MODULE 1

INTRODUCTION TO TALLY
FEATURES OF TALLY

The following are the main features of tally:

 A leading accounting package: The first version of Tally was released in 1988 and,
through continuous development, is now recognized as one of the leading accounting
packages across the world, with over a quarter million customers. Tally’s market
share is more than 90%.

 No accounting codes: Unlike other computerised accounting packages which require

numeric codes, Tally pioneered the ‘no accounting codes’ concept. Tally users have
the freedom to allocate meaningful names in plain English to their data items in the
system.

 Complete business solution: Tally 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, 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 is very flexible. It mimics the human thought process,
which means that Tally can adapt to any business need. Tally users need not change
the way their business is run to adapt to the package.

 Speed : Tally 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 allows the user to maintain multiple companies and with unlimited
levels of classification & grouping capabilities. It also allows drill down facility from
report level to transaction level.

 Concurrent multi-lingual capability : Tally 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 facilitates real-time multi-user environment.

 Versatility: Tally is suitable for a range of organisations, from small grocery stores to
large corporations with international locations and operations.
  Multi-platform availability: Tally 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.

 Simple and rapid installation: Tally 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 uses minimum hard disk space in the local drive. Its installation on the
local disk takes just a few seconds.

 Internal backup/ restore: Tally 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.

 User-defined security levels: Tally 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’s data integrity checks ensure that there are no external changes
to the data. Tally also uses a binary encoding format of storage to prevent devious
grouping of information.

FUNCTIONAL FEATURES OF TALLY

STARTING UP TALLY

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.

TALLY OPENING SCREEN COMPONENTS

 Title bar: The title bar displays the Tally version number.

 Horizontal button bar: The horizontal button tool bar displays the Selection of
Language key, Keyboard Language and Tally Help.

 Close button: Performs the standard Windows Operating Systems function

(Windows 95 onwards), allowing you to minimise Tally and work on other
applications. To restore Tally, click the Tally icon on the taskbar.
  Gateway of Tally: The Gateway of Tally is the main screen portion of the tally
opening screen it displays menus, screens, reports and accepts the choices and options
which you select to view data as required.
 Buttons toolbar: The button toolbar is displayed on the right hand side of the tally
screen it displays buttons which provide quick interaction with Tally. Only buttons
relevant to the current task are visible.

 Calculator Area: Used for Calculator functions. The shortcut for accessing the
calculator area is “Ctrl+ N”

 Info Panel: Displays Version number, License details, Configuration details.

CLOSING/ QUTTING TALLY

You can exit the program from any Tally screen, but Tally requires all screens to be
closed before it shuts down.

To quit working on Tally,

 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.

CREATION OF A COMPANY IN TALLY

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

Go to Gateway of Tally > Company Info. > Create Company

COMPONENTS OF COMPANY CREATION SCREEN

 Directory: Tally 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.

 Name: This specifies the name of the company as it appears in Tally. If you have
several companies to create with similar names, you will have to distinguish between
them to provide a unique name for Tally.
 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.

 Address: 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).

 Statutory compliance for: Select India from the list of countries.

 State: Select the appropriate state from the list.

 Pin code: Enter the correct pin code.

 Telephone no:

 E-mail:

 Mobile No:

 Currency Symbol: This refers to the currency symbol Tally will use for monetary
values. By default, Tally.ERP 9 displays Rs.

 Maintain: Select the nature of the company i.e, Accounts only or Accounts with
Inventory.

 Financial year from: 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 toMarch - in this case, ending with
31st March 2010.

 Books Beginning From: 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.

 Tally vault Password: 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.

 Use Security Control: Tally 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.
BASE CURRENCY INFORMATION

 Base Currency Symbol: Pre-set as a default currency — Rs. (as specified earlier).

 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 mentioned.
Enter Paise.

 Show amount in millions: ‘No’ by default.

 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.

After entering all the required details press enter key to create the company.

SELECT A COMPANY

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.

In case two or more companies are loaded 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.

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.
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.

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

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

Enable the required features and press enter to save.

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

Go to Gateway of Tally > F11: Features > Inventory Features or click on F2 :

Inventory

Enable the necessary features and press enter to save.

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
 Payroll

Enable the necessary features and press enter to save.

F12 : CONFIGURATIONS

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
There are numerous settings available under various menus in the F12: Configurations
screen, such as
 General
 Numeric Symbols
 Accounts/ Inventory Info
 Voucher entry
  Invoice / Orders Entry
 Payroll Configuration
 TDL Configuration
 Advanced Configuration
 Licensing

SETTING UP ACCOUNTS IN TALLY

Tally 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 suitable for businesses across
industries, verticals and geographies, without changing the way they do their business.

GROUPS IN TALLY

The group is a collection of leaders of the same nature. Tally software automatically
creates 28 groups that are used in the account chart. There are 28 predefined groups in Tally,
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. Among the 15
predefined groups, 9 Groups are Balance Sheet items and the remaining 6 groups are Profit &
Loss A/c items. Following are the predefined groups in tally:

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 Trading and P & L Account.
1. Sales Accounts
2. Purchase Accounts
3. Direct Incomes [Income (Direct)]
4. Indirect Incomes [Income (Indirect)]
5. Direct Expenses [Expenses (Direct)]
6. Indirect Expenses [Expenses (Indirect)].

CREATION OF GROUPS IN TALLY

Go to the Gateway of Tally > Accounts Info. > Groups.

The Groups menu appears. From the Group menu select the “Create” option. The
group creation screen will appear.
In the group creation screen:-
1. Enter the required name in the ‘name’ section and press enter to go to the next field.
2. Enter required alias if necessary.
3. Select the appropriate group from the list of groups that appears in the ‘under’ option.
4. Press enter to create the group.

[Tally.ERP 9 allows you to create any number of groups under all the default groups.]

ALTERATION OF GROUPS IN TALLY

Go to the Gateway of Tally > Accounts Info. > Groups > Single/Multiple Groups>
Alter

- Select the appropriate group from the list of groups that appears.
- Make the necessary alterations in the group alteration screen that appears.
- Press enter to save.

DELETION OF GROUPS IN TALLY

You can delete a group via the Group Alteration (Single Mode) screen by pressing
‘Alt+D’. However, you cannot delete Tally.ERP 9’s pre-defined groups, or groups with sub-
groups or groups containing ledgers. The lowest level must be deleted first.

LEDGERS IN TALLY

A ledger is the actual account head to identify your transactions and are used in all
accounting vouchers. For example, purchase, payments, sales, receipts, and others accounts
heads are ledger accounts. Without a ledger, you cannot record any transaction.

PREDEFINED LEDGERS IN TALLY

There are two predefined ledgers in tally i.e these two ledgers are already created in
tally. They are:
 Cash in hand
 Profit and Loss A/c
CREATION OF LEDGERS IN TALLY (SINGLE LEDGER)

Go to Gateway of Tally > Accounts Info. > Ledgers > Create (Single Ledger. The
Single Ledger Creation screen appears.

1. Enter the name of ledger in the ‘name’ field.

2. Enter alias if necessary.
3. Select the appropriate group under which the ledger is to be created from the
list of groups that appears from the ‘Under’ field.
4. Enter the inventory, mailing, tax details if necessary.
5. Enter opening balances if required.
6. Press enter to save the ledger.

CREATION OF LEDGERS IN TALLY (MULTIPLE LEDGER)

Go to Gateway of Tally > Accounts Info. > Ledgers > Create (Multiple)
Ledger. The Multiple Ledger Creation screen appears.

1. Select the appropriate group under which the ledgers are to be created from
the list of groups that appears from the ‘Under’ field.
2. Enter the names of the ledgers to be created.
3. Select the appropriate group.
4. Enter opening balances if necessary.
5. Press enter to save.

DISPLAY, ALTER AND DELETE LEDGERS

 Display/alter a ledger
Go to Gateway of Tally > Accounts Info. > Ledgers > Display or Alter .
Modification of account ledgers is possible for single ledgers as well as multiple
ledgers. However for multiple ledgers, all the fields are not available for alteration.

 Delete a ledger
Go to Gateway of Tally > Accounts Info. > Ledgers > Alter > Press Alt+D .
NOTE: You can delete the ledger if no vouchers have been created under it. If you
want to delete a ledger for which vouchers have been created, you have to first delete
all the vouchers from that ledger and then delete the ledger account.
INVENTORY ITEMS IN TALLY (INVENTORY INFO)

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.

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.

Creating stock groups

Go to the Gateway of Tally > Inventory Info. > Stock Groups > Create (under the
Single Stock Group).

The single stock group screen is displayed. Enter the necessary details and press enter
to save.

Display, Alter stock groups

 Display:
Gateway of Tally > Inventory Info. > Stock Groups > Display (single or
multiple)

 Alter:
Gateway of Tally > Inventory Info. > Stock Groups > Alter (single or
multiple).
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 lies in categorizing 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.

Creating Stock Category

Go to the Gateway of Tally > Inventory Info. > Stock Categories > Create.

The stock category creation screen is displayed enter the necessary details and press
enter to save.

Displaying and altering Stock Category

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.

UNITS OF MEASURE

Stock Items are mainly purchased and sold on the basis of quantity. The quantity in
turn 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.,
meters, kilograms, pieces etc. Examples for compound units are: a box of 10 pieces etc.
Create the Units of Measure before creating the Stock Items.

CREATING UNITS OF MEASURE

Go to the Gateway of Tally > Inventory Info. > Units of Measure > Create.

The Units of Measure creation screen is displayed. The Units of Measure creation screen
contains the following components.
 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.

 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.

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.

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.

CREATION OF STOCK ITEMS

Go to Gateway of Tally > Inventory Info. > Stock Items > Create.

The stock item creation screen is displayed.

 Enter the name of the stock item in the ‘name’ field.
 Select the appropriate stock group from the list that appears under the ‘under’ field.
 Select the appropriate stock category.
 Select the appropriate Units of Measure.
 Press enter to save and create the stock item.

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 Godowns under Inventory Info.