PRATEEKGUPTA_TALLY.docx

Computerized Accounting Software
(Using Tally.ERP9)
PRACTICAL FILE
Submitted for partial fulfilment for the award of the Degree of
BACHELOR OF COMMERCE
{B.COM (H) 2020 – 2023}
Under the supervision of
Dr.Ashu Lamba
Submitted by
PRATEEK GUPTA
05729888820
SCHOOL OF BUSINESS STUDIES
VIVEKANANDA INSTITUTE OF PROFESSIONAL
STUDIES
(Affiliated to Guru Gobind Singh Indraprastha University)

UNIT 1
Introduction to Tally
1.1
Tally Solutions, then known as Peutronics, was co-founded in 1986 by Shyam
Sunder Goenka and his son Bharat Goenka and incorporated in 1991. Shyam
Sundar Goenka was running a company that supplied raw materials and
machine parts to plants and textile mills in southern and eastern India. Unable to
find software that could manage his books of accounts, he asked his son, Bharat
Goenka, 23, a Maths graduate to create a software application that would handle
financial accounts for his business. The first version of the accounting software
was launched as an MS-DOS application. It had only basic accounting functions
and was named PeutronicsFinancial Accountant.
It is headquartered in Bengaluru, Karnataka India.
Inventory: A well maintained inventory helps reduce loss and wastage. Tally is of
immense help in this regard, especially if the environment involves
manufacturing. You can go one step further to classify inventories with regard to-
Groups, Units, Tariff, Stock items, Godowns.
Tally accounting software provides a solution around inventory management,
stock management, invoicing, purchase order management, discounting, stock
valuation methodology, etc.
Tally accounting software also comes with drill down options, which can track
every detail of transaction. It helps in maintaining simple classification of
accounts, general ledger, accounts receivable and payable, bank reconciliation,
etc.
The technology employed by tally makes data reliable and secure. Tally software
supports all the major types of file transfer protocols. This helps in connecting
files across multiple office locations.It helps you to reconcile the bank statements
with the books of accounts.

Historical versions of Tally
Tally has undergone a revolution that led it to discover different versions of Tally.
Tally 3.0 (1990)
Tally 3.0 is the first version of Tally that has been used for basic accounting needs
of small businesses. But, the software needs external and special commands to
perform the operation. And, it supports only Microsoft DOS.
Tally 3.12 (1991)
Tally 3.12 is similar to the before version i.e., Tally 3.0. Here, few features have
been updated. Still, it resembles the operation done as like Tally 3.0
Tally 4 (1992)
Tally 4 is the next version of Tally came up in the year 1992. As like Tally 3.0 and
Tally 3.12, it also supports Microsoft DOS and differs slightly from that of the rest
two versions.
Tally 4.5 (1994)
Tally 4.5 is a DOS-based program. DOS program is very lightweight and hence
the operation will be completed quickly.
Tally 5.4 (1996)

Followed by Tally 4.5, Tally 5.4 is the next version of Tally. It is a graphic interface
version that became popular in masses. Within a short period, its pirated version
has made Tally as the best accounting software.
Tally 6.3 (2001)
Tally 6.3 is the next Tally version that supports Windows operating system. It is
the true windows-based version thereby supporting printing and VAT. In addition,
Tally 6.3 has been built with watertight security that made the software hard to
crack.
Tally 7.2 (2005)
Tally 7.2 is the version that came up with new additional features. It is the fastest
version where operations are completed faster than before. Additional features
including statutory compliant features, different VAT values, etc made it more
unique than usual versions.
Tally 8.1 (2006)
Tally 8.1 is the version that adds new data structure to the Tally. It adds the
module of POS and payroll feature in this version. The version was not welcomed
by people as expected. Hence, Tally team has moved forward to launch another
version.
Tally 9 (2006)

Tally 9 is the next version of Tally with 9 added features. The features of Tally 9
include excise, payroll, e- TDS filing facility, FBT, TDS, and other regular features
related to accounting and inventory management.
Tally ERP 9 (2009)
Tally ERP 9 is the latest version of Tally since 2009. It has lingual many business
organizations. It has advanced features including GST calculations, invoice and
payroll procedures, remote access, multi-user login, and transaction procedures.
Nowadays, businessmen wish to have a complete business solution software like
Tally.
Tally 18
Many Tally users have been waiting for its recent updated version Tally
18. Several features of Tally ERP 9 have been updated and tuned as per user
convenience.
These are the different Tally versions that ruled over the accounting realm for
years.
1.2
Evolution of bookkeeping to accounting
Small business accounting and bookkeeping services are undergoing
somewhat of an evolutionary phase. Historically, especially for small
business, interactions with the accountant were limited to an annual visit to

review how the year had gone, maybe set some budgets for the year
ahead and sign off on tax reporting.
If it was more than that, at best it was a couple of times a year, maybe you
wanted to buy an asset and needed to check its impact on cash flows and
whether the business could afford it, etc.
And for several decades now, small business owners have been employing
staff (internal and external) to tap away at keyboards, entering information
into accounting software so that invoices (and employees) got paid, bank
accounts were reconciled and reporting obligations were met.
It’s just how thing have always been done – the ‘normal’ way of operating a
business. Except before the 80s, it wasn’t. If you were in small business, it
was all done by hand. Hours of laborious double column entries in big hard
cover books.
Now, however, accounting and bookkeeping services are morphing yet
again to help you, as a small business owner, make better decisions
around how you run your business – looking forward (not backward). And
just like Microsoft Excel made all the columns magically add up in the 80s
without a calculator in sight (as long as your formula was correct), today’s
accounting technologies are making the need for excel spreadsheets (and
their formulas) less necessary*.
Better still, almost gone are the days where accountants and bookkeepers
would be presented with a shoebox full of paper receipts, that would then
be manually data entered. Technologies like Shoeboxes have made that a
thing of the past.
Minimizing manual data entry and errors can result in massive savings of
your precious time and money. Need we say more? And then there’s the
added bonus of being able to track where your business is at financially at
any given time – in real pretty close to real time.

Difference between Bookkeeping and Accounting
Basis Bookkeeping Accounting
Definition Bookkeeping is an activity of
recording the financial
transactions of the company
in a systematic manner.
Accounting is the process
of summarizing,
interpreting, and
communicating financial
transactions which were
classified in the ledger
account.
Decision Making Based on bookkeeping
records, decisions cannot
be taken.
Decisions can be taken on
the basis of accounting
records.
Skills Required Bookkeeping doesn't
require any special skill
sets
Accounting requires
special skills due to its
analytical and complex
nature
Methods Single Entry System of
Bookkeeping and Double
Entry System of
Bookkeeping
Financial Accounting, Cost
Accounting, Management
Accounting, Human
Resource Accounting,
Social Responsibility
Accounting
Preparation of Financial
Statements
Not done in the
bookkeeping process
Part of Accounting Process
Determination of Financial
Position
Bookkeeping does not
reflect the financial position
of an organization.
Accounting clearly shows
the financial position of the
entity.

1.3
Accounting Principles- GAAP
Generally accepted accounting principles (GAAP) refer to a common set of accounting
principles, standards, and procedures issued by the Financial Accounting Standards Board
(FASB). Public companies in the United States must follow GAAP when their accountants
compile their financial statements. GAAP is a combination of authoritative standards (set by
policy boards) and the commonly accepted ways of recording and reporting accounting
information. GAAP aims to improve the clarity, consistency, and comparability of the
communication of financial information.
GAAP may be contrasted with pro forma accounting, which is a non-GAAP financial reporting
method. Internationally, the equivalent to GAAP in the United States is referred to as
International Financial Reporting Standards (IFRS). IFRS is followed in over 120 countries,
including those in the European Union (EU).
GAAP helps govern the world of accounting according to general rules and guidelines. It
attempts to standardize and regulate the definitions, assumptions, and methods used in
accounting across all industries. GAAP covers such topics as revenue recognition, balance sheet
classification, and materiality.
The ultimate goal of GAAP is ensure a company's financial statements are complete, consistent,
and comparable. This makes it easier for investors to analyze and extract useful information from
the company's financial statements, including trend data over a period of time. It also facilitates
the comparison of financial information across different companies.
Accounting Concepts
These 10 general concepts can help you remember the main mission of GAAP:
1. Historical Cost Principle – requires companies to record the purchase of
goods, services, or capital assets at the price they paid for them. Assets are then
remain on the balance sheet at their historical without being adjusted for
fluctuations in market value.
2. Revenue Recognition Principle – requires companies to record revenue when
it is earned instead of when it is collected. This accrual basis of accounting gives
a more accurate picture of financial events during the period.

3. Matching Principle– states that all expenses must be matched and recorded
with their respective revenues in the period that they were incurred instead of
when they are paid. This principle works with the revenue recognition principle
ensuring all revenue and expenses are recorded on the accrual basis.
4. Full Disclosure Principle – requires that any knowledge that would materially
affect a financial statement user’s decision about the company must be disclosed
in the footnotes of the financial statements. This prevents companies from hiding
material facts about accounting practices or known contingencies in the future.
5. Cost Benefit Principle – limits the required amount of research and time to
record or report financial information if the cost outweighs the benefit. Thus, if
recording an immaterial event would cost the company a material amount of
money, it should be forgone.
6. Conservatism Principle– accountants should always error on the most
conservative side possible in any situation. This prevents accountants from over
estimating future revenues and underestimated future expenses that could
mislead financial statement users.
7. Objectivity Principle – financial statements, accounting records, and financial
information as a whole should be independent and free from bias. The financial
statements are meant to convey the financial position of the company and not to
persuade end users to take certain actions.
8. Consistency Principle – all accounting principles and assumptions should be
applied consistently from one period to the next. This ensures that financial
statements are comparable between periods and throughout the company’s
history.
9. Monetary Unit Assumption – assumes that all financial transactions are
recorded in a stable currency. This is essential for the usefulness of a financial
report. Companies that record their financial activities in currencies experiencing
hyper-inflation will distort the true financial picture of the company.
10.Periodicity Assumption – simply states that companies should be able to
record their financial activities during a certain period of time. The standard time
periods usually include a full year or quarter year.

Accounting Conventions
Accounting conventions are certain guidelines for complicated and unclear business
transactions, though it is not compulsory or legally binding, however, these generally
accepted principles maintain consistency in financial statements. While standardizing
financial reporting process these conventions consider comparison, relevance, full
disclosure of transactions, and application in financial statements.
1. Conservatism
The accountant must follow the conservatism principle of “playing safe” while preparing
financial statements, considering all possible scenarios of loss while recording
transactions. Two values occurred while logging assets, i.e., Market value and Book
Value, in general, a lower value is considered since these conventions consider the
worst-case scenario. There are specific points used for criticizing such a principle. In
some instances, it’s observed that secret reserves are being created by showing excess
provision for bad debt and doubtful debts, depreciation, etc. And this affects the
principle of ‘true and fair status of financial conditions.’
2. Consistency
Once a particular method is selected by the business while reporting process, it should
be followed consistently in ensuing years. This principle is helpful for investors and
analysts to read, understand, and compare the financial statements of the company. If
the company wants to make a change in method, it should do so only with proper
reasons to make specific changes. There are certain points, which criticize this
principle, like considering certain items on a cost basis while others at market value void
the principle of consistency in accounting. Still, accounting convention considers
consistency in reporting methods over the years and not consistency with line items in
comparison.
3. Full Disclosure
Relevant and important information regarding the financial status of the company must
be revealed in financial statements even after the application of the accounting
convention. E.g., Contingent Liabilities.

4. Materiality
Materiality Concept includes the impact of event or item and its relevance in financial
statements. The accountant must report all such events and items that might influence
the decision of investors or analysts. However, the information should be worthy of
investigation and should have high value than the cost of preparation of statements. It
means materiality allows an accountant to ignore certain principles when items are not
material.
1.4
Types of Accounts: Real, Personal & Nominal Accounts
There are mainly three types of accounts in accounting: Real, Personal and
Nominal, personal accounts are classified into three subcategories: Artificial, Natural,
and Personal.
1. Real Accounts
All assets of a firm, which are tangible or intangible, fall under the category of
‘Real Accounts’.
Tangible real accounts are related to things that can be touched and felt physically.
Few examples of tangible real accounts are building, machinery, stock, land, etc.
Intangible real accounts are related to things that can’t be touched and felt physically.
Few examples of such real accounts are goodwill, patents, trademarks, etc.
2. Personal Accounts
Second among three types of accounts are personal accounts which are related to
individuals, firms, companies, etc. Few examples are debtors, creditors, banks,
outstanding account, prepaid accounts, accounts of customers, accounts of goods
suppliers, capital, drawings, etc.
Natural personal accounts: This type of personal accounts is the simplest to
understand out of all and includes all of God’s creations who have the ability to deal,
who, in most cases, are people.
E.g., Kumar’s A/C, Adam’s A/C, etc.
Artificial personal accounts: Personal accounts which are created artificially by law,
such as corporate bodies and institutions, are called Artificial personal accounts.
E.g., private companies, LLCs, LLPs, clubs, schools, etc.

Representative personal accounts: Accounts which represent a certain person or a
group directly or indirectly.
E.g.,Let’s say that wages are paid in advance to an employee – a wage prepaid account
will be opened in the books of accounts. This wages prepaid account is a representative
personal account indirectly linked to the person.
3. Nominal Accounts
Accounts which are related to expenses, losses, incomes or gains are called Nominal
accounts. The dictionary meaning of the word ‘nominal’ is “existing in name only" and
the meaning remains true in accounting sense too, furthermore nominal accounts do not
really exist in physical form, but behind every nominal account money is involved.
Example – Purchase A/C, Salary A/C, Sales A/C, Commission received A/C, Bad
DebtA/C, etc. The result of all nominal accounts is either profit or loss which is then
transferred to the capital account.
Rules of Journal Entries- Traditional and Modern classification
Journal is the book of original entry, in which any business transaction is recorded for
the very first time and in a chronological manner and there are rules of debit and credit
which apply to such recording. Such rules vary with the nature of the accounts to be
considered in the transaction.
Most popular classification is the Personal, Real & Nominal account and the rules of
these are as follows:
1 – Personal Account
A personal account is that of a person, company, an organization such as a bank, and
so on.
 Debit the Receiver, Credit the giver
 Accounts that fall in this category are: Debtors, Creditors and so on
The golden rule for personal accounts
Debit is the Receiver
Credit is the Giver

2 – Real Account
Real Account is the account of tangible and intangible items such as inventory, cash,
bank account, plant and machinery and so on
 Debit what comes in, Credit what goes out
 Accounts that fall in this category are: Cash, bank balance, stock of goods,
Purchase, Sales, Plant & Machinery and so on
The golden rule for real accounts
Debit what comes In
Credit what goes Out
3 – Nominal Account
This account is the account of profits, losses, incomes, and gains.
 Debit all losses and expenses, Credit all incomes and gains.
 Accounts that fall in this category are Profit, Interest, Dividend, Depreciation.
The golden rule for nominal accounts
Debit all Expenses and losses
Credit all Income and Gains
1.5
Accounting Methods
An accounting method is defined as a means to record when income is received and
expenses are paid so that profit can be determined for a specific time period, referred to
as the accounting period.
Following the accounting methods, a business measures its own success and by which
the tax authorities can determine taxable income. But in most of the cases, the tax law
restricts the choice of accounting methods and accounting periods for specific business
entities.

Advantages of Accounting
 Maintenance of business records
 Preparation of financial statements
 Comparison of results
 Decision making
 Evidence in legal matters
 Provides information to related parties
 Helps in taxation matters
 Valuation of business
 Replacement of memory
Disadvantages of Accounting
 Expresses Accounting information in terms of money
 Accounting information is based on estimates
 Accounting information may be biased
 Recording of Fixed assets at the original cost
 Manipulation of Accounts
 Money as a measurement unit changes in value
Difference between Accrual basis and Cash basis of Accounting
The difference between cash and accrual accounting lies in the timing of when
sales and purchases are recorded in your accounts. Cash accounting
recognizes revenue and expenses only when money changes hands, but
accrual accounting recognizes revenue when it’s earned, and expenses when
they’re billed (but not paid).
BASIS CASH BASIS OF
ACCOUNTING
ACCRUAL BASIS OF
ACCOUNTING
Meaning According to Cash Basis
Accounting, Revenue is
recorded only after
payment received and
expenses are recorded
when payments are made.
According to Accrual Basis
Accounting, Revenue is
recorded when earned
irrespective of the cash
received or not and
expenses are recorded

irrespective of the
payments made or not.
Income Income or revenue is
recorded when payments
are received.
Income or revenue is
recorded immediately after
the sale is done.
Expenses Expenses are recorded
only after the payment is
made for them.
Expenses are recorded
when incurred in the
process of generating
revenue.
Compliance to standards Cash basis accounting is
not in compliance with
standards of GAAP.
Accrual basis accounting
is fully in compliance with
standards set by GAAP.
Time required The time required for
recording of transactions is
less in Cash Basis.
The time required for
recording of transactions is
more in Accrual Basis.
Accuracy The income statements
may not provide the
accurate and complete
information in Cash Basis
because the expenses and
revenues are not matched
always.
Accrual Basis method uses
various accounts to record
information which helps in
providing complete and
accurate information in
income statements.
Followed By Commonly this method is
followed by Professionals,
Educational institutions, etc
because of monthly
transactions.
Usually, this method is
followed by business
enterprises, corporate
organizations, etc because
of the need for cash and
credit transactions.
Receivables and Payables The Cash basis method
does not record cash
receivables and payables
or uncollected payments.
The Accrual basis method
records cash receivables
and payables in the
balance sheet.

UNIT 2
Introduction to Tally:
Tally. ERP 9 is one of the most popular accounting software used in India. It is complete
enterprise software for small & medium enterprises.
Tally. ERP 9 is a perfect business management solution and GST software with an ideal
combination of function, control, and in-built customisability.
It permits business owners and their associates to interact more in accounts related
discussions and is a complete product that retains its original simplicity yet offers
comprehensive business functionalities such as Accounting, Finance, Inventory, Sales,
Purchase, Point of Sales, Manufacturing, Costing, Job Costing, Payroll and Branch
Management along with compliance capabilities for Excise, TDS, TCS, and now GST
too!
Salient Features of Tally ERP 9
 Simple andFlexible:
Tally. ERP 9 is simple to learn and flexible to use. It allows both keyboard and mouse
conventions smooth and easydata entry.
 Codeless Accounting:
Tally. ERP 9 pioneered the accounting! codes “concept which allows the
user to maintain data in plain English.
 Complete Business Solution:
Tally. ERP 9 provides an integrated business solution or account% in &
inventory& sales&purchasing &manufacturing &excise and payrollextensive with
featuresto record& extract& displayand printing information.
 Speed:
Tally. ERP 9 is a robust software which provides tremendous capability
to maintain multiple companies with unlimited levels with high speed and
accuracy and drilldown to the transaction level at any point time
 Real time processing
Tally. ERP 9 helps to generate numerous reports and statements instantly upon
entering! the transactions.
 Power:
Tally.
ERP9allowstheusertomaintainmultiplecompaniesandwithunlimitedlevelsofclassific

ation & grouping capabilities. It also allows drill down facility from report level to
transactionlevel.
Concurrent multilingual capability: Tally. ERP9 offers you the exclusive capability
of maintaining your
accountsinanyIndianlanguage,viewingtheminanotherlanguageandprintingtheminyeta
notherIndian language.
 Real time processing:Immediate posting & updating of books of accounts as
soon as the transactions are
entered,therebyfacilitatinginstantstatements&Reports.Italsofacilitatesareal-
timemulti-userenvironment.
 Versatility:Tally.
ERP9issuitableforarangeoforganizations,fromsmallgrocerystorestolargecorporatio
ns with international locations andoperations.
 Multi-platformavailability:Tally.
ERP9isavailableonmultipleversionsofwindows.ItrunsonasinglePC or on a
network. On a network, it supports access via any combination ofplatforms.
 Online Help: The Tally. ERP 9 Online Help (Alt+H) provides instant assistance
on basic and advanced features or any other relevant topics of Tally. ERP 9.
Shortcut Keys of Tally
Key Functionality Available screens
F1 To select a company At all masters menu screen
F1 To select the Accounts Button
At the Accounting Voucher creation and
Alteration screen
F2 To change the current date At almost all screens in TALLY.ERP 9
F3 To select the company At almost all screens in TALLY.ERP 9
F4 To open Contra voucher
At Accounting / Inventory Voucher
creation and alteration screen
F5 To open Payment voucher At Accounting / Inventory Voucher

F6 To open Receipt voucher
F7 To open Journal voucher
F8 To open Sales voucher
Ctrl+F8
For selecting the Purchase
voucher
At the Accounting/ Inventory vouchers
F9 To open Purchase voucher
Ctrl+F9
For selecting the Memorandum
voucher
At Inventory Voucher creation and
alteration screen
F10
To open Reversing Journal
voucher
Ctrl+F10
For selecting the Functions and
Features screen
At Inventory Voucher creation and
alteration screen
F11
To select the Functions and
Features screen
At almost all screens in TALLY.ERP 9
F12 To open Configure screen At almost all screens in TALLY.ERP 9
Functional Features of Tally
 Data Reliability: The tool is robust that even power failures or machine shut
down during functioning does not affect data stored in Tally database.
Quality data integrity checks at periodic levels ensure complete data
reliability.
 Data Security: Data integrity checks also ensure that no external
modifications to the data can intervene with Tally. The availability of binary
encoding storage format avoids tricky information grouping. Access to
database is through an activated ODBC layer.
 Tally Audit: A specified user can be given administrator rights to check for
correctness of entries entered by authorized users and make changes where
required. Audited entries and alterations made are displayed along with the
name of the user who has made those modifications with the time of change.

 Tally Vault: Data encryption option available in Tally is called the Tally
Vault. Data Encryption Standard (DES) method prevents breaking of
password for the vault.
 Security Levels: Numerous other Tally technology benefits include security
levels that are user defined, quick and easy installation, internal backups,
unlimited multi-user support, import or export of tally data and its graphical
analysis besides several others.
Advantages of Tally ERP 9
 Simple and rapid installation: Tally. ERP 9 has a simple, menu-driven
installation procedure. The user can install the program files on any drive if the
hard disk has partitions. The user can also specify the name and directory
location of the program files. Tally. ERP 9 uses minimum hard disk space in the
local drive. Its installation on the local disk takes just a few seconds.
 Internal backup/restore: Tally. ERP 9 has an in-built, user-friendly ‘backup and
restore’ option. It helps the user to take a backup of one or more companies or all
companies, in a single directory, in the local hard disk, or in any external media.
 User-defined security levels: Tally. ERP9 offers high levels of security. Users
can define multiple levels of security according to their requirements. Every
authorized user in the company can have an individual password, with rights to
use specific features only. The user with the administrator level password will
have full access and can set controls for otherusers.
 Data security: Tally. ERP 9’s data integrity checks ensure that there are no
external changes to the data. Tally. ERP 9 also uses a binary encoding format of
storage to prevent devious grouping of information.
 Tally audit: The Tally. ERP9 audit feature provides the user with administrator
rights and the capability to check the entries made by the authorized users and
alter these entries, if necessary. Once the entries are audited, Tally.ERP9
displays the altered entries, if any, along with the name of the user, who has
altered the entry, and the date and time of the alteration.

 Multi-directory for company management: The user can create multiple
directories to store data. The data stored in these directories can be accessed
directly in Tally. ERP 9, by specifying the path.
 Import/Export of data: Any transaction can be exported and imported to other
software after suitably altering the current structures to accept the Tally. ERP9
data structure. Data can also be imported to Tally. ERP9 by writing
aTDLprogram.The datawhichis to beexported from Tally. ERP9 can bein
XML,HTML or ASCIIformat.
 Data Synchronization: Synchronization is the process of exchanging Tally.
ERP9 data between two or
morelocations.Thisprocessenablesabranchofficetosenditsdatatotheheadoffice,ov
ertheInternetora privatenetwork.
 Graphicalanalysisofdata:Tally. ERP9 providesgraphicalanalysis
ofdatawhichhelpsthe user toperform deeper analysis. The user can generate
graphical analysis reports such as Sales register, Purchase register, Ledgers,
Funds flow, Cash flow, Stock Item registers and so on. This helps the
management to quickly judge performance and be better prepared for
difficulttimes.
 ODBC (Open Database Connectivity) compliance: It allows other programs to
use data from Tally. ERP 9, directly.
Thus, any program such as MS-Excel or Oracle, which is ODBC compliant, can
use data from Tally. ERP9. Data connectivity is dynamic, which means that any
update in Tally. ERP9 is reflected in real time in other ODBC compliant software.
The user can also extract data from Tally. ERP9 and design his/her own report
formats in other ODBC compliantsoftware.
 Protocol support: Tally. ERP9 provides protocol support for HTTP, HTTPS, FTP,
SMTP, ODBC and raw sockets with data interchange formats such as XML,
HTML with XML islands, SOAP and related formats. Protocol refers to a
mechanism by which information (data) can be put into or taken from Tally. ERP9.
Formats refer to the standard for information to be generated from Tally. ERP9 or
from other applications which can exchange data with Tally. ERP9.
 Directwebbrowseraccess:WhileworkingonTally. ERP 9,
theusercandirectlylogontotheTally website, provided he/she has access to the
Internet. The website lists details of all the facilities offered by Tally. ERP 9. The

user can also download the latest release of Tally. ERP9 as and when it is
available. The Tally website also offers Tally Chat, by which a user can
communicate with aTally representative and get required information.
 Ability to preview and publish reports and documents on the Internet:
Companies which want to publish reports and price lists on their website can do
so directly from Tally. ERP 9.
Starting With Tally ERP 9
 Title Bar: It displays the Tally software that you are using.
 Horizontal Button Bar: It helps to choose Language, Keyboard settings, Control
centre, support centre and Help.
 Close Button: By click on this button or Ctrl+M, tally window closes
 Task Bar: Displays the task of Tally ERP 9
 Gateway of Tally: It displays menu, screen, reports
 Info Panel: Information panel displays the tally version, license details and
configuration details
 Calculation Area: Calculation area will be used for calculation functions.

 Buttons Tool Bar: It displays the buttons that enables for immediate interaction
with Tally. ERP 9. It displays only the buttons that are applicable to the current
task.
 Date and Time: Displays current data and time.
Setting up a company in Tally. ERP 9
Create a new company

STEPS:
o Open Tally Software.
o If you are opening Tally ERP 9, First time after installation, you will be landed to
a menu called company info menu. (If you are in Gateway of Tally Press Alt+F3
to get that menu).
o Select Create Company option in the menu and press enter key.
o Type the name of the company, address, financial yearbegins, and all other
details asked by the creation screen.
o To save and create company do Press Enter Key, Press Y Key or click on Yes.
The program will create a company and you will be entered into it.
Select a company

STEPS:
o In the Company Info. menu choose Select Company option.
o Then you will see the List of Companies, which are created using the
Create Company option under the Company Info. menu.
o From the list choose any one of the companies

o Select F3: Comp Info. (ALT+F3) from the button bar
o Select Alter and press Enter
o Select the company from the List of Companies and press Enter to view
the Company Alteration screen.
o Make the necessary changes in the required fields and accept the screen.
Shut a company

STEPS:
o Load the company you want to delete.
o From the gateway of Tally Press Alt + F3 Shortcut key of click on Alt+F3
comp info.
o In the company info menu select Alter menu, now you are in company
alteration screen.
o Now press Alt+D Shortcut Key
o First confirmation message ‘Delete’ will be asked by Tally
o Click on Yes or Press enter or press Y from your Keyboard.
o Second confirmation message will be asked ‘Are you sure’.
o Repeat the previous action Click on Yes
o The company will have deleted.
Groups of Accounts
Tally.ERP9 has predefined groups to work on. There are total 28 groups out of which 15 groups
are called primary groups and remaining 13 are subgroups. Among the 15 primary groups, 9
relates to capital account i.e., balance sheet item and 6 relates to revenue account i.e., profit and
loss account.
All the 13-subgroup related to 9 groups of balance sheet items. We can alter the nomenclature of
any of these predefined groups.
All the groups whether relating to asset or liability or income or expense are as follows: -
Liabilities
1. Capital reserve

 Reserves and surplus
Loans
 Bank OD
 Secured loans
 Unsecured loans
Current liabilities
 Duties and taxes
 Provision
 Sundry creditors
Assets
Fixed assets
Investments
Current assets
 Bank
 Cash-in-hand
 Deposits
 Loans in advance
 Sundry debtors
 Stock in hand
 Suspense A/C
Income
10. Sales A/C
11. Direct income
12. Indirect income
Expenses
13. Purchase A/C
13. Direct expenses
15. Indirect expenses
But we’ll focus on the following:
Income
-Sales A/C (P)
(a)Computer (L)
(b)Component (L)
(c)Printer (L)
-Indirect income (P)
-Bank interest (L)

Expenses
-Purchases A/C (P)
(a)Computer A/C (L)
(b)Component A/C (L)
-Indirect Expenses (P)
(a)Salary (L)
(b)Office cost (L)
Assets
-Current assets (P)
(a)Bank A/C (L)
(b)Bank deposit (L)
-Cash in hand
(a)Petty cash
(b)Sundry debtors
-Depreciation (New primary group)
Fixed Assets
-Building (NG)
(a)Building (L)
(b)Building account depreciation (L)
-Office equipment (NG)
(a)Office equipment (L)
(b)Office equipment depreciation (L)
NOTE: L stands for ledger
P stands for primary group

NG stands for New Primary group
Creating group
STEPS:
 From the screen of Gateway to Tally go to Accounts Info and select Groups
 Select ‘Create’ under the Single group section in the Group menu.

Creating Primary Group
STEPS:
 From the screen of Gateway to Tally go to Accounts Info and select Groups.
 Select ‘Create’ under the Single group section in the Group menu.
 Fill in the details as required

Ex – Name: Depreciation
Under: Primary
Nature of group: Expenses
Displaying Group(Single and Multiple)
STEPS:
 Select ‘Display’ under the Single group section in the Group menu.

 Select ‘Display’ under the Multiple group section in the Group menu

Altering Group
I. SINGLE GROUP
STEPS:

 Select ‘Alter’ under the Single group section in the Group menu.
 Make required alteration.
II. MULTIPLE GROUP
STEPS:

 Select ‘Alter’ under the multiple group section in the Group menu.
Ledgers
A ledger is the actual account head to identify your transactions and are used in all
accounting vouchers. For example, purchase, payments, sales, receipts, and others

accounts heads are ledger accounts. Without a ledger, you cannot record any
transaction.
All ledgers have to be classified into groups. These groups and ledgers are classified
into profit and loss or balance sheet.
Creating Ledgers
1.Single
STEPS:
 From the screen of Gateway to Tally go to Accounts Info and select Ledgers.
Select ‘Create’ under the Single section in the Ledgers menu.

2.Multiple
STEPS:
 Select ‘Create’ under the multiple section in the Ledgers menu.

Altering Ledger
Multiple
STEPS:
 Select ‘Alter’ under the multiple section in the Ledgers menu.

 Make necessary alterations.
Single

Display Trial Balance
STEPS:
 On the screen of Gateway to Tally select Trial Balance option under the Reports
Section

Particulars Amount
Bank Account 35000
Deposit 40,000
Petty Cash 500
Sundry Debtors (Total) 57300
Compu Care Systems 5400

Data Link Technologies 12400
Supreme Computer 13500
Buildings 75000
Buildings Accumulated
Deprn 8000
Office Equipment 25000
Office Equipment Depn 4500
Tax deducted at source 4780
Sales Tax 13600
Sundry Creditors (Total) 156000
Challenger Systems 65650
Horizon Enterprises 44750
Silverplus Computers 45600
Mutual Trust Loan 50000
Equity Capital 250000
Profit & Loss Account 32070
Vouchers in Tally.ERP9
Standard or pre-programmed vouchers
A voucher is a document that contains details of a financial transaction and is required
for recording the same into the books of accounts. For every transaction, you can use
the appropriate Tally voucher to enter the details into the ledgers and update the

financial position of the company.Tally comprises of the following predefined Vouchers,
to suit different business requirements for recording various transactions. Tally also
allows you to create user-defined Vouchers (Voucher Types) as per your requirements.
Contra Voucher.
As per the Accounting Principles, a Contra entry is a transaction involving transfer of
cash between one Cash A/c to another or one Cash A/c to another Bank A/c.
Payment Voucher.
It is used to account all the payments made by the company by way of Cash/Bank.
Payment voucher can be passed using Single Entry or Double Entry mode by
configuring the setting Use Single Entry mode for Pymt/Rcpt/Contra in F12
configuration.
Receipt Voucher.
Any money received from debtors against sales Invoices or on Account and for all
transactions where money is received are accounted or entered intoTally.ERP 9
using the Receipt Voucher.
Journal Voucher.
This voucher is used for all adjustment or due entries in tally software, or in other
words entry which is not made by other accounting vouchers are made by this
voucher.
Purchase Voucher.
When a company buys goods on credit or cash, Purchase voucher is used to record
all the Purchase transactions of the company.
Sales Voucher.
Sales Voucher is used to record the Sales transactions of the company. You can pass
an entry using the Voucher mode or the Invoice mode where the calculations can be
automated and the transactions can be fed into the system easily.
Debit Note Voucher.

Debit Note is a document issued to a party stating that you are debiting their
Account in your Books of Accounts for the stated reason or vice versa. It is
commonly used in case of Purchase Returns, Escalation/De-escalation in price, any
other expenses incurred by you on behalf of the party etc.
Credit Note Voucher.
Credit Note is a document issued to a party stating that you are crediting their Account
in your Books of Accounts for the stated reason or vice versa. It is commonly used in
case of Sales Returns, Escalation/De-escalation in price etc. A Credit Note can be
entered in voucher or Invoice mode.
CREATION
A voucher is a document that contains details of a financial transaction and is
required for recording the same into the books of accounts. For every transaction,
you can use the appropriate Tally voucher to enter the details into the ledgers and
update the financial position of the company.
The voucher entry menus options are available under Transactions in the Gateway
of Tally. The Payroll and Order Vouchers are available as separate options which
can be enabled based on the requirements.
The Payroll Vouchers can be enabled from F1: Accounting Features, whereas
the Order Vouchers can be activated from F2: Inventory Features .

2020 Entries to be Passed
April 1 You started a business with cash Rs. 10,00,000…. Cash A/C to Capital A/C
April 1 Opened a bank account with Bank SBT Rs. 2,00,000………..SBT Bank A/C to Cash
A/C.. Contra
April 2 Received a bank loan from HDFC Bank Rs. 5,00,000….. SBT Bank A/C to HDFC
BANK LOAN
April 3 Bought furniture from Furniture Mart Rs. 1,00,000…… Furniture A/C to Furniture
Mart A/C
Advertisement payable to Media Advertiser Rs. 1,00,000(Inv. No. 1284, due days 10
days)………Advertisment A/C (Indirect Expenses) to Media Advertiser(Creditor)
April 4 Paid printing charges Rs. 500…..Printing charges to Cash
Bought Machinery Rs. 1,20,000…….Machinery A/C to Cash
April 5 Purchased goods from Aroma Traders Rs. 85,000(bill no. 108)…Purchases A/c to
Aroma Traders
Purchased goods for cash Rs. 10,000…… Purchases to Cash
April 6 Telephone charges paid by SBT Cheque Rs. 1,800(Ch No. 123456789).. Telephone
Charges to SBT Bank A/c
April 7 Cash sales Rs. 50,000…….. Cash A/C to Sales
April 8 Goods returned to Aroma Traders Rs. 5,000(agst bill No. 108)….Aroma Traders to
Purchase Returns..
April 10 Cash paid to Aroma Traders Rs. 25,000 (Bill 108)… Aroma Traders A/C to Cash
April 11 Sold goods to Kishore Rs. 40,000 (Bill No. 2)……….Kishore A/C to Sales
April 12 Cash received from Kishore Rs. 25,000(Bill No. 2)……… Cash A/C to Kishore
April 13 Goods Returned from Kishore Rs. 5,000(Bill No. 2).. Sales Return to Kishore
April 15 Cash withdrawn from SBT Bank Rs. 10,000…… Cash to SBT A/C
April 16 Paid loan of HDFC Rs. 1,00,000…….. HDFC BANK LOAN A/C to SBT BANK

April 17 Cheque of Bank SBT issued to Furniture Mart Rs. 50,000… Furniture Mart to SBT
Bank
April 18 SBT Cheque issued to Media Advertiser Rs. 50,000 Media Advertiser to
SBT Bank
April 25 Cash withdrawn from SBT Bank for personal use Rs. 5,000…Drawings
A/C to SBT Bank
April 30 Paid salary Rs. 12,000…… Salary A/C to Cash A/C
 Contra Voucher in Tally
Contra vouchers are used to withdraw or deposit money in banks with the help of
instruments such as cheques/ATM/DD or e-transfer to another account through
NEFT/IMPS. With the help of contra vouchers in Tally, accountants can also
generate deposit slips for recordkeeping.
Tally also provides exact currency denominations to monitor and print the deposit slip while
also depositing the amount.

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