COMPUTERISED ACCOUNTING SYSTEM

Tally and its recent trends

Prof. Piyali Mullick
Points to be noted
• Notes and assignment must be hand written in single ruled pages of lace bound
practical book
• Only results of assignment are to be printed
• All the notes along with assignments and their results are to be neatly arranged
sequentially in lace bound practical book

Lecture 1 on Ledger Creation

Different versions of Tally

• First Version of Tally - in 1990 – Tally 3

• Second Version of Tally - in 1991 – Tally 3.12
• Third Version of Tally - in 1992 – Tally 4
• Next Version of Tally - in 1994 – Tally 4.5
• Next Version of Tally - in 1996 – Tally 5.4
• Next Version of Tally - in 2001 – Tally 6.3
• Next Version of Tally – in 2005 – Tally 7.2
• Next Version of Tally – in 2006 – Tally 8.1
• Next Version of Tally – in 2006 – Tally 9
• Next Version of Tally – in 2009 – Tally ERP 9
• Next Version of Tally – in 2020 – TallyPrime
• First Version of Tally - in 1990 – Tally 3
• Second Version of Tally - in 1991 – Tally 3.12
• Third Version of Tally - in 1992 – Tally 4
• Next Version of Tally - in 1994 – Tally 4.5
• Next Version of Tally - in 1996 – Tally 5.4
• Next Version of Tally - in 2001 – Tally 6.3
• Next Version of Tally – in 2005 – Tally 7.2
• Next Version of Tally – in 2006 – Tally 8.1
• Next Version of Tally – in 2006 – Tally 9
• Next Version of Tally – in 2009 – Tally ERP 9
• Next Version of Tally – in 2020 – TallyPrime
Introduction
Financial Accounting packages are tailor-made software used for preparation of Final
Accounts, Cash/Funds Flow Statement, Inventory Records, Bank Reconciliation Statement,
Tax Related Reports and many other important reports. Tally is one of such software, which is
not only versatile but also easy to use.
Tally Prime: Accounting in digital format
• Tally Prime is one of the most popular accounting software used in India.
• It is complete enterprise software for small & medium enterprises.
• Maintaining accounts in manual books, we write accounting entries as debit and credit.
In Tally, we create entries the same way.

What The Software Will Automatically Do for Us?

At first, we will have to make the software ready before starting Journal Entries. Thereafter,
Journal Entries and some other entries are to be passed as a routine work.

The Software will:

• Make ledger postings;
• Prepare Trial Balance;
• Prepare Inventory records and value closing stock;
• Prepare Profit & Loss Account;
• Prepare Balance Sheet;
• Prepare Bank Reconciliation Statement;
• Prepare GST Report;
• Prepare Funds Flow & Cash Flow Statements;
• Work out Ratios;
• Show Cost-Centre wise results;
• Many other subsidiary accounting jobs;
• Help in auditing.

Lets start Accounting in TallyPrime

Step 1: Visit the official website of Tally solution with the help of any web browser you
like.
• Download the setup files.
• Go to https://tallysolutions.com/download/.
•
Click Download.
The exe will get downloaded in the Downloads folder. You can copy and paste it to
any folder, if needed.
Step 2: Install TallyPrime.
• Double-click setup.exe.
 • Double-click Install New.
• Configure Application Path, if needed.
By default, the application will be installed at C:Program FilesTallyPrime.
Click Configure.
• Double-click Application Path.
• Click … and change the path as needed.

Close the List of Configurations window.

• Click Install.
The application gets installed, and the following window opens.
• Press S (Start TallyPrime) to begin your journey with TallyPrime. If you would like to
explore additional options, then press C (Continue Setup).
• After installation, you will be asked to configure some basic settings such as the data
path, country, and accounting terminology, and so on. These settings will be carried
forward on your journey with TallyPrime.
• You will see the following welcome screen. Select the appropriate licensing option for
your TallyPrime installation.
At this point, Tally Prime is successfully installed on the system and an icon is created on
the desktop.

Major steps involved

Creation of Masters (i.e. one time):
A. Creation of Company:
B. Accounting Masters
C. Stock Master
D. Statutory Masters

Record of Transactions (i.e. repeated activity):

• Entry of Accounting Vouchers and Inventory Vouchers
• Entries for Bank Reconciliation Statements

Create a Company:
1: On launching Tally Prime, select Create Company. You can do that with an easy shortcut i.e.
“Alt+K” or “F3” then click on “Create”.
2: Provide the Company details:
a) By default, your company data will be saved in the location specified under Company
Data Path (you can even change it as per your need)
b) Enter the Name, Mailing name, and Address.
c) Enter the State, Country, and other contact details
d) Set up financial year details and security options (This is optional. You can enable
security features such as Tally Vault and User controls for your company anytime
later by Pressing F12(configuration) then set the security option to yes.
3: Specify the Base Currency Information.
4: Accept the Company Creation screen. As always, you can press Ctrl+A to save or at last Accept
it to save the creation.
When creation of company is over, a screen will appear. This screen is called Gateway of
Tally.

Recapitulation of Basic Accounting Rules

Rules of Debit and Credit

Items Increase Decrease
Expenditure/Loss Debit Credit
Assets Debit Credit
Income/Profit Credit Debit
Liabilities Credit Debit

8 Types of Journals in MANUAL accounting:

Journal Type Purpose

1.Cash Book All Cash/bank transactions including Contra entries
2. Purchase Day Book Only credit Purchases
3. Sales Day Book Only credit Sales
4. Purchase Return Book Only credit Purchases Returns
5. Sales Return Book Only credit Sales Returns
6. Bills Receivable Book B/R received
7. Bills Payable Book B/P accepted
8. Journal Proper Residual entries.

Tally Groups

28 predefined groups in tally, primary groups are 15, and the sub-groups are 13. The different types
of groups are as follows:
Primary Groups - 15
This group is the main group at the top of the hierarchy
9 groups are balance sheets items, 6 groups are profit and loss a/c items

1. Branch/Division 6. Current Assets 11. Indirect Income

2. Capital Accounts 7. Fixed Assets 12. Misc. Expenses
3. Loans 8. Investments 13. Purchase Accounts
4. Suspense Account 9. Sales Accounts 14. Direct Income
5. Current Liabilities 10. Indirect Expenses 15. Direct Expenses

Sub Groups - 13

1. Sundry Creditors 6. Secured Loans 11. Bank Accounts

2. Stock in Hand 7. Deposits 12. Cash in Hand
3. Duties & Taxes 8. Banks OD Accounts 13. Loan &
4. Unsecured Loans 9. Provisions Advances (Assets)
5. Reserves & Surplus 10. Sundry Debtors

Creation of Ledger heads

• Now proceed to create ledger heads. Without creating ledger heads, journal entries
cannot be passed.
• Note that only Cash A/C and Profit & Loss Account are available by default.
• Other ledger heads have to be created, whenever a new company is created.
• For creation of ledger heads, choose the following menu/sub-menu at GOT:
Create >Ledgers
• Thereafter a screen for Ledger Creation will appear.

How to change/Alter Ledgers

Gateway of Tally (GOT) –>Alter -> Ledgers

All ledgers will be displayed here you can select that ledger that you want to change/alter. Make
the changes in the ledger and press “CTRL+A”

How to delete Ledgers?

Go to Gateway of Tally > Alter > Ledger > 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.
 Lecture 2
How to Alter/ Delete/ Shut Company in Tally

How to Alter Company in TALLY

• After the company creation in Tally, the given information of the company can alter/
modify/ change as per requirement. Use the following steps to alter company in Tally:
• Step 1: Gateway of Tally → Press F3 → Alter company → Select the company
name from the list of companies → Company alteration screen will appear for required
modification → Press Ctrl+A (Save) → Yes
How to Delete Company in TALLY
• In Tally, if we delete the company, it can remove the company's complete information
from the Hard disk. All the directories and files that are associated with the company
will be permanently deleted. This information cannot be reserved.
• In Tally Prime, use the following path to delete the company:
• Gateway of Tally → F3 → Alter company → Alt+D → Yes
• Step 1: The company information will display on the screen after using F3 keys. Here,
the delete option will not be available. Now, click on the alter option.
• Step 2: Now, click on Select Company and then click Alt+D. After this, click on the
YES option to delete the company.

How to Shut/Close Company in TALLY

• In Tally, shut a company does not mean that delete a company, it means close. After
working with the company, choose the "Quit" button to close the present company or
press F3 from the Gateway of Tally then Select Shut Company.
• Select the company from the list of companies
• Press Yes

How to set business preferences in Tally

When you create a company in Tally Prime, the key features required to start recording your
business transactions are set by default. As per your business requirements - such as inventory
management, tax-based invoicing, payroll management, audit and security management - you
can set your preferences using the company features (F11).

Company Features in Tally Prime

Description
Features
Accounting
Maintain Accounts When you create a company in Tally Prime, the key features
required for your bookkeeping needs are all set. You can create
a ledger, record sales/purchase transactions, and view the
transaction details in your reports.

Enable Bill-wise entry You can maintain your credit sales and purchase amounts in
separate bills for tracking against the payments and receipts.
When this option is Yes, the ledger master displays Maintain
Balances bill-by-bill for sundry debtors and creditors. Refer
to Maintain Credit Sales Bill-by-Bill for more information.

Enable Cost Centres Enable Cost Centres if you need to allocate expenses to different
cost centres.

Inventory

Maintain Inventory Tally Prime provides the basic inventory features by default to
maintain your stock or inventory. You can create masters such
as stock items, stock groups, units and so on.

Integrate Accounts with Using Tally Prime, enable this option to include the stock or
Inventory inventory balance from your inventory records.
Stock records may contain errors caused by wrong allocation to
items. Using this feature, you can finalise your financial reports
without having to wait for the reconciliation of stocks. You can
drill down from Balance Sheet to Stock Register. Disable this
option to maintain accounts and inventory separately.
Enable multiple Price If you maintain different prices for your stock items, depending
Levels on your business type, you can create multiple price levels for
your stock items.

Enable Batches If you sell or purchase your stock in different lots or batches,
you will need to store them accordingly. In Tally Prime, you can
assign batches to your stock when recording transactions.
 Use Discount column If you provide discounts to your parties on the sale or purchase
in invoices of items, you can manage trade discounts for each item during
the corresponding voucher entry.

Use separate Actual In case the billed quantity is usually different from the actual
and Billed Quantity quantity of stock items when recording transactions, you can
columns in invoices track such details by setting this option to Yes.

Taxation

Enable Goods and If your business is under the GST regime, you can specify the
Services Tax (GST) GST Details for your company.

Enable Tax Deducted at If your business is under the TDS regime, set this option
Source (TDS) to Yes and specify the TDS details for your company.

Enable Tax Collected at If your business is under the TCS regime, set this option
Source (TCS) to Yes and specify the TCS details for your company.

Online Access

Enable Browser Access Tally Prime facilitates viewing reports on the browser using any
for Reports device. You can view the reports supported for viewing on the
browser when you are traveling or at the client’s place – away
from your office computer.
Enable Tally.NET If you need to access your company data from a location away
Services for Remote from your office or synchronize company data available on
Access & different computers, set this option to Yes. You can use the
Synchronization Tally.NET services to connect your company to a centralized
server.

How to open Company Features

In Tally Prime, we can use one of the following methods to open company features:
Path: Tally Prime > Gateway of Tally > F11: Company Features