Introduction of Tally

Tally.ERP 9 is one of the most widely used financial software. Tally.ERP 9 reports can help a business owner make
informed decisions to increase efficiency, reduce costs, and organize business operations.
With Tally.ERP 9, accurate, up-to-date business information is available at your fingertips anytime. It provides a
Comprehensive solution for the accounting and inventory needs of a business.

Tally software developed by Tally solution Pvt Ltd, Bangalore.

Tally Features:
F11: Company Features
F1- Company features
F2- configuration
F3- taxation
F12: Configuration

Tally groups: 28
There are two groups
 Primary group 15
 Secondary group 13

Cash paid to rent rs.5000

Goods purchased from ravi & co Rs. 500000

 Getting Started withTally.ERP 9
Open Tally Screen
Click Start menu or Desktop show in tally icon

The fields in the company creation screen and the information to be filled in each of them are explained
below. To navigate between the fields, use the Enter/Tab/Arrow Keys, or Mouse clicks.

 Directory: The path to the location of Tally.ERP 9 data is displayed here. By default, the path
provided while installing Tally.ERP 9 will be displayed. However, you can press backspace and
specify the location in which you want the data to be stored.
 Name: Provide a name for the company that is being created. In this example, we are creating
a company named Vridhi Traders.
 Primary Mailing details: The mailing name and address details are picked from here for any
report such as balance sheet and statements of accounts.
 Mailing Name: The name provided for the company in the name field is automatically
displayed here. However, you can change it as per requirements. The name specified here
will be used for mailing purposes. In this example, Vridhi Traders is retained.
 Fill in the company’s address.
 Country: Select the country in which the company is located. This will allow users to choose
the statutory capabilities available for that country. In this example, the country selected is
India.
 Fill in the relevant numbers in the Telephone No. and Mobile No. fields.
 E-Mail: Fill in the company’s official e-mail ID here. This will be used while e-mailing reports
and statements from Tally.ERP 9.
 Books and Financial Year Details:
 Financial Year from: This refers to the twelve-month accounting period of the company. For
Vridhi Traders, the financial year begins on 1-7-2016.
 Books beginning from: The date provided in the aforesaid field will be automatically
displayed here. In the example, the date is retained. However, if you have started with
maintaining your books of accounts with Tally.ERP 9 mid-year, the required date can be set
accordingly. Tally will not allow you to record the transactions for dates preceding the date
entered in the books beginning from field.

Security Control:
 TallyVault Password (if any): Once you enter a password here, you will need it to open your
company each time. The name of a company that is locked using TallyVault will be hidden
with the asterisk ‘*’ symbol. You need to provide the TallyVault password to open and
access the company.
 Repeat Password: Here, enter the password entered in the TallyVault field, as a confirmation.
 Use Security Control?: Setting this option to Yes will allow you to define the access rights for
each user who will access your company. This feature is explained in forthcoming chapters.

Base Currency Information:

 Base Currency Symbol: The base currency symbol will be filled as per the country selected.
 Formal Name: The currency’s formal name will be filled here. In this example, it is INR (Indian Rupees).
 Suffix Symbol to Amount: For some countries, the currency symbol is specified after the
amount. This option can be enabled for such countries, so that the currency symbol may be
printed after the amount. However, Vridhi Traders is an Indian company and hence this
option is set to No.
 Add Space between Amount and Symbol?: Tally.ERP 9 will provide a single space between
the amount and the currency symbol, if this option is set to Yes. For e.g.: KSh 5,000. Notice
the space between symbol and the amount.
 Show amounts in Millions?: If the company’s financial statements need to have their values
expressed in terms of millions, set this option to Yes.

Number of Decimal Places: By default, the number of decimal places for the base currency
is set to 2. However, you can have up to 4 decimal places. The Indian currency has 2
decimal places whereas certain other countries require 3 decimal places and so on.
 Word representing amount after decimal: The symbol for amounts expressed in
decimals will be set by default. For India, it is Paise.
 Decimal Places for printing amounts in Words: You can specify the number of decimal
places for printing the amount in words. This number should be equal to or lesser than the
number specified in number of decimal Places field. For example, if the currency has up to
3 decimal places, the value to be printed in words can be restricted to 2 decimal places

The Completed Company Creation screen appears as per Figure 1.2

Figure 1.2 Company Creation screen of Vridhi Traders

The message Accept? Yes or No will be

displayed. Press Y or Enter to save the details.

Select a Company
By ‘selecting’ a company, you are essentially opening the company it in Tally.ERP 9.
 Go to Gateway of Tally > F3: Company Info. (Alt+F3)
 Click Select Company, or press S. Tally.ERP 9 displays the Select Company screen, with a List
of Companies that are available in the location specified. You can also press F1 to get to the
Select Company screen.

Shut a Company
By ‘shutting’ a company, you are essentially closing a company.
 Go to Gateway of Tally > F3: Company Info. (Alt+F3)
 Click Shut Company. Tally.ERP 9 displays the Close Company screen, with the List of
Companies that are open. You can also use Alt+F1 from the Gateway of Tally to get to this
screen.

Alter Company Details

By ‘altering’ a company, you are modifying the details which you have provided in the Company
Creation screen.
Go to Gateway of Tally > F3: Company Info. (Alt+F3)
1. Click Alter or press A. Tally.ERP 9 displays the Select Item screen, with a List of Companies that are
available in the location specified. Select the company which you need to alter and press Enter to
view the Company Alteration screen. Alter the company details as required and accept the screen

Groups

A ‘Group’ is the accounting group under which ledgers of the same nature can be classified. For
instance, Tally.ERP 9 has a default Group ‘Sales Accounts’, under which all the sales ledgers will be
classified.
There are 28 pre-defined groups in Tally.ERP 9, which feature in the chart of accounts of many
organisations. Out of these, 15 groups are primary groups and the remaining 13 are sub-groups.
Among the 15 primary groups, 9 groups are balance sheet items and the remaining 6 groups are Profit
& Loss A/c items. You can use these groups to build your chart of accounts, as well as create and used
group’s specific to your business transactions.
.

However, you may also alter the nomenclature of these 28 groups.

To view the list of the 28 groups, known as the List of Accounts, go to Gateway of Tally > Accounts
Info. > Groups > Display (Multiple Groups) > Select All Items.

Ledger Creation:

In Tally.ERP 9, we can create the ledgers in two ways given below:

I. Single Ledger Creation: Here we can create one ledger at a time.
II. Multiple Ledger Creation: Here we can create different ledgers at one go and also ledgers which
belong to particular group.

I. Single Ledger Creation

Creation of Proprietor’s Capital Account ledger from single ledger creation screen.
1. Go to Gateway of Tally > Accounts Info. > Ledgers > Create (Single Ledger Creation)
2. Enter Name as Proprietor’s Capital Account
3. Select Capital Account from the List of Groups
 The Ledger Creation Screen appears as per Figure 1.8

Figure 1.8 Ledger Creation screen — Proprietor’s Capital Account

4. Press Y or Enter to accept the screen

Tally.ERP 9 displays the total debit and credit opening balances in the right upper corner of screen while
the ledgers are being created in the ledger creation screen. This is to avoid differences in the opening
balance.
II. Multiple Ledger Creation
Now let us create the following ledgers using the Multi Ledger Creation option:

To create Multiple Ledgers at once, follow the below given steps:

1. Go to Gateway of Tally > Accounts Info > Ledgers > Multiple ledgers > Create
2. From Under Group field select All Items
.Under Name of Ledger enter the name as Kaltronic Ltd
1. Select as Sundry Creditors from the List of Groups
2. Press Enter and move to next line as there is no openingbalance
3. Similarly, select the other ledgers as shown in figure 1.9:

Figure 1.9 Multi Ledger Creation Screen

4. Press Enter or Y to Accept

Now that we have learnt how to create ledgers under Tally.ERP 9’s default pre-defined groups, let us move
on to understand how to make alterations to ledgers that are already created.

Altering and Displaying Ledgers

Now, go to Gateway of Tally >Accounts Info>Ledgers > Select Display under single ledger, you will see
that the List of Ledgers.

You can also Alter ledgers from Accounts Info. > Ledgers > Alter (Multiple Ledgers). 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, all the
transactions must be deleted first by pressing Alt+D.
Ledger Exercise: 1

Gateway of Tally Master Account info

Ledgers Multi ledgers create

TALLY LEDGERS AND GROUPS LIST

LEDGERS NAME GROUPS NAME

Accrued Income Current Assets
Accrued Rent/ Accrued Income Current Assets
Advertisement Expenses Indirect Expenses
Advertisement Payable Current Liabilities
Air Conditioner Fixed Assets
Apprentice Premium Direct Incomes
Audit Fees Indirect Expenses
Bad Debts Indirect Expenses
Bad Debts Received Indirect Incomes
Bad Debts Reserve (last year balance) Indirect Incomes
Bank Bank Account
Bank Balance Bank Account
Bank Charges Indirect Expenses
Bank Commission Indirect Expenses
Bank Loan Loans & Liabilities
Bank Overdraft Bank OD
Bills Payable Current Liabilities
Bills Receivable Current Assets
Bombay Branch Branch & Division
Bonds Current Assets
Building Fixed Assets
Capital Capital Account
Car Fixed Assets
Car Expenses Indirect Expenses
Car Repair Indirect Expenses
Carriage Direct Expenses
Carriage on Sales Indirect Expenses
Cash Cash in Hand
Cash at Bank Bank Account
CGST Duties & Taxes
Closing Stock Stock in Hand
Coal & Fuel Direct Expenses
Coal, Gas & Water of Factory Direct Expenses
Coffee Expenses Indirect Expenses
Coke Expenses Indirect Expenses
Commission (Cr.) / Commission Received Indirect Incomes
Commission (Dr.) Indirect Expenses
Computer Fixed Assets
Consignment Stock Current Assets
Consumed Material Direct Expenses
Coolage Direct Expenses
Creditors Sundry Creditors
Debtors Sundry Debtors
Deferred Expenses Current Assets
Deferred Income Current Liabilities
Delhi Branch Branch & Division
Depreciation Indirect Expenses
Depreciation Reserve Current Liabilities
Difference in Trial Balance (Dr or Cr) Suspense Account
Discount (Cr.) / Discount Received Indirect Incomes
Discount (Dr) / Discount Allowed Indirect Expenses
Donation Indirect Expenses
Drawing Capital Account
Electricity Expenses Indirect Expenses
Expenses on Purchases Direct Expenses
Expenses on Sales Indirect Expenses
Export Duty Indirect Expenses
Factory Fixed Assets
Factory Expenses (Lighting, Power etc.) Direct Expenses
Factory Incomes Direct Incomes
Farm House Fixed Assets
FDR Current Assets
Fire Insurance Indirect Expenses
Fitting Charges Received Indirect Income
Forex Gain Loss Indirect Expenses
Freight Direct Expenses
Freight Inward Direct Expenses
Freight on Purchase (Freight Inward) Direct Expenses
Freight on Sale (Freight Outward) Indirect Expenses
Freight Outward Indirect Expenses
Fuel & Power of Factory Direct Expenses
Furniture & Fitting Fixed Assets
Furniture & Fixture Fixed Assets
Gas and Water Direct Expenses
General Expenses Indirect Expenses
General Reserve Current Liabilities
Godown Rent Indirect Expenses
Goods Sent on Consignment Sales Account
Goodwill Fixed Assets
Horse & Carts Fixed Assets
House Rent Capital Account
Hundi (Assets) Current Assets
Hundi (Liability) Current Liabilities
IGST Duties & Taxes
Import Duty Direct Expenses
Income From Repair Indirect Incomes
Income on Assets Indirect Incomes
Income on Investments Indirect Incomes
Income Tax Capital Account
Input VAT 4%, 12.5% Duties & Taxes
Insurance Indirect Expenses
Insurance Claim Indirect Incomes
Insurance Company Sundry Debtors
Interest (Dr.) Indirect Expenses
Interest on Capital Indirect Expenses
Interest on Drawing Indirect Incomes
Interest on Loan Indirect Expenses
Interest Received (Cr.) Indirect Incomes
Invest in Govt. Bond Investment
Investment Investment
Labour Charges Indirect Expenses
Land & Building Fixed Assets
Lease Hold Building Fixed Assets
Legal Expenses Indirect Expenses
LIC Premium (Dr) Capital Account
LIC Refund (Cr) Capital Account
Life Insurance Capital Account
Loan on Mortgage, Loans Loans & Liabilities
Loose Tools Fixed Assets
Loss By Damage Indirect Expenses
Loss by Fire Indirect Expenses
Loss in Transit Indirect Expenses
Loss on Assets Indirect Expenses
Loss on Joint Venture Indirect Expenses
Machine & Tools Fixed Assets
Machine Repair Indirect Expenses
Manager’s Commission Indirect Expenses
Manufacturing Expenses Direct Expenses
Master Plus Investment
Miscellaneous Expenses Indirect Expenses
Miscellaneous Income Indirect Incomes
Motor Cycle Fixed Assets
Motor Cycle Repair Indirect Expenses
Mutual Fund Investment
Octroi Direct Expenses
Office Expenses Indirect Expenses
Oil Direct Expenses
Opening Stock Stock in Hand
Output VAT 4%, 12.5% Duties & Taxes
Outstanding Expenses Current Liabilities
Packing Exp. Indirect Expenses
Pan and Tea Expenses Indirect Expenses
Personal Expenses Capital Account
Petrol Expenses Indirect Expenses
Plant & Machine Fixed Assets
Postage & Telegram Indirect Expenses
Power & Fuel Direct Expenses
Prepaid Expenses Current Assets
Printing & Advertisement Indirect Expenses
Printing & Stationery Indirect Expenses
Printing, Papers & Advertisement Indirect Expenses
Production Wages Direct Expenses
Profit on Consignment Indirect Incomes
Profit on Jointventure Indirect Incomes
Provision for Bad Debts Indirect Expenses
Provision for Discount on Creditors Indirect Incomes
Provision for Discount on Debtors Indirect Expenses
Provision for Office Expenses Current Liabilities
Purchase Purchase Account
Purchase of New Land Fixed Assets
Purchase of Raw Material Purchase Account
Purchase Return Purchase Account
Purchase UP/ Ex-UP Purchase Account
Railway Authority Sundry Debtors
Rates & Taxes Indirect Expenses
Refreshment Expenses Indirect Expenses
Refrigerator Fixed Assets
Rent Indirect Expenses
Rent & Tax Indirect Expenses
Rent on Purchase Direct Expenses
Rent Payable Current Liabilities
Rent Received Indirect Incomes
Repair & Renovation Indirect Expenses
Repairing Charges Received Indirect Incomes
Return Inward Sales Account
Return Outward Purchase Account
Salary Indirect Expenses
Salary & Wages Indirect Expenses
Salary Payable Current Liabilities
Sales Sales Account
Sales Return Sales Account
Sales UP/ Sales Ex-UP Sales Account
Scooter Fixed Assets
SGST Duties & Taxes
Shares / Bonds Investments
Shop Fixed Assets
Shop Expenses Indirect Expenses
Shop Rent Indirect Expenses
Showroom / Shop Fixed Assets
Showroom Repair Indirect Expenses
Stable Expenses Indirect Expenses
Stamp & Postage Indirect Expenses
Stationery Indirect Expenses
Stock (1st April and 31st March) Stock in Hand
Stock of Material Current Assets
Sundry Creditors Sundry Creditors
Sundry Debtors Sundry Debtors
Tea Exp. Payable Current Liabilities
Tea or Coffee Expenses Indirect Expenses
 Telephone Expenses Indirect Expenses
Telephone Securities Indirect Expenses
Trade Expenses Indirect Expenses
Train Freight & Rent Direct Expenses
Travelling Expenses Indirect Expenses
Typewriter Fixed Assets
Unearned Income Current Liabilities
Vehicle Repair Indirect Expenses
Wages Direct Expenses
Wages on Production Direct Expenses

Ledger Exercise: 2