MODULE 3

BOOKS OF ACCOUNTS AND ITS ADVANCED USAGES

Books of account record the transaction details as entered. Although items are posted too
many different ledgers, Tally.ERP 9 brings all the transactions of a particular category together
into a book of account for viewing and printing. For example, Cash Book records all the
transactions affecting cash and the Sales Book records all sales transactions. The different books
of accounts available in tally are:

 Cash book
 Bank book
 Ledger voucher report
 Journal register
 Purchase register
 Sales register
 Stock item
 Stock group summary etc…

CASH BOOK AND BANK BOOK

The Cash Book is a record of the receipts and payments of cash. It is a book of original
entry as well as a ledger account. Similarly, the Bank Book is a record of all the receipts and
payments made through the bank. The Cash/Bank Book in Tally is a two-in-one report where
you can see both the cash and the bank transactions on the same screen, but in separate sections.
Both the Cash Book and Bank Book are account books that are used to record individual
transaction details. Accordingly, all transactions that affect cash will appear in the Cash Book,
while all transactions that involve a bank, such as deposits, credits, and withdrawals, will appear
in the Bank Book. To display the cash/bank book go to:

Gateway of Tally > Display > Account Books > Cash/Bank Book(s)

LEDGER VOUCHER REPORT

The Ledger Vouchers report for ledgers is used to display all the transactions pertaining
to the selected Ledger.

Gateway of Tally > Display > Account Books > Ledger

JOURNAL REGISTER

Journal register displays all the journal vouchers recorded for each month.

Go to Gateway of Tally > Display > Account Books > Journal Register

Select the appropriate month and press enter.

PURCHASE REGISTER

A Purchase Register displays the information on the periodic purchases of a business

concern. Purchase register helps in analyzing the details of movement of purchased goods to
various godowns, on the basis of which the stock movement at each godown is determined. You
can also view the columnar register for purchase.

Go to Gateway of Tally > Display > Account Books > Purchase Register

SALES REGISTER

The sales register is used to display all the sales transactions effected by the business
during a particular period of time.

Go to Gateway of Tally > Display > Account Books > Sales Register

GROUP SUMMARY

The group summary statement shows the closing balances of the accounts of a selected
group for a specified period up to the current date. The list of group shows primary group and
individual groups. Primary groups include all lists of accounts under all groups. Individual
groups show the list of accounts under a particular group.

Go to Gateway of Tally > Display > Account Books > Group summary

STOCK SUMMARY

It is a statement of stock in hand on a particular date. The statement is updated with

every transaction to provide stock position at any given time. The stock summary can be
accessed directly from the Gateway of Tally. As other reports, it can be drilled down and see the
full details. The stock summary can be configured to show the flow of goods. Select F12:
Configuration while in the stock summary screen and select opening stock, goods inwards, goods
outwards and closing stock. Stock summary can also be expanded to show consumption and
gross profits for each stock item.

Go to Gateway of tally> Stock summary

MOVEMENT ANALYSIS

Movement analysis is one of the important inventory management tool. It shows the
analysis of only those inventory transactions which are integrated with the accounts. It helps to
analyse the movement pattern of materials either party wise, group wise or item wise. It provides
the details of the price at which each supplier has supplied a particular item. It shows the total
inward and outward movement of stock items with their effective rates and values for that
particular group. The following are the steps involved in the movement analysis.

Step l: Gateway of Tally → Display → Inventory books → Movement analysis→ Stock item
analysis.

Step 2: select the required stock item.

Step 3: change configuration for showing graph if any.

SALES ORDER

Sales order is an order placed by a buyer for purchasing goods. It consists of details such
as date of sales order, party name, voucher type, voucher no, order ref no, order amount etc. It
shows a list of all sales orders. After opening the order book, press F7 for showing profit.

Go to Gateway of Tally → Display → Inventory books → Sales order book.

PURCHASE ORDER

When the order is placed with the suppliers for the supply of goods, items, quantities,
date of receipt etc, details are given with the purchase order number. Later, at the time of
receiving these goods, the purchase order is tracked for the order details either in the receipt note
or in the purchase invoice. The outstanding purchase order reports are available in tally. It is
possible to know the order position of any item in the stock summary. Separate purchase order
outstanding reports and purchase order summary reports are also available.

Go to Gateway of Tally → Display → Inventory books → Purchase order book.

LOCATION WISE STOCK REPORT

The reconciled flow of goods at each location is available in tally Select F12:
Configuration while in the godown/ location summary screen and set the required columns
(Opening balance, inwards, outwards, closing balance) to yes. Then the godown summary
statement displays the flow of stock (opening stock, goods inwards, goods outwards and closing
stock) at each location. Here the statement is quantitatively reconciled, not monetarily, i.e.
opening quantity + inward quantity outward quantity= closing stock. Press F7: Show profit to
expand the outward column for consumption and profit figure.

Go to Gateway of Tally → Display → Statements of Inventory → Godown summary.

STOCK QUERY

Stock query report shows complete information pertaining to a particular stock item viz,
alias, part no, stock group, stock category, available closing quantity and balance, cost price,
standard selling price. It is broadly categorized into four sections namely purchases, sales,
godown/ batch details and items of the same group. To view the stock query report:

Gateway of Tally → Display → Statement of Inventory> Stock query > Select the
item from the list.

BRANCH ACCOUNTING

There are two types of entities namely head office and branches. A branch is a distinct
entity from its head office having separate TIN CST number. There is a need of a large amount
of communication, sharing of information and co-ordination required among head office,
warehouse, manufacturing plant and the branch offices. A head office and branch office accounts
are needed to be prepared separately. However, at the end of the year, the branch accounts are
required to be incorporated into the head office account. The separation of head office entries
and branch entries can be done with the help of Cost centre and cost category.

BANK RECONCILIATION

Bank Reconciliation Statement is an explanation of the difference between bank balance

as per cash book and bank balance as per Passbook (Bank statement). Sometimes, the bank
balance as per cash book and pass book do not tally with each other, then we can know the
difference between them by preparing the bank reconciliation statement.
 The process of checking the differences between a bank column of the cash book and the
bank statement or passbook is called Bank reconciliation process in accounting terms. The
person preparing BRS Statement has to check all the transaction recorded in the cash book with
transactions recorded in passbook by the bank.

To use the bank reconciliation statement in tally follow these steps:

 Go to gateway of Tally> Display> Account books> Cash/Bank book

 Select the required bank account and press enter on the required month (or press F2
function button on the keyboard and Specify the required period from which date you
want to reconcile your bank account)

 Now press “F5”– the short cut key for bank reconciliation in Tally function key from the
keyboard and Bank reconciliation statement screen will open

 Enter the date of clearing from the bank statements into Bank Date column next to
voucher type column to reconcile the statements and finally press Yes to accept/ save the
reconciliation statement prepared.

FLEXIBLE INVOICING

Invoices are a big part of any business. It is like a bill which contain all information about
goods or stock item it also contains information about customer, delivery note, made of payment,
delivery place etc. In fact, without invoices, a business cannot be even run. Invoices are needed
to make sales as well as to purchase products. It is also needed for recording regular expenses for
running the business. It helps to know the exact amount of purchase, sales or expenses have
made in business. Thus, invoices are an inseparable part of the business. Tax invoices and Retail
Invoices are the two different types of invoices in Tally for the business.

MANUFACTURING ACCOUNT

Manufacturing business produces items with the usage of machines, tools and labour. The
core process of manufacturing involves raw materials that are transformed into finished goods on
a large Scale. Such finished goods may be used for manufacturing other more complex products,
such as household appliances or automobile or sold to wholesalers, who in turn sell them to
retailers, who then sell them to end users called consumers. The following are the features and
functions of tally related with manufacturing.
Stock Item Classification as Raw material, Work in Progress, Finished goods

All items that that are procured to manufacture a particular item is called Raw Material &
is grouped under the group Raw Materials whereas, a product whose shape has changed, but has
not reached its finished stage is called Semi-finished item. These items will be grouped under the
Group Work-in-Progress' and any item that is changed its shape / nature completely and reached
the final form to sell are called finished Goods and is grouped under Finished goods' group. The
user can also create ledgers with the name Raw Materials, Work-in-Progress and Finished goods
under the group Stock-in-Hand. Once the user has deactivated the option 'Integrate Accounts
with Inventory'. based on the Closing balances entered by the user, Tally automatically displays
the total of closing balances of all the ledgers grouped under the group Stock-in-Hand

Bill of Material with auto adjustments of stock

In many industries, especially assembly units there are number of components involved
in the manufacture of finished items. It is extremely difficult to issue stock items each time a
product is manufactured Such situations can be handled in Tally by using Bill of Material To
generate a Bill of Material, create a new item (finished or intermediate product and specify the
components that go in to manufacturing of that finished / intermediate product. Now, using
manufacturing journal, specify the quantity of items to be manufactured. Tally immediately
selects all items that go in to manufacturing of the finished product and automatically adjusts
(decreases) the stock. Any additional manufacturing cost like wages, power, water charges etc,
can be added to the value of the manufactured product.

Additional cost of Manufacturing with notional value and percentage

When a product is manufactured, other than the component cost there are manufacturing
costs like labor, electricity, accessories etc which will have to be added to the cost of the product.
In Tally, the additional cost can be added to the product while entering stock Journals or at the
time of entering a manufacturing Journal (use B.O.M). The user can specify additional cost as a
% of the component cost or even specify a notional value.

PRICE LISTS

Price Lists Price lists are useful for orders and invoices. An up-to-date price list helps in
decision-making even at the lower levels of the organization and quickens the sales process.
Price lists are available only for inventory items and hence the feature is available only if
inventory and invoicing are activated for the company here there are one or more price lists. And
also the option “ use multiple price levels” from f11: Inventory features should be set to ‘yes’
in order to activate price levels in tally. It may be required more than one price list at the time of
having different price structures/ levels for different purposes, i. e., different groups of customers
requiring different discounts or dealing in different products.

The procedure

Step1: Gateway of Tally → Inventory Info. → Price List

Creating Price List based on Stock Group

Gateway of Tally > Inventory Info. → Price List →Stock Groups