Supply Chain

A supply chain is the process or a network between the company and its suppliers, which
involve the production of raw materials into finished goods and distribution

Supply Chain Management

Supply Chain Management is the management of activities that involves:
• Raw Materials - The procurement of raw materials from the suppliers
• Production - Conversion of raw material to finished goods
• Storage - Storage of goods ( raw materials, work-in-progress goods, and finished
goods)
• Transportation - Transportation of goods from storage place to the distributors,
vendors, retailers and end consumers
• Goods Return - Handling goods returns and its replacements

Company Creation
 Groups
Groups are collection of ledgers having same nature. Tally provides 28 predefined groups, in
which 15 are Primary and 13 are Sub groups.

1. Bank Accounts
All Banks and their Accounts like Current Accounts, Saving Accounts etc., should be placed
under Bank Account. Ex: - Union Bank, SBI, SBM, HSBC etc.

2. Bank OCC Accounts

OCC stands for – Over Cash Credit. OCC is a facility given to current account holder.
Ex: Canara Bank occ account, HDFC Bank OCC Account etc.

Bank OD Accounts
OD stands for - Over Draft. OD is a facility given to current account and on Fixed deposits but
only for companies and Organizations.

3. Branch/Divisions
All Company branches or bank branches comes under Branch /Divisions.
Ex: Mysore Brach, Mangalore Branch, Bangalore Branch, Vijayanagar Branch etc.

4. Capital Accounts
Owners capital and their drawings are placed under Capital Account.
Ex: share capital, partners capital, Proprietors capital, Drawings & Withdrawals.

5. Cash In Hand
Tally automatically creates Cash A/c in this group. You can open more than one cash account,
if necessary.
Ex: Petty cash, Main cash, Administrative cash etc.
6. Current Assets
The assets which can be converted into cash on sale easily.
Ex: Cash in hand, Cash at Bank, Sundry Debtors, Bills Receivables, Prepaid Insurance, Stock, etc.

7. Current liabilities
The amount which we have to pay from business to others within a shorter period is called
Current Liability.
Ex: Sundry Creditors, Bills Payables, Provisions, Advance from Customers etc.

8. Deposits (Assets)
Deposits contain Fixed Deposits, Security Deposits or any deposit made by the company (not
received by the company, which is a liability).
Ex: Fixed deposits, Security deposits, Electricity deposits, Telephone deposits, Deposits in other
companies, Rental advance etc.

9. Duties and Taxes

All the Duties and Taxes that you collect or Pay through sales and purchase transactions.
Ex: VAT, CST, FBT, Custom Duty, Excise Duty, Input vat, Output vat etc.
 10. Direct expenses
The expenses which do not have any Regular or fixed period to pay.
Ex: Wages, Auto fair, Freight charges, Service charges, Delivery charges etc.

11. Direct incomes

The Incomes which do not have regular period to receive.
Ex: Professional charges received, Wages received, Service charges received, etc.

12. Fixed Assets

The assets which cannot be converted into Cash easily and on conversion which affects your
business.
Ex: Land, Building, Plant, Machinery, Furniture Etc.

13. Indirect Incomes

Incomes which are regular in nature which has limited period to receive.
Ex: Rent received, commission received, Interest received, dividend received, etc.

14. Indirect expenses

Expenses which have limited or fixed period to pay and which are regular in nature.
Ex: Salary expenses, Rent expenses, Telephone expenses, Electricity expenses, Etc.

15. Investments
Group your investment accounts like Investment in Shares, Bonds, Govt. securities, long term
Bank deposit accounts and so on. This allows you to view the total investments made by the company.
Ex: Shares, Bonds, Govt. Securities and Investments in other companies.

16. Loans and Advances (Asset)

All loans and advances given to our Employees and Suppliers.
Ex: Salary advance, Festival advance, Tour advance, Loan to employees, Rent advance, etc.

17. Loans Liability

Loans taken from others Loans that a company has borrowed, typically long-terms loans.
Ex: Bank OD A/c, Party names.
18. Misc. Expenses (asset)
The expenses which are unexpected in nature, apart from direct and indirect expenses.
Ex: Preliminary expenses, Fire, Theft, Accident, Leakage, Breakage etc.,

19. Provisions
All payables should be grouped under provisions.
Ex: Salary payables, Rent payables, Electricity Payables, Telephone payables, etc.

20. Purchase Accounts

You can classify your purchase accounts based on Tax slabs or type of purchase. This also
becomes a simple mechanism for preparation of Tax returns. (Buying of goods)
Ex: Raw materials Purchase, Goods purchase, Interstate purchase, Local purchase, Tax on purchases
etc.
 21. Reserves and Surplus Retained Earnings
This contains ledgers like Capital Reserve, General Reserve, Reserve for Depreciation and so
on.
Ex: Share reserves, Capital reserves, Stock reserves, General reserves, etc.

22. Sales Accounts

You can classify your sales accounts based on Tax slabs or type of sales. This also becomes a
simple mechanism for preparation of Tax returns.
Ex: Finished goods, Local sales, Interstate Sales, Sales@5%, Sales@12.5%, etc.

23. Secured Loans

Loans given with security. Term loans or other long/medium term loans, which are obtained
against security of some asset.
Ex: Debentures, Term Loans, etc.

24. Unsecured Loans

Loans obtained without any security. (Loans given without security)
Ex: Loans from Directors/Partners or outside parties.

25. Stock In Hand

This group contains accounts like Raw Materials, Work-in-Progress and Finished Goods. The
balance control depends on whether you have selected Integrated Account-cum-Inventory option
while creating the company. (refer to Company Creation section for more details)

26. Sundry Debtors

Sundry Debtor is a person who owes money to the business. When you sell the products or service
party will be Sundry Debtor.
Ex: ACE Computers, GR InfoTech, Technocon Builders etc.

27. Sundry Creditors

Sundry Creditor is a person to whom business owes money, when you purchase the product
or Service party will be Sundry Creditor.
Ex: Sanjay Infotech, Nakoda and Company, Giriyas etc.

28. Suspense A/c

In modern accounting, many large corporations use Suspense Ledger to track the money paid
or recovered, the nature of which is not yet known. The most common example is money paid for
Traveling Advance whose details will be known only upon submission of the TA bill. Some companies
may prefer to open such accounts under Suspense Account, Account which doesn’t have a clear
definition.
 Ledger Creation
Go to Gateway of Tally > Create >(Accounting Masters) Ledger

The Ledger Creation screen appears as shown

 Assignment - 1

MANJU-SATHISH INDUSTRIES
Particulars Debit Credit
Akash Traders 40000.00
Bad Debts 3400.00
Bad Debts Recovered 3400.00
Bank A/c 5000.00
Bills Receivable 50000.00
Carriage Inwards 550.00
Commission Received 1400.00
Current Assets 140000.00
Depreciation Expenses 1600.00
Discount Allowed 2000.00
Discount Received 20000.00
Electricity Expenses 5000.00
Excise Duty payables 2600.00
Factory Rent 10000.00
Fixed Deposits 5400.00
Furniture 15000.00
General Reserves 70000.00
Harsha Trading Company 5400.00
Income Tax Payable 5000.00
Insurance Premiums 3550.00
Loan Taken 40000.00
Mr Manjunath -Capital 100000.00
Mr Sathish-Capital 100000.00
Plant & Machinery 80000.00
Printing & Stationery 1600.00
Rent Expenses 7000.00
Purchases 150000.00
Rahul Enterprises 54200.00
Rent Advance 5400.00
Salary Expenses 15000.00
Sales 220000.00
Interest Received 5600.00
Sales Tax 4000.00
Srinidhi Corporations 7700.00
Stock As on 1-1-2005 55000.00

Grand Total 617400.00 617400.00

 Assignment – 2

YASHAS INDUSTRIES
Particulars Debit Credit
Bank of India 20000

Buildings 100000

Central Bank OD A/c 15000

Central Sales Tax 260

Electricity Charges 4800

Furniture 18000

General Reserves 30000

Harsha Trading Company 36750

Infantry Road (Branch) 25000

Interest Received 1400

Yashas Capital 200000

M G Road (Branch) 40000

Miscellaneous Expenses 15000

Petty Cash 500

Purchase 850

Raw Materials (Purchase) 60000

Rent Deposits 5500

Rent Expenses 4500

Rent Payables 1250

Salary Expenses 45000

Sales 1600

Shares 2560

Stock 1050

Grand total 314510 314510

 Assignment – 3

RAJESH ASSOCIATES
Particulars Debit Credit
Bad Debts 45000

Bank Charges 4000

Bills Payable 50000

Bills Receivables 30000

Bonus Paid 60000

Capital 350000

Carriage Inwards 450

Carriage Outwards 800

Cash Purchases 18000

Cash Sales 25000

Conveyance Paid 5290

Debentures 2500

Furniture 70000

Hong Kong and Shanghai Banking Corporation 42000

Indian Bank 200000

Interest Paid 11100

Petty Cash 1000

Postage & Telegraph 560

Power & Fuel Charges 800

Printing & Stationery 21000

Rent Payable 2500

Reserve Fund 80000

Grand Total 510000 510000

 Assignment – 4
PADMABUSHNA INDUSTRIES
Particular Debit Credit
Audit Fees Payable 80000
Canara Bank 50000
Car 210000
Citi Bank 110000
CST Sales 56000
Delivery Charges 22500
Factory Rent 115000
Freight Charges 16000
Furniture 85000
Income Tax Payable 8500
Interstate Purchase 175000
Jagadish Loan Taken 100000
KPTCL Expenses Payable 2580
KST Sales 121000
Local Purchase 98150
Machinery 100000
Main Cash 120000
Mobile Phone 5000
Mohan Enterprises 16000
Mohan's Loan 300000
Padma's Capital 267000
Petty Cash 4800
Raju Marketing 99200
Raman Capital 265000
Ramesh Traders 27000
Rent Advance 100000
Rent Received 3000
Rishi Technics 50000
Sales Tax Payable 15100
Sanjay Infotech 50500
Sham Enterprises 200000
Shares 50000
Site 100000
Spare Parts 8000
Staff Salary 101200
Telephone Deposit 2000
Telephone Charges Payable 4850
Vignesh and Company 75000
Wages Paid 70000
Wages Received 320
Grand Total 1641850 1641850
 Accounting Vouchers
It is a supporting document for the financial transaction.
There are 4 Vouchers.
1. Receipt Voucher (F6).
2. Payment Voucher (F5).
3. Contra Voucher (F4).
4. Journal Voucher (F7).

1. Receipt Voucher (F6)

All the Receipts made by the company by way of cash or Bank is recovered under Receipt
Voucher.

Checklist for Receipt Voucher

a) Receipt to Capital Investment.
Ex: Mr Arun invested Rs.5,00,000/- to his business by cash.
Particulars Dr Cr
Dr Cash 5,00,000

Cr Arun’s Capital A/c 5,00,000

b) Receipt to Sundry Debtors

Ex: Received Rs.1,50,000 from ABC Company by cheque.
Particulars Dr Cr

Dr Canara Bank 1,50,000

Cr ABC Company 1,50,000

c) Receipts to Sales
Ex: Goods sold worth Rs.2,50,000 and received by cash.
Particulars Dr Cr

Dr Cash 2,50,000

Cr Sales A/c 2,50,000

d) Receipts to all types of Incomes (Direct/Indirect)

Ex: Rent received Rs. 15,000 by cheque.
Particulars Dr Cr

Dr Canara Bank 15,000

Cr Rent Received 15,000
 2. Payment Voucher (F5)
All the Payments made by the company by way of cash or bank is passed under Payment
Voucher.

Checklist for Payment Voucher.

a) Payments to Withdrawal
Ex: Mr. Arun withdrawal Rs.7500 for his personal use by cash.

Particulars Dr Cr

Dr Arun’s Withdrawal 7,500

Cr Cash 7,500

b) Payments to Sundry Creditors

Ex: Paid 1,00,000 to XYZ & Company by cheque.
Particulars Dr Cr
Dr XYZ & Company 1,00,000

Cr Canara Bank 1,00,000

c) Payments to Purchase
Ex: The goods purchased worth Rs 50,000 & Paid by cash.
Particulars Dr Cr

Dr Purchase A/c 50,000

Cr Cash 50,000

d) Payments to all types of Expenses

Ex: Salary paid to office staff Rs 18,000 by cash.
Particulars Dr Cr

Dr Salary Expenses 18,000

Cr Cash 18,000

e) Payments to purchase of Fixed Assets

Ex: Furniture purchased worth Rs 25,000 and paid by cash.
Particulars Dr Cr

Dr Furniture 25,000

Cr Cash 25,000
 3. Contra Voucher (F4)
In Contra Voucher the transaction takes place between only Bank & Cash.

Checklist for Contra Voucher

a) Cash to Bank
Ex: Cash deposited Rs 50,000 to Canara Bank
Dr Cr

Dr Canara Bank 50,000

Cr Cash 50,000

b) Bank to Cash
Ex: Withdrawn Rs 20,000 cash from Canara Bank for office use
Dr Cr

Dr Cash 20,000

Cr Canara Bank 20,000

c) Cash to Cash
Ex: Transferred Rs 1,000 from main cash to petty cash.
Dr Cr

Dr Petty Cash 1,000

Cr Cash 1,000

d) Bank to Bank
Ex: Transferred Rs 20,000 from Canara Bank to HDFC Bank.
Dr Cr

Dr HDFC Bank 20,000

Cr Canara Bank 20,000

4. Journal Voucher (F7)

Journal voucher is mainly used for passing adjustment Entries.

Checklist for Journal Voucher.

a) Adjustments
Ex: Prepaid Insurance adjustments Rs 4,000.
Particulars Dr Cr

Dr Insurance Expenses 4,000

Cr Prepaid Insurance 4,000

 b) Credit purchase/ Invoice received
Ex: The goods purchased from XYZ & Company worth Rs 1,50,000 on credit
or Invoice received from XYZ & Company for Rs 1,50,000.
Particulars Dr Cr

Dr Purchase A/c 1,50,000

Cr XYZ & Company 1,50,000

c) Credit sales / Invoice raised

Ex: Goods sold to ABC Company worth Rs 2,50,000 on credit
or Invoice raised to ABC & Company for Rs 2,50,000.

Particulars Dr Cr

Dr ABC & Company 2,50,000

Cr Sales A/c 2,50,000

d) 4. Credit purchase of Fixed Assets

Ex: Land purchased from Sai Land developers Rs 5,00,000 on credit.
Particulars Dr Cr

Dr Land A/c 5,00,000

Cr Sai Land 5,00,000

e) Depreciation Entries
Reduction in value of tangible fixed assets due to normal usage, wear and tear, new technology
or unfavorable market conditions is called Depreciation. Journal entry for depreciation depends
on whether the provision for depreciation/accumulated depreciation account is maintained or
not.
Assets such as plant and machinery, buildings, vehicles etc. which are expected to last more
than one year, but not for an infinite number of years are subject to depreciation. Below journal
entry for depreciation assumes that depreciation is charged directly to the asset account.

f) Provisional Entries
Provisional entries are entries that are made to account for expenses that have not been
accounted in the period for which it relates. Hence the provision is created by debiting the
expenses and crediting the party account or liability account.
g) Year End Adjustment Entries
The adjusting entry for Accumulated Depreciation in general journal format is:
The ending balance in the contra asset account Accumulated Depreciation - Equipment at
the end of the accounting year will carry forward to the next accounting year.
 Case Study 1
Company Name – Apple Software Solutions
April 2023
1. Company got an investment of Rs 25,00,000 by cash. (Owner Name is Akash)
2. Akash rented an office space by depositing of Rs 2,00,000 as an advance and agreed pay
30,000 monthly Rent.
3. Akash paid 20,000 for Auditing Charges to A2B Consultants by Cash.
4. Open a Current a/c in HDFC Bank by depositing Rs.10,00,000.
5. Paid 2,50,000 to IKEA for Interior Design by cheque.
6. Purchased all Fixed Accounts & Issued a cheque
Sl No Assets Name Amount
1 Furniture 45,000
2 Computers 1,00,000
3 Tally Software 25,000
4 Printer 20,000

7. Got an Internet connection by depositing 5,000 through online transfer & agreed for monthly
plan of Rs 2,499.
8. Applied for Telephone connection by paying Security deposit of Rs 8,000 by cash & agreed
for monthly plan of Rs 1,499.
9. The following employees hired for office work
Sl No Employees Name Designation Amount
1 Arun Software Developer 55,000
2 Joy Admin 35,000
3 Madhu Accountant 40,000
4 Jhon Office Assistant 10,000
 Cost center
This option is used to maintain individual records. Cost Center are the units where you can
classify the amount into different ledger.
A Cost center is a unit of an organization to which costs or expenses are allowed and profit
centers are units to which incomes are allocated. Tally. ERP 9 gives you the cost center break-up of
each transaction as well as details of transactions for each cost center.
Cost Categories
Cost Categories have been introduced specially for project oriented organization as they require
allocation of resource to parrel sets of cost centers. For example, consider there is a project to
construct an airport. The airport is the cost center. For this project certain expenses are incurred by
the project head. A simultaneous allocation of the amount has to be made for the both the project, the
employees working for the project and the project head. This requirement can be achieved using Tally.
ERP 9 Cost Category features. Any number of Parallel allocations can be done as per requirements.

Cost Categories Creation

GOT – Create – Show More – Cost Category – Create New
1. Employees
2. Expenses

Cost Center Creation

GOT – Create – Cost Center
Sl No Employees Expenses
1 Arun Conveyance
2 Joy Food
3 Madhu Snacks
4 John Garland

May 2023
1. Rent Paid through online transfer.
2. Internet & Telephone bill paid through online transfer.
3. Salary paid to all employees by issuing a cheque.
4. Invoice raised to Blossom School for software development of Rs 12,50,000.
5. Blossom School setteled half of bill amount by issuing cheque.
6. Invoice raised to Kuberan Electronics for Software Development of Rs 14,75,000
7. Received an advance of Rs 5,00,000 from ABC Pvt Ltd for Software Development by receving
a cheque.
8. Invoice raised to ABC Pvt Ltd for Software Developmet of Rs 12,00,000.
9. Blossom School setteled remaining amount by receiving a cheque.
10. ABC Pvt Ltd setteled Balance amount by issuing DD.
11. Company paid Rs. 3,000 for office maintenance expenses by cash.

Sl No Expenses Amount
1 Conveyance Rs. 1,100
2 Food Rs. 1,000
3 Snacks Rs. 500
4 Garland Rs. 400
 TEST

June 2023
1. Kubrean Electronics settled full amount by cheque.
2. Received an advance of Rs 7,50,000 from Dell Pvt Ltd for Software Development through
NEFT.
3. Akash Paid Internet & Telephone charges through online transfer.
4. Salary paid to all employees by cheque.
5. Rent paid to owner by cash.
6. Invoice raised to MARK Education Academy for Software Development of Rs 22,00,000.
7. Blossom School received Software Develpoment service of Rs 6,50,000 and settled bill on
same day by issuing cheque.
8. Invoice raised to Dell Pvt Ltd of Rs 17,50,000.
9. MARK Education Academy settled full amount by online transfer.
10. Dell Pvt Ltd cleared Balance amount by NEFT.
11. Company paid Rs. 4,000 for office maintenance expenses by cash.

Sl No Expenses Amount
1 Conveyance Rs. 1,500
2 Food Rs. 1,500
3 Snacks Rs. 500
4 Garland Rs. 500