TALLY INTRODUCTIONThere are many accounting packages are available in the market, Tally remains the undisputed king

of all financial accounting packages available in India. Tally is capable of handling any kind of transaction you would need, whatever your business. In order to use tally, you neither need to learn new accounting methods nor should change your existing style of handling accounts. The information can be fed as well retrieved at random and all human errors can be corrected. A transaction in accounting terminology means transfer of money or moneys worth from one party to another, for example sale of goods, purchase of furniture etc. are examples of transactions. Fundamentally there are two systems of transactions: Pre transaction and post transaction. Let us explore it in detail, assume that you have to make payment to a party, in pre transaction, this is done by first creating a voucher, which is signed by payee and then the transaction is completed by actually making the pay creation of internal entries in case of completed transactions. The post transaction system follows the traditional practice of entering a voucher or cash bill into a cash book after the payment has been made. Tally is a post transaction system. It follows the traditional methods of accounting, that is, the payment is first made on the basis of existing accounting methods (i.e., against a voucher or a cash bill) and that information is fed into the Tally. The simple fact that your existing system of accounting remains untouched by Tally is a big reason behind the success of this package. Prerequisites for the learning tally The area of the Tally is very wide, you could be the owner, financial controller, accountant, manager or an auditor. All that is required to learn Tally is fundamental knowledge of accounts and familiarity with basic accounting terminology. This means that you should understand certain basic terms like an account, a debtor, a creditor, assets, liabilities, capital etc. Even if you are not well versed with the accounting, you can still use Tally effectively at the same time become known to accounting methods. Tally have many versions like 3.0, 4, 4.5, 5.0 5.4 etc. Tally release 5.0 and 5.4 are window based software in which you feel the window look like programs, than the text based screens.

It is the area in which you actually work. You can activate this area either by clicking any where in this area or by pressing <Ctrl> + <M> key combination. Direct Command Area Although Tally supports mouse commands, you can execute all commands in plain English from a keyboard by typing them in this area. You can activate this area either by clicking anywhere in this area or by pressing <Ctrl> + <N> key combination. The Buttons This area contains buttons which perform various useful functions. For example the second button in this area has a caption F4:Backup this means that in order to take backup of a company on floppy disk you will have to either click on this button or press the <F4> key. The third button has caption F4:Restore this means that in order to restore a company whose backup had been already taken on floppy you will have to either click on this button or press <Alt+F4> key combination. Company Information Menu The right half of the Gateway of Tally area displays the company info. Menu This menu has following three options: Select Company Create Company Quit

Creating a New Company In order to create a new company for accounting following screen will appear :

(Figure 1.2) Once you have created a company then you are ready for maintaining account for the company. You have to feed all the information given in above figure and then save it. You can also alter any information given above in the figure. When you have created company then go to main menu and select company by giving username and password (if you have enabled the security) when you select a company then following screen will appear.

(Figure 1.3) in the left hand side of the screen you will see the information about company selected like current period financial year of books, name of company selected etc. On right hand side of screen you will see the Gateway of Tally.

GATEWAY OF TALLY It is the area in which you actually work. You can activate this area either by clicking any where in this area or by pressing <Ctrl> + <M> key combination. Direct Command Area Although Tally supports mouse commands, you can execute all commands in plain English from a keyboard by typing them in this area. You can activate this area either by clicking anywhere in this area or by pressing <Ctrl> + <N> key combination. The Buttons This area contains buttons which perform various useful functions. For example the second button in this area has a caption F4:Backup this means that in order to take backup of a company on floppy disk you will have to either click on this button or press the <F4> key. The third button has caption F4:Restore this means that in order to restore a company whose backup had been already taken on floppy you will have to either click on this button or press <Alt+F4> key combination. Company Information Menu The right half of the Gateway of Tally area displays the company info. Menu This menu has following three options: Select Company Create Company Quit Creating a New Company In order to create a new company for accounting following screen will appear :

(Figure 1.2) Once you have created a company then you are ready for maintaining account for the company. You have to feed all the information given in above figure and then save it. You can also alter any information given above in the figure. When you have created company then go to main menu and select company by giving username and password (if you have enabled the security) when you select a company then following screen will appear.

(Figure 1.3) in the left hand side of the screen you will see the information about company selected like current period financial year of books, name of company selected etc. On right hand side of screen you will see the Gateway of Tally.

Account Info. This option permits you to handle all the information related to financial accounts. It allows you to work on creation and maintenance of masters like Ledgers, Cost Centers, Cost Categories and other related information. Inventory Info Using this option you can handle information relating to the inventory accounts. It enables you to work on stock items, stock groups, stock categories, units of measurement and other inventory related information Voucher Entry This is the most frequently used option. It allows you to make daily vouchers as well as invoices. Balance Sheet This option displays the balance sheet of your company as at the last voucher entered. Profit and Loss Account This option allows you to take a look at gross profit and net profit for both opening and closing stock. Stock Summary This option displays the stock position of all items in stock as at the last entry made. Display This option enables you to view all reports like, Trial Balance, Account Books, Statement of Accounts, Inventory Books, Statement of Inventory, Cash Flow, List of Accounts etc. Multi-Account Printing Choose this option to print Account Books, Inventory Books and Day Book. Quit This option allows you to Quit Tally.

ACCOUNTING IN TALLY

Accounting is the language of business, it involves identifying, measuring and presenting economic information about a business in such a manner that the user of t he information can use it for opinions about the business, judge its performance and take certain decision. For this reasons certain norms and systems of accounting have been developed perfected. The best thing in tally is that it does not follow a tailor made accounting pattern but allows the user to customize its according to his/her requirements. Initially you have to setup an accounting chart for the company. Creating Master Accounts You can create master for both accounts and inventory by providing information regarding both accounts and inventory. We will start from creating account masters. Account Information In order to work on the master of accounts of a company, first activate the desired company then Gateway of Tally menu appear on the screen

(Figure 2.1)

Select option Account Info Then following menu will appear:

(Figure 2.2)

Group During manual accounting the accounts (ledger) are grouped upon preparation of Trial Balance to prepare Profit & Loss account and Balance Sheet which reflect the final accounts of the company. In tally the concept remains analogous. Following screen will appears when you select Group option.

(Figure 2.3)

Means you can create, display, alter single and multiple account groups. Ledger The next option after group in Account info menu is Ledger( See following figure 2.4) In this menu you can create, display and alter single and multiple ledger accounts.

(Figure 2.4)

Voucher Types A voucher is basically an on-line document for recording day to day transactions and is perhaps the most frequently hunted area of Tally. Tally by default provides 18 types of predefined vouchers are unable to fulfill your requirements then Tally also gives you a provision to alter these existing types according to you need. For example, Tally provides a Payment voucher, if you need more than one type of payment voucher, say Petty cash Payment voucher and Cash payment voucher then Tally has a provision to create these new types. Following are the voucher type provided by Tally.

(Figure 2.5)

INVENTORY

The best thing in tally is that it does not follow a tailor made accounting pattern but allows the user to customize its according to his/her requirements. Initially you have to setup an accounting chart for the company. Creating Master Accounts You can create master for both accounts and inventory by providing information regarding both accounts and inventory. We will start from creating account masters. Account Information In order to work on the master of accounts of a company, first activate the desired company then Gateway of Tally menu appear on the screen

(Figure 2.1)

Select option Account Info Then following menu will appear:

(Figure 2.2)

Group During manual accounting the accounts (ledger) are grouped upon preparation of Trial Balance to prepare Profit & Loss account and Balance Sheet which reflect the final accounts of the company. In tally the concept remains analogous. Following screen will appears when you select Group option.

(Figure 2.3)

Means you can create, display, alter single and multiple account groups. Ledger The next option after group in Account info menu is Ledger( See following figure 2.4) In this menu you can create, display and alter single and multiple ledger accounts.

(Figure 2.4)

Voucher Types A voucher is basically an on-line document for recording day to day transactions and is perhaps the most frequently hunted area of Tally. Tally by default provides 18 types of predefined vouchers are unable to fulfill your requirements then Tally also gives you a provision to alter these existing types according to you need. For example, Tally provides a Payment voucher, if you need more than one type of payment voucher, say Petty cash Payment voucher and Cash payment voucher then Tally has a provision to create these new types. Following are the voucher type provided by Tally.

(Figure 2.5)

VOUCHER ENTRY
Voucher Entry in tally is the most visited area by the user and is key to all business information. A voucher (also called a journal) is a document containing the details of transaction. For every transaction you do, you enter a voucher in Tally. The voucher entry option at the Gateway of Tally enables you to make your day-to-day entries.

(Figure 3.1) on the left hand side of the screen a menu will display, from which you can change type of voucher.

COMMON INFORMATION
Type of Voucher: All screens at the top left of voucher box display the Type of Voucher you are entering like, Purchase, Payment etc. You can change this type by pressing the relevant key. Voucher Number: The entire voucher displays the number of the voucher. You can set these numbers manually or let the Tally generate it automatically. Date of Voucher: The top right of the voucher box displays the date of voucher and the day of the week; this date indicates the current date on which you are entering the voucher. The same date appears as the current date at the Gateway of Tally. You can change date by pressing <F2> Key. Particular: In accounting vouchers this column contains the information about the ledgers you debit or credit. When To or Cr is displayed, specify the ledger to credit. When By or Dr is displayed, specify the ledger to debit. Debit/Credit: This column takes value of transactions therefore, specify the amount of the transaction here. If you debit a ledger, the amount goes into the debit column and if you credit a ledger, the amount goes into the credit column. At the bottom of these columns, the totals of the debit and credit amount appears. Note: The voucher entry is completed only when the total in the two columns matches. Narration: Under each debit or credit entry, there is a provision for narration. In this column, you can mention the details of the entry. At the end of the voucher, there is a common narration for the whole voucher. The option for writing narration, for each entry will be present only if you had set the option Use narration for each entry in the accounting vouchers section of the voucher configuration menu Yes. The following screen will display for voucher entry:

VOPUCHER TYPES
Type of Voucher: All screens at the top left of voucher box display the Type of Voucher you are entering like, Purchase, Payment etc. You can change this type by pressing the relevant key. Voucher Number: The entire voucher displays the number of the voucher. You can set these numbers manually or let the Tally generate it automatically. Date of Voucher: The top right of the voucher box displays the date of voucher and the day of the week; this date indicates the current date on which you are entering the voucher. The same date appears as the current date at the Gateway of Tally. You can change date by pressing <F2> Key. Particular: In accounting vouchers this column contains the information about the ledgers you debit or credit. When To or Cr is displayed, specify the ledger to credit. When By or Dr is displayed, specify the ledger to debit. Debit/Credit: This column takes value of transactions therefore, specify the amount of the transaction here. If you debit a ledger, the amount goes into the debit column and if you credit a ledger, the amount goes into the credit column. At the bottom of these columns, the totals of the debit and credit amount appears. Note: The voucher entry is completed only when the total in the two columns matches. Narration: Under each debit or credit entry, there is a provision for narration. In this column, you can mention the details of the entry. At the end of the voucher, there is a common narration for the whole voucher. The option for writing narration, for each entry will be present only if you had set the option

Use narration for each entry in the accounting vouchers section of the voucher configuration menu Yes. The following screen will display for voucher entry:

VIEWING REPORTS
The purpose of putting in all your data is to present them in the traditional form of accounting. Tally has been designed to make this task easy. In order to get any report all you have to do is to enter vouchers. Tally gives you maximum benefit of the data that has been entered through vouchers. It takes care of all reporting based on these transactions and automatically presents them in comprehensible format. All these reports are up to date as tally displays these reports as the last voucher entered. You can view reports like the Trial Balance, Profit and Loss Account, Balance Sheet, Stock statement, Ledger & Summaries, Sales, Purchase and other registers, Cash and Fund Flow Statements, Cost Center Analysis and what not. All these reports require no additional effort on your part. Once you have entered the vouchers, based on the information in these vouchers, Tally automatically generates all these reports. Following are some of the reports generated by Tally: Just press enter on the Display option on the Gateway of Tally. Following menu will displayed.

(Figure 4.1) Each area is grouped separately into books and statements. For example, Account Books and Statements of Accounts, Inventory books and Statements of Inventory. The Day Book contains all the vouchers that have been entered till date (both inventory and accounting). However you are permitted to restrict the amount of information you wish to see by using the change period option. Some of the option in the Display menu bring up other menus. For example, the option Account Books brings up the Account Books in following menu.

(Figure 4.2) The option statements of Accounts of brings up the Account Statements menu in following menu:

(Figure 4.3)

Then Inventory Books option in the Display menu brings up the Inventory Books menu like following figure:

(Figure 4.4)

The Statements of Inventory option in Display menu brings up the Inventory Books

(Figure 4.5)

Then Inventory Books option in the Display menu brings up the Inventory Books menu like following figure: The Statements of Inventory option in Display menu brings up the Inventory Books

BALANCE SHEET
A Balance sheet is a statement of the financial position of a company in terms of the capital, assets and liabilities of a business entry. At the Gateway of Tally select Balance Sheet option. It displays the closing balances of the primary groups Liabilities and Assets.

(Figure 4.6) The liabilities include the Capital Account, Current Liabilities, Loan Liabilities, Net Profit (if any) and any other primary group that you created as liability. Assets include the Fixed Assets, Current Assets, Investments, Loans and Advances, Miscellaneous Expenses and Net Loss (if any). To see detailed Report Press <Alt> + <F1> you will find following screen :

(Figure 4.7) You can alter the balance sheet periodically, Column wise etc.

P &L
The next option at the Gateway of Tally Menu after balance sheet is Profit and Loss Account. In order to view the Profit and Loss Account of a Company make sure that the Gateway of Tally menu is active. Press the <P> key. This will bring up the profit and loss Account of the financial Year on the screen.

(Figure 4.8)

For detailed information press <Alt>+<F1>

DISPLAY
The next option in the Gateway of Tally menu after Ratio Analysis is Display. This option allows you to view books accounts and inventory such as Cash Book, Bank Books, Ledgers, Stock Item Summaries etc. Apart from these you can also view reports like the Trial Balance, Statement of Accounts (Bill Receivable or Payable), Day Book, List of Accounts, Cash Flow, Funds Flow etc.

TRAIL BALANCE
The next option in the Gateway of Tally menu after Ratio Analysis is Display. This option allows you to view books accounts and inventory such as Cash Book, Bank Books, Ledgers, Stock Item Summaries etc. Apart from these you can also view reports like the Trial Balance, Statement of Accounts (Bill Receivable or Payable), Day Book, List of Accounts, Cash Flow, Funds Flow etc.