figure 13.9 Security Level Definition screen
Under List of Security Levels, the default value is Data Entry, Tally.NET User and Tally.NET Auditor Press the Down Arrow Key to create a new security level. Enter Manager in the List of Security Level field. Press Enter to view the Level definition screen.
Security Level Definition Screen The Level definition screen displays the following: Name of Security Level: This by default displays the name created. Use Basic Facilities of: Select Owner from the security List. However the other option called Data Entry is also available. Press O to get the popup list or revert from the next field for it to pop up. Likewise, a Manager is created at the next level. Select the Owner. Days Allowed for Back dated vouchers: It refers to the number of days the users at this level are allowed to alter Back-Dated Vouchers. For example, specifying 0 will indicate that back dated vouchers are not allowed and entering 7 will allow the user at this level to insert vouchers going back 7 days. Here enter 0. This is only effective if you disallow back-dated entries in the disallow column. Cut-off date for Back-dated Vouchers: Specify the dates before which users of this profile or Security level may not create or alter vouchers. This is useful in cases where the Tax Assessment for a period are complete and no further changes are required in the data for that period. Here, enter 31st December 2009. Allow to Connect Company: If this option is set to Yes, the user classified under this security level can connect to a Company with a valid Tally.NET subscription.
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Use Tally.NET Authentication: If this option is set to Yes, the user classified under this security level can login remotely with Tally.NET User capabilities. Use Tally.NET Auditor Authentication: If this option is set to Yes, the auditor can access the clients data remotely and perform an audit. However, a user not having the auditors license will not be able to perform an audit by setting this option to Yes.
The Security Levels Definition screen is displayed as shown below:
Figure 13.10 Security level Definition screen with Allow and Disallow Facilities
Once the above details are entered, the screen is divided into two broad columns having two sub columns. The left side is to disallow access to the various options of the systems. The right side allows the security level, different facilities. The sub-columns are Types of Access and the List of Reports under both Allow and Disallow facilities Enter the type of access you wish to give and the option to be controlled. Once the entry is completed select End of List from the Type of Access field to complete the allocation. Press Enter after specifying the cut-off date as 31-Dec-2009 under Disallow the following Features Select Full Access (from the Type of Access list): Select the Balance Sheet from the List of Reports as per this screen:
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Figure 13.11 Security Levels Definition screen
In order to make any modifications in any of the reports, select the option Back-dated Vouchers under the field Full Access select Create/Alter Back Dated Vouchers. Verify with the screen shown below:
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Figure 13.12 Security Levels screen
Once you accept the above settings you are taken back to the Security Levels for Company screen. The cursor rests at the blank field following the recently created one. Follow the same procedure if you require to create another Security level else accept and return from this screen to the Security Control Menu.
13.2.3 Users and Passwords

A Security level called Manager uses the basic facilities of the Owner. To set up a user name and password for this level, press Enter on Users and Passwords in the Security Control Menu. Create Users and Passwords Go to Gateway of Tally > F3: Company Info > Security Control > Select Users and Passwords Tally.ERP 9 prompts you to select the Security Level, Select Manager and the screen appears as shown below:
Figure 13.13 List of Users for Company screen
Enter Manager for both the Name of User and Password. By default Allow Remote Access and Allow Local TDL is set to No.
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Enter the users mobile number in Mobile Number field
Figure 13.14 Users and Password screen
Accept this and return to the Gateway of Tally. You would need to create different users who belong to one or more different Security Levels or Types of security. Select the option at the Security Control menu to define users, give their passwords and their security levels.
Only the Administrator can assign users and their passwords.
13.2.4 Alter/ Display a User / Type of Security

There is no separate menu option to alter or display the security options. Use the same menu to display or alter user or security level set-up. To delete a user, simply blank out the user name by pressing Esc/ Spacebar and accept the screen. Do the same for the security level. A user defined under a security level cannot be deleted without deleting the users under it.
13.2.5 Loading a Company with a User name

Security Level The Manager Security Level is set by using Admin as the user name and password. A password is assigned at this level.
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Let us shut National Traders and re-select it with the Manager user name and password.
Figure 13.15 Gateway of Tally screen
Notice that the report Balance Sheet is not appearing in the menu. This is because the access was denied while defining the security level. Practice this by disallowing other reports and make your observations.
13.3 Tally Audit

Tally.ERP 9 Audit allows the Administrator/ Auditor to track changes in the accounts made subsequent to the earlier review. Changes in two areas are important i.e in the transactions or vouchers and in the ledger masters. Only changes that affect the integrity of a transaction are considered. Tally.ERP 9 Audit feature is enabled while creating a Company. This option is activated only when the user-levels are defined. In this case, it was already enabled when the Security Control feature was activated and given a user name and password.
13.3.1 Using Tally Audit Feature

1. Ensure that you have loaded National Traders with Admin as the user name and password. Now, to view the Tally.ERP 9 Audit Lists Go to Gateway of the Tally > Display > Statements of Accounts > Tally Audit. The menu is displayed as shown below:
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Figure 13.16 Tally Audit Menu
You can audit both ledgers and vouchers. Change the period of the report from 1-Apr-2009 to 31-Mar-2010. Click on F12: Configure and enter Yes to Show Entered/Altered By. The listing now incorporates the users name as shown below :
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Figure 13.17 Tally Audit Listing screen
Only a portion of the actual report has been displayed for your reference. Since the password feature was not activated when these entries were made, the field Entered By appears as Unknown. Place the cursor on the relevant voucher, click on F7: Accept One to accept the voucher as valid and remove it from the list. Click on F7: Accept All option, If you are satisfied that all the vouchers are valid. To view the Ledger Audit list, select Ledger from the Tally Audit. A screen showing the Id, Ledger Names and the Opening Balance is displayed as shown below:
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Figure 13.18 Tally Audit Ledgers screen
Make changes to any two Ledger Accounts these will be shown in the list of new or altered Ledger Accounts. Notice that their Id does not change. Hence it is useful to track them. The user who changed the accounts and when it was done, can be identified. Once you are satisfied with the changes made in the ledger click on F7: Accept One or F7: Accept All. This would accept the ledger as valid and it will be removed from the list.
13.4 Backup and Restore

13.4.1 Backup
Tally.ERP 9 has a flexible backup mechanism where in you can virtually take a backup of the data from one storage medium to another. The more commonly used mechanisms are floppy drive, hard disk drive, zip drive, tape drive etc. installed either locally or on a network. In the backup screen, the source and destination of the backup is entered. Tally.ERP 9 will do as required. From the Company Info screen, select the Backup option and the screen appears as shown below:
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Figure 13.19 Tally.ERP 9 Company Backup screen
Specify the source (where Tally.ERP 9 has to take the data from). Specify the destination (where you want Tally.ERP 9 to store the data backup). Tally.ERP 9 then displays the list of companies created select one.
Backup Precautions As we are already aware, data on a computer is vulnerable to data loss. It is therefore important that we do not overlook the importance of taking a regular backup of data, however strong the database may be. The maintenance of important data can be made continuous and hassle-free with a little planning and forethought. Depending on the volume of data entry, an appropriate backup mechanism is devised. This can be done by maintaining a backup directory in the local hard disk or server. External storage media such as floppy disks and zip diskettes can also be used. We can have sub-directories for every day of the week under the main backup directory. Regularly data backups, depending on the day of the week can be taken in the following manner: Monday C:\TallyBackup\Monday Tuesday C:\TallyBackup\Tuesday Wednesday C:\TallyBackup\Wednesday and so on till Saturday
The Backup option is available only on the Company Information screen. In the example, we have used the C drive path, this does not mean that the Tally.ERP 9 backup facility is limited to the Hard Disk drive alone.
The above procedure ensures that there exists a reliable data backup at any given time. The Restore option is used to bring back data from the data backup.
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13.4.2 Restore
Restore literally means to bring back. Tally.ERP 9 allows the restoration of data from one medium to another. In Tally.ERP 9s context, restore means we have a Tally.ERP 9 backup and we want to work on the data backup instead of the current data. This can be done from the Company Info screen by selecting the Restore field. The Select Companies to Restore screen appears as shown below:
Figure 13.20 Tally.ERP 9 Company Restoration screen
You have to specify the destination (where Tally.ERP 9 has to store the data backup). Then specify the source (where you want Tally.ERP 9 to take the data from). Tally.ERP 9 then displays the list of companies you have in the source. Select the required companies to be restored as desired.
Restore Precautions It is preferable not to restore a backup on the original data directory primarily to ensure that no data is unintentionally overwritten.
The Restore option is also available only on the Company Information screen.
13.5 Split Company Data

Tally.ERP 9's flexible period-less accounting permits entry of data for any number of years. This in itself has tremendous benefits. However, presence of old data in cases where they are voluminous, causes greater overhead on the system. Splitting financial years enables you to retain most benefits while overcoming this overhead. On splitting the data, two things happen: New companies are created for the respective split periods. The full data is retained in the original company.
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Important Pre-split Activity Before you split data, ensure that: All the unadjusted forex-gains/ losses have been fully adjusted by journal entries. Verify that the item does not appear in the Balance Sheet. There are no pending Purchase Bills/ Sales Bills. Check the Profit & Loss Account and Inventory Statements for the pending Purchase/ Sales Bills. These bills can be accounted for in the respective party accounts or in the 'Bills Pending' Account. Ensure that a backup of the data exists.
To Split Company Data, Load National Traders with the Admin user name and password. At the Gateway of Tally.ERP 9 > Select Alt+F3: Cmp Info. Press Enter on Split Company Data. Tally.ERP 9 prompts you to re-select the company name, select National Traders and the screen appears as shown below:
Figure 13.21 Split Company Data screen
Since National Traders has data only for one year (April 1, 2009 to March 31, 2010).The split will take place from the mid-point (September 1, 2009). You can change the date given in the Split From. Press Enter and accept to the split. Tally.ERP 9 creates two new companies.
13.6 Export and Import of Data

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We will now learn about Tally.ERP 9s export and import capabilities, which enables Tally.ERP 9 to interact globally. Statements and data from Tally.ERP 9 can be exported to other programs like spreadsheets and databases. Only data from Tally.ERP 9 can be imported and not data from other systems. Importing from other systems involves the usage of Tally.ERP 9s Definition Language TDL and this is outside the scope of this training.
13.6.1 Export of Data

You might need to export information for different purposes, viz: To re-import data into another company run on Tally.ERP 9. To export data out to be used by other programs.
13.6.2 Exporting Masters

Step 1: Go to Gateway of Tally.ERP 9 > Display > List of Accounts > click on Export. Tally.ERP 9 first asks for the export format. The different formats are, ASCII, EXCEL, HTML and XML. The filename extension will take the default format.
Figure 13.22 Exporting the List of Ledgers screen
For example, since we have selected XML, the filename displayed will be Master.xml
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Figure 13.23 Exporting List of Ledgers
Type of Masters Any of the mentioned master types can be exported. Select All Masters and accept it to Export.
13.6.3 Exporting Data for Re-import into another Company

Step 1: Exporting Daybook Go to Gateway of Tally > Multi Account Printing > Daybook > click on Export.
Figure 13.24 Exporting Day Book
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Tally.ERP 9 first asks for the language. Select Default (All Languages), then convert it into the export format. The different formats are: ASCII, EXCEL, HTML and XML. The filename extension will take the default format. For example: Selecting ASCII, results in the filename being displayed as Daybook.txt. Specify the other details as desired. Accept to export, Data exported from a company can be imported into another.
13.6.4 Import of Data

Step 1: Importing Masters Return to the Gateway of Tally. Shut National Traders and load Indus Enterprises (Ensure that it has the same financial year as the current company National Traders). Select Import of Data > Masters Type in the file name. The name and path of the source file should match. In this case the current directory is in use, hence you do not need to give the path.
Figure 13.25 Import of Masters screen
The opening balance can be modified from the exported source file. Carefully select, Modify with new data.
Data can be imported from the previous version, provided the Import filename is in the XML format, since Tally.ERP 9 supports only the XML format.
Verify that the import is completed successfully.
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Step 2: Importing Vouchers Return to the Gateway of Tally. Select Import of Data > Vouchers. Give the filename Daybook.xml. Check the statistics after import.
13.6.5 Export to Excel

Tally.ERP 9 now comes with the functionality, wherein all reports can be exported to Microsoft Excel spreadsheet. This feature enables you to export any report generated by Tally.ERP 9 into Excel. To export the Trial Balance, Go to Gateway of Tally > Display > Trial Balance Click on Export.
Figure 13.26 Export Option in Tally.ERP 9
Select Restricted (ASCII only). Select Excel (Spreadsheet) in Format.

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Type the name of file for Output File Name as required. Specify other details.
Figure 13.27 Report Generation Screen for Excel
Click Yes for Export. By default, the exported report in Excel format is saved in the Tally.ERP 9 folder. Open this file using MS-Excel to view the report.
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Figure 13.28 Report in Excel Imported from Tally.ERP 9
13.7 ODBC Connectivity

ODBC is expanded as Open database Connectivity and is used to merge the imported data with the existing data. In short, Tally.ERP 9 uses ODBC to exchange data. Tally.ERP 9 ODBC extracts data from Tally.ERP 9 and submits the reports in MS Excel format. A brief exercise will explain the process. We wish to send greeting cards to all our customers. The customer (local debtors) database exists in Tally.ERP 9. These names and addresses can be printed out on MS Excel.
Ensure that MS-Query is installed on the computer in which you will be installing Tally.ERP 9. This enables ODBC as soon as Tally.ERP 9 is installed.
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The steps to be followed are: Start Tally.ERP 9 and select National Traders Ensure that the words ODBC Server is visible in the Information Panel under Configuration section of Tally.ERP 9 screen. Ensure that Tally.ERP 9 is running and is minimized Start MS Excel > click on Data > Import External Data > New Database Query from the menu. Select TallyODBC (Example: TallyODBC 9000*) from the Choose Data Source dialog box. The screen appears as shown below:
Figure 13.29 Choose Data Source screen
Let the option Use the Query Wizard to create/edit queries remain checked. The Query Wizard displays the Tally.ERP 9 fields that are selected. You can also give filter conditions to limit the data to only those that match your criteria
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Figure 13.30 Query Wizard Choose Columns screen
Select the ledger and move it by clicking the > button to the right of the following fields: $Name, $Parent, $Address (move all the other address fields as well.) Click on Next.
Figure 13.31 Query Wizard Choose Columns screen
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Then in the next Query Wizard Screen, filter the data to limit all ledger accounts belonging to the group that contains the name Sundry Debtors. We want to print the List of Sundry Debtors only.
Figure 13.32 Query wizard Filter Data
Click Next, If any sorting is required select the sorting
Figure 13.33 Query wizard Sort Data
Select Return Data to Microsoft Excel from the last window of the Query Wizard and click on Finish. Then the process in the domain of MS-Excel is complete.
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Figure 13.34 Query wizard Finish
Click OK in the Import Data window to import the data to Excel
Figure 13.35 Import Data in Excel
13.8 Web Enabled, Print Preview and Online Help

Tally.ERP 9 is web enabled, has a Print Preview facility and online help.
13.8.1 Web Enabled

Email and Internet Publishing are the Web enabled features available in Tally.ERP 9. This facility of Tally.ERP 9 reduces the paper work. Reports, Reminder letters, Statement of Accounts, Invoices and Purchase Orders can be e-mailed directly from Tally.ERP 9. Thus, the user does not have to send printed invoice or purchase orders. This feature helps you to save on postage and valuable time.
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E-mailing Customers Outstanding Statement Select a customers Outstandings Statement from the following path: Go to Gateway of Tally > Display > Statements of Accounts > Outstandings > Ledger > click the E-mail button. The Mailing Ledger Outstanding screen appears as shown below :
Figure 13.36 Mailing Ledger Outstanding screen
There are various options that are automatically filled in provided the information had been supplied in the master records. Check if the details are all right. Select Yes, If they are, and if not select No to change the options. The cursor first goes to the To E-mail address field as it saves time by skipping standard information. However, to change the standard information, use a backspace and retype.
The fields that appear in the Mailing Outstading Ledger screen is briefed below: E-mail Server: Give the name of your E-mail SMTP server, e.g. mail.btinternet.com. It should be a valid and compatible SMTP server to send your mail. Ask your Internet Service Provider or network administrator for help, if required. This information is entered only once and thereafter use it by default. From: Your Company name is picked up from the Company Information Master records. From E-Mail Address: Your own e-mail address. Tally.ERP 9 picks up the address given in the Company Information master data. Fill this option, if it does not exist.
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Format: There are three formats available: ASCII (Comma delimited): This is plain text format where data is separated by commas. This format does not have any special formatting or fonts. This is the most common e-mail format are compatible with all mail programs. ASCII data can be easily worked upon by other programs. HTML (Web-publishing): Reports are attractive and retain their formatting and fonts. They can be read by an HTML enabled mail program. It can also be read by using a browser like the Microsoft Internet Explorer. XML (data interchange): Stands for Extensible Mark-up Language, it is an extension of HTML but the data is capable of being imported by other XML compatible systems. Using XML, Tally enables you to exchange information even with non-Tally systems. An XML output will have an XML envelope and is formatted with XML tags to enable import into other systems. Therefore, Your Tally invoice in XML format can be imported by another system without difficulty reducing data entry time and errors. This language is fast emerging as the de-facto standard for information exchange all over the world and with it Tally gives you the means to collaborate with others and share information like never before. Select the one required by your recipient. An explanation on each format is given below: Resolution: This is required only in the case of HTML formats and refers to the resolution of graphic images in terms of pixels. This is a feature that is used to format a report since it affects the quality of output. Higher resolutions are generally recommended to obtain clear prints. Tally recommends a standard pixel resolution size of 1024x768. To E-Mail Address (Mandatory field): This is for the recipient's e-mail address. A valid e-mail address is required. CC: (if any): For sending the same mail to another recipient. Subject: This is pre-filled for you. This can be changed to any other subject, according to your requirements. Additional Text: The text in this will appear as the first lines in the message body of the recepients mail program. The other options are the same as in Print option and are self-explanatory.
13.8.2 Internet Publishing

Tally.ERP 9 makes commercial use of your web space by uploading reports and documents on the website. For this purpose, it creates reports in the web-language HTML, that is directly put on the website. You can use this feature to inform customers of the latest business offers. The data used for transmission is encrypted.
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13.8.3 Upload
Any report, statement or data can be published on the internet. Publishing is carried out by uploading the report to an Internet Server that has been configured to accept files in specific protocols. A Site is basically a specific directory space allotted on that server. Protocols are sets of rules and specifications on how data and files are transferred over a network. It covers all aspects of communication between computers including the content, its formatting and error control. For example: You want to publish your Price List on your Website. Select the Price List from Inventory Information. Click the Upload button. The first time you upload, fill up the dialogue box with the information required. Select No initially, in the upload window to edit information on the screen.
Figure 13.37 Upload screen
The fields that appear in the Upload screen are briefed below: Upload to FTP Site: FTP or File Transfer Protocol, is the most common choice of transferring data or files of any type to an Internet site. An FTP site is a directory space in a server that accepts FTP connections called the FTP Server.If you know that your server is set up for HTTP/HTTPS, then use this option, else choose FTP. Upload to Web Page HTTP/HTTPS: HTTP - short for Hyper Text Transfer Protocol is a standard for the transfer of HTML files over the internet. HTTP Servers are pre-programmed to accept HTTP connections. HTTPS sites are Servers that are configured to accept secure connections. They conform to standard security protocols (e.g. SSL and SET) to ensure that your data and files are not tampered.
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URL: Stands for Universal Resource Locator, identifies the server address where you want your report to be published. In order to use FTP you will need to know the FTP server name and directory path. The FTP server name is the domain name of the Web server to which you are publishing (for example, ftp.server.com). The directory path is the folder on the server where your web page is stored (for example, / public_html). For a web page, an URL will typically be in the form www.myweb.com/public_html. Secure Server: In order to upload a Web Page a secure connection is required. Select Yes, in this option if you think your data is sensitive. A secure site is one that has an s prefixed with http. You will know it is a secure site when you see in your browser URL like: https:/ /www.mybank.com/myaccount/stats.htm. User Name and Password: The Internet server would require an Id proof before allowing you to upload data and files on site. Contact your Internet service provider if you have forgotten your user name, password or FTP location. File Name: A file name is given to an FTP Site to where the content is uploaded. Accept it as it is or modify it, if necessary. Format: There are four formats that have already been explained earlier under the e-mail section.
13.8.4 Print Preview

Tally.ERP 9, provides you with the facility to check report formats and layouts, before the actual printing takes place. The same can also be e-mailed. For example, to see the print preview of the Trial Balance. Go to Gateway of Tally > Display > Trial Balance > Click on Print and click on the button With Preview. The screen now appears as shown below:
Figure 13.38 Print Preview of Trial Balance
The button With Preview toggles with No Preview and the last saved setting is retained.
13.8.5 Local / Online Help

This is a Local help system, which displays the help screen relevant to the topic, by just clicking on the help button provided in Tally.ERP 9. For example: For information on Cash Flow or Funds Flows, press Alt+H. Go the Gateway of Tally >select Display > Cash/Funds Flow >Cash Flow and click on the Help button (or use Alt + H) and the following screen appears:
Figure 13.39 Help Options screen
Select Local Help to access the relevant topics in the Tally.ERP 9 Reference Manual.
Figure 13.40 Online Help screen
The Tally.ERP 9 Reference Manual, displays the content for the particular screen. This facility is available on all screens in Tally.ERP 9.
13.9 Printing of Reports and Cheques

In this chapter, we will examine the different issues involved in printing a desired report quickly and easily. There are two types of printing: Display and Print. Multi-Account Printing menu. Both will yield the same output. The display and print method is more flexible where you can see on screen the details required. However, the Multi-Account prints without an on-screen display.
13.9.1 Display and Print

You can obtain a printed version of the screen currently being displayed by selecting Print from the button bar menu. This brings up the Print Configuration screen for the report, which asks
Print? Yes or No. The report will be printed using the options specified on the screen on selecting Yes. However, the options before printing can be changed by selecting No, if required.
There are two types of print configuration options. They are Common Printing Options and Dynamic Report Specific Options. Common printing options Common printing options affect the printing of all reports and are changed by selecting the appropriate button which are explained below as follows: Print Language: Reports can be printed in the language supported by Tally.ERP 9. With Preview: To view the report in print preview mode before actual printing. Titling: To change the title of the report. Page Nos.: To specify the page number range. Pre - Printed / Plain Paper: Toggle to make the selection. Print Format: A pop-up list displays the printing formats available in Tally.ERP 9. The formats provided are, Dot-Matrix Format, Neat Format and Quick (Draft) Format. With Colour: This option is only relevant if you have a colour printer. Copies: To specify the number of pages to be printed. Printer: To change the printer. This also displays the default paper size that you have set for the printer. Dynamic - Report specific options Options specific to a report, are displayed in a sub-screen when you select to print it. You are permitted to change various options before you finally print. Tally.ERP 9 supports printing of reports in various languages. Notice the Standard Options in the button bar on the right hand side. The specific options for printing the Balance Sheet appears in the sub-screen.
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Figure 13.41 Printing Balance Sheet
13.9.2 Print Format

Print Format is a button which appears on the Print screen (after pressing Alt+P or click on the Print button). By clicking on the Print Format button, Tally.ERP 9 displays a list of Print Formats as follows:
Figure 13.42 Print Mode Neat Mode
Neat Mode and Quick/Draft Mode print formats are compatible with most of the printer drivers installed on the Windows Operating System. Dot Matrix Format in Tally.ERP 9 is a special print format which allows you to print Tally.ERP 9 reports in text format using the Blazing speed of Dot Matrix printers.
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In today's hi-technology software environment, most GUI-based softwares do not provide Dot Matrix printing capabilities. On the selection of a Dot- Matrix Format, the screen appears as shown below :
Figure 13.43 Print Mode Epson
The Epson printer drivers have been defined by default. You may install Epson Printer drivers in Windows for any Dot Matrix printer and use this format for faster report printing.
Any Dot Matrix printer may be used, but ONLY the Epson printer drivers (LQ and FX series) should be used for the Dot Matrix Format printing of Tally.ERP 9.
13.9.3 Multi-Account Printing

Gateway of Tally > Multi-Account Printing Principally geared towards printing all the Primary Books of Accounts, like the Cash and Bank Books, Account Ledgers, Sales and Purchase Registers etc. can be printed as: One Account at a time, All Accounts, or All Accounts in a selected Group. Before printing, the date range and other selections may also be set up. The current mechanism of printing used by Tally.ERP 9, require that for large company accounts, choose each ledger account is printed on separate pages.
13.9.4 Draft Mode Printing (Quick Format)

Almost every report except for cheques can be printed in a Draft Mode. In Tally.ERP 9, the Neat print format functions by default. However, this may be altered by pressing Alt+F just before printing. All subsequent reports will be printed in Quick Format, until Alt+F is pressed again. (The button equivalent for this is marked Quick Format). Draft mode brings in additional restrictions in the printing, which you will quickly learn by experimentation. After selecting the Draft mode or Quick Format, click on Alt+S to select the option Print to a File. Specify the name of the File to output the data and select the Printer whose dimensions are to be used.
13.9.5 Cheque Printing

A Cheque is a written order to the bank to pay the stated sum of money. Cheques are usually handwritten. In order to automate the entire cheque printing process, Tally.ERP 9 allows cheques
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to be printed directly. Cheques are printed only when printing a Payment Voucher. Since the cheque formats differ from bank to bank, Tally.ERP 9 facilitates cheque printing according to user defined cheque dimensions. Let us activate the Cheque Printing capability in the F11: Features (Accounting Feature). Activating Cheque Printing Ensure that you are on the Gateway of Tally of Indus Enterprises (shut National Traders) Create a ledger namely > Canara Bank under the Group Bank Accounts (accept all other defaults) and return to the Gateway of Tally Click on the button F11: Features (Accounting Features) and set Enable Cheque Printing to Yes as shown below:
Figure 13.44 F11: Accounting Features screen
Press Enter after setting the feature Set Alter Cheque Printing Configuration to Yes. Tally.ERP 9 displays the Company Cheque Details screen according to this screen:
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Figure 13.45 Company Cheque Details screen
Company Name on Cheque: Many banks give cheques with the company name already printed on it. To print Tally.ERP 9 on the cheque beneath the signature, give the name e.g. Indus Enterprises to print the name, or leave the option blank if you dont want to utilise this option. Name of Banks: Press the space bar and you will get a pop-up list of the bank ledger accounts created in the company. There are two ledgers viz. the Deposit Account and the State Bank of India. Select the bank for which you want to specify the user-defined cheque dimensions. Here select State Bank of India and press Enter. You can now fill in the dimensions of the cheque in the Cheque Printing Configuration screen.
Figure 13.46 Cheque Printing Configuration screen
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The cheque will be printed as shown : For National Traders Authorized Signatory In case of a cheque with two signatories, both can be specified. Both could be the same salutation or different, e.g., one could be Director, the other could be Secretary. Give whatever you currently use. Many banks pre-print both the company name and the salutation.
Take the bank's cheque book and measure the dimensions of a cheque carefully in millimetres and fill the form. You may need to correct it after trying out a couple of cheques so that the positioning is accurate. The placing of the cheque in the printer also determines the printing. Trials could be made on photocopies of a cheque before using an actual cheque leaf. All the fields are self-explanatory. The Salutation fields, are for signatures and naturally follow the Company name (that you might have chosen to print), e.g. Director.
13.9.6 Printing Cheques

Go to Gateway of Tally > Accounting Vouchers > F5: Payment The Cheque printing option is available only from the Payment Voucher when the concerned Bank account (State Bank of India) is credited. Make a payment entry as shown below :
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Here, after crediting the State Bank of India account, two additional fields appear. They are: Name on Cheque and Cross Cheques explained below: Name on the Cheque: On selection of the Party Account, the Name on the cheque is filled with the Partys account name. Thus, instead of the Party Account, if any other expense head is selected, the expense head will not appear as the name on the cheque. Cross Cheque using: This is filled in by the most common words used - Account payee. However, you can change it. After accepting the voucher, Tally.ERP 9 immediately prompts you to print the cheque! Click on the button Print Preview and then accept the print command to view the printed cheque.
Check the dimensions given in the F11: Features. Ensure that you have not left any field, other than the salutation fields, blank. Trial and error is the only way to get the printing in the right positions. Therefore do not panic if some words do not print in the correct positions. Change the set-up a couple of times to set it right. This is necessary to be able to print on the many different cheque styles used by different banks.
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Points to Remember
Tally.ERP 9 has a customisable security control for companys data. Tally.ERP 9 has a flexible backup mechanism where in you can take a backup of the data and can restore the same data. Tally.ERP 9 Audit provides the capability to the administrator/auditor to track changes in the accounts. Data exported to a spreadsheet can be reorganised and used for statutory presentations. ODBC (Open Database Connectivity) compliance allows other programs to use data from Tally.ERP 9 directly. E-mail, internet publishing and web browser are the web-enabled features available in Tally.ERP 9. Tally.ERP 9 provides an online help system, which is context sensitive. TallyVault feature is an enhanced security system Tally.ERP 9 Print Preview facility helps you check printed report formats and layouts before actual printing takes place. Tally.ERP 9 allows us to print cheques directly.
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Lesson 14: Tally.NET and Remote Capabilities
Lesson Objectives
On completion of this lesson, you will learn how to Configure Tally.NET Features Connect Company on Tally.NET Create and Authorise Remote Users Access Company data Remotely
14.1 Overview of Tally.NET

Tally.NET is an enabling framework which establishes a connection through which the remote user can access the Client's data without copying / transferring the data. In other words, the remote user can access the company data, provided the Company is open and connected on Tally.NET. Using Tally.NET features, the user can create remote users (ids), authorize & authenticate them for accessing the connected (available) companies. The remote users can be mapped to a particular user and assigned security controls based upon their security levels (viz., Tax Auditor / Administrator, Standard User etc.). The remote user can further create sub-ids under him to assign tasks based on their security levels. The user making the company available and a person accessing the data behave as clients to Tally.NET, thereby rendering a secure exchange system. Tally.NET Features Tally.NET is a default feature available in the product and provides the following host of capabilities. Connect companies from Tally.ERP 9 Create and maintain Remote Users Synchronization of data (via Tally.NET)
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Tally.NET and Remote Capabilities
Remote access of data by authorised Remote User(s) Use online help and support from Tally or the browser Use Control Centre for centralised Account Management Remote availability of Auditors' Edition of Tally License As discussed above, Tally.NET is enabled in Tally.ERP 9 but however, certain configurations are required to be setup for enabling Company data to get connected. Follow the steps given below : 1. Configuring Tally.NET features 2. Creating and Authorising Remote Users
14.2 Configure Tally.NET Features

To configure Tally.NET follow the steps shown: Go to Gateway of Tally > F11: Features > F4: Tally.NET Features The Tally.NET Features screen appears. In the Registration Details section: In the Connect Name field provide a specific name with which the company is displayed on Tally.NET servers. Provide the name of the contact person in the field Contact Person Name. Provide the Mobile/Telephone numbers of contact person in the field Contact Number The name of the contact person and the contact number are published alongwith Company Name, Account ID and Serial Number in the List of Companies screen. In the Connect for Remote Access section, Allow to Connect Company is set to Yes, in case you want the company to be connected for remote access. Contact on Load is set to Yes, when you want the company to be connected for remote access on loading. Press Enter to accept. The completed Tally.NET Features screen is displayed as shown:
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Figure 14.1 Tally.NET Features
Accept to save the Configurations

You must set Security Controls to Yes while creating/altering a company, in order to enable Tally.NET in Tally.ERP 9.
14.3 Connect Company on Tally.NET

To connect the company on Tally.NET, Go to Gateway of Tally > press F4: Connect.
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Figure 14.2 Connected to Tally.NET
A message Company connected successfully is displayed in the Calculator panel. In the same way to disconnect a Company from Tally.NET, Go to Gateway of Tally, Press F4: Disconnect
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Figure 14.3 Disconnected from Tally.NET
A message Company disconnected successfully is displayed in the calculator panel.
14.4 Create Remote Users

Tally.ERP 9 allows you to connect from a remote location and access your data. The Remote users are broadly classified into two security levels, namely: Tally.NET User: can access data from a remote location. Tally.NET Auditor: can audit data from a remote location, subject to using Auditors Edition of Tally.ERP 9. To create the remote users: Go to Gateway of Tally Click K: Control Centre or press Ctrl + K. The Login as Remote Tally.NET User screen is displayed.
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Enter the required Account ID in the Your E-Mail ID field and Password in Your Tally.NET Password field. The password is sent by e-mail separately to the email address provided while activating Tally.ERP 9.
Figure 14.4 Login as Tally.NET User
Press Enter The Control Centre screen appears as shown:
Figure 14.5 Control Centre
Select My Tally.NET Accounts, the My Tally.NET Accounts screen appears
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Figure 14.6 List of Tally.NET Users
Select the required Account ID and press Enter. The Control Centre for the selected Account ID screen appears To view User Management screen, select User Management and press Enter To create Remote Users, execute the following steps: Select Standard User from the list of Security Level. Enter [email protected] in the Tally.NET ID field and press Enter. Set Yes to Tally.NET User in case you want this user to access data remotely Based on your requirement, select the required status from the list of Status. Similarly you can create the required Tally.NET User.
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Figure 14.7 User Management
Accept to save the new Tally.NET User that has been created
The companys system administrator should authorise the Tally.NET User ID and connect to Tally.NET and allow remote access. A brief write-up about each feature of the Control Centre is discussed under the section Features of the Control Centre
14.5 Authorise Remote Users

Once the Company is registered and connected, the system administrator can authorise users created under Tally.NET User security level to access by logging in from a remote location. To authorise the remote users to login follow the steps shown: Authorise Remote User Go to Gateway of Tally > Press Alt + F3 The Company Info. menu appears Select Security Control > Users and Password
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The List of Users for Companies screen is displayed as shown.
Figure 14.8 List of Users for Company
Select Tally.NET User from the list of Security List. Enter [email protected] in Name of User field. Set Allow Remote Access to Yes, in order to allow Tally.NET User created earlier to access data from a remote location Set Allow Local TDLs to No so that the local TDL available in the remote users machine will not be loaded. Enter 9980699332 in Mobile Number field. Select End of List.
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Figure 14.9 Creation of Users
Accept to Authorise the Tally.NET User.
14.6 Remote Access

Tally.ERP 9 provides remote capabilities to access the data from anywhere. The account administrator can create user ids, authorise and authenticate them to access data remotely. The Remote users created under the security level Tally.NET Auditor or Tally.NET User can login, audit and access data from a remote location using another instance of Tally.ERP 9 running in Licensed or Educational mode. The data is transferred between the remote location and the server is transferred using a secured mechanism called encryption.
14.6.1 Login as Remote User

Start Tally.ERP 9 at the remote location In the Company Info screen Select Login as Remote User or Select Login as Remote Tally.NET User in the Startup screen.
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Figure 14.10 Login as Remote Tally.NET User
Press Enter, the Login As Remote Tally.NET User screen is displayed. Enter your email address in the Your Email ID field. Enter the password in Your Tally.NET Password and Press Enter. The Select Remote Company screen is displayed, showing the list of remote companies accessible by the remote user.
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Figure 14.11 List of Remote Companies
Select the required company and press Alt+O or click O:Open or press Enter. The Gateway of Tally for the selected company appears displaying the Remote User Details
In the Select Remote Company screen, the companies that are Offline does not appear against the Company Name when the company is connected to Tally.NET Servers.
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Figure 14.12 Remote Company
To view or print the reports select the required options available.
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Points to Remember
Tally.NET allows to access Company data Remotely
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Lesson 15: Application Management and Controls
Lesson Objectives
On completion of this lesson, you will learn how to Access Control Centre Manage Accounts using Control Centre
15.1 Concept of Control Centre

Tally.ERP 9 provides a powerful feature named Control Centre to its users, which works as an interface between the user and Tally.ERP 9 installed at different sites, it enables the user to centrally configure and administer Site/User belonging to an account.
15.1.1 Features of Control Centre

The Control Centre encompasses the following features Manage Licenses Central Configuration Manage Users Manage Company Profile Manage Accounts (using My Tally.NET Accounts) Change Passwords Activity History Jobs and Recruitments (Coming Soon) Shop (Coming Soon)
15.1.2 Advantages of Control Centre

With the help of Control Centre, you will be able to
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Application Management and Controls
Create users with predefined Security levels Centrally Configure & manage your Tally.ERP 9 Surrender, Confirm or Reject activation of a Site Maintain Account related information Manage Licenses and Activity History Create users with predefined Security levels Using the Control Centre feature, the Account Administrator can create users and map them to a predefined security level and authorise them to access a Site/Location linked to that Account. And further the system administrator can also create Remote users and allow / disallow them to remotely access the data. The predefined security levels in Tally.ERP 9 are: Owner Standard User Tally.NET User Tally.NET Auditor Centrally Configure and manage your Tally.ERP 9 The Control Centre provides the flexiblity to make changes to product configurations in the Tally.ini (Configuration file) and apply them to immediate effect without restarting the application. The following master configurations set can be made from the Control Centre Add/Modify the Tally.ini parameters Assign TDLs to a site or all the sites under an Account Permit or Deny changes to the local configurations The master configurations set created is applied initially to the Account centrally which is inherited by the site(s) on updation of license, based on the site level permissions by the Account Administrator. Surrender, Confirm or Reject activation of a Site The Account Administrator is authorised to surrender, confirm a site license or Reject the request received on activation from another site. Maintain Account related information Allows you to maintain information about the organisation. Based on the requirements, the Account Administrator can merge multiple accounts into one or split an account into multiple account for easy and better management.
Before we start using Control Centre in Tally.ERP 9, it is recommended to understand the process of installation of Tally.ERP 9 as explained.
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15.2 Installing & Activating Tally.ERP 9

Tally.ERP 9 software installation is a simple and one time activity. You can install program files on any drive (if the hard disk has partitions) or specify a directory for installation. You can also specify the location of the data directory.
15.2.1 Installing Tally.ERP 9

To install Tally.ERP 9: Insert the Tally.ERP 9 Installation CD in the computer's CD drive Select My Computer on Desktop Select CD drive Run Install.exe > Specify Path (for Program files and data directory) Click Install After Installation a message Installation Successful is displayed. Click OK. On successful installation of Tally.ERP 9, a shortcut is placed on the desktop, a folder titled Tally.ERP 9 is created in the selected drive and all the files required to run Tally.ERP 9 are stored in this default folder. In the same way, you can install Tally.ERP 9 Multi-User. In Multi-User installation, select the required programs (Tally.ERP 9 / License Server) to install at Server and client locations and specify other required details.
15.2.2 Activating Tally.ERP 9 License

On successful installation of Tally.ERP 9, the Licensing Operations Startup screen appears on your computer, once you start Tally.ERP 9. Step 1 : Activate License To activate license, follow the steps given below :
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The Startup screen appears as shown:
Figure 15.1 Startup screen
Select Activate License, the Activate License screen appears as below
Figure 15.2 Activate License
The Activate License has three options which allows you to activate the license based on your requirements. 1. First time activation for your organization: allows you to activate a single site license. 2. Activation of an additional Site for your organization: allows you to activate the next or consecutive site licenses for your organization. 3. Activation of Promotional Rental License : allows you to activate promotional rental license. Select First time activation for your organization
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The Activate License Form appears, Enter the required License Serial Number in the Serial Number field Enter the required Activation Key in the Activation Key field Enter your E-Mail ID in the E-Mail ID of Administrator field Repeat the Email-ID in the Repeat (E-Mail ID of Administrator) field
Figure 15.3 Activation Form
An unique account identification is created using this E-Mail Id and the license serial number is linked to this account. The License Key, Password and Account related information are mailed to the E-Mail Id provided in the activation form. Press Enter, Tally.ERP 9 searches for the availability of Internet Connectivity on your computer. If Internet Connection is Available, Tally.ERP 9 displays a message Congratulation! Your activation Request has been processed. The Tally_lck.lic file is created and placed in the default Tally.ERP 9 directory. You can also Activate License in Offline Mode, if Internet Connection is not Available. To activate License in Offline Mode, generate the License File Offline and paste the license file onto the system where internet is available and Tally.ERP 9 is installed, go to the licensing menu, select send External request, the license file will be generated, copy the file and paste it where the license is to activated. Step 2 : Unlock License File Access your mail and retrieve the unlock key In the Startup screen, select Unlock License Type the Unlock Key in unlock field and press Enter On successfully unlocking the license file, Tally.ERP 9 displays the message Congratulations! Your License is successfully activated.
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Start Tally.ERP 9, the License Serial Number and Account ID are displayed under the Version and Licensing sections of the information panel respectively. In the same way, you can activate license for Multi-Site, by selecting Activation of an Additional Site for your Organisation in the Activate License screen and providing Site Name, Site Administrator Email ID and other related details.
15.2.3 Launch Tally.ERP 9

Start Tally.ERP 9 by choosing any one of the methods discussed earlier. On starting Tally.ERP 9 the Gateway of Tally screen appears displaying the Edition and Users under Version block, Serial Number and Account ID under License block and Stat version and ODBC details in Configuration block of the Information panel.
15.3 Logging to Control Centre

To start Control Centre follow the steps shown: Go to Company Info menu or Gateway of Tally
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Press K: Control Centre or press Ctrl + K
Figure 15.5 Start Control centre
The Login As Remote Tally.NET User screen appears Enter the User ID in Your E-Mail ID field. Enter the password emailed in Your Tally.NET Password field.
Figure 15.6 Start Control Centre
Based on the authentication received from Tally.NET you can access the Control Centre.
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Depending on the requirement, you can enter the Account/Site Administrator's Id to administer an Account and Site respectively. You can also provide the other User Id to access the support centre and access other areas of the control centre based on the permissions assigned. Incase, you have Forgotten the Password, provide the Account/Site/ User ID in Your E-Mail ID and press F5. The new password will be emailed to the respective E-Mail ID.
15.4 Managing Accounts using Control Centre

After logging in, the Control Centre screen will appear as shown :
Figure 15.7 Control centre
The Control Centre screen displays the options available which are briefly described below My Tally.NET Account use this option to configure, activate / deactivate sites, create users and assign security levels and manage your Account details. The My Tally.NET Account has the following sub-options: Licensing & Configuration enables you to configure and surrender a site belonging to an account. The configuration set can be created for each site by the Account / Site administrator. Further, the Account Administrator may allow or restrain the site administrator from making any changes to the configuration set locally.
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User Management enables you to administer users belonging to an account by assign security levels with predefined permissions to enable remote access, assign users to a site and maintain the active users as required. Profile Management enables you to enter the essential information related to the Account/Site ID. Change Account Admin enables you to change the Account Administrators ID. To change the account id, the account administrator should provide the existing account id and the new account id. My Active Sessions displays the number of active session for a logged in user. You can analyse and delete the required session in case you have logged in from more than one machine or improperly logged out or did not logout from the previous session. My Profile enables you to manage the Tally.NET Users profile by providing the required details for further communications. My Password this option enables you to change password at your convenience.
15.4.1 My Tally.NET Accounts

Select My Tally.NET Accounts and press Enter On selecting My Tally.NET Accounts, the My Tally.NET Accounts screen appears as shown.
Figure 15.8 My Tally.NET Accounts
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The My Tally.NET Accounts screen displays the User ID against Tally.NET ID field, the Account ID, Security Level, permission to access Tally.NET, Site ID (for Multi Site only), permission to administer the Account and the account status. It also displays the Account IDs associated with your Account, based on your requirement you may disassociate your Account ID.
Site ID will not appear when you have a Single Site Account. To disassociate from another account, select the required Account ID and press Alt+D. The Account/Site Administrator ID cannot be disassociated from associated accounts.
Select the required Site Account ID and press Enter, the Control Centre of an Account appears
Figure 15.9 Control Centre of an Account
You can use this option to configure, activate / deactivate sites, create users and assign security levels and manage your Account details. The options available are briefly explained below : Licensing & Configuration: Allows you to configure and activate/ deactivate a site User Management: You can create Remote Users and assign security controls Profile Management: Maintain details related to your account My Activity History: Display the list of accounts where your ID is used Change Account Admin: Allows the Account Administrator to change the Account Administrator's User ID
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Licensing & Configuration The Account administrator can configure and surrender a site belonging to an account. The configuration set can be created for each site by the Account/Site administrator. Further, the Account administrator can allow or restrain the site administrator from making any changes to the configuration set locally. The Licensing & Configuration screen displaying the information related to each site / license serial number and the date on which the site was created.
Figure 15.10 Licensing & Configuration
By default, the status is Active, based on your requirement you can surrender the license by selecting Surrender from the list of Status. The license status are briefly explained for your benefit: Active: indicates that the site is in operation Surrender: indicates that the site has been surrendered
The Licensing & Configuration screen displayed above is for Single Site Account. The Site ID will be displayed for Multi-Account Site.
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The Licensing & Configuration screen of Multi-Site Account will display the information for the sites associated with the selected account : To view the Site Profile, press Enter on the required Site ID A brief explanation on each Status types for Multi-Site Account are given below : Active : Is displayed when the site is in use and the accoount administrator has confirmed the activation of a site within the stipulated period or the site is not surrendered. Surrendered : Is displayed when the Tally.ERP 9 license of the respective site is given up. Pending for Confirmation : Is displayed after the activation of a site and awaits a confirmation from the account administrator. Confirm : The account administrator selects this option to confirm the activation of a site. Reject : The account administrator selects this option to reject the activation of a site.
General Configuration To create configuration set for a Site, follow the steps given below In the Licensing & Configuration screen Click on F6: Show Config or press F6 The General Config and TDL Config fields appear
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In the General Config field, press Alt+C to create configuration The General Configuration Management screen appears Enter the required configuration name in Name of Configuration field. The configuration parameters are saved with the configuration name provided in the account. Set Want to set client/server configuration to Yes to create a fresh set of configuration. In Tally is Acting as field, select the required behaviour from the list of Client/Server list. Tally.ERP 9 will act as Server/Client/Both/None based on the parameter selected. Set Enable ODBC Server to Yes, when you want to transfer data from any third party application to Tally.ERP 9 or Vice Versa. Enter the required port number in Port field. Set Can be overridden locally to Yes, when you want the above parameters to changed / modified by the site administrator locally. In Disallow Request section, specify the required Server Name/ IP Address/URL in From field to deny a request from the Server/IP Address/URL. Similarly, specify the required Server Name/ IP Address/URL in To field to deny a request to Server/IP Address/URL In Allow Request section, specify the required Server Name/ IP Address/URL in From field to allow a request from the Server/IP Address/URL. Similarly, specify the required Server Name/ IP Address/URL in To field to allow a request to Server/IP Address/URL.
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Press Enter to save the General Configuration Select the specified configuration package in the General Configuration field. To View/Alter General Configuration In the Licensing & Configuration screen Click F7: Gen Config List or press F7 The Select Item screen appears
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Select the required configuration from the List of General Configs The General Configuration Management screen will appear, you can make the required changes as per your requirements.
TDL Configuration Allows the Account Administrator to link a set of programs that were uploaded earlier using the web control centre. Similarly, you can also create a TDL configuration pack by pressing Alt+C in TDL Config field.
User Management You can administer users belonging to an account by assign security levels with predefined permissions in order to enable remote access, assign users to a site and maintain the active users as required. To administer the users within an account follow the steps shown: In the Control Centre screen Select User Management and press Enter
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By default, the Security Level for the User ID, Permission to access Tally.NET and the Status is displayed. To create the required user: Select the required Security Level from the list of Security Level
The options which appear in the Secuirty Level field are explained below : Owner: has the capability to manage Sites/Users belonging to an account. The Owner is not permitted to change Account/Site Admin ID, Site Status and Account Profile. Standard User: Created with predefined permissions. All users other than the Owner are created under this security level.
Enter the required E-Mail ID in the Tally.NET ID field. Using the E-Mail ID provided a Tally.NET ID is created and the Password is emailed. Set Tally.NET User field to Yes when you want the user to access data from a anywhere using Tally.NET. In the Status field, select the required status from list of Status
The options which appear in the Status field are explained below : Active: Set the status to active when you want the user to be in operational mode. Deleted: Set the status to deleted when you want the user to be removed permanently. In-active: Set the status to In-active when you want the user to be nonoperational mode. You can change the status to Active as required.
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Figure 15.14 User Management
Accept to save the user created.

Default users such as Account Administrator or Site Administrator are assigned the security levels of Owner. However, based on the requirements, you can change the security level. From the above screen, you can change the Tally.NET ID for any user other than Account/Site Administrators. However, you will not able to change the status to Delete or In-Active for Account/Site Administrator. To change the User ID, type the new user id in the Tally.NET ID field.
The User Management screen also displays the number of Tally.NET Users created for an account. To view in Detailed mode, In the User Management screen, Click F1: Detailed or press Alt+F1 The User Management screen appears displaying the user details as shown
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Figure 15.15 User Management Detailed
In case of Multi-Site Account, press F3: Sitewise to display the users under each site.
To view the Security Level List In the User Management screen Click F8:Sec Level List or press F8 The Select Items screen appears, select the required security level from the List of Security Levels The Security Levels screen appears as shown
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Figure 15.16 Security Levels
By default, the Standard User is authorised to access the Support Centre only, based on your requirement select the access controls from the list of Access Rights as shown.
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Figure 15.17 Access Rights
Accept to save the access rights assigned to the security level. Create Security Levels An authorised user can create security levels and assign the Access Rights to the user in order to allow the user to perform certain tasks within the account. The security levels created are then assigned to the users belonging to the account. To create a security level and assign access controls follow the steps shown: Press Alt+C in the Security Level field, the Security Level Management screen appears Type the required security level name in the Name of Security Level In Allow the Following Facilities, select the required access rights from the list of Access Rights shown
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Figure 15.18 Create Security Levels
Accept to save the security level created.
To alter an existing security level, place the cursor in Security Level field and press Ctrl+Enter or press F8: Sec Level List, select the required security level to make necessary changes. The Owner security level is assigned all the access rights and cannot be modified.
Profile Management The user can enter the essential information related to the Account/Site ID in Profile Management. To enter the details regarding the organisation follow the steps shown: In the Control Centre screen Select Profile Management and press Enter The Profile Management screen appears By default the E-Mail ID of the Account Administrator appears in the Account ID field. Select the required account type from the list of Account Types Enter the details related to the Account as shown.
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Figure 15.19 Profile Management
Accept to save the information. Change Account Admin This feature allows you to change the Account Administrators ID for an account. To change the Account Administrators ID follow the steps shown: In the Control Centre screen Select Change Account Admin The Change Account Admin screen appears
Figure 15.20 Change Account Admin
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Enter the required Account Administrators ID in the Old Account Admin ID field Enter the new Account Administrators ID in the New Account Admin ID field Accept the create a new Account Administrators ID
The new Account Administrators ID can be created only by an existing account administrator.
15.4.2 My Active Sessions

This option displays the number of active session for a logged in user. You can analyse and delete the required session in case you have logged in from more than one machine or improperly logged out or did not logout from the previous session. To display the Active Session(s) for an user, In the Control Centre screen, Select My Active Sessions or press Alt+T The My Account Active Sessions screen appears as shown:
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Figure 15.21 My Active Session
To delete the required session, Press Space and select the required session Press Alt+D to delete a Sessio
You cannot delete an active session.
15.4.3 My Profile
You can manage the Tally.NET User's profile by providing the required details for further communications. To change the user profile the user has to follow the steps shown: In the Control Centre screen Select My Profile or press Alt+P The My Profile screen appears displaying the Tally.NET ID In the Salutation field select the required salutation from the list of Salutation. Enter the required name in the Name field.
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Enter the required Mobile Number in the Mobile field.
Figure 15.22 Change Profile
Accept to save the profile.
15.4.4 My Password
This options allows the user to change the password as required. To change the Password follow the steps shown: In the Control Centre screen Select My Password or press Alt+W,
Figure 15.23 My Password
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The Change My Password screen appears with the Username Enter the current password in Old Password field. Enter the new password in New Password field. Repeat the new password in Repeat field for the purpose of confirmation.
Figure 15.24 Change Password
Accept to change the password. .
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Points to Remember
Control Centre allows us to manage and centrally configure Tally.ERP 9.
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Lesson 16: Online Help and Support
Lesson Objectives
On completion of this lesson, you will learn how to Access Support Centre Use Support Centre
Tally.ERP 9 provides a new capability to its users known as Support Centre, wherein a user can directly post his support queries on the functional and technical aspects of the Product. Using Support Centre feature, the user can view all the support queries reported via Support Centre and also through other modes viz., Email, Chat, Calls, etc. The Support Centre features facilitates viewing queries for a activated license alongwith the Status i.e., Closed / Pending and Ticket Summary. The report is viewed based on Date, Status and Location and so on.
16.1 Features of Support Centre

Faster reach for help and support :The Support Centre feature makes it easy and convenient to reach out to Tally.ERP 9 service partner and Tally-support team for any product help and support, by click of a button from within the product. Access solutions to your problems any time : This feature facilitates instant reference to the solutions provided for your queries at any point of time. Avoid repeated explanations : Availability of information on the issues, interactions and resolutions, to Tally Service Partners and Tally Support Team, largely reduces the possibilities of repeated explanations on the issues/support queries and thereby ensures quality help and support. Track your issues on real-time basis : The Support Centre makes available the status of your queries including the full chain of interactions irrespective of the mode of communication. i.e., if you have posted a query onto the Support Centre feature in Tally.ERP 9 and
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Online Help and Support
then interacted over phone, even in such cases, the complete discussion will be available to you. Access issues of any Location/Site : In Multi-site License, using the Support Centre feature you can view details of issues of any location /site from any of your Location(s). Reach out to your nearest Service Partner instantly : You can search for a service partner and post your queries instantly. Access your Support Centre remotely from any Tally.ERP 9 : The Support Centre feature can also be accessed remotely from any Tally.ERP 9 from anywhere with Tally.ERP 9 installed and activated or in Educational mode, as an authorised Tally.NET user.
16.2 Accessing the Support Centre

Support Centre can be accessed locally from your machine as well from another remote location where Tally.ERP 9 is installed and activated or in Educational mode.
16.2.1 Local Access

To access the Support Centre locally: Start Tally.ERP 9 From the Company Info menu or Gateway of Tally, click H: Support Centre or press Ctrl + H.
Figure 16.1 Support Centre Button
The Support Centre screen appears as shown:
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Figure 16.2 Support Centre
To exit the Support Centre, press the Esc or press Ctrl + Q.
The Support Centre appears blank for newly activated Tally.ERP 9. When you log on to the Support Centre from Gateway of Tally and select a company, the Username is displayed on the top right corner of the screen. The Username does not appear when you log on to the Support Centre from Company Info. menu Issues posted on the current date appear in Blue.
16.2.2 Remote Access

To access the Support Centre from any remote location you can use the Login option available. To login remotely follow the steps shown:: Go to Company Info menu or Gateway of Tally Click H: Support Centre or press Ctrl + H
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The Support Centre screen appears Click L: Login or press Alt + L . The Login As Remote Tally.NET User screen appears: Enter your Tally.NET ID in Your E-Mail ID field Enter the Password in Your Tally.NET Password field.
Figure 16.3 Login As Remote User
Press Enter The Select Account appears displays the list of User Accounts. The list of User Accounts will appear when your E-mail ID is linked to one or more accounts.
Figure 16.4 Select Account
Select the required User Account and press Enter The Support Centre for the account selected will be appear as shown:
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Press Alt + L or click on L: Logout button, if you wish to logout from the Support Centre.
The selected Account ID will be displayed on the top left hand corner of the screen and your User ID will be displayed in the top right hand corner of the screen. Using Alt + L, you can toggle between Login/ Logout. In case you forget the Tally.NET Password, click on F5: Reset Password or press F5. The new password will be sent to your E-mail address.
16.3 Using Support Centre

Go to Company Info menu or Gateway of Tally Click H: Support Centre or press Ctrl + H By default, the Support Centre screen will display the queries raised during the the last 7 days.
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Figure 16.6 Support Centre - Query List
Issues posted on the current date are in Blue. Click on R: Refresh button or press Ctrl + R to refresh the query list, as required.
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The screen displays the following information in different views: Query List : The default page size is set to 10 queries per page. Click There are 10 rows more, show next 10 rows to view the next set of 10 queries. An option to view 10 more or show previous 10 rows is displayed above the list of queries. Ticket Summary : The Ticket Summary column displays the Ticket number of the query, Account ID of the user, the date on which the query was Reported On, the Current Owner of the query, the Current Status of the query (Pending or Closed) and the Ticket Interactions. It also displays the Date, Subject of the query, From indicates the name of the person who posted the query, To to whom the query was addressed and Description of the query.
You can also view the content in zoom in content mode which gives an expanded view of the Ticket Summary. To view the query/ issue horizontally: Highlight the required query/ issue and press Enter. The detailed query appears in the bottom part of the Support Centre screen You can also click B: Go to Browser to browse the Ticket View in detail.
16.3.1 Adding a New Issue/ Query

You can post your query for any support required on the functional and technical aspects of the Product. To add a New Issue/ Query: Go to Company Info menu or Gateway of Tally Click H:Support Centre or press Ctrl + H Click N: New Issue or press Alt+N The form entitled Post Your Support Query is appears, enter the required details in the fields provided:
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Figure 16.7 Post Your Support Query
Send to: Select a New Service Partner or Tally Solutions Pvt Ltd. New Service Partner the query is directed to the Service Partner. Tally Solutions Pvt Ltd., the query is directed to Tally (Customer) Support.
Select New Service Partner from Send your query to, the New Service Partner screen appears. Enter the Partner Account ID or Name in the Tally Service Partner field
Figure 16.8 New Service Partner
To search for a service partner based on the Location: In Search by field, select the Location from the list of Searching Methods In the Location field, enter the name of the location and press Enter The New Partner Details screen will appear displaying the Name of the Partner along with the Distance Select the required Partner and press Enter To search for a service partner by Name: In the Search by field, select Name from the list of Searching Methods In the Name Containing field, enter the name of the service partner and press Enter
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The New Partner Details screen will appear displaying the Name of the Partner Select the required Partner and press Enter
Press Alt + F1 or click on F1: Detailed button to view the contact details of the partners.
If you have selected Tally Solutions Pvt. Ltd. under Send to, the Post Your Support Query form will be displayed as shown:
Figure 16.9 Post Your Support Query
When you login remotely the Send to field will display the E-mail address of the account to which you have logged in, under the Send your query to list.
Accept the query and despatch to the required sender An updated query list will appear as shown:
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Subsequently when you send a New Query, the Send to field in the Post Your Support Query form will display the service partner selected earlier in the Send your query to list suffixed with Preferred service partner in brackets.
16.3.2 Reply to an Issue/Query

You can respond or seek clarification/additional information from the Customer Centre or a Service Partner to a query raised. You can also forward the queries received with status Pending or Closed by selecting the required query from the list. To reply to a query: Go to Company Info menu or Gateway of Tally Click H : Support Centre or press Ctrl + H Select the query that has to be replied/forwarded Click R: Reply or press Alt + R
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The Post Your Response screen appears, in the Description field, type the response to the query posted.
Figure 16.11 Reply to an Issue/Query
Accept the reply to the query raised. The reply to the query is updated in the Query List as shown:
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As the query is linked to the reply using the ticket number, you can view the reply along with the query raised. To view the query and its reply select the subject under Ticket Interaction or Thread View or Zoom in Content or Go to Browser
The ticket number of the query/ issue to which a reply has been posted, will automatically be displayed on top of the form, as shown in the image. When the Reply button is pressed, the cursor will blink at the Description field automatically in the Post Your Response form. The Send to and Subject fields will automatically be pre-filled with the recipient address and the subject, respectively. You may change the same by pressing back-space if required. You may also select the required Subject under Ticket Interactions available in the Zoom Out Content mode (default query list) or in the Zoom in Content mode and press Enter, to Reply.
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16.3.3 Close an Issue/ Query

You can Close the issues once you have received a response from the Customer Centre or Tally Support or a Service Partner. To close an Issue follow the steps shown Go to Company Info menu or Gateway of Tally Click H : Support Centre or press Ctrl + H Select the query that needs to be closed Click C: Close or press Alt + C.
Figure 16.13 Close an Issue/ Query
The Status of the query will change to Closed
The Close button will be active for Pending issues only. When you are satisfied with the response received you can change the Status of an interaction to Close. When an issue with Status as Pending is closed, the status of other issues that are linked using the same ticket number change to Closed.
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16.3.4 Other Functions

To view support centre information in Detailed/ Condensed mode, Go to Company Info menu or Gateway of Tally Click H : Support Centre or press Ctrl + H Click F1: Detailed/Condensed or press F1 You can toggle between the detailed and the condensed mode by pressing the F1 button. It is active when you opt to view the list in Status wise or Site wise mode. The Detailed report displays a list of queries whereas the Condensed report displays the count of queries based on their Status. Period By default, the query listing is displayed for the last 7 days. To change the period follow the steps shown: Go to Company Info menu or Gateway of Tally Click H : Support Centre or press Ctrl + H Click F2: Period or press F2 Enter the number of Days/Weeks/Months/Years in the Default Period field to display the query listing for the mentioned period. Group by To view the query list by organising them based on the Date, Site and Status, you can also set the Default Grouping using this option. Go to Company Info or Gateway of Tally Click H : Support Centre or press Ctrl + H Click F3: Group by or press F3 Select any one of the following options to group Group by Date: Allows you to view the list of queries based on the Date Group by Site: Allows you to view the query list based on the Site/Location Group by Status: Allows you to view the query list based on their Status List/ Thread View To view the Support queries in the List View mode or in the Thread View mode follow the steps shown: Go to Company Info menu or Gateway of Tally
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Click H : Support Centre or press Ctrl + H Click F4: Thread View/List View or press F4 A brief description for the modes are as below: List View displays the queries individually in a detail Thread View displays the entire chain of interaction Zoom In/ Zoom Out List To view the query list with other column details, in an enlarged mode follow the steps shown: Go to Company Info menu or Gateway of Tally Click H : Support Centre or press Ctrl + H Click Z: Zoom In List/ Zoom Out List or press Alt + Z Press Alt + Z to toggle between the Zoom In and Zoom Out view Zoom In Content/ Zoom Out Content To view the selected query in an enlarged mode follow the steps shown: Go to Company Info menu or Gateway of Tally Click H : Support Centre or press Ctrl + H Click Z: Zoom In Content/ Zoom Out Content or press Ctrl + Z Press Ctrl + Z to toggle between the Zoom In Content and Zoom Out Content view. Browser View The Browse mode displays all the additional information that is not displayed in the Zoom In Content option, such as Reported by, Issue type, Priority, Product, Product Serial No., Status, etc., under Ticket Summary Similarly, the content area in the Support Centre is limited and when the content displayed exceeds the limit, the Browse Issue mode will display the entire content and their properties under interaction details . To view the content in Browse mode, click B: Go to Browser or press Alt + B. Site Filter You can use the site filter to view the queries posted for each on a site. To arrange the queries based on each site follow the steps shown: Go to Company Info menu or Gateway of Tally Click H : Support Centre or press Ctrl + H Click F8: Site Filter or press F8 Select the required site from the list of Sites or Select All to displays queries/ issues related to all Sites/Locations.
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Status Filter You can view the queries posted based on their status, Go to Company Info menu or Gateway of Tally Click H : Support Centre or press Ctrl + H Click F9: Status Filter or press F9 Select the required status from the list of Default Status available. The Status are briefly explained for your benefit: All: will display all the queries/ issues irrespective of their status. Pending: will display all the Pending queries/issues Closed: will display all the Closed queries/ issues. Page Size You can use this option to set the page size or the number of queries that can be displayed per screen, by default the page size is set to display 10 queries per screen. Go to Company Info menu or Gateway of Tally Click H : Support Centre or press Ctrl + H Click F10: Page Size or press F10 The Configuration screen appears In the Page Size field enter the required number, so as to display the number of queries per page. F12: Configure Allows the user to configure the support centre based on their requirement. The configuration settings are also as buttons on the horizontal toolbar. Go to Company Info menu or Gateway of Tally Click H : Support Centre or press Ctrl + H Click F12: Configure or press F12 The Configuration screens appears as shown :
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Figure 16.14 Configuration
The F12: Configuration options are explained as below : Default Period You can re-set the default Period to display the queries as per your requirement. For instance, you can select Last 15 Days from the Default Period list to display the queries listed for the past 15 days. Similarly, you can also choose other options from the Default Period list to display the queries for the respective period. Default Grouping This option allows you to view the list of queries based on the Grouping options selected. Default Grouping - Date : In cases where Date is selected from the Default Grouping list, the queries are displayed in a chronological order (Date wise). Default Grouping - Site : In cases where the Site option is selected from the Default Grouping list, the queries are displayed Site/ Location wise. The option Site under Default Grouping will not be listed for Single Site users. Default Grouping - Status : In cases where the Status is selected from the Default Grouping list, the queries are displayed on the basis of the Status (All / Pending / Closed). Default Status : This option allows you to set the default Status, i.e., All, Closed or Pending, for any Group by option selected. Default View You can opt to view the list of queries either in a List View or in a Thread View mode. Default View - List : In cases where the option List View is selected, the query list can be viewed in List View mode.
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Default View - Thread : In cases where the option Thread View is selected, the query list can be viewed in Thread View mode. Default View Mode You can opt to view the list of queries in either a Detailed or Condensed mode. Default View Mode - Detailed : The Detailed View Mode displays the list of queries in Detail based on the Status (All/ Pending/ Closed) selected. Default View Mode - Condensed : The Condensed View Mode displays only the counts of queries based on the Status (All/ Pending/ Closed) selected. The Default View Mode option will be disabled in case Date is selected under Default Grouping option. Default Page Size This option allows you to define the number of queries/ issues to be listed in the Support Centre screen, for instance: 15, 20, 25, and so on. The default Page Size is 10. i.e., the Support Centre screen displays 10 queries in a screen at a time. The next set of 10 queries can be viewed by clicking on 'X rows more, show next x rows' available below the list. The Page Size can be set to display between 10 and 100 rows.
You can change the configuration as required in the Configuration screen or individually click on the required buttons available on the Horizantal tool bar.
The configuration setting options available in F12: Configuration are also available in the button bar viz., F1: Detailed/Condensed, F2: Period, F3: Group by, F9: Status Filter, F4: Thread/List View and F10 Page Size.
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Points to Remember
Support Centre features facilitate viewing queries for a activated license along with the Status.
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Lesson 17: Service Tax
Lesson Objectives
On completion of this lesson, you will be able to Enable Service Tax in Tally.ERP 9 Create the masters neccesary for Service Tax transactions Record Service Tax transactions Generate Service Tax reports and challans in Tally.ERP 9
Service Tax is a tax on services rendered. The person, one who renders the service, is liable to pay service tax. Service tax was imposed for first time in 1994 and its scope is increasing every year.
17.1 Basics of Service Tax

Let us understand the following definitions and terminologies used in Service Tax : Features of service tax Service tax is payable on gross amount charged for service provided or to be provided, excluding material cost. Tax is also payable on reimbursement of expenses which form part of service. However, payments made by service provider as 'pure agent' of service receiver is kept outside the purview of Service Tax. In cases, where the value of Service provided is not ascertainable the valuation is done on the basis of similar service or on basis of cost. Gross amount charged is considered as inclusive of service tax and then tax is back calculated. Service tax is payable only when bill amount is received from service receiver. However, in case of service provided to associated enterprises, service tax is payable on booking such entry.
Service Tax
Taxable Service Service tax is payable on 'taxable service'. The definition of taxable service is different for each class of services, e.g. in case of advertising agency, any service provided to a client, by an advertising agency in relation to advertisement, in any manner will be 'taxable service'. Value of Taxable Service Service tax is payable on 'value of services'. Value of Service shall be the gross amount charged by the service provider for such service rendered by him. Service Provider As defined u/s 65(105) a service provider is one who provides taxable service. Person liable to pay service tax Every person providing taxable service to any person has to pay service tax at the prescribed rates. In few cases, tax is payable by service receiver, under reverse charge method. Exemption from service tax Small service providers whose total value of services provided (including exempt and nontaxable services) is less than Rs 10 lakhs in previous year are not required to pay service tax in current financial year till they reach turnover of Rs 10 lakhs. Services provided to SEZ units or developer for consumption within SEZ are exempt. Refund is eligible for specified services utilised for export. Services provided by RBI are exempt but service provided to RBI are not exempt. Rate of Service Tax According to Section 66 of Finance Act, 1994 there shall be levied a tax at the rate of 10% of value of taxable services referred in section 65(105) of Finance Act, 1994. In addition, education cess @ 2% and Secondary Higher Education cess @ 1% is payable. Thus, total service tax is 10.3%. Let us consider the following example to understand how Service Tax is calculated : Particulars a. b. c. d. Charge on service (i.e. Bill amount) Service Tax @ 10% Cess on Service Tax @ 2% Sec Cess on Service Tax @ 1% Total invoice amount Rs. 10,000 1,000 20 10 11,030
Service Tax
Assuming the buyer pays the seller only Rs. 5,000 the Service Tax payable is calculated as below: Particulars a. b. c. d. Charge paid on service Service Tax on Rs.5000/- is Cess on Service Tax is Sec Cess on Service Tax is (10,000 x 5,000)/11,030 (1,000 x 5,000)/11,030 (20 x 5,000)/11,030 (10 x 5,000)/11,030 Total Payment Received Abatements Abatement refers to the percentage of tax exemption provided by the government on the value to be considered for calculation of Service Tax. It is either a percentage of the service charges or a lump sum amount. Rs. 4,533 453 9 5 5,000.00
Particulars a. b. c. Charge on Service An abatement of 30% amounts to: Here, the assessable value is (a-b) Therefore, Service Tax @ 10% on Rs. 7,000, Cess @ 2% and Sec Cess @ 1% on Service Tax Cenvat Credit
Rs. 10,000 3,000 7,000
Service provider can avail Cenvat credit of service tax paid on input services and excise duty paid on inputs and capital goods. The credit can be utilised for payment of service tax on output services. However, in cases where the assessee is providing both taxable and exempt services and if input services are common, Cenvat credit can either be taken on proportionate basis or 8% 'amount' is required to be paid on exempted services. Payment of Service Tax when the assessee is a corporate, service tax is payable on a monthly basis by the 5th of the following month. For example, service tax has to be paid by January 5, for the month of December. Non-corporate bodies such as individuals, proprietary firms and partnership firms pay service tax for the fiscal quarter. The payment is to be made by the 5th day of the month, following the quarter. For example, service tax for the quarter ending June 30, is to be paid by July 5th. For the month of March though, corporate and non-corporate bodies, have to pay the service tax by March 31. The service tax assessee must use a GAR 7 Challan to pay tax in the bank nominated by the commissionerate. The payment must be rounded off to the nearest rupee. It is advisable to use separate GAR 7 Challans for different categories of service.
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Service Tax
17.2 Configuring Tally.ERP 9 for Service Tax

It is a one time configuration for Service Tax features to be enabled in Tally.ERP 9.
17.2.1 Salient Features of Service Tax compliant Tally.ERP 9

Tally.ERP 9 tracks the details bill-wise and automatically calculates the Service Tax payable and Input Credit on each bill while offering the flexibility to make adjustments later. It has a built-in assessable value feature on which Service Tax is calculated. It also accounts for abatement and expenses. It maintains information on Service Tax category-wise which is mandatory for filing the Service Tax returns. It also makes a provision for exemption notification details. Eliminates error-prone information, incorrect remittances. It generates reports in the government suggested formats like GAR-7 Challans, ST3 Report, Management Information Services (MIS) reports and Service Tax Payable Reports. Create a company called FirstC Services to understand the Service Tax feature of Tally.ERP 9.

Create a company Go to Gateway of Tally > Alt + F3: Company Info. > Create Company In the Company Creation screen, Specify FirstC Services as the Company Name and Address details Select India in the Statutory Compliance for field Specify the State, Pin code & Accounts with Inventory details Specify Financial Year From & Books beginning from date as 1-4-2009 The completed Company Creation screen is displayed as shown below :
Service Tax
17.2.3 Enabling Service Tax

In the F11: Features (Statutory & Taxation Features), Set Enable Service Tax to Yes. Enable Set/Alter Service Tax Details to Yes. The Company Operations Alteration screen appears as shown below:
Service Tax
Figure 17.2 Company Operations Alterations
Press Enter to view the Company Service Tax Details screen and enter the details as shown below:
Figure 17.3 Company Service Tax Details
The fields that appears in the Company Service Tax Details screen are briefed below: 1. Service Tax Registration No.: Enter the registration number allotted to you by the Service Tax Department.
Service Tax
2. Date of Registration: Enter the date of registration of Service Tax for your service. 3. Assessee Code: Enter the code given to your company by the Service Tax Department. 4. Premises Code No. Enter the Premises code/Location code. It is the identification number provided to the service tax payers. 5. Type of Organisation: Select the type of your organisation from the List of Organisations menu.
Figure 17.4 List of Organisations
6. Is Large Tax Payer This field is set to Yes/No base on the amount of tax paid by the assessee.
Large Tax payers are those assesses who pay large amount of Tax. They are the eligible taxpayer for the purposes of being served by the LTU. For e.g.: Rs.5,00,00,000.
7. Large Tax payer Unit : Enter the name of the unit where the large tax payers pay tax. 8. Division: Enter the code and name of the division your company falls under. 9. Range: Enter the code and name of the range your company falls under. 10.Commissionerate: Enter the code and name of the Commissionerate of Service Tax Department, under which the address of your Companys registered office is located.
17.2.4 Service Tax Statutory Masters

Before creating masters, the following Statutory Master is loaded into Tally.ERP 9. To view the Service Category, Go to Gateway of Tally > Display > Statutory Info. > Service Categories > Advertising Agency
Service Tax
Figure 17.5 Service Category
The Service Category screen has a Name field showing the category, followed by the Country Code, Accounting Code, Category Code and Sub-Clause No. fields. The Applicable From column displays the date from which the Abatement (%), Service Tax Rate (%), Cess Rate (%) and Secondary Cess Rate (%) are applicable. Each service category has a predefined master in Tally.ERP 9 which can also be updated for statutory changes from the Tally website (www.Tallysolutions.com). You can view the values for each of these categories in Tally.ERP 9.

Let us create the following ledger masters related to Service Tax : Sundry Creditors Sundry Debtors Duties and Taxes Sales Accounts Purchase Accounts
Service Tax
i. Create Sundry Creditor Ledger

Go to Gateway of Tally > Accounts Info. > Ledgers > Create 1. 2. 3. 4. 5. 6. 7. Enter the Name as KrazyCool Agencies. Select Sundry Creditors from the List of groups in the Under field. Set Maintain balances bill-by-bill to Yes. Default Credit Period: Leave the field blank The Inventory Values are affected? field is set by default to No Set Is Service Tax Applicable to Yes. In the Exemption Detail screen enter the details as shown below:
Figure 17.6 Service Tax Exemption Details Screen
8. Under Mailing Details enter the Address, State and PIN Code details 9. Under Tax Information enter the PAN/IT No. 10.Enable the field Set/Alter Service Tax Details to Yes
Figure 17.7 Ledger Creation
11.In Service Tax Details screen enter the Service Tax Registration details
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Service Tax
In the Service Tax No. field enter the service tax registration number of the party In the Service Tax Reg. Date field enter the service tax registration date
Figure 17.8 Service Tax Details
12.Accept the Service Tax Details screen The completed Ledger Creation screen appears as shown below:
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Service Tax
Figure 17.9 Ledger Creation KrazyCool Agencies
13.Press Y or Enter to accept the screen.
ii. Create Sundry Debtor Ledger

Go to Gateway of Tally > Accounts Info. > Ledgers > Create 1. 2. 3. 4. 5. 6. Enter the Name as Computech Systems. Select Sundry Debtors from the List of groups. Set Maintain balances bill-by-bill to Yes. The Inventory Values are affected field is set by default to No. Set Is Service Tax Applicable to Yes. In the Exemption Detail screen, enter the details as shown below:
Figure 17.10 Service Tax Exemption Details Screen
7. Under Mailing Details enter the Address, State and PIN Code details
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Service Tax
8. Under Tax Information enter the PAN/IT No. 9. Enable the field Set/Alter Service Tax Details to Yes 10.In Service Tax Details screen enter the Service Tax Registration details
11.Accept the Service Tax Details screen The completed Ledger Creation screen appears as shown below:
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Service Tax
Figure 17.12 Ledger Creation Computech Systems
12.Press Y or Enter to accept the ledger creation screen. Similarly, create a ledger for Global Business House under the Sundry Debtors group. .
A Service Tax Ledger is used to predefine the rate of Service Tax and the rate of Cess on each transaction. Tally.ERP 9 gives you the option to predefine these values or directly select them during voucher entry.
iii. Create Service Tax Ledger Go to Gateway of Tally > Accounts Info. > Ledgers > Create 1. 2. 3. 4. 5. Enter the Name as Input Service Tax. Select Duties & Taxes from the List of groups in the Under field. In the Type of Duty/ Tax field select Service Tax from the Type of Duty/Tax list In the Category Name, select Advertising Agency from the List of Service Tax Categories Set Inventory values are affected to No.
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Service Tax
The completed Ledger Creation screen appears as shown below :
Figure 17.13 Ledger Creation INPUT Service Tax
6. Press Y or Enter to accept the screen. Practice Exercise Create the following ledgers. Ledger Output Service Tax Input ST-TELEPHONE CHRG HSBC Under Duties & Taxes Duties & Taxes Bank Accounts Type of Duty/Tax Service Tax Service Tax Category Name Advertising Agency Telephone Service Opening Balance Nil Nil 5,00,000
iv. Create Sales Ledger for Services Go to Gateway of Tally > Accounts Info. > Ledgers > Create. 1. Enter the Name as Consultancy Services. 2. Select Sales Accounts fom the List of Groups menu in the Under field.
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Service Tax
3. Set Inventory values are affected to No. 4. Set Is Service Tax Applicable to Yes. 5. In the Category Name, select Advertising Agency from the list. 6. Set Is Abatement Applicable to No. The completed Ledger Creation screen appears as shown below:
Figure 17.14 Ledger Creation Consultancy Services
7. Press Y or Enter to accept the screen. v. Create Purchase Ledger for Services Go to Gateway of Tally > Accounts Info. > Ledgers > Create 1. 2. 3. 4. 5. 6. Enter the Name as Professional Services. Select Purchases Accounts from the List of Groups. Set Inventory Values are affected to Yes if service is purchased as an item. Set Is Service Tax Applicable to Yes. In the Category Name, select Advertising Agency from the list. Set Is Abatement Applicable to No.
The completed Ledger Creation screen appears as shown below:
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Service Tax
Figure 17.15 Ledger Creation Professional Services

If the field Is Abatement Applicable is set to Yes in the Income/Expenses or Sales/Purchase ledger masters, the Abatement Details screen appears, in which Notification No. and Percentage can be entered, which is captured in the invoice and can be altered.

Tally.ERP 9 allows the user to record the Service Tax transactions in Accounting Invoice Mode or Voucher Mode. Enter the invoice using the Accounting Invoice Mode. This allows the Service Tax amount to be displayed automatically in the invoices, on selection of the Service Tax ledger. Tally.ERP 9 also supports purchase or sale of a service, as an item.

On 15-4-09, FirstC Services received Professional Services from KrazyCool Agencies worth Rs. 1,75,000. The payment for the services was made on 16-4-2009.
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Service Tax
Step1: Create Purchase Invoice Go to Gateway of Tally > Accounting Vouchers > F9: Purchase 1. 1. 2. 3. 4. 5. Press F2 and change the date to 15-4-2009. Enter the Supplier Invoice No. and Date as desired. In the Party's A/c Name, select KrazyCool Agencies from the List of Ledger Accounts. Select the Name of Ledger as Professional Services from the List of Ledger Accounts. Enter the amount Rs. 175000. Select the Input Service Tax ledger from the List of Ledger Accounts.
The Service Tax Details sub-form appears as shown below:
Figure 17.16 Service Tax Details screen
Tally.ERP 9 allows you to make the necessary changes in the Service Tax Details screen.
6. In The Bill-wise Details screen, select New Ref and type the Name as KC-1. Select INPUT Service Tax from the List of Service Tax Ledgers.
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Service Tax
The Completed Bill-wise Details appears as shown below:
Figure 17.17 Bill wise Details for: KrazyCool Agencies
The Completed Purchase Invoice appears as shown below:
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Service Tax
7. Press Y or Enter to accept the screen. Step 2: Create Payment Voucher Go to Gateway of Tally > Accounting Vouchers > F5: Payment
In the F12: Configuration, set Use Single Entry mode for Pymt/Rcpt/ Contra to Yes.
1. 2. 3. 4. 5.
Press F2 and change the date to 16-4-2009. In the Account field, select HSBC from the List of Ledger Accounts. In the Particulars field select KrazyCool Agencies from the List of Ledger Accounts. Enter Rs. 1,93,025 in the Amount field. In the Bill-wise Details screen, select Agst Ref.
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Service Tax
The Bill-wise details screen appears as shown below:
Figure 17.19 Bill-wise Details for KrazyCool Agencies
Select KC-1 from the List of Pending Bills and accept the Bill-wise Details screen. 6. Enter Narration, if any. The completed Payment Voucher appears as shown below:
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Service Tax
7. Press Y or Enter to accept the Payment voucher.

On 20-4-2009, Consultancy Services worth Rs. 7,00,000 was provided to Computech Systems and the amount was received on 25-4-2009. Step 1: Create Sales Invoice Go to Gateway of Tally > Accounting Vouchers > F8: Sales 1. Press F2 and change the date to 20-4-2009. 2. In the Party's A/c Name, select Computech Systems from the List of Ledger Accounts. 3. Press Enter to view the Despatch Details and accept the default details. 4. Select Consultancy Services from the List of Ledger Accounts. 5. Enter the amount as Rs. 700000. 6. Select Output Service Tax from the List of Ledger Accounts. The resultant Service Tax Details appears as shown below:
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Service Tax
Figure 17.21 Service Tax Details screen
7. The Bill-wise Details screen, select New Ref from the Method of Adj.
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Service Tax
Figure 17.22 Bill-wise Details for Computech Systems
8.Enter the Name as 1 and select the Service Tax ledger as Output Service Tax. The completed Sales Invoice appears as shown below:
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Service Tax
9. Press Y or Enter to accept the Sales Invoice. Step 2: Create Receipt Voucher Go to Gateway of Tally > Accounting Vouchers > F6: Receipt
In the F12: Configuration, set Use Single Entry mode for Pymt/Rcpt/ Contra to No.
1. Press F2 and change the date to 25-4-2009. 2. Select Computech Systems in the Credit field and enter the amount as Rs. 772100. 3. In the Bill-wise Details screen, select Agst Ref from Method of Adj. The Bill-wise Details screen appears as shown below:
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Service Tax
Figure 17.24 Bill-wise Details for Computech Systems
4. Select the Sales Voucher from the List of Pending Bills to default Service Tax Ledger and Amount. 5. Accept the Bill-wise Details screen. 6. In Debit field select HSBC Bank from the List of Ledger Accounts, Amount is defaulted automatically. 7. In Narration field enter the Cheque Number. The completed Receipt Voucher is displayed as shown:
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Service Tax
8. Press Y or Enter to accept the Receipt Voucher.
Tally.ERP 9 calculates the Service Tax liability based on the amount received against serviced rendered i.e., Sales Invoice amount.
Step 3 : Display Service Tax Payables Report Go to Gateway of Tally > Display > Statutory Reports > Service Tax Reports > Service Tax Payables. The Service Tax Payables report displays the pending service tax payables for the selected period.
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Service Tax
Figure 17.26 Service Tax Payable
The Service Tax payable report displays Rs. 72,100 as the Service Tax due
17.5 Accounting for Advance Receipts

As mentioned earlier, Service tax is not applicable on the receipt of advance for a service until the invoice is raised. Service tax is to be paid on the amount received on the invoice value including the advance received. On 27-4-09, FirstC Services receives an advance of Rs. 70,000 for a service rendered by it from Global Business House as on 29-4-2009. On 29-4-2009, FirstC Services, completed the contract and raised an invoice on Global Business House towards Advertising Agency Services with 10% Service Tax, 2% Education Cess and 1% Secondary Education Cess for a total amount of Rs 1,70,000 of which Rs 70,000 was received as an advance. Service tax, Education Cess and Secondary Cess is calculated on the total assessable value of Rs. 1,70,000. Step 1: Create Receipt Voucher Go to Gateway of Tally > Accounting Vouchers > F6: Receipt
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Service Tax
1. Press F2 and change the date to 27-4-2009. 2. Select Global Business House in the Credit field and enter the amount as Rs. 70,000. 3. In the Bill-wise Details screen, select Advance from the Method of Adj. The Bill Wise Details screen appears as shown below :
Figure 17.27 Bill-wise Details for Global Business House
4. Type the Name as GBH and select Output Service Tax as the Service Tax Ledger. 5. In Debit field select HSBC Bank from the List of Ledger Accounts, Amount is defaulted automatically. 6. In Narration field enter the Cheque Number. The completed Receipt Voucher appears as shown below:
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Service Tax
7. Press Y or Enter to accept the Receipt Voucher. Step 2: Create Sales Invoice Go to Gateway of Tally > Accounting Vouchers > F8: Sales Press F2 and change the date to 29-4-2009. In the Party's A/C Name select Global Business House. Press Enter to view the Despatch details screen and accept the default screen. Select Consultancy Services from the List of Ledgers Accounts and enter the amount as Rs. 1,70,000. 5. Select Output Service Tax ledger from the List of Ledgers Accounts. 6. The Service Tax Details screen appears, the Service Tax and the Cess percentage and Amounts are defaulted automatically. 1. 2. 3. 4.
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Service Tax
In Service TaxBill Wise Details for section, the Bill-Wise Details are defaulted automatically. The Bill-Wise details can also be changed to the required reference number.
7. In the Bill-wise Details screen, enter the details as shown below:
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Service Tax
Figure 17.30 Bill-wise Details for Global Business House
The resultant Sales Invoice appears as shown below:
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Service Tax
8. Press Y or Enter to accept the Sales Invoice. Step 3: Display Service Tax Payable Report This will display the Service Tax Payable screen. This report contains the pending Service Tax payables for the selected period. Go to Gateway of Tally > Display > Statutory Reports > Service Tax Reports > Service Tax Payables. The Service Tax Payable screen appears as shown below:
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Service Tax
17.6 Accounting for Opening Service Tax Credit

The pending Service Tax payables and available Input Credit on Service Tax can be transfered from the previous financial year to the current financial year in Tally.ERP 9. On 30-4-09, FirstC Services decided to pay Service Tax to the government. Information pertaining to the Previous year is given below: Input Service Tax Credit for Rs. 1,030 on 10,000 bill value Service Tax payable of Rs. 2,060 on 20,000 bill value Setup : Create the following ledgers: BSNL under Sundry Debtors. Set Is Service Tax applicable to Yes. Service Tax Credit under Duties and Taxes with an opening balance of Rs. 1030. Select the Type of Duty/Tax as Others.
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Service Tax
Service Tax Payable under Duties & Taxes with an opening balance of Rs. 2060. The completed Service Tax Payable ledger creation screen appears as shown below:
Figure 17.33 Ledger Creation Service Tax Payable
Press Y or Enter to accept Step 1: Create Journal Voucher Go to Gateway of Tally > Accounting Vouchers > F7: Journal. 1. Press F2 and change the date to 1-4-2009. 2. Select Input ST-Telephone Charges in the Debit field and enter the amount as Rs. 1030 for Telephone Services. 3. In the Service Tax Bill Details for Input ST-Telephone CHRG, select New Ref and type the Name as Jrnl/11. 4. Enter the amount Rs. 1,030
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Service Tax
Figure 17.34 Service Tax Bill Details
5. In the Service Tax Opening Bill Details screen, enter the details as shown below:
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Service Tax
Figure 17.35 Service Tax Opening Bill Details
6. Press Ctrl+A to accept the screen.

Enter the bill reference number associated with the Tax Ledger in the Bill Name field. Select Not Applicable in case there is no bill reference number.
7. Select Service Tax Credit in the Credit field. The completed Journal Voucher appears as shown below:
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Service Tax
8. Press Y or Enter to accept the Journal voucher. Step 2 : Create Journal Voucher Pass a journal voucher for transferring the previous years balance of the Advertising Agency category to the Service Tax Payable ledger Go to Gateway of Tally > Accounting Vouchers > F7: Journal. The completed Journal voucher appears as shown below:
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Service Tax
Press Y or Enter to accept the Journal Voucher.
17.7 Payment of Service Tax

On 05-5-2009, FirstC Services, paid Service Tax of Rs. 5506.72 towards Advertising Agency Services, vide cheque no. 551899 after adjusting Input Service Tax Credit on Telephone Services.
Payment of Service Tax is done through a normal payment voucher. You can make a payment for a single category in one payment voucher.
Step 1: Create Payment Voucher Go to Gateway of Tally > Accounting Vouchers > F5: Payment 1. Press F2 and change the date to 05-5-2009. 2. Select the Output Service Tax Ledger, to be debited, from the List of Ledger Accounts.
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Service Tax
The Tax Bill Details screen appears as shown below:
Figure 17.38 Service Tax Bill Details for Output Service Tax
3. In the Service Tax Bill Details screen, select all the bills in the List of Service Tax Bills. 4. Select the INPUT Service Tax in the credit field. The Service Tax Bill Details for INPUT Service Tax appears as shown below:
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Service Tax
Figure 17.39 Service Tax Bill Details for Input Service Tax
5. Select HSBC in the credit field. 6. Set the field Provide Details to Yes
Figure 17.40 Payment Details
The period for which the payment is made is specified in the above screen.
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Service Tax
7. Specify the Service Tax Period with Challan No., Date, Bank Name, Cheque/Draft/Pay Order No. and Cheque Date. 8. Enter the cheque no. in Narration field. The completed Payment Voucher appears as shown below:
9. Press Y or Enter to accept the Payment voucher. Step 2 : Printing GAR-7 challan Go to Gateway of Tally > Display > Day Book. Press Pg Up from the above voucher entry screen to go the Payment Voucher Use Alt + P key or click on the Print option on the Accounting Voucher Alteration screen. The Voucher Printing screen is displayed. Set the Print GAR-7 Challan option to Yes.
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Service Tax
Figure 17.42 Print Configuration Screen
Use the Print Preview Option (ALT+I) to view the print preview of the challan. The printed GAR-7 Challan appears as shown below:
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Service Tax
Figure 17.43 GAR-7 Challan

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Service Tax
17.8 Service Tax Reports

Service Tax reports are the reports which is used to view all the Service Tax related details at one place. The reports available in the menu are: Service Tax Payables Input Credit Form ST3 Report Go to Gateway of Tally > Display > Statutory Reports
Figure 17.44 Service Tax Reports
17.8.1 Service Tax Payables

Service Tax Payable report displays the Total Service Tax Payables as on a specified date. Go to Gateway of Tally > Display > Statutory Reports > Service Tax Reports > Service Tax Payables. Select the period for the report using the F2: Period option. Set the period from 1-4-2009 to 30-4-2009. The Service Tax payable for the selected period displays various details as shown below:
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Service Tax
Use the Alt+P key or click on Print option to print the report.
The fields which appears in the Service Tax Payable report are briefed below: Date - The date of the sales invoice is displayed. Ref. No.: The reference number given to the sales invoice. Partys Name: The name of the customer to whom the sale is made. Category Name: The name of the category of service selected from the list of service categories. Bill Value: The total invoice amount. Assessable Value: The assessable value for the service. Service Tax: The total Service Tax calculated on the assessable value. Cess: The total cess on the Service Tax.
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Service Tax
Realized Value: Amount received on the invoice value. Assessable Value: The assessable value based on the realized value. Service Tax Payable: The amount of Service Tax payable based on the realized value. Cess Payable: The cess on the Service Tax payable based on the realized value. Total Payable: The amount of Service Tax payable inclusive of educational cess.
17.8.2 Input Credit Form

Go to Gateway of Tally > Display > Statutory Reports > Service Tax Reports > Input Credit Form The Input Credit Form displays various details as shown below:
Figure 17.46 Input Credit Form

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Service Tax
The Input Credit Form contains: Date of transactions Reference Number of the transaction Partys Name with Service Tax No. and Address Name of the Service Category purchased Bill Value of the input service including Assessable Value, Service Tax and Cess amount. Realised Value of the input service including Assessable Value, Service Tax and Cess amount. Total Credit available on input services.
17.8.3 ST 3 Report
Go to Gateway of Tally > Display > Statutory Reports > Service Tax Reports > ST3 Report 1. In the Service Tax Reports menu, select ST3 Report. 2. In Period For field, select the period for which ST3 Report to be printed. 3. Specify the Place and Date for Printing ST3 Report.
Figure 17.47 Print Configuration Screen
The printed ST3 Report appears as shown below:
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Service Tax
Figure 17.48 Printed ST3 Report (Page-1)
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Service Tax
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Service Tax
Figure 17.50 Printed ST3 Report P(age-3)
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Service Tax
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Service Tax
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Service Tax
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Service Tax
Create a Service Tax payment voucher debiting Output Service Tax and crediting the Input ST Telephone Chrg and HSBC for the balance Service Tax payable, if any.
Practice Exercise 1. ProC Advertising Agency, earns its major income from advertising service, which comes under the category Advertisement under Service Tax. Create the following ledgers in the masters and select/enter the fields as given in the table. Name of the Ledger Group under Maintain balance bill-bybill Yes No Is Service Tax Applicable Yes Yes Inventory Values are affected No No Type of Duty/ Tax N.A. N.A. Category
Manoj Videos Pur - Video & Graphic Advertisement Contract Nexus Solutions Ltd.
Sundry Creditors Purchase A/c Sales A/c Sundry Debtors
N.A. Photography Advertising Agency N.A.
No Yes
Yes Yes
No No
N.A. N.A.
Create the following ledgers for Service Tax and enter them as given in the table below: Name of the Ledger Output ST - Advertisement Input ST - Video & Graphic Under Duties & Taxes Duties & Taxes Type of Duty/Tax Service Tax Service Tax Category Advertising Agency Photography Inventory values are affected No No
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Service Tax
Given below, are transactions from 3-05-09. Create ProC Advertising Agency and pass the following transactions : SNo 1. Date 3-5-09 Particulars Sales Bill raised on Nexus Solutions Pvt. Ltd., after completing their advertisement order no. DL-010 for Rs. 30000 + Service Tax @ 10% + Cess @ 2% + Sec Cess @ 1%. Payment received from Nexus Solutions Pvt. Ltd., for Rs. 33,090 vide Ch.No. 7564121. Received the bill towards photography charges from Manoj Video Ref. No. SV-09 for Rs. 15000 [Service Tax @ 10% + Cess @ 2% + Sec Cess @ 1%]. Payment made through Canara Bank to Sonia Video for their bill no. SVB-09 for Rs. 16,545 vide Ch.No. 6665261. Sales bill raised for Outdoor Advertisement charges for Rs. 6000 + Service Tax + Cess to Nexus Solutions Pvt. Ltd. Manoj Video sent their Video recording charges Bill [SV-012] for Rs. 8979.20 [Video Charges Rs. 8000, Service Tax @ 10% + Cess @ 2% + Sec Cess @ 1%]. Payment made to Manoj Video for their bill no. SV-012 for Rs. 4000 vide Ch.No. 675510 Received Rs. 5000, from Nexus Solutions Pvt. Ltd., towards outdoor advertisement bill. Advance payments of Rs. 10000 received from Nexus Solutions Pvt. Ltd., vide Ch.No. 7565551 towards their advertisement work order no. DL-028. Deposit the same in the Canara Bank A/c. Sales Bill raised on Nexus Solutions Pvt. Ltd., after completing their advertisement works towards order no. DL-028. for Rs. 40000 + Service Tax @ 10% + Cess @ 2% + Sec Cess @ 1%. Make a payment to Canara Bank towards Service Tax Payable for the month of May09.
2. 3.
7-5-09 12-5-09
4. 5. 6.
15-5-09 19-5-09 20-5-09
7. 8. 9.
21-5-09 25-5-09 28-5-09
10.
30-5-09
11.
31-5-09
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Service Tax
Points to Remember
Service Tax is an indirect tax levied on certain categories of services provided by a person, firm, agency etc Avail of the input credit on Service Tax paid on purchases by deducting the Service Tax payable. Service Tax is calculated on the assessable value but is payable on the value realised on the invoice. Tally.ERP 9 calculates the Service Tax payable and the Input Credit on each bill by tracking it bill-wise. The Statutory Masters in Tally.ERP 9 maintain a category-wise information on Service Tax. Tally.ERP 9 gives you the option to bill for services as an item. Account for Service Tax on the receipt of advance and make adjustments when an invoice is raised. Transfer the Service Tax balance payable and input credit from previous year to current year. The Service Tax Payable report displays the net Service Tax payable, after availing the input credit. Print the Form GAR-7 Challan from Tally.ERP 9 to pay your Service Tax. Print and File Statutory Reports from Tally.ERP 9, for the half-yearly filing of returns with details in Form ST3 and the Input Credit Form.
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Lesson 18: Tax Deducted at Source
Lesson Objectives
On completion of this lesson, you will learn how to Configure Tax Deducted at Source in Tally.ERP 9 Record TDS Transactions Generate TDS Reports and Challans
Tax deducted at source is one of the modes of collecting Income-tax from the assessees. Such collection of tax is effected at the source when income arises or accrues. Hence, where any specified type of income arises or accrues to any one, the Income-tax Act enjoins on the payer of such income to deduct a stipulated percentage of such income by way of Income-tax and pay only the balance amount to the recipient of such income. The tax so deducted at source by the payer has to be deposited in the Government treasury to the credit of Central Government within the specified time. The tax so deducted from the income of the recipient is deemed to be payment of Income-tax by the recipient at the time of his assessment. The person responsible for deducting Tax at source is liable to issue a certificate to the person from whom the tax is deducted, so that the person can submit the same to Income Tax authorities.
18.1 Basic concepts of TDS

It is important to understand some of the terminologies & concepts of TDS : Scope and Applicability At present, incomes from several sources are subjected to tax deduction at source. Some of such income which are subject to T.D.S. are : Salary Interest on securities, Debentures
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Tax Deducted at Source
Deemed Dividend Interest other than interest on securities Winnings from Lottery or Crossword Puzzles Winnings from horse races Payment to contractors (Other than Advertisement) Payment to contractors (Advertisement Contractors) Payment to Sub-contractors Payments to non-residents Payment to non-resident Sportsmen or Sports Association Payment in respect of deposit under NSS Payment on Account of Re-purchase of Units by Mutual Fund or UTI Payments in Respect of Units to an Offshore Fund Payment of Compensation on Acquisition of Immovable Property Insurance Commission Commission etc. on sale of Lottery tickets Commission, brokerage etc Rent of Land, Building or Furniture Rent of Plant, Machinery or Equipment Royalty Agreement is MAde on Or After June 1, 2005 Short-Term Capital Gains U/s 111A Fees for professional or technical services Fees for Tech. Services Agreement is Made on Or After June 1, 2005 Income in Respect of Units of Non-Residents Income from foreign currency bonds or shares of Indian company Income of Foreign Institutional Investors From Securities Income From Foreign Exchange Assets Payable to an Indian Citizen Income by Way of Long Term Capital Gains Referred to in Section 115E Any other Interest on Securities Interest on 8% Savings (Taxable) Bonds, 2003 What is TAN? TAN is the Tax Deduction Account Number issued by the Income-tax Department to all persons deducting tax at source. TAN has to be quoted in all relevant challans, tax deduction certificates, TDS returns and other notified documents. To obtain TAN, all persons or organisations are required to apply in Form 49B to the TIN Facilitation Centres of NSDL.
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Who has to Deduct Tax ? Any person making the payments to third parties as specified in scope and applicability section are required to deduct tax at source. Who is a Deductee ? As per Income Tax Act, the Tax will be deducted at source based on the prescribed rate on payments made to the third parties, who are Assessees (includes individual & HUF as covered U/ S 44AB) carrying on business of following types. Such Tax will be deducted at time of payment or credit, whichever is earlier. Individual Hindu undivided Family (HUF) Body of Individual (BOI) Association of person (AOP) Co-Operative society Local Authority Partnership firm Domestic company (Indian company) Foreign company Artificial Judicial Person
18.2 Configuring TDS in Tally.ERP 9

The TDS module in Tally.ERP 9 is integrated with financial accounts and takes care of all the TDS and eTDS requirements of your business, right from voucher entry to report generation. Tally.ERP 9 completely automates your TDS management and accurately computes Tax to be deducted at source & TDS payable amount, TDS payment challans, TDS Certificates, Statutory Returns and other related MIS reports. Its eTDS features further assist you to file your mandatory tax returns in electronic format as specified by the Income Tax Department. It helps in minimizing error-prone entry of information, incorrect remittances and also provides accounting for interest & penalties (if any) for smooth & effective functioning of your business. Features of TDS compliant Tally.ERP 9 Tally.ERP 9 comprises of comprehensive features to ensure accurate & automatic computation of Tax Deductible at Source for Non-Salaried deductees according to the provisions stipulated in the Income Tax Act. The TDS functionality in Tally.ERP 9 encompasses the following salient features: Simple & User friendly Easy and quick to setup & implement
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Maintains complete tracking of each transaction from Booking, deduction tillpayment Allows deduction of TDS at the time of Booking expenses in the same voucher or separately at a later date Allows deduction of TDS at Lower / Zero Rate Allows deduction of TDS on multiple expenses of single nature of payment type in a single voucher. Allows computation of TDS on Expenses partly subject to tax Allows TDS calculation on advance payments Provides facility to compute TDS with/without considering Surcharge Exemption Limits for parties Provides retrospective surcharge calculations for prior / current period Allows partial / full payment of Tax deducted at source Provides automatic computation of TDS amount for each nature of payment Generates TDS payment Challan ITNS 283 (for Corporates & Non-Corporates) Generates TDS Certificates, TDS Outstanding report and various other TDS related MIS Reports Facilitates automatic generation of Quarterly as well as Annual eTDS returns in the physical as well as eReturns formats. Allows Challan reconciliation facility to keep track of issue of TDS certificates and remittance through challans. Comprises of all required provisions for TDS as specified by Income Tax Department Also generates consolidated TDS Certificates, Challan and Annual Returns for statutory and tax audit purpose.
18.2.1 Enabling TDS in Tally.ERP 9

It takes a one-time configuration in Tally.ERP 9 for TDS features to be activated. Follow the steps given below to enable TDS in Tally.ERP 9 for a new company, M/s. National Enterprises M/s. National Enterprises, is a domestic company engaged in manufacturing cement and other water proofing components. The first step is to create a Company as shown below : Step 1: Company Setup In the Company Creation Screen, Select India in the Statutory Compliance for field Specify State, Pin code, Telephone, Mobile, E-mail details Specify 01/04/09 in the Financial Year from field
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Specify 01/04/09 in the Books beginning from field
Figure 18.1 Company Creation
Step 2: F11: Statutory & Taxation Set Enable Tax Deducted at Source (TDS) to Yes Set Set/Alter TDS Details to Yes and press Enter
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Figure 18.2 F11: Statutory & Taxation
Step 3: Company TDS Deductor Details Specify Tax Assessment Number (TAN) of the Company (TAN is a ten-digit alphanumeric number, issued to the deductors by the Income Tax Department). Specify the Income Tax Circle / Ward (TDS) details of the deductor Specify the Deductor Type as Others for the Deductor Types other than government (if the deductor is a government body, select Government as the Deductor Type)
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Figure 18.3 Company TDS Deductor Details
Specify the Name of person responsible and his/her designation details as shown
Figure 18.4 Company TDS Deductor Details
Press Enter to accept
The format of the 10 digit alphanumeric TAN - BLRN00789B is : BLR indicates the location code of the TAN allotment center. (Eg: BLR for Bangalore) N indicates the first alphabet of the deductor name. 00789 is the number within each location. B is the check digit for security and verification.
Enable VAT and specify VAT TIN Number, if Value Added Tax (VAT) is applicable in the State or otherwise specify the Local Sales Tax Number & Interstate Sales Tax Number Specify the PAN details as shown
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The completed F11: Statutory & Taxation Features screen appears as shown :
Figure 18.5 Enabling VAT
Press Enter to accept F11: Statutory & Taxation Features screen
18.2.2 TDS Statutory Masters

The statutory masters contains details in respect of TDS nature of payments, Deductee Types, rate of TDS for each nature of payment and period of applicability. These masters are loaded automatically soon after enabling TDS in Tally.ERP 9. Tally.ERP 9 conforms to all statutory provisions and in case of any changes / amendments in Income Tax laws, the same can be updated by downloading the Stat.900 file from the Tally Website. TDS Nature of Payments Go to Gateway of Tally > Display > Statutory Info. > TDS Nature of Pymts
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Figure 18.6 TDS nature of payments
Select a Nature of Payment from the list and press Enter
Figure 18.7 TDS nature of payments
Deductee Types Go to Gateway of Tally > Display > Statutory Info.> Deductee Types
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Figure 18.8 Deductee Types
Select a Deductee Type from the list and press Enter
Figure 18.9 Deductee Types
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18.3 Creation of Masters

Once you have enabled the company for TDS, create necessary Expenses ledger, Party ledgers and TDS ledger masters. The TDS option would now be available in each type of ledger masters.
18.3.1 Expenses Ledger Accounts

Create the following expense ledger accounts : Inventory Values are affected No No Is TDS Applicable Yes Yes Default Nature of Payment
Ledger Consultancy Charges Advertisement Expenses
Under Indirect Expenses Indirect Expenses Indirect Expenses Indirect Expenses
Fees for Professional Or Technical Services Payment to Contractors (Advertisement Contractors) Rent of Land, Building Or Furniture Commission or Brokerage
Rent Commission Charges
No No
Yes Yes
Go to Gateway of Tally > Accounts Info. > Ledgers> Create Type Consultancy Charges as the Ledger Name Select Indirect Expenses in the Under field Set Use for Assessable Value Calculation to No Set Is TDS Applicable to Yes In Default Nature of Payment filed, select Fees for Professional Or Technical Services from the List of TDS Nature of Pymt.
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Figure 18.10 Ledger Creation - Consultancy charges
The completed Consultancy Charges ledger creation screen is shown below :
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Figure 18.11 Ledger Creation - Consultancy charges
Press Enter to accept Similarly, create other Expenses Ledgers with the required TDS Nature of Payments.
18.3.2 TDS Ledger Accounts

Create the following TDS Tax ledgers : Ledger TDS on Consultancy Charges TDS on Advt. Expenses Under Duties & Taxes Duties & Taxes Type of Duty/Tax TDS TDS Nature of Pymt Fees for Professional Or Technical Services Payment to Contractors (Advertisement Contractors) Rent of Land, Building Or Furniture Commission or Brokerage
TDS on Rent TDS on Commission
Duties & Taxes Duties & Taxes
TDS TDS
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Go to Gateway of Tally > Accounts Info. > Ledgers> Create In the Ledger Creation screen, Type TDS on Consultancy Charges in the Name field Select Duties & Taxes group in the Under field Select TDS from the list in the Type of Duty/Tax field and press Enter
Figure 18.12 Ledger Creation TDS on Consultancy Charges
Select Fees for Professional Or Technical Services from the list, in the Nature of Payment field
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Figure 18.13 Ledger Creation TDS on Consultancy Charges
Set No in the Inventory values are affected field The completed TDS on Consultancy Charges ledger creation screen is as shown :
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Figure 18.14
Ledger Creation - TDS on Consultancy Charges
Press Enter to accept Similarly, the completed TDS on Advertisement Expenses ledger will appear as shown :
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Figure 18.15 Ledger Creation - Advertisement Expenses
Press Enter to accept Similarly, the completed TDS on Rent ledger will appear as shown :
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Figure 18.16 Ledger Creation - TDS on Rent
Press Enter to accept And the completed TDS on Commission ledger will appear as shown :
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Figure 18.17 Ledger Creation - TDS on Commission
It is recommended to create separate TDS ledgers for each type of Nature of TDS payments, since TDS payments are required to be paid separately for each type of TDS nature of payment.
18.3.3 Party Ledger Accounts

Create the following Party ledgers : Maintain balances bill-by-bill Yes Inventory Values are affected No Is TDS Deduct able Yes
Ledger Evergreen Consulting Services
Deductee Type Company - Resident

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Star Advertisement Agency Ramesh Kumar
Sundry Creditors Sundry Creditors Sundry Creditors
Yes Yes
No No
Yes Yes
Partnership Firm Individual /HUF Resident Body of Individuals
Silverplus Enterprises
Yes
No
Yes
Go to Gateway of Tally > Accounts Info. > Ledgers> Create Set Up: In F12: Configuration (Ledger Configuration) Set Allow ADVANCED entries in TDS Master to Yes
Figure 18.18 F12: Ledger Configuration
In the Ledger Creation screen, Type Evergreen Consulting Services in the Name field Select Sundry Creditors group in the Under field Set Maintain balances bill-by-bill to Yes Set Inventory Values are affected to No Set Is TDS Deductable to Yes and press Enter
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Figure 18.19 Ledger Creation - Evergreen consulting services
Select Company - Resident from the list, in the Deductee Type field
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Figure 18.20 Ledger creation - Deductee Type
Set Use Advanced TDS Entries to Yes
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Figure 18.21 Ledger creation - Advanced TDS Entries
Press Enter, the Advanced TDS Entries subscreen appears, In the Advanced TDS Entries subscreen, Set Ignore Surcharge Exemption Limit to No Set Ignore Income Tax Exemption Limit to No Set Zero/Lower Deduction to No Set Deduct TDS in Same Voucher if applicable to No
Figure 18.22 Ledger creation - Advanced TDS Entries
Press Enter to accept the screen
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When Ignore Surcharge Exemption Limit is set to Yes, the Surcharge amount is automatically calculated at the applicable rates without considering the threshold limits prescribed by the ITD, for the respective persons.
Type the Mailing address, State, PIN Code and Tax information of the party Set/Alter VAT Details to No The completed Evergreen Consulting Services ledger creation screen is as shown:
Figure 18.23 Completed Ledger Creation - Evergreen consulting services
Press Enter to accept Similarly, create other Sundry Creditors ledgers with appropriate Deductee types.
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While creating Star Advertisement Agency and Ramesh Kumar Ledger, in Advanced TDS Entries subscreenset Ignore Surcharge Exemption Limit to Yes. When Is TDS Deductable option is set to Yes, Maintain balances bill-by-bill is automatically set to Yes (if not enabled previously). In Tally.ERP 9, Is TDS Deductable option is available for all ledgers created under Sundry Creditors and Sundry Debtors Groups.
18.3.4 Bank Accounts

Ledger HDFC Bank In the Ledger Creation screen, Type HDFC Bank as the Ledger Name Group it under Bank Accounts group Under Mailing Details, In Address field enter the Bank Branch Address. Select appropriate state in State field. In Pin Code field enter the pincode of the City In Account Number field enter the account number as 005364477129 In Branch Name field, enter Kasturba Road. Enter the Banks BSR Code as 0012934 (BSR Code is a 7 digit Number allotted by Reserve Bank of India (RBI) to Bank). The Completed Bank ledger screen is displayed as shown Under Bank Accounts Effective Date for Reconciliation 01/04/2009
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Figure 18.24 Completed Bank Ledger Creation Screen
18.4 Processing Transactions

As discussed earlier, Tax Deducted at Source on incomes specified by Income Tax department is affected at source when income arises/ accrues or paid whichever is earlier. Let us consider the following transactions to illustrate the TDS functionality in Tally.ERP 9.
18.4.1 Booking Expenses and Deducting TDS

Example 1: On 01/04/09, M/s. National Enterprises received a Bill (Vide No. ECS/001/09-10) from Evergreen Consulting Services, for Rs. 27,000/- towards Consultancy Charges. Consultancy Charges is subject to TDS under Fees for Professional or Technical Services Nature of Payments. The applicable Income tax rates for payment of Fees for Professional or Technical Services to Company Resident Deductee Type is given below :
Particulars TDS Surcharge

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Rate 10% -
Create Journal Voucher Go to Gateway of Tally > Accounting Vouchers > Press F7: Journal 1. Press F2 and change the date to 01-04-2009 2. Select Consultancy Charges in the Debit field and press Enter 3. Enter 27,000 in the Amount field. The Expense Allocation screen is displayed as shown
Figure 18.25 Expense Allocation Screen
The TDS Nature of Payment Details screen displays the Nature of Payment and the Assessable Value of the expenditure. Press Enter to accept Fees for Professional or Technical Services as Nature of Payment. The amount in the Assessable Value is defaulted to 27,000.
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Figure 18.26 TDS Nature of Payment Details with Assessable Value
4. Select Evergreen Consulting Services in the Credit field and press Enter. The TDS Details screen is displayed as shown
Figure 18.27 TDS Details Screen
In the TDS Details screen, provide the following details Select New Ref as the Type of Ref. field
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Type the Reference Number in the Name field (By default Jrnl / 1-1 is prefilled) Select Fees for Professional Or Technical Services in Nature of Payment field.
Figure 18.28 TDS Details Nature of Payment Selection
Select TDS on Consultancy Charges from the list of TDS Duty Ledgers The Assessable Amount field is defaulted with the amount specified against the expenses ledger Set Yes in Deduct Now field (This field will be set to Yes or No depending on the tax deduction, if the deduction has to be done later, this option can be set to No). The Tax amount deducted at source is displayed in the TDS Amount field. The amount (after deducting TDS) payable to the Party is displayed in the Payable Amount field. The completed TDS Details screen is displayed as shown
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Figure 18.29 Completed TDS Details Screen
Press Enter to accept TDS Details 5. The Payable Amount calculated in the TDS Details screen will be defaulted in the Partys Amount (Credit) field 6. Press Enter to view Billwise Details screen 7. In Billwise Details screen, Select New Ref as the Type of Ref In the Name field, enter the Bill name as ECS/001/09-10 Skip the Due Date or Credit Days field Accept the default amount allocation and Dr/Cr. (By default, Tally.ERP 9 displays the Bill amount in the amount field as the credit balance). Press Enter, select New Ref as Type of Ref and Enter Bill name as ECS/TDS/001 Press Enter to accept the Amount allocation The completed Billwise Details screen is displayed as shown
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Figure 18.30 Billwise Details Screen
In the above screen, the amount payable to the party after deduction of TDS is displayed separately and the TDS deducted amount is displayed separately for easy identification of Bill amount in the outstanding statement. 8. Select TDS on Consultancy Charges in the Credit field and press Enter to accept the amount. 9. Enter the details of the transaction in the narration field. The completed Journal Voucher is displayed as shown
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10.Press Enter to accept
Example 2: On 13/04/09, M/s. National Enterprises received a Bill (Vide No. SAA/102) for Rs. 36,000/from Star Advertisement Agency towards Advertisement Expenses. The applicable Income tax rates for Advertisement Expenses payable to Contractors is given below : Particulars TDS Surcharge Rate 1% -
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Create Purchase Voucher Set Up: In F12: Configure, set Use Common Ledger A/c for Item Allocation and Use Defaults for Bill Allocations to No Go to Gateway of Tally > Accounting Vouchers > Press F9: Purchase 1. Press Alt + I for Account Invoice mode 2. Press F2 and change the date to 13-04-2009 3. In Partys A/c Name field, select Star Advertisement Agency from the List of Ledger Accounts 4. Under Type of Dealer, Select Not Applicable 5. Under Particulars, select Advertisement Expenses and press Enter 6. Type 36000 in the Amount field, press Enter to view TDS Nature of Payment Details screen and accept the default details in the screen. The Expense Allocation screen is displayed as shown
Figure 18.32 Expense Allocation screen
The TDS Nature of Payment Details screen displays the Nature of Payment and the Assessable Value of the expenditure.
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Press Enter to accept Payment to Contractors (Advertisement Contractors) as Nature of Payment. The amount in the Assessable Value is defaulted to 36,000.
7. Select TDS on Advertisement Expenses from the List of Ledger Accounts 8. Press Enter twice to view TDS details screen. 9. In the TDS Details screen, provide the following details Select New Ref as the Type of Ref. field Type the Reference Number in the Name field (By default Purc / 1-1 is prefilled) Select Payment to Contractors (Advertisement Contractors) in Nature of Payment field. Select TDS on Advertisement Expenses from the list of TDS Ledgers The Assessable Amount field is defaulted as 36,000 and the TDS Amount is calculated automatically based on the applicable TDS rates.
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Figure 18.34 TDS Details
10.Press Enter to accept the TDS Details 11.In the Bill-wise Details screen Select New Ref as the Type of Ref In the Name field, enter the Bill name as SAA/102 Skip the Due Date or Credit Days field Accept the default amount allocation and Dr/Cr.
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Figure 18.35 Billwise Details
12.Enter the details of the transaction in the Narration field, if required. The completed Purchase Voucher is displayed as shown
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Figure 18.36 Completed Purchase Voucher
13.Press Enter to accept.
18.4.2 Booking Expenses and Deducting TDS Later

Example 3: On 20/04/09, M/s. National Enterprises received a Bill (Vide No. 024/09) for Rs. 9,000/- from Silverplus Enterprises towards commission charges. The company intends not to deduct TDS on the above transaction at the time of booking the expenses. Create Journal Voucher Go to Gateway of Tally > Accounting Vouchers > Press F7:Journal 1. 2. 3. 4. Press F2 and change the date to 20-04-2009 Select Commission Charges in the Debit field and press Enter Enter 9,000 in the Amount field and press Enter The Expense Allocation screen appears as shown,
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Figure 18.37 Expense Allocation screen
Press Enter to accept Commission Or Brokerage as Nature of Payment. The Assessable Value field is defaulted as 9,000
Press Enter to accept the screen
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5. Select Silverplus Enterprises in the Credit field and press Enter, the TDS Details screen appears, 6. In TDS Details screen, enter the following details Select New Ref in Type of Ref field In the Name field, accept the default TDS reference number as Jrnl / 2-1 Select Commission Or Brokerage in Nature of Payment field Select TDS on Commission in the TDS Duty Ledger field Set Deduct Now to No (in order to deduct the TDS later). The Payable Amount field displays the amount payable to the Party. The completed TDS Details screen is displayed as shown
7. Press Enter to accept the TDS details screen 8. The Payable Amount calculated in the TDS Details screen is defaulted in the Partys Amount (Credit) field. 9. Press Enter to view Billwise Details screen. 10.In Billwise Details screen, Select New Ref as the Type of Ref
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In the Name field enter the Bill name as 024/09 Accept the default amount allocation and Dr/Cr.
Figure 18.40 Billwise Details
Press Enter to accept Bill-wise Details screen. 11.Type the details of the transaction in the Narration field, if required. The completed Journal Voucher is displayed as shown
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12.Press Enter to accept

The Deduction of TDS on the above Transaction (i.e., Commission Charges of Rs. 9,000/- payable to Silverplus Enterprises) is discussed in Example 8 dt. 30/04/09.
Example 4: On 23/04/09, M/s. National Enterprises paid Rs. 35,640/- to Star Advertisement Agency towards Advertisement Expenses (vide Ch. No. 145687). Setup: In F12: Configure, set Use Single Entry mode for Pymt/Rcpt/Contra to Yes.
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Create Payment Voucher Go to Gateway of Tally > Accounting Vouchers > Press F5: Payment 1. 2. 3. 4. Press F2 and change date to 23/04/2009 In Debit field, select Star Advertisement Agency from the List of Ledger Accounts Enter 35,640 in Amount field and press enter to view Bill-wise Details screen In Bill-wise Details screen Select Agst Ref in the Type of Ref Select SAA/102 from the List of Pending Bills in Name field, Amount is defaulted automatically. The Completed Bill-wise Details screen is displayed as shown.
Press Enter to accept the screen 5. In Credit field, select HDFC Bank from the List of Ledger Accounts, the Amount is defaulted automatically 6. Enter Cheque No. 145687 in Narration field. The completed Payment Voucher is displayed as shown
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Figure 18.43 Completed Payment Voucher
7. Press Enter to accept Example 5: On 23/04/09, M/s. National Enterprises paid Rs. 24,300/- (vide Ch. No. 145690) to Evergreen Consulting Services towards final settlement of Bill No. ECS/001/09-10 dt. 10/04/09. Create Payment Voucher Go to Gateway of Tally > Accounting Vouchers > Press F5: Payment 1. 2. 3. 4. Press F2 and change date to 23/04/2009 In Debit field, select Evergreen Consulting Services from the List of Ledger Accounts Enter 24,300 in Amount field and press enter to view Bill-wise Details screen In Bill-wise Details screen Select Agst Ref in the Type of Ref Select ECS/001/09-10 from the List of Pending Bills in Name field, Amount is defaulted automatically. The Completed Bill-wise Details screen is displayed as shown.
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Press Enter to accept the screen 5. In Credit field, select HDFC Bank from the List of Ledger Accounts, Amount is defaulted automatically 6. Enter Cheque No. 145690 in Narration field. The completed Payment Voucher is displayed as shown
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Figure 18.45 Completed Payment Voucher
7. Press Enter to accept
18.4.3 TDS Deduction @ Lower Rate

The Income Tax Act, as per Sec 197 allows the benefit of deduction of tax at source at a lower rate on filing of declaration in the prescribed form with the payer. Example 6: On 24/04/09, National Enterprises received a bill for Rs. 45,000/- from Prompt Consultancy towards commission charges. Prompt Consultancy has been granted a lower deduction certificate for deduction of Tax @ 5% on commission. Set Up: In F12: Configure (Ledger Configuration) Set Allow Advanced entries in TDS Masters to Yes
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Figure 18.46 Ledger Configuration
Create Party Ledger Go to Gateway of Tally > Accounts Info. > Ledgers > Create Enter the Name of the Party Ledger e.g. Prompt Consultancy Select Sundry Creditors from the List of Groups in the Under field Set Maintain balances bill-by-bill to Yes Enter the Default Credit Period, if required. Set Is TDS Deductable to Yes In the Deductee Type field, select Partnership Firm from the List of Deductee Type Set Use Advanced TDS Entries to Yes In Advanced TDS Entries screen Set the option Zero / Lower Deduction to Yes
Figure 18.47 Advanced TDS Entries
In Zero / Lower Deduction Details screen Select Nature of payment as Commission Or Brokerage Select Section Number as 197 Enter the Certificate No./ Date Enter the Applicable From date Enter the Applicable To date Enter the alloted TDS rate Enter the Surcharge, Ed Cess and Sec Ed Cess, if applicable (Tally.ERP 9 defaults the rate as Zero).
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Figure 18.48 Zero / Lower Deduction Details
Type the Mailing address, State, PIN Code and Tax information of the party The completed Prompt Consultancy ledger creation screen is as shown:
Figure 18.49 Ledger Creation - Prompt Consultancy
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Create Journal Voucher Go to Gateway of Tally > Accounting Vouchers > Press F7: Journal 1. Press F2 and change the date to 24-04-2009 2. Select Commission Charges in the Debit field and press Enter 3. Enter 45,000 in the Amount field. The Expense Allocation screen is displayed as shown
The TDS Nature of Payment Details screen displays the Nature of Payment and the Assessable Value of the expenditure. Press Enter to accept Commission or Brokerage as Nature of Payment. The amount in the Assessable Value is defaulted to 45,000.
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4. Select Prompt Consultancy in the Credit field and press Enter. In the TDS Details screen, provide the following details Select New Ref as the Type of Ref. field Type the Reference Number in the Name field (By default Jrnl / 3-1 is prefilled) Select Commission or Brokerage in Nature of Payment field.
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Select TDS on Commission from the list of TDS Duty Ledgers The Assessable Amount field is defaulted with the amount specified against the expenses ledger Set Yes in Deduct Now field (This field will be set to Yes or No depending on the tax deduction, if the deduction has to be done later, this option can be set to No). The Tax amount deducted at source is displayed in the TDS Amount field. The amount (after deducting TDS) payable to the Party is displayed in the Payable Amount field. The completed TDS Details screen is displayed as shown
Press Enter to accept TDS Details 5. The Payable Amount calculated in the TDS Details screen will be defaulted in the Partys Amount (Credit) field 6. Press Enter to view Billwise Details screen 7. In Billwise Details screen, Select New Ref as the Type of Ref In the Name field, enter the Bill name as PCS/001/09-10
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Skip the Due Date or Credit Days field Accept the default amount allocation and Dr/Cr. (By default, Tally.ERP 9 displays the Bill amount in the amount field as the credit balance). Press Enter, select New Ref as Type of Ref and Enter Bill name as PCS/TDS/001 Press Enter to accept the Amount allocation The completed Billwise Details screen is displayed as shown
In the above screen, the amount payable to the party after deduction of TDS is displayed separately and the TDS deducted amount is displayed separately for easy identification of Bill amount in the outstanding statement. 8. Select TDS on Commission in the Credit field and press Enter to accept the amount. 9. Enter the details of the transaction in the narration field. The completed Journal Voucher is displayed as shown
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18.4.4 TDS Deduction @ Zero Rate

The Income Tax Act, as per Sec 197A allows the benefit of non-deduction of tax at source to an individual payee on filing of declaration in the prescribed form with the payer. Example 7: On 25/04/10, National Enterprises received a bill for Rs. 9,000/- from Crown Advisory Services towards Fees for Professional Services. Crown Advisory Services has been granted a No Deduction Certificate. Set Up: In F12: Configure (Ledger Configuration) Set Allow Advanced entries in TDS Masters to Yes
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Figure 18.56 Ledger Configuration
Create Party Ledger Go to Gateway of Tally > Accounts Info. > Ledgers > Create Enter the Name of the Party Ledger e.g. Crown Advisory Services Select Sundry Creditors from the List of Groups in the Under field Set Maintain balances bill-by-bill to Yes Enter the Default Credit Period, if required. Set Is TDS Deductable to Yes In the Deductee Type field, select Association of Persons from the List of Deductee Type Set Use Advanced TDS Entries to Yes In Advanced TDS Entries screen Set the option Zero / Lower Deduction to Yes
Figure 18.57 Advanced TDS Entries
In Zero / Lower Deduction Details screen Select Nature of payment as Commission Or Brokerage Select Section Number as 197A Enter the Certificate No./ Date Enter the Applicable From date Enter the Applicable To date The TDS rate will be defaulted to 0%
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Figure 18.58 Zero / Lower Deduction Details
Type the Mailing address, State, PIN Code and Tax information of the party The completed Crown Advisory Services ledger creation screen is as shown:
Figure 18.59 Ledger Creation - Crown Advisory Services
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Create Journal Voucher Go to Gateway of Tally > Accounting Vouchers > Press F7: Journal 1. Press F2 and change the date to 25-04-2009 2. Select Consultancy Charges in the Debit field and press Enter 3. Enter 9,000 in the Amount field. The Expense Allocation screen is displayed as shown
The TDS Nature of Payment Details screen displays the Nature of Payment and the Assessable Value of the expenditure. Press Enter to accept Fees for Professional Or Technical Services as Nature of Payment. The amount in the Assessable Value is defaulted to 9,000.
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4. Select Crown Advisory Services in the Credit field and press Enter. 5. In the TDS Details screen, provide the following details Select New Ref as the Type of Ref. field Type the Reference Number in the Name field (By default Jrnl / 4-1 is prefilled) Select Fees for Professional Or Technical Services in Nature of Payment field.
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In Is Zero/ Lower Rate field, select section 197A for zero deduction The completed TDS Details screen is displayed as shown
Press Enter to accept TDS Details 6. The Payable Amount is defaulted in the Partys Amount (Credit) field 7. Press Enter to view Billwise Details screen 8. In Billwise Details screen, Select New Ref as the Type of Ref In the Name field, enter the Bill name as CAS/001/09-10 Skip the Due Date or Credit Days field Accept the default amount allocation and Dr/Cr. (By default, Tally.ERP 9 displays the Bill amount in the amount field as the credit balance). Press Enter to accept the Amount allocation The completed Billwise Details screen is displayed as shown
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9. Enter the details of the transaction in the narration field. The completed Journal Voucher is displayed as shown
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Press Enter to accept Example 8: On 30/04/09, M/s. National Enterprises deducts TDS at the following rates on Commission payable to Silverplus Enterprises (vide B.No. 024/09 dt. 20/04/09 - Refer Example 3). The applicable Income tax rates for Commission is as follows : Particulars TDS Surcharge Create Journal Voucher Go to Gateway of Tally > Accounting Vouchers > Press F7: Journal 1. Press F2 and change the date to 30-04-2009 2. Press Alt +S or click on S: TDS Deduction button, to view TDS Deductions screen. Rate 10% -
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3. In TDS Deduction screen, In Till Date field, enter the date till which the TDS deduction is to be made (i.e., 30-042009) Select Silverplus Enterprises from the List of Ledger(s) in the Party field
Figure 18.66 TDS Deductions Party Selection
Select Commission Or Brokerage from the List of Nature of Payments
Figure 18.67 TDS Deduction Nature of Payment Selection
Press Enter to accept the TDS Deductions subscreen 4. The TDS amount with the respective bill details will be prefilled automatically
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Figure 18.68 Journal Voucher with Auto filled TDS values
5. In the Bill-wise Details screen, Select Agst Ref in the Type of Ref Select 024/09 dated 20-Apr-2009 in the Name field and press Enter The amount is defaulted as 900 The completed Bill-wise Details is displayed as shown
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Figure 18.69 Bill-wise Details screen
Press Enter to accept the screen 6. Enter the details of the transaction in the Narration field, if required. The completed Journal Voucher is displayed as shown
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18.4.5 Deducting TDS on Payments

Example 9: On 30/04/09, M/s. National Enterprises paid Rs. 15,000/- to Mr. Ramesh Kumar (Landlord) towards Rent for the month of April 2009 (vide Ch. No. 145787). The applicable Income tax rates for payment of Rent to Individual / HUF - Resident Deductee Type is given below : Particulars TDS Surcharge Rate 15% -
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Create Payment Voucher Go to Gateway of Tally > Accounting Vouchers > Press F5: Payment 1. 2. 3. 4. Press F2 and change the date to 30-04-2009 In Debit field, select Ramesh Kumar from the List of Ledger Accounts Enter 15,000 in Amount field and press Enter to view Bill-wise Details screen In Bill-wise Details screen, Select New Ref from the Method of Adj in the Type of Ref field Enter the Bill name as Apr09 Press Enter to skip the Due Date, or Credit Days filed Press Enter to accept the Amount (i.e., 15,000)
Figure 18.71 Bill-wise details Screen
Press Enter to accept the Bill-wise Details screen 5. In the Credit field, select TDS on Rent from the List of Ledger Accounts and press Enter 6. In the TDS Details screen, provide the following details Select New Ref as the Type of Ref. field Type the Reference Number in the Name field (By default, Pymt / 3-1 is prefilled) Select Rent of Land, Building Or Furniture in Nature of Payment field. The Assessable Amount field is defaulted as 15,000 and the TDS Amount (i.e., 2250) is calculated automatically based on the applicable TDS rates.
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The completed TDS Details screen is displayed as shown
Press Enter to accept the TDS Details screen 7. In Credit field, select HDFC Bank from the List of Ledger Accounts, the balance Amount is defaulted automatically as 12,750. 8. Enter the cheque details in the Narration field. The completed Payment Voucher is displayed as shown
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18.4.6 Payment of TDS

As per Income Tax Act, Corporate & Non- Corporate entities (deductors) making payments (specified under Income Tax Act) to third parties (deductees) are required to deduct tax at source at the prescribed rates on such payments. The TDS so deducted should be deposited to the credit of the Central Government within one week from the last day of the month in which the deduction is made, into any of the designated branches of banks authorized to collect taxes on behalf of Government accompanied by Income Tax Challan ITNS 281.
Example 10: On 05/05/09, M/s. National Enterprises paid Rs. 2,700/- to Government towards TDS on Consulting Charges for the month of April 2009.
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Setup: In F12: Configure (Payment Configuration), ensure Use Single Entry mode for Pymt/Rcpt/ Contra is set to Yes. Step 1 : Create Payment Voucher Go to Gateway of Tally > Accounting Vouchers > Press F5: Payment 1. Press F2 and change date to 05-05-2009 2. Press Alt+S or click S: TDS Helper button, to view TDS helper screen. 3. In the TDS Helper Screen, Enter the date till which the TDS deductions are to be considered (i.e., 30-04-2009) in Deducted Till Date field Select 194J in the Section field Select Fees for Professional Or Technical Services as the Nature of Payment Select the Deductee Status as Company Select HDFC Bank from the List of Ledger Accounts The completed TDS Helper screen is displayed as shown
Figure 18.74 TDS Helper Screen
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Press Enter to accept the TDS helper screen 4. The Bank selected in the TDS Helper screen is defaulted automatically in the Account field. 5. Set Provide Details to Yes, to view the TDS Payment Details
Figure 18.75 TDS Payment details
6. In the Payment Details screen Enter the periodicity of the payment of TDS amount in the From Date and To Date field respectively Enter the Cheque/DD No details Select the Bank in the Name of Bank field
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Figure 18.76 Payment Details List of Banks
Enter the Branch Account Number Enter the Bank Branch name Enter the BSR code of the branch Enter the Challan No. and Challan Date The completed Payment Details screen is displayed as shown
Figure 18.77 Completed Payment Details Screen
Press Enter to accept the screen 7. Enter the details of the transaction in the Narration field, if required The Completed TDS Payment voucher is displayed as shown
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Figure 18.78 TDS Payment Voucher
Tally.ERP 9 allows you to enter above transaction in Double Entry mode also.
Step 2 : Print ITNS Challan 281 The TDS amount is remitted to the credit of the Government through TDS Challan ITNS 281. To print the TDS Challan, follow the steps given below 1. Press PageUp to go back to payment voucher entry 2. Press Alt + P from the payment voucher to view the Voucher Printing screen 3. In the Voucher Printing screen Ensure Print as TDS Challan is set to Yes Ensure other details are entered in the similar manner
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Figure 18.79 Voucher Printing Screen
Press Enter to Print The Printed ITNS 281 Challan is displayed as shown
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Figure 18.80 Printed ITNS 281 Challan
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Example 11: On 05/05/09, M/s. National Enterprises paid Rs. 360/- to Government towards TDS on Advertisement Expenses for the month of April 2009. Step 1 : Create Payment Voucher Go to Gateway of Tally > Accounting Vouchers > Press F5: Payment 1. Press F2 and change date to 05-05-2009 2. Press Alt+S or click S: TDS Helper button to view TDS helper screen. 3. In TDS Helper screen, Enter the date till which the TDS deductions are to be considered (i.e., 30-04-2009) in Deducted Till Date field Select 194C in the Section field Select Payment to Contractors (Advertisement Contractors) as the Nature of Payment Select the Deductee Status as Non Company Select HDFC Bank from the List of Ledger Accounts The completed TDS Helper screen is displayed as shown
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Press Enter to accept the TDS helper screen 4. The Bank selected in the TDS Helper screen is defaulted automatically in the Account field. 5. Set Provide Details to Yes, to view the TDS Payment Details 6. In the Payment Details screen Enter the periodicity of the payment of TDS amount in the From Date and To Date field respectively Enter the Cheque/DD No details Select the Bank in the Name of Bank field Enter the Branch Account Number Enter the Bank Branch name Enter the BSR code of the branch Enter the Challan No. and Challan Date The completed Payment Details screen is displayed as shown
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Press Enter to accept the screen 7. Enter the details of the transaction in the Narration field, if required The completed Payment voucher will appear as shown
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Step 2 : Print ITNS Challan 281 1. Press PageUp to go back to payment voucher entry 2. Press Alt + P from the payment voucher to view the Voucher Printing screen 3. In the Voucher Printing screen Ensure Print as TDS Challan is set to Yes Ensure other details are entered in the similar manner
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Example 12: On 05/05/09, M/s. National Enterprises paid Rs. 3,150/- to Government towards TDS on Commission for the month of April 2009. Step 1 : Create Payment Voucher Go to Gateway of Tally > Accounting Vouchers > Press F5: Payment 1. Press F2 and change date to 05-05-2009 2. Press Alt+S or click S: TDS Helper button to view TDS helper screen. 3. In the TDS Helper Screen, Enter the date till which the TDS deductions are to be considered (i.e., 30-04-2009) in Deducted Till Date field Select 194H in the Section field Select Commission Or Brokerage as the Nature of Payment Select the Deductee Status as Non Company Select HDFC Bank from the List of Ledger Accounts The completed TDS Helper screen is displayed as shown
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Press Enter to accept the TDS helper screen 4. The Bank selected in the TDS Helper screen is defaulted automatically in the Account field. 5. Set Provide Details to Yes, to view the TDS Payment Details 6. In the Payment Details screen Enter the periodicity of the payment of TDS amount in the From Date and To Date field respectively Enter the Cheque/DD No details Select the Bank in the Name of Bank field Enter the Branch Account Number Enter the Bank Branch name Enter the BSR code of the branch Enter the Challan No. and Challan Date The completed Payment Details screen is displayed as shown
Press Enter to accept the screen 7. Enter the details of the transaction in the Narration field, if required
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8. Press Enter to accept. Step 2 : Print ITNS Challan 281 1. Press PageUp to go back to payment voucher entry 2. Press Alt + P from the payment voucher to view the Voucher Printing screen 3. In the Voucher Printing screen Ensure Print as TDS Challan is set to Yes Ensure other details are entered in the similar manner
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18.5 TDS Reports

Tally.ERP 9 provides the facility to generate various TDS reports, Challans and forms in the prescribed format viz., TDS Computation Report, TDS Challan and TDS Statutory Returns for a month, quarter, year or any given period. To view the TDS Reports, Go to Gateway of Tally > Display > Statutory Reports > TDS Reports
Figure 18.91 TDS Reports
18.5.1 Computation
The TDS Computation report displays information about TDS transactions. It includes information about the total expenses and advances on which TDS is applicable, TDS amount deducted, balance TDS amount deductible, TDS amount paid and TDS amount pending for payment. To view TDS Computation report, Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Computation
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Figure 18.92 TDS Computation
The TDS Computation report is broadly subdivided into 2 sections, namely Deduction Details: In this section, the Assessable value of Expenses & Advances (comprising of TDS Not Applicable, Under Exemption Limit, Zero Rate and the Net Taxable Expenses & Advances), TDS Deducted amount (at Normal and Lower Rate) and the Balance Deductable at Normal and Lower Rate is displayed. Payment Details: In this section, the details of TDS paid during the current and previous month and the balance payable during the current/previous month is displayed. TDS Computation Party Wise To view Party Wise TDS Computation report, Highlight Expenses & Advances and press Enter to drill down to Party Wise Report
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Figure 18.93 TDS Computation Party Wise
You can configure the Party wise report, by pressing F12: Configure In F12: Configure, Show Tax Deductible, Show Balance to be deducted, Show Balance Payable to Government options are set to Yes
Figure 18.94 F12: Configure
In F12: Configuration, Set Show Tax Deducted to Yes Show Tax Deductable Break-up to Yes Set all other options to No
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Figure 18.95 F12: Configure
Now, the Expenses & Advances report will display the complete break up of Tax, Surcharge, Education Cess, Secondary and Higher Education Cess details for the tax deducted amount. The TDS Computation Report displays the details as shown
Figure 18.96 TDS Computation Party wise
TDS Computation Payment Wise The TDS Paid report displays the details of TDS payments made during the selected period. To view Payment Wise TDS Computation,
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Press Enter on Paid details to drill down to TDS Paid report The TDS Paid report is displayed as shown
Figure 18.97 TDS Paid Report
TDS Computation Balance Payable To view TDS Payable report from TDS Computation, Press Enter on any particular Balance Payable details
The TDS Payable report is displayed as shown
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Figure 18.98 TDS Payable Report
18.5.2 Challan Reconciliation

As per Income Tax Act, the details of payment of Tax Deducted at Source are required to be furnished in the TDS certificate issued to the deductee. For this purpose, the Challan details containing the information in respect of Bank Challan No. & Date, Bank Name, BSR Code etc., are required to be specified. Tally.ERP 9 allows to enter all the required information as specified by the statutes, by using the Challan Reconciliation facility. Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Challan Reconciliation > Press F5: Challan Reconcile The Challan Reconciliation report is displayed as shown
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Figure 18.99 Challan Reconciliation
Click on S: Set Challan Details button to fill the challan details..
Figure 18.100 Challan Details
Press Enter to accept the Challan Details.

In our case study (National Enterprises) the challan details for the TDS Payment entries are entered in the respective Payment Vouchers. Hence, the details are prefilled in the Challan Reconcilliation Report. However, where challan details are not entered during payment entry, are required to be updated in Challan Reconcilliation report before generating Form 16A.
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The completed Challan Reconciliation screen will appear as shown
Figure 18.101 Challan Reconciliation Screen
Press Enter to accept.
18.5.3 Return
Corporate & Non- Corporate entities (deductors) responsible for making payments (specified under Income Tax Act) to third parties (deductees) and deducting tax at source at the prescribed rates on such payments are required to furnish TDS returns containing details of deductee(s) and the payment details relating to the deposit of such tax to Income tax department. The following statutory returns have to be filed by the tax deductors : Form Form 24 Nature of Payment Annual return of 'Salaries' under Section 206 of Income Tax Act, 1961 Periodicity Annual
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Form Form 26
Nature of Payment Annual return of deduction of tax under section 206 of Income Tax Act, 1961 in respect of all payments other than 'Salaries'. Statement of deduction of tax from interest, dividend or any other sum payable to persons specified under Rule 37A of Income Tax Rules, 1962. Quarterly statement for tax deducted at source from 'Salaries'. Quarterly statement of tax deducted at source in respect of all payments other than 'Salaries'. Quarterly statement of deduction of tax from interest, dividend or any other sum payable to non-residents. to be filed in physical form with each return.
Periodicity Annual
Form 27
Quarterly
Form 24Q Form 26Q Form 27Q
Quarterly Quarterly Quarterly
Form 27A
Tally.ERP 9 allows you to generate and print statutory Returns in physical as well as uploadable formats as prescribed by the government. In Tally.ERP 9, you can generate the following Quarterly/Annual Returns Form 16A Form 26Q Annexure to 26Q Form 27Q Annexure to 27Q Form 26 Annexure to 26 Form 27 Annexure to 27 Form 16A Every person deducting tax at source from payments (as specified in the Income Tax Act) other than salaries, is required to furnish a certificate in Form 16A to the person on whose account such tax is paid to the credit of Central Government within the prescribed time and specifying the amount so deducted, the rate at which the tax has been deducted and any other particulars as may be prescribed.
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Print Form 16A Form 16A is a certificate in evidence of deduction of tax at source by the deductor and payment of the same into credit of the government. Form 16A is essential to claim credit of tax by the deductor in his Income Tax returns. To print Form 16A Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Print Form 16A In Select Item screen,select Silverplus Enterprises from the List of TDS Party Ledgers
Figure 18.102 Select Item Screen
In Printing TDS Form 16A screen, enter the details as shown
Figure 18.103 Printing TDS Form 16A screen
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The printed Form 16A is displayed as shown
Figure 18.104 Printed Form 16A
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Form 26Q Form 26Q is a Quarterly return for deduction of tax in respect of payments made to residents other than salary. To print Form 26Q Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Form 26Q In Printing TDS Form 26Q, press Backspace and enter the following details
Figure 18.105 Printing TDS Form 26Q
The printed Form 26Q is displayed as shown
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Figure 18.106 Form 26Q (Page 1)
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Annexure to Form 26Q As per Income Act, the annexures in respect of each deductee with breakup of TDS is required to be furnished alongwith the Quarterly/Annual Returns. Annexure for each deductee should be generated in separate page. To print Annexure to Form 26 Q Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Annexure to Form 26Q In Printing TDS Form 26Q, press Backspace and enter the required details Press Enter to print Annexure to Form 26 Q
The printed Annexure to Form 26Q appears as shown
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Figure 18.108 Annexure to 26Q
The second page will be printed for the next deductee with the TDS breakup details. Form 27 Q Form 27Q is a Quarterly return for deduction of tax in respect of payments made to non-residents other than salary. To print Form 27Q Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Form 27Q In Printing TDS Form 27Q screen, press Backspace and enter the required details
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The printed Form 27Q appears as shown
Figure 18.109 Form 27Q ( Page 1)
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In our examples, we have not considered payments made to Non-residents. Hence, the Form 27Q will appear blank.
Annexure to 27Q As per Income Act, the annexures in respect of each deductee with breakup of TDS is required to be furnished alongwith the Quarterly/Annual Returns. Annexure for each deductee should be generated in separate page. To Print Annexure to Form 27Q Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Annexure to Form 27Q In Printing TDS Form 27Q, press Backspace and enter the required details Press Enter to print Annexure to Form 27Q
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Form 26 Form 26 is an Annual return for deduction of tax in respect of payments made to residents other than salary. To print Form 26, Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Form 26 In Printing TDS Form 26, press Backspace and enter the required information
Figure 18.111 Printing TDS Form 26
Press enter to print Form 26 The printed Form 26 appears as shown
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Figure 18.112 Printed Form 26
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Annexure to Form 26 To Print Annexure to Form 26, Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Annexure to Form 26 In Printing TDS Form 26, press Backspace and enter the required details The printed Annexure to Form 26 appears as shown
Figure 18.113 Annexure to Form 26
Similarly, the annexure for the subsequent nature of payment will be printed in the next page. Form 27 Form 27 is an annual return for deduction of tax in respect of payments other than salary made to Non-residents. To print Form 27 Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Form 27 In Printing TDS Form 27, press Backspace and enter the required details Press Enter to print
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The printed Form 27 appears as shown
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Annexure to 27 To print Annexure to Form 27 Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Annexure to Form 27 In Printing TDS Form 27, press Backspace and enter the required details Press Enter to print
In our examples, we have not considered payments made to Non-residents. Hence, the Form 27Q, Form 27 and Annexure to Form 27Q will appear blank.
18.5.4 eTDS Returns

With the automation of collection, compilation and processing of TDS returns, ITD notified Electronic Filing of Returns of Tax Deducted at Source Scheme 2003. Under this scheme : It is mandatory (w.e.f. June 1, 2003) for corporate deductors to furnish their TDS returns in electronic form (e-TDS return). From F.Y. 2004-2005 onwards furnishing TDS returns in electronic form is also mandatory for government deductors in addition to corporate deductors. Deductors (other than government and corporates) may file TDS return in electronic or physical form. National Securities Depository Ltd. (NSDL) is the e-TDS Intermediary (appointed by ITD) to receive the e-TDS returns from the deductors, on behalf of ITD. Deductors furnishing e-TDS returns are required to furnish a control chart - Form 27A in physical form along with the e-TDS return furnished in CD/floppy. Form 27A is a summary of TDS return (Form 24, 26 or 27), which contains control totals of Amount Paid and Income tax deducted at source. The control totals mentioned on Form 27A should match with the corresponding control totals in e-TDS return file. Form 27A is required to be furnished separately for each TDS return (Form 24, 26 or 27). The deductors / collectors preparing e-TDS returns are required to validate their returns with the File Validation Utility (a freely downloadable utility developed by NSDL), to conform to the prescribed format. In Tally.ERP 9, the eReturn menu displays the eTDS Quarterly/ Annual Forms, which can be exported and validated with the File Validation Utility. To view the E-TDS Forms Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > EReturn > ETDS
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Figure 18.115 E-TDS Forms
Form 26Q Form 26Q is a Quarterly return for deduction of tax in respect of payments made to residents other than salary. To export Form 26Q Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > E-Return > E-TDS > Form 26Q In Exporting eTDS Form, press Backspace and enter the following details By default, the Language and Format is preset as Restricted (ASCII Only) and SDF (Fixed Width) respectively. In Export Location field enter the details of the path to where the txt file to be exported. In the Output File Name field specify the file name as Form 26Q.txt Press Enter to accept the Person Responsible Details (The Address details are automatically defaulted from the Company masters in the Person Responsible Details column) Select Yes or No as applicable, in Is Change in Address since last Return field. Under Other Details, In Category (deductor/Collector) field select the Deductor Category and specify the applicable date in the From and To fields Specify 30-06-2009 in the Challan Date Till field (i.e., Challan date to be considered for TDS payments made for the respective quarter/period) In Form Name field, Form 26Q is defaulted Specify the Place and Date of Filing Returns
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The Exporting eTDS Forms configuration screen appears as shown
Figure 18.116 Exporting eTDS Forms
Press Enter to Export Quarterly Return in 26Q The exported file is placed in the Tally.ERP 9 Directory with the file name as specified above.
Figure 18.117 Exported Form 26Q in Tally.ERP 9 Directory
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The exported file (Form 26Q) is required to be validated with the File Validation Utility (a freely downloadable utility from NSDL website) and after validation, the returns should be submitted to the department in CD along with Form 27A in Physical Form.
It is mandatory to validate the TDS returns with File Validation Utility to confirm to the requirements as prescribed by the Income tax department. In case of any errors in exported file (Returns), the FVU prompts a error message with error code, the assessee may correct the same and revalidate the returns (The File Validation Utility is available for Quarterly and Annual returns separately). Tally.ERP 9 exports both Form 26Q & Form 27Q in the text (.txt) format as prescribed by NSDL.
Print Form 27A Form 27A is a summary of TDS return which contains control totals of Amount paid and Income tax deducted at source. Form 27A is to be filed in physical form with each return i.e., Form 26Q, Form 27 Q, Form 26 and Form 27. In case of returns submitted in the paper form, form 27A need not be attached. Follow the steps given below to print Form 27A Go to Gateway of Tally > Display >Statutory Reports > TDS Reports > EReturn > Print Form 27A In the Printing TDS Form 27A screen, Press Enter to accept the Person Responsible Details Under Other Details, specify the following Select the Deductor Category in Category (deductor/Collector) field. Enter the applicable date in the From and To fields Specify 30-06-2009 in the Challan Date Till field Select the Enclosed Form Type as Form 26Q Specify Previous Receipt No., if any Specify 1 in the No. of Annexures enclosed field Specify Other Information, if any Specify the Place and Date of filing returns The completed Printing TDS Form 27A configuration screen is displayed as shown.
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Figure 18.118 Printing TDS Form 27A
Press Enter to Print Form 27A The printed Form 27A is displayed as shown.
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Form 27Q Form 27Q is a Quarterly return for deduction of tax in respect of payments made to nonresidents other than salary. To Export Form 27Q Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > EReturn > ETDS > Form 27Q In Exporting TDS Form 27Q, press Backspace and enter the required details
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Figure 18.120 Exporting eTDS Forms
Press Enter to Print Form 27Q.
18.5.5 Outstandings
In Tally.ERP 9, you can generate TDS outstandings on the following TDS Payables Ledgerwise TDS Payable Nature of Payment TDS Not Deducted TDS payables The TDS Payables report gives you information on the TDS payable (pending) to Government for a particular Nature of Payment. To view TDS Payables report, Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Outstanding > TDS Payables
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Figure 18.121 TDS Payable Report
Press Alt+F1 or click on F1: Detailed to view in detailed mode To Print TDS Payables report, press Alt+P from the above screen. The printed TDS Payables report appears as shown :
Figure 18.122 Print Preview TDS Payable Report
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Ledger TDS Ledger Outstandings report displays ledger wise TDS outstandings. This report can be viewed for all the ledgers or for one ledger.
Figure 18.123 Ledger Menu
Select All Items, to view Ledger Outstandings for all the ledgers The TDS Ledger Outstandings report appears as shown
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Figure 18.124 TDS Ledger Outstandings All Items
Select One Item, to view TDS Ledger Outstandings for particular ledger Select Ramesh Kumar and press Enter to view TDS Ledger Outstandings Report
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Figure 18.125 TDS Ledger Outstandings One Item
Nature of Payment TDS Nature of Payment Outstandings report displays Nature of Payment wise TDS outstandings. This report can be viewed for all the Nature of Payment or for one Nature of Payments.
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Figure 18.126 Nature of Payment
Select All Items, to view Nature of Payment Outstandings for all the Nature of Payment The TDS Nature of Payment Outstandings report is dispayed as shown
Figure 18.127 TDS Nature of Payment Outstandings All Item
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Select One Item, to view TDS Nature of Payment Outstandings for Particular Nature of Payment From the List of TDS Nature of Payments, select Commission Or Brokerage Press Enter to view TDS Nature of Payment Outstandings report
Figure 18.128 TDS Nature of Payment Outstandings One Item
TDS Not Deducted The TDS Not Deducted report displays party wise information on the Amount subject to TDS, Tax to be Deducted on such amount, Tax Deducted till date and Balance to be deducted i.e., Not deducted (if any). To view the TDS Not Deducted report, Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Outstandings > TDS Not Deducted
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In our case study (National Enterprises), the TDS Not Deducted Report will be blank, since TDS is deducted on all the transactions. In such cases, you may press F7 to display all TDS related transactions.
Press F7 (Show All) to display all transactions
Figure 18.129 TDS Not Deducted Report
Press Alt+F1 or click on F1: Detailed to view in detailed mode
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Figure 18.130 Detailed TDS Not Deducted Report
To Print TDS Payables report, press Alt+P from the above screen.
18.5.6 Exception Reports

In Tally.ERP 9, you can generate various TDS exception reports to help track and rectify any discrepancies in TDS entries. Tally.ERP 9 allows you to generate exception reports to track Migrated Vouchers, Migrated Bills, TDS Masters with advanced configuration, Migrates TDS Vouchers, TDS Masters without PAN Details and TDS Masters without deductee Type. To view TDS Exception Reports Go to Gateway of Tally > Display> Statutory Reports > TDS Reports > Exception Reports
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Figure 18.131 Exception Reports
PAN Not Available The PAN Not Available report displays all the Party Ledgers for whom the PAN details is not available. To view the PAN Not Available report. Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Exception Reports > PAN Not Available For eg., create ledger Nikhil Computers without providing PAN / IT No.. The PAN Not Available report will appear as shown :
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Figure 18.132 PAN Not Available
You can also update the PAN Details of the Party from the above screen. This report is useful in tracking the party ledgers for which the PAN Details are not available before filing the e-returns. Unknown Deductee Type The Unknown Deductee Type report displays all the Party Ledgers for whom the Deductee Type is not defined. To view the Unknown Deductee Type report Go to Gateway of Tally > Display > Statutory Reports > TDS Reports> Exception Reports > Unknown Deductee Type For eg., create ledger Somitel Communication without selecting Deductee Type
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Figure 18.133 Unknown Deductee Type
You can also update the Deductee Type Details of the Party from the above screen. This report is useful in tracking the party ledgers for which the Deductee Type Details are not available before filing the e-returns. Migrate Tool The Migrate Tool comprises of the following reports Track Migrate Voucher : The Track Migrate Vouchers reports displays Date-wise Migrated and Non-migrated vouchers. Tally.ERP 9 displays the Non Migrated vouchers' Amount in Bold for easy identification. Track Migrate Bills : The Track Migrate Bills report displays Tax bill name wise migrated and non-migrated voucher. In this report, you can identify migrated/non- migrated vouchers by comparing the previous deduction amount and new deduction amount and previous payment amount and new payment amount are same. If the Deduction Amounts (Previous and New) and Payment Amounts (Previous and New) are same then, it is understood that
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the vouchers are successfully migrated. On the other hand, if the Deduction Amounts (Previous and New) and Payment Amounts (Previous and New) are not same then it is understood that the vouchers are not migrated. Track Masters : The Track Masters Report displays TDS Ledger wise Lower Deduction, Zero Deduction and IT Exemption details. Re-Migrate : The Re-Migrate option, first un-migrates all the TDS vouchers and then remigrates all the vouchers. If the migration is not complete then the application displays the message - TDS Migration did not complete sucessfully. If the migration is complete you can continue to record TDS transactions and generate required reports.
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Points to Remember
Tax Deducted at Source is one of the modes of collecting income tax. The buyer/service and receiver/payer of income files annual returns electronically or in physical form. Tax Assessment Number is a ten-digit alphanumeric number issued by the Income Tax Department to the deductor. The Statutory Masters are of two types Deductee Type and Nature of Payments. Tally gives you the option of booking of expenses either using a journal voucher or a purchase voucher. Tax transactions for a particular party providing services is recorded in a journal voucher using the TDS Deduction button. TDS payment is done in two ways - Manual bill selection and Auto-fill selection (using TDS Helper). TDS payment voucher is printed as a TDS Challan. The TDS amount on advance payments is adjusted only when the final settlement of accounts for a contract is made. The TDS Computation Report provides you with a list of party and TDS Ledger names for which the TDS bills are deducted. TDS Payables Report gives the status of TDS payable (pending) amounts for a particular TDS Ledger account. Ledger Outstandings Report is used to find out the outstanding status of a particular tax ledger account. The reconciliation of challan payments made to the Bank for TDS accounts is done in the Ledger Voucher Report.
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Lesson 19: Tax Collected at Source
Lesson Objectives
On completion of this lesson, you will be able to understand Enable TCS in Tally.ERP 9 Create masters necessary for TCS transactions. Record TCS transactions Generate TCS reports and challans in Tally.ERP 9
Tax Collected at Source means tax being collected from the source by the seller (collector) from the buyer (collectee/ payee) for goods traded u/s 206C (1) of the Income Tax Act, 1961. It is collected when accrued or when paid whichever occurs earlier. It is prescribed for any business or trade dealing with alcoholic liquor, forest produce, scrap, etc. It also includes lease, license or contract related to parking lots, toll plaza, mines and quarry, etc., as defined in Section 206C of the Income Tax Act, 1961. The following brief description covers the applicability of Act.
19.1 Basic Concepts of TCS

19.1.1 TCS Nature of Goods
The following table describes the Nature of Goods covered under TCS and the rate applied thereon. S.No 1 2 3 4 Nature of Goods Alcoholic liquor for human consumption Tendu leaves Timber obtained under a forest lease Timber obtained by any mode other than under a forest lease % 1 5 2.5 2.5
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Tax Collected at Source
5 6
Any other forest product apart from timber or Tendu leaves *Scrap
2.5 1
*Scrap means waste. These are damaged materials obtained from manufacturing units that are of no further use. Seller A seller can refer to any one of the following: The Central Government. A State Government. Any Local Authority. Corporation or Authority established by or under a Central, State or Provincial Act. Any Company. Firm. Co-operative Society. It also includes Individuals or Hindu Undivided Family (HUF) running businesses or professions. The total sales, or turnovers of these businesses must exceed the monetary limits specified under Clause (a) or Clause (b) of Section 44AB of Tax Audit of Income Tax Act, 1961 . This must be done during the financial year immediately preceding the financial year in which the goods of the nature specified above are sold. Buyer A Buyer is a person who has the right to receive or obtain goods specified above by means of a sale, auction, tender, or any other mode. The buyer does not include: A public sector company, the central government, a state government, an embassy, a high commission, legation, commission, consulate and the trade representation of a foreign state and a club; or A buyer in the retail sale of such goods purchased by him for personal consumption.
19.1.2 TCS on Contracts, License and Leases

According to Sec 206C (1C), Other than a public sector company (licensee or lessee), every person while dealing with another person for business, in whole or in part, either: grants a lease or license enters into a contract transfers any right or interest
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The TCS is collected from the licensee at the rates specified in the following table: S.No 1 2 3 Nature of contract, license, lease, etc. Parking Lot Toll Plaza Mining or Quarrying % 2 2 2
19.1.3 Time and Mode of Payment of TCS to the Government Account

The total amount collected is paid to the Central Government within a week from the last day of the month. The collection when made by or on behalf of the Government, results in the amount being credited without the production of a challan.
19.1.4 Credit for Tax Collected at Source

The amount collected on behalf of a person and paid under Section 206C(3) to the Central Government, and specified in the second provision to sub-section (5) shall be deemed as payment of tax. Credit shall be given for that amount, for the assessment year in which such income is assessable without the production of a certificate.
19.1.5 The Issue of a TCS Certificate

The person collecting tax, issues a certificate (Form No. 27D) to the buyer stating the tax collected at source. This is issued within a month of the amount being debited to the account of the buyer or the payment received from the buyer subject to the clauses listed below: Provided that no certificate is furnished for the tax collected on or after 1-4-2005 Provided that the income-tax authority or the authorised person issues Form No. 26AS specifying the amount of tax collected to the buyer or to the licensee or lessee, within the prescribed time (i.e. 15th June) at the end of each financial year. The annual statement Form No. 26AS is issued for the tax deducted and collected at source from the financial year 2005-06 onwards.
19.1.6 The Issue of a Consolidated Certificate

Some times, a buyer requires multiple certificates as proof of the tax collected at source for the period ending on 30th September and 31st March, in each financial year. In such cases, the person collecting the tax, can on request, issue a consolidated certificate (Form No. 27D) within a month.
19.1.7 TCS Returns

To ensure proper checks on the collections (TCS) and subsequent credit taken by the collectee/ payee, the collectors are required to file their TCS returns with the Income Tax Department. The TCS returns contain the following information in the form prescribed by the Income Tax Department:
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Collector details (the TAN, Name, Address). The bank where the tax is deposited (like the amount, challan identification number). The collectee details (the PAN, Name, Amount paid, Tax collected at source).
19.1.8 Returns
Forms and periodicity The revised forms for e-TCS returns and periodicity thereof prescribed under income tax laws are as follows: Financial Year 2004-05 Form No. Form 27E Form 27B Particulars Annual return of collection of tax under Section 206C of Income Tax Act, 1961 Physical control charts containing control totals mentioned in TCS returns furnished electronically. Form 27B in physical form to be submitted along with e-TCS annual return Form 27E. Quarterly return of collection of tax. Physical control charts containing control totals mentioned in TCS returns furnished electronically. Form 27B in physical form to be submitted along with e-TCS quarterly return Form 27EQ. Periodicity Annual With each eTCS returns Form 27E. Quarterly With each eTCS returns Form 27EQ.
2005-06
Form 27EQ Form 27B
19.2 Configuring Tally.ERP 9 for TCS

Tally.ERP 9s simple yet powerful TCS feature enables you to record transactions related to Tax Collection at Source with ease. It also helps you generate necessary reports and returns such as Form 27D, e-TCS Forms (Form 27E, Form 27EQ) and Form 27B.

Create a company called Risali Timber Traders, to understand the TCS feature of Tally.ERP 9.
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The completed Company Creation screen appears as shown below:
Press Y or Enter to accept the screen. Setup: In the F11: Features (Statutory & Taxation Features), Set the option Tax Collected at Source to Yes. The Company Operations Alteration screen is displayed as shown below:
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Figure 19.2 Company Operations Alteration
Set/Alter TCS Details to Yes. Press Enter to view the TCS Collector Details screen, ensure that the TCS Collector Details screen is displayed as shown below:
Figure 19.3 Company TCS Collector Details
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19.2.2 TCS Statutory Masters

Before creating the Masters, observe the TCS Master screens in Tally.ERP 9. List of Collectee Types Go to Gateway of Tally > Display > Statutory Info. > Collectee Types The list of Collectee Types, is provided for you as shown below:
Figure 19.4 List of Collectee Type
In order to know the Collectee TCS Details, select a Collectee from the above list. For example, select Association of Persons. The screen displays details such as the Date from which the rate is applicable, Surcharge Exemption Limit, Surcharge and Additional Surcharge.
The buyers (customers) covered under TCS have to be identified with a Collectee Type.
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Figure 19.5 Collectee Type Display
The List of TCS Types The transactions covered under TCS are grouped under the List of TCS Types. Go to Gateway of Tally > Display > Statutory Info. > TCS Nature of Goods.
Figure 19.6 List of TCS Types
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Select a TCS Type from the above list, in order to obtain the TCS Details. For example, select Timber Obtained Under Forest Lease. The screen displays details such as Collectee Type, the TCS rate and the Date from which the rate is applicable.
Figure 19.7 TCS Nature of Goods Display
The nature of transaction has to be identified with the respective TCS ledger.
Tally.ERP 9 updates the latest rates on its website, www.tallysolutions.com whenever there is a change in the rates of TCS or Surcharge. The latest statutory master file can be imported from the website.
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The following Masters are required to generate information on the TCS: Party Ledger TCS Ledger Sales Ledger Timber as Stock Item
19.3.1 Creating Party Ledger

A new option Is TCS Applicable appears when you create a Customer ledger. Once this is set to Yes, the List of Collectee Types displays to enable you to select the nature of Buyer/ Lessee. Select the appropriate Nature of the Collectee. Step 1: Create Customer Ledger Go to Gateway of Tally > Accounts Info. > Ledgers > Create Create a customer ledger, Bhima Timbers under Sundry Debtors. Set Is TCS Applicable to Yes. In the TCS Details screen, select the Buyer/ Lessee as Body of Individuals as shown below :
Figure 19.8 Ledger Creation Bhima Timbers with List of Collectee Types
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Ensure that the completed Ledger Creation screen is as shown below :
Figure 19.9 Ledger Creation Bhima Timbers
19.3.2 Creating TCS Ledgers

TCS Ledgers are created under Duties & Taxes by selecting the Type of Tax as TCS and Nature of Goods/ Contract/ License/ Lease as Timber Obtained Under Forest Lease. Step 1: Create TCS Ledger Go to Gateway of Tally > Accounts Info. > Ledgers > Create Create TCS Ledger under Duties & Taxes Select Timber Obtained Under Forest Lease with respect to the Nature of Goods/Contract/License/Lease field
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Figure 19.10 Ledger Creation TCS Ledger
Retain the other fields as default and accept the ledger creation screen. Practice Exercise Similarly, create the following Masters: 1. 2. 3. 4. Sales Ledger under Sales Accounts. Freight under Indirect Expenses. HSBC Bank under Bank Accounts with an opening balance of Rs. 2,00,000. Timber as a Stock Item with the unit of Measurement as MT (Metric Ton).

19.4.1 Creating Sales
On 9-4-09, sold 250 MT of Timber to Bhima Timbers @ Rs. 1,250/MT with TCS The Freight charges are Rs. 1,500. Go to Gateway of Tally > Accounting Voucherse > F8: Sales 1. In a Sales Entry, on selection of a TCS ledger, the TCS Details screen is displayed as shown:
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Figure 19.11 TCS Details
The TCS rate is taken from the TCS Nature of Goods Display based on the Collectee Type and Applicable period. In this case, it is Timber Obtained Under Forest Lease selected at the time of Creation of TCS ledger. Surcharge and Cess are taken from the Name of Collectee Types based on the nature of Buyer/Lessee. In this case, it is a Body of Individuals selected at the time of the Creation of Bhima Timbers.
The completed Sales Invoice appears as shown below:
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Press Y or Enter to accept the Sales Invoice.
19.4.2 Payment of TCS

Step 1: Create Payment Voucher Go to Gateway of Tally > Accounting Vouchers > F5: Payment 1. Press Alt+R or select TCS Helper from the buttons bar. 2. Select TCS Ledger and press Enter.
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Figure 19.13 TCS Filters
3. In the TCS Filters screen enter the details as shown below:
Figure 19.14 TCS Filters
4. The TCS payable amount will be auto-filled with the respective bill details. 5. Select HSBC Bank in the Account field. The completed Payment Voucher appears as shown below:
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6. Once a payment is made, the challan can be printed using the Print option available on the buttons bar.
Figure 19.16 Voucher Printing
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7. Press Y or Enter to obtain a print preview of the TCS Challan. 8. Press Alt+Z to zoom the screen. The Print Preview of the TCS Challan appears as shown below:
Figure 19.17 TCS Challan
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19.4.3 Challan Reconciliation

The challan particulars can be reconciled with the payment made in their respective TCS ledgers. Step 1: Reconcile TCS Ledger Go to Gateway of Tally > Display > Account Books > Ledger > select TCS Ledger
Figure 19.18 Ledger Vouchers screen
Press Alt+F5 or click on Challan Reconcile on the buttons bar The TCS Challan Reconciliation screen appears as shown below :
Figure 19.19 TCS Challan Reconciliation screen
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Enter the Cheque/DD No., Name of Bank, A/c No., Branch Name, BSR Code, Challan No, Challan Date, Transaction ID and set Is PAN Valid to Yes Challans can be reconciled by entering the appropriate data.
19.5 TCS Reports

Tally.ERP 9 provides the following TCS Forms and Reports, Form 27D Form 27E (eTCS Forms) Form 27EQ (eTCS Forms) Form 27B
19.5.1 Form 27D

Form 27D can be printed from the print option in Tally.ERP 9, In order to print Form 27D: Go to Gateway of Tally > Display > Statutory Reports > TCS Reports > Print Form 27D > select Bhima Timbers. The print configuration can be set according to requirement.
Figure 19.20 Print Configuration Form 27D
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The printed Form 27D is displayed as shown below:
Figure 19.21 Printed Form 27D
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19.5.2 e-TCS Returns

The Income Tax department has introduced the Electronic Filing of Returns of Tax Collection at Source Scheme, 2005. It is applicable to all the deductors wanting to furnish their TCS returns online. It is mandatory for corporate and government deductors to furnish their TCS returns in the electronic form (e-TCS return) from the financial year 2004-2005 onwards. Deductors (other than government and corporates) may file their TCS returns in the electronic or physical form. NSDL National Securities Depository Ltd. has been appointed by ITD (The Income Tax Department) as an e-TCS intermediary to receive on its behalf e-TCS returns from deductors. Deductors furnishing their e-TCS have to furnish: Form 27B as a control chart. A CD/ Floppy containing the e-TCS annual return (Form 27E). Tally.ERP 9 allows you to export the ETCS Forms in NSDL compliant formats. The ETCS forms available in Tally.ERP 9 are Form 27E and Form 27EQ. To export ETCS Forms, Go to Gateway of Tally > Display > Statutory Reports > TCS Reports > ETCS Forms In the Exporting eTCS Forms Printing configuration screen, enter the required information as shown :
Figure 15.22 Exporting eTCS Forms
Press Y or Enter to export eTCS Form 27E

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The exported file will be saved in the path specified in the output file name. The file can be validated through NSDLs freely downloadable utility called File Validation Utility. This can be used to verify whether the ETCS return filed by the deductors conforms to the prescribed format. Similarly, you can export other eTCS forms.
19.5.3 Form 27B

Form 27B should be furnished separately for each TCS return. Form 27B contains the control totals of the Amount paid and the Income tax collected at source. The control totals mentioned on Form 27B should match with the corresponding control totals in e-TCS returns. Form 27B is a physical form to be attached with annual e-TCS returns Form 27E. Go to Gateway of Tally > Display > Statutory Reports > TCS Reports > Print Form 27B The Print configuration options available for Form 27B are displayed as shown below:
Figure 19.23 Print Configuration Form 27B
Accept the Printing Form27B screen. Press Alt+Z to zoom the screen.
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The print preview of Form 27B appears as shown below:
Figure 19.24 Print Preview of Form 27B
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Practice Exercise ParkView Agency dealing in modern parking lots, earns its major income by providing the best parking lots in the city. This leads to a collection of TCS from their customers and paying it to the concerned department respectively. Given below are transactions for the month of April 2009, create a company in the name of ParkView and pass the following transactions : i. Create the following ledgers Name of the ledger Group Under Is TCS applicable Yes NA Maintain balance bill by bill Yes NA Inventory values are affected NA No Type of Duty/ Tax NA NA TCS Details
Sheetal Super Bazaar Parking Lots Lease Income TCS on Parking Lots Lease
Sundry Debtors Sales A/c
Company Resident NA
Duties & Taxes
NA
NA
NA
TCS
Contractors\License\ Lease Relating to Parking Lots NA
IDBI Bank
Bank Accounts
NA
NA
NA
NA
ii. Create the following transactions Date 10-4-09 5-5-09 Particulars ParkView Agency provided Sheetal Super Bazaar with a 3000 sqft of parking lot on lease for 2 years the invoice was raised for 950000. TCS paid to the concerned authority
View the TCS payment challan. Reconcile the TCS ledger and view the relevant reports related to TCS. Enter the following details i. Challan number as DB 123 ii. Date as 5-5-2009 iii. Cheque/DD number 566214 iv. Bank name as IDBI Bank v. BSR code as XY12
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Points to Remember
TCS refers to the collection of tax at source by the seller (collector) from the buyer (collectee/payee) for the trade of goods specified u/s 206C (1) of the Income Tax Act, 1961. The term Seller refers to the Central Government, a State Government, any local authority, Corporation or authority established by or under a Central, State or Provincial Act, any Firm or Co-operative society. The term Buyer refers to a person who obtains goods from any sale, auction, tender, or any other mode. TCS collected shall be paid to the credit of the Central Government within one week from the end of the month in which the collection is made. To ensure proper checks and balances on TCS collections and subsequent credit taken there of by the collectee/payee, the collectors are required to file TCS returns with the Income Tax Department.
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Lesson 20: Excise for Dealers
Lesson Objectives
On completion of this lesson, you will be able to understand Basic terms related to Excise Enable Dealer Excise in Tally.ERP 9 Create Masters and Ledgers related to Excise How to Record Excise transactions for dealers Generate Excise Invoice as per Rule 11 Generate and Print Excise related Statutory Reports
Excise duty or Duty of Excise is a tax on goods produced or manufactured in India and intended for consumption in India. The Excise duty is levied at the time of production or manufacturing but for convenience is collected at the time of removal. It is an indirect tax on the manufacturer or producer which is passed on to the ultimate consumer. The levy and collection of duty of Excise is provided under the authority of the Central Excise Act, 1944, at the rates specified under the Central Excise Tariff Act, 1985. The duty is commonly referred to as the Basic Excise Duty. Certain items like fibre, yarn and so on also attract Additional Excise Duty under the Additional Duties of Excise (Textiles and Textile Articles) Act, 1975.
20.1 Basic concepts

The following are some of the basic terms related to Excise. Excisable Goods Excisable goods are goods specified in the schedule under the Central Excise Tariff Act, 1985 as being subject to a duty of excise. The basic conditions to be satisfied are as follows:
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The goods must be: a. Movable. b. Marketable: The actual sale of goods in the market is not necessary as excise duty is charge able on manufacture and not on sale. c. Specified in the Central Excise Tariff Act. Dealer of Excisable Goods A dealer of excisable goods is a person who is registered under the Central Excise Rules. Any of the following categories can be applicable to a registered dealer: 1. Depot of a manufacturer or the premises of the consignment agent of the manufacturer or any other premises from where the goods are sold on behalf of the manufacturer. 2. First stage dealer of excisable goods. 3. Second stage dealer of excisable goods. 4. Depot of an importer or the premises of the consignment agent of the importer. 5. First stage dealer of imported goods. 6. Second stage dealer of imported goods. First Stage Dealer A First Stage Dealer is a person who purchases the goods directly from: i. The manufacturer registered under the provisions of Central Excise Rules, 2002, or representative of such manufacturer, under cover of an invoice. ii. An importer or from the representative of such importer, under the cover of an invoice. Second Stage Dealer A Second Stage Dealer is a person who purchases the goods from a first stage dealer. Registration of Dealers Every Dealer or Importer issuing Cenvatable Invoices should be registered with the jurisdictional Range Superintendent as per the procedure prescribed in Rule 9 of the Central Excise (No. 2) Rules 2001. The registration is valid only for the premises for which it is granted. In cases where the manufacturer or dealer, has more than one premise, it is necessary to obtain a separate registration for each premise. The registration numbers are PAN based 15 digit alpha numeric. The first part denotes 10 character (alpha numeric) Permanent Account Number issued by Income tax authorities and the second part comprises of a fixed 2 character alpha code which is as follows: S.No. 1. 2. Category Central Excise Manufacturers Registered Dealers Code XM XD
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This is followed by three character numeric codes 001, 002, 003, which denotes the number of premises registered by the manufacturer or the dealer. CENVAT Credit A manufacturer or producer of final products is allowed to take tax credit known as CENVAT credit on the following payments: i. Duty of excise specified in the First and Second Schedule to the Excise Tariff Act (ED). ii. Additional duty of Excise leviable under Additional Duties of Excise (Textile and Textile Articles) (AED [T and TA]). iii. Additional duty of Excise leviable under Additional Duties of Excise (Goods of Special Importance) (AED [GSI]). iv. The National Calamity Contingent duty (NCCD) leviable under Finance Act. v. Education Cess on excisable goods. vi. Additional Duty leviable under Customs Tariff Act. A manufacturer of excisable goods can avail of CENVAT credit for duty paid on the inputs purchased and utilise the same for the payment of excise on any final product.
20.2 Enabling Dealer Excise in Tally.ERP 9

The Dealer Excise module in Tally.ERP 9, facilitates complete Excise Accounting for dealers engaged in the trading of excisable goods and desiring to issue cenvatable invoices. It minimises the possibility of erroneous data entry and ensures transparency and better levels of compliance with the statutes. It takes a one-time configuration in Tally.ERP 9 for Dealer Excise features to be activated.
20.2.1 Salient Features of Dealer Excise

The following are the salient features of the excise module: i. Simple and user-friendly. ii. Easy to setup and use. iii. Generates Excise Invoice raised by first and second stage registered dealers to pass on Cenvat Credit. iv. Allows Batch-wise Inventory details. v. Provides an option to print details of Manufacturer/ Supplier and all other relevant particulars of the corresponding purchase invoice. vi. Tracks the item history of excisable goods, right from the instance of purchase till the time of sale/ passing / termination of Cenvat Credit. vii.Generates statutory returns and excise related reports such as Form II and Stock Register. viii.Provides the flexibility to adjust unassigned Cenvat Credit well within the prescribed lapse period.Monnet Ispat & Energy Ltd. ix. Facilitates various Excise duty parameters like BED, AED (GSI), SED, NCCD, AED (T and TA), AED (T and TW) and Education Cess.
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20.3 Enabling Dealer Excise in Tally.ERP 9

It takes a one-time configuration in Tally.ERP 9 for Excise features to be activated. Follow the steps given below to enable Excise in Tally.ERP 9 for a new company Monnet Ispat & Energy Ltd. Create Company Enable Excise Enable VAT Monnet Ispat & Energy Ltd., is dealing in Iron & Steel products such as Hot & Cold Rolled Coils,Sheets etc.

Go to Gateway of Tally > Alt + F3: Company Info. > Create Company In the Company Creation screen, Specify Monnet Ispat & Energy Ltd. as the Company Name and Address details Select India in the Statutory Compliance for field Specify the State, Pin code & Accounts with Inventory details Specify Financial Year From & Books beginning from date as 1-4-2009 The completed Company Creation screen is displayed as shown below :
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Setup: Go to Gateway of Tally of Monnet Ispat & Energy Ltd. and press F11: Features (Statutory & Taxation Features). Set Enable Dealer Excise to Yes Set Set/Alter Dealer Excise Details to Yes The Statutory & Taxation features screen appears as shown
Press Enter, to view the Excise Registration Details screen In the Excise Registration Details sub form appears as shown
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Figure 20.3 Excise Registration Details Screen
1. Registration Type: Select Dealer from Registration Types list 2. Address, Telephone No and PIN Code: Address, Telephone No. and PIN Code details are captured from the company creation screen. If required, it can be altered. 3. Excise Details: Under this section provide Excise Details of the unit. Excise Details will be specific to the Registration Type selected.
Registration Type selected will be displayed below the heading - Excise Details to identify the unit as a manufacturer or a dealer.
4. Unit Mailing Name: The Mailing Name entered in the company creation will be displayed as the Unit Mailing Name. If required, it can be altered.
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Name entered in the Unit Mailing Name will be used in all Excise Reports.
5. Excise Registration (ECC) No.: Enter 15 digits Excise Registration Number (ECC) of the Company/Unit, e.g. MIEBA3201RXD001 6. Date of Registration: Enter the date of Excise registration, e.g. 01-05-2001 7. Other Details: In this section enter Range, Division and Commissionerate details Range: Enter the code Name and Address of the range under which your company is registered. Code: Enter Range Code as 060372 Name: Enter Range Name as Yelanka II Address: Enter the Range Address Division: Enter the code Name and Address of the division under which your company is registered. Code: Enter Division Code as 0903 Name: Enter Division Name as Division II Address: Enter the Division Address Commissionerate: Enter the code Name and Address of the Commissionerate under which your company is registered. Code: Enter Commissionerate Code as 06 Name: Enter Commissionerate Name as Bangalore IV Address: Enter the Commissionerate Address
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Figure 20.4 Completed Excise Registration Details
8. Press Enter to accept and save Excise registration Details
20.3.2 Enabling VAT

To enable VAT Feature, for a company Set the option Enable Value Added Tax (VAT) to Yes. Enable the option Set/Alter VAT Details to Yes. Specify the Company VAT Details as shown below
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Figure 20.5 VAT Details
Specify the VAT TIN No., Inter-state Sales tax and Companys PAN / Income Tax No details. The completed Statutory & Taxation Features screen appears as shown :
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20.4.1 Voucher Type Setup
Create Excise Purchases and Excise Sales Voucher Types, to record Excise transactions with the required specifications. Voucher Types Excise - Purchases Excise - Sales Type of Voucher Purchase Sales Abbreviate Ex-Purc Ex-Sale Use for Excise Yes Yes Default Excise Unit Monnet Ispat & Energy Ltd. Monnet Ispat & Energy Ltd.
i. Voucher Type Creation Excise Purchases Go to Gateway of Tally > Accounts Info. > Voucher Types > Create 1. Enter Excise Purchases as Name of the Voucher Type. 2. Select the Type of Voucher as Purchase from the list of voucher types.
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3. Type the Abbr. as Ex-Purc. 4. Select the Method of Voucher Numbering as Automatic. 5. By default Use Common narration is set to Yes. 6. Set Use for Excise to Yes. 7. In Default Excise Unit field select Monnet Ispat & Energy Ltd. from the List of Excise Units The completed Excise - Purchase Voucher Type screen is displayed as shown below:
Figure 20.7 Voucher Type Creation Excise Purchases
8. Press Y or Enter to accept the screen. ii. Voucher Type Creation Excise Sales Go to Gateway of Tally > Accounts Info. > Voucher Types > Create 1. Enter Excise Sales as Name of the Voucher Type. 2. Select the Type of Voucher as sale from the list of voucher types. 3. Type the Abbr. as Ex-Sale. 4. Select the Method of Voucher Numbering as Automatic. 5. By default Use Common narration is set to Yes. 6. Set Use for Excise to Yes. 7. In Default Excise Unit field select Monnet Ispat & Energy Ltd. from the List of Excise Units 8. Set Print after saving Voucher to Yes. 9. Type the Default Print Title as Invoice. 10.Is Tax Invoice: Yes. 11.Type the Declaration, if any.
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The completed Excise Sales Voucher Type screen is displayed as shown below:
Figure 20.8 Voucher Type Creation Excise Sales
12.Press Y or Enter to accept the screen.

Create Purchases, Sales and Party ledgers with the required Excise options. i. Create Party Ledger Ledger Bhargavan Steels Step 1: Go to Gateway of Tally > Accounts Info. > Ledgers > Create 1. 2. 3. 4. 5. Enter the Name of the Supplier in the Name field. E.g. Bhargavan Steels. Select Sundry Creditors as the group name in the Under field. Set Maintain Balances Bill by Bill to Yes and enter the Default Credit Period if any. Set Inventory Values are affected to No In the Mailing Details and Tax Information section enter the supplier contact details, Income Tax and the Sales Tax numbers. 6. Enable Set/Alter VAT Details to Yes to display the VAT Details sub screen. Under Sundry Creditors Maintain balances bill-by-bill Yes Excise Details Yes
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7. In the VAT Details screen; Select the Registered Dealer as Type of Dealer from the Type of VAT Dealer list. Enter the TIN/Sales Tax No. of the customer e.g. KHJNN5680A 8. Enable Set/Alter Excise Details to Yes to display the Excise Details screen. Ensure that the ledger creation screen appears as shown below:
Figure 20.9 Ledger Creation Bhargavan Steels
9. In the Excise Details screen, Enter the Excise Registration Number of the supplier. E.g. AFSDS0058FXD009 Enter the Date of Excise Registration in Date of Registration field. E.g. 15-Jun-2002 Enter the Range under which the supplier's company is registered. E.g. Yeshwanthpur I Enter the Division under which the supplier's company is registered. E.g. Division II Enter the Commissionerate under which the premise of the Supplier's company is registered. E.g. Bangalore III Select the Default Nature of Purchase as Manufacturer from Nature of Purchase list
The default type of purchases depends upon the status of the supplier, whether he is a Manufacturer / First Stage Dealer / Importer / Second Stage Dealer/ Agent of Manufacturer/Purchase from Importer.
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The completed Excise Details screen appears as shown below :
Figure 20.10 Excise Details screen
Press Ctrl+A to accept the Excise Details screen. Accept the ledger creation screen. Similarly create a ledger Jaykanth Engineering under Sundry Debtors with the necessary Excise details and the default nature of purchase as a Second Stage Dealer.
Tally.ERP 9 allows you to modify the Nature of purchase during a voucher entry, if required.
ii. Create Sales Ledger Go to Gateway of Tally > Accounts Info. > Ledgers > Create Ledger Under Inventory values are affected Yes Used in VAT Returns Yes VAT/Tax Class
Sales Excisable Goods
Sales Accounts
Sales @ 4%
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Ensure that the completed Sales Excisable Goods ledger appears as shown below:
Figure 20.11 Ledger Creation Sales - Excisable Goods
Press Y or Enter to accept the ledger creation screen. iii. Purchase Ledger Ledger Purchases Excisable Goods iv. VAT Ledger Inventory values are affected No Under Purchase Accounts Inventory values are affected Yes Used in VAT Returns Yes VAT/Tax Class Purchases @ 4%
Ledger Input VAT @ 4%
Under Duties & Taxes
Type of Duty/Tax VAT
VAT/Tax Class Input VAT @ 4%
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In order to enter the transactions for Purchase and Sales, create the Stock items with the unit of measure. This will enable you to raise the Item invoice and get the stock summary with all the item details. Name Hot Rolled Coils Stock Group Name Primary UOM MT Tariff Classification 72271000 Set/Alter Excise Details Yes Valuation Type Ad Valorem Rate Of VAT 4%
Go to Inventory Info. > Stock Items > Create Step 1: Create Stock Item 1. 2. 3. 4. Enter the Name of the item as Hot Rolled Coils. Specify the Group as Primary. Define the Units as MT (Metric Tonnes). In Tariff Classification field, select the applicable tariff classification e.g. 72271000 from the List of Tariff Classifications (Use Alt + C to create Tariff Classifications). 5. Enable Set/Alter Excise Details to Yes to display the Excise Details sub screen
Figure 20.12 Stock Item Creation
6. In the Excise Details Screen Excise Unit Name: By default, Tally.ERP 9 displays Monnet Ispat & Energy Ltd as Excise Unit Name. Reporting UOM: By default the unit of Measurement selected under Units will be considered as UOM for all the reports.
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Set/Alter Duty Details: Set this field to Yes to view the Duty Details screen.
Figure 20.13 Excise Details
In Duty Details screen Select the Basic Excise Duty in the Type of Duty field from the List of Excise Duty Classifications Specify the Rate of Duty as 16% Select the Education Cess as the second duty in the Type of Duty field from the List of Excise Duty classifications Specify the Rate of Duty as 2% Select the Secondary Education Cess as the third duty in the Type of Duty field from the List of Excise Duty classifications. Specify the Rate of Duty as 1% The completed Duty Details screen appears as shown below:
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Figure 20.14 Duty Details
7. Accept to save Excise Duty Details screen. 8. Rate of VAT (%): in this field enter the Rate of VAT applicable for the Stock Item e.g. 4% The completed Stock Item creation screen appears as shown below :
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In cases, where the excisable commodity attracts Additional duties of Excise and Special duties of Excise, these can be activated as required from the screen shown.

According to the provisions mentioned in the Central Excise Rules, 2002, a Selling Dealer is eligible to pass CENVAT Credit to the purchasing dealer provided they are registered. Such a sale should be made under the cover of an invoice issued in terms of the provisions of Central Excise. The following chart shows the flow of purchase and sales between the Manufacturer, Agent of Manufacturer, First Stage Dealer or Second Stage Dealer and the passing of CENVAT Credit by the Selling Dealer.
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i. Purchases from Manufacturer
Figure 20.16 Purchases from Manufacturer/Importer
ii. Purchase from Agent of Manufacturer
Figure 20.17 Purchase from Agent of Manufacturer
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iii. Purchase from Importer
Figure 20.18 Purchase from Importer
iv. Purchases from First Stage Dealer
Figure 20.19 Purchases from First Stage Dealer
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v. Purchases from the Second Stage Dealer
Figure 20.20 Purchases from the Second Stage Dealer
20.5.1 Creating Purchases

On the April 10, 2009, Monnet Ispat & Energy Ltd. purchased the following goods from M/s. Bhargavan Steels (Manufacturer) vide B.No. BS/101. Item Description Hot Rolled Coils. Qty (Mts) 400 Rate 500 Assessable Value 2,00,000
Excise Duty @ 16% 32,000
Education Cess @ 2% 640
Sec. Educ. Cess @ 1% 320
VAT @ 4% 9,318.40
Invoice Amount 2,42,278.40
Step 1: Create Purchase Invoice Go to Gateway of Tally > Accounting Vouchers > F9: Purchase > select Excise Purchase from the List of Types. Setup: In the F12: Configuration set Use Common Ledger A/c for Item Allocation to No as shown below:
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1. 2. 3. 4.
Press F2 and change the date to 10-4-09. Select Bhargavan Steels in Partys A/c Name. Press Enter to view the Suppliers details screen. Specify the manufacturer of the goods in the Manufacturer / Importer details section, if the supplier of the goods, is not the manufacturer.
The completed suppliers detail screen is displayed as shown below:
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Figure 20.22 Suppliers Details screen
5. Press Enter to accept the screen. 6. Press Enter to accept the nature of purchase. The Nature of purchase field is by default set to Manufacturer based on the predefinition in the ledger master. You can modify the same depending upon the status of the dealer. 7. Select Hot Rolled Coils in the Name of the Item field. 8. Type the Quantity as 400. 9. Specify the Amount as 232960 and press Enter. 10.The Stock Item Excise details screen is displayed. Specify 1 in the RG 23 Entry No. field Accept the Supplier Invoice No. as BS/101 and Supplier Invoice Date as 10-04-09 (The Supplier Invoice No. & Supplier Invoice Date is defaulted from voucher screen) Specify 12 in the PLA/RG 23 Entry No. field (The PLA RG 23 Sl. No. represents the display of this particular transaction in the relevant page of RG 23 D Register) Type the Assessable Value as Rs. 2,00,000 (Assessable Value [Basic Value of Goods] = Qty x Rate i.e, 400MT X Rs. 500) and press Enter The completed Excise Details subscreen is displayed as shown.
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Figure 20.23 Excise Details for: Hot Rolled coils
The Excise Duty, Education Cess and Secondary Education Cess amounts are automatically calculated on the basis of the configuration in the stock item master.
However, in some cases though the excise duty is chargeable at a specified rate, the net burden on the buyer may be less than such percentage. In such cases Tally.ERP 9 provides the flexibility to modify the amount of tax.
Press Y or Enter to accept the screen. 11.In the Accounting Details screen, Select Purchases Excisable Goods in the particulars column, the VAT/ Tax class is by default set to Purchases @ 4%.
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Figure 20.24 Accounting Details screen
Press Enter to accept the Amount. Press Enter again. 12.Select Input VAT @ 4% ledger and press Enter to automatically display the VAT Amount i.e. Rs. 9318.40 13.Set Show Statutory Details to Yes to view Statutory Details of the transaction The Statutory Details screen is displayed as shown:
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Figure 20.25 Statutory Details Screen
14.In the Bill-wise Details screen, specify the Type of Ref as New Ref and type BS/101 in the Name field. 15. Press Enter to accept the screen. 16.Type the details of the transaction in the Narration field. The completed Excise -Purchase Invoice is displayed as shown below:
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Figure 20.26 Excise- Purchase Invoice
17. Press Y or Enter to accept the Excise - Purchase Invoice.
20.5.2 Excise Invoicing

Tally.ERP 9 allows you to generate and print Cenvat Invoices in the prescribed format besides a Non-Cenvatable Invoice. The following mandatory stipulations on the preparation of Cenvat Invoices are met by Tally.ERP 9: 1. Name, Address and Central Excise Registration number of the registered location issuing the invoice, name of the jurisdictional range / Division / Commissionerate and the companys Income Tax Number and Sales Tax Registration Number is pre-printed on the Invoice. 2. The mandatory four copies are prepared and each copy is marked as follows: a. Original copy marked as Original for a Buyer. b. Duplicate marked as Duplicate for Transporter (to be used for availing Cenvat credit). c. Triplicate marked as Triplicate for Central Excise. d. Quadruplicate marked as Quadruplicate for a Registered person. 3. The copies of the invoices issued by a first stage dealer and a second stage dealer are marked as First Stage Dealer and Second Stage Dealer respectively.
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4. The dealer is required to issue only one invoice per consignment ,if all the packages in the consignment are despatched in one lot. However, in cases where the consignment is despatched in batches either on the same day or different days or loaded on more than one vehicle, a separate invoice is made for each lot or consignment. 5. Each Cenvat Invoice issued by the location bears a printed serial number, beginning from the 1st of April of the year. The starting serial number as well as formats for recording the excise can be easily intimated to the commissioner, whose jurisdiction the company falls. An acknowledgement of such an intimation can be obtained. 6. Records and Invoice generated through computer are also recognised. The serial number likely to be used in the forthcoming quarter should be intimated to the Assistant Commisioner. A revised intimation is sent when the serial numbers are exhausted.

Record the following sales transaction made by Monnet Ispat & Energy Ltd. on the April 15, 2009, to Jaykanth Engineering, Bangalore. Item Description Hot Rolled Coils Setup: Create a ledger Output VAT @ 4%. Step 1: Create Excise - Sales Go to Gateway of Tally > Accounting Vouchers > F8: Sales > select Excise - Sales from the List of Types. 1. Press F2 and change the date to 15-4-09 2. In Ref field, enter the reference number of the transaction 3. The Excise Unit field displays Monnet Ispat & Energy Ltd. as selected during voucher type creation. 4. Select Jaykanth Engineering in Partys A/c Name and press Enter. 5. Specify the details of the despatch, if any in the Despatch Details screen displayed. 6. The Date and Time of the consignment is displayed in the Excise Details column along with the buyer Excise details. Quantity 200 MT Rate 600 VAT 4%
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The completed Despatch Details Screen appears as shown below:
Figure 20.27 Despatch Details
Press Enter to accept the screen. 7. Select Hot Rolled Coils in the Name of the Item field and press Enter. 8. The Supplier Details screen is displayed. Select the relevant Invoice Number BS/101 from the List of Purchases.
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Figure 20.28 Supplier Details
Specify the Quantity as 200.
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Select End of List and press Enter to accept the screen. 9. Specify the Rate as 600 and Press Enter. 10.Press Enter twice. 11.In the Accounting Details screen: Select Sales Excisable Goods in the Particulars column. The VAT/ Tax class defaults to Sales @ 4%.
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Figure 20.30 Accounting Details
Press Enter to accept the amount. Press Enter again to return to the main Sales invoice creation screen. 12. Select Output VAT @ 4% ledger and press Enter. 13. The VAT amount is pre-filled automatically. 14.To view the Statutory Details set the option Show Statutory Details to Yes. 15. In the Bill-wise Details screen, press Enter to accept the default bill allocations. 16. Press Enter to accept the screen. 17. Type the details of the transaction in the Narration field. The completed Sales Invoice is displayed as shown below:
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Figure 20.31 Excise Sales
18. Press Enter to accept the Voucher and print the Sales Invoice.
The default sales voucher type can be used for invoicing non-excisable goods.
Printing of Sales Invoice Step 1: 1. Press PgUp key to view the above sales invoice and press Alt+P (To print).
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2. Press F12: Configure (Invoice Printing Configuration) and Set the following to Yes. Print Date and Time Print Trader Supplier Info Print Purchase Excise Duty details Print Purchase Assessable Value The completed Printing Configuration screen is displayed as shown below:
Figure 20.33 Invoice Printing Configuration
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3. Press Ctrl+A to accept the Screen. 4. Press Enter from the Voucher Printing screen to print Sales Invoice under Rule 11 of the Central Excise Rules, 2002 5. Press Alt+Z or click on Zoom button to view an enlarged version of the report. The print preview of First Stage Dealer's Sales Invoice of Excisable Goods to a second stage dealer is displayed as shown below:
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Figure 20.34 Excise Invoice
This Invoice displays the Excise details of the buyer, seller and manufacturer in accordance with the Excise rules. It reveals the Item history, including the details of the purchases with their
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respective tariff and duties. This serves as an evidence for the passing of CENVAT Credit to the subsequent dealer/ manufacturer. It also specifies the manufacturers name, address and Excise details besides recording the date and time of the removal of goods from the dealers premises. The Invoice is marked as the First Stage Dealer, depicting the position of the selling dealer and has to be authenticated by the authorised signatory in the relevant space provided in the document.
20.6 Excise Reports

Dealers registered with the Central Excise are required to maintain a prescribed register with the proper entries of the consignments received or issued by them. A dealer registered under Excise Rules are required to submit to the Range Superintendent a quarterly return and other documents for verification namely, the Stock Register (earlier referred as RG 23D) and Form II. In Tally.ERP 9, you can generate and print all statutory and excise related forms and report required by a dealer of excisable goods.
20.6.1 Excise Stock Register

The registered dealer issuing invoices for cenvatable goods should maintain a stock account as prescribed in the form RG - 23D. The details of the consignments received under the cover of invoice issued in terms of the provisions of Central Excise Rules, 2002 should also be recorded. However, consignments without a Cenvatable Invoice need not be entered. In respect of any consignment, part of which is sold under Centavable invoice and the other part under the cover of non-cenvatable invoice, then the details of sales under non-cenvatable invoices have also to be entered in the prescribed stock register by making a consolidated entry at the end of the day indicating such quantity and invoice numbers. Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Dealer > Excise Stock Register Select Hot Rolled Coils and press Enter to display the stock register. To print the Stock Register press Alt+P The printed Stock Register is displayed as shown below:
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Figure 20.35 Print Preview of Stock Register
In case of Sales Returns, the issued quantity will be reduced by the returned quantity and the received quantity will be reduced in the case of purchase returns.
20.6.2 Excise Purchase Bill Register

Excise Purchase Bill Register is a Purchase bill wise report displaying the details of purchases (Receipts) and sales (Issues) of excisable goods in a given period. It precisely shows Receipts and Issues of Excisable goods alongwith the information on the duty amount passed, duty amount not passed and the balance of duty including Cess amount available during the specified period. Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Dealer > Excise Purchase Bill Register In Selected Excise Unit screen By default, Monnet Ispat & Energy Ltd appears in Name of Excise Unit field Select Hot Rolled Coils from the List of Excise Stock Items and press Enter
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Figure 20.36 Select Excise Unit
The Excise Purchase Bill Register of Monnet Ispat & Energy Ltd., is as shown.
Figure 20.37 Excise Purchase Bill Register - Page 1
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Scroll to the right using Right @arrow button
Figure 20.38 Excise Purchase Bill Register - Page 2
20.7 Sales and Purchase Extract

Excise Sales and Purchase Extract report displays the details of purchase and sales transactions of all excisable goods (Excise Invoice as well as Commercial Invoice). Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Dealer > Sales and Purchase Extract In the Sales and Purchase Extract printing screen, Press Backspace and in Excise Unit field select Monnet Ispat & Energy Ltd. from the List of Trader Excise Unit Specify the From date as 1-4-2009 and To date as 30-4-2009 Specify Place and Date
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Figure 20.39 Sales and Purchase Extract Printing Configuration
Press Enter to Print The printed Sales and Purchase Extract of Monnet Ispat & Energy Ltd. is as shown.
Figure 20.40 Sales and Purchase Extract (Page 1)
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Figure 20.41 Sales and Purchase Extract (Page 2)
20.7.1 Form RG 23D

Form RG 23D is the commodity wise Stock Register displaying the details of Receipts and sales Issues of excisable goods in a given period. It precisely shows Receipts and Issues of Excisable goods alongwith the information on the duty amount passed, duty amount not passed and the balance of duty including Cess amount available during the specified period. Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Dealer > Form RG 23D > Select All Items to view Form RG 23D for all Items In Selected Excise Unit screen By default, Monnet Ispat & Energy Ltd appears in Name of Excise Unit field The Form RG 23D Register is displayed as shown
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Figure 20.42 RG 23D Register
20.7.2 Quarterly Return - Form II

A first stage dealer or a second stage dealer is required to submit a return. This has to be done in the form specified within fifteen days from the close of each quarter, to the Superintendent of Central Excise. To print Quarterly Return - Form II, Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Dealer > select Form - 2 and press Enter.
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In the Form - 2 printing screen, Press Backspace and in Excise Unit field select Monnet Ispat & Energy Ltd. from the List of Trader Excise Unit Specify the period of the report from 1-4-2009 to 30-6-2009. Type the Place and Date of report. Press Enter to print Form 2. Press Alt+Z or click on Zoom button to view an enlarged version of the report. The printed Form 2 for the quarter ending 30th June 2009 is displayed as shown below:
Figure 20.44 Print Preview of Form-2 Page-1
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Figure 20.45 Print Preview of Form-2 Page-2
20.7.3 Accounting for Returns of Goods

In the normal course of business, customers may return goods sold to them due to defective quality, price differences etc. Debit and Credit Notes are used to adjust entries for transactions involving the return of excisable goods. Sales Returns On 25-4-09, Jaykanth Engineering returned Hot Rolled Coils, the details of which are as given below: Item Description Hot Rolled Coils. Setup : In the F11: Features (Accounting Features), Set Use Debit/Credit Notes to Yes Set Use Invoice mode for Credit Notes to Yes Set Use Invoice mode for Debit Notes to Yes Quantity 5 MT Rate 600 VAT 4%
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Figure 20.46 F11: Company Features
Press Ctrl+A to accept the screen. Create Excise Sales Returns Voucher Type Create Credit Note Voucher Type for Excise as discussed in our earlier lessons. Ensure that the completed Excise - Sales Returns Voucher Type appears as shown below:
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Figure 20.47 Voucher Type Creation Excise Sales Returns
Step 1: Create Credit Note Go to Gateway of Tally > Accounting Vouchers > Ctrl+F8: Credit Note > select Excise - Sales Returns from the List of Types. 1. Press F2 and change the date to 25-4-09. 2. Select Goods Sold Returned as the type of VAT Adjustment in the Used for field and press Enter. 3. Select Jaykanth Engineering in the Party's A/c Name. 4. Press Enter to view the Receipt Details screen and accept the default details. 5. Select Hot Rolled Coils in the Name of the Item field and press Enter. 6. The Supplier Details screen is displayed. Specify the Sales Invoice Number as 1 and the date of the invoice appears.
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Select BS/101 as the Supplier Invoice No. from the List of Purchases. Type the returned Quantity as 5 in the Quantity Return column.
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Select End of List to accept the screen. 7. Press Enter to accept the Rate and the Amount in the main screen. 8. In the Accounting Details screen, select Sales - Excisable Goods in the Particulars column. 9. The VAT/ Tax Class is by default set at Sales @ 4%.
In the case of Debit Notes/ Credit Notes, the accounting and VAT ledgers used earlier to account for purchases / sales entries, should be used in a reverse order. This will reverse the effect of the sales/ purchase transaction.
10.Select Output VAT @ 4% ledger. 11.The VAT Amount is displayed automatically. 12.To view the statutory details of the transaction set Show Statutory Details to Yes 13. In the Bill-wise Details screen, select Agst Ref as teh type of reference and 1 as the Bill No. 14.Type the details of the transaction in the Narration field.
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The completed Sales Returns entry appears as shown below:
Figure 20.50 Accounting Voucher Excise-Sales Returns
15. Press Y or Enter to accept the screen. Step 2 : Display Excise Stock Register In the Excise Stock Register, the issued quantity will be reduced by the quantity returned. In the case of purchase returns, create a Debit Voucher Type with Use for Dealer Excise set to Yes and pass an entry as explained above. Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Dealer> Excise Stock Register Select Hot Rolled coils and press Enter. The Excise Stock Register after the Sales Returns will appear as shown below:
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Figure 20.51 Excise Stock Register
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Practice Exercise 1. Jayanth Industries Pvt Ltd., dealing in cold rolled coils, has a bank account in SBI with an opening balance of Rs. 800000. Given below are the transactions for the month of May 2009. Create Jayanth Industries Pvt Ltd. and pass the following transactions:
In the F11: Features (Statutory & Taxation Features), Enable Excise for Dealers and VAT to Yes.
Create the following Voucher types and select/enter the fields as given in the table: Name of Voucher Types Excise - Purchases Excise - Sales Excise-Sales Returns Type of Voucher Purchase Sales Credit Note Abbr. Ex - Purc Ex- sal Ex-C/Note Method of voucher Numbering Automatic Automatic Automatic Use for Dealer Excise Yes Yes Yes
Create the following Ledgers in the masters and select/ enter the fields as given in the table: Name of the Ledger Vishveshwara Steel Industries Ashok Engineers Under Sundry Creditors Sundry Debtors Maintain balances bill-by-bill Yes Yes Excise Details Yes Yes
In Excise Details Screen Enter Excise Regn. No., Range, Division, Commissionerate and Select as Manufacturer for Default Nature of Purchase. In the Excise Details Screen Enter Excise Regn. No., Range, Division, Commissionerate and Select the Second Stage Dealer for Default Nature of Purchase.
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Create the following Ledgers in the masters and select/ enter the fields as given in the table: Name of the ledger Under Inventory Values are affected Yes Yes Used in VAT Returns Yes Yes VAT/Tax Class Purchases @ 4% Sales @ 4%
Purchases - Excisable Goods Sales - Excisable Goods
Purchase Accounts Sales Accounts
Create the following Ledgers for VAT and enter the fields as given in the table below: Name Of the ledger Under Type of Duty/Tax VAT VAT VAT/Tax Class Inventory values are affected No No
Input VAT @ 4% Output VAT @ 4%
Duties & Taxes Duties & Taxes
Input VAT @ 4% Output VAT @ 4%
Create the following Units of Measure and enter the fields as given in the table below: Type Simple Symbol MT Formal Name Metric Tonnes Number of Decimal Places 0
Create the following Stock Items and enter the fields as given in the table below: Name Cold Rolled Coils Under Primary Units MT Excise Details Yes
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In Duty Details for: Hot Rolled Coils Tariff Classification: 74476000 Type of Duty: Basic Excise Duty Rate of Duty: 16% Method of Calculation: On Assessable Value Type of Duty: Education Cess Rate of Duty: 2% Method of Calculation: On Duty value Type of Duty: Secondary Education Cess Rate of Duty: 1% Method of Calculation: On Duty value
Given below are the transactions : 1. On 12-5-2009, Jayanth Industries purchased the following items from Vishveshwara Steel Industries (Manufacturer) (Invoice No. 10056). Item Description Quantity (MT) Rate Assessable Value Excise Duty @ 15% Education Cess @ 2% Total Amount VAT @ 4% Invoice Amount Hot Rolled Coils 200 600 1,20,000 19,200 384 1,39,584 5,583.36 1,45,167.36
2. On 20-5-2009, Jayanth Industries sold the following items to Ashok Engineers. Item Description Quantity (MT) Rate VAT Hot Rolled Coils 150 800 4%
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3. On 22-5-2009, Ashok Engineers returned the following items to Jayanth Industries Item Description Quantity (MT) Rate VAT Hot Rolled Coils 10 800 4%
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Points to Remember
Excise duty is tax charged on goods manufactured and consumed within India. Goods to be Excisable must satisfy the three basic conditions i.e, it must be movable, marketable and specified in the Central Excise Tariff Act. CENVAT Credit is the set-off of duty paid on inputs used in the manufacture of final products, against the duty liability on such final products. Only the registered dealers are eligible to pass on or avail as the case may be the CENVAT Credit. Tally.ERP 9 permits you to create specific voucher types like ExcisePurchase & Excise-Sales for entering the excise related transactions. Supplier/ Buyer details can be entered during invoice entry. Tally.ERP 9 permits you to generate & print both Cenvatable & NonCenvatable Sales Invoice. A Registered Dealer is required to maintain Statutory Reports like Stock Register of the cenvatable goods & Quarterly Return of the Excise Duty paid. Tally.ERP 9 permits you to generate and print these Statutory Reports. Tally.ERP 9 also allows you to make adjustments in the records for the sales return of Cenvatable goods and view its effect in the Statutory Reports.
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Lesson 21: Excise for Manufacturers
Lesson Objectives
On completion of this lesson, you will learn how to Configure Excise for Manufacturers in Tally.ERP 9 Record Excise Purchase and Sales Generate Excise Reports
Excise duty or Duty of Excise is a tax on goods produced or manufactured in India and intended for home consumption i.e, sale in India. The Excise duty is chargeable at the time of production or manufacturing, but for convenience it is charged at the time of removal. It is basically an indirect tax on the manufacturer or producer which is passed on to the ultimate consumer. The levy and collection of duty of Excise is provided under authority of the Central Excise Act, 1944 at the rates specified under Central Excise Tariff Act, 1985. The duty is commonly referred to as the Basic Excise Duty. Certain items like fibre, yarn and so on also attract Additional Excise Duty under Additional Duties of Excise (Textiles and Textile Articles) Act, 1975 in addition to Basic duty of Excise.
21.1 Basic Concepts of Excise Duty

The following are some of the basic terms related to Excise.
21.1.1 Scope and Applicability

Excisable goods means goods specified in the schedule to the Central Excise Tariff Act, 1985 as being subject to a duty of excise. The basic conditions to be satisfied are, The goods must be movable.
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The goods must be marketable i.e., saleable in the market as such goods. Actual sale of goods in the market is not necessary as excise duty is chargeable on manufacture and not on sale. The goods must be specified in the Central Excise Tariff Act. Who is a Manufacturer ? Manufacturer is a person who actually manufactures or produces excisable goods, i.e. one that actually brings into existence a new and identifiable product. What is Excisable Goods ? Excisable goods means, goods specified in the schedule to the Central Excise Tariff Act, 1985 as being subject to a duty of excise. Types of Excise Duties As per Excise Act, the various duties of Excise are explained below : 1. Basic Excise Duty: This is the duty charged under section 3 of the Central Excises and Salt Act,1944 on all excisable goods other than salt which are produced or manufactured in India. Basic Excise Duty [also known as Central Value Added Tax (CENVAT)] is levied at the rates specified in Central Excise Tariff Act. 2. Special Excise Duty: As per Section 37 of the Finance Act,1978 Special excise Duty was levied on all excisable goods on which Basic excise Duty was levied under the Central Excises and Salt Act,1944. Special Excise Duty is levied at the rates specified in the Second Schedule to Central Excise Tariff Act, 1985. 3. Education Cess on excise duty: Section 93 of Finance (No. 2) Act, 2004 states that education cess is 'duty of excise', to be calculated on aggregate of all duties of excise including special excise duty or any other duty of excise, but excluding education cess on excisable goods. 4. Excise duty in case of clearances by EOU: The EOU units are expected to export all their production. However, if they clear their final product in DTA (domestic tariff area), the rate of excise duty will be equal to customs duty on like article if imported in India. 5. National Calamity contingent Duty (NCCD): A 'National Calamity Contingent Duty' (NCCD) has been imposed vide section 136 of Finance Act, 2001 [clause 129 of Finance Bill, 2001, w.e.f. 1.3.2001]. This duty is imposed on pan masala, chewing tobacco and cigarettes. 6. Duties under other Acts: Some duties and cesses are levied on manufactured products under other Acts. The administrative machinery of central excise is used to collect those taxes. Provisions of Central Excise Act and Rules have been made applicable for levy and collection of these duties / cesses. 7. Additional Duty on goods of special importance - Some goods of special importance are levied Additional Excise under Additional Duties of Excise (Goods of Special Importance) Act, 1957. The 'Additional Duty' is in addition to excise duty. This scheme was introduced based on the suggestion made by the manufacturers to Government, that multiple level taxes and duties should be avoided. Levy and collection of all taxes at one stage by single authority will be convenient for payment and administration. Hence, by agreement between Central and State Governments, it was decided to make a beginning in 1957, by selecting some items where additional duty will be collected instead of sales tax and such additional duty will be distributed
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among various States. Revenue from this duty is distributed among State Governments on the basis of percentages given in the second schedule to the Act. Some items covered are textile articles like cotton fabrics, silk and wool fabrics, man-made fibres, terry fabrics, metallised yarn, embroidery; sugar, branded tobacco, pan masala containing tobacco and cigarettes. 8. Duty on Medical and Toilet preparations: An duty of excise is imposed on medical preparations under Medical and Toilet Preparations (Excise Duties) Act, 1955. 9. Additional duty on mineral products - Additional duty on mineral products (like motor spirit, kerosene, diesel and furnace oil) is payable under Mineral Products (Additional Duties of Excise and Customs) Act, 1958. 10.Additional Customs Duty commonly known as countervailing Duty (CVD): Countervailing duty (CVD) is imposed on the Imports. 11.Special Additional Duty of Customs (Special CVD): Special CVD is being imposed on items bound under the Information Technology Agreement (except information technology software), and also on specified inputs/raw materials for manufacture of electronics/IT goods. 12. Additional Duties of Excise (Textiles and Textile Articles) [AED (TTA)] 13. Additional Duty of Excise (Tea and Tea Waste) [AED (TTW)] 14. Secondary Higher Education Cess
21.1.2 Excise Valuation Methods

Value of the excisable goods has to be necessarily determined to levy the duty on the goods. Under the Central Excise Act, 1944, the following methods of valuation of goods are considered for the assessment of Duty. 1. Ad valorem/ Transaction Value: Transaction value means the value of goods which are sold at the time and place of removal and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, including any amount charged for, or to make provision for, advertising or publicity, marketing and selling, organization expenses, storage, outward handling, servicing, warranty, commission or any other matter. Transaction value, on each removal of goods, shall be determined on the fulfilment of the following conditions: The goods should be sold at the time and place of removal Buyer and Assessee should not be related Price should be the sole consideration for the sale Each removal will be treated as a separate transaction and 'value' for each removal will be separately fixed. 2. Ad Quantum: In case of Ad Quantum, the duty is payable on the basis of certain units Like Weight, Length, volume etc. For Example, Duty on cigarette is payable on the basis of length of the cigarette, duty on Sugar is based on per Kg. 3. Value determined on the basis of Maximum Retail Sale Price: Retail sale price means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like, as the case may be, and the price is the sole consideration for such sale.
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The following factors need to be considered while determining the value on the basis of maximum retail sale price Where, on the packages of any excisable goods, more than one retail sale price is declared, the maximum of such retail sale price shall be deemed to be the retail sale price Where, the retail price, declared on the package of any excisable goods at the time of its clearance from the place of manufacture, is altered to increase the retail sale price, such altered retail sale price shall be deemed to be the retail sale price. Where, different retail sale prices are declared on different packages for the sale of any excisable goods in packaged form in different areas, each such retail price shall be the retail sale price for the purposes of valuation of the excisable goods intended to be sold in the area to which the retail sale price relates.
21.1.3 CENVAT Credit

The Government entitles the manufacturer of excisable goods to take credit of Excise duty paid on the inputs or raw materials known as CENVAT Credit. A manufacturer or producer can avail CENVAT Credit on the following duties as specified in the Cenvat Credit Rules, 2002. Basic Excise Duty on inputs specified in the First Schedule to Central Excise tariff Act (corresponding CVD on imported goods is allowable). Special Excise Duty on goods specified in the Second Schedule to the Tariff Act (corresponding CVD on imported goods is allowable). Additional Excise Duty paid under Additional Duties of Excise (Textile and Textile Article). Additional Excise Duty paid under Additional Duties of Excise (Goods of Special Importance). National Calamity Contingent duty (NCCD). Education Cess and Secondary and Higher Education Cess on Excise Duty. Additional custom duty leviable under Customs Tariff Act (Spl. CVD) Education Cess and Secondary and Higher Education Cess on CVD Additional Excise Duty paid under Clause 85 of Finance Bill,2005 on Pan Masala and Certain other Tobacco products. Service tax on input services. Education Cess and Secondary & Higher Education Cess paid on service tax. This credit can be utilised only for payment of education cess on the final product or output services.
21.1.4 Registration of Manufacturers

Every manufacturer of excisable goods on which excise duty is leviable or persons who desire to issue CENVATABLE invoices under the provisions of the CENVAT Credit Rules, 2001 are required to be registered as per the procedure prescribed in Rule 9 of Central Excise (No. 2) Rules 2001. The registration is valid only for the premises it is granted. Where the manufacturer or dealer, has more than one premise it is necessary to obtain a separate registration for each premises from the respective Range Superintendent having jurisdiction over the premises, whether it be a factory or a depot / branch office desiring to issue CENVAT invoices.
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The registration numbers are PAN based 15 digit alpha numeric. The first part denotes 10 character (alpha numeric) Permanent Account number issued by Income tax authorities and the second part comprises of a fixed 2 character alpha code which is as follows: Category Central Excise Manufacturer (Including registered warehouses) Registered Dealer Code XM XD
This is followed by a three character numeric code - 001, 002, 003 etc., i.e, where a manufacturer has only one factory / dealer's premise / warehouse, the last three character will be 001. If there are more than one factories / dealer's premises / warehouses of such a person holding common PAN for all such premises, the last three characters would be 002, 003 etc.
21.1.5 Requirements of Excise Invoice

The Registered Location of a manufacturer is required to issue invoice in the prescribed format containing the following details: Minimum four copies of Invoice are required to be prepared and the copies of the invoice should be marked at the top in the following manner: Original copy should be marked as Original for Buyer Duplicate should be marked as Duplicate for Transporter (to be used for availing CENVAT credit) Triplicate should be marked as Triplicate for Central Excise Quadruplicate should be marked as Quadruplicate for Registered person The dealer is required to issue only one invoice in respect of the consignment wherein all the packages are dispatched in one lot. However, in cases where the consignment is dispatched separately either on the same day or on different days or loaded on more than one vehicle, a separate invoice shall be made out for each lot or consignment. The copies of the invoices issued by a first stage dealer and a second stage dealer shall be marked at the top as First Stage Dealer and Second Stage Dealer respectively. Name, address and Central Excise Registration number of the registered location issuing the invoice, name of the jurisdictional range / Division / Commissionerate and company's Income Tax Number and Sales Tax Registration Number should pre-printed on the Invoice. Only one invoice book of each type shall be used by the registered location. Each CENVAT Invoice issued by the location should bear a printed serial number, beginning from 1st April of the year.
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The serial numbers of the invoices to be used are to be intimated to the respective jurisdictional Assistant Commissioner of Central Excise and obtain a dated acknowledgement of such intimation. Records and Invoice generated through computer are also recognized. In that case, the serial number likely to be used in the f0.orthcoming quarter should be intimated to the Asst. Commissioner. As soon as the said serial Nos. are exhausted, a revised intimation may be sent. Such registered Location should also send details of the software used including the format for information of the Asst. Commissioner in case he demands. In case of Records and Invoice generated through computer, the serial number likely to be used in the forthcoming quarter should be intimated to the jurisdictional Assistant Commissioner of Central Excise. The details of software used including a format used for information, is also required to be sent to the Assistant Commissioner.
21.1.6 Types of Duties and Method of Calculation

Duties of Excise Basic Excise Duty (BED) Special Excise Duty (SED) AED (GSI) AED (TTA) AED (TTW) AED (PM&T) NCCD Special AED AED on High Speed Diesel Educational Cess SHE Cess on Excise duty Countervailing Duty(CVD) SED of CVD AED (GSI) of CVD AED (TTA) of CVD AED (TTW) of CVD AED (PM&T) of CVD NCCD of CVD Special AED of CVD AED on High Speed Diesel of CVD Type Excise Excise Excise Excise Excise Excise Excise Excise Excise Excise Excise CVD CVD CVD CVD CVD CVD CVD CVD CVD Method of Calculation on Assessable Value on Assessable Value on Assessable Value on BED + SED on BED + SED on BED + SED on BED + SED + AED (GSI) on Quantity on Quantity On Total Excise Duty On Total Excise Duty on Assessable Value+ BCD on Assessable Value+ BCD on Assessable Value+ BCD on CVD + SEDCVD on CVD + SEDCVD on CVD + SEDCVD on CVD + SEDCVD + AED (GSI)CVD on Quantity on Quantity
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Duties of Excise Educational Cess on CVD SHE Cess on CVD Basic Custom Duty Additional Duty on Customs Educational Cess on Customs SHE Cess on Customs Special Custom Duty
Type CVD CVD Customs Customs Customs Customs Customs
Method of Calculation On Total CVD On Total CVD on Assessable Value on BCD on Total Customs and CVD on Total Customs and CVD on Current Sub Total
21.1.7 Time and Mode of Payment of Duty

S.No 1. Particulars Assesses (Large Units) who are not availing the concession of duty based on turnover Periodicity Fortnightly Due Date On 20th of a month for the clearances made between 1st to 15th. On 5th of the subsequent month for clearance made between 16th to end of a month. 15th of the subsequent month
2.
Assessees who are neither Large Units nor availing concession of duty based on turnover Assessees availing small scale industries (SSI) concession of duty based on turnover
Monthly
3.
Monthly
15th of the subsequent month
In case of clearances made in the month of March, the payment should be made on the 31st of the same month.
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21.1.8 Returns & Timelines

The following Returns are required to be filed under Excise for Manufacturers: Form No. ER1 Particulars Return by Assesses, who are not availing the concession of duty based on turnover (large units) (eReturns). Return by Assessees, who are neither Large Units nor availing concession of duty based on turnover. Monthly Return for CENVAT ER3 Return by large and Regular units Periodicity Monthly Due Date On or before 10th of the subsequent month On or before 10th of the subsequent month On or before 10th of the subsequent month (With ER-1) Within 20days from the close of quarter
Monthly
Monthly
Return by Assessees availing small scale industries (SSI) concession of duty based on turnover
Quarterly
21.2 Configuring Excise in Tally.ERP 9

Tally.ERP 9s simple yet powerful Excise feature enables you to record transactions related to Excise with ease. The Excise functionality in Tally.ERP 9 has the following features: Salient Features of Excise in Tally.ERP 9 Simple and user-friendly. Easy to setup and use. Allows Multiple Excise units (Manufacturer as well as Dealer) in a Single Company Allows Tariff (HSN) / Commodity Code for Excisable items Facilitates various Excise duty parameters like BED, AED (GSI), SED, NCCD, AED (T and TA), AED (T&TW), Education Cess and so on. Generate Excise Invoice as per Rule 11 of Excise Rules 2001. Allows additional ledgers such as expenses / incomes to form part of Assessable value. Allows calculation of duty for different Items under different valuation methods in a single invoice. Allows recording of Exempt, Export & Special Rate transactions. Facilitates reversal of CENVAT Credit and also full or partial CENVAT Credit on Inputs and Capital Goods/ Service Tax towards Duty payable. Generate and print Excise payment challan in G.A.R. -7 Challan.
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Generate Excise Reports viz., Excise Computation Report, PLA Register, CENVAT Credit Register, ER-1 & ER-3 returns.
21.2.1 Enabling Excise in Tally.ERP 9

Its a one time configuration in Tally.ERP 9 for Excise features to be enabled for Manufacturers. Let us consider the example of M/s. Metal Craft Engineering Pvt. Ltd., who are engaged in the business of manufacturing Hot Rolled Beams, Cold Rolled Channels, Slotted angles and so on. Step 1 : Create Company Go to Gateway of Tally > Alt + F3: Cmp Info > Create Company/ Alter In the Company Creation/ Company Alteration screen Specify the Country, State and Accounts with Inventory details Enter the other details as shown The completed Company Creation screen is displayed as shown:
Step 2 : Enable Excise To enable Excise for Manufacturers, follow the steps given below :
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Go to Gateway of Tally > F11: Features > Statutory & Taxation Set Enable Excise to Yes Enable Set/Alter Excise Details to Yes
Figure 21.2 Enabling Excise
The Excise Registration Details sub-form is displayed as shown:
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Figure 21.3 Excise Registration Details
4. Registration Type: Select Manufacturer from Registration Types list 5. Address, Telephone No and PIN Code: Address, Telephone No. and PIN Code details are captured from the company creation screen. If required, it can be altered. 6. Excise Details: Under this section provide Excise Details of the unit. Excise Details will be specific to the Registration Type selected.
Registration Type selected will be displayed below the heading - Excise Details to identify the unit as a manufacturer or a dealer.
Unit Mailing Name: The Mailing Name entered in the company creation will be displayed as the Unit Mailing Name. If required, it can be altered.
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Name entered in the Unit Mailing Name will be used in all Excise Reports.
Excise Registration (ECC) No.: Enter 15 digits Excise Registration Number (ECC) of the Company/Unit, e.g. KABCC3220DXL003 Date of Registration: Enter the date of Excise registration, e.g. 01-05-2001 Type of Manufacturer: select the appropriate Manufacturer Type from the list of Types of Manufacturer, e.g. Regular
Large Tax Payer Unit (LTU) Code: Enter the LTU code, if your company/unit is a large tax payer and has opted for assessment in Large Tax Payer Unit. Skip the Large Tax Payer Unit (LTU) Code field.
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Large Tax Payers are those assessees who pay large amounts of Tax. They are the eligible taxpayer for the purposes of being served by the LTU. For e.g.: Rs.5 Crores.
Excise Book Name (as per Rule 11): Enter the Excise Book Name which is allowed by the Commissioner of Central Excise for the company/unit. Select the option New Number from the List of Excise Books, to view Serial Number Alteration (Secondary) screen.
Figure 21.5 Serial Number Alteration
Name: Enter the excise invoice book name allowed by the Commissioner of Central Excise for the company/unit, e.g. MCE/Rule11/Book-1/09-10 MCE - Denotes Company Name. Rule 11: Denotes that invoice book is maintained as per Rule 11 of Central Excise Rules.
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Book-1: Denotes the Book Number, which is allowed for the current financial year. 09-10: Denotes the financial year. Method of Numbering: By default Automatic (Manual Override) is displayed as the method of numbering.
It is recommended to use Automatic (Manual override) method of numbering to automatically generate serial numbers for Excise Invoices in Tally.ERP 9.
Prevent Duplicates: By default this field will be set to Yes. Starting Number: Enter the Starting Voucher Number which is allowed by the Commissioner of Central Excise. E.g. 101 Width of Numerical part: Mention the width of the numerical part. Prefill with Zero: when this option is set to No the digits before the invoice number will be blank. If this field is set to Yes the invoice number will be prefilled with Zeros based on the width of numerical part e.g. 00001(where the width of numerical part is set to 5). Restart Numbering: In this field enter the Starting Number as 101 and ensure under Particulars the Type of Period is Yearly In this section user can set the dates to restart the voucher number by defining the types of period (Daily, Monthly, Never, weekly or Yearly). Prefix Details: Here enter the information to be prefixed with voucher number Applicable From: Enter 1-4-2009 in Applicable From field. The date mentioned in this field indicates the date from when the prefix should be displayed along with the voucher number. Particulars: Enter the information to be prefixed to the voucher number E.g. MCE/ Suffix Details: Here enter the information to be suffixed with the voucher number Applicable From: Enter 1-4-2009 in Applicable From field. The date mentioned in this field indicates the date from when the suffix should be displayed along with the voucher number. Particulars: Enter the information to be suffixed to the voucher number E.g. /09-10
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Figure 21.6 Serial Number Alteration
Tally.ERP 9 allows you to create more than one Excise Book Name for the same company or Unit. To create more serial numbers, you can either follow the steps given above or go to Serial Number option in Accounts info menu. 7. Other Details: In this section enter Range, Division and Commissionerate details Range: Enter the code Name and Address of the range under which your company is registered. Code: Enter Range Code as 090506 Name: Enter Range Name as Hosur Address: Enter the Range Address Division: Enter the code Name and Address of the division under which your company is registered. Code: Enter Division Code as 0905 Name: Enter Division Name as Division II Address: Enter the Division Address Commissionerate: Enter the code Name and Address of the Commissionerate under which your company is registered. Code: Enter Commissionerate Code as 06
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Name: Enter Commissionerate Name as Bangalore V Address: Enter the Commissionerate Address
8. Press Enter to accept and save Excise Registration Details and go back to F3: Statutory and Taxation Screen Step 3 : Enable Value Added Tax (VAT) To enable VAT Feature, for a company Set the option Enable Value Added Tax (VAT) to Yes Enable the option Set/Alter VAT Details to Yes Enter the Type of Dealer and Date of Applicability in VAT Details screen as shown
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Figure 21.8 Enabling VAT
Press Enter to save and go back to F11: Statutory & Taxation features screen Enter VAT TIN e.g. 11567844129 Enter Inter-state Sales Tax Number e.g. 32457841339 Enter Company's PAN / Income - Tax No. e.g. AHEPN5342B
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Figure 21.9 F11: Statutory & Taxation Features
Press Enter to accept and save.
21.3 Creation of Masters

Once you have enabled Excise in Tally.ERP 9 in the manner as discussed above, the Excise options will now be available in the ledger masters.

Before creating transactions create the following ledger masters in the manner as discussed. i. Create Purchase Ledgers Inventory values are affected Yes Yes Used In VAT Returns Yes Yes
Ledger Purchases @ 4% Purchases @ 12.5%
Under Purchase Accounts Purchase Accounts
VAT/Tax Class Purchases @ 4% Purchases @ 12.5%
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To create a Purchase Ledger: Go to Gateway of Tally > Accounts Info. > Ledgers > Create 1. Enter the Name of the purchase ledger you wish to create, for e.g., Purchase @ 4% Select Purchase Accounts as the group name in the Under field. 2. Set Inventory values are affected to Yes. 3. Select Not Applicable in Type of Ledger field 4. Set the option Used In VAT Returns to Yes to display the default VAT/Tax Class sub screen.
Figure 21.10 Purchase Ledger Creation
5. Select the required VAT/Tax Class, for e.g., Purchases @ 4%.
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Figure 21.11 VAT/Tax Class
6. Set Use for Assessable Value Calculation to No.
When the option Assessable Value Calculation (for Excise /VAT) is set to Yes, the Value given against this ledger will be used to calculate the assessable value of the stock item to compute the excise duty or VAT.
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Figure 21.12 Purchase Ledger
7. Press Enter to Accept and save.

It is recommended to create separate Purchase ledgers with appropriate VAT classification for different rates of VAT. However, Tally.ERP 9 provides you the flexibility to use a common Purchase ledger for different rates, by selecting VAT classification as Not Applicable and allows selection of required classification from the list of VAT/Tax Class while recording a transaction.
Similarly, create Purchase @ 12.5% under Purchase Accounts. ii. Create Sales Ledgers Inventory values are affected Yes Yes
Ledger Sales @ 4% Sales @ 12.5%
Under Sales Accounts Sales Accounts
Used In VAT Returns Yes Yes
VAT/Tax Class Sales @ 4% Sales @ 12.5%
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To create a Sales Ledger, Go to Gateway of Tally > Accounts Info. > Ledgers > Create 1. 2. 3. 4. 5. Enter the Name of the sales ledger you wish to create, for e.g., Sales @ 4%. Select Sales Accounts as the group name in the Under field. Set Inventory values are affected to Yes. Select Not Applicable in Type of Ledger field Set the option Used In VAT Returns to Yes to display the default VAT/Tax Class sub screen.
Figure 21.13 Sales Ledger Creation
6. Select the required VAT/Tax Class, for e.g., Sales @ 4%.
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Figure 21.14 VAt/Tax Class
7. Set Use for Assessable Value Calculation to No.
When the option Assessable Value Calculation (for Excise /VAT) is set to Yes, the Value given against this ledger will be used to calculate the assessable value of the stock item to compute the excise duty or VAT.
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Figure 21.15 Sales Ledger
8. Press Enter to Accept and save. Similarly, create Sales @ 12.5% under Sales Accounts. iii. Creating Customer Ledgers Maintain Balances Bill by Bill Yes Yes Inventory values are affected No No Set/Alter Excise Details Yes Yes
Ledger Simplex Casting Limited General Fabricators
Under Sundry Debtors Sundry Debtors
To create the Sundry Debtor (Customer) Ledger, Go to Gateway of Tally > Accounts Info > Ledgers > Create 1. 2. 3. 4.
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Enter the Name of the Customer in the Name field i.e., Simplex Casting Limited Select the group Sundry Debtors in the Under field. Set Maintain Balances Bill by Bill to Yes and enter the Default Credit Period, if any Set Inventory Values are affected to No
5. In Mailing Details and Tax Information sections enter the supplier contact details, Income Tax and the Sales Tax numbers. 6. Enable Set/Alter Excise Details to Yes to display the Excise Details sub screen.
Figure 21.16 Party Ledger Creation
7. In the Excise Details screen; Enter the Excise Registration (ECC) No. of the customer e.g. SCL49024HIAP002 Enter the Date of Excise Registration in Date of Registration field e.g. 21-Nov-2003 Enter the Range under which the supplier's company is registered. E.g. Madiwala II Enter the Division under which the supplier's company is registered. E.g. Madiwala Enter the Commissionerate under which the premise of the Supplier's company is registered. E.g. Bangalore II In Default Nature of Purchase field select the option Not Applicable Select the Nature of Removal as Domestic from Types of Removal list.
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The Nature of Removal depends upon the removal, whether it is for Domestic/Exports/Exempt sales. It is mandatory to specify the nature of removal, however, you can alter the same during voucher entry.
Press Enter
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Figure 21.18 Party Ledger
8. Press Enter to Accept and save

The Set/Alter Excise Details option appears for ledgers created under Sundry Creditors and Sundry Debtors .
Similarly, create General Fabricators under Sundry Debtors. iv. Creating Supplier Ledgers Maintain Balances Bill by Bill Yes Yes Inventory values are affected No No Set/Alter Excise Details Yes Yes
Ledger Durga Steel Industries Beekay Engineering Corporation
Under Sundry Credtors Sundry Creditors
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To Create the Sundry Creditor (Supplier) Ledger, Go to Gateway of Tally > Accounts Info. > Ledgers > Create 1. 2. 3. 4. 5. Enter the Name of the Supplier in the Name field. E.g. Durga Steel Industries. Select Sundry Creditors as the group name in the Under field. Set Maintain Balances Bill by Bill to Yes and enter the Default Credit Period if any. Set Inventory Values are affected to No In the Mailing Details and Tax Information section enter the supplier contact details, Income Tax and the Sales Tax numbers. 6. Enable Set/Alter Excise Details to Yes to display the Excise Details screen.
Figure 21.19 Party Ledger Creation
7. In the Excise Details screen, Enter the Excise Registration Number of the supplier. E.g. DSIFB0023XKC002 Enter the Date of Excise Registration in Date of Registration field. E.g. 04-Dec-1998 Enter the Range under which the supplier's company is registered. E.g. Whitefield Enter the Division under which the supplier's company is registered. E.g. Bangalore IV Enter the Commissionerate under which the premise of the Supplier's company is registered. E.g. Bangalore I Select the Default Nature of Purchase as Manufacturer from Nature of Purchase
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Select the Nature of Removal as Domestic from Types of Removal list
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Figure 21.21 Party Ledger
8. Press Enter to accept and save. Similarly, create Beekay Engineering Corporation under Sundry Creditors
21.3.2 Creating Excise Duty Ledgers

Inventory values are affected No No No
Ledger Basic Excise Duty @ 16% Education Cess @ 2% Secondary Education Cess @ 1%
Under Duties & Taxes Duties & Taxes Duties & Taxes
Type of Duty/Tax Excise Excise Excise
Duty Head Basic Excise Duty Education Cess Secondary Education Cess
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i. Creating Basic Excise Duty Ledger To create a Basic Excise Duty Ledger, Go to Gateway of Tally > Accounts Info. > Ledgers > Create 1. Enter the Name of the excise duty ledger you wish to create, for e.g., Basic Excise Duty @ 16% 2. Select Duties & Taxes as the group name in the Under field. 3. Select Excise from the Type of Duty/Tax list in the field Type of Duty/Tax. 4. In Excise Accounting Code field enter the accounting code of Basic Excise Duty- 00490001 5. In Duty Head field select Basic Excise Duty from the List of Excise Duty Classification
Figure 21.22 Basic Excise Duty Ledger Creation
6. Set the option Inventory values are affected to No 7. In Percentage of Calculation field enter 16% as the percentage of calculation 8. In Method of Calculation field, Tally.ERP 9 defaults On Assessable Value as the method of calculation. 9. Select Not Applicable in Rounding Method field
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Figure 21.23 Basic Excise Duty Ledger
10.Press Enter to Accept.
Excise Duty is calculated on the assessable value (Basic Value of Goods plus additional expenses, if applicable).
ii. Creating Education Cess Ledger To create a Education Cess Ledger, Go to Gateway of Tally > Accounts Info. > Ledgers > Create 1. Enter the Name of the Education Cess ledger you wish to create, for e.g., Education Cess @ 2% 2. Select Duties & Taxes as the group name in the Under field. 3. Select Excise from the Type of Duty/Tax list in Type of Duty/Tax field. 4. In Excise Accounting Code field, enter the accounting code of Education Cess - 00490020 5. In Duty Head field select Education Cess from the List of Excise Duty Classification
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Figure 21.24 Education Cess Ledger Creation
6. Set the option Inventory values are affected to No 7. In Percentage of Calculation field, enter 2% as the percentage of calculation 8. In Method of Calculation field, by default Tally.ERP 9 selects On Total Excise Duty as the method of calculation 9. Select Not Applicable in Rounding Method field
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Figure 21.25 Education Cess Ledger
10.Press Enter to Accept to save iii. Creating Secondary Education Cess Ledger To create a Secondary and Higher Education (SHE) Cess Ledger, Go to Gateway of Tally > Accounts Info. > Ledgers > Create 1. Enter the Name of the Secondary and Higher Education Cess ledger you wish to create, for e.g., Secondary Education Cess @ 1% 2. Select Duties & Taxes as the group name in the Under field. 3. Select Excise from the Type of Duty/Tax list in the field Type of Duty/Tax. 4. In Excise Accounting Code field, enter the accounting code of Secondary Education Cess 00490006 5. In Duty Head field, select Secondary Education Cess from the List of Duty Heads
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Figure 21.26 Secondary Education Cess Ledger Creation
6. Set the option Inventory values are affected to No 7. In the Percentage of Calculation field enter 1% as the percentage of calculation 8. In Method of Calculation field, by default Tally.ERP 9 selects On Total Excise Duty as the method of calculation. 9. Select Not Applicable in Rounding Method field
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Figure 21.27 Secondary Education Cess Ledger
10.Press Enter to accept to save
21.3.3 Creating CENVAT Ledgers

Percentage of Calculation 16%
Ledger Basic Excise Duty (CENVAT) Education Cess (CENVAT) Secondary Education Cess (CENVAT)
Under Current Assets Current Assets Current Assets
Type of Duty/ Tax CENVAT
Excise AccountingCode 00490027
Duty Head Basic Excise Duty Education Cess Secondary Education Cess
Method of Calculation On Assessable Value On Total Excise Duty On Total Excise Duty
CENVAT
00490028
2%
CENVAT
00490029
1%
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To create a Basic Excise Duty (CENVAT) Ledger, Go to Gateway of Tally > Accounts Info. > Ledgers > Create 1. Enter the Name of the excise duty ledger you wish to create, for e.g., Basic Excise Duty (CENVAT) 2. Select Current Assets as the group name in the Under field. 3. Select CENVAT from the Type of Duty/Tax list in the field Type of Duty/Tax. 4. In Excise Accounting Code field enter the accounting code of Basic Excise Duty (CENVAT) - 00490027 5. In Duty Head field, select Basic Excise Duty from the List of Excise Duty Classification
Figure 21.28 Basic Excise Duty (CENVAT) Ledger Creation
6. Set the option Inventory values are affected to No 7. In Percentage of Calculation field, enter 16% as the percentage of calculation 8. In Method of Calculation field, by default Tally.ERP 9 selects On Assessable Value as the method of calculation. 9. Select Not Applicable in Rounding Method field
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Figure 21.29 Basic Excise Duty (CENVAT) Ledger
10.Press Enter to Accept to save
To avail Cenvat credit, it is recommended to create required duty ledgers under Current Assets group with Type of Duty/Tax as CENVAT.
Similarly, create Education Cess (CENVAT), Secondary Education Cess (CENVAT) under Current Assets Group.
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21.3.4 Creating VAT Ledgers

Type of Duty/ Tax VAT VAT VAT VAT Inventory values are affected No No No No
Ledger Input VAT @ 4% Input VAT @ 12.5% Output VAT @ 4% Output VAT @ 12.5%
Under Duties & Taxes Duties & Taxes Duties & Taxes Duties & Taxes
VAT/Tax Class Input VAT @ 4% Input VAT @ 12.5% Output VAT @ 4% Output VAT @ 12.5%
To create a Input VAT Ledger, Go to Gateway of Tally > Accounts Info. > Ledgers > Create 1. 2. 3. 4. Enter the Name of the input VAT ledger you wish to create, for e.g., Input VAT @ 4%. Select Duties & Taxes as the group name in the Under field. Select VAT from the Type of Duty/Tax list in the Type of Duty/Tax field Select the required VAT/Tax Class, for e.g., Input VAT @ 4% from the VAT/TAX Class list.
Figure 21.30 Input Vat Ledger
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5. Percentage of Calculation and Method of Calculation are updated automatically based on the Type of Duty/Tax and VAT/Tax Class selected.
Figure 21.31 Input VAT Ledger Completed Screen
6. Press Enter to Accept and save.

Similarly, create Input VAT @ 12.5%, Output VAT @ 4%, Output VAT @ 12.5% under Current Duties & Taxes group.
21.3.5 Creating Expenses Ledgers

Inventory values are affected No No No Use for Assessable Value Calculation (for Excise / VAT) Yes Yes Yes
Ledger Packing Charges Freight Charges Labour Charges
Under Indirect Expenses Indirect Expenses Indirect Expenses
Method of Apportion Based on Value Based on Value Based on Value
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To create a Expense Ledger, 1. 2. 3. 4. 5. Enter the Name of the expense ledger you wish to create, for e.g., Packing Charges Select Indirect Expenses as the group name in the Under field. Set Inventory values are affected to No Select Not Applicable in Type of Ledger field Set the option Use for Assessable Value Calculation (for Excise /VAT) to Yes
When the option Assessable Value Calculation (for Excise /VAT) is set to Yes the Value given against this ledger in the sales/Purchase voucher will be used to calculate the assessable value of the stock item to compute the excise duty or VAT.
6. Select Excise & VAT in Apportion for field 7. In Method of Apportion, select Based on Value from Method of Apportion List.
Figure 21.32 Expense Ledger Creation
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Based on Value If Based on Value method of apportion is selected, the expenses will be apportioned based on the Value of the Stock item. For e.g. Packing charges is 1,000 Value of Item X is 10,000 Value of Item Y is 5,000 Then, Apportionment of Packing Charges to Item X: 1,000*10,000/15,000 =666.67 Apportionment of Packing Charges to Item Y: 1,000*5,000/15,000 = 333.33 Assessable Value of Item X (10,666.67) = Value of Item X (10,000) + Packing Charges (666.67) Assessable Value of Item Y (5,333.33) = Value of Item Y (5,000) + Packing Charges (333.33) Based on Quantity If Based on Quantity method of apportion is selected, the expenses will be apportioned based on the quantity of the Stock item. For eg., Packing charges is 1,000 Quantity of Item X is 100 and Value is 10,000 Quantity of Item Y is 75 and Value is 5,000 Then, Apportionment of Packing Charges to Item X: 1,000*100/175 = 571.43 Apportionment of Packing Charges to Item Y: 1,000*75/175 = 428.57 Assessable Value of Item X (10,571.43) = Value of Item X (10,000) + Packing Charges (571.43) Assessable Value of Item Y (5,428.57) = Value of Item Y (5,000) + Packing Charges (428.57).
8. Press Enter
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Figure 21.33 Expense Ledger
9. Press Enter to accept and save Similarly, create Freight Charges and Labour Charges under Indirect Expenses Group.
21.3.6 Creating Excise Voucher Types

Type of Voucher Purchase Sales Credit Note Debit Note Stock Journal Use for Excise Yes Yes Yes Yes -
Voucher Types Excise - Purchases Excise - Sales Sales Returns Purchase Returns Manufacturing Journal
Abbreviate Ex-Purc Ex-Sale Ex-C/Note Ex-D/Note Ex-Stk Jrnl
Default Excise Unit Metal Craft Engineering Metal Craft Engineering Metal Craft Engineering Metal Craft Engineering -
The Excise Voucher Types for Purchase, Sales, Sales Returns, Purchase Returns and Manufacturing Journal has to be created before creating the invoices.
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i. Creating Purchase Voucher Type To create the Purchase Voucher Type, Go to Gateway of Tally > Accounts Info > Voucher Type > Create 1. 2. 3. 4. 5. Enter the name of the Voucher type in Name Field e.g. Excise - Purchases Select Purchase as the voucher type in Type of Voucher Field You may abbreviate the Voucher type as per your requirement e.g. Ex-Purc Select the appropriate Method of Voucher Numbering e.g. Automatic Set Use Advanced Configuration to Yes to specify the advanced settings for the numbering method selected, if required. 6. Set Use for Excise to Yes to enter Excise Purchase to capture Assessable Value and Excise Duty breakup. 7. In Default Excise Unit field select Metal Craft Engineering from the List of Excise Units
Figure 21.34 Excise Purchase Voucher Type Creation
8. Set Print after saving Voucher to No.
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Figure 21.35 Excise Purchase Voucher Type
9. Press Enter to accept and save.
The Use for Excise option will be available in Purchase, Sales, Debit Note and Credit Note Voucher Types, only if the Excise Feature is enabled in the F11 : Statutory & Taxation. In case, where a company has more than One Excise Unit, it is recommended to create Voucher types for each Excise Unit separately.
Similarly, create Excise Sales Voucher Type, Excise Debit Note and Credit Note Voucher Types. ii. Manufacturing Journal Voucher Type Manufacturing Journal is used to account the issue of raw materials to production floor and for the receipt of finished goods. In Tally.ERP 9, you can create a Manufacturing Journal under Stock Journal or alter the existing Stock Journal Alter the Stock Journal Go to Gateway of Tally > Accounts Info. > Voucher Types > Alter Set the option Use as a Manufacturing Journal to Yes
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Figure 21.36 Stock Journal Voucher Alteration
You may also create a separate Stock Journal for Manufacturing Journal with the option Use as a Manufacturing Journal.
21.3.7 Creating Tariff Classification

As per the Excise Tariff Act, all the excisable goods are classified under a specific code known as Tariff Classification code, which consists of 8 digits. Out of these eight digits, the first 4 digits denote Chapter and heading and next 2 digits represent sub-heading and the last 2 digits indicate sub-sub heading of the particular article/commodity. To create a Tariff Classification, Go to Gateway of Tally > Inventory Info. > Tariff Classification > Create 1. Enter the name of the Tariff Classification e.g. 72221111 in the Name field. 2. In Used For field select Excise from the list of Tax Type.
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The HSN code refers to Harmonised System of Nomenclature (HSN). It is an internationally standardized system of names and numbers for classifying traded products developed and maintained by the World Customs Organization.
Figure 21.37 Tariff Classification
The Tariff Classification created with the option Both will be available during creation of Stock Items, when Excise as well as VAT are applicable. Selecting any one i.e., either VAT or Excise will restrict display of Tariff classification only for the Stock items for which it is applicable. When the option VAT or Both is selected, you will be able to enter details of Schedule Number and Schedule Serial Number.
3. In Notes field, enter any additional information
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Figure 21.38 Tariff Classification

Set/ Alter Excise Details Yes Yes Yes Yes Yes
Name Iron Bars Steel Sheets Hot Rolled Beams 25mm Cold Rolled Channels - 10 mm Slotted Angle - 10mm
Stock Group Name Raw Materials Raw Materials Finished Goods Finished Goods Finished Goods
UOM Kgs Kgs Nos Nos Nos
Tariff Classification 72221111 72221191 72221199 72221992 72221166
Valuation Type MRP Based Ad Quantum Ad Valorem Ad Valorem Ad Valorem
Rate Of VAT 4% 12.5% 4% 12.5% 12.5%
i. Create Stock Items on MRP To create a Stock Item on MRP, Go to Gateway of Tally > Inventory Info. > Stock item > Create 1. Enter the name of the Stock Item i.e., Iron Bars in the Name field. 2. Select the Stock Group Name as Raw Materials in the Under field (Use Alt + C to create Stock Group)
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3. Select the unit of measurement as Kgs (Kilograms) of the stock item in the Units field (Use Alt + C to create Unit of Measurement) 4. In Tariff Classification field, select the applicable tariff classification e.g. 72221111 from the List of Tariff Classifications
5. Enable Set/Alter Excise Details to Yes to display the Excise Details sub screen
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6. In the Excise Details Screen Excise Unit Name: By default, Tally.ERP 9 displays Metal Craft Engineering as Excise Unit Name.
In Tally.ERP 9, the Excise units whether created for Dealer / Manufacturer are identified as Godowns. However, when the option Maintain Multiple Godowns/Excise Units is not enabled in F11: Inventory Features (F2) Tally.ERP 9 by default, identifies the Default Godown named Main Location as the Excise Unit Name To create more than one Excise Unit, enable Maintain Multiple Godowns/Excise Units in F11: Inventory Features (F2).
Reporting UOM: Select Kgs as Reporting UOM (All the reports will display the Stock item details based on the reporting UOM selected).
As per Central Excise Act, the stock items are required to be reported in the prescribed unit of measurements.The Applicable Unit of Quantity for Iron Bars is Kgs (Kilograms). Hence, select Kgs (Kilograms) as the Reporting UOM.
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Set/Alter Duty Details: Set this field to Yes to view the Duty Details screen.
In Duty Details screen In valuation Type field Select MRP Based from the List of Valuation Type In MRP field enter the Rate as Rs. 35 Select the Basic Excise Duty in the Type of Duty field from the List of Excise Duty Classifications Specify the Rate of Duty as 16% Select the Education Cess as the second duty in the Type of Duty field from the List of Excise Duty classifications Specify the Rate of Duty as 2% Select the Secondary Education Cess as the third duty in the Type of Duty field from the List of Excise Duty classifications. Specify the Rate of Duty as 1%
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Accept to save Duty Details screen. In Excise Details screen, under Stock Item Type field select as Principal Input from the List of Item Types
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7. Rate of VAT (%): in this field enter the Rate of VAT applicable for the Stock Item e.g. 4%
8. Press Enter to accept and save
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ii. Create Stock Items on Ad Quantum To create a Stock Item on Ad Quantum, Go to Gateway of Tally > Inventory Info. > Stock item > Create Enter the name of the Stock Item e.g. Steel Sheets in the Name field Select the Group Name e.g. Raw Materials in the Under field Select the unit of measurement e.g. Kgs (kilograms) of the stock item in the Units field In Tariff Classification field select the applicable tariff classification e.g. 72221191 from the List of Tariff Classifications (Use Alt + C to create Tariff Classifications) 5. Enable Set/Alter Excise Details to Yes to display the Excise Details sub screen. 6. In the Excise Details Screen Excise Unit Name: By default Tally.ERP 9 displays Metal Craft Engineering as Excise Unit Name. Reporting UOM: Select Kgs as Reporting UOM. All the reports will display the Stock item details based on the reporting UOM selected Set/Alter Duty Details: Set this field to Yes to view the Duty Details screen. In Duty Details screen In valuation Type field Select Ad Quantum Based from the List of Valuation Type Select the Basic Excise Duty in the Type of Duty field from the List of Excise Duty Classifications Specify the Rate of Duty as 16% Select the Education Cess as the second duty in the Type of Duty field from the List of Excise Duty classifications Specify the Rate of Duty as 2% Select the Secondary Education Cess as the third duty in the Type of Duty field from the List of Excise Duty classifications. Specify the Rate of Duty as 1% 1. 2. 3. 4.
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Accept to save Duty Details screen. In Excise Details screen, under Stock Item Type field select as Principal Input from the List of Item Types 7. Rate of VAT (%): in this field enter the Rate of VAT applicable for the Stock Item e.g. 12.5%
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8. Press Enter to accept and save. iii. Create Stock Items on Ad Valorem To create a Stock Item (Finished Good) on Ad Valorem Setup : In F12: Configuration (Stock Item Configuration) Set the option Allow ADVANCED entries in Masters to Yes Set the option Allow Component list details (Bill of Materials) to Yes Go to Gateway of Tally > Inventory Info. > Stock item > Create 1. Enter the name of the Stock Item e.g. Hot Rolled Beams - 25mm in the Name field. 2. Select the Stock Group Name e.g. Finished Goods in the Under field (Use Alt + C to create Unit of Measurement) 3. Select the unit of measurement e.g. Nos (numbers) of the stock item in the Units field 4. Enable Set Components (BoM) to Yes and press enter to view Stock ltem Components (BoM) screen 5. In Stock ltem Components (BoM) screen In Unit of manufacture field enter as 1 Under Item and Quantity field enter the details as shown
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Figure 21.47 Stock item BOM
6. In Tariff Classification field, select the applicable tariff classification e.g. 72221199 from the List of Tariff Classifications (Use Alt + C to create Tariff Classifications) 7. Enable Set/Alter Excise Details to Yes to display the Excise Details sub screen. 8. In the Excise Details Screen Excise Unit Name: By default Tally.ERP 9 displays Metal Craft Engineering as Excise Unit Name. Reporting UOM: select Nos (numbers) as Reporting UOM. All the reports will display the Stock item details based on the reporting UOM selected. Set/Alter Duty Details: Set this field to Yes to view the Duty Details screen. In Duty Details screen In Valuation Type select Ad Valorem from List of Valuation Type. Select the Basic Excise Duty in the Type of Duty field from the List of Excise Duty classifications Specify the Rate of Duty as 16% Select the Education Cess as the second duty in the Type of Duty field from the List of Excise Duty classifications Specify the Rate of Duty as 2%
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Select the Secondary Education Cess as the third duty in the Type of Duty field from the List of Excise Duty classifications. Specify the Rate of Duty as 1%
In Excise Details screen, under Stock Item Type select as Finished Goods from the List of Item Types
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Set the option Set/ Alter Reporting BOM to Yes.
Reporting BOM Screen is displayed as shown
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Figure 21.51 Set/Alter Reporting BOM
Specify the Stock Item Components (BOM) under the option Set/ Alter Reporting BOM, only when the Stock item has different components list other than those defined under the BOM for Production. The Bill of Materials (BOM) defined under this option is used only for reporting purpose.
9. Rate of VAT (%): in this field enter the Rate of VAT applicable for the Stock Item e.g. 4%
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Figure 21.52 Stock Item MRP
10.Press Enter to accept and save.
Wherever, Additional duties of Excise and Special duties of Excise are applicable on the Exciseable Item, the same can be activated as required from the List of Excise Duty Classifications.
iv. Creating Stock Item - Finished Goods (Ad Valorem) Go to Gateway of Tally > Inventory Info. > Stock item > Create 1. 2. 3. 4. Enter the name of the Stock Item e.g. Cold Rolled Channels - 10 mm in the Name field. Select the Stock Group Name e.g. Finished Goods in the Under field. Select the unit of measurement e.g. Nos (numbers) of the stock item in the Units field. Enable Set Components (BoM) to Yes and press enter to view Stock ltem Components (BoM) screen 5. In Stock ltem Components (BoM) screen In Unit of manufacture field enter as 1 Under Item and Quantity field enter the details as shown
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Figure 21.53 Stock item BOM
6. In Tariff Classification field select the applicable tariff classification e.g. 72221992 from the List of Tariff Classifications (Use Alt + C to create Tariff Classifications) 7. Enable Set/Alter Excise Details to Yes to display the Excise Details sub screen. 8. In the Excise Details Screen Excise Unit Name: By default Tally.ERP 9 displays Metal Craft Engineering as Excise Unit Name Reporting UOM: select Nos (numbers) as Reporting UOM. All the reports will display the Stock item details based on the reporting UOM selected Set/Alter Duty Details: Set this field to Yes to view the Duty Details screen In the Duty Details screen In Valuation Type, select Ad Valorem from List of Valuation Type. Select the Basic Excise Duty in the Type of Duty field from the List of Excise Duty classifications Specify the Rate of Duty as 16% Select the Education Cess as the second duty in the Type of Duty field from the List of Excise Duty classifications Specify the Rate of Duty as 2%
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Select the Secondary Education Cess as the third duty in the Type of Duty field from the List of Excise Duty classifications. Specify the Rate of Duty as 1% In Excise Details screen, under Stock Item Type field select as Finished Goods from the List of Item Types Set the option Set/ Alter Reporting BOM to Yes. Reporting BOM screen is displayed as shown 9. Rate of VAT (%): in this field enter the Rate of VAT applicable for the Stock Item e.g. 12.5%
Figure 21.54 Stock Item MRP
10.Press Enter to accept and save. Similarly, create Slotted Angle - 10mm in the manner as discussed above.
21.4 Processing Transactions

Once the required Party ledgers, Purchase, Sales and Tax Ledgers are created in the manner as discussed above, let us consider the following transactions pertaining to Excise Manufacturing.
21.4.1 Purchase of Excisable Goods

Example 1: On 01/04/09, M/s. Metal Craft Engineering purchased the following Excisable goods from Durga Steel Industries
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Item Description Iron Bars
Qty (Kgs) 1000
Rate (Rs) 35
The above items are subject to Basic Excise Duty @ 16%, Education Cess @ 2%, Sec. Educational Cess @ 1% and VAT @ 4%. Step 1 : Create Excise Purchase Voucher To create a Purchase Voucher Setup : In F12: Configuration (Purchase Invoice Configuration), ensure the option Use Common Ledger A/c for Item Allocation is set to Yes Go to Gateway of Tally > Accounting Vouchers > F9: Purchases 1. In Voucher Type sub form select Excise - Purchases as the voucher type 2. Ensure that the Purchase Voucher is in Item Invoice Mode
In Tally.ERP 9, Excise Purchase Transactions are required to be recorded in Invoice Mode Only.
3. Enter the Date as 1-4-2009 4. In Supplier Invoice No. field enter the Invoice No. as MCE/201 5. In the Party's A/c Name field, select the supplier i.e. Durga Steel Industries from the List of Ledger Accounts 6. Select Manufacturer in n Nature of Purchase field
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Figure 21.55 Nature of Purchase
7. In the Purchase Ledger field, select the ledger Purchase @ 4% from List of Ledger Accounts 8. VAT/Tax Class field automatically gets updated with the VAT/Tax class as selected in the purchase ledger, which can be changed. 9. In Name of Item field select the Stock Item i.e. Iron Bars 10.In Quantity field, enter the quantity as 1,000 11.In Rate field, enter the rate as Rs. 35. The Amount will be displayed automatically 12.Select Duty Ledger i.e. Basic Excise Duty @ 16%. Amount will be calculated and displayed automatically. 13.Select Education Cess @ 2% and Secondary Education Cess @ 1% ledgers. Amount will be calculated and displayed automatically 14.Select Input VAT @ 4%, the Amount will be displayed automatically
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Figure 21.56 Excise Purchase Invoice
15.Set the option Show Statutory Details to Yes to view Statutory Details screen 16.In Statutory Details screen, press Alt + F1: Detailed to view details of duty calculation. The Statutory Details screen is displayed as shown.
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Figure 21.57 Statutory Details
In Statutory details screen, Item/ ledger wise assessable value and Duty/ Tax calculations are displayed.
17.In Bill-wise Details screen, select Type of Ref as New Ref and in other fields retain the default details.
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Figure 21.58 Bill-wise Details
18.Enter the Narration, if required The completed Excise Purchase Voucher is displayed as shown:
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19.Press Enter to save and accept.
Example 2: On 03/04/09, M/s. Metal Craft Engineering purchased the following Excisable goods from Beekay Engineering Corporation Item Description Steel Sheets Qty (Kgs) 600 Rate (Rs) 42
The above items are subject to Basic Excise Duty @ 16%, Education Cess @ 2%, Sec. Educational Cess @ 1% and VAT @ 12.5%. The Duties of Excise payable in the above purchase are claimable as CENVAT Credit.
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Step 1 : Create Excise Purchase Voucher Setup : In F12: Configuration (Purchase Invoice Configuration), Ensure Use Common Ledger A/c for Item Allocation is set to Yes Set Calculate Tax on Current subtotal (else calculations are on Inventory Total only) to Yes Go to Gateway of Tally > Accounting Vouchers > F9: Purchases 1. 2. 3. 4. 5. In Voucher Type sub form, select Excise - Purchases as the voucher type Ensure that the Purchase Voucher is in Item Invoice Mode Enter the Date as 3-4-2009 In Supplier Invoice No. field enter the Invoice No. as DSI/202 In Party's A/c Name field select the supplier i.e. Beekay Engineering Corporation from the List of Ledger Accounts 6. In Nature of Purchase field the option Manufacturer is displayed automatically 7. In Purchase Ledger field select the ledger Purchase @ 12.5% from List of Ledger Accounts, the VAT/Tax Class field automatically gets updated with the VAT/Tax class as selected in the purchase ledger 8. In Name of Item field select the Stock Item i.e. Steel Sheets 9. In Quantity field enter the quantity as 600 10.In Rate field enter the rate as Rs. 42, the Amount will be displayed automatically 11.Select Duty Ledger i.e. Basic Excise Duty (CENVAT).
In order to avail Cenvat Credit, create the duty ledgers under Current Assets with Duty/Tax type as CENVAT.
12.The Amount for Basic Excise duty (CENVAT) ledger will be displayed automatically 13.Similarly, select Education Cess (CENVAT) and Secondary Education Cess (CENVAT) ledger subsequently 14.Select Input VAT @ 12.5%, the Amount will be displayed automatically 15.Set the option Show Statutory Details to Yes to view Statutory Details screen In Statutory Details screen, press Alt + F1: Detailed to view details of duty calculation. The Statutory Details screen is displayed as shown
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16.In Bill-wise Details screen, select Type of Ref as New Ref and in other fields retain the default details. 17.Enter the Narration, if required The completed Excise Purchase Voucher is displayed as shown:
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18.Press Enter to save and accept.
21.4.2 Manufacturing Excisable Goods

Example 3: On 06/04/09, M/s. Metal Craft Engineering manufactured the following excisable goods Item Description Hot Rolled Beams - 25mm Qty (Nos) 300
To Manufacture 1 Nos of Hot Rolled Beams - 25mm, the following inputs are required at the given proportions. Item Description Iron Bars Steel Sheets Qty (Kgs) 2 1
Labour Charges of Rs. 1,000/- was incurred during the process of manufacturing.
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Step 1 : Create Manufacturing Journal Voucher Go to Gateway of Tally > Inventory Vouchers > Alt +F7: Stock Journal 1. Select Manufacturing journal from the list of Voucher Types 2. Press F2 and enter the Voucher Date as 6-4-2009 3. In Name of Product field, select Hot Rolled Beams - 25mm from the List of Items. (Tally.ERP 9 automatically updates the components required to manufacture Hot Rolled Beams - 25mm, as defined in Bill of Materials of the respective Stock Item). 4. In Quantity field, enter 300 as the quantity manufactured (Tally.ERP 9 automatically updates the Quantity, Rate and Amount of the components used in the manufacture of Hot Rolled Beams - 25mm). 5. Select the Ledger Labour charges and enter the amount 1000 as the additional cost incurred for manufacturing the finished goods. 6. Enter the Narration, if required. The completed Excise Manufacturing Journal Voucher is displayed as shown :
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The procedure to create Manufacturing Journal Voucher Type is explained in Creation of Masters section.
Example 4: On 07/04/09, M/s. Metal Craft Engineering manufactured the following excisable goods Item Description Cold Rolled Channels - 10mm Qty (Nos) 200
To Manufacture 1 Nos of Cold Rolled Channels - 10mm, the following inputs are required in the given proportion.
Item Description Iron Bars Steel Sheets
Qty (Kgs) 1 1
Labour Charges of Rs. 1,500/- was incurred during the process of manufacturing. Step 1 : Create a Manufacturing Journal Go to Gateway of Tally > Inventory Vouchers > Alt +F7: Stock Journal 1. Select Manufacturing journal from the list of Voucher Types 2. Press F2 and enter the Voucher Date as 7-4-2009 3. In Name of Product field, select Cold Rolled Channels - 10 mm from the List of Items. Tally.ERP 9 automatically updates the components required to manufacture Cold Rolled Channels - 10 mm as defined in BOM of finished goods. 4. In Quantity field enter 200 as the quantity manufactured. Tally.ERP 9 automatically updates the Quantity, Rate and Amount of the components used in the manufacture of Cold Rolled Channels - 10 mm 5. Select the Ledger Labour charges and enter the amount 1500 as the additional cost incurred for manufacturing the finished goods. 6. Enter the Narration, if required.
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The completed Excise Manufacturing Journal Voucher is displayed as shown:
21.4.3 Sale of Excisable Goods

As discussed in earlier sections, it is mandatory to generate Excise Invoice under Rule 11 of Excise Rules 2002, for removal of excisable goods from a factory / warehouse. Such Invoice should be serially numbered and contain the registration number, description, classification, time and date of removal, rate of duty, quantity and value, of goods and the duty payable. Let us consider the following transaction to illustrate the same. Example 5: On 10/04/09, M/s. Metal Craft Engineering sold the following excisable goods to Simplex Casting Limited (vide Invoice No. MCE/101/09-10).
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Item Description Hot Rolled Beams - 25mm
Qty (Nos) 200
Rate (Rs.) 360
The above goods are subject to Basic Excise Duty @ 16%, Education Cess @ 2%, Sec. Educ. Cess @ 1% and VAT @ 4%. Step 1 : Create a Sales Voucher To create a Sales Voucher Go to Gateway of Tally > Accounting Vouchers > F8: Sales 1. 2. 3. 4. 5. 6. 7. 8. Select Excise - Sales as the voucher type from the list of Voucher Types Ensure that the Sales Voucher is in Item Invoice Mode Enter the Date as 10-4-2009 Enter the Ref details as SCL/321 In Excise Unit field, Metal Craft Engineering is defaulted automatically The Excise Book Name and the Serial No. is defaulted automatically In Party A/c Name field, select Simplex Casting Limited from the List of Ledger Accounts In Party Details sub form, Enter the Despatch and Order Details Enter the Sl.No. in PLA /RG-23 Register The Date and Time of Invoice is defaulted automatically based on the system time and date, the same can be changed as required) The Date and Time of removal is automatically set by default based on the system time and date (the same can be changed as and when required). The Buyer Details are automatically selected by default based on the ledger specifications
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As per Excise Rules, it is mandatory to record the Time and date of removal of excisable goods in the Sales Invoice.
9. In Nature of Removal field, select the option Domestic from the list of Types of Removals
The Types of Removals available in Tally.ERP 9 are : Domestic : This option is selected when the removal of goods is intended for domestic or local Sales within the country. Export : This option is selected when the removal of goods is intended for Export outside the country. Exempt : This option is selected when the removal of goods is for purpose of Exempt sales (under any notification, if applicable).
10.Select Sales @ 4% from the List of Ledger Accounts in Sales Ledger field. The VAT/Tax Class field is defaulted automatically 11.In Name of Item field. Select the Stock Item i.e. Hot Rolled Beams - 25mm
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Enter the quantity as 200 and Rate as 360, the Amount will be displayed automatically 12.Select Basic Excise Duty @ 16%, the Amount will be calculated and displayed automatically. 13.Select Education Cess @ 2% and Secondary Education Cess @ 1% ledgers. Amount will be calculated and displayed automatically 14.Select Output VAT @ 4%, the Amount will be displayed automatically 15.Set Yes in the Show Statutory Details field and press Enter
16.In Statutory Details screen, press Alt + F1: Detailed to view details of duty calculation.
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17.In Bill-wise Details screen, select Type of Ref as New Ref and retain the default details in the other fields .
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18.Enter the Narration, if required The completed Excise Sales Voucher is displayed as shown:
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19.Press Enter to save and accept. Step 2 : Print Excise Invoice under Rule 11 1. Press Page Up from the above screen and press Alt+P (if Print after saving option is enabled in Excise - Sales Voucher Type, Tally.ERP 9 will automatically redirect you to the Voucher Printing Screen
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2. Press F12: Configure and set the following options to Yes Print Excise Duty Details of Items Print Tax Analysis of Items Print VAT Analysis of Items Print Date & Time
3. Press Enter to print Excise Invoice The printed Excise Sales Invoice as per Rule 11 of Excise Rules is displayed as shown.
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Figure 21.71 Printed Excise Invoice
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Example 6: On 16/04/09, M/s. Metal Craft Engineering sold the following excisable goods to General Fabricators (vide Invoice No. MCE/102/09-10). Qty (Nos) 100 100 Rate (Rs.) 360 300
Item Description Hot Rolled Beams - 25mm Cold Rolled Channels - 10mm
Total Value 36,000 30,000
VAT (%) 4% 12.5%
The above goods are subject to Basic Excise Duty @ 16%, Education Cess @ 2%, Sec. Educ. Cess @ 1%. Additionally, Packing Charges of Rs. 5,000 was incurred during transit and the same is also subject to Excise Duty as applicable on the goods. In order to create Excise Sales Invoice for Stock Items subject to multiple VAT rates, ensure that Use Common Ledger A/c for Item Allocation is set to No in F12: Configuration (Sales Invoice Configuration). Step 1 : Create Sales Voucher Go to Gateway of Tally > Accounting Vouchers > F8: Sales Select Excise - Sales as the voucher type Ensure that the Sales Voucher is in Item Invoice Mode Enter the Date as 16-4-2009 Enter the Ref details as GEN/332 Metal Craft Engineering is defaulted automatically in the in Excise Unit field Excise Book Name and the Serial No. field is automatically prefilled based on predefined configurations 7. In Party A/c Name field, select General Fabricators from the List of Ledger Accounts 8. In Party Details sub form, Enter the Despatch and Order Details Enter the Sl.No. in PLA /RG-23 Register The Date and Time of Invoice is defaulted automatically based on the system time and date, the same can be changed as required) The Date and Time of removal is automatically set by default based on the system time and date (the same can be changed as and when required) The Buyer Details are automatically selected by default based on the ledger specifications 1. 2. 3. 4. 5. 6.
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9. In Nature of Removal field, select Domestic from the list of Types of Removals 10.In Name of Item field, Select the Stock Item as Hot Rolled Beams - 25mm Quantity as 100 and the Rate as 360, the Amount will be displayed automatically 11.In Accounting Details for screen, select Sales @ 4% from the List of Ledger Accounts. The VAT/Tax Class field is automatically defaulted 12. Similarly, select Cold Rolled Channels - 10mm as the second Stock Item 13.Enter 100 as Quantity and 300 as Rate 14.In Accounting Details for screen, select Sales @ 12.5% from the List of Ledger Accounts. The VAT/Tax Class field is automatically defaulted 15.Select Packing Charges ledger and specify the amount as 5000 16.Select Basic Excise Duty @ 16%, the Amount will be calculated and displayed automatically. 17.Select Education Cess @ 2% and Secondary Education Cess @ 1% ledgers. Amount will be calculated and displayed automatically 18.Select Output VAT @ 4%, the Amount will be calculated and displayed automatically. 19.Select Output VAT @ 12.5%, the Amount will be calculated and displayed automatically. 20.Set Show Statutory Details to Yes and press Enter 21.In Statutory Details screen, press Alt + F1: Detailed to view details of duty calculations.
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22.In Bill-wise Details screen, select Type of Ref as New Ref, Name as GEN/332 and in other fields retain the default details. 23.Enter the Narration, if required The completed Excise Sales Voucher is displayed as shown:
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24.Press Enter to accept and save.
In the above case, the Method of Apportion for Packing charges ledger is selected as Based on Value. Thus, The value of Packing Charges of Rs. 5,000/- is apportioned based on the value of the goods. i.e., Rs. 2,727.27 (5,000*36,000/66,000) is subject to Excise Duty at applicable rates and VAT @ 4% for the respective item and Rs. 2,272.72 (5000*30,000/66,000) is subject to Excise Duty at the applicable rates and VAT @ 12.5% for the respective item.
Step 2 : Print Excise Invoice under Rule 11 1. Press Page up from the above screen and press Alt+P (if Print after saving option is enabled in Excise - Sales Voucher Type, Tally.ERP 9 will be automatically redirect to Voucher Printing Screen 2. Press F12: Configure and ensure that the following options are set to Yes Print Excise Duty Details of Items
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Print Tax Analysis of Items Print VAT Analysis of Items Print Date & Time 3. Press Enter to print the Excise Invoice The printed Excise Sales Invoice as per Rule 11 of Excise Rules is displayed as shown.
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Figure 21.75 Print Preview Excise Invoice
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Example 7: On 21/04/09, M/s. Metal Craft Engineering manufactured the following excisable goods Item Description Slotted Angle - 10mm Qty (Nos) 50
To Manufacture 1 Nos of Slotted Angle - 10mm, the following inputs are required in the given proportions. Item Description Steel Sheets Additionally, Labour Charges of Rs. 300 was incurred. Create necessary Stock Items with the required Bill of Materials (BoM) and create the Manufacturing Journal as discussed in Example 3. The completed Excise Manufacturing Journal is displayed as shown: Qty (Kgs) 1

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Example 8: On 22/04/09, M/s. Metal Craft Engineering sold the following excisable goods to Simplex Casting Limited (vide Invoice No. MCE/103/09-10). Item Description Slotted Angle - 10mm Cold Rolled Channels - 10mm Qty (Nos) 50 100 Rate (Rs.) 250 300 Total Value 12,500 30,000 VAT (%) 12.5% 12.5%
The above goods are subject to Basic Excise Duty @ 16%, Education Cess @ 2%, Sec. Educ. Cess @ 1%. Step 1 : Create Excise Sales Voucher To create a Sales Voucher Go to Gateway of Tally > Accounting Vouchers > F8: Sales Select Excise - Sales as the voucher type Ensure that the Sales Voucher is in Item Invoice Mode Enter the Date as 22-4-2009 Enter the Ref details as SCL/410 Metal Craft Engineering is displayed automatically in Excise Unit field Excise Book Name and the Serial No. field is automatically prefilled based on predefined configurations 7. Select Simplex Casting Limited in the Party A/c Name field. In Party Details screen, enter the required details 8. Select Domestic in Nature of Removal field 9. Select Slotted Angle - 10mm in Name of Item field 10.Enter Quantity as 50 and Rate as 250, press Enter the amount will calculated automatically 11.In Accounting Details for screen, select Sales @ 12.5%, the VAT/Tax Class is defaulted automatically 12.Similarly, select Cold Rolled Channels - 10mm as the second stock item 13.Enter Quantity as 100 and Rate as 300, press Enter the amount will calculated automatically 14.In Accounting Details for screen, select Sales @ 12.5%, the VAT/Tax Class is defaulted automatically 15.Select Basic Excise Duty @ 16%, the Amount will be calculated and displayed automatically. 16.Select Education Cess @ 2% and Secondary Education Cess @ 1%, the Amount will be calculated and displayed automatically 17.Select Output VAT @ 4%, the Amount will be displayed automatically 18.Set Show Statutory Details to Yes and press Enter 19.In Statutory Details screen, press Alt+F1 to view in detailed mode 1. 2. 3. 4. 5. 6.
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20.In Bill-wise Details screen, select Type of Ref as New Ref and in other fields retain the default details. 21.Enter the Narration, if required The completed Excise Sales Voucher is displayed as shown :
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22.Press Enter to save and accept. Step 2 : Print Excise Invoice under Rule 11 Press Page Up from the above screen and press Alt+P The printed Excise Sales Invoice as per Rule 11 of Excise Rules is displayed as shown
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Figure 21.79 Print Preview Excise Invoice
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21.4.4 Return of Goods

It is mandatory to account for return of excisable goods sold under the cover of Excise Invoice as per rule 11 of Excise Rules 2002 and to precisely maintain excise books & reports. Let us consider the following transaction to illustrate the same. Example 9: On 28/04/09, M/s. Simplex Casting Limited returned the following goods to Metal Craft Engineering. Item Description Hot Rolled Beams - 25mm Qty (Nos) 10 Rate (Rs.) 360 Total Value 3600 VAT (%) 4%
The above goods were sold under Invoice No. MCE/101/09-10 dt. 10/04/09. Step 1 : Create Credit Note Setup : In F11: Features (Accounting Features) Set Use Debit/Credit Notes to Yes Set Use Invoice mode for Credit Notes to Yes Go to Gateway of Tally > Accounting Vouchers > Ctrl + F8: Credit Note Select Excise - Credit Note as the voucher type Ensure that the Credit Note Voucher is in Item Invoice Mode Enter the Date as 28-4-2009 Enter the Ref details as SCL/CN/001 Metal Craft Engineering is automatically selected by default in the Excise Unit field Select Goods Sold Returned as the type of VAT Adjustment in the Used for field and press Enter 7. Select Simplex Casting Limited in Party A/c Name field 8. In Name of Item field, select Hot Rolled Beams - 25mm 9. Enter the Quantity as 10 and Rate as 360 10.In Accounting Details for screen, select Sales @ 4% and press Enter, the VAT/Tax Class is automatically selected by default 11.Select Basic Excise Duty @ 16%, Education Cess @ 2% and Secondary Education Cess @ 1% ledgers subsequently and press Enter. The Amount will be calculated and displayed automatically 12.Select Output VAT @ 4%, the Amount will be displayed automatically 13.Set Show Statutory Details to Yes and press Enter 14.In Statutory Details screen, press Alt+F1 to view in detailed mode
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1. 2. 3. 4. 5. 6.
15.In the Bill-wise Details screen, select Type of Ref as Agst Ref and select SCL/321 dated 104-2009.
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16.Enter the Narration, if required The completed Excise Credit Note is displayed as shown :
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Figure 21.82 Credit Note Voucher
17.Press Enter to accept and save Similarly, in case of Purchase Returns you can create the required Debit Note Voucher Type and pass the Debit Note Voucher with the returned goods.
21.4.5 Availing CENVAT Credit

As discussed earlier, Government entitles the manufacturer of exciseable goods to avail CENVAT credit on Excise duty (Viz., BED, SED, AED, NCCD, Cess etc) paid on the inputs / raw materials. To record the CENVAT adjustment in Tally.ERP 9, Excise Duty Ledgers are debited and CENVAT Duty Ledgers are credited respectively, in order to nullify the balances in the CENVAT ledgers. Let us consider the following transaction to illustrate the same. Example 10: On 30/04/09, M/s. Metal Craft Engineering Pvt. Ltd., availed CENVAT Credit on Duties of Excise paid on purchases, during the month of April 2009.
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The details of available CENVAT Credit for April 2009 are as follows Duties of Excise Basic Excise Duty (CENVAT) Education Cess (CENVAT) Secondary Education Cess (CENVAT) Step 1 : Create Journal Voucher Class Go to Gateway of Tally > Accounts info. > Voucher Types > Alter > Journal Tab down to Name of Class field Enter the Name of Class as CENVAT Credit Adjustment and press Enter In Voucher Type Class screen, set Use Class for Excise / CENVAT Adjustment to Yes Amount (Rs.) 9,600 1,200 600
Figure 21.83 Journal Voucher Class Creation

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The completed Journal Voucher Type is displayed as shown:
Press Enter to accept and save. Step 2 : Create Journal Voucher Go to Gateway of Tally > Accounting Vouchers > F7: Journal 1. Select CENVAT Credit Adjustment as the Voucher Class
Figure 21.85 Journal Voucher Class Selection
2. Enter the Date as 30-4-2009 3. Select CENVAT Adjustment in Used for field
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Figure 21.86 User for field
4. Press Alt + L or click on L: Excise Helper button to view CENVAT Adjustments screen
Figure 21.87 Excise Helper button
In CENVAT Adjustments screen In Excise Unit field, select Metal Craft Engineering from the List of Excise Units. On selecting Excise Unit, the CENVAT credit available details will be displayed in Available Amount column In Payable From and To field mention the period for which the payment is done i.e., From 1-4-2009 to 30-4-2009.
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On specifying the Payable From and To date, the duty payable for the period specified will be displayed in Payable Amount column
Figure 21.88 Excise Duty Adjustments
Rs. 9,600 is the CENVAT Credit (Basic Excise Duty amount) available for adjustment towards excise duty payable Rs. 1,200 is the CENVAT Credit (Education Cess amount) available for adjustment towards excise duty payable. Credit of Education Cess on Excisable goods and imported goods can be utilised only for payment of education cess on final products. Rs. 600 is the CENVAT Credit (Secondary Education Cess amount) available for adjustment towards excise duty payable. Credit of SHE Cess on Excisable goods and imported goods can be utilised only for payment of education cess on final products.
In Adjustable Amount column, specify the amount to be adjusted as Basic Excise Duty Rs. 9,600 Education Cess Rs. 600 Secondary Education Cess Rs. 300 Press Enter to save the adjustment. Tally.ERP 9 displays Proceed to Adjust Excise Duties screen for confirmation to adjust excise duties
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Figure 21.89 Adjust Excise Duties
Press Enter to save the CENVAT Adjustments. Now, the Journal Voucher automatically displays the CENVAT Ledgers adjusted against the respective Duty Payable ledgers with the specified amounts.
Figure 21.90 CENVAT Adjustments
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As per Excise Rules, the duty paid on account of Excise Duty, Education Cess and Higher Education Cess can be adjusted / availed only against the dues on account of Excise Duty, Education Cess and Higher Education Cess payable respectively.
5. Enter the Narration, if required The completed Journal voucher is displayed as shown:
6. Press Enter to accept and save
The CENVAT adjustment entry can be passed depending upon the periodicity of payment of Excise Duty to Government by the Manufacturer i.e., on monthly or quarterly basis depending upon the type of manufacturer.
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21.4.6 Payment of Excise Duty

As per Excise Rules, the Excise duty is payable on a monthly or quarterly basis depending on the Type of manufacturer. In case of a Regular Manufacturer, the Excise Duty is payable on a monthly basis and for Small Scale Industries (SSI), the Excise Duty is payable on a Quarterly basis. In order to make the payment in respect of Excise duty, it is essential for the Excise unit to ascertain the accurate net duty payable to the government for any given period after adjusting the available CENVAT credit, if any. Thus, whenever the Excise Duty payments (monthly/quarterly whichever is applicable) are due, the CENVAT adjustment entry is required to be passed at the end of every month/quarter (as the case may be) before the payment entry. Example 11: On 04/05/09, M/s. Metal Craft Engineering Pvt. Ltd., paid Excise Duty for the month of April 2009 vide Cheque No.156387. The excise duty details are as follows :
Duties of Excise Basic Excise Duty @ 16% Education Cess @ 2% Secondary Education Cess @ 1% Step 1 : Creating Payment Voucher Setup :
Amount (Rs.) 18,880.00 53.60 26.80
In F12: Configure (Payment Configuration), ensure Use Single Entry mode for Pymt/ Rcpt/Contra is set to Yes Go to Gateway of Tally > Accounting Vouchers > F5: Payment 1. Enter the Date as 4-5-2009 2. Press Alt + L or click on L: Excise Helper button on the Buttons Bar to view Payment Details (Excise Helper) screen
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Figure 21.92 Excise Helper Button
3. In the Payment Details (for Excise) screen Enter 1-4-2009 to 30-4-2009 in Period From and To fields respectively Select Metal Craft Engineering in the Excise Unit Name field Enter 934150 in Challan No. field Enter 4-5-2009 in Challan Date field Enter HDFC Bank in Bank Name field Enter the BSR code of the Bank Enter 156387 in Cheque/Draft/Pay Order No. field Enter 4-5-2009 in Cheque Date field
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Figure 21.93 Payment Details
Press Enter to accept the payment details screen, Based on the period selected duty ledger with the tax amount due for payment will be displayed automatically.
4. In the Account field, select Bank Ledger i.e., HDFC Bank 5. Enter the details of the transaction in the Narration field.
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6. Press Enter to accept. Step 2 : Print G A R 7 Challan Press Page Up from the payment voucher Press Alt +P, the Voucher Printing screen is displayed as shown.
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The option Print G.A.R.7 Challan is by default set to Yes Press Alt+P to print G A R 7 Challan
Figure 21.97 Printed G A R 7 Challan
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21.5 Excise Reports

With the help of Tally.ERP 9, you can generate Excise reports, registers and Statutory Challans & Forms in the prescribed formats. Tally.ERP 9 provides the following Excise reports for Manufacturers : Excise Computation Daily Stock Register PLA Register Form ER 1 CENVAT Registers To view Excise Reports, Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Manufacturer
Figure 21.98 Excise Reports
21.5.1 Excise Computation Report

The Excise Computation report displays the complete information on the Excisable transactions made during a particular period. It precisely provides details on how Excise duty is computed on the Assessable value besides indicating the Credit adjustments available for the respective period, if any. To view Excise Computation report Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Manufacturer > Excise Computation Select Metal Craft Engineering from the List of Excise Units
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Figure 21.99 Excise Computation
Press F12: Configuration and set Show All Classifications to Yes Show Cenvat Credit Adjustements to Yes The Excise Computation report is displayed as shown:
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Figure 21.100 Excise Computation
The Excise Computation report is divided into three broad sections, namely: Excise Duty Payable: This section displays the details of Excise Sales, Payable from the previous period and Excise Duty Payments/ Credit Adjustment. Excise Sales: This section displays the details of Excise sales at regular rate and Exempt Payable from previous period: This section displays the duty amount payable from the previous period. Excise Duty Payments/ Credit Adjustments: This section displays the details in respect of G.A.R. 7 Payments and Credit Adjustment made during the given period Other Charges: This section displays the details of other charges viz., Interest Penalty and Arrears amount paid during the period. Balance Input Credit: This section displays the details of balance CENVAT credit in respect of Inputs, Capital goods and Service Tax Input Credit.
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21.5.2 Daily Stock Register

The Daily Stock Register displays the details of stock movements of selected Excisable commodity. The report contains information on Opening quantity, Manufactured quantity, Issued for repacking/sales, Assessable Value, Excise Duty details and Excise Notification details and so on. To view Daily Stock Register Go to Gateway of Tally > Display > Statutory Reports> Excise Reports > Manufacturer > Daily Stock Register > One Item In Selected Excise Unit screen By default, Metal Craft Engineering appears in Name of Excise Unit field Select Any in Tariff No. field Select the required Stock Item from the List of Excise Stock Items and press Enter
Figure 21.101 Select Excise Unit
The Daily Stock Register is displayed as shown:
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Figure 21.102 Daily Stock Register
This report allows you to drill down from any document reference to voucher level for kind of reference/verification. In the same way, you can generate Daily Stock Register for Multiple Exciseable Items from Multi Item menu.
21.5.3 PLA Register

The Personal Ledger Account (PLA) refers to an Account Current through which Assessee pays the Duty to the Government. The PLA register is credited when the duty is payable and on the other hand when the Duty is discharged (by CENVAT Credit /Payment), the PLA register is debited. Any balance of duty payable is displayed as Balance. The PLA Register displays the following particulars: Particulars of Credit/Debit Document / Description of Documents With name of treasury Where necessary Document No. and Date Central Excise Tariff Sub-heading Number ECC no. of the Buyer Basic Excise Duty (Credit, Debit and Balance duty amount) Education Cess (Credit, Debit and Balance Education Cess amount)
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Secondary Education Cess (Credit, Debit and Balance secondary Education Cess amount) To view PLA Register Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Manufacturer > PLA Register In Select Item screen, Select Metal Craft Engineering from the List of Excise Units The PLA Register is displayed as shown:
Figure 21.103 PLA Register
21.5.4 Form ER 1
As per Excise Rules, every Manufacturer (Regular / Large Tax Payer Unit) of Excisable Goods is required to file returns in Form ER 1. Form ER 1 is a monthly return containing the details of production, removal of Goods, CENVAT Credit and other relevant particulars. in Tally.ERP 9, you can generate Form ER 1 in the prescribed format.
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Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Manufacturer > Form ER 1 The Printing Configuration screen is displayed, press Backspace and enter the information as shown.
Press Alt + P to print The Printed Form ER 1 is displayed as shown:
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Figure 21.105 Printed Form ER 1 (Page 1)
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21.5.5 CENVAT Registers

In Tally.ERP 9, the following CENVAT Registers are available Credit Summary Credit Availed RG23 Part II Annexure 10 Abstract Credit Summary The CENVAT Credit Summary displays the details in respect of opening and closing balance of CENVAT credit available for the selected Excise Unit for different types of Stock Item Types.
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To view CENVAT Credit Summary, Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Manufacturer > CENVAT Registers > Credit Summary In Selected Excise Unit screen, Metal Craft Engineering is displayed automatically in Name of Excise Unit field Select Any in Tariff No. field Select Principal Unit in the Stock Item Type field Select All Items from the List of Stock Items
Figure 21.109 List of Stock Items selection
Press Enter The CENVAT Credit Summary for Principal Input is displayed as shown:
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Figure 21.110 CENVAT Credit Summary
Credit Availed The Credit Availed report displays the details of CENVAT credit availed in respect of Principal Input or Capital Goods for the selected period. The Credit Availed report displays information such as Excise Unit Name, Stock Item Type, Date of Entry, Inv/Adj Reference, Type of Document, Supplier Name, Supplier ECC No., Assessable Value, Basic Excise Duty, Education Cess, Sec Ed Cess and so on. To view Credit Availed report Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Manufacturer > CENVAT Registers > Credit Availed In Selected Excise Unit screen, Metal Craft Engineering is displayed automatically in Name of Excise Unit field Select Any in Tariff No. field Select Principal Unit in the Stock Item Type field Select All Items from the List of Stock Items
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Figure 21.111 Selected Excise Unit
The CENVAT Credit Availed report for Principal Input is displayed as shown:
Figure 21.112 CENVAT Credit Availed
RG 23 Part II RG 23A Part II report displays the details of Fresh Credit allowed documents, Fresh Credit Allowed Amount, Total Credit Available, Credit Adjusted with Opening and Balance Credit of Principal Inputs (RG 23A Part II)/Capital Goods (RG 23A Part II) for the Period selected.
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To view RG 23 Part II report, Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Manufacturer > CENVAT Registers > RG 23 Part II In Selected Excise Unit screen, Metal Craft Engineering is displayed automatically in Name of Excise Unit field Select Principal Unit in the Stock Item Type field
The RG23 Part II report for Principal Input is displayed as shown:
Figure 21.114 RG 23 Part II
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Annexure 10 Annexure 10 is a monthly return under Rule 7 of the cenvat credit rules, 2001. This report displays the details of CENVAT credit availed for the Main Item. To view Annexure 10, Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Manufacturer > CENVAT Registers > Annexure 10 In Selected Excise Unit screen, Metal Craft Engineering is displayed automatically in Name of Excise Unit field Select Principal Unit in the Stock Item Type field
The Annexure10 for Principal Input is displayed as shown:
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Figure 21.116 Annexure 10
Abstract This report displays the details of Credit Availed on Inputs/capital goods/inputs services, Credit Utilised for Payment of Duty on Goods/Services, Credit Utilised When the Goods are removed as such with Opening and Closing Balance of Credit. To view Abstract report, Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Manufacturer > CENVAT Registers > Abstract In Selected Excise Unit screen, Metal Craft Engineering is displayed automatically in Name of Excise Unit field Select Principal Unit in the Stock Item Type field
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The Abstract report for Principal Input is displayed as shown:
Figure 21.118 Abstract
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Points to Remember
Excise duty is tax charged on goods manufactured and consumed within India. Goods to be Excisable must satisfy the three basic conditions i.e, it must be movable, marketable and specified in the Central Excise Tariff Act. CENVAT Credit is the set-off of duty paid on inputs used in the manufacture of final products, against the duty liability on such final products. Tally.ERP 9 permits you to create specific voucher types like ExcisePurchase & Excise-Sales for entering the excise related transactions. Manufacturer / Supplier/ Buyer details can be entered during invoice entry. Tally.ERP 9 permits you to generate & print Excise Invoice as per Rule 11 of Excise Rules. Tally.ERP 9 permits you to generate and print Excise Reports and Statutory Returns Tally.ERP 9 also allows you to make adjustments in the records for the sales return of Cenvatable goods and view its effect in the Statutory Reports.
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Lesson 22: Payroll Accounting and Compliance
Lesson Objectives
On completion of this lesson, you will learn, Payroll Accounting & Statutory Features in Tally.ERP 9
The term Payroll refers to a series of accounting transactions involved in the process of paying employees for the services rendered after taking all the statutory and non-statutory deductions into account, in conformance with the terms of employment, company policy and the law of the land i.e., payment of payroll taxes, insurance premiums, employee benefits and other deductions. An efficient payroll system facilitates an error-free, accurate and timely employee payment while ensuring that the employment is well within the valid work permit.
22.1 Configuring Payroll in Tally.ERP 9

Payroll in Tally.ERP 9 is easy to use and can handle all the functional, accounting and statutory requirements of the payroll department.
22.1.1 Salient Features of Tally.ERP 9s Payroll

The key features of the Payroll functionality in Tally.ERP 9 are as follows: It is fully integrated with accounts to give you the benefits of simplified Payroll processing and accounting It has user defined classifications and sub-classifications for comprehensive reporting.This may be related to the employees, employee groups, pay components, departments etc. It provides the facility to create user-defined earnings and deductions Pay Heads It allows flexible and User-definable criteria for simple or complex calculations It allows unlimited grouping of Payroll Masters
Payroll Accounting and Compliance
It supports user-defined production units i.e., attendance/ production/ time based remuneration units It provides a flexible payroll processing period It provides comprehensive Cost Centre as well as employee-wise costing reports It ensures an accurate & timely Salary Processing, Employee Statutory Deductions & Employer Statutory Contributions with the help of predefined processes It provides auto-fill facility to expedite the Attendance, Payroll & Employer Contributions processes. It facilitates an accurate computation and deduction of ESI, EPF, Professional Tax, Gratuity etc. It helps in the generation of Statutory Forms & Challans for EPF & ESI, as prescribed. It allows drill-down facility to voucher level for any kind of alteration. It facilitates computation of arrears pertaining to prior period(s). It helps in tracking employee loan details
22.1.2 Enabling Payroll in Tally.ERP 9

It takes a one-time configuration in Tally.ERP 9 for the Payroll functionality to be activated. Create a new company in Tally.ERP 9 and follow the steps given below to enable Payroll. Let us consider M/s. Indus Solutions Pvt. Ltd., which is engaged in the business of Software services. It is based at Bangalore with the following three major departments: Sales Administration R&D Step 1: Company Setup Go to Gateway of Tally > Company Info. > Create Company In the Company Creation screen, Select India in the field Statutory compliance for from the List of Countries provided Type 1-4-2009 as Financial Year from date and press Enter The completed Company Creation screen is displayed as shown:
Press Enter to Accept the completed Company Creation screen Step 2 : Enable Payroll Go to Gateway of Tally > Press F11: Company Features > press F1: Accounting Features In the F11: Accounting Features screen: Set Maintain Payroll to Yes Set More than ONE Payroll / Cost Category to Yes The completed F11: Accounting Features screen is displayed as shown:
Figure 22.2 F11: Accounting Features screen
Press Enter to Accept the F11: Accounting Features screen

The option More than ONE Payroll / Cost Category is set to Yes, when separate cost categories are created to allocate Employee cost. In cases, where only one cost category i.e., primary cost category is used to allocate multiple cost centres, this option may be set to No.
Once the Payroll feature is activated in Tally.ERP 9, the following two new options get activated in the F11: Statutory & Taxation Master Step 3: Enable Payroll Statutory Features Go to Gateway of Tally > press F11: Company Features > press F3: Statutory & Taxation In F11: Statutory & Taxation Features screen: Set Enable Payroll Statutory to Yes Set Set/Alter Payroll Statutory Details to Yes
Figure 22.3 F11: Statutory & Taxation Features screen
Press Enter In the Payroll Statutory Details screen, Enter the Provident Fund & Employee State Insurance details of the company as shown:
Figure 22.4 Payroll Statutory Details screen
Provident Fund : Company Code : This field denotes the Provident Fund Code of the Company allotted by the Department. Company Account Group Code : This field denotes the Provident Fund Group Code of the Company allotted by the Department. Company Security Code : This field denotes the Security Code of the Company allotted by the Department. Employee State Insurance : Company Code : This field denotes the ESI Code of the Company allotted by the Department. ESI Branch Office : This field denotes the nearest ESI office under whose jurisdiction, the company is situated. Eligibility Amount : This field denotes the threshold limit, beyond which the Employee will not be eligible for ESI. Standard Working days (per month) : This field denotes the consistent Pay Period to be considered for ESI Calculation. If this field is left blank, the calculation is done based on the Calendar days in each month.
Press Enter to Accept the screen and go back to F11: Statutory & Taxation Features screen Press Ctrl+A to Accept the screen
22.2 Creating Payroll Masters

Tally.ERP 9's Payroll features require minimal effort for accurate payroll processing. It takes five easy steps to process payroll & generate Payslip in Tally.ERP 9. Essentially, Payroll involves the calculation of amounts due for an employee on the following basis. On hourly wages Pay on a fixed basis such as certain amount per week, per month and so on Pay to sales persons on commission Reimbursement of expenses such as travel expenses, either as paid by the employee or based on per item rate Pay on number of pieces produced/ manufactured/ sold
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It is therefore essential to quantify the following payroll information for the purpose of computation of payments to employees. For this purpose the following Payroll masters are required to be created in Tally.ERP 9 in the manner as discussed: Employee Masters Payroll Masters Pay Heads Salary Details
Figure 22.5 Payroll Cycle
22.2.1 Employee Setup

The Employee Master records employee information department, date of joining, date of leaving, ID number, designation, location, function, employee bank details, statutory details, Passport and Visa details and so on.
Employee Group Master Businesses with multiple departments, divisions, functions or activities may create the required employee groups and classify individual employees under a specified group i.e., Production, Sales, Marketing, Stores, Support or a particular group of employees such as managers, supervisors, sub-staff and so on. To create Sales as an Employee Group: Go to Gateway of Tally > Payroll Info. > Employee Groups > Create In the Employee Group Creation screen, 1. Select Primary Cost Category as the Category (You can also create a separate cost category to segregate Employee Cost based on respective categories) 2. Type Sales as the Name of the Employee Group 3. Select the group as Primary (Tally.ERP 9 allows an unlimited grouping of Employee Groups) The Employee Group Creation screen is displayed as shown:
Figure 22.6 Employee Group Creation screen
4. Press Enter to Accept the Employee Group Creation screen Similarly, create the other Employee Groups such as Administration and R&D. Employee Master Now that you have created the Employee Groups, create individual Employee Masters, with or without grouping them, under the Employee Group Master. In Tally.ERP 9, you can record all the necessary information of the employees in the Employee Masters. Tally.ERP 9 also allows you to enter the Statutory, Expat and Contract details of the employees. To display the options for entering the Statutory, Expat and Contract details, enable these options from the Company Configuration screen as explained below: Go to Gateway of Tally > F12:Configure > Payroll Configuration
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Set the following options: Show Statutory Details to Yes Show Passport & Visa Details to Yes Show Contact Details to Yes The F12: Payroll Configuration screen is displayed as shown:
Figure 22.7 F12: Payroll Configuration screen
Press Enter to Accept
Tally.ERP 9 allows you to configure the above settings from the Employee Creation screen, by pressing F12: Configure. The information to be printed in the Payment Advice is automatically pre-filled in Tally.ERP 9. However, you can also modify the same as per your requirements.
Create the following Employee Masters Employee Name Rohit Roy Preeti Sinha Atul Sharma Ramesh Arora Department Administration R&D Sales Sales Date of Joining 1-4-2009 1-4-2009 1-4-2009 1-4-2009
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Go to Gateway of Tally > Payroll Info. > Employees > Create In the Employee Creation screen, 1. 2. 3. 4. 5. Select the Primary Cost Category as the Category Type the Name of the Employee as Rohit Roy Specify the Name of the Employee Group as Administration in the field Under Specify the Date of Joining as 01-04-2009 Type the other details of the employee as shown.
Figure 22.8 Employee Creation screen
6. Press Enter to Accept the screen
The Date of Leaving and Reason for Leaving option will be available only in the Alteration mode.
Similarly, create the Employee Masters for other employees with their respective departments.
22.2.2 Payroll Masters

As discussed in the above section, Pay components are computed based on the Payroll Units. Therefore, create the following Payroll masters in Tally.ERP 9: Payroll Units Attendance / Production Types
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Payroll Units A payroll unit refers to a unit of measurement based on which pay heads are calculated. Payroll units can be classified into two types viz., Simple Payroll Units and Compound Payroll Units. Simple Payroll Units refer to individual units such as Day, Week, Month, Hours, Pcs, Box, Nos etc., Whereas, Compound Payroll Units refer to Units which are combination of two simple units, i.e., an Hour of 60 Minutes, Month of 26 days, Day of 8 Hrs. Usually, the Pay components are computed based on a single or compound payroll units. Sometimes an employee may be paid on the basis of a combination of two or more units. For example, an employee is paid a regular salary and an hourly rate for the overtime hours. In this case, the two likely units are Calendar Month and Hours. In Tally.ERP, you can create simple as well as compound units. By default, Tally.ERP 9 contains four preset Calculation Periods Days, Fortnights, Months & Weeks. However, you can also create new Payroll Units based on your business requirements. Name Hours Minutes Hrs of 60 Mins i. Simple Payroll Units Go to Gateway of Tally > Payroll Info. > Units (Work) > Create In the Unit Creation screen, 1. 2. 3. 4. Simple is defualted as the Type of Unit Specify Hrs as the Symbol Type Hours as the Formal Name Specify 2 as the Number of Decimal Places Simple Simple Compound Type Hrs Mins Hrs of 60 Mins Symbol
The completed Unit Creation screen is displayed as shown:
Figure 22.9 Simple Unit Creation screen
5. Press Enter to Accept the Unit Creation screen. Similarly, create Minutes as another Simple Unit.
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ii. Compound Payroll Units Create Hrs of 60 Mins as a Compound Unit. In the Unit Creation screen: 1. 2. 3. 4. Press Backspace and select Compound as the Type of Unit Specify Hrs as the First Unit Enter 60 as the Conversion Specify Mins as the Second Unit
Figure 22.10 Compound Unit Creation screen
5. Press Enter to Accept the Unit Creation screen.

Types of Units: Simple Units are individual units with no relationship with other units i.e., Hrs, Nos, Pieces and so on. Compound Units are a combination of two simple units, where the two units have an arithmetical relationship with each other. For example, an Hour of 60 Minutes.
22.2.3 Attendance/ Production Types

Attendance/Production Type masters are used to record the nature of attendance/ production i.e., time and work rate. In Tally.ERP 9, you can create Attendance types based on time such as Present and Absent or based on work based production units such as Piece productions, Sales performance and so on. Create the following Attendance Types for M/s. Indus Solutions Pvt. Ltd., Name Present Absent Overtime Under Primary Primary Primary Attendance/Production Type Attendance/ Leave with Pay Leave without Pay Production Period Type Days Days Hrs of 60 Mins
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i. Present Attendance Type Go to Gateway of Tally > Payroll Info. > Attendance / Production Types > Create In the Attendance Type Creation screen, 1. Type Present as the Name of the Attendance type 2. Specify the group as Primary in the field Under. By defualt primary is selected. 3. Select Attendance/ Leave with Pay as the Attendance Type and the Period Type appears as Days, by default.
Figure 22.11 Attendance/ Production Type Creation screen
Attendance/Production Types : Attendance / Leave with Pay : This Attendance Type is used when the Salary is computed based on the number of days present. Leave without Pay : This Attendance Type is used when the Salary is computed number of days absent. Production : This Attendance Type is used when the Salary is computed on the basis of units produced. User Defined Calendar Type : This Attendance Type is used when the Salary is computed based on the number of days present in a user defined calendar period.
The completed Attendance Type Creation screen is displayed as shown.:
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Figure 22.12 Attendance/Production Type Creation Screen
4. Press Enter to Accept the Attendance Type Creation screen. ii. Absent Attendance Type Similarly, create another Attendance Type as Absent. Enter Leave without Pay in the field Attendance Type. The completed Attendance Type Creation screen is displayed as shown:
Figure 22.13 Attendance/ Production Type Creation screen
Press Enter to Accept the Attendance Type Creation screen. In the same way, create Overtime as the Production Type with Production as the Attendance Type. iii. Calendar Month In the Attendance Type Creation screen, 1. Type Calendar Month as the Name of the Attendance type 2. Specify the group as Primary in the Under field.
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3. Select User Defined Calendar Type as the Attendance Type and the Period Type appears as Days, by default.
Figure 22.14 User Defined Calendar Type Creation screen
iv. Overtime Production Type The completed Overtime - Production Type Creation screen is displayed as shown below:
Figure 22.15 Overtime - Production Type Creation screen
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Press Enter to Accept the Production Type Creation screen.

Attendance/Production Types details: Present Attendance Type may be used when the pay value is measured on the basis of positive attendance units, i.e. number of days present. Absent Attendance Type may be used when the pay value is measured on the basis of negative attendance units, i.e. number of days absent. Production Attendance Type may be used when the pay value is measured on the basis of units produced, for e.g., number of boxes produced. Calendar Month Attendance Type may be used when the pay value is measured on the basis of positive attendance units (i.e. number of days present) in a user defined calendar period.
22.2.4 Pay Heads

Pay Heads may be broadly considered as Earnings and Deductions from an employees point of view. However, these pay heads would still be Expense and Liability from the employers view point. Some examples of Earnings Pay Heads are Basic Salary, Dearness Allowance, City Compensatory Allowance, House Rent Allowance, Night Shift Allowance, Uniform Allowance, Sales Commission and so on. Some examples of Deductions pay heads are Employees Provident Fund (EPF), Employees State Insurance (ESI), Professional Tax, Income Tax, TDS, Advance (if any). In Tally.ERP 9, each pay head is to be created as an individual ledger account and grouped under its respective group i.e., all Earnings pay heads under Indirect Expenses group or Direct Expenses group and all Deductions pay heads under Current Liabilities, Curent Assets and Duties & Taxes group. The preset Pay Head types in Tally.ERP 9 are: 1. 2. 3. 4. 5. 6. 7. 8. 9. Earnings for Employees Deductions from Employees Employees Statutory Deductions Employers Statutory Contributions Employers Other Charges Bonus Gratuity Loans and Advances Reimbursements to Employees
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The pay heads marked with the above pay head types will be available during payroll processing, and if the Pay Head Type is marked as Not Applicable, will not be available. The Salary Payable, PF Payable, ESI Payable ledgers are required to be created, by selecting Not Applicable as Pay Head Type. Create the following pay heads in the books of M/s. Indus Solutions Pvt. Ltd. I. Earning Pay Heads Create the following Earnings Pay Heads: Pay Head Name Pay Head Type Under Affect Net Salary Name to Appea r in Payslip Basic House Rent Allowance Conveyance Overtime Pay Variable Pay Use for Gratuity Yes No Calculation Type Calculation Period/ Production Type Months
Basic Pay House Rent Allowance Conveyance Overtime Pay Variable Pay
Earnings for Employees Earnings for Employees Earnings for Employees Earnings for Employees Earnings for Employees
Indirect Expenses Indirect Expenses Indirect Expenses Indirect Expenses Indirect Expenses
Yes Yes
On Attendance As Computed Value Flat Rate On Production As User Defined Value
Yes Yes Yes
No No No
Months Overtime
i. Basic Pay Head Creation Go to Gateway of Tally > Payroll Info. > Pay Heads > Create In the Pay Heads Creation screen, 1. Type Basic Pay as the Name of the Pay Head 2. Select Earnings for Employees in the field Pay Head Type. The Pay Head Creation screen appears as shown:
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Figure 22.16 Basic Pay Head Creation Pay Head Type Selection
3. 4. 5. 6. 7.
Specify the group as Indirect Expenses in the field Under and press Enter Set Affect Net Salary to Yes Specify Basic in the field Name to appear in Payslip Set Use for Gratuity to Yes Select On Attendance in the field Calculation Type and press Enter
Description of general parameters in Pay Head creation: Affect Net Salary If this option is set to Yes, then the Pay Head will appear in the Salary Slip for calculation of Net salary. Name to appear in the Payslip If Affect Net Salary is set to Yes, then the required name for the Pay Head that appears in the Payslip should be specified against this field. Use for Gratuity This parameter should be set to Yes, for the Pay Head components that will be used for the Gratuity calculation (e.g. Basic and DA.
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The Pay Head Creation screen with the List of Calculation is displayed as shown:
Figure 22.17 Basic Pay Head Creation - Calculation Type
Calculation Type refers to the method of computation of pay components. In Tally.ERP 9, there are basically 5 calculation types. As Computed Value This method is used when the pay value is computed based on certain predefined factors i.e., slab rates, pay heads and so on. As User-Defined Value This method is used when the value of pay is not fixed and does not depend upon any pay components. Flat Rate This method is used when the value of the pay heads is fixed for the given month. This calculation type is not dependant upon attendance/production. For example, conveyance of Rs. 700 per month. On Attendance This calculation type depends upon Attendance records and is used along with rate per unit of attendance. For example, Overtime of Rs. 25 per hour. On Production This method is used when the pay value is measured based on work done i.e., pieces or numbers produced/manufactured.
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8. Select Present in the field Attendance/ Leave with Pay. The Pay Head Creation screen with the List of Attendance Types is displayed as shown below:
Figure 22.18 Pay Head Creation screen with List of Attendance Types
If the user intends to record Negative Attendance viz., Absent (i.e if the pay value is measured on the basis of negative attendance units), select Not Applicable in the Attendance/ Leave with Pay field and press Enter & then select Absent in the Leave without Pay field. In the above example, we have selected Positive Attendance unit i.e Present.
9. Select Months in Calculation period field and press Enter The Pay Head Creation screen with the List of Calculation Periods is displayed as shown:
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Figure 22.19 Pay Head Creation - Calculation Period selection
Tally.ERP 9 contains four predefined Calculation periods namely, Days Fortnights Months Weeks
10. Select User defined in the Per Day Calculation Basis field
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Figure 22.20 Pay Head Creation screen - Calculation Basis Selection
11.Press Enter to Accept
Calculation Basis refers to the periodicity of the given calculation period. As per Calendar Period refers to the perpetual calendar month, i.e. if the payroll process is carried out for the month of March, then the attendance records will be entered for 31 days. User Defined Value refers to the consistent payroll period irrespective of calendar month, i.e. If an employees salary is based on a standard month of 30 days irrespective of the calendar month, then you can select User Defined as the Calculation Basis and define the periodicity of the specified period or month. For example, an employees monthly salary is Rs. 3,000 and the calculation basis is defined as a month of 30 days. If he takes 3 days leave in January (which consists of 31 days), then the salary per day is computed as (Rs. 3000/30 days, i.e. 100). The net salary after deducting the leave salary [i.e. Rs. 300 (3 days x Rs. 100)] amounts to Rs. 2,700.
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User Defined Calendar Type refers to the calendar month as defined by the user, i.e. if the payroll process is carried out for the particular month considering 26 days and in some months with 28 days (where the months extends to 5 weeks).
12. Specify the Months of 26 Days and press Enter
Figure 22.21 Pay Head Creation screen - Calculation period
13.Select Normal Rounding as the Rounding Method and press Enter.
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Figure 22.22 Pay Head Creation screen Rounding Method selection
14.Specify 1 as the rounding Limit (The Rounding limit allows the value to be in multiples of the limit specified and is based on the Rounding Method selected)
There are 4 methods of Rounding Off in Tally.ERP 9 which are as follows: Not Applicable The decimal points will be taken into consideration, and the amount will not be rounded off. Downward Rounding The decimal points will not be taken in to consideration and the amount will be rounded off to the lower value. Normal Rounding The amount will be rounded off to the nearest currency value. Upward Rounding The amount will be rounded off to the higher value.
The completed Basic Pay Head Creation screen is displayed as shown.
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Figure 22.23 Completed Basic Pay Head Creation screen
15.Press Enter to Accept the screen. ii. House Rent Allowance Pay Head Creation In the Pay Head Creation screen, 1. 2. 3. 4. 5. 6. 7. Type House Rent Allowance as the Name of the Pay Head Select Earnings for Employees in the field Pay Head Type Specify the group as Indirect Expenses in the field Under and then press Enter Set Affect Net Salary to Yes Specify House Rent Allowance as the Name to appear in Payslip Set Use for Gratuity to No Select As Computed Value in the Calculation Type field and press Enter
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Figure 22.24 HRA Pay Head Creation screen - Calculation Type selection
8. Select Normal Rounding as the Rounding Method and 1 as the rounding Limit and press Enter 9. In the Computation Info screen, select On Specified Formula in the Compute field.
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Figure 22.25 Pay Head Creation screen with Compute method
Computation on details: On Current Deductions Total This calculation type is used when the value of a pay head depends upon the total of the deductions pay heads previously defined. On Current Earnings Total This calculation type is used when the value of a pay head depends upon the total earnings pay heads previously defined. On Current Sub Total This calculation type is used when the value of a pay head depends upon the net totals of earnings and deductions previously defined. On Specified Formula This calculation type is used when the pay head value is computed on the value of one or more pay heads already defined in the pay structure. (Tally.ERP 9 allows the addition and subtraction of pay heads already defined in the pay structure and multiplication and divisions using attendance types. For example, HRA is computed as 40% of the basic salary.)
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10. Press Enter and the Compute subscreen is displayed 11. In the Sub-screen Compute: Select Basic Pay as the Add Pay Head function and press Enter
Figure 22.26 Compute sub-screen
The pay head drop-down box contains pay heads already created. If any pay head(s) is a component for the given Pay Head, you may create the required Pay Head by pressing Alt+C from the above Pay Head field and make the necessary alterations in the required pay head. Select End of List
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Figure 22.27 Compute: On Specified Formula sub-screen
Press Enter to Accept the screen 12. Specify 1-4-2009 as the Effective From date (In case of a revision in pay structure, you can define the revised computation information for the given pay head, by giving the effective from date) 13. The From Amount column is automatically skipped, assuming it to be zero. Press Enter to skip the Amount Upto column 14. Select Percentage as the Slab Type from the List of Slabs
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Figure 22.28 Pay Head Creation screen - Slab Type selection
Slab Type Details: Percentage This Slab rate is used when the amount is stated as a proportion of a whole. Value This Slab rate is used when the amount is stated as absolute value.
15. Specify 40% in the Value Basis field and press Enter
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Figure 22.29 Pay Head Creation - Value Basis screen
The completed House Rent Allowance (HRA) Pay Head Creation screen is displayed as shown.
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Figure 22.30 Completed HRA Pay Head Creation screen
16.Press Enter to Accept the screen iii. Conveyance Pay Head Creation Create the Conveyance Pay Head with Calculation Type as Flat Rate. The completed Conveyance Pay Head Creation screen is displayed as shown.
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Figure 22.31 Conveyance Pay Head Creation
Press Enter to Accept the screen iv. Overtime Pay Head Creation Create the Overtime Pay Head with Calculation Type as Production. The completed Overtime Pay Head Creation screen is displayed as shown.
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Figure 22.32 Overtime Pay Head Creation screen
Press Enter to Accept the screen v. Variable Pay Head Creation Similarly, create the Variable Pay Head with Calculation Type as User Defined Value.
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Figure 22.33 Variable Pay Head Creation
II. Deduction Pay Heads Create the following Deductions Pay Heads.
Pay Head Name Employees PF Contribution @ 12%
Pay Head Type Employees Statutory Deductions
Statutory Pay Type PF Accoun t (A/c No.1)
Under
Affec t Net Salary Yes
Name to Appear in Payslip EPF @ 12%
Calculation Type As Computed Value
Computation Method On Specified Formula
Current Liabilities
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Pay Head Name Employees ESI Contribution @ 1.75%
Pay Head Type Employees Statutory Deductions
Statutory Pay Type Employ ee State Insurance
Under
Affec t Net Salary Yes
Name to Appear in Payslip ESI @ 1.75%
Calculation Type On Specified Formula
Computation Method Basic Pay + House Rent Allownce + Conveyance + Overtime Pay (or Current Earnings Variable Pay) On Current Earnings Total
Current Liabilities
Professional Tax
Employees Statutory Deductions
Professional Tax
Current Liabilities
Yes
Profession Tax
As Computed Value
i. Employees PF Contribution @ 12% Pay Head Creation Go to Gateway of Tally > Payroll Info. > Pay Heads > Create In the Pay Head Creation screen, 1. Type Employees PF Contribution @ 12% as the Name of the Pay Head 2. Select Employees Statutory Deductions in the field Pay Head Type and press Enter
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Figure 22.34 Employees' PF Contribution @ 12% Pay Head Creation
3. Select PF Account (A/c No. 1) in the Statutory Pay Type field as shown
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Figure 22.35 Employees' PF Contribution @ 12% Statutory Pay Type selection
4. Specify the group as Current Liabilities in the field Under and press Enter (In Tally.ERP 9, only relevant groups appear during selection, to reduce erroneous data inputs) 5. Set Affect Net Salary to Yes 6. Specify EPF @ 12% in the field Name to appear in Payslip 7. As Computed Value appears in the field Calculation Type by default 8. Select Normal Rounding as the Rounding Method. Specify 1 as the rounding Limit and press Enter 9. Select On Specified Formula as the Compute method and press Enter 10. In the Compute sub-screen, select Basic Pay as the Add Pay Head function and press Enter
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Figure 22.36 Deduction Pay Head Creation screen Compute On selection
11.Press Enter to Accept the screen 12.Specify 1-4-2009 as the Effective From date 13.The From Amount column is automatically skipped, assuming the amount to be zero 14.Specify 6500 in the Amount Upto column and press Enter
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Figure 22.37 Deduction Pay Head Creation Computation Info.
15.Select Percentage as the Slab Type from the List of Slabs 16.Specify 12% as the Value Basis Percentage and press Enter (the From Amount is defaulted as 6500) 17.Press Enter to accept the upper level as 0 and select Value as the Slab Type from the List of Slabs 18.Specify Rs. 780 in the Value Basis field and then press Enter
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Figure 22.38 Deduction Pay Head Creation screen with Value Basis
19.Press Enter twice The completed Employees PF Contribution @ 12% Pay Head Creation screen is displayed as shown:
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Figure 22.39 Completed Employees PF @ 12% Pay Head Creation screen
20.Press Enter to Accept the screen ii. Employees ESI Contribution @ 1.75% Pay Head Creation Create Employees State Insurance (ESI) Pay Head as discussed. In the Pay Head Creation screen, 1. 2. 3. 4. 5. 6. 7. 8. Type Employees ESI Contribution @ 1.75% as the Name of the Pay Head Select Employees Statutory Deductions in the field Pay Head Type Select ESI in the field Statutory Pay Type Specify the group as Current Liabilities in the field Under and press Enter Set Affect Net Salary to Yes Specify ESI @ 1.75% in the field Name to appear in Payslip As Computed Value appears by default in the field Calculation Type Select the option Normal Rounding as the Rounding Method. Specify 1 as the rounding Limit and press Enter 9. Select On Specified Formula in the field Compute and press Enter
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Figure 22.40 Employee's ESI Pay Head creation screen - Compute On Selection
10.In the Compute On Sub-screen, subscreen, Select Basic Pay as the Add Pay Head function and press Enter Select House Rent Allowance as the second Pay Head in the Add Pay Head Function Similarly, select Conveyance and Overtime Pay as the Add Pay Head function
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Figure 22.41 Employee's ESI Pay Head creation screen - Add Pay Head selection
Select End of List and press Enter
Any income of a regular nature will be subject to ESI calculation viz., Basic Pay, Dearness Allowance, House Rent Allowance, Conveyance, Overtime etc.
11.Specify 1-4-2009 as the Effective From date 12.The From Amount and Amount Upto fields are skiped as the amount is already entered in the Statutory & Taxation screen 13.Select Percentage as the Slab Type from the List of Slabs 14.Specify 1.75% as the Value Basis Percentage and press Enter The Pay Head creation screen appears as shown:
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Figure 22.42 Employee's ESI Pay Head creation screen Slab Rate
The completed ESI Employees Contribution Pay Head Creation screen is displayed as shown:
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Figure 22.43 Completed ESI Employees Contribution Pay Head Creation screen
15.Press Enter to Accept the screen. iii. Professional Tax Pay Head Creation Create Professional Tax Pay Head ledger with the required Slab rates. The completed Professional Tax Pay Head Creation screen is displayed as shown:
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Figure 22.44 Profession Tax Pay Head Creation
Press Enter to Accept
22.2.5 Gratuity
Apart from the above Pay Heads, create Gratuity Expenses (Provisional) Account in order to get provisional Gratuity liability report for the employer at any given period. Gratuity refers to the monetary benefit given by the employer to the employee at the end of the employment for the services rendered over a period of employment either by law or otherwise. It is calculated provisionally at the end of each financial period to assess the possible liability of the company towards its employees. A Gratuity Provisional Account is created to capture the details required for the calculation of gratuity. Gratuity is calculated based on select salary components. The formula used for Gratuity calculation is as follows.
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* Eligible salary refers to the sum of pay heads covered in the employees latest pay structure, for the relevant period. The pay heads must be set to Yes for Use for gratuity and the Gratuity ledger should be part of the pay structure. # Served period is computed from the date of joining to the end date of calculation period. Served period may be proportionate such as 11 years 10 months and 5 days. When Served period covers more than one slab, the total of calculation of all slabs will constitute the gratuity provisional amount of the employee.
Gratuity Pay Head Creation Ledger Gratuity Expenses (Provisional) Pay Head Type Gratuity Under Provisions (Current Liabilities)
In the Pay Head Creation screen, 1. Type Gratuity Expenses (Provisional) as the Name of the Pay Head 2. Select Gratuity in the field Pay Head Type. The Slab Rate details for Gratuity Calculation screen are displayed. 3. In the Gratuity Calculation subscreen, specify the following details: Specify Gratuity Days of a Month as 26 Enter 1 and 60 (months) in the From and To fields under the Number of Months column Specify 0 in the field Eligibility days for Gratuity Calculation per year Similarly, select 61 and 120 in the From and To fields Specify 15 in the Eligibility days for Gratuity Calculation per year field Press Enter to accept 121 in the field From Specify 15 in the field Eligibility days for Gratuity Calculation per year
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The Slab Rate Details for Gratuity calculation screen is displayed as shown.
Figure 22.45 Slab Rate Details for Gratuity Calculation screen
4. Press Enter to Accept the screen
Gratuity parameter details: Gratuity days of a Month The number of days per calendar month varies from 28 to 31. In this case, you can apply a consistent period of 26 days (excluding 4 Sundays) for all employees irrespective of their month of leaving. It can also be fixed by law. Number of months From and To This represents the months until which the eligible days are applicable in the Slab system, beginning from the date of joining. Eligibility days for Gratuity Calculation per year This refers to the Number of days pay given as gratuity for the entire slab. If the slab period has not ended, then the slab is applied based on the number of months covered in the previous slab. If the number of days eligible is zero (0), then the eligible days mentioned in the next slab are considered.
5. Specify the group as Provisions (Current Liabilities) in the field Under and press Enter
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The completed Gratuity Expenses (Provisional) Pay Head Creation screen is displayed as shown.
Figure 22.46 Gratuity Expenses Ledger Creation screen
6. Press Enter to Accept the screen.
22.2.6 Salary Details Setup

The Salary Details masters contain information on the Employee Group/ individual employee pay structure, comprising both earnings and deductions pay components for the applicable period. Businesses having a common pay structure for a particular department or division or set of employees can define salary details for an employee group and classify individual employees under the specified group to inherit the parent pay values. The Employee Group master prefills the parent group values to the individual employee masters created under them. It reduces the possibility of erroneous data entry and expedites data entry. This categorisation also helps in generation of Group-wise reporting. Pay structure constituting the Pay Heads and basis of calculation should be similar for the employees falling under the same group, but pay values need not be same. Tally.ERP 9 also allows you to set up individual employee salary details with all parameters applicable for Employee groups. The individual employee masters with separate pay structure are usually created on a case-to-case basis.
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To define Salary Details for employees, Go to Gateway of Tally > Payroll Info. > Salary Details > Create
Figure 22.47 List of Employee Groups/ Employees screen
1. Select Rohit Roy from the List of Employees and press Enter In the Salary Details screen, The Effective date is entered as 01-04-2009 by default based on the Date of Joining entered in the Employee Master Select Basic Pay as the Pay Head from the List of Pay Heads Specify 7,000 as Rate The Attendance units, Pay Head Type and Calculation Type appear by default, based on the pay head definitions. The Salary Details Creation screen is displayed as shown:
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Figure 22.48 Salary Details Creation screen
2. 3. 4. 5. 6. 7. 8. 9.
Select House Rent Allowance as the second Pay Head and press Enter Select Conveyance as the next Pay Head Specify 500 as Rate and press Enter Select Overtime Pay as the Pay Head Specify 40 as the Rate and press Enter Select Variable Pay as the Pay Head and press Enter Select Professional Tax against the Pay Head and press Enter Select Employees PF Contribution @ 12% and Employees ESI Contribution @ 1.75% as Pay Heads and press Enter 10.Select the Gratuity Expenses (Provisional) ledger and press Enter
In case of Employees eligible for Gratuity, the Gratuity Expenses ledger is required to be included in the Salary details of the respective Employee for provisional assessment of Gratuity.
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The completed Salary Details Creation screen for Mr. Rohit Roy is displayed as shown:
Figure 22.49 Completed Salary Details screen
Tally.ERP 9 allows you to modify the pre-defined Slab rates, by pressing F12: Configure and setting the option Allow to Override Slab Percentage to Yes.
In case a revision in pay structure is required for any subsequent period, define the latest pay structure by specifying the relevant Effective from date.
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Similarly, create the pay structure for the other employees as per the details given in the following table: Pay Head Basic Pay House Rent Allowance Conveyance Overtime Pay Variable Pay Professional Tax Employees PF Contribution @ 12% Employees ESI Contribution @ 1.75% Gratuity Expenses (Provisional) Preeti Sinha 12,000 40% User defined Applicable as Slab Rates Applicable as Slab Rates Applicable as Slab Rates Only for reporting purpose Atul Sharma 20,000 40% 2,500 Ramesh Arora 18,000 20% 2,000 150
Salary Details for Ramesh Arora can be created similar to the Salary Details creation for Rohit Roy. Since Ramesh Arora and Atul Sharma work for Sales Department, we may create the Salary Details for the Sales Group and inherit the same for the Employees (Ramesh Arora and Atul Sharma). Salary Details creation for Sales Group Go to Gateway of Tally > Payroll Info. > Salary Details > Create 1. From the List of Group / Employees select Sales 2. Select the Pay Heads from the List of Pay Heads which are applicable to this group. 3. Leave the Rate field empty if there is no standard rate. The completed Salary structure for the Sales Group is as shown.
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Figure 22.50 Completed Salary Details for Sales Group
The Pay structure created above can be inherited for all the employees belonging to Sales Group. This feature helps in eliminating the repititions while creating the Salary Details and expedites the pay structuring process. To define the Salary Details for Mr. Ramesh Arora belonging to Sales Group, follow the steps given below: Go to Gateway of Tally > Payroll Info. > Salary Details > Create 1. From the List of Group / Employees select Ramesh Arora and press Enter 2. Select Copy From parent Value from the Start Type options under Pay Head The Salary Details Creation screen appears as shown:
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Figure 22.51 Salary details Creation Copy From Parent Value
Start Type Details: Copy From Parent Value will copy the pay structure from the Group to which the Employee belongs. This will help you to save time in creating the Salary Details for large number of Employees. Start Afresh will allow the user to start selecting the Pay Head from the List of pay Heads already created.
3. The Pay Structure (comprising of Earning & Deductions pay heads) defined for Group is prefilled automatically. 4. Enter the values for each Pay Head for Ramesh Arora as per the details mentioned earlier. 5. Press F12: Configure, set the option Allow to Override Slab Percentage to Yes, since the HRA calculation percentage is 20%.
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The Salary Details Configuration screen is displayed as shown.
Figure 22.52 Salary Details Configuration
Press Enter to Accept 6. Now, you will be able to enter the user-defined pay rates to compute the HRA, specify 20% and press Enter
In the Salary Details Configuration screen, when the option Allow to Override Slab Percentage is set to Yes, the predefined slab rates for the Pay Heads can be modified as per user requirements.
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The completed Salary Details screen of Mr. Ramesh Arora is displayed as shown.
Figure 22.53 Completed Salary Details screen
7. Press Enter to Accept the screen. Similarly, you can create the Salary Details for Atul Sharma.
22.3 Processing Payroll in Tally.ERP 9

Typically, Payroll Processing comprises of the following activities : Recording of Attendance (on time / work) Processing Payroll Vouchers Payment of Salaries There are three types of Payroll Vouchers namely Attendance Voucher, Payroll Voucher and Payment Voucher, which are by default preset in Tally.ERP 9 to record above Payroll transactions. Payroll Vouchers are used for the purposes of operating your payroll and also records the attendance of the employees for a given period. These vouchers are basically used to input information pertaining to Payroll processing.
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22.3.1 Attendance Vouchers

An Attendance Voucher is used to record employees attendance data, based on Attendance/ Production types (i.e., present or absent days, overtime hours and so on). An Attendance Voucher allows you to record the attendance/ production units for employees. Tally.ERP 9 gives you the flexibility to enter the attendance records through a single attendance voucher for a payroll period, or through multiple attendance vouchers as and when required within a payroll period. You also have the option of recording one attendance/ production voucher per employee per day or collectively for a month or any other variation thereof for all the employees. In Tally.ERP 9, the auto-fill facility (Alt+A) is used to prefill the required Attendance/Production types data for the selected employee group/ employee for the specified period. Example 1: On 30th April, 2009 the attendance records of Indus Solutions Pvt. Ltd., displayed the following details : Attendance/ Production Types Present Days Overtime hours Rohit Roy 26 720 Mins Preeti Sinha 18 Atul Sharma 20 360 Mins Ramesh Arora 22 -
In the above scenario, separate attendance vouchers are required to be entered for recording Present days and Overtime hours. Go to Gateway of Tally > Payroll Vouchers 1. Press Ctrl+F5 for Attendance Voucher The Attendance Voucher Creation screen is displayed as shown:
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Figure 22.54 Attendance Voucher Creation screen
2. Press F2 and specify the date as 30-4-2009 3. Press Enter 4. Press Alt+A (Attendance Auto Fill) to prefill employee payroll details The Attendance Auto Fill screen is displayed as shown:
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Figure 22.55 Attendance Voucher - Employee Filters screen
5. In the Attendance Auto Fill screen, Specify the Voucher Date as 30-04-2009 Select Primary Cost Category as Cost Category (If separate cost categories are used to capture employee cost, then select the respective cost category) Select All Items as Employee/ Group (if you want to generate payroll voucher for individual employee/ group, select the respective employee or group) The Attendance Auto Fill with Employee Filters screen is displayed as shown:
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Figure 22.56 Attendance Auto Fill with Employee List
Select Present as Attendance Type in the Attendance/ Production Type field
Figure 22.57 Attendance Auto Fill with List of Attendance Type
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Specify the Default Value to Fill as 0 Press Enter to accept the screen
When Auto fill option is used, separate Attendance vouchers are required to be passed for recording attendance on Work and Production. However, if attendance voucher is passed by manually selecting the employees, then in such cases, you may record attendance on Work as well as Production in the same Attendance Voucher. If Absent is opted as Attendance Type, then the negative attendance of the employees needs to be recorded. This method help minimise data entry time.
6. Employees pertaining to the respective Employee Groups are displayed automatically
Figure 22.58 Attendance Voucher
7. Specify the attendance details as given in the table above The Attendance Voucher Creation screen with the attendance details screen is displayed as shown:
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Figure 22.59 Attendance Voucher
8. Press Enter 9. Enter the details of the transaction in the Narration field The completed Attendance Voucher Creation for Present Attendance is displayed as shown:
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Figure 22.60 Completed Attendance Voucher Screen
10.Press Enter to accept the completed Attendance Voucher screen
Days with Loss of Pay (LOP) are treated as a Deductible with respect to the Earnings Pay Head type and as a Payable with respect to the Deductions Pay Head type. For example, LOP is deducted from the Basic salary (Earnings Pay Head) and Canteen expenses (Deductions Pay Head) are treated as a payable.
In the same way, create an Attendance Voucher for Overtime hours. The completed Attendance Voucher for Overtime Hours is displayed as shown.
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Figure 22.61 Attendance Voucher Screen - Overtime
You can also record Overtime in hours, provided the Unit of Measurement for the Payroll unit is defined as Hrs.
After creating the Attendance Voucher, you can change any attendance value for a particular employee, if required, in the Voucher Alteration mode.
22.3.2 Payroll Vouchers

A payroll voucher is used to record all employee-related transactions. It enables you to compute all the values for the respective Pay Heads (Earnings and Deductions). The calculations are made on the basis of the definitions specified in the pay head masters, pay structure and attendance entries. In Tally.ERP 9, you can pass payroll vouchers manually for individual employee as well as for the entire group/ organisation by using the Auto Fill facility (Alt+A).
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In Tally.ERP 9, the disbursement of salaries can be effected in any of the following modes. Direct Remittance in cash or by cheque Bank Transfer a direct transfer is made to an employees bank account and the list of disbursement is printed separately. I. Cash (or Direct) Remittance Example 2: On 30th April, 2009, Indus Solutions Pvt. Ltd., processes Payroll for all the employees and entitled the following employees for Variable Pay. Particulars Variable Pay Rohit Roy 1500 Preeti Sinha Atul Sharma 1000 Ramesh Arora -
Go to Gateway of Tally > Payroll Vouchers 1. 2. 3. 4. Press Ctrl+F4 for Payroll Voucher Press F2, specify the date as 30-4-2009 and press Enter Press Alt+A (Payroll Auto Fill) to prefill employee payroll details In the Employee Filters screen, Select Salary in the Process for field
Figure 22.62 Payroll Autofill with Process List
In Tally.ERP 9, the following processes are preset for faster processing of Payroll : Salary : This process is used for processing salaries for a specified period wherein Salaries are disbursed through Cash or a bank transfer. ESI Contribution : This process is used for processing Employers contributions towards ESI for a specified period. PF Contribution : This process is used for processing Employers Provident Fund (PF) contributions for a specified period.
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Specify 1-4-2009 in the From field Specify 30-4-2009 in the To field
Figure 22.63 Payroll Autofill with List of Employees
Select All Items as Employee/Group The completed Employee Filters screen is displayed as shown:
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Figure 22.64
Payroll Autofill with payment Ledger list
Select Cash in the Payroll Ledger field Press Enter to accept the screen (the Cash ledger is prefilled in the Account field) All the pay values are calculated for the applicable pay heads for each employee grouped under the selected group. The Payroll Voucher Creation screen is displayed as shown:
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Figure 22.65 Payroll Voucher Creation
5. Press Enter and specify the pay values for the pay heads defined as user-definable values against each employee (in this case, define the Variable Pay) Specify 1000 as Variable Pay for Atul Sharma
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Figure 22.66 Payroll Voucher - adding Variable pay
Similarly, specify 1500 as Variable Pay for Rohit Roy and press Enter The completed Payroll Voucher Creation screen is displayed as shown:
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Figure 22.67 Completed Payroll Voucher
Press Alt+S to pass the above voucher in the Voucher mode.
II. Bank Transfer Bank transfer refers to disbursement of Salaries directly into the Employee Bank Accounts by intimating the Bank through Payment advice. Tally.ERP 9 facilitates processing salaries through Bank transfer with the help of predefined Salary process. Example 3: On 31st May, 2009 Indus Solutions Pvt. Ltd., disbursed Salaries payable for the month of May 2009 through Bank Transfer. The attendance records displayed the following details :
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: Attendance/Production Types Present Days Overtime Hours Rohit Roy 25 Preeti Sinha 20 Atul Sharma 26 Ramesh Arora 21 120 Min (2hr x 60min)
On 31st May 2009, Indus Solutions Pvt. Ltd., processes Payroll for all the employees and entitled the following employees for Variable Pay. Particulars Variable Pay Rohit Roy 500 Preeti Sinha Atul Sharma Ramesh Arora 1200
Step 1 : Create Attendance Voucher Create Attendance Vouchers for Present days and Overtime hours for May 2009 as per the details given in the above table. The completed Attendance Voucher for Present days is displayed as shown:
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Figure 22.68 Attendance Voucher for Present days
Press Enter to accept In the same way, create an Attendance Voucher for Overtime Hours. The completed Attendance Voucher for Overtime Hours is displayed as shown:
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Figure 22.69 Attendance Voucher for Overtime Hours
Press Enter to accept Step 2 : Create Salary Payable Ledger Before passing the Salary payment voucher, create the following ledger: Ledger Salary Payable Pay Head Type Not Applicable Under Current Liabilities
Go to Gateway of Tally > Payroll Info. > Pay Heads > Create The completed Salary Payable Ledger creation screen is displayed as shown:
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Figure 22.70 Salary Payable Ledger Creation
Press Enter to accept Step 3 : Create Payroll Voucher Go to Gateway of Tally > Payroll Vouchers 1. 2. 3. 4. Press Ctrl+F4 for Payroll Voucher Press F2, specify the date as 31-05-2009 and press Enter Press Alt+A (Payroll Auto Fill) to prefill employee payroll details In the Employee Filters screen, Select Salary in the Process for field as shown
Figure 22.71 Payroll Autofill with List of Processes
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Specify 01-05-2009 in the From field Specify 31-05-2009 in the To field Select All Items as Employee/Group Select Salary Payable in the Payroll Ledger field as shown
Figure 22.72 Payroll Autofill - List of Ledger Accounts
5. Press Enter (All the pay values are calculated for the applicable pay heads for each employee grouped under the selected group). 6. Press Enter and specify the pay values for the pay heads defined as user-definable values against each employee Specify 1200 as Variable Pay for Ramesh Arora Specify 500 as Variable Pay for Rohit Roy The completed Payroll Voucher for the month of May 2009 is displayed as shown:
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Figure 22.73 Completed Payroll Voucher
7. Press Enter to accept After passing the above entry, the salaries payable for the month of May 2009 are transferred to the Salary Payable Ledger, at the time of payment of salaries, the amount is reversed.
22.3.3 Payment of Salaries (Salary Disbursement)

In Tally.ERP 9, Payment voucher can be used to effect salary disbursement to employees. The payment voucher for the salaries payable may be passed through regular payment voucher or automated using the preset Salary Payment process available in Tally.ERP 9 for error free data input during Payroll Payment entry with the help of Auto Fill facility. Example 4: On 31st May 2009, Indus Solutions Pvt. Ltd., paid the salaries due for the month of May 2009. Before passing the payment voucher, necessary Bank Accounts should be created. To make the Salary payment, follow the steps given below:
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Go to Gateway of Tally > Accounting Vouchers 1. 2. 3. 4. Press F5 for Payment Voucher Press F2, specify the date as 31-05-2009 and press Enter Press Alt+A (Payroll Auto Fill) to prefill employee payroll details In the Employee Filters screen, Select Salary Payment in the Process for field as shown.
Figure 22.74 Disburse Employee Filters - Payment Process Selection
Specify 01-05-2009 as From period Specify 31-05-2009 as To period Select All Items in the Employee/Group field Select HDFC Bank in the Bank / Cash Ledger field as shown. Select Salary Payable in the Payroll Ledger field The completed Employee Filters screen displays as shown.
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Figure 22.75 Disburse Employee Filters screen
5. Press Enter and the employee payroll details appear by default. 6. Enter the details of the transactions in the Narration field The completed Payroll Payment Entry screen is displayed as shown.
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7. Press Enter to accept If a partial payment of salaries is made to a particular group of employees, then generate a separate payroll voucher for their payables and pass a separate payment entry based on the settlement. However, Tally.ERP 9 also allows you to modify the payment amount to the Employees. The unpaid salary will remain as outstanding in the Salary payable account and can be auto-filled in the payment voucher as and when the actual payments are made.
If any cash disbursements are made prior to the payment voucher entry, after using the Auto-Fill facility, select the unpaid salaries and enter zero (0) in the amount payable. If salaries are disbursed by cheque, select individual employee in the Auto Fill Employee Filter and print the cheque for the payment voucher. In such cases, a separate payroll payment entries for each employee has to be made.
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22.4 Accounting for Employer PF Contributions

The Employees' Provident Funds and Miscellaneous Provisions Act is a social security legislation which administers provident fund, family pension and insurance to employees. The Act covers three schemes namely., PF (Provident Fund scheme), EPS (Employees Pension Fund Scheme), EDLI (Employees Deposit Linked Insurance scheme). Under the Employees Provident Fund scheme, both the employees and employer contribute to the fund at the rate of 12% of the basic wages, dearness allowance, cash value of food concession and retaining allowance (if any), payable to employees per month. The rate of contribution is 10% in the case of following establishments: Any covered establishment with less than 20 employees Any sick industrial company as specified in the relevant section of Sick Industrial Companies (Special Provisions) Act, 1985 and which has been declared as such by the Board for Industrial and Financial Reconstruction Any establishment which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth and Any establishment engaged in manufacturing of (a) jute (b) Breed (d) coir and (e) Guar gum Industries/ Factories. The Contribution payable by the Employer is not allowed to be deducted from the wages of the employee. However, the employer has to deduct employee's share from their Salaries and pay the same in EPF scheme. The deduction can be only from the wages pertaining to a period for which contribution is paid. However, if there is an accidental omission, the amount can be recovered later. Out of employer's contribution of 12% or 10%, the Employer's contribution of 8.33% is diverted to Employees' Pension Scheme and the balance is retained in the EPF scheme. On retirement, the employee gets his full share plus the balance of Employer's share retained to his credit in EPF account. Once an establishment is covered under PF, all its departments and branches wherever they are situated are also covered. i. Employees' Pension Scheme : As discussed above, the employer's contribution of 8.33% is diverted to the fund of Pension Scheme and the balance 3.67% (1.67%, if the contribution is 10%) is credited in employee's name in Provident Fund account. The contribution of 8.33% is on maximum salary of Rs. 6,500. However, if the some employers are paying contribution on salary in excess of Rs. 6,500, the excess contribution will be credited to Provident Fund account and not to Pension scheme. Benefits under the Scheme Members will get pension on superannuation or retirement from service and upon disablement during employment. Family pension will be available to widow/widower for life or till he/she remarries. In addition, children will be entitled to pension, upto 25 years of their age. In case of orphans, pension at enhanced rate is available upon death of widow/widower or ceasing payment of widow
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pension. Benefit of pension to children or orphan is only restricted for two children/orphans. If the person is unmarried or has no family, pension is available to nominee for a specified period. ii. Employees Deposit Linked Insurance Scheme : The purpose of the scheme is to provide life insurance benefits to employees who are already covered under PF/EPS. The employer has to pay contribution equal to 0.50% of the total wages of employees. In addition, administrative charges of 0.1% of total wages.The employee does not have to contribute any amount to the scheme. The salary limit for coverage of employees is same as that of Provident Fund. Benefit to nominee of employee In case of death of an employee during employment, his nominee or family member gets an amount equal to average balance in the Provident Fund Account of the deceased employee during last 12 months. As discussed earlier, the statutory features viz., EPF & ESI etc., are required to be configured in F11: Statutory & Taxation Features. In this section, we will discuss, recording of transactions related to computation and contribution of Provident Fund. Example 5: On 30th April, 2009 M/s. Indus Solutions Pvt. Ltd., processed Provident Fund contributions for the month of April 2009 and paid the amount in full to EPFO. The same is accounted as shown : In Tally.ERP 9, follow the steps given below to process Employer contribution towards Provident Fund: Create Employer PF Contribution Masters Alter/Modify Salary Details Processing Employer PF Contribution Processing PF Admin Expenses Payment of Provident Fund
22.4.1 Creating Employer PF Contribution Masters

In Tally.ERP 9, Employer contribution towards Employees Pension Fund (Employees Pension Scheme), Provident Fund, Admin Charges and other PF related ledgers are required to be created separately for appropriate Accounting and reporting. Create the following ledgers in Tally.ERP 9, 1. Employer Contributions Pay Head 2. Employer PF Admin Charges
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3. PF Payable Ledger 4. PF Admin Expenses Ledger I. Employer Contributions Pay Head Pay Head Name Employer EPS @ 8.33% Employer EPF @ 3.67% Pay Head Type Employers Statutory Contributions Employers Statutory Contributions Statutory Pay Type EPS Account (A/c No.10) PF Account (A/c No.1) Under Indirect Expenses Indirect Expenses Affect Net Salary No Calculation Type As computed value As computed value
No
i. Employer Contribution EPS @ 8.33% Pay Head Creation Go to Gateway of Tally > Payroll Info. > PayHeads > Create In the Pay Heads Creation screen, 1. Type Employer EPS @ 8.33% as the Name of the Pay Head 2. Select Employers Statutory Contributions in the field Pay Head Type 3. In Statutory Pay Type field, select EPS Account (A/c No. 10) as shown
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Figure 22.77 Employer EPS @ 8.33% Pay Head Creation
4. Specify the Group as Indirect Expenses in the Under field and press Enter 5. Set Affect Net Salary to No 6. The Calculation Type is defaulted automatically as As Computed Value and Calculation Period as Months 7. Select Normal Rounding as the Rounding Method and 1 as the rounding Limit and press Enter 8. In the Computation Info section, Select On Specified Formula in the Compute field Press Enter, the Compute subscreen appears In the Compute Sub screen, Select Basic Pay as the Add Pay Head function from the list of Pay Heads as shown.
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Figure 22.78 Compute Subscreen
Select End of List 9. Specify 1-4-2009 as the Effective From date 10.Specify 6500 in the Amount Upto column 11.Select Percentage as the Slab Type from the List of Slabs and specify 8.33% in the Value Basis field and press Enter 12.The From Amount is prefilled as 6500, press Enter to skip the Amount Upto field 13.Select Value as the Slab Type from the List of Slabs 14.Specify 541 in the Value Basis field and press Enter The completed Employer EPS @ 8.33% Pay Head Creation screen is displayed as shown:
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Figure 22.79 Completed Employer EPS Pay Head Creation Screen
15.Press Enter to accept ii. Employer Contribution EPF @ 3.67% Pay Head Go to Gateway of Tally > Payroll Info > PayHeads > Create In the Pay Heads Creation screen, 1. Type Employer EPF @ 3.67% as the Name of the Pay Head 2. Select Employers Statutory Contributions in the field Pay Head Type 3. In Statutory Pay Type filed select PF Account (A/c No. 1) The Pay Head Creation screen appears as shown:
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Figure 22.80 Employer EPF @ 3.67% Pay Head Creation
4. Specify the group as Indirect Expenses in the Under field and press Enter 5. Set Affect Net Salary to No 6. The Calculation Type is defaulted automatically as As Computed Value and Calculation Period as Months 7. Select Normal Rounding as the Rounding Method and 1 as the rounding Limit and press Enter 8. In the Computation Info section, Select On Specified Formula in the Compute field Press Enter and the Compute On subscreen displays In the Compute sub-screen, Select Employees PF Contribution @ 12% from the List of Pay Heads as the Add Pay Head function and press Enter Select Subtract Pay Head in Function and under Pay Head select Employer EPS @ 8.33% from the List of Pay Heads. The Compute sub-screen appears as shown:
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Figure 22.81 Compute Subscreen
Select End of List Specify 1-4-2009 as the Effective From date Press Enter to skip the Slab fields Select Percentage as the Slab Type from the List of Slabs Specify 100% in the Value Basis field and press Enter The completed Employer EPF @ 3.67% Pay Head Creation screen is displayed as shown:
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Figure 22.82 Completed Employer EPF Pay Head Creation Screen
Alternatively, you can also define the criteria for computation of Employer PF Contribution @ 3.67% Pay head, by selecting Basic Pay in the Compute subscreen. and defining the percentage as 3.67%.
II. Employer PF Admin Charges Pay Head Name Pay Head Type Employers Other Charges Statutory Pay Type Admin Charges (A/c No.2) Under Affect Net Salary No Calculation Type As computed value
PF Admin Charges @ 1.10%
Current Liabilities
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Pay Head Name
Pay Head Type Employers Other Charges Employers Other Charges
Statutory Pay Type EDLI Contribution (A/c No.21) EDLI Admin Charges (A/c No.22)
Under
Affect Net Salary No No
Calculation Type As computed value As computed value
EDLI Contribution @ 0.5% EDLI Admin Charges @ 0.01%
Current Liabilities Current Liabilities
i. PF Administrative Charges @ 1.10% Pay Head Creation Go to Gateway of Tally > Payroll Info > PayHeads > Create In the Pay Heads Creation screen, 1. Type PF Administrative Charges @ 1.10% as the Name of the Pay Head 2. Select Employers Other Charges in the field Pay Head Type 3. In Statutory Pay Type field, select Admin Charges (A/c No. 2) as shown
Figure 22.83 PF Admin Charges Pay Head creation
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4. Specify the group as Current Liabilities in the Under field and press Enter 5. Set Affect Net Salary to No 6. The Calculation Type is defaulted automatically as As Computed Value and Calculation Period as Months 7. The Rounding Method is defaulted to Normal Rounding and 1 defaulted as the rounding Limit 8. In the Computation Info section, On PF Gross is selected automatically in the Compute field Specify 1-4-2009 as the Effective From date Specify 6500 in the Amount Upto column Select Percentage as the Slab Type and specify 1.10% in the Value Basis field and press Enter The completed PF Admin Charges @ 1.10% Pay Head Creation screen is displayed as shown:
Figure 22.84 Completed Pay Head Creation - PF Admin Charges
9. Press Enter to accept ii. EDLI Contribution @ 0.5% Pay Head Creation Go to Gateway of Tally > Payroll Info > PayHeads > Create
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In the Pay Heads Creation screen: 1. Type EDLI Contribution @ 0.5% as the Name of the Pay Head 2. Select Employers Other Charges in the field Pay Head Type. 3. In Statutory Pay Type filed select EDLI Contribution (A/c No. 21) as shown.
Figure 22.85 EDLI Contribution Pay Head Creation
4. Specify the group as Current Liabilities in the field Under and press Enter 5. Set Affect Net Salary to No 6. In the Computation Info screen, In the Compute field, On PF Gross is selected by default. Specify 1-4-2009 as the Effective From date (In case of a revision in pay structure, you can define the revised computation information for the given pay head, by giving the effective from date) The From Amount column is automatically skipped, assuming it to be zero. Enter 6500 in the Amount Upto column. Select Percentage as the Slab Type from the List of Slabs Specify 0.5% in the Value Basis field and press Enter
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The completed EDLI Contribution @ 0.5% Pay Head Creation screen is displayed as shown:
Figure 22.86 Completed Pay Head for EDLI Contribution
7. Press Enter to accept and save the Pay Head iii. EDLI Administrative Charges @ 0.01% Pay Head Creation Go to Gateway of Tally > Payroll Info > PayHeads > Create In the Pay Heads Creation screen, 1. Type EDLI Administrative Charges @ 0.01% as the Name of the Pay Head 2. Select Employers Other Charges in the field Pay Head Type 3. In Stautory Pay Type filed select EDLI Admin Charges (A/c No. 22) The Pay Head Creation screen appears as shown:
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Figure 22.87 EDLI Admin Charges Pay Head Creation
4. Specify the group as Current Liabilities in the field Under and press Enter 5. Set Affect Net Salary to No 6. In the Computation Info screen, On PF Gross is selected in the Compute field, by default Specify 1-4-2009 as the Effective From date The From Amount column is automatically skipped, assuming it to be zero. Enter 6500 in the Amount Upto column Select Percentage as the Slab Type from the List of Slabs Specify 0.01% in the Value Basis field and press Enter The completed EDLI Administrative Charges @ 0.01% Pay Head Creation screen is displayed as shown.
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Figure 22.88 Completed pay Head for EDLI Admin Charges
7. Press Enter to accept and save the Pay Head. III. PF Payable Ledger To process the Employer PF Contribution, create PF Payable Ledger as explained below: Ledger PF Payable Pay Head Type Not Applicable Under Current Liabilities
Go to Gateway of Tally > Payroll Info. > Payheads > Create 1. Type PF Payable in the Name field 2. In the Pay Head Type field select Not Applicable 3. Specify the Group as Current Liabilities in the Under field and press Enter The completed PF Payable Ledger creation screen is displayed as shown:
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Figure 22.89 Completed PF Payable Ledger Creation
4. Press Enter to accept. IV. PF Admin Expenses Ledger To process the Employer Other Charges (PF Admin, EDLI Contribution and EDLI Admin expenses), create PF Admin Expenses Ledger as explained below: Ledger PF Admin Expenses Under Indirect Expenses
Go to Gateway of Tally > Accounts Info. > Ledgers > Create 1. In the Name field type PF Admin Expenses 2. Specify the group as Indirect Expenses in the field Under and press Enter The completed PF Admin Expenses Ledger creation screen is displayed as shown:
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Figure 22.90 PF Admin Expenses Ledger Creation
22.4.2 Salary Details setup

Once the required Employer Contribution Pay Heads and Admin Expenses ledgers are created, the salary details of the Employee should be altered to constitute the Employer Contribution pay head ledgers for automatic calculations based on the monthly payments made to the Employees. Create / Alter Salary Details Master To update the salary details Master of the Employees, follow the steps given below, Go to Gateway of Tally > Payroll Info. > Salary Details > Alter 1. Select the Rohit Roy one by from the List of Groups / Employees 2. Add the Pay Heads Employer EPS @ 8.33% and Employer EPF @ 3.67% The completed Salary Details screen is as shown:
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Figure 22.91 Salary Details Alteration Screen
Similarly, include Employee Contribution Pay Heads in the Salary Details Masters of other employees.
While, including the Employer Contribution Pay Heads in the Salary Details master, the order of precedence in which the Pay Heads are included must on the basis of their calculation criteria i.e., Earning Pay Heads Deduction Pay Heads Professional Tax or Income Tax Pay Heads (if any) Employee PF Contribution Pay Heads Employer PF Contribution Pay Heads Gratuity (Gratuity is calculated on Basic Pay + DA, hence Gratuity Pay Head can be sequenced in the Salary details of an Employer in any order after Earnings Pay Heads).
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It is necessary to include Employer Contribution Pay Heads (i.e., Employer PF and Employer Pension Fund Pay Heads in the Salary Structure of the Employee, to automate the Computation of Employer PF Contribution on the basis of payments made to Employees.
22.4.3 Processing Employer PF Contribution

In Tally.ERP 9, you are required to process Employer PF Contributions, PF Admin Charges separately and make the payment towards PF comprising of Employees PF Contribution, Employer PF Admin Expenses through a combined challan. Follow the steps explained below to process Provident Fund. Step 1: Create Payroll voucher Go to Gateway of Tally > Payroll Vouchers 1. 2. 3. 4. Press Ctrl+F4 for Payroll Voucher Press F2, specify the date as 30-04-2009 and press Enter Press Alt+A (Payroll Auto Fill) to automate the employee payroll details In the Employee Filter subscreen, Select PF Contribution from the Process List drop down as shown
Figure 22.92 Employee Filters - Process List Selection
Tally.ERP 9 provides the following predefined processes that will help in processing Payroll transactions: ESI Contribution : This process is selected to automate computation of Employer ESI Contribution. PF Contribution : This process is selected to automate computation of Employer PF Contribution Salary : This process is selected to automate computation of Salaries payable to Employees.
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Specify 1-4-2009 and 30-4-2009 in the From and To Date fields respectively Select Primary Cost Category in the Cost Category field Select All Items as Employee/ Group field (To process, for a particular group / Employee select the respective Employee / group, as required) Select PF Payable Ledger from the list of Ledger Accounts drop down in the Payroll Ledger field as shown
Figure 22.93 Employee Filters screen Payroll Ledger Selection
The values for the Employer PF contributions are prefilled in the Payroll Voucher for PF Contribution process. The Payroll Voucher for Employer PF Contribution is as shown:
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Figure 22.94 Payroll Voucher Creation - PF Contribution
5. Press Enter to accept The completed Payroll Voucher for Employer PF Contribution is as shown:
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Figure 22.95 Completed PF Contribution screen
22.4.4 Processing PF Admin Expenses

Example 6: On 30th April, 2009 M/s. Indus Solutions Pvt. Ltd., processed PF Admin Expenses for the month of April 2009. To process the PF Admin Charges, follow the steps given below: Step 1: Create Journal voucher Go to Gateway of Tally > Accounting Vouchers 1. Press F7 for Journal Voucher 2. Press F2, specify the date as 30-04-2009 and press Enter 3. Press Alt+A (Other Charges Auto Fill) to prefill Employers Other Charges details Specify 1-4-2009 and 30-4-2009 in the From and To Date fields respectively Select Primary Cost Category in the Cost Category field Select All Items in the Employee/ Group field
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Select PF Admin Expenses Ledger in the Expense Ledger field
Figure 22.96 Employers Other Charges screen Expenses Ledger Selection
Select PF Admin Charges @ 1.10% Ledger in the Admin Charges (A/c No. 2) field as shown
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Figure 22.97 Employers Other Charges screen Admin Charges Ledger Selection
Similarly, select EDLI Contribution @ 0.5% and EDLI Admin Charges @ 0.01% in the EDLI Contribution (A/c No. 21) and EDLI Admin Charges (A/c No. 22) fields respectively. The completed Employers Other Charges subscreen appears as shown:
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Figure 22.98 Completed Employers Other Charges screen
Press Enter 4. Type the details of the transaction in the Narration field The completed Employer PF Expenses Voucher is as shown:
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Figure 22.99 Completed PF Expenses Voucher screen
22.4.5 Payment of Provident Fund

In Tally.ERP 9, once process for Employee and Employer contributions to Provident Fund is implemented in the manner as discussed in earlier sections, the total amount payable to EPFO is accumulated separately in three Ledger Accounts, PF Payable Account (Employer Contributions), Employee PF Contributions and the PF Admin Charges Ledger. At the time of making payment to EPFO, a payment voucher is required to be passed. Example 7: On 30th April, 2009 M/s. Indus Solutions Pvt. Ltd., made the payment in respect of EPF, EDLI Admin Expenses, EDLI Contribution and PF Admin Charges for the month of April 2009. To process the payment of Provident Fund, follow the steps given below:
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Step 1 : Create PF Payment Voucher Go to Gateway of Tally > Accounting Vouchers 1. Press F5 for Payment Voucher 2. Press F2, specify 30-04-2009 as the Voucher Date and press Enter 3. Press Alt+A (Payroll Auto Fill) to prefill PF details Select PF Challan in the Process for field from the Process List screen
Figure 22.100 Employee Filters screen - Process Selection
Enter 1-4-2009 and 30-4-2009 in the From and To Date fields respectively Specify 30-4-2009 in the Voucher Date field (This field is prefilled, if the voucher date is specified during Voucher Entry) Select Primary Cost Category in the Cost Category field Select All Items in the Employee/ Group field Select HDFC Bank in the Bank / Cash Ledger field Select PF Payable Ledger in the Payroll Ledger field
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Figure 22.101 Employee Filters screen - PF Ledger selection
4. Press Enter to prefill PF Payable Amount in respect of Employer Contributions during the relevant month The Payment voucher appears as shown:
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Figure 22.102 PF Payment Voucher with Employer PF Contribution details
5. Press Enter again, to prefill the amount of Employee Contributions during the relevant month
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Figure 22.103 PF Payment Voucher - with Employee Contribution details
6. Press Enter thrice to again, to prefill EDLI Admin Expenses, EDLI Contribution and PF Admin Charges during the selected month as shown:
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Figure 22.104 PF Payment Voucher with Employer Other charges details
7. Press Enter twice 8. Set Yes in Provide Details field and press Enter 9. In the Provide Details subscreen, Specify 547245 in the Cheque/ DD No. field Specify 30-4-2009 in the Cheque/DD Date field Specify 30-4-2009 in the Challan Date field Type the name of the Depositor in the Depositor Name field Specify the name of the Bank on which the Cheque is drawn in the Bank Name field The completed Provide Details subscreen is as shown:
Figure 22.105 Payment details subscreen

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10.Press Enter to go back to the PF Payment Voucher screen 11.Type the details of the transaction in the narration field The completed PF Payment Voucher screen for the month of April 2009, is as shown:
Figure 22.106 Completed PF Payment Voucher screen
12.Press Enter to accept Step 2 : Print PF Payment Challan Press Pg UP from the above Voucher Entry screen Press Alt + P, the Voucher Printing screen appears,
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In the Voucher printing screen, select Yes in the Print Challan field Enter Total No. of Subscribers (A/c.1) Enter Total No. of Subscribers (A/c.10) Enter Total No. of Subscribers (A/c.21) Press Enter to Print The printed PF Combined Challan for the month of April 2009 of M/s. Indus Solutions Pvt. Ltd. is as shown:
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Figure 22.108 Printed PF Payment Challan
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22.5 Accounting for Employer ESI Contributions

ESI Contribution refers to the amount payable to the Corporation by the Principal Employer in respect of Employees and comprises of the amount payable by the employee as well as the employer. The employer is required to calculate and remit ESI Contributions comprising of employers' share plus employees' share on or before 21st of the subsequent month in respect of salaries of the related month. The Principal Employer should pay Employers share of contribution @ 4.75% in respect of every employee whether employed directly or through immediate employer. And the Employees share @ 1.75% has to be recovered by making deduction from their wages for the respective salary/wages period. In case, if the employee is drawing upto Rs. 70/- as daily average wage, he is exempt from payment of his share of contribution. However, the employer has to pay employers share of 4.75% of the Salary payable to the employees. As discussed earlier, the statutory features viz., EPF & ESI etc., are required to be configured in F11: Statutory & Taxation Features. In this section, we will discuss, recording of transactions related to computation and contribution of Employee State Insurance. Example 8: On 1st June 2009, the list of new joinees with their Salary details are given below: Employee Name Tamanna Dinesh Department Administration Sales Date of Joining 05-6-2009 08-6-2009
The Salary details for the above new employees is listed in the table below: Pay Head Basic Pay House Rent Allowance Conveyance Overtime Pay Variable Pay Gratuity Expenses (Provisional) Employees PF Contribution @ 12% Employees ESI Contribution @ 1.75% Profession Tax Tamanna 9,000 40% 800 User defined Only for reporting purpose Applicable based on Slab Rates Applicable based on Slab Rates Applicable based on Slab Rates Dinesh 10,000 40% 700
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The Attendance details for the month of June 2009 are given as shown: Attendance/ Production Types Present Days Overtime hours Rohit Roy 26 120 Min Preeti Sinha 24 Atul Sharma 26 Ramesh Arora 20 600 Min Tamanna 17 Dinesh 18
The same is accounted as shown: Create the above employees and their Salary details and then process the Salaries, PF Contributions for the month of June 2009, in the manner as discussed in the earlier chapters. In Tally.ERP 9, follow the steps given below to process Employer contribution towards Employees State Insurance: Create Employer ESI Contribution Masters Alter/Modify Salary Details Processing Employer ESI Contribution Payment of ESI
22.5.1 Creating Employer ESI Contribution Masters

In Tally.ERP 9, Employer and Employees contribution towards Employees State Insurance (ESI) are required to be created separately for appropriate Accounting and reporting. Create the following ledgers in Tally.ERP 9: Employer Contribution Pay Head ESI payable Ledger I. Create Employer ESI Contribution @ 4.75% Pay Head Pay Head Name Employer ESI @ 4.75% Pay Head Type Statutory Pay Type Employee State Insurance Under Affect Net Salary No Calculation Type As Computed Value
Employers Statutory Contributions
Indirect Expenses
Go to Gateway of Tally >Payroll Info >Pay Heads >Create In the Pay Heads Creation screen, 1. Type Employer ESI @ 4.75% as the Name of the Pay Head 2. Select Employers Statutory Contributions in the field Pay Head Type 3. Select Employee State Insurance in the Statutory Pay Type field from the Employers Statutory Contributions drop down
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Figure 22.109 Pay Head Creation - Employer ESI
4. Specify the group as Indirect Expenses in the Under field and press Enter 5. Set Affect Net Salary to No and press Enter 6. In the Calculation Type and Calculation Period fields, As Computed Value and Months are defaulted automatically based on the Statutory Pay Type selected. 7. Select Normal Rounding as the Rounding Method and 1 as the rounding Limit and press Enter 8. In the Computation Info screen, Select On Specified Formula in the Compute field and press Enter In the Compute subscreen, Select Basic Pay as the Add Pay Head function and press Enter Select House Rent Allowance as the second Pay Head in the Add Pay Head Function Similarly, select Conveyance and Overtime Pay in the Add Pay Head function The Compute sub-screen will appear as shown:
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Figure 22.110 Employer ESI Pay Head Creation Compute sub-screen
Select End of List and press Enter to accept the screen

Any Earning Pay component of a recurring nature will be subject to ESI calculation viz., Basic Pay, Dearness Allowance, House Rent Allowance, Conveyance, Overtime Pay and so on.
Specify 1-4-2009 in the Effective From date field and press Enter, the From Amount column is automatically skipped, assuming the amount to be zero The Amount Upto field is skipped and automatically defaulted with the amount specified in the Payroll Statutory Details screen in F11: Satutory & Taxation Select Percentage in the Slab Type field Specify 4.75% as the Value Basis Percentage in the Value Basis field and press Enter
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Figure 22.111 Employer ESI Pay Head Creation
In Tally.ERP 9, the Earning Payheads which are selected for computation of Employer ESI contribution are listed in the Specified Formula for easy reference. You can alter / modify the criteria for calculation, by Enter in the Compute field and redefining the Function Pay components. Specify 4.75% as the Value Basis Percentage in the Value Basis field and press Enter Press Enter to accept The completed Employer ESI Contribution Pay Head Creation screen is as shown:
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Figure 22.112 Completed Employer ESI Pay Head
Press Enter to accept. II. Create ESI Payable Ledger Create ESI Payable Ledger as explained below: Ledger ESI Payable Pay Head Type Not Applicable Under Current Liabilities
Go to Gateway of Tally > Payroll Info. > Pay Heads > Create 1. Type ESI Payable in the Name field 2. In the Pay Head Type field select Not Applicable 3. Specify the group as Current Liabilities in the Under field and press Enter The completed ESI Payable Ledger creation screen is displayed as shown:
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Figure 22.113 ESI Payable Ledger Creation
22.5.2 Salary Details setup

Once the required Employer Contribution Pay Heads are created, the salary details of the Employees should be updated to constitute the Employer Contribution pay head ledgers for automatic calculations based on the monthly payments made to the Employees. Create / Alter Salary Details Master To update the salary details for the Employees, follow the steps given below: Go to Gateway of Tally > Payroll Info. > Salary Details > Alter 1. Select Rohit Roy from the List of Groups / Employees 2. Tab down to the last line and select Employer ESI @ 4.75% Pay Head from the List of Pay Heads 3. Press Enter to select End of List The completed Salary Details Alteration screen is as shown:
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Figure 22.114 Salary Details Alteration screen
4. Press Enter to Accept
While, including the Employer Contribution Pay Heads in the Salary Details master, the order of precedence in which the Pay Heads are included on the basis of their calculation criteria i.e., Earning Pay Heads Deduction Pay Heads Employee PF Contribution Ledgers Professional Tax or Income Tax Ledger (if any) Employer PF Contribution Ledgers Employer ESI Contribution Ledgers Gratuity (Gratuity is calculated on Basic Pay + DA, hence Gratuity Pay Head can be sequenced in the Salary details of an Employer in any order).
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It is necessary to include Employer ESI Contribution Pay Head in the Salary Structure of the Employees, to automate the Computation of Employer ESI Contribution on the basis of payments made to Employees.
Similarly, include Employer ESI @ 4.75% Pay Head in the Salary details of all other Employees.
22.5.3 Processing Employer ESI Contribution

In Tally.ERP 9, you can process Employer ESI Contributions and make the payment towards ESI comprising of Employees and Employers ESI Contribution through a challan. To process the ESI Contribution for June 2009, follow the steps given below: Example 9: On 30th June, 2009 M/s. Indus Solutions Pvt. Ltd., processed Employer ESI Contribution for the month of June 2009. Step 1: Create Payroll Voucher Go to Gateway of Tally > Payroll Vouchers 1. 2. 3. 4. Press Ctrl+F4 for Payroll Voucher Press F2, specify the date as 30-06-2009 and press Enter Press Alt+A (Payroll Auto Fill) to prefill employee payroll details In the Employee Filters subscreen, Select ESI Contribution from the Process List as shown:
Figure 22.115 Payroll Autofill - ESI process selection
Specify 1-6-2009 and 30-6-2009 in the From and To Date fields respectively Select Primary Cost Category as Cost Category field
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Select All Items in the Employee/ Group field Select ESI Payable Ledger in the Payroll Ledger field as shown:
Figure 22.116 Payroll Autofill Payroll Ledger selection
5. Press Enter to accept and go back to the Payroll Voucher screen The completed Employer ESI Contribution Voucher Creation screen will appear as shown:
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Figure 22.117 Completed ESI Voucher

The Employer ESI contribution will be computed automatically upon selection of ESI Contribution Process during Payroll Voucher Entry. However, only for employees those who meet the criteria of monthly earnings not exceeding the prescribed limits will be subject to ESI Contribution. In the same way while processing Salaries, the Employees ESI Contribution will also be computed based on the Eligibility amount prescribed in F11: Statutory & Taxation Features.
22.5.4 Payment of ESI

In Tally.ERP 9, once process for Employee and Employer contributions to Employees state Insurance is implemented in the manner as discussed in earlier sections, the total amount payable to ESIC comprising of Employees Contribution as well as Employers contribution to ESI is accumulated separately in ESI Payable Ledger. At the time of making payment to ESIC, a payment voucher is required to be passed.
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Example 10: On 30th June, 2009 M/s. Indus Solutions Pvt. Ltd., processed the payment of ESI for the month of June 2009. To process the payment of ESI and generate ESI Challan, follow the steps given below: Step 1 : Create ESI Payment Voucher Go to Gateway of Tally > Accounting Vouchers 1. 2. 3. 4. Press F5 for Payment Voucher Press F2, specify the date as 30-06-2009 and press Enter Press Alt+A (Payroll Auto Fill) to prefill employee payroll details In the Employee Filters subscreen, Select ESI Challan from the Process List as shown:
Figure 22.118 Employee Filters subscreen - ESI Process Selection
Specify 1-6-2009 and 30-6-2009 in the From and To Date fields respectively Specify 30-6-2009 in the Voucher Date field (This field is prefilled, if the voucher date is specified during Voucher Entry) Select Primary Cost Category in the Cost Category field Select All Items in the Employee/ Group field Select HDFC Bank in the Bank / Cash Ledger field
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Figure 22.119 Employee Filters Subscreen Bank Ledger Selection
Select ESI Payable Ledger in the Payroll Ledger field
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Figure 22.120 Employee Filters Subscreen - Payroll Ledger Selection
5. Press Enter to accept and go back to Payment Voucher Screen 6. Press Enter to prefill the Employers ESI Contribution amount for the eligible Employees
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Figure 22.121 ESI Payment Voucher with Employer Contributions
7. Press Enter again, to prefill the Employees ESI Contribution amount against the eligible Employees
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Figure 22.122 ESI Payment Voucher with both Employee and Employer Contributions
8. Press Enter twice 9. Set Yes in the Provide Details field and press Enter 10.In the Provide Details subscreen, specify the Cheque / DD No., Cheque / DD Date and Bank & Branch Code Details as shown:
Figure 22.123 Complete Provide Details subscreen
11. Press Enter to accept 12.Type the details of the transaction in the narration field The completed ESI Payment Voucher for the month of June 2009 will appear as shown:
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Figure 22.124 Completed ESI Payment Voucher
13.Press Enter to accept Step 2 : Print ESI Payment Challan Press Pg UP from the above Voucher Entry screen Press Alt + P, the Voucher Printing screen appears,
Figure 22.125 ESI Voucher Printing Screen
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In the Voucher printing screen, select Yes in the Print Challan field Press Enter to Print The printed ESI Payment Challan for the month of June 2009 of M/s. Indus Solutions Pvt. Ltd. is as shown:
Figure 22.126 Printed ESI Payment Challan
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22.6 Payment of Professional Tax

The Professional Tax is applicable to those individuals or professionals in India who are involved in any profession or trade. The state government of each state governs and administers the levy and collection of Professional Tax in the respective State.The state is empowered with the responsibility of structuring as well as formulating the professional tax criteria for the respective state. Professional tax is charged on the incomes of Individuals, profits of business or gains in vocations as per the list II of the Indian Constitution. In India, the professional tax slabs are different for all the states in India and some of the states have formulated different professional tax slabs for men, women and the senior citizens of the respective states. The rates depend upon profession, years in the profession and the amount of income or turnover and so on. In Karnataka, the professional taxes are leviable as follows: S.No (a) (b) (c) (d) (e) Salary or wage earners whose salary or wage or both, as the case may be, for a month is, less than Rs.5000 not less than Rs. 5,000 but less than Rs.8,000 not less than Rs.8,000 but less than Rs.10,000 not less than Rs.10,000 but less than Rs.15,000 Rs. 15,000 and above Tax Amount Rs. 0 Per month Rs. 60 Per month Rs.100 Per month Rs.150 Per month Rs.200 Per month
22.6.1 Processing Professional Tax Payment

In Tally.ERP 9, creation of Professional Tax Ledger is discussed in detail in the Creation of Masters chapter and the procedure to process Professional Tax Deduction from Employee Salaries is discussed in detail in Processing Payroll in Tally.ERP 9 Chapter. In this section, we will discuss recording of transactions related to payment of Professional Tax. Example 11: On 30th April, 2009 M/s. Indus Solutions Pvt. Ltd., made payment of Professional Tax for the month of April 2009. The same is accounted as shown : Step 1: Create Payment Voucher Go to Gateway of Tally > Accounting Vouchers 1. 2. 3. 4. Press F5 for Payment Voucher Press F2, specify the date as 30-04-2009 and press Enter Press Alt+A (Payroll Auto Fill) to prefill employee payroll details In Employee Filters screen, Select Professional Tax Payment from the Process List Specify 1-4-2009 and 30-4-2009 in the From and To date fields respectively
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Specify 30-4-2009 in the Voucher Date field (This field is prefilled, if the voucher date is specified during Voucher Entry) Select Primary Cost Category in the Cost Category field Select All Items in the Employee/ Group field Select HDFC Bank in the Bank / Cash Ledger field
Figure 22.127 Employee Filters screen - Payment Ledger Selection
Select Profession Tax Ledger in the Payroll Ledger field The completed Employee Filters screen will appear as shown:
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Figure 22.128 Completed Employee Filters screen
Press Enter to accept the screen and go back to Payment Voucher Screen Press Enter to Prefill the Professional Tax amount in the Payment Voucher The completed Professional Tax Payment Voucher will appear as shown:
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Figure 22.129 Completed Profession Tax Payment Voucher
5. Press Enter to Accept. Similarly, process the Professional Tax payments for other months.
The creation of Professional Tax Pay Head is discussed in detail in Creation of Masters section. The procedure to process Professional Tax Deduction from Employee Salaries is discussed in detail in Processing Payroll in Tally.ERP 9 section.
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22.7 Generating Payroll Reports

Payroll Reports help you to ascertain the payroll expenses for a specified month or for year-todate (YTD) transactions for a particular employee/ group along with the Attendance and Production details. You can also view the statutory forms required for Provident Fund and Employee State Insurance. In Tally.ERP 9, the Payroll reports can be broadly categorized into two viz., Payroll Reports Payroll Statutory Reports
22.7.1 Payroll Reports

In Tally.ERP 9, you can generate the following Payroll related reports. Chart showing Payroll Reports in Tally.ERP 9
Figure 22.130 Payroll Reports in Tally.ERP 9
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We will discuss each report in detail in the coming sections as explained below : Payslip A Payslip refers to a document issued to an employee, which itemises each component of his/ her earnings and deductions and the net amount paid for a given pay period. It provides particulars on how the net amount has been arrived at i.e., how much money has been earned and how much tax / deductions have been made. Display Payslip Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll > Payslip > Single Pay Slip Select the required Employee and press Enter The Payslip for the selected employee displays as shown:
Figure 22.131 Payslip
In Tally.ERP 9 Payroll, the Payslip can be configured to vertically display the details of attendance, in terms of attendance or production, with Year to Date Values (YTD).
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Press F12: Configure and set the following options to Yes
Figure 22.132 Payslip F12: Configuration screen
Some of the options in F12: Configuration screen, are by default set to Yes viz., Show Employee Details, Show Attendance/Production Details, Show Attendance/Production Groups, Remove Zero Entries for Attendance/Production also based on the Payroll Features / Payroll Statutory features enabled during voucher entry.
The F12:Configuration options in Payslip are explained as follows: Show Vertical Payslip Set this option to Yes to view / print the Payslip in vertical format, i.e. align Deductions pay heads below Earnings pay heads Show Employee Details Set this option to Yes to display employee information as entered in the employee master Show Passport Details Set this option to Yes to display an employees passport details Show Visa Expiry Date Set this option to Yes to display an employees visa expiry date Show Attendance/Production Details Set this option to Yes to display Attendance/Production information Show Attendance/Production Groups Set this option to Yes to display the grouping of the Attendance/Production data as defined during the creation of Types
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The F12:Configuration options in Payslip are explained as follows: Display Attendance/Production Type in Tail Units For compound units used in Attendance/Production Type, set this option to Yes, to display the value of the Attendance/Production details in the Tail unit. If this option is set to No, the Production units will display in primary units Show Year To Date values Set this option to Yes to display the cumulative value of Attendance/Production records and Earnings /Deductions for any given period Show Gross Salary - Set this option to Yes by setting the Show Year To Date values to No, to view Gross Earnings and Deductions for any given period Remove Zero Entries Set this option to Yes to remove the Earnings/ Deductions components with Zero value from the Payslip For Attendance/Production also Set this option to Yes to remove Attendance/ Production records with zero values from the Payslip Appearance of Employee Names Select the appropriate name style to appear in the Payslip (i.e., Alias (Name), Alias only, Name (Alias), Name only) Appearance of Pay Head Names Select the appropriate name style to appear for each Pay Head in Payslip (i.e. Alias(Name), Alias only, Name(Alias), Name Only, Payslip Name)
The Payslip with the above configurations will appear as shown:
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Figure 22.133 Payslip with YTD values
The Payslip now displays the Attendance with Present / Overtime details, Year to Date balance, and so on. To view the Payslip in vertical form, press F12: Configure and set Show Vertical Payslip to Yes. The Vertical Payslip will appear as shown:
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Figure 22.134 Configured Payslip with Vertical Display
You can further view additional information in the Payslip, by pressing Alt+F1. The detailed Payslip displays as shown:
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Figure 22.135 Detailed Payslip
The voucher number, date and the number of attendance or payroll records are displayed as shown in the screen above. This is very useful where multiple attendance/payroll vouchers are entered for the same payroll period. You can drill down to the voucher level for reference or to effect an alteration by pressing Enter on the required record.
Period Button By default, the Payslip for the current month displays. However, you can change the period by pressing F2: Date and defining the required date. This button can be used to display multiple period payroll information to view/print a consolidated Payslip. Employee Button From the existing Payslip of an employee, you can toggle between employees by pressing F4: Employee.
Printing Payslip Press Alt+P from the Payslip screen, the Printing Payslip screen appears
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Figure 22.136 Payslip Print Configuration screen
Some of the configuration in the Printing screen, are similar to F12: Configure and can be configured from either of the screens. In addition, Show Authorised Signatory option is available in the above screen. In the Printing Payslip screen, press backspace and enable the required option as required Press Enter to Print The printed Payslip of Mr. Rohit Roy displays as shown.
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Figure 22.137 Printed Payslip
Printing Multiple Payslips Tally.ERP 9 allows you to print Payslips for all the employees at once in each separate page, by using Multi-Payslip option. You may print multiple Payslips of all the of employees or employees in a particular group / department for the selected period. Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll > Payslip > Multiple Pay Slip In the Employee Filters screen, In the Name of Category field select the required Payroll Category In the Name of Employee Group select the required Employee Group from the List of Employees / Groups Press Alt+P to Print Multiple Pay Slip In the Printing Payslip screen, Press Backspace and enable the options as required
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The Printing Configuration for Multi-Payslip displays as shown.
Figure 22.138 Printing Configuration for Multi-Payslip
Press Enter to print the payslips of all employees in alphabetical order in separate sheets. The printed Payslip for Atul Sharma is as shown:
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Figure 22.139 Printed Payslip through Multi Payslip Printing
The subsequent pages will print the Payslips for the remaining employees in the alphabetical order. Emailing Payslip Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll > Payslip > Single Pay Slip Select the required Employee and press Enter Press Alt+M, the Mailing Payslip screen is as shown:
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Figure 22.140 Mailing Payslip sub screen
In the Mailing Payslip screen, Specify the SMTP Server Name in the Email Server field Press Enter to accept the From & From E-mail Address fields (The company name & Email id is defaulted from the company master, however you can modify the same) Specify the Authentication User Name and Password, if required Set Use SSL to No Select HTML (Web publishing) in the Format field Select the required Resolution from the Resolutions drop down Press Enter to accept the To Email Address (The Employee address is defaulted from the Employee Master, however, you may modify as required) Enter the other information as shown The completed Mailing Payslip configuration screen is as shown.
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Figure 22.141 Completed Mailing Payslip sub screen
Mailing Payslip Configurations Email Server Name of the SMTP mail server should be specified. From - In the From field is prefilled with the name of your Company as specified in the Company Creation screen. You can change the same if you want some other name to be displayed. From E-mail Address is pre-filled with the Companys email address as filled during the Company Creation. Authentication User Name and Password field should be filled if your SMTP Server needs Authentication for sending emails. Use SSL - This is set to Yes for the servers using the Secured Socket Layer protocol for extra security reasons. Format - you can select from format in which the Payslip should be viewed by the mail recipient. Resolution - appropriate resolution for the Emailed Payslip can be selected in this field. To E-Mail Address - this will be selected automatically if the email address is provided in the Employee Master. Or else, you need to specify the same at the time of emailing. CC To (if any) - If you want the Payslip to be marked to some other email address that can be specified here. Subject - specify the Subject of email to be seen by the user. Additional Text (if any) - This will appear in the body of the email that is sent. Information Sent - The option to send the Email as an Attachment or as a direct view can be selected here.
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Press Enter to Email the Payslip

If you want to use the Gmails (Google Mail) SMTP service for emailing Payslip, Enter Gmails SMTP server name: port no. (viz. smtp.gmail.com:465) Provide your Gmail User name and Password against Authentication User Name and Password Set Use SSL to Yes All other settings will be same as shown above.
The emailed Payslip when viewed from the mail box of the employee is as shown:
Figure 22.142 Emailed payslip
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Exporting Payslip to MS Excel Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll > Payslip > Single Payslip Select the required Employee and press Enter Press Alt+E, the configuration screen to select the required format appears as shown: In the Export screen, Select the required Format in the Languages field Select the Excel as Format from the drop down list of Formats Output File Name is defaulted to Payslip.xls, however you can modify the same Output Sheet Name is defaulted to Payslip, however you can modify the same Complete the remaining options as shown The completed Export screen is as shown:
Figure 22.143 Export Payslip screen
The Payslip exported into Excel will appear as shown:
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Figure 22.144 Exported Payslip
Pay Sheet A Pay Sheet is a columnar report which displays the Group/Department-wise employees breakup of earnings and deductions for the selected month. Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll > Pay Sheet In the Employee Filters screen, In the Name of Category field select the required Payroll Category In the Name of Employee Group select the required Employee Group from the List of Employees / Groups The Pay Sheet displays as shown:
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Figure 22.145 Pay Sheet
You can further configure the Pay Sheet to display the net amount, column subtotals, Category/ Group subtotals, user-defined payslip names, Employee names and sort it by Employee number in the F12: Configure. The F12: Configuration from the Pay Sheet screen displays as shown:

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The F12 :Configuration options in the Pay Sheet are explained as follows. Appearance of Pay Head Types Set All Items to view Deductions and Earnings. Show Net Amount Column Set this option to Yes to display the Net Payable Column. Show Column SubTotals Set this option to Yes to display the subtotals of Earnings/Deductions pay head columns. Remove Zero Entries Set this option to Yes to eliminate Earnings/ Deductions pay heads with Zero values. Show Payslip Names for Ledgers Set this option to Yes to display the Name defined in the Appear in Payslip field in the pay head master. Include Employee Groups & Categories Set this option to Yes to display Category-wise/ Group-wise pay sheet. If this option is set to No, the Pay Sheet will appear Employee-wise. Show Category/Group Total Set this option to Yes to display Category and Group-wise columnar pay head totals. Show Grand Total Set this option to Yes to display the sum of all pay head columns appearing in the report. Show Attendance Details - Set this Option to Yes to display the Attendance for the Employees Display Production types in Tail Units - Set this Option to Yes to show the Overtime details in minutes. Format Select Detailed mode to view Pay Sheet information of employees with their respective category and group. Select Condensed mode when only sum totals are required for each category and group. Show Employee Number Set this option to Yes to display employee numbers. Show Employee Designation - Set this Option to Yes to show the designation for employees. Expand all levels in Detailed Format Set this option to Yes to expand all levels and display Employee details. Appearance of Names Select the appropriate name style to appear in the paysheet (viz., Alias (Name), Alias only, Name (Alias), Name only). Sorting Method Sort the Pay Sheet either by Alphabetical increasing / decreasing, Employee number or by the Default method.
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Set the F12: Configuration screen as shown:
Figure 22.147 F12: Configuration screen - Pay Sheet
The Pay Sheet with the above configurations will appear as shown:
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Figure 22.148 Pay Sheet
To view the Pay Sheet till date with Category and Group Totals In F12: Configuration, set Category / Group Total to Yes (by default it is set to Yes) Press Alt+F2 and change period as 01-04-2009 to 30-06-2009 The Pay Sheet with Category and Group Totals displays as shown:
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Figure 22.149 Pay Sheet with Category and Group Total
Button options: Detailed/Condensed Button This button (Alt+F1) is used to toggle between the detailed and condensed modes of reporting. Period button This option (F2) is used to define the periodicity of the report, i.e. for a day, week, fortnight, month, quarter, half-year, year or any given period.
To view the Pay Sheet for a particular Employee Group, Press Ctrl+F7 from the Pay Sheet display, the Employee Filters screen appears In the Employee Filters screen, Select Primary Cost Category in the Cost Category field Select Sales as the Employees/ group
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The Employee Filters screen displays as shown:
Figure 22.150 Employee Filters
The Pay Sheet for the selected Employee Group displays as shown:
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Figure 22.151 Employee Group Pay Sheet
You can also drill down from the above report to the voucher level, by highlighting the pay heads column of the required employee and pressing Enter.
Button Options: Employee Filter Button By using the Employee Filter button (Ctrl+F7), view the individual employee/ Employee group pay sheet report. New Column This option (Alt+C) is used to add a new column for any other Pay Head, which is not part of the pay structure. Alter Column This option (Alt+A) is used to replace an existing column in the report with another Pay Head column. Delete Column - This option (Alt+D) is used to delete an existing column in the report.
You can also print the Pay Sheet, by pressing Alt+P and specifying the required options in the Pay Sheet Print configuration screen.
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The Pay Sheet Print Configuration screen will appear as shown:
Figure 22.152 Pay Sheet Print Configuration screen
The Printed Pay Sheet displays as shown:
Figure 22.153 Printed Pay Sheet 1A
Figure 22.154 Printed Pay Sheet 1B

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While printing the Pay Sheet, you can choose to Increase the Line Height (for each employee line) if you want to create space for the employees signature or to affix a stamp. Such a Pay Sheet can also be used as a salary disbursement register. Press Alt+P to print Pay Sheet and set the Increase Line Height for Signature/ Stamp? field to Yes The printed Pay Sheet with space for signature/ stamp is as shown.
Figure 22.155 Printed Pay Sheet with space for Signature/ Stamp (1A)
Figure 22.156 Printed Pay Sheet with space for Signature/ Stamp (1B)
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You can also Email or Export Pay Sheet Report in the manner as discussed in Payslip Section. The navigation steps for Emailing, Exporting Pay Sheet is similar to as explained in Payslip Report.
Payroll Statement A Payroll Statement is a columnar report which displays Group/Department-wise employees break-up of selected earnings or deductions, for a specified month or period. Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll > Payroll Statement Select the required pay head and press Enter The Payroll Statement for Basic Pay Earnings Head for the month of April 2009 is as shown:
Figure 22.157 Payroll Statement
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You can further configure the Payroll Statement to display the Employee groups and categories, category/group subtotals, grand totals, user-defined Payslip names, employee names, employee bank details, sort it by Employee number, by pressing F12: Configure Enter the details in F12: Configuration screen as shown The F12: Configuration screen will appear as shown:
The F12: Configuration options in Payroll Statement Report are as follows: Remove Zero Entries Set this option to Yes to remove Earnings/ Deductions pay head information with Zero values. Show Payslip Names for Ledgers Set this option to Yes, to view the names of pay heads as specified in the Name to Appear in Payslip field in the Pay Head master creation. Include Employee Groups & Categories Set this option to Yes to display Category and Group-wise Employee information. Show Category/Group Total Set this option to Yes, to display Category and Group-wise Totals.
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Show Grand Total Set this option to Yes, to display the sum of all the pay head columns in the report. Format Select the Detailed mode to view payroll information of employees with their respective categories and groups. Select the Condensed mode when only sum totals are required for each category and group. Show Employee PF Account Number Set this option to Yes, to display the Provident Fund Account number of an employee. Show Employee I.T. PAN Set this option to Yes, to display the Income Tax Permanent Account Number (PAN) of an employee. Show Employee Bank Details Set this option to Yes, to display the Bank Account Number of an employee Show Employee Number Set this option to Yes, to display the Employee Number of an employee. Show Employee ESI Number Set this option to Yes, to display the State Insurance Number of an employee. Show Employee Passport Details Set this option to Yes, to display an employees passport details. Show Employee Visa Expiry Date Set this option to Yes, to display an employees visa expiry date. Expand all levels in Detailed format Set this option to Yes, to expand all levels and display Employee details. Appearance of Names Select the appropriate name style to appear in the Payroll Statement (Alias (Name), Alias only, Name (Alias), Name only). Sorting Method Sort the Payroll Statement using Alphabetical (Decreasing), Alphabetical (Increasing), Bank details, Employee IT Pan Number, Employee Number, ESI Number, PF Account Number, Passport details or by the default method.
The Employee PF Account Number, IT PAN Number, ESI Number, Passport Details, Visa Expiry Date options will be available in F12: Configure only when the options, Show Statutory details and Passport & Visa details, are set to Yes in F12: Payroll Configuration.
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The Payroll Statement with the above Configurations will appear as shown:
Figure 22.159 Payroll Statement with additional information
You can also Email or Export Payroll Statement in the manner as discussed in Payslip Section. The Button Bar options in Payroll Statement are same as in the Paysheet report.
To view Payroll Statement for other Pay Heads, you may either select other Pay Head(s) in the manner as discussed or you may also include other Pay Heads in the above report for comparative analysis or to obtain a cumulative value, by pressing Alt+C and selecting the required Pay Head(s). The Payroll statement with additional Pay Heads will appear as shown:
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Figure 22.160 Payroll Statement with additional Columns
Payment Advice A Payment Advice is an intimation letter containing the details of employees with their bank account numbers issued to the banker to transfer a specified sum (salaries earned) to the employees bank accounts. As discussed earlier, the contents of the Payment Advice can be altered in F12: Payroll Configuration as per the employers requirements. Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll > Payment Advice The Printing Configuration for Payment Advice displays as shown:
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Figure 22.161 Printing Configuration for Payment Advice
Press Backspace and enter the details as shown above Press Enter to print The printed Payment Advice for May 2009 displays as shown:
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Figure 22.162 Printed Payment Advice
The Payment Advice will be available only when the Salaries are processed through Bank Transfer and a Payment voucher is passed for the salaries payable for a given month/period. You can also Email or Export Payment Advice in the manner as discussed in Payslip Section.
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Payroll Register A Payroll Register is a month-wise transaction summary report which displays the number of payroll vouchers passed during a particular month. Additional information can be appended into the Payroll Register, by inserting a new column with the required voucher type i.e., Attendance, Journal, Purchases, Sales and so on. Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll >Payroll Register The Payroll Register displays as shown:
Figure 22.163 Payroll Register
Press F12: Configure and set the Appearance of Names and the Periodicity to use as shown. The F12: Configuration screen displays as shown:
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The Payroll Register with the above configurations will appear as shown:
Figure 22.165 Payroll Register - Quarterly
Tally.ERP 9 allows you to drill down to the voucher level from the above display for any kind of verification, by pressing Enter on the required month/period.
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The Payroll Register voucher level screen displays as shown:
Figure 22.166 Payroll Voucher Register
You can further drill down to transaction level, by selecting the required transaction and pressing Enter. Employee Pay Head Breakup An Employee Pay Head Breakup report is a columnar report which displays the Group/Department-wise employees breakup of a selected earnings or deductions pay head for a specified month/period. This report also displays the opening balance, debit and credit transactions and the closing balance for a specified period. This report is also beneficial in tracking loan outstanding and instalments deducted till date or for any specified period. Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll >Employee Pay Head Breakup Select the required Pay Head from the List of Pay Heads and press Enter The Employee Breakup of Pay Head for Basic pay screen displays as shown:
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Figure 22.167 Employee Breakup of Pay Head
To drill down to Employee Summary report from the above display, Select Cost Category and press Enter Press Alt+F1 to view the detailed report The Employee Summary screen displays as shown:
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Figure 22.168 Employee Summary
You can also Email or Export Employee Breakup of Pay Head Report in the manner as discussed in Payslip Section.
To drill down to the Employee Monthly Summary report from the Employee Summary report, Highlight the required employee and press Enter The Employee Monthly Summary screen displays as shown:
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Figure 22.169 Employee Monthly Summary
To further drill down to Employee Voucher level screen from the Employee Monthly Summary report, press Enter on the required month The Employee Summary voucher level screen displays as shown:
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Figure 22.170 Employee Vouchers Summary
You can further drill down to transaction level, by selecting the required transaction and pressing Enter. The Employee Breakup of Pay Head report can be viewed with additional Pay Heads, by pressing Alt+C and adding the required Pay Head and for multiple periods, by pressing Alt+N. Pay Head Employee Breakup A Pay Head Employee Breakup report displays the sum of transactions and closing balance of the transacted groups for the selected employee. Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll >Pay Head Employee Breakup The Employee Selection screen displays as shown:
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Figure 22.171 Employee Selection
To view the ledger breakup, Select the required Employee from the List of Employees and press Enter Press Alt+F1 for detailed view The ledger-wise Breakup of Employee screen displays as shown:
Figure 22.172 Pay Head Employee Breakup
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To further drill down to view the Breakup of Employee report for each ledger from the above displayed report, select the required ledger and press Enter The Breakup of Employee screen for a selected ledger (Basic Pay) displays as shown:
Figure 22.173 Ledger Monthly Summary
You can drill down further to view the Monthly Summary of the selected ledger and the Employee Voucher report. The Pay Head Employee Breakup report can be viewed with additional employees, by pressing Alt+C and adding the required Employee and for multiple periods, by pressing Alt+N. Attendance Sheet An Attendance Sheet is a columnar report which displays the details of Attendance/ Production types with the number of attendance/ production units achieved during a particular month or period. Go to Gateway of Tally > Display > Payroll Reports > Attendance Sheet
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The Attendance Sheet displays as shown:
Figure 22.174 Attendance Sheet
You may configure the above report with additional details, by pressing F12:Configure and enabling the following options, as required. The completed F12: Configuration screen displays as shown:
Figure 22.175 F12: Configuration screen
F12: Configurations for Attendance Sheet: Remove Zero Entries Set this option to Yes, to remove Attendance/ Production information with Zero values. Include Employee Groups & Categories Set this option to Yes, to display Category and Group-wise Employee information.
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F12: Configurations for Attendance Sheet: Show Category/Group Total - Set this option to Yes, to display Category and Group-wise Totals. Include Group Attendance/Production Types Set this option to Yes to include Group Attendance/Production Types in Attendance Sheet report. Display Attendance/Production Types in Tail Units Set this option to Yes, to display the Attendance/Production Types in Tail Units. Format Select the Detailed mode to view the payroll information of employees with their respective categories and groups. Select the Condensed mode when only sum totals are required for each category and group. Expand all levels in Detailed Format Set this option to Yes, to expand all levels and display Employee details. Show Employee Number Set this option to Yes, to display employee numbers of employees. Appearance of Names Select the appropriate name style to appear in the payroll statement (Alias (Name), Alias only, Name (Alias), Name only) Sorting Method Sort the Attendance Sheet, either by Employee Number or by the Default method.
The Attendance sheet with the above Configurations is as shown:
Figure 22.176 Attendance sheet
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Attendance Register An Attendance Register is a month-wise transactions summary report which displays the number of attendance vouchers passed during the month. You can append additional information by inserting a new column with the required voucher type, i.e. Payroll, Journal, Purchases, Sales and so on. Go to Gateway of Tally > Display > Payroll Reports > Attendance Register The Attendance Register displays as shown:
Figure 22.177 Attendance Register
Press F12: Configure and set the Appearance of Names and the Periodicity to use as shown The F12:Configuration options in Attendance Register are as follows:
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Figure 22.178 F12: Configuration for Attendance Register
Tally.ERP 9 allows you to drill down to the voucher register, from the Attendance Register screen for any kind of verification. The Voucher level screen from Attendance Register displays as shown:
Figure 22.179 Attendance Voucher Register
You may further drill down to voucher level, by pressing Enter on the required transaction.
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22.7.2 Expat Reports

Expat Reports provide information about regular as well as contractual employees, working abroad on a short/ long tenure or on assignment. They capture all the relevant information in respect of passport, visa and contract details along with the date of joining, the issuing country and the expiry date. In Tally.ERP 9, the following Expat reports are available. Passport Expiry Visa Expiry Contract Expiry Passport Expiry Report The Passport Expiry Report provides information on the passport details of employees, such as passport number, country of Issue, passport expiry date and other details such as the employee's date of joining and email id. Go to Gateway of Tally > Display > Payroll Reports > Expat Reports > Passport Expiry The Passport Expiry Report displays as shown:
Figure 22.180 Passport Expiry Report
Press F12: Configure to configure additional options The F12: Configuration screen appears as shown:
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The F12: Configurations in Passport Expiry Report are Show All Employees Set this option to Yes, to view the passport details of all employees. It includes information on expired and unexpired passport details. If this option is set to No, Show Expiry in days will be available. Show Expiry in days Set this option to Yes, to enter the expiry days. When Show All Employees and Show Expiry in days options are set to No, Tally.ERP 9 filters only those employee passport details, which are nearing the expiry date. If this option is set to Yes, Expiry in next n days will be available. Expiry in next n days Set this option to Yes, to get the passport expiry details for the next specified number of days. On entering the number of days, Tally.ERP 9 filters the employee passport details which are likely to expire within the specified period (number of specified days). If this option is left blank, the report will denote the current date (last date of voucher entry). Show Employee Number Set this option to Yes, to display the employee number of employees in the report. Appearance of Names Select the appropriate name style to appear in the Passport Expiry Report (Alias (Name), Alias only, Name (Alias), Name only). Sorting Method Sort employee details based on Employee Number, Passport Expiry Date (Ascending/Descending), or by the default method. Show Employee Email Id Set this option to Yes, to view the email ids of employees.
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Button Functions in a Passport Expiry Report: F2: Change Period Allows you to change the period of the report. F5: Employee Wise Allows you to display the Employee-wise Passport Expiry report. F7: Employee Filters This option (Ctrl+F7) allows you to display the Passport Expiry Report for a particular Cost Category with the required Group or Employee.
Similarly Visa Expiry and Contract Expiry reports can be generated.
22.7.3 Payroll Statutory Reports

In Tally.ERP 9, you can display, print statutory forms and reports for Provident Fund (EPF), Employee State Insurance (ESI) and Professional Tax (PT) in the prescribed format as required by the statutes. The following Statutory reports are available in Tally.ERP 9 :
Figure 22.182 Payroll Statutory Reports in Tally.ERP 9
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You can view Payroll Statutory reports either from Statutory Reports menu or Payroll Reports menu i.e., Gateway of Tally > Display > Statutory Reports > Payroll Reports or Gateway of Tally > Display > Payroll Reports > Statutory Reports Provident Fund Reports As discussed, the following Provident Fund Reports are available in Tally.ERP 9: Computation report Form 5 Form 10 Form 12A Monthly Statement Form 3A Form 6A E-Return In this section, we will generate each of the above forms / report and understand the purpose and information to be furnished. i. Computation Report The PF Computation Report provides the summary of Amount Payable and amount paid in respect of PF for a given period comprising of Employer Contributions, Employee Deductions and Employers Other charges, if any. To view PF Computation Report, follow the steps given below: Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Computation Press F2 and specify the period as 01-04-2009 to 30-06-2009 and press Enter The Payroll Statutory Computation Report appears as shown:
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Figure 22.183 Payroll Statutory Computation Report
The report, by default displays summary of Employees Provident Fund, Employees State Insurance and Professional Tax, you may however configure to display only details of Provident Fund Press F12 : Configure and enable/disable the following options as required
Figure 22.184 F12: Configurations screen
Press Enter The PF Computation report will appear as shown:
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Figure 22.185 PF Computation screen
To view detailed ledger wise information under each contributions / deductions head, press Alt+F1. The detailed Provident Fund Computation Report will appear as shown:
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Figure 22.186 Detailed PF Computation Report
You can further drill down to Employee Breakup of Pay Head report and from their to Employee Vouchers and so on, by pressing Enter on the required ledger from the above screen. ii. Form 5 As per the Employees' Provident Funds Scheme,1952 [para 36 (2)(a)], a return is required to be submitted in Form 5 within 15 days of the following month detailing the list of Employees qualifying for membership to the Employees Provident Fund for the First time during every month. Form 5 is a monthly Returns to be submitted with the details of any new employee covered under EPF. In Tally.ERP 9, you can generate Form 5 in the prescribed format containing the details of the new joinees in the organisation for the selected month. To generate the PF Form 5 for the month of June 2009, follow the steps given below: Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Provident Fund > Form 5 In the Payroll Statutory Print Configuration screen, Specify 01-04-2009 and 30-04-2009 in the From and To fields respectively Select the required Payroll Category, Employee/Group and Sorting Method
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Specify 07-05-2009 in the Date field The completed Payroll Statutory Print Configuration screen is as shown:
Figure 22.187 Payroll Statutory Print Configuration screen
Press Enter to print. The printed PF Form 5 will appear as shown:
190
Figure 22.188 PF Form 5
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In our case study, there are two new employees joined during the month of June 2009 and thus Form 5 contains the details of the above employees. iii. Form 10 As per the Employees' Provident Funds Scheme,1952 [para 36 (2)(a) & (b), a Return is required to be submitted in Form 10 within 15 days of the following month detailing the list of members leaving service during the month. Form 10 is a monthly Return to be submitted with the details of employees leaving the organisation. In Tally.ERP 9, on resignation or retirement or expulsion of any employee, the date of leaving is required to be specified in the Employee master of such employee. The Date of Leaving option in the Employee Master appears, in alteration mode. The Form 10 will contain the details of Employees for whom the date of leaving is specified in the Employee Master. You can generate Form 10 in the prescribed format containing the details of the employees resigned for the selected month. To generate the PF Form 10 for the month of August 2009, follow the steps given below. Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Provident Fund > Form 10 In the Payroll Statutory Print Configuration screen Specify 01-09-2009 and 30-09-2009 in the From and To fields respectively Select the required Payroll Category, Employee/Group and Sorting Method Specify 10-10-2009 in the Date field The completed Payroll Statutory Print Configuration screen is as shown:
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Press Enter to print The printed Form 10 is as shown:
193
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iv. Form 12A As per the Employees' Provident Funds Scheme, 1952 [para 36(1)] and the Employees' Pension Scheme 1995 [para 20(4)] and the Employees' Deposit Linked Insurance Scheme, 1976, a consolidated Statement of dues and remittance is required to be submitted by 25th of the following month to which the dues relate. You can generate Form 12A in the prescribed format containing the details of the amount of contribution, amount of contribution remitted and the date of remittance in respect of EPF, Pension Fund and EDLI Contribution for the selected month. To generate the PF Form 12A for the month of August 2009, follow the steps given below. Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Provident Fund > Form 12A In the Payroll Statutory Print Configuration screen Specify 01-04-2009 and 30-04-2009 in the From and To fields respectively Select the required Payroll Category, Employee/Group and Sorting Method Specify the Name & Address of the Bank Set Include VPF Account to No Specify 0 in the Number of Contract Employees field Press Enter to accept 0 in Number of Rest (Temporary Employees) field The completed Payroll Statutory Print Configuration screen is as shown.
Figure 22.191 Completed Print Configuration screen
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Press Enter to print The printed Form 12A is as shown:
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v. PF Monthly Statement The PF Monthly Statement provides a summary of Employee wise monthly PF Employee Deductions and Employer Contribution amount. To print PF Monthly Statement, follow the steps given below: Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Provident Fund > Monthly Statement In the Payroll Statutory Print Configuration screen, Specify 01-04-2009 and 30-04-2009 in the From and To fields respectively Select the required Payroll Category, Employee/Group and Sorting Method
Figure 22.193 Print Configuration screen
Press Enter to Print. The printed PF Monthly Statement for April 2009 will appear as shown:
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Figure 22.194 PF Monthly Statement
vi. Form 3A As per the Employees' Provident Funds Scheme,1952 [para 35 & 42] and the Employees' Pension Scheme 1995 (Para 19), a Form (Members Annual Contribution Card) showing month wise recoveries towards EPF and Pension Fund in respect of a member for one financial year is required to be furnished by the employer before 30th April of the following year. Form 3A is a annual contribution card to be furnished for each employee in separate sheet to EPFO. To print Form 3A, follow the steps given below: Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Provident Fund > Form 3A In the Payroll Statutory Print Configuration screen Select Primary Cost Category in the Cost Category field Select All Items in the Employee/Group field Specify 01-03-2009 and 28-02-2010 in the From and To fields respectively Set Include VPF Account to No Select the Employee Name in the Sorting Method field Specify 28-02-2010 in the Date of Printing field The completed Payroll Statutory Print Configuration screen will appear as shown:
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Figure 22.195 Payroll Statutory Print Configuration
Press Enter to Print. The printed Form 3A for Atul Sharma will appear as shown:
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Figure 22.196 Printed PF Form 3A
The next page will contain the Contribution Card in Form 3A for the next employee.
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vii. Form 6A As per the Employees' Provident Funds Scheme,1952 [para 43] and the Employees' Pension Scheme 1975 [para 20], a Form (Consolidated Annual Contribution Statement) providing annual contributions of each member of the establishment is required to be submitted by 30th April. Form 6A is vital form for compiling the annual Provident Fund statement of a subscriber. In Tally.ERP 9, you can generate Form 6A in the prescribed format. To print Form 6A follow the steps given below: Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Provident Fund > Form 6A In the Payroll Statutory Print Configuration screen Specify 01-03-2009 and 28-02-2010 in the From and To fields respectively Select the required Payroll Category, Employee/Group and Sorting Method The completed Payroll Statutory Print Configuration screen will appear as shown:
Figure 22.197 Payroll Statutory Print Configuration for PF Form 6A
Press Enter to Print. The printed Form 6A will appear as shown:
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Figure 22.198 Printed Form 6A - Page 1
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The Page 2 of PF Form 6A is as shown:
Figure 22.199 Printed Form 6A - Page 2
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viii. E-Return In Tally.ERP 9 , you can also generate PF Form 3A in .xls format for e-filing purposes. Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Provident Fund > E-Return In the Exporting Form 3A Configuration screen Select Default (All Languages) in Language field Select Excel (Spreadsheet) in Format field Specify the Export Location Specify Output File Name as Form 3A.xls Specify Output Sheet Name as Form 3A Set Yes in Update Existing file, Excel (Spreadsheet) Formatting, with Colour to Yes Specify 01-03-2009 and 28-02-2010 in the From and To fields respectively Select the required Payroll Category, Employee/Group and Sorting Method The completed Exporting Form 3A Configuration screen will appear as shown:
Figure 22.200 E-Return
Press Enter to Export the file The exported file (E-Return) will be placed in the default Tally.ERP 9 directory.
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Employees State Insurance Reports As discussed, the following ESI Reports are available in Tally.ERP 9: Computation Report Form 3 Monthly Statement Form 5 Form 6 In this section, we will generate each of the above forms / report and understand the purpose and information to be furnished. i. Computation Report The ESI Computation Report provides the summary of Amount Payable and amount paid in respect of ESI for given period comprising of Employer Contributions and Employee Deductions. To view ESI Computation Report, follow the steps given below: Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Computation Press F2 and specify the period as 01-06-2009 to 30-06-2009 and press Enter
Figure 22.201 Payroll Computation report
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The report, by default displays summary of Employees Provident Fund, Employees State Insurance and Professional Tax, you may however configure to display only details of Employee State Insurance. Press F12 : Configure and enable/disable the following options as required
Press Enter The ESI Computation report will appear as shown:
Figure 22.203 ESI Computation report
To view detailed ledger wise information under each contributions / deductions head, press Alt+F1.
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The detailed Employee State Insurance Computation Report will appear as shown:
Figure 22.204 Detailed ESI Computation report
You can further drill down to Employee Breakup of Pay Head report and from their to Employee Vouchers and so on, by pressing Enter on the required ledger from the above screen. ii. Form 3 As per Regulation 14, a declaration form in Form 3 is required to be filed for every Half Yearly stating the list of Employees whose remuneration is not exceeding Rs. 10,000/- per month.To generate ESI Form 3, follow the steps given below: Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Employee State Insurance > Form 3 In the Payroll Statutory Print Configuration screen, Specify 1-04-2009 and 30-09-2009 in the From and To fields respectively Select the required Payroll Category, Employee/Group and Sorting Method Select the required Gender from the List of Gender field Type Bangalore in the Place field
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Specify 10-10-2009 in the Date of Printing field Type the Designation details of the person submitting the declaration form The completed Payroll Statutory Print Configuration screen will appear as shown:
Figure 22.205 Payroll Statutory Print Configuration for ESI Form 3
Press Enter to Print. The printed declaration form in Form 3 will appear as shown:
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iii. Monthly Statement The ESI Monthly Statement provides a summary of Employee wise monthly ESI Employee Deductions and Employer Contribution amount. To print ESI Monthly Statement, follow the steps given below:
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Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Employee State Insurance > Monthly Statement In the Payroll Statutory Print Configuration screen, Specify 01-06-2009 and 30-06-2009 in the From and To fields respectively Select the required Payroll Category, Employee/Group and Sorting Method The completed Payroll Configuration Print screen will appear as shown:
Press Enter to Print. The printed ESI Monthly Statement for June 2009 will appear as shown:
210
Figure 22.208 ESI Monthly Statement
iv. Form 5 As per Regulation 26, a Return of Contribution in Form 5 is required to be submitted to the appropriate Branch Office within 42 days of the expiry of the contribution period (i.e, 12th May or November 11th of each year). Such return of contribution should be prepared in quadruplicate and submitted separately for the main Code Number and each sub-code number. The employer may make compliance from the parent unit and submit only one return in respect of all the branches or may make compliance through their Branch Offices/ Sales Offices separately in the Regions where such offices are located. Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Employee State Insurance > Form 5 In the Payroll Statutory Print Configuration screen Specify 01-04-2009 and 30-09-2009 in the From and To fields respectively Select the required Payroll Category, Employee/Group and Sorting Method Select the required Display Employee Name Style in Appearance of Employee Names field Specify Bangalore in the Place Field Specify 30-09-2009 in the Date of Printing field Type the name of the Signatory in the Authorised Signatory Name field Type the Designation details of the signing authority In the Residential Address field provide the Home Address of Authorised Signatory
211
The completed Payroll Statutory Print Configuration screen for ESI Monthly Statement is as shown:
Press Enter to Print The printed From 5 will appear as shown:
212
Figure 22.210 Printed Form 5 - Page 1
213
The Page 2 of Form 5 is as shown:
214
The Page 3 of Form 5 is as shown:
215
v. Form 6 As per Regulation 32, a register of Employees covered under Employees State Insurance Scheme, containing information regarding the Insurance No., dispensary, other occupational details, Employers Share and month wise (under that particular Half Year) ESI details (i.e., Gross wages, Number of working days and ESI Contribution for each employee) should be furnished. To generate Form 6, follow the steps given below: Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Employee State Insurance > Form 6 In the Payroll Statutory Print Configuration screen Type 01-04-2009 in the From field Type 30-09-2009 in the To field Select the required Payroll Category, Employee/Group and Sorting Method The completed Payroll Statutory Print Configuration screen will appear as shown:
Figure 22.213 Payroll Statutory Print Configuration for ESI Form 6
Press Enter to Print. The printed Form 6 will appear as shown:
216
217
The Page 2 of Form 6 will appear as shown:
218
The Page 3 of Form 6 will appear as shown:
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Professional Tax Reports As discussed earlier, Professional Tax is applicable to those individuals or professionals in India who are involved in any profession or trade. The state government of each state governs and administers the levy and collection of Professional Tax in the respective State.The state is empowered with the responsibility of structuring as well as formulating the professional tax criteria for the respective state. Professional tax is charged on the incomes of Individuals, profits of business or gains in vocations as per the list II of the Indian Constitution. In India, the professional tax slabs are different for all the states in India and some of the states have formulated different professional tax slabs for men, women and the senior citizens of the respective states. The rates depend upon profession, years in the profession and the amount of income or turnover and so on. In Tally.ERP 9, based on the Slab Rates defined in the Professional Tax Ledger, the Professional Tax Report is generated, capturing the amount of Professional Tax deducted under each slab rate. i. Professional Tax Computation Report The Professional Tax Computation Report provides the summary of Amount deducted as Professional Tax in accordance with the Slab rates applicable for the particular state, from the Earnings of the Employees exceeding the prescribed threshold limits. Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Professional Tax > Computation Report From the List of Ledgers drop down, select Professional Tax and press Enter, the Payroll Statutory Print Configuration screen appears In the Payroll Statutory Print Configuration screen, Specify 01-06-2009 and 30-06-2009 in the From and To fields respectively Select the required Payroll Category, Employee/Group and Sorting Method Type Bangalore in the Place field Specify 30-06-2009 in the Date of Printing field The completed Payroll Statutory Print Configuration screen will appear as shown:
220
Press Enter to Print. The printed Professional Tax Computation Report for the month of June 2009 will appear as shown:
221
Figure 22.218 Printed PT Computation Report
222
ii. Professional Tax Statement The Professional Tax Statement provides the summary of Employee wise Gross Wages paid, No. of Working Days and the amount of Professional Tax deducted during the selected period. To generate the Professional Tax Statement for a month, Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Professional Tax > Statement From the List of Ledgers drop down, select Professional Tax and press Enter, the Payroll Statutory Print Configuration screen appears In the Payroll Statutory Print Configuration screen, specify 01-06-2009 and 30-06-2009 in the From and To fields respectively Select the required Payroll Category, Employee/Group and Sorting Method The completed Payroll Statutory Print Configuration screen will appear as shown:
Press Enter to Print. The printed Professional Tax Statement for June 2009 will appear as shown:
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Figure 22.220 Printed Professional Tax Statement
You can view PT Computation Report from Gateway of Tally > Display > Payroll Reports > Statutory Reports > Computation menu, detailing Professional Tax collected and paid during a given period in the manner as discussed in Provident Fund Computation Report section.
Gratuity Report The Gratuity Report displays the provisional liability of an employer towards his employee in respect of gratuity payable at the time of cessation of employment either by resignation, death, retirement or termination. The Gratuity Summary Report displays the gratuity amount payable in accordance with the pay components and formulae defined in the ledger master, as discussed earlier. In Tally.ERP 9, the Gratuity amount is calculated proportionately for eligible days in a year to the extent of completed months of service. You can view Gratuity Report either from Statutory Reports menu or Payroll Reports menu i.e., Gateway of Tally > Display > Payroll Reports > Statutory Reports or Gateway of Tally > Display > Statutory Reports > Payroll Reports.
224
Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Gratuity Report The Gratuity Report for the Employees eligible for Gratuity will appear as shown:
Figure 22.221 Gratuity Summary Report
In order to ascertain the Gratuity payable amount, set Use for Gratuity to Yes in the Pay Head master (i.e. Basic Pay, Dearness Allowance etc.)
Button Options in the Gratuity Report: F4: Change Currency Allows you to display the report in any other foreign currency other than base currency. F5: Employee Wise Allows you to display the Employee-wise Gratuity report. F7: Employee Filters This option (Ctrl+F7) allows you to display the Gratuity report for a particular Cost Category with the required Group or Employee.
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The above report displays the details of all employees' along with the Date of Birth, Date of Joining and the Gratuity Eligible Salary, besides commenting on the total Gratuity liability as on date. Press F12: Configure to configure for additional options
Tally.ERP 9 allows you to drill down to the Gratuity Details report from the above display. Select the required employee and press Enter The Gratuity Details screen displays as shown:
Figure 22.223 Gratuity Details Report
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Once the employee is deactivated (i.e., when the date of leaving is filled in the Employee master), Tally.ERP 9 stops computing Gratuity for the deactivated employee. If the tenure of service of such an employee falls below the eligible slab for gratuity calculation, he/she will not be entitled for any gratuity amount. However, in cases where the tenure of service is spread over more than one eligible slab(s), he/she will be entitled to the sum total of all the slabs.
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Points to Remember
Payroll is the process of maintaining records of all employees salaries. The Payroll function in Tally.ERP 9 facilitates accurate and timely employee payments. The Attendance/Production Type is used to record attendance and production data. Salary components constituting Pay Structures are called Pay Heads. Gratuity is a monetary benefit paid by an employer to an employee, at the end of the employment, for the services rendered over the period of employment. Attendance voucher is a voucher type used to record attendance, overtime, leave or production details. Payroll voucher is used to record employees payroll related transactions. Payslip is a document, issued to an employee, that itemises each component of his/her earnings and deductions. Pay Sheet is a matrix report with details of pay heads pertaining to employees. Payroll Statement helps to generate reports for specific pay heads. Attendance Sheet displays information relating to employees attendance or production data. Gratuity Summary Report calculates the liability of a company in terms of gratuity. Expat Report provides comprehensive information about employees who are abroad, on short/ long-term assignments.
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Lesson 1: Basics of Accounting

1.1.1 Types of Accounts

1.1.2 Golden Rules of Accounting

1.1.3 Accounting Principles, Concepts and Conventions

1.1.4 Double Entry System of Book Keeping

Figure 1.1 Double Entry System

1.1.5 Mode of Accounting

1.1.6 Financial Statements

1.1.8 Recording Transactions

Figure 1.2 Parties dealt with in a business process

Lesson 2: Fundamentals of Tally.ERP 9

2.1.1 Salient Features of Tally.ERP 9

2.1.2 Functional Features of Tally.ERP 9

2.1.3 Technology Advantages

2.1.5 Data Migration Capability

2.1.6 Features pertaining to Duties and Taxes

2.2 Getting Functional with Tally.ERP 9

Figure 2.1 Tally.ERP 9 Start - up screen

2.2.2 Tally.ERP 9 Screen Components

2.2.3 Mouse/ Keyboard Conventions

2.2.4 Switching between Screen Areas

2.2.5 Quitting Tally.ERP 9

2.3 Creation/ Setting up of Company in Tally.ERP 9

2.3.1 Creation of a Company

Figure 2.2 Company Creation screen

Books Beginning From

Use Security Control

2.3.2 Base Currency Information

Symbol for Decimal Portion Show amounts in millions?

The completed company creation screen is displayed as shown below:

Figure 2.3 Completed Company Creation screen National Traders

Figure 2.4 Gateway of Tally

2.3.3 Working with Multiple Companies

2.3.4 Exercise to Create another Company

The Gateway of Tally screen will now appear as shown below:

Practice Exercise 1. Select a Company 2. Shut a Company 3. Alter a Company

Lesson 3: Creating Accounting Masters in Tally.ERP 9

Creating Accounting Masters in Tally.ERP 9

The Company Features screen is displayed as shown.

Figure 3.1 F11: Features Menu

Creating Accounting Masters in Tally.ERP 9

The Accounting Feature screen is displayed as shown.

Figure 3.2 F11: Accounting Features Screen

Creating Accounting Masters in Tally.ERP 9

Figure 3.3 F11: Inventory Features Screen

Creating Accounting Masters in Tally.ERP 9

Figure 3.4 F11: Statutory & Taxation Features Screen

3.2 F12 : Configurations

Creating Accounting Masters in Tally.ERP 9

Figure 3.5 F12: Configuration Menu

Creating Accounting Masters in Tally.ERP 9

Figure 3.6 General Configuration screen

3.2.2 Numeric Symbols

Creating Accounting Masters in Tally.ERP 9

Figure 3.7 Number Styles Configuration screen

3.2.3 Accts / Inventory Info.