Tally

Tally.ERP 9 is the world's fastest and most powerful concurrent Multi-lingual business
Accounting and Inventory Management software.
Tally is a fully integrated, affordable and highly reliable and successful commercial software
product and is designed exclusively to meet the needs of small and medium businesses.

The concept of Tally software was visualized in 1986 by Shyam Sundar Goenka who was
the founder of the company Peotronics Pvt. Ltd.

The recent and current versions are Tally 4.5, Tally 5.0, Tally 4.5, Tally 5.4, Tally 6.3, Tally
7.2, Tally 8.1, Tally 9.0, and Tally ERP 9.

Difference between Manual Accounting and Computerized Accounting (Accounting

Software)
Manual Accounting Computerized Accounting
(Accounting Software)
Classification It post accounting classification It is a pre accounting classification
Meaning It is a system of accounting that It is accounting software for
uses physical registers and account recording financial transactions
books, for keeping financial electronically.
records
Recording It is possible through books of Data content is recorded in
original entry customized database
Calculation All calculation are performed Only data input is required, the
manually calculations are performed by
computer system
Speed Slow Comparatively faster
Backup Not possible Entries of transactions can be saved
and backed up
Trial Balance Prepared when necessary Instant trail balance is provided on
daily basis
Financial It is prepared at the end of period It is provided at the click of button
Statements or quarter
Cost Involved The cost is high because several The cost is less as all records are kept
books of account are to be in soft copy
maintained
Retrieval of It becomes difficult and time Retrieval of data is easier as the
data consuming to retrieve data as records are kept in soft copy in
several books have to be gone database.
through By giving instruction, data can be
retrieved quickly
Communication Communication of report takes It is easier and takes less time. The
of reports time and it is difficult as it has to report is in soft copy and if online
be done manually to the user of facility is available, it is
information communicated to the user very easily
at any time and at any place.
History and versions of Tally
Tally is a successful commercial software product. It was developed by S.S Goenka. Due
to path breaking research and development activities by his son Bharat Goenka, Tally
software began to emerge as leading software solutions in accounting.
 Tally 4.5 – This version MS-DOS support financial accounting system. It takes care of
accounting activities only such as Ledger classification and voucher entry. It provides
simple financial reports.
 Tally 5.0 – It works in windows operating system. Inventory module is introduced in
this version, which involves detailed inventory, invoicing etc.
 Tally 5.4 – This version is an improved module over version 5.0 where it is capable of
converting earlier data format into current data format, it is possible through Import of
Data Facility.
 Tally 6.3- It is an extended enterprise systems where it interacts with other system
through ODBC and Email to upload your financial records in from tally.
 Tally 7.2 – In 2005, Government of India introduced new taxing concept called VAT.
It is an integrated enterprise system provides different kind of taxes like VAT, TDS,
service tax etc.
 Tally 8.1 – It is multi language support software. It supports 10 languages included is
introduced in this version.
 Tally 9.0 – It is an improved model over the version 8.1. It support 13 languages and
also payroll, POS.
 Tally ERP 9 – This is latest version which provides different features like remote
access and data security.

Features of Tally

 Tally is user friendly accounting software that can be easily used by beginners and
professionals.
 It provides instant result at any point of time
 It takes off burden of remembering accounts, creditors and debtors.
 It consist of all book keeping capabilities
 Tally is very flexible due to customization features for vouchers, final reports etc.
 Tally can provide reports in legislative formats and thus reports generated in tally are
acceptable by government.
 Tally provides scenario management features that help to investigate business under
conditions
 Tally provide online help that can be used for any incorrectness in handling the
software
 Tally offers remote access services and online help for its customer.
 Tally allows us to efficiently manage our employee details and experience error free
processing of employees salaries.
 Tally had ODBC facility to link to other application for exchange of data dynamically.
 Tally’s mass mailing feature allows the user to e-mail a single report to multiple E-
mail Id’s
 Tally offers multi-lingual support, which means data entry, report generation etc.
operation can be carried out in other than English also.
Components of Gateway of Tally

Gateway of Tally is the main menu that appears on the selection of a company in Tally
application. It is an introductory screen for a company in Tally. It is divided into three
sections. 1) Title or calculator Area 2) Main Area and 3) Button Bar

1) Title or Calculator Area – It is also called Bottom area, it can be accessed by using
CTRL+N shortcut. It contains Tally Logo, copyrighted Tally Company Name, Tally
software Version (Gold, Silver), License(Educational, Professional/Commercial),
Serial Number, Tally Website URL information(http://www.tallysolutions.com).

It contains calculator, used to perform arithmetic calculations. It also contains

Configuration section, ODBC for connecting to other applications for exchange of
data.

Status Bar – It lies at the bottom of Tally screen, which shows the path of currently
displayed screen (Tally Main ->Gateway of Tally), Release Details, System Date and
Time.

2) Main Area – The Main Area can be accessed by using CTRL+M keys. It is separated
into two areas.
a) Left-hand side Area – It provides following information
 Current period – It shows currently loaded or selected company’s
accounting period. Ex. 1-4-2013to 31-3-2014
 Current Date – It shows the date of the last voucher entry of the selected
company.
 List of Selected Companies – It shows the list of selected companies and
their voucher entry dates. We can load any number of companies on
Gateway of Tally.
 b) Right-hand side Area – It contains Gateway of Tally menu
 Masters – This section contains two options 1) Accounts Info which
contains Groups, Ledgers, Cost Center, Cost categories and voucher Types
2)Inventory Info which contains Stock group, stock Item, Stock category,
Units of Measure and Voucher Types
 Transaction – It contains Accounting voucher and Inventory voucher for
making voucher Entries.
 Import – It contains option to import Accounting and Inventory master and
vouchers from other versions and computers in XML
 Reports – This section contains Balance sheet, Profit & Loss a\c, Stock
summary, Ratio Analysis, Display, etc used for viewing and printing
financial reports.

3) Button Bar - The button or keys help us to work with Tally in easier and faster ways.
It has horizontal as well as Vertical Button Bar

Horizontal Button Bar options –

 Print (Alt+P) –It is used to display the printing menu that contains printing
reports and transactions of a company.
 Export (Alt+E) – It is used to export the Tally Master and Transactions in
XML format.
 E-mail (Alt +M) – This button is used to send tally reports and invoices to the
customers. Online purchase order, reminder letter etc can also be sent.
 Upload (Alt+O)- It is used to publish any report and statement or data on
internet
 Language (ALT+L) – It is used to select language for working in Tally.
Default language is English.
 Keyboard (Alt+K) –It is used to select language for the keyboard
 Help (Alt+H) – It is used to access Tally’s online context – sensitive help.

Vertical Button Bar options –

F1: Select Cmp- It is used to select a company from a list of companies
F1:Shut Cmp- It is used to close the company
F2: Date –It is used to set current date for transaction
F2: Period – It is used to change the financial accounting period
F3: Company-It is used to switch from one active company to another active
company
F3: Company Info. – It is used to access the Company Information menu
F4: Connect – It is used to connect Tally with network (Internet)
F4: Disconnect- It is used to disconnect Tally from network (Internet)
F11: Features – It is used to modify and Access Company features for a company.
F12: Configure- It is used to access the configuration settings to manage the
information put into Tally.

Company Info. Menu in Tally

It contains options like create, select, alter or shut company.
Select Company (S key/F1) – This option is used to select required company from a list of
already created company.
Shut company (H key/ALT+F1) – this option is used to remove required company from a
list of companies in Gateway of Tally screen. It will not delete the company.
Create Company (Key C)- This option displays Company creation screen which is used to
create new company in Tally.
Create Group Company (Key G) – It is used to create a group of companies or members
under a common company name.
Alter (Key A) – This option displays Company alteration screen which is used to modify or
change required company’s details.
Change Tally Vault (Key T) – It is used to set a new password for Tally vault.
Split Company Data (Key P) – This option is used to split required company into two
halves. I.e. two new companies. Second company’s recommended financial year is 1 st
September.
Backup (Key B) – It is used to take backup of selected company’s data in a required drive of
the computer.
Restore (Key R) – This option is used to restore required company’s data by selecting from
already backed up list of companies.

Creating a Company in Tally

First step is to create a company whose transactions have to be accounted for.

The following steps are used to create a company in Tally:-

1. Go to Gateway of Tally screen.
2. Click on F3: Cmp. Info. Button present on the button bar (use Alt+F3) of Gateway of
Tally screen. Instantly we see Company Info. Menu
3. Click Create Company option or press key ‘C’. Immediately company creation screen
is displayed with various fields. Enter the relevant information for the company in
following fields.

a) Directory – It is used to specify path where we want to create our Company.

Default directory is C:\Tally\Data
b) Name - This specifies the name of the company to be created.
c) Mailing Name - 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.
d) Address – full address of the company is typed here.
e) Statutory Compliance for – This field is used to select country of the company.
f) State - Select the appropriate State from the list of States.
g) PIN code – Postal Index Number of city or village is typed here
h) Telephone No. – The landline number of the company is entered here
i) Mobile No – The mobile number of the company is entered here
j) E-mail Address- The field is used to provide email ID of the company.
k) Currency Symbol - This refers to the currency symbol Tally will use for monetary
values. By default
l) Maintain – It is compulsory entry that contains two options as follows:-
 Accounts Only – It company deals only with accounts
 Accounts-with-Inventory – If it deals with both Financial Book of Accounts
as well as Inventory (stocks)
m) Financial year From – this field is used to mention starting date of financial year.
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 financial year will be April to
March - in this case, ending with 31st March 2010.

n) Books Beginning From – Actual date of the commencement of business is typed

here as there is possibility of a company start functioning in the middle of a
financial year.

o) Tally Vault Password – Here we can type a password To maintain company data
in an encrypted form. It is an enhanced security feature in Tally allows for
encryption of the company data.

p) Use Security Control- If the option is set to ‘Yes’, Tally allows us to enter Name
of Administrator, password and let us to Use Tally Audit Feature option.

q) Use Tally Audit Feature - It allows the administrator or an auditor profile user to
track changes in accounting information. It tracks changes in transactions or
vouchers and in ledger masters that are more than 30 days old.
 r) Enable Auto Backup - If this option is turned on Tally automatically takes backup
of our master and transactions.

Base Currency Information

 Base currency symbol- Pre-set as a default currency — Rs.
 Formal name- Complete name for the currency symbol.By default, this is set to
Indian Rupees.

 Number of decimal places- By default, this is set to 2

 Is symbol suffixed to amounts?- By default, this is set to No. For example,

in India, we place the Rs symbol in front of amounts.

 Symbol for Decimal Portion- Enter the decimal portion for the currency is
mentioned. Enter Paise.

 Show amounts in millions? 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.

 Put a space between amounts and symbol? By default, this is set to Yes.

 Decimal Places for Printing Amounts in words-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.

4) After filling up the information for the company and coming to the last field, press
Enter key. Instantly we see Accept dialog box at the right bottom of corner of screen.
Click ‘Yes’ to accept and conclude company creation process.

Selecting or Loading a Company

1. Go to the Gateway of Tally screen, press Alt + F3 keys. Immediately Company Info.
Menu is displayed.
2. Click Select Company or Press F1 or Use S key. Now we see Select Company screen
showing List of existing Companies. All the companies created are displayed in an
alphabetical order.
3. Select the company name from the list given by clicking it. Instantly, Gateway of
Tally screen is displayed showing the selected company.

Shutting a Company

1. Go to the Gateway of Tally screen, press Alt + F3 keys. Immediately Company Info.
Menu is displayed.
2. Click Shut Company option (use H key or Alt + F1 keys) to display Shut Company
screen with List of selected Companies.
3. Select the company to be shut down from the List of companies and press Enter key.
Altering or Modifying Existing Company
Sometimes we need to change some of the company Information that has been already
entered.
1. Go to Gateway of Tally screen and click Company Info or Press Alt+F3 keys.
Immediately Company Info Menu will be displayed.
2. Click Alter option ( we can use A key) to display List of companies.
3. Select the Company to be altered from List of Companies and press Enter key.
Immediately Company Alteration screen appears.
4. Make required changes and accept in the end by pressing yes option in the Accept
dialog box.

Deleting a Company
1. Go to Gateway of Tally screen and click Company Info or Press Alt+F3 keys.
Immediately Company Info Menu will be displayed.
2. Click Alter option ( we can use A key) to display List of companies.
3. Select the Company to be altered from List of Companies and press Enter key.
Immediately Company Alteration screen appears.
4. Press Alt+D keys. Instantly Delete? message box is seen
5. Press ‘Y’ to confirm the deletion. Now the company is permanently deleted from
Tally.

Groups in Tally

In tally, ‘Group’ is considered as a collection of ledgers having similar nature and function.
It is a pre accounting classification technique used by Tally.

Predefined Groups

It has 28 predefined groups, out of which 15 are Primary Groups and 13 are Sub-Groups,
Out of the 15 Primary groups, 9 Primary group appears in Balance sheet which are capital in
Nature and 6 Primary group appear under Profit & Loss account which are Revenue in
nature.

1. Capital Asset: It holds Capital and Reserves of the Company. Ex. Owner’s or
proprietor’s capital a/c, Partner’s capital a/c, Share capital a/c etc.
 Reserves and Surplus (Retained earnings) – Capital reserve, general reserve and
Reserve for depreciation

2. Current Asset – It consists of 6 subgroups.

 Bank account – It holds current saving, short term deposits etc
 Cash-in- hand – It can hold ledger account for cash. We can open more than one
Cash a/c. Ex. Petty cash
 Deposits (Asset) – It holds deposits like Fixed Deposit, Rental Deposits, security
Deposits etc. Deposits made by the company are only considered nut not the received.
 Loans & Advances (Asset) - It is a subgroup that holds loans given by the company.
These will be non-trading in nature. Ex. Salary advance, advance for the purchase of
fixed assets etc
 Stock –in- hands – It is a special group that holds opening and closing stock. Ex. Raw
material a/c, work in progress, finished goods a/c,
 Sundry debtor – This subgroup can hold accounts of debtors those owe money to
business.

3. Current Liabilities – This group holds Outstanding, statutory and minor

Liabilities
 Duties and Taxes – It holds account such as trade duties, excise, Local sales tax
and central sales tax
 Provisions – It acts like a reserve. Ex. Provision for Depreciation, Provision for
taxation
 Sundry creditors- it holds account of the trade creditors of the company.

4. Fixed Asset – It holds fixed asset of a company.

5. Investments – It holds accounts related to investments like bonds, shares Govt.

securities, etc.

6. Loans (Liability) – The account is related to loan taken by the company is

considered in this group.
 Bank OD (OCC) account – It holds Overdraft account like bill discounting a/c of the
bank etc. OD means Overdraft which is excess withdrawal from bank. OCC means
Open cash credit is credit facility for working capital based on stocks, receivable etc.
Both bank ODD and OCC are loan accounts showing credit balance and bank a/c
shows debit balance.
 Secured Loans –It holds account of the loans taken by the company from banks and
other financial establishments by mortgaging its fixed assets.
 Unsecured Loans –This is unconditional loan taken from partners, directors or third
parties.

7. Suspense Account – This group is created when there is some discrepancy in the
Balance Sheet due to unsettled accounts. Eg.Travelling advance – the exact
expense can only be known when TA bill is submitted.

8. Miscellaneous Expenses (Asset) – It is rarely used. This is mainly required for

legal disclosure like Schedule VI of Indian Companies Act.

9. Branch/Divisions – It holds accounts of a company’s sister concern, Branch,

divisions, affiliation etc.

10.Sales Account – The group holds different sales account. It can be categorized
based on Types of sale (Domestic and export) and Tax slabs. We can open sales
return a/c to consider net sales after return.

11. Purchase Account – This group holds accounts related to purchase.

12. Direct Income –It holds account related to income due to sale of goods
13. Indirect Income – The group holds account related to non-sale income earned like
Rent received, Commission received, Interest Received etc

14. Direct Expense – It holds direct trading expenses of the factory like wages paid to
labors, transportation, electricity bill etc

15. Indirect Expense – The expenses incurred in the administrative building such as
Salary paid to staff, Maintenance, Stationary etc come under this group.