Method of Calculation

There are four methods of calculating a duty.

1. Duty Based on Items – Tax based on Item Rate

2. Additional Duty

3. On Total Sales

4. Surcharge on Tax

Tax or Duty Based on Items Rate (or Excise Duty)

This type of account is suitable in cases where there are differential rates of
duty/tax on items. In India, excise duty accounts would normally adopt this method. In the UK,
VAT accounts would do likewise. When creating your Inventory item masters, you might
specify Rate of Duty for each item. In your account books, you would open a ledger for the
duty, possibly by the name VAT 17.5%or Excise Duty 12.5%. You will select this method to
instruct Tally to pick up the Rate of Duty specified in your Inventory item master during master
during invoice entry. If one or more items exist with the same rate of duty, then the amount is
calculated using the total. Otherwise, it is calculated on total sales. For example,

Your invoice lists,

Item A (Rate 10%) for 10000/-

Item B (Rate 12%) for 15000/-

Item c (Rate 10%) for 18000/-

Duty (VAT or Excise) will be calculated as follows:

Additional Duty

When excise duty is not enabled for invoicing purposes in Company Features
[F11] (as applicable for many products in India), Additional Duty and Surcharge function alike.

51
In case it is enabled, then Additional Duty is added to the ‘Duty Based on Items’ in the invoice
to reflect the ‘Table Duty payable’. Its method of calculation is explained under ‘Surcharge’.

On Total Sales

As the type suggests, duty will be calculated on the total of individual values of
the items. It does not consider the Rate of Duty specified for each item in your inventory
masters.

It does not calculate duty on the current sub-total unless you have specifically
opted for it in the company features. Hence, the two scenarios could be as follows:

When you have not opted for calculation on current sub-total:

Assuming that there are two items in the invoice:

Item A 10000/-

Item B 15000/-

Tax 2% will be calculated at 2% on total sales of 25000/- = 500/- tax amount

following which you obtain a current sub-total of 25500/-.

If you now add another line, Tax 4%, it will calculate 4% also on 25000/- (on total
sales) giving another 1000/- as tax.

If you opt for calculating on current sub-total:

The above Tax 4% will be calculated on 25500/- (25000+500) giving 1020/-.

Surcharge on Tax

Surcharge and Additional Duty are charged on the immediately preceding entry. A
surcharge is treated as a percentage of the duty levied. Tally expects the preceding line in the
invoice to be the duty on which surcharge is to be calculated.

Hence, in the above example if you have added a line Surcharge 10% it will
appear as:

Item A 10000/-
Item B 15000/-
25000/-
Tax 2% 500/-

52
 Surcharge 10% 50/- (10% of 500)

If your invoice is as below:

Item A 10000/-
Item B 15000/-
25000/-
Tax 2% 500/-
Surcharge 10% 50/-(10% of 500)
Addl. Surcharge8% 4/- (8% of 50)

During invoice creation, this figure is used to calculate tax amount based on the
method of calculation as well as specified in invoicing configuration

([F12] configure > Invoice Entry > Calculate tax on current sub-total?).

Though invoicing has been discussed separately in greater detail, we shall touch
upon relevant aspects here.

Calculate tax on current sub-total: (Yes/No)

Tax here refers to VAT or sales tax. During voucher entry in Invoicing mode, you
may enter additional ledger accounts after giving the list of items in the invoice. Typically, the
ledgers would pertain to duties, taxes, delivery charges, other charges and discounts. Sales Tax
may be calculated on the total of item values, viz., Inventory sub-total, or you may specify it to
calculate on the immediately preceding sub- total. In the latter case, the immediately preceding
sub-total could include any entry that you may have passed, e.g. Delivery Charges. Tally does
not make any presumptions and would not verify its appropriateness or otherwise.

Normally, you would not answer Yes to this option. The facility of Surcharge
being available, the need to calculate on current sub-total is fulfilled by it. Hence, use it
sparingly, maybe only when you have both Excise Duty and Sales Tax (on Excise Duty)
applicable on an.

Display or Alter a Ledger Account

Information in display and alter is the same, hence only alter is discussed. Display
option does not permit any modification. Alter option is accessible only to authorised users.

Gateway of Tally > Accounts Info.>Ledgers > Single Alter > select
ledger

53
 You are allowed to alter any information of the ledger master with the exception
of the Closing Balance of a ledger account, if any, other than closing balance of accounts under
the group ‘stock –in-hand’.

Deleting a ledger account

You can delete a ledger from the alteration mode by pressing <Alt>+<D>. Tally
does not allow deletion of accounts that have transactions. Therefore, should you wish to delete
an account, which has transactions, you must first delete all its voucher entries.

Interest Calculations

Tally allows you to obtain reports on interest calculated by Tally based on the
instructions you furnish. Interest figures are typically desired in the following situations:

1. On outstanding balance amounts

2. On outstanding bills/invoices/transactions (Received and payable)

Tally gives you an exhaustive capability to obtain interest implications on both.

Activate Interest Calculations

Interest is a legitimate return on money invested and chargeable in the business

world on loans and also on delayed payments. Interest can be calculated on the basis of Simple
or Compound Interest.

54
 Tally allows you to obtain reports on interest calculated based on the instructions
you furnish. Interest figures are typically desired in the following situations:

• On Outstanding Balance amounts.

• On Outstanding Bills/Invoices /Transactions (Receivables and Payables)

The Activate Interest Calculation field is displayed in the Ledger Creation screen
only if Activate Interest Calculations is set to Yes in F11: Features.

Set this field to Yes for each specific ledger account for which interest is to be
calculated.

Simple Mode (Where advanced parameters are not applicable)

To calculate Interest in the Simple Mode:

1. Go to Gateway of Tally > F11: Features > Set Activate Interest Calculation to
Yes.>Set Use Advanced Parameters to No.

2. In the Ledger Creation screen set Activate Interest Calculation to Yes.

3. The Interest Parameters sub screen is displayed. Enter the Rate and select the
interest style from the list.

Interest calculations on outstanding balances

Enter Interest details in Vouchers (only in case of transaction by transaction/Bill-

by-bill). View Interest reports.

You will have to alter existing ledger accounts to permit interest calculations on
them. The same operation will apply when creating a new ledger account.

Interest calculation on outstanding balances is allowed for any ledger account.

You simply specify the interest rate and style of calculation. Nothing is required to be done for
interest during voucher entry.

Let’s take an example: Interest calculated on Outstanding Balances

1. Go to Gateway of Tally> Accounts Info.> Ledgers> Alter (Single)> Bank Ltd

(bank account)

55
 2. Set Activate4 interest Calculation to Yes.

3. On activation, the Interest Parameters must be set. It is the basis on which

interest will be calculated for this Ledger account.

4. Rate: This is the rate at which the interest has to be calculated. In this case,
specify 15%.

5. Interest Style: It is the basis on which the rate is applied. Of the four options,
select 365-Day Year.

6. Accept the screen.

You can now view the amount of interest that could be charged by the Bank.

Report on Interest Calculated on outstanding balances.

The Interest Calculations Report can be displayed and printed.

Go to Gateway of Tally> Display> Statements of Accounts> Interest

Calculations> Ledger> Bank Account

Interest calculation transaction by transaction

Activate and specify interest calculations in ledger masters.

Transaction by transaction or Bill-by-bill interest calculation is permitted for

‘Party’ accounts like accounts falling under the groups Sundry Debtors and Sundry Creditors.
For example:

1. Alter a Customer account (under the group Sundry Debtors or one of its sub-
groups).

2. Set Activate Interest Calculation to Yes. In the Interest Parameters now you
have three lines to answer.

3. Set Calculate Interest Transaction-by-transaction to Yes.

4. Set Over-ride Parameters for each transaction to No.

If set to No, you are not allowed to change interest parameters in voucher/invoice
entry. If set to Yes, you can change the interest parameters during entry.

Report on Interest Calculated on outstanding transactions/bills

56
 To view the Interest calculated

Go to Gateway of Tally> Display> Statements of Accounts> Interest

Calculations> Ledger> CP Ltd

The report is similar to the Bill-wise Outstanding Statement. The last column
gives the interest amount on the transaction. Select the line to be viewed in detail for its
calculations.

How to enter the calculated interest amounts?

Use Debit/Credit Note with Voucher Classes

Use Debit notes for Interest receivable and Credit Notes for Interest Payable.
Interest is calculated on Simple or Compound basis and separate classes should be used for
them.

Set-up Debit/Credit Note Classes for interest entries

Set up Debit Notes. Credit Notes will behave the same way.

Go to Gateway of Tally > Accounts Info.> Voucher Types> Create/Alter

1. Alter the Voucher Type Debit Note.

2. Tab down to the field Class.

3. Type the name of the Class.

4. Type Simple Interest.

Likewise, create a Class – Compound Interest and set Yes to Amounts to be

treated as Compound Interest.

Accept the Voucher Type and return to the Gateway of Tally. Create a ledger
account Interest Received under Group Indirect Income.

Voucher Entry for booking Interest

1. Go to Gateway of Tally> Accounting Voucher> Voucher Entry

2. Select F7: Journal > Debit Note

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 3. A Cost Centre Class is also selected if required. Marketing Expenses Class has
been selected here.

4. There are two situations for interest adjustment:-

Billwise interest

• Simple Interest – Interest amounts are not debited onto the same bills.
Create a fresh reference for it.

• Compound Interest – Amounts are auto-debited to the selected bills. Bill-

wise details will not appear in this case.

5. Interest on balances only

Bill-wise interest entry

Debit CP Ltd

Credit Interest Received

When you debit the party account, a list of bills for which interest is applicable
pops up. Select the bills to adjust. Note that even cleared bills appear.

Select the respective interest bills from the list. The debit amount is filled up with
the total. Select New Ref in the bill-wise allocations. In the interest sub-screen, ensure that the
rate of interest is 0. Now Credit Interest Received. The amount is already filled in.

Your voucher will resemble the one below:

58
 Entries for compound interest are exactly the same as for Simple Interest where all
you do is select the Voucher Class Compound Interest. Also the Bill-wise details popup sub-
screen does not come up as the amounts are added onto the bills.

Select Demo from the list and complete a Debit Note.

Now display Outstanding for CP Ltd

Note the contents:

The Bill reference Demo/28/01 and Demo/31/01d are invoices onto which interest
has been compounded.

A new Reference no 2 has been created for Simple Interest due from CP Ltd.

Entries for Interest on Balances only

Again, the issues are Simple and Compound Interest

Compound Interest

Make the following entries in a Debit note with Compound Interest. Voucher
Class Debit Bank Ltd the amount is automatically filled up with the calculated interest

Credit Interest Received

And nothing needs to be dome! The Bank Account has been increased by the
amount of inte4rest due and the Income account of Interest Received also credited.

Simple Interest

Make the same entry as above.

However, since it has the effect of increasing the Bank Ltd account with the
amount due (compound effect), you must make a journal entry to reverse it. the reversal entry
would be something like this:

Debit Interest Receivable (a current asset account)

Credit Bank Ltd

Use a normal Journal voucher for this entry.

59
 We have to necessary go this route to take advantage of the auto filling of the
interest amount which can appear only when we use the Bank Ltd account in Debit Note in the
first place.

Interest Calculation Reports

Interest Calculation report are automatically produced if the feature is activated In

F11: Features and the parameters are set for individual ledger accounts.

There are two types of reports, one pertaining to interest on balances of accounts
like loans, and the other interest on overdue invoices.

Interest reports are available for individual ledger accounts as well as for Groups

Interest Calculation on Ledger Balances (e.g. Loans)

You can get a report on the Ledger balances for the interest calculated.

Go to Gateway of Tally> Display> Statements of Accounts> Interest

Calculations> Ledger

Select Account E.g. Bank Loan Account.

Interest is re-calculated with every change in balance outstanding. The Cr in the

interest amount should not be confused to resemble an Income. It only means that it is payable
and is a Liability.

To ease interest recording, Tally has an interest template, a special voucher class
in Debit Note and Credit Notes.

Specifying Closing Stock Values

Closing stock values have to be specified when accounts and inventory are not
integrated. Tally allows you to specify closing stock values even if your books are integrated. It
would simply ignore the specified figure so long as you maintain the integration. If and when
you select to separate the books, the specified values would automatically be considered.

To enter the closing stock as on a specific date, you must alter the ledger account.
Simply follow the ledger alteration procedure or go from the Balance Sheet via Current Assets.

Go to Gateway of Tally> Balance Sheet> Current Assets> Group Summary

(Or)

60
 Go to Gateway of Tally> Accounts Info.> Ledgers> Alter (Single)

Assuming that you had a ledger account ‘Stock’ under the group Stock-in-hand the
information would be as follows

You are allowed to alter the opening balance as well as specify/alter closing
balances on different dates. You would typically specify Balance Sheet dates so that the Balance
Sheet reflects the amount of that date.

Effective Date for Reconciliation (Bank Accounts only)

The Effective Date for Reconciliation is given for accounts falling under the Bank
Accounts Group (or Bank OCC a/c). By default it is the books beginning date.

This is the date from which you can reconcile your bank account in your books
with the bank statements. Normally, it would be the books beginning date.

However, you can import data from a previous version of Tally or from any other
system (where the reconciliation process was not available or was different). In that case, you
may not need to reconcile the bank account with your bank statements from the very beginning.
Give the date from which you want the reconciliation facility to be activated. Then, previous
entries will not appear for reconciliation.

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 Indirect Expenses

DISPLAYING AND ALTERING LEDGERS

Displaying and Altering Ledgers can be done in Single mode and Multiple mode.
The Multiple mode allows you to display and alter multiple Ledgers at a time.

62
 Displaying and Altering a Single Ledger

You can view the details of the Ledger Masters in Display mode. Display does not
permit any modification. However you can make changed to Ledger Masters in Alter mode.

Displaying a Single Ledger

Go to Gateway of Tally> Accounts Info.> Ledgers> Display (under Single

Ledger.)

Select the Ledger from the List of Ledgers. The Ledger Display screen in
displayed. You will be able to view the details of the selected Ledger Master.

Altering a Single Ledger

Select the Ledger from the List of Ledgers. The Ledgers Alteration screen is
displayed.

You are allowed to alter any information. Make the necessary changes and Accept
Yes to save.

Specifying Closing Stock Values of a Ledger account the group

Stock in Hand

This is possible only in Ledger alteration mode. Closing stock values have to be
specified when accounts and inventory are not integrated. Tally allows you to specify closing
stock values even if your books are integrated. It would simply ignore the specified figure so
long as you maintain the integration. If and when you select to separate the books, the specified
values would automatically be considered.

To enter the closing stock as on a specific date, you must alter the ledger account.
Simply follow the ledger alteration procedure or go from the Balance Sheet via Current Assets.

Go to Gateway of Tally > Balance Sheet> Current Assets> Group Summary

Assuming that you had a ledger account Stock under the group Stock-in-hand the
information would be as follows:

63
 You are allowed to alter the opening balance as well as specify closing balances
on different dates. You would typically specify Balance Sheet dates so that the Balance Sheet
reflects the amount of that date.

DELETING SINGLE LEDGER

You can delete a Ledger account from the Ledger Alteration screen by pressing
ATL+D Tally does not allow deletion of accounts that have transactions. Therefore, should you
wish to delete an account, which has transactions, you must first delete all its voucher entries.

64
DISPLAYING AND ALTERING MULTIPLE LEDGERS
DISPLAYING MULTIPLE LEDGERS

Go to Gateway of Tally> Accounts Info.> Ledgers> Display (under Multiple

Ledger.

Select All Items from the List of Groups to view the details of all the Ledgers in
Tally. If you want to view the details of all the Ledgers created under a Group select the Group
from the List of Groups. The Multiple Ledger Display screen is displayed.

Altering Ledgers in Multiple Mode

Go to Gateway of Tally> Accounts Info.> Ledgers> Alter (under Multiple

Ledger.)

Select any Group or All Items from the List of Groups. The Multi Ledger
Alteration screen is displayed. Make the necessary changes and Accept Yes to save.

Note: You are not allowed to delete a ledger from this mode. Select single alter
mode to delete.

Explanation on Buttons

F3: Company: To work with a different company. In the creation mode, you
can create cost categories in the other company. In alter mode, you can copy the information by
accepting the screen
(<enter> or <Ctrl>+<A>). The old company’s information remains. Not available in Display
mode.

F3: New Cmp: To work on the same report of another company. Available
only in display mode.

F4: Parent: To move the cursor to the field ‘Under Group’

F4: New Parent: To bring up the list of Groups to select a new parent Group.

Zero Op Bal: To nullify (change to zero) all opening balances in this group.

F6: Skip names: For faster data entry when you do not need to the names of
ledgers. The cursor will not go to that column ‘Under’. Toggle to ‘Edit Parent’.

65
 F7: Skip Parent: For faster data entry when you do not need to alter the parent
Group. The cursor will not go to the column ‘Under’. Toggle to ‘Edit Parent’.

F8: Skip Details: the cursor will not go to the columns Opening Balance and
Dr/Cr. Toggle to ‘Edit Details’.

F9: Show Closing: Closing Balances replace Opening Balances. This is

available only in alter mode. Closing balance is not alterable and the cursor skips the field.

F10: Chg Sort: To display a column of sorting position indices. Toggle to

‘Skip Sort’. You may change display positions of ledger accounts under the group.

Groups, Ledger, Cost Categories, and Cost Centres: To enable you to switch to
these areas without having to quit from the current screen.

66
 Chapter
4
Cost Centres and
Cost Categories
A Cost Centre is any unit of an organization to which transactions (generally,
revenue) can be allocated. When only costs or expenses are allocated to these units, they are
referred to as Cost Centres. When profits are also allocated to these units, they become Profit
Centres. You can now obtain a Profit and Loss account of each such Profit Centre.

Cost Centre in Tally allows an additional dimension to a transaction where a

Ledger account indicates the nature of thee transaction. It does not readily disclose, except in the
narration field, which part of the organization was involved in the transaction.

By providing Cost Centres, a transaction can be allocated to it, which would then
enable extraction of all transactions for a Cost Centre. Tally gives you the Cost Centre break-up
of each transaction as well as details of transactions for each Cost Centre.

Some examples of Cost Centers are

• Departments of an organization – Finance, Manufacturing, Marketing, and so

on.

• Products of a company.

• Individuals such as Salesman A, Salesman B.

USE OF COST CENTRES

You can classify Cost Centres just as how you classified Group/Ledger accounts.
You can have Primary Cost Centres and several levels of Cost Centres under each Primary Cost
Centre.

Consider the following example.

Primary Cost Centres - Finance, Manufacturing, Marketing.

Under Marketing, classify the company’s sales executives as Cost Centres. This
will help you track a sales executive’s performance, in terms of cost and revenue generated.

67
 You will then have the following Cost Centre structure (shown here only for the
Marketing Department):

Primary Cost Centre – Marketing

Under Marketing:

Salesman A

Salesman B

Salesman C

Allocate expenditure incurred on sales by the salesmen, as well as the sales

generated by them, directly to their Cost Centres. The allocation is done online at the time of
tr4ansaction entry. This prevents allocation problems at the end of the period, when you find a
large number of transactions not allocated.

By allocating expenses and sales transactions to the salesman, you are setting up a
valuable information system that tracks the performance of your salesmen.

CREATING A SINGLE COST CENTRE

To create a Cost Centre, set Maintain Cost Centres to Yes in F11: Features. It is
advisable not to set More than ONE Payroll/Cost Category to Yes, unless required.

By default, Tally activates the Cost Centre feature for Ledger accounts under Sales
Accounts, Purchase Accounts, Expense and Income groups.

Go to Gateway of Tally> Accounts Info.> Cost Centres> Create (Single Cost

Centre)

The Cost Centre Creation screen displays.

68
 A brief explanation on each of the fields in the Cost Centre Creation screen
follows.

Name

Enter the name of the Cost Centre in this field. For example, Bangalore.

Alias

Enter an alternative name, if required. For example, the Cost Centre Bangalore can
be referred to as Head Office or by a code number.

Under

Select the parent Cost Centre under which the Cost Centre needs to be created
from the list of Cost Centres. If you want the Cost Centre to be a Primary Cost Centre, select
primary from the list.

Note: Unlike Groups, you can allocate transactions to Primary Cost Centre.
However, you should do so when you do not have Sub Cost Centres under the Primary Cost
Centre. It is suggested that you allocate transactions to the lowest levels (similar to ledgers).

DISPLAYING A SINGLE COST CENTRE

To display the details of Cost Centre masters

Go to Gateway of Tally> Accounts Info.> Cost Centres> Create (Under Single

Cost Centre)
The Cost Centre Display screen appears. It is not possible to make any
modifications to the Cost Centre master in the Display mode. You can only view the details in
this mode.

Altering a Cost Centre

To alter an existing Cost Centre

Go to Gateway of Tally> Accounts Info.> Alter > Create (Under Single Cost
Centre)

The Cost Centre Alteration screen appears. Make the necessary changes and
Accept to save.

Deleting a Cost Centre

69
 You can delete a Cost Centre from the Cost Centre Alteration screen by pressing
ALT+D.

You can delete a Cost Centre only if

• It does not have any Cost Centres created under it.

• It is not used in any transactions.

EXPLANATION ON BUTTONS FOR COST CENTRES IN

SINGLE MODE
Groups, Ledger, Voucher Types

It enables you to switch to these areas without having to quit from the current
screen.

F11: Features

To change company features.

F12: Configure

To change the configuration of master information.

Note: Configuration changes affect all companies in the data directory. Whereas
Features changes affect the current company only.

Altering a Cost Centre

To alter an existing Cost Centre

Go to Gateway of Tally> Accounts Info.> Alter > Create (Under Single Cost
Centre)

The Cost Centre Alteration screen appears. Make the necessary changes and
Accept to save.

Deleting a Cost Centre

You can delete a Cost Centre from the Cost Centre Alteration screen by pressing
ALT+D.

70
 You can delete a Cost Centre only if

• It does not have any Cost Centres created under it.

• It is not used in any transactions.

COST CATEGORY
Cost Categories are useful for organizations that require allocation of resources to
parallel sets of Cost Centres. Such organizations would usually be project oriented.

Most organizations would not need Cost Categories. The proper use of Cost
Centres itself would offer the same benefits. Cost Categories could increase data entry work and
make it more complicated. Hence, before opting for Cost Categories, evaluate whether you
actually need this option. Always attempt to first use Cost Centres.

Use of Cost Categories

By using cost Categories you may allocate, in parallel, a transaction to more than
one set of Cost Centres. The following example illustrates the use of Cost Categories.

The Primary Cost Centres such as Marketing, Finance and Manufacturing can now
be-long to a category – Departments.

The Salesman A, Band C can be Cost Centres under a Category – Executives.

Similarly, you can create4 a new Cost Category ‘Projects’ under which Cost
Centres such as Airport construction, Road construction and Buildings may be created. The
classification appears as in the following matrix.

Cost Departments Executives Projects

Categories:
Cost Centres: Marketing Salesman A Airports cont.
Manufacturing Salesman B Roads const.
Finance Salesman C Buildings

Specify a Cost Category to allow allocation of only revenue items or items of both
revenue and capital nature. In this example, allow both for Departments and Projects Categories
and only revenue for Executives.

Salesman A incurs conveyance expenses of Rs. 1000. If he has incurred it for

marketing, allocate this amount to the Cost Centre – Marketing and his own Cost Centre-

71
Salesman A. (Allocate this while entering a payment voucher debiting Conveyance and
crediting Cash.). If the salesman now incurs expense for the project Buildings, allocate to the
Cost Centres – Salesman A and Buildings.

Allocate an expense to one or more Cost Centres. It is not essential to always

allocate expenses to all Cost Centres. If you did not create Cost Categories, you would have
been able to allocate the expense to either the Project Buildings cost centre or Salesman A, not
to both.
You can obtain details of conveyance expenses incurred by Salesman A on
Marketing as well as on the Buildings project when you have Cost Categories.

You cannot, however, extract a single report giving details of marketing expensed
incurred by Salesman A on the Project Buildings. These are different Cost Categories and
cannot be merged. If such reports are required, you must create ledgers such as Conveyance-
Marketing which will help you generate the desired report.

By allocating expenses to parallel Cost Centres under different categories, you are
simply assigning the amounts to them; the amount does not increase. In the above example, the
conveyance of Rs. 1000 remains an expense of Rs. 1000 only. Tally performs an automatic
reconciliation on real- time basis, saving you the effort of reconciling Ledgers and Cost Centres.

Note: Transactions are not allocated to Cost Categories but to Cost Centres only.

GREATING A SINGLE COST CATEGORY

To create a Cost Category, set Maintain Cost Centres to Yes in F11: Features and
the set More then ONE Payroll/Cost Category to Yes.

By default, it is set to No. Tally creates a single Cost Category called Primary Cost
Category and allocates all Cost Centres created, prior to enabling this feature, to this category.
You can create new cost categories, and alter the existing Cost Centres to allocate them under
required Cost Categories.

72
 To create a Cost Category

Go to Gateway of Tally> Accounts Info.> Cost Categories> Create (Under Single

Cost Centre)

The Cost Category Creation screen displays.

A brief description on each of the fields in the Cost Category Creation screen
follows.

Name

Enter the name of the Cost Category. For example, Products.

Note: There is no sub-classification of Cost Categories and hence you do not find
an Under option. Though there is a Primary Cost Category, it is not a parent of other categories.

(Alias)

Enter an alias if you wish to call the Category by another name or even by a code
number. this field displays only if you set Allow ASVANCED entries in Masters in Gateway of
Tally > F12: Configure> Accts/Inv Info. to Yes.

ALLOCATE REVENUEITEMS
Set this options to Yes, to allocate all sales, purchase, expenses and income related
transactions to Cost Centres that you create under the Cost Category. Normally, you would
enable this option. However, should you need to allocate only capital/non-revenue items only to
Cost Centres in that cost category, set this to No.

ALLOCATE NON-REVENUEITEMS
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 You would, usually, disable this options by setting it to No as most Cost Centres
need only revenue allocation. However, should you wish to allocate items of non-revenue
(capital) or Balance Sheet items, you may set it to Yes. Organizations increasingly incurred on
Cost Centres and measure them against revenue earned. Recognizing this trend, Tally has
provided this option.

Note: Enable either revenue or non-revenue items, or both. Do not disable both.
Tally sets Yes, by default, for revenue items and No for Non-revenue items.

DISPLAYING SINGLE COST CATEGORY

To view the details of the selected Cost Category masters from this mode

Go to Gateway of Tally> Accounts Info.> Cost Categories> Display (Under

Single Cost Category)

Select a Cost Category form the List of Categories. The Cost Category Display
screen displays.

You cannot make any changes to the fields in the Display mode.

ALTETING SINGLE COST CATEGORY

To alter and existing Cost Category

Go to Gateway of Tally> Accounts Info.> Cost Categories> Alter (Under Single

Cost Category)

Select a Cost Category form the List of Categories. The Cost Category Alteration
screen displays. Make the changes in the required fields and Accept to save.

Deleting a Cost Category

You may delete a Cost Category that does not have any cost centre under it from
the Cost Category Alteration screen. Use ALT+D to delete it. tally does not allow deletion of a
Cost Category that has Cost Centres.

Buttons in Single Cost Category screens

Groups, Ledgers, Voucher Types

It enables you to switch to these areas without having to quit from the current
screen.

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 F11: Features

To change company features. A detailed explanation on features has been given in

the earlier section under Gateway of Tally.

Note: Configuration changes affect all companies, whereas Features changes

affect only the current company.

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 Chapter
5
Introduction to Budgets
A budget is a plan prepared for the flow of funds in an organization. It contains
financial guidelines for the future plan of action for a selected period of time.

A budget helps to refine goals and use funds efficiently. It provides accurate
information for evaluation of financial activities, aids in decision making and provides a
reference for future planning.

• Multiple budgets can be created for specific porpoises in Tally. Budgets for
Banks, Head offices, Optimistic budgets, Realistic budgets, Pessimistic budgets, and so on can
be created. Departmental budgets like Marketing Budgets, Finance Budgets, and so on, can also
be created. Budget figures can be used in Tally to compare actuals and variances.

In Tally, you can create, alter and delete a budget.

ACTIVATING BUDGETS FEATURE

To activate the Budgets feature in Tally:

• Select F11: Features > Accounting Features

• Set Maintain Budgets and Controls? to Yes.
• Accept to save.

CREATING A BUDGET
To create a Budget in Tally

• Go to Gateway of Tally > Accounts Info> Budgets> Create

• In the Budget Creation screen enter a Name for your budget.

• Select from the List of Budgets for Under field. You can have a hierarchical
setup for budgets. In the List of Budgets, Primary is at the top of the hierarchy and you can
create more primary budgets. Sub-budgets can be created under Primary budgets.

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 • Enter the period of the budget in the From and To fields. The period entered
can be a month, a year or any other period.

• In Set/Alter Budgets of, select

• Groups – To create a budget for a Group of ledger accounts.

• Ledgers – To create a budget for Ledgers.

• Cost Centres – To create a budget for Cost Centers.

• Accept to save.

BUDGET FOR GROUPS

Set Yes in the Groups field in the Budget Creation/ Alterations screen to set
budgets for a group or group of ledgers.

In the Group Budget screen, select a Group from the List of Groups and enter
Account Name.

Enter the cost center for a group in Cost Centre. Select Not Applicable, if the
budget is not for a particular cost centre, but for th company.

In Type of Budget, select from the following two types.

1. On Nett Transactions

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 Select this option to monitor the transaction amounts, not the balances. Nett is not
of debits and credits for the specified period. For example, Nett transactions for Indirect
Expenses are the debit amount for the specified period after reducing the credits for the same
period. Opening and closing balances are not considered.

2. On Closing Balance
Select this option to monitor the balance of the accounts, not the transactions. For
example, balances of bank accounts, balances of debtors.

Enter the budget amount in the Amount field.

BUDGET FOR LEDGER ACCOUNTS

Set Yes in the Ledgers field in the Budget Creation/ Alteration screen to set
budgets for ledgers.

In the Ledger Budget screen, select a Ledger from the List of Ledgers and enter
Account Name.

Enter the cost centre foe a group in Cost Centre. Budgets can be created for ledger
accounts pertaining to a cost centre. For example, Accountancy Fees for Finance Group.
Accountancy Fees can be repeated for another cost centre such as a Branch. Select Not
Applicable if the budget is not for a particular cost centre, but for the company.
In Type of Budget, select from the following two types.

1. On Nett Transactions

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 Select this option to monitor the transaction amounts, not the balances. Nett is not
of debits and credits for the specified period. You do not expect to have a negative figure in
Revenue items which reflect the transacted amounts. If there are negative figures, they are
adjustments. For example, an expense account like travel always has debit entries unless there is
a reversal due to error or change to a customer.

Caution: When using Nett Transactions, the Budget Closing Balances actually get
adjusted even if you have not selected this type. The figures in the Profit & Loss Account reflect
the Closing Balance figures.

Note: To compare transactions against budgets, especially revenue income and

expenses, select On Nett Transactions.

2. Closing Balance
Select this option to monitor the balance of the accounts, not the transactions. For
example, balances of bank accounts, balances of debtors.

Note: To compare closing balance figures in final statements, especially Balance

Sheet items like assets and liabilities, select Closing Balances.

Enter the budget amount in the Amount field.

Apportionment of budget specified for periods more than a month

• Ledger Budgets are apportioned for each month on the basis of number of
days.

• Group Budgets do not get apportioned. Hence, Budget for Current Assets does
not automatically flow to sub- groups.

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 • Closing Balances Budget: Each month will have the same budget value except
that the actual Opening Balance is taken into account.

• Nett transactions Budgets specified for a period get equally apportioned over
the period.

• Enter the budget amount for the specific ledger.

• You can set the Budget for as many ledger accounts as required and accept to
save.

• Use Columns and Variance options to compare budget figures with actuals in
most statements.

BUDGETS FOR COST CENTRES

The purpose of a budget is to control expenditure. You can create multiple budgets
in Tally, each for a specific purpose such as for the Bank, for the Bank, for the Head Office,
Marketing budgets, Finance budgets, and so on.

• Set Yes in the Cost Centres field in the Budget Creation/ Alteration screen to
set budgets for cost centres.
• In the Cost Centre Budget screen, select a Cost Centre from the List of Cost
Centres and enter Cost Centre.

• Enter a budget figure in Expenses for the cost centre.

• Enter a budget figure in Income for the cost centre.

• Enter Closing Balance.

• Enter more cost centres, if required, and acci0pt to save.

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ALTER A BUDGET
You can modify a budget, using the alter option.

• Go to Gateway of Tally> Accounts Info> Budgets> Alter

• In the Budget Alteration screen, modify the fields as required. Change the
period or change budgets of Groups, Ledgers and Cost Centers.

Note: Set/Alter Budget is set to No by default. Set this option to Yes to alter.

DELETING A BUDGET
To delete a budget

• Go to Gateway of Tally> Accounts Info> Budgets> Alter

• Press Alt+D.

BUDGET VARIANCE
Trial Balance and Group Summary have a feature called Budget Variance. The
Budget Variance button (Alt+B) is active if Budgets feature is enable and at least one budget
created. Budget Variance displays Budgets, Actuals with percentage and Variance from the
budget with percentage.

1. Budget Variance can be accessed from:

• Gateway of Tally> Display> Trial Balance to display the Trial Balance screen.

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 • Gateway of Tally> Display> Account Books> Group Summary and select a
group form List of Groups to display th Group Summary screen.

2. Click on Budget Variance (Alt+B) from the toolbar to display the Budget
Analysis screen.

3. Select from the List of Budgets for Budgets/Scenario.

4. Three columns display Budget, Actuals and Budget Variance, respectively.

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 Chapter
6
Introduction to voucher

A voucher is the primary online document for recording transactions. Transactions

recording and analysis are greatly facilitated by having specific formats for different types of
transactions. Tally provides 16 different predefined voucher formats or what it calls predefined
types of vouchers. These are used for recording various transactions. A payment voucher is used
for all types of payments, a receipt voucher for all types of money receipts, a sales voucher for
recording sales transactions, and so on.

These predefined vouchers fulfill your normal transaction needs. They pertain to
both accounting and inventory. Some of these vouchers can also be used differently according to
the situation, e.g., sales vouchers can be used as invoices, vouchers can be post-dated, etc. Such
use can be decided at the time of voucher entry by selecting the appropriate button.

The predefined voucher types can be displayed as follows:

Gateway of Tally> Display> List of Accounts> <Ctrl>+<V> [Voucher Types]

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 Tally acknowledges the special requirements of some users for more voucher
types. These arise in cases like when you need the same voucher but in different names or
separate series of numbers.

Examples include Cash Payment Vouchers and Bank Payment vouchers where the
relevant predefined voucher is Payment Voucher. You may have two or more sets of Sales
Vouchers for different kinds of also transactions e.g. Credit Sales, Cash Sales, etc.

You would need to alter a voucher type to change default setting for different
information appearing in vouchers. Using F12: Configure, you can further configure a voucher.

ALTER A PREDEFINED VOUCHER TYPE

Even if you do not need extra voucher types, you would normally alter the
predefined voucher types to customize them according to your needs, e.g., to control their
numbers.

Display or alter each voucher type (by pressing enter or double clicking) after
Gateway of Tally> Display> List of Accounts> Ctrl+V Voucher Types

We shall create a new voucher type to explain the different features. It would also
be applicable to alteration of voucher types including predefined types.

CREATING A VOUCHER TYPE

Go to Gateway of Tally> Accounts Info.>Voucher Type> Create
Note: A new voucher type must assume the functions of a predefined voucher type

The Voucher Type creation screen is divided into three sections depending on the
various setting.

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 Name

Give the name of the new voucher type, e.g., Sales Invoice.

General

Type of Voucher

The type of voucher should be any one of the predefined voucher types (already
listed in introduction). The new voucher type would inherit the properties of this predefined
voucher type. It would function exactly like the predefined voucher.

Abbreviation

An abbreviation is required particularly for unformatted reports, which do not use

compressing techniques. (Tally allows printing of both formatted and unformatted reports).
Event if the Abbreviation is not specified, Tally automatically sets a default name to the
Voucher. In this example, give ‘Purch’ as the abbreviation. Though there is no restriction on the
length of the abbreviation, it should preferably be five characters or less.

Method of Voucher Numbering

This is, perhaps, one reason for your opting for a new voucher type. There are
three methods available:

None

This will disable numbering of such vouchers. If you select this method, no further
information is required.

Manual

This method will allow you to number vouchers of this type your self. It does not
check for sequence of the numbers and permits you to specify anything you wish in the voucher
number field. However, you may choose to prevent entry of duplicate numbers. If you do,
enable the next field ‘Prevent Duplicates’.

1. Prevention of Duplicates is possible if you enable the option at the time of

creation. You may enable it later (by alteration) only if there are no transactions of this voucher
type.

2. If you face difficulty because transactions now exist, simple create another
voucher type for preventing duplicates of subsequent voucher number

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 No further information is required for manual numbering method.

Automatic

This method is both flexible and exhaustive. Use it carefully to give you your
desired numbering system. Select this option to let Tally number the vouchers automatically for
you.

Use Advance Configuration

If the Method of Voucher Numbering is set to Automatic, then an additional field

to set the advanced configuration for the Voucher type appears. Setting this field to Yes,
Voucher Type Creation (Secondary) screen appears.

A further discussion on these options is necessary.

Use EFFECTIVE dates for vouchers?

Select Yes if you want to enter effective dates for vouchers. You would opt for
this if you have instances where a transition under consideration for overdue/ageing analysis is
recorded currently but will take effect from another date. If effective date is entered, the
overdue/ageing will be considered from the effective date and not from voucher date.

Make Optional as Default

Setting this option to Yes, will set your Voucher to Optional Voucher by default.

Use common narration?

Select Yes to give a common narration for the entire voucher. Tally vouchers can
have multiple entries. Hence, you may wish to give a common narration for all the entries of the
voucher or a separate narration for each entry or both. Select Yes even when you want both.
Select No if you do not want a common narration.

Example of common narration in a voucher:

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 Narrations for each entry

Select Yes if you want to give a separate narration for each entry of a voucher.
This would be applicable for a multiple entry voucher where you want separate details for each
entry. Select Not if you do not want separate narration for each entry.

Note: The option to create an Excise Voucher type appears in the General section
if, the Excise feature is enabled in F11 features.

PRINTING
Print after saving voucher?

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 If you want to print every voucher after entering it, select Yes, else select No. This
is suitable for an online environment where you use the Tally printed voucher as the formal
voucher. Remember, however, that the transaction is already recorded and posted and should
you wish to make corrections to the printed voucher, you must alter the Tally voucher online
and print it out again.

Note: Depending on the Type of Voucher you have selected to create or alter,
different printing features appear in this field.

Name of Class

You can create classes by entering the class name in this section

If the Method of Voucher Numbering is set to Automatic, then and additional field
to set the advanced configuration for the Voucher type appears. Setting this field to Yes,
Voucher Type Creation (Secondary) screen appears.

Starting number

Give the number for the first voucher. Usually it is 1. You can set it to any number
you want. Tally will auto-increment from this number for subsequent vouchers. However, the
numbering of vouchers also depends on other variables supplied by you, which follow hereafter.

Width of Numerical Part

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 You may leave it blanks to let Tally automatically adjust the width according to th
number. however, for more aesthetically aligned look in reports, you may keep a fixed width,
e.g., 3.

Prefill with ZERO?

When the width is specified, the digits before the number is blank if ‘No’ and
zeroes if ‘Yes’

E.g. 001 1
O10 10
PEU/001/06-07
PEU/1/06/07
PEU/1/06/07

Restart Numbering

Voucher Numbering may be restarted with the starting number (as specified) at
intervals selected by you- Daily, Monthly, Never, Weekly or Yearly. You must give the date
whence numbering should restart under the field Application from. The date must be the first
day of the month. You may specify more than one Restart dates. For example, should you wish
to renumber your vouchers form o1 June 06 on yearly basis, you must specify it in the next
field. this would retain the numbering system in the period. If, however, you want to change the
numbers from the beginning from monthly to yearly basis, simple alter the first field itself.

Prefix Details

If you want the voucher numbers to be prefixed with some fixed information, give
the information here. Examples of prefix details are:

1. month of the voucher as given above-‘April/’

2. company info like ‘TSPL/’

3. even fixed number series like ’1000’

Note: The numeric portion begins immediately after the prefix information.
Therefore, be sure to give a space or a slash ’/’ or some such character should you want a
separation, e.g. we have specified April/. The slash would cause the voucher number to appear
as April/001. other-wish it would be April001. This facilitates simple usage for fixed number
series appearing as 200100001 where 2001 is the prefix, and 00001 is the starting number with a
width of 5, and with leading zeros.

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 You can choose different prefix information for different periods or let one
continue. The prefix continues from the date you mention under ‘Applicable from ‘till the next
date that you may give under ‘Applicable from’. Hence, we have chosen to change the prefix
from April to May when the month changes. Please note, however, that if we omit to change the
prefix for the subsequent months (i.e. do not give ‘Applicable form’ date for the month), your
voucher numbers for even June, July etc would contain the prefix ‘May/’.

Suffix Details

You can also give fixed suffix information for the voucher number. The same
rules and effects as for Prefix Details apply.

VOUCHER CLASSES
Voucher Classes are available for all major voucher types and the Cost Centres
can be allocated if classes are used. Automation of cost centre allocation has met the need of
‘percentage allocation’ based on predefined figures.
Cost centre classes affect all voucher types.

Voucher Classes for Payment, Receipt and Contra Vouchers

The primary intention of using classes for payment, receipt and contra vouchers is
to enable data input in ‘single entry’ or list rather than in Tally’s traditional double entry mode.
You can also use it to have a separate from for each cash and bank account.

Let us take an example of a Payment Voucher.

You can either alter the existing Payment Voucher Type or create a new voucher
type based on it.

(From Gateway of Tally> Account Info> Voucher Types)

The item Name of Class is below Effective Dates for Voucher and above the
Numbering Table.

Give a name to the class by simply typing it, e.g. Barclays Band Payment. You
may create more than one class. Hence, you might want to have one more for Cash Payment.

The Class Table

Exclude these Groups

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 Groups other than Bank or Cash groups should not be selected. This is used to
exclude Cash or Bank Groups that are not to be used in this class to pay out the money. In out
example, we want to exclude Cash and Credit Cards.

Exclude these Groups

Groups other than Bank or Cash groups should not be selected. You might exclude
a top level group but include its sub-group.

Ledger Name

Selecting the ledger account that will be used to pay out the money will eliminate
the need to select it during entry. In title case, it is BareSlays Bank. In a receipt voucher, you
will select the ledger account into which monies will be received. You may even select ‘Not
Applicable ‘. The purpose of selecting ‘Not Applicable’ will be to permit Single Entry mode and
at the same time relaining the option of selecting the account during entry.

Note: Exclude or include Groups are irrelevant when you specify a Ledger Name
for which the class is created. They are useful when you select ‘Not Applicable’.

In case you do not require split payments, you could create only one class with
nothing in include/exclude Groups and without any ledger Name. A single class does not require
class selection and is a rapid way of using Single Entry mode with full functionality of all
ledgers available.

Accept the class table and the voucher type alteration. You may use [CTRL] + [A]
combination.

PAYMENT VOUCHER ENTRY WITH CLASSES

Select Voucher Entry at the Gateway of Tally. Press F5: Payment. You have to
select a class or Not Applicable if no class is desired for this entry. If Cost Centre Class has been
set, it can be selected too.

The entries will be made as

PURCHASE ENTRIES INVOICE MODE (WITHOUT CLASSES)

Purchase Voucher can now be created in Invoice mode. You can enter the
suppliers’ invoices in the same way as they physically appear.

Set-up Invoice Mode entry for Purchase transactions

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 1. Select F11: Company Features.

2. Select F1: Accounting Features.

3. Set the option ‘Allow Invoicing’ to Yes.

4. Enter Purchases in Invoice Format? Set it to Yes.

5. Accept the screen using Ctrl+A.

ENTRY OF PURCHASE VOUCHERS IN INVOICE MODE

Select F9: Purchase. Select As Invoice button or use CTRL+V. This button is a
toggle for Invoice and Voucher modes. You may want to use the voucher mode for more
complex entries.

Entries are exactly like sales invoices and hence are not discussed.

The treatment of additional cost of purchase needs elaborating.

ADDITONAL COST OF PURCHAESE

If it is desired to add the other purchase expenses like freight and import duty to
the cost of the item, you would have activated the option in F11: Company Features ‘Track

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Additional Costs of Purchases’. In voucher mode, the additional cost details have to be filled in
after the allocation of each purchase item.

In Invoice mode, the treatment of additional costs on stock items is automated by

altering the parent group master details of the expenses.

In Invoice mode, than one item is purchased where the expense that is incurred for
them is charged as a lump-sum. However, to give an effective cost including the expense to each
purchased item, you would earlier give additional costs of purchase for each item. That method
though very flexible and practical could be tedious. That process is now automated and
allocation of the expense to stock item can be done on a predefined basis.

The following set-up activity is required to be carried out:

1. Alter the Parent Group of the expense ledger accounts, e.g. Direct Expenses.
You will find a new option – Method to Allocate when used in Purchase Invoice. If you want to
appropriate the ledger accounts under this group to stock items by either Quantity or value, you
must select the option. Select Appropriate by Qty for out example.

Now if freight belongs to the group Direct Expenses, the amount will be
apportioned by quantity, i.e., in the ratio of 1:5. If however, the parent group does not have and
allocation method or is set to No Appropriation or Not Applicable, the amount of freight will not
be apportioned to the items and will simply remain in the financial books as expense.

Note: In Invoice mode, Purchases can be allocated to Cost Centres only when Cost
Centre classes are used, i.e., you have to auto- allocate purchases to cost centres if you are using
the invoice mode of entry. Using the voucher mode of entry for purchases allows manual
allocation of purchase to cost centres.

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 Chapter
7
Currencies
(Multiple currencies and foreign exchange)

Many Organizations have transactions in more than one currency. Such

transactions have to be recorded either in the base (home) currency or in the foreign currency. If
the transactions are recorded in home currency, the rate at which the foreign currency is
exchanged should be recorded as well. At times you need to record the transaction in the foreign
currency itself when you maintain the balance of the concerned account in foreign currency.
Tally uses the tern base currency for the currency in which your account books are kept. Foreign
Exchange is used interchangeably with foreign currency. The base currency is specified while
creating the company.

Tally makes it easy to manage multiple currencies, automatic calculations of

exchange rates, automatic conversion of any currency used to record a transaction to the
currency of the account, etc.

The Balance Sheet and Profit & Loss Account of the company is maintained in the
base currency. Conversion of foreign currency account balances is done as per rules set by you.

ENABLING MULTIPLE CURRENCY IN TALLY

Enable Multi-Currency feature to view and enter transactions in multiple
currencies.

1. Go to Gateway of Tally

2. Select F11: Features > Accounting Features> to display the Company

Operations Alteration screen

3. Set Allow Multi-Currency? to Yes

4. Accept to Save.

Multi Currency feature is now enabled.

CURRENCIES MENU

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 View the Currencies menu from Gateway of Tally > Accounts Info > Currencies.
Creating a Currency
Use ASCII Special Characters with [Alt] key combination if our keyboard does
not have the symbol. Utilities like Character Map (Start>All Programs>Accessories> System
Tools) in Windows shows the key combination for most symbols. This might be different on
some notebook computers, refer to the computer’s user manual or the vendor.

You cannot assign a duplicate currency symbol for a company in Tally.

The Key combinations for a few currency symbols are given below:

1. Alt + 156 – Pound Sterling - £

2. Alt + 0165 – Japanese Yen - ¥

3. Alt + o128 – Euro - €

4. Use the Dollar and the Rs. Symbol from the keyboard.

To create a foreign currency

1. Go to Gateway of Tally > Accounts Info.> Currencies> Create

2. Enter the currency symbol in Symbol. This symbol appears in your reports
wherever applicable.

3. Enter the name of the currency in Formal Name.

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 A formal name is required to distinguish different currencies with the same
symbols. For e.g. you have created two companies (ABC and PQR) in Tally. ABC and PQR
have different set of currencies. ABC uses symbol $ for Australian Dollars and PQR uses the
symbol $ for U.S. Dollars. The formal name. distinguishes two different currencies with the
same symbol when you compare accounts of two companies.

The company that is loaded first retains the original symbol for display purposes.
The other company’s currency symbol will be prefixed with the first letter/first letters (to make
it unique) of the formal name. Here, if ABC is loaded first then the symbol $ is for Australian
Dollars and in PQR (loaded next) the symbol $ is prefixed with the letter U (first letter of its
formal name).

e.g., US Dollars, Pound Sterling, Indian Rupees, Omani Rial, etc.

Note: You cannot assign a dup0licate Formal Name for a company in Tally.

4. Enter the number of decimal places for the currency in Number of Decimal
Places. E.g. Currencies with 2 decimal places like paisa and currencies with three decimal places
like diner. There are currencies that do not have decimal places, e.g., Vietnamese Dong

5. Tally has two formats for displaying an amount, viz., in millions and in lakhs.
1000000 (one followed by six zeroes) in millions format would appear as 1,000,000 and lakhs
would appear as 10, 00,000.

Selecting No means you want amounts to appear in lakhs.

Note: You can always specify the appearance of numbers in specific reports, e.g.
In Profit & Loss Account display, press [F12]: Configure to change scale factors for values.

6. Set Is Symbol SUFFEXED to Amounts? to Yes for the symbol to appear after
the amount. Set to No for the symbol to be prefixed to the amount.

7. Set Put a SPACE between Amount and symbol? to Yes to apply a space
between amounts and symbol.

8. Enter the symbol for decimal portion of currency in Symbol for Decimal
Portion of Amount. E. g. Ps. For Paisa.

9. Enter the number of decimal places for printing the amounts in words in
Decimal Places for Printing Amounts in Words. This number should be equal to or lesser than
the number specified in Number of Decimal Places field.

Note: The Currency cannot be translated or transliterated but will appear in

the Language created.

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 ALTER CURRENCY
You can modify or delete a currency master using the Alter option. Rates of
Exchange can also be altered from here.

To alter a currency master:

1. Go to Gateway of Tally > Accounts Info.> Currencies> Alter

2. Select a Currency from the Currencies list (displayed if there is more than 1
currency)

3. In the Currency Alteration screen alter details as required. For details see
Creating a Currency Master

DISPLAYING A CURRENCY
The currency Display screen displays the details and rates of exchange for a
selected currency.

To display the Currency screen.

1. Go to Gateway of Tally > Accounts Info.> Currencies> Display

2. Select a Currency from Currencies list (displayed if there is more than 1
currency)

3. Enter to view the details

DELETING A CURRENCY
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 To delete a Currency

1. Go to Gateway of Tally > Accounts Info.> Currencies> Alter

2. Select a currency from the Currencies list (displayed if there is more than 1
currency)

3. Press Alt + D in the Currency Alteration screen to delete

Note: You cannot delete a Currency that has been used in a voucher
transaction.

RATES OF EXCHANGE
Rate of Exchange is a feature wherein you can enter the rate of foreign currency
for a specific date. Foreign exchange variations occur every day with different selling and
buying rates. Rate of Exchange helps you apply the rate for the given date in your transactions.

To open Rates of Exchange:

1. Go to Gateway of Tally > Accounts Info.> Currencies> Rates of Exchange

2. The Multi-Currency Alteration screen is displayed

3. Enter the date for which the exchange rate is applicable

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 4. Enter the Standard Rate (optional) which is used to calculate variances from
the actual transaction rates

5. Enter the Setting Rate (your setting rate)

6. Enter the Buying Rate (your buying rate)

7. Accept to Save

Note: Last Voucher Rate is displayed if any voucher has been entered earlier.

SELLING RATE – SPECIFIED RAT

Setting rate is your selling rate (as opposed to bank’s selling rate) used for receipt
voucher entry where you receive foreign exchange.

This is the rate obtained from the daily newspaper or your banker. If you input this
rate before any transaction entry, while entering a foreign transaction, this rate will be brought
up by default. (You can still change the actual rate).

The actual rate at which the currency was last used is displayed and cannot be
changed.

The specified rate is used for calculating foreign exchange variances only in case
there is no standard rate.

BUTING RATE – SPECIFIED RATE

Buying Rate is your buying rate (as opposed to bank’s buying rate) used in
payment vouchers.

The actual rate at which the currency was last used is displayed and cannot be
changed.

The specified rate is used for calculating foreign exchange variances only in case
there is no standard rate.

Note: Tally calculates Gain Loss in foreign exchange transactions automatically

using the standard rates, specified rates and actual transaction rates

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 Chapter
8
Inventory information
The Inventory Info menu lists the masters, through which you can provide Tally
the details of your company’s inventory.

Go to Gateway of Tally > Inventory Info.

Note: The Inventory Info menu is displayed in Gateway of Tally, only select
Maintain Accounts with Inventory forma the Type of Company list in the Company Creation
screen.

STOCK GROUPS
Stock Groups in Inventory are similar to Groups in Accounting Masters. They are
helpful in the classification of Stock Items. Classifications is based on some common behaviour.
Stock Group enable easy identification and reporting of Stock Items in statements.

You can group Stock Items under different Stock Group to reflect their
classification based on some common functionality. Grouping enables you to locate Stock Items
easily and report their details in statements.

You can group the items of a particular brand to extract stock of all items of that
brand.

Consider that the Stock Items in your inventory are Sony 3.5” disks, Maxell 3.5”
disks, Sony tapes, Maxell tapes, and so on. Create Stock Groups, Sony and Maxell, and classify
Sony products under the group Sony and Maxell products under Maxell. You now have ready
details of all Sony and Maxell products, duly classified.

Create sub-groups under Stock Groups for deeper analysis.

Go to Gateway of Tally> Inventory Info.> Stock Groups

CREATING A STOCK GROUP

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

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