Basic Accounting Software

AKSHIT BANSAL

B. Com 3A
INTRODUCTION TO TALLY ERP 9

TallyERP9 is one of the most widely used financial software. Tally.ERP9 reports can help a
business owner make informed decisions to increase efficiency, reduce costs, and organize
business operations.

WithTally.ERP9, accurate, up-to-date business information is available at your fingertips

anytime. It provides a Comprehensive solution for the accounting and inventory needs of a
business.

It provides the capability to generate fully accurate tax returns in a matter of minutes and is
also capable of extracting, interpreting and presenting financial data.

Tally.ERP9 is the world’s fastest and most powerful concurrent Multi-lingual business
Accounting and Inventory Management software. Tally.ERP9, designed exclusively to meet
the needs of small and medium businesses, is a fully integrated, affordable and highly reliable
software. Tally.ERP9 is easy to buy, quick to install, and easy to learn and use. Tally.ERP9 is
designed to automate and integrate all your business operations, such as sales, finance,
purchasing, inventory, and manufacturing. With Tally.ERP9, accurate, up-to-date business
information is literally at your fingertip anywhere. The powerful new features and blazing
speed and power of Tally.ERP9 combined with enhanced MIS, Multilingual, Data
Synchronization and Remote capabilities help you simplify all your business processes easily
and cost-effectively.

SALIENT FEATURES OF TALLY ERP 9

 A leading accounting package: The first version of Tally was released in 1988 and,
through continuous development, is now recognized as one of the leading accounting
packages across the world, with over a quarter million customers. Tally’s market share
is more than90%.
 No accounting codes: Unlike other computerized accounting packages which require
numeric codes, TallyERP 9 pioneered the ‘no accounting codes’ concept. TallyERP 9
users have the freedom to allocate meaningful names in plain English to their data
items in the system.
 Complete business solution: TallyERP 9 provides a comprehensive solution to the
accounting and inventory needs of a business. The package comprises financial
accounting, book-keeping and inventory accounting. It also has various tools to
extract, interpret and present data.
 Integrated/Non-integrated accounting and inventory: With TallyERP 9, the user is
able to choose to maintain accounts only. If accounting with inventory is opted for, the
user can choose whether it should be integrated or not.
  Flexible and easy to use: TallyERP 9 is very flexible. It mimics the human thought
process, which means that TallyERP 9 can adapt itself to any business need. TallyERP
9 users need not change the way their business is run to adapt themselves to the
package.
 Speed: TallyERP 9 provides the capability to generate instant and accurate reports,
which assist the management to take timely and correct decisions for the overall
productivity and growth of the company.
 Power:TallyERP9 allows the user to maintain multiple companies and with unlimited
levels of classification & grouping capabilities. It also allows drill down facility from
report level to transaction level.
 Flexibility: TallyERP 9 provides flexibility to generate instant reports for any given
period (month/year) or at any point of time besides providing the facility to toggle
between Accounting & Inventory reports of the same company or between
companies.
 Concurrent multilingual capability: TallyERP 9 offers you the exclusive capability
of maintaining your accounts in any Indian language, viewing them in another
language and printing them in yet another Indian language.
 Real time processing: Immediate posting & updating of books of accounts as soon as
the transactions are entered, thereby facilitating instant statements & Reports. It also
facilitates a real-time multi-user environment.
 Versatility:TallyERP9 is suitable for a range of organizations, from small grocery
stores to large corporations with international locations and operations.
 Multi-platform availability: TallyERP9 is available on multiple versions of
windows. It runs on a single PC or on a network. On a network, it supports access via
any combination of platforms.
 Online Help: The TallyERP 9 Online Help (Alt+H) provides instant assistance on
basic and advanced features or any other relevant topics of TallyERP 9.
 [Link]: is an enabling framework which establishes a connection through which
the remote user can access the client’s data without copying / transferring thedata.
 Remote Access:TallyERP9 provides remote capabilities to access the data from
anywhere and anytime.
 Control Centre: works as an interface between the user and TallyERP 9 installed at
different sites and enables the user to centrally configure and administer Site/User
belonging to anaccount.
 Support Centre: allows a user to directly post his support queries on the functional
and technical aspects of theProduct.
 Auditor’s Edition: TallyERP9 offers a special Auditors’ Edition of TallyERP9, which
provides auditing and compliance capabilities exclusively for Chartered Accountants.

FUNCTIONAL FEATURES OF TALLY ERP 9

 BASIC ACCOUNTING BASIC INVENTORY

Complete book-keeping Stock categories

Books, registers and statements of Stock query by stock group, or stock

accounts category

General ledgers Multiple godowns

Accounts receivable and accounts Stock transfers to godowns and branches

payable

Flexible voucher numbering Multiple stock valuation methods

Flexible classification of account heads Batch-wise/Lot-wise, including expiry date

handling

Panoramic view Alternate units of measure and tail units

Drill-down display Tracking through receipt notes/delivery

notes/rejections inwards/rejections
outwards

Database reporting Additional costs incurred on purchase

Voucher and cheque printing Movement/Profitability analysis Party-

wise/Item-wise/ Stock Group-wise

Columnar reports Customisable sales invoices using price

lists with

multiple prices

Bank reconciliation Sales and purchase order processing

Cash flow statement

ADVANCED ACCOUNTING ADVANCED INVENTORY

Multiple companies Stock items classified as raw materials, work-in-

process, finished goods

Multi-currency Bill of Material with auto-adjustment of stocks

Multiple financial years Job-working concepts, including sub-contracting

Comparison of data using multi-columnar Additional cost of manufacturing with notional value
reporting

Memo vouchers CENVAT support

Post-dated vouchers Reorder levels

User-defined voucher types Stock ageing analysis

Sales and purchase extracts Batch related stock reports

Point of Sale (POS)

Daily balances and transaction values/ Excise/ VAT/ Central Sales Tax (CST)/ Tax Collected
Interest calculations at Source (TCS) related Inventory transactions and
reports

Percentage-based reporting

Ratio analysis

Value Added Tax (VAT)/ Central Sales

Tax (CST)

Service Tax (ST)

Tax Deducted at Source (TDS)

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.
 Unlimited multi-user support: A multi-user version of Tally ERP 9 can be installed
on a network, having any number of computers with different operating systems such
as Win 98, NT, 2000, XP etc.
 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.
 Data reliability: Tally ERP 9 offers reliable data. It uses a flexi-field, flexi-length,
self-indexed, weighted file structure for an extremely compact and fast database.
Tally ERP 9 is robust. Tally ERP 9 uses signalling quality data integrity checks, at
regular levels, to ensure the complete reliability of data.
 User-defined security levels: Tally ERP 9 offers high levels of security. Users can
define multiple levels of security according to their requirements. Every authorised
 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 other users.
 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 ERP 9 audit feature provides the user with administrator
rights and the capability to check the entries made by the authorised users and alter
these entries, if necessary. Once the entries are audited, TallyERP 9 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.
 Tally Vault: Tally ERP 9 offers a data encryption option called Tally Vault. Without
the valid Tally Vault password, the data cannot be accessed. Tally ERP 9 follows the
DES (Data Encryption Standard) encryption method to safeguard the data.
 Removal of data into a separate company: Tally ERP 9 allows users to maintain a
company for any number of financial years. Once the books of accounts have been
completed for the earlier financial years, the user can split the company data into
multiple companies as per financial periods required. The user can specify the date
from which the company has to be split and Tally ERP 9 will split the company to
form two companies as per periods specified. Once the data has been split, the closing
balance of the first period (first company) becomes the opening balance for the next
period (second company).
 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
[Link] 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 ERP 9 data
structure. Data can also be imported to Tally. ERP 9 by writing a TDL program. The
data which is to be exported from Tally ERP 9 can be in XML, HTML or ASCII
format.
 Data Synchronization: Synchronization is the process of exchanging Tally ERP 9
data between two or more locations. This process enables a branch office to send its
data to the head office, over the Internet or a private network.
 Graphical analysis of data: Tally ERP 9 provides graphical analysis of data which
helps the user to perform 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 difficult times.
 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 ERP 9. Data connectivity is
dynamic, which means that any update in Tally ERP 9 is reflected in real time in other
ODBC compliant software. The user can also extract data from Tally ERP 9 and
design his/her own report formats in other ODBC compliant software.
 Protocol support: Tally ERP 9 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 ERP 9. Formats refer to
the standard for information to be generated from Tally ERP 9 or from other
applications which can exchange data with Tally ERP 9.

 Direct web browser access: While working on Tally ERP 9, the user can directly log
on to the Tally 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 ERP 9 as and when it is available. The Tally website also offers
Tally Chat, by which a user can communicate with a Tally 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.
 E-mail Facility: Tally ERP 9 facilitates the mailing of any Tally ERP 9 report or
document.
 Multilingual capability: Tally is the world’s first accounting and inventory software
with multilingual capability. Currently, Tally ERP 9’s multilingual capability extends
to 12 languages which include nine Indian languages. Tally ERP 9 enables you to
enter data in one language and have it transliterated into different languages. You can
generate invoices, purchase orders or delivery notes in the language of your choice
after entering data for the same in any of the nine specified languages. Also, the
phonetic keyboard allows you to spell the term phonetically based on how it sounds
and Tally ERP 9 displays the data in the language selected after transliteration.
 Point of Sale (POS): POS is an acronym for Point of Sale. Point of Sale can be a
retail outlet, a check-out counter in a shop, or any other location where a sales
transaction takes place. It is a computerised cash register which adds up the sales
totals, calculates the balance to be returned to buyer and automatically adjusts the
inventory level to reflect the quantity sold. The equipment required for POS to work
effectively are cash registers, card readers, barcode scanners and so on.
INTRODUCTION TO 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.

SHORT CUT KEYS FOR TALLY

Keyboard shortcut is a set of one or more key that helps to activate a function without the
use of mouse. Short cuts invoke a command in tally software as an alternatives to mouse
clicks or contentious use of Enter Key. In Tally.ERP9 there are shortcuts for almost all
functions. This means that you can use tally software without touching mouse, which will
help you in faster data entry, easy navigation, easy report viewing, easy printing, export
import of data etc.
Key Functionality Available screens

F1 To select a company At all master’s menu screen

At the Accounting Voucher creation and

F1 To select the Accounts Button
Alteration screen

F2 To change the current date At almost all screens in [Link] 9

F3 To select the company At almost all screens in [Link] 9

At Accounting / Inventory Voucher creation

F4 To open Contra voucher
and alteration screen

At Accounting / Inventory Voucher creation

F5 To open Payment voucher
and alteration screen

At Accounting / Inventory Voucher creation

F6 To open Receipt voucher
and alteration screen

At Accounting / Inventory Voucher creation

F7 To open Journal voucher
and alteration screen

At Accounting / Inventory Voucher creation

F8 To open Sales voucher
and alteration screen

At Accounting / Inventory Voucher creation

F9 To open Purchase voucher
and alteration screen

To open Reversing Journal At Accounting / Inventory Voucher creation

F10
voucher and alteration screen

To select the Functions and

F11 At almost all screens in [Link] 9
Features screen

F12 To open Configure screen At almost all screens in [Link] 9

CREATING A COMPANY

Step 1: Select Cmp Info on the vertical column

Step 2: Select Create Company

Step 3: Enter Company details and select yes

A new company has been created

FEATURES
The Company Features section in Tally ERP 9 is divided into the following major categories:
 Accounting Features
 Inventory Features
 Statutory & Taxation
 TSS Features
 Add-On Features

ACCOUNTING FEATURES
The Accounting Features consists of configurations/functionalities, which generally affect
accounting transactions and reports.
Gateway of Tally > F11: Company Features > Accounting Features or click F1
INVENTORY FEATURES
The Inventory features comprise of configurations/functionalities pertaining to inventory
transactions and reports.
Go to Gateway of Tally > F11: Company Features > Inventory Features
STATUTORY FEATURES
The Statutory & Taxation features comprise of configurations/functionalities pertaining to
statutory compliances available in Tally ERP 9. The Statutory features are country specific
and strictly depend upon the country selected in the Company Creation screen.

TSS FEATURES
The Tally Software Services (TSS) screen comprises information about Connection, Remote
Access and SMS Access details of a company. The TSS Features will be available only when
Use Security Control is set to Yes in Company Creation screen.

ADD-ON FEATURES
Customers, to meet their accounting requirements, may purchase customised solutions from
Tally Partners. Depending on the customer requirement, the solution provider formulates the
solution. In some cases, a solution may require the introduction of a new feature in Tally ERP
9 to support the functionality. F6: Add-On Features is a place holder for the features provided
in the Add-ons/Local TDLs loaded.

CONFIGURATIONS
In Tally ERP 9, F12: Configurations are provided for Accounting, Inventory & printing
options and are user definable as per the business’ requirements.
The F12: Configurations are applicable to all the companies residing in the Tally ERP 9 data
Directory. The F12: Configuration options vary depending upon the context, i.e., if you press
F12: Configure from voucher entry screen, the respective F12: Configurations screen is
displayed.
Go to Gateway of Tally > F12: Configure
CREATING MULTIPLE GROUPS AT ONCE

Step 1: Select Accounts Info

Step 2: Select Groups

Step 3: Create Multiple

Step 4: Enter the primary group and then enter the sub groups and select yes
All the groups have been created at once

CREATING LEDGERS

Step 1: Select Accounts Info

Step 2: Select Ledger

Step 3: Select Create Single

Step 4: Enter all ledger details and select yes

A ledger has been created

ALTERING AN EXISTING LEDGER

Step 1: Select Accounts Info

Step 2: Select Ledger

Step 3: Select Alter Single

Step 4: Select the A/c you want to alter

Step 5: Enter altered details and select yes

The ledger has been altered

GROUPS AND LEDGERS EXERCISE

GROUPS
LEDGER

ALTERATION
DISPLAYING TRIAL BALANCE

Step 1: Delect Display

Step 2: Select Trial Balance

The Trial Balance is Visible

VOUCHER CREATION

Step 1: Select Accounting vouchers

Step 2: Select the type of voucher

Step 3: Enter voucher details and select yes

A voucher has been passed

VOUCHER DELETION

Step 1: Select Display

Step 2: Select Day Book

Step 3: Select the entry you want to delete and select delete
Step 4: Select yes

The entry has been deleted

TYPES OF VOUCHERS

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
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 into Tally 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.
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.

Purchase Voucher
When a company buys goods on credit or cash, Purchase voucher is used to record all the
Purchase transactions of the company.
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.

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.
ACCOUNTING VOUCHERS EXERCISE

2020 Entries to be Passed

April 1 Arjun started a business with cash Rs. 10,00,000
April 1 Opened a bank account with Bank SBT Rs. 2,00,000
April 2 Received a bank loan from HDFC Bank Rs. 5,00,000
April 3 Bought furniture from Furniture Mart Rs. 1,00,000
Advertisement payable to Media Advertiser Rs. 1,00,000(Inv. No. 1284, due
days 10 days)
April 4 Paid printing charges Rs. 500
Bought Machinery Rs. 1,20,000
April 5 Purchased goods from Aroma Traders Rs. 85,000(bill no. 108)
Purchased goods for cash Rs. 10,000
April 6 Telephone charges paid by SBT Cheque Rs. 1,800(Ch No. 123456789)
April 7 Cash sales Rs. 50,000
April 8 Goods returned to Aroma Traders Rs. 5,000(agst bill No. 108)
April 10 Cash paid to Aroma Traders Rs. 25,000 (Bill 108)
April 11 Sold goods to Kishore Rs. 40,000 (Bill No. 2)
April 12 Cash received from Kishore Rs. 25,000(Bill No. 2)
April 13 Goods Returned from Kishore Rs. 5,000(Bill No. 2)
April 15 Cash withdrawn from SBT Bank Rs. 10,000
April 16 Paid loan of HDFC Rs. 1,00,000
April 17 Cheque of Bank SBT issued to Furniture Mart Rs. 50,000
 April 18 SBT Cheque issued to Media Advertiser Rs. 50,000
April 25 Cash withdrawn from SBT Bank for personal use Rs. 5,000
April 30 Paid salary Rs. 12,000

The following ledgers have to be made

BANK RECONCILIATION STATEMENT
Bank reconciliation is a process that explains the difference between the bank balance shown
in an organization's bank statement, as supplied by the bank, and the corresponding amount
shown in the organization's own [accounting] records at a particular point of time.
Reconciling the company's bank books with the banker's statement is a regular task of
accounting.

Step 1: From the screen of Gateway of Tally select Banking

Step 2: Select Bank Reconciliation

Step 3: Add the bank date to reconcile by pressing F5-Reconcile.

EXPORT AND IMPORT

Export
This option is used to send data from one company to other company in tally or send tally
data to other softwares (ex- MS-word, MS-excel etc.). You have to export the masters first
and then the transactions.
Ensure that F11: Features of the exporting and the importing company are the same.
You can export masters created in a company, in different formats.
1. ASCII delimited
2. JPEG
3. PDF
4. Excel
5. XML
6. HTML
You can also choose the type of masters to export. Masters exported in XML format can be
imported into Tally.ERP9 using the Import Masters option.
Step 1: Select Display
Step 2: Go to list of accounts

Step 3: Click Export.

Step 4: Press backspace to configure the export options, select language, format, export
location, file name, types of masters and set include dependent masters and export closing
balances to opening to yes.

Step 5: Select yes to export.

The file has been exported.

Import

The company features that were enabled while exporting the data should be enabled in the
company in which the data is imported.
Step 1: Go to Import
Step 2: Select Masters

Step 3: Enter the file name and select the behaviour to define the method by which the existing
masters in the company will be treated.

Combine Opening Balances: Select this option to import data of different branches and
consolidate the opening balances. You can also select this option when the opening balances
of existing masters are Zero and need to be overwritten by the balances in the data being
imported.
Ignore Duplicates: Select this option to import new masters along with the existing masters
in Tally ignoring the duplicates.
Modify with new data: Select this option to replace the existing balances with those existing
in the data imported and also override the other options available in list of behaviours
available.

Step 4: Press Enter to import.

Go to Accounts Info or Inventory Info to view all the masters that has been imported. You
can also open the file [Link] located in the [Link] 9 installation folder to view the
import log.
INVENTORY MANAGEMENT

Inventory management is one of the key factors which will define the success of the business.
Inventory is money sitting around in another form and it holds huge working capital.
Inventory management can be defined as a whole lot of activities done to maintain an
optimum number of inventories to ensure uninterrupted production, sales, high customer
satisfaction, reduced inventory handling cost and so on.
In simple words, inventory management is all about striking the balance between
overstocking and under stocking. Overstocking will lead to cash flow blockage and additional
cost for managing excess stock. On the flip side, under stocking leads to loss of sale due to
non-availability of stock at the right time.
Thus, it is all about maintaining the right level inventories at the right time and keeping the
inventory handling cost at low.

INVENTORY INFORMATION
The Inventory Information menu lists the inventory masters like Stock Group, Stock Items,
Units of Measure of the company, using which you can create, alter, and display the
inventory master details.
By using F11: Features, you can enable the various settings under inventory features which
determine the information to be entered during transaction entries.
By using F12: Configure, you can enable the required settings of Inventory Masters.

By default, the settings pertaining to Inventory Masters are set to No. If you set them to Yes,
the features will be enabled. Typically, they are additional fields that appear during master’s
creation which enable you to obtain more information and detailed analyses.
The inventory system operates in much the same way as the accounting system. In the place
of accounting groups, ‘Stock Groups’ and ‘Stock Categories’ are used, and in the place of
ledgers, ‘Stock Items’ are used.

STOCK GROUP
A Stock Group is similar to the groups we create for accounting. Stock Items of similar
nature, brand, etc. can be classified under a single stock group. In the example above, the
stock group for ‘Television’ can be the brand, like ‘Sony’, ‘Videocon’, ‘Philips’, etc.
Stock Group Creation

Step 1: Go to Inventory Info.

Step 2: Go to Stock Group

Step 3: Select Create

Step 4: Enter Group Details and select Yes

The Stock Group has been created.

STOCK CATEGORIES
The advantage of Categorizing items is that you can classify the stock items (based on
functionality) together – across different stock groups which enable you to obtain reports on
alternatives or substitutes for a stock item.
For enabling Stock Category option in the Inventory Info menu, press F11 > Inventory
Features > Set Yes for Maintain stock categories.
Step 1: Go to Inventory Info.

Step 2: Stelect Stock Categories

Step 3: Select Create (under the Single Stock Category)

Step 4: Enter Details and select yes

A new stock category has been created

UNITS OF MEASURE
Stock items are purchased and sold on the basis of quantity. The quantity in turn is measured
in units. In Tally. ERP 9, such goods are quantified using ‘Units of Measurement’. Units of
Measure can be ‘simple’ or ‘compound’. Examples of simple units of measure are: numbers,
metres, kilograms, pieces, etc. Examples for compound units of measure are: a box of 10
pieces, etc.
Creation of Unit of Measure
Step 1: Go to Inventory Info.
Step 2: Select Units of Measure

Step 3: Select Create

Step 4: Enter the required details and click on Accept.

A new unit of measure is created

GODOWNS
A place where stock items are stored is referred to as a “Godown”. For example, a
warehouse. You can obtain stock reports for each Godown and account for the movement of
stock between Godowns (Store houses). To activate Godown Feature, Go to Inventory
Info menu, press F11 > Inventory Features > Set the option Maintain Multiple Godown to
Yes.

Creation of Godown

Step 1: Go to Inventory Info.

Step 2: Select Godowns

Step 3: Select Create

Step 4: Enter godown details and press enter

A new godown is created

STOCK ITEM
A Stock Item is a unit of the goods that a business trades [Link] is the primary inventory entity
and is the lowest level of information on your inventory. You must create a Stock Item in
[Link] 9 for each inventory item that you want to account for.

Creating stock items

Stock items are goods that you manufacture or trade (sell and purchase). It is the
primary inventory entity. Stock Items in the Inventory transactions are like ledgers being
used in accounting transactions.
Step 1: Go to Inventory Info.

Step 2: Select Stock Items

Step 3: Select Create

Step 4: Enter the required details and click on Accept.

A new stock item is created

ORDER PROCESSING

Different types of Inventory Voucher

Receipt Note Voucher

It is used to record the receipt of goods. For instance, the company may receive new
inventory from a supplier. If a Purchase Order for that Supplier exists, selecting it will
display the order details.

Rejections In Voucher
It is used for recording returned goods that a customer rejected. For example, the company
restocks items produced by a customer.

Delivery Note Voucher

It is used for keeping track of goods delivered to a customer. For instance, the company may
provide goods from inventory to a customer. If a Sales Order exists for that customer,
selecting the appropriate Sales Order will display the pertinent information.
Rejections Out Voucher
It is used for keeping track of goods that are rejected and returned to a supplier. For example,
the company returns to the supplier previously taken into stock items.

Stock Journal Voucher

To document stock transfers from one location to another. For example, the company moves
inventory from the warehouse to the shop.
Physical Stock Voucher
To record actual stock that has been physically verified or counted. For example, stock
discovered during a stock check. It is not uncommon for the company to find a difference
between the actual stock and the computer stock figure.
If you’ve set your inventory vouchers to ignore physical stock differences, these physical
stock vouchers will only be used for recording. However, if you have configured the coupons
not to forget the physical stock difference, then all subsequent transactions will use the
balance specified in the physical stock voucher.
INVENTORY AND ORDER VOUCHER QUESTION

1. Received Sales Order on 1.4.2020- Philips 25 inches TV at a price of Rs 60,000 -15 units.
Customer Name- Ram Ltd.
2. Sent goods on 2.4.2020
3. 1 Philips TV returns on 3.4.2020 due to fault.
4. Sales bill sent to the party on 4.4.2020
5. On 10 April 2020, one more TV returned by Ram Ltd.
6. Stock shifting had to be done due to Diwali cleaning. Sony CD player 10 nos. being shifted
from Bangalore to Mumbai
7. During the month closing, the stock counting took place and they discovered that in
Mumbai’s godown. The Sony 29 inches count was 15 instead of 10 as reported in Tally ERP
software.
8. Order given to Rohan Jain Ltd. For buying Sony CD player –20 nos. To be delivered at
Bangalore Godown on 2.4.2020. at price Rs 35000
9. Goods received on 2/4/2020 from Rohan Jain Ltd.
10. 2 CD players returned due to fault on 3.4.2020 to Rohan Jain Ltd.
11. Purchase bill received on 4.4.2020. from Rohan Jain Ltd.
12. 2 more CD players returned due to lack of demand to Rohan Jain Ltd on 10-4-2020.
The following ledgers have to be created

The following stock items are created

The following godowns are to be created

Inventory Entries
STOCK SUMMARY
Stock Summary is a statement of stock in hand on a particular date. The statement gets
updated with every transaction to provide stock position at any given time. [Link] 9 treats
stock summary as one of the primary statements and makes it accessible directly from the
Gateway of Tally. Similar to other [Link] 9 reports, Stock Summary can also be drilled
down and configured to view various inventory information including inflow and outflow of
stock.

Steps to view the Stock Summary

Step 1: Go to Stock Summary
By default, Stock Group balances are displayed

Press Alt+F1 for detailed view

BILL WISE DETAIL
Bill wise detail is used to know about party outstanding detail. If we make an entry to a
ledger that needs bill wise details, we have to give the details of the bill at the voucher entry
itself. Where we can see the details of bills, specific credit periods and get the correct
outstanding result [balance] of each ledger. But when there are large numbers of entries it
becomes difficult to match a payment to an invoice. It is so that the details of creditors and
debtors are maintained at the invoice level and called as Bill-Wise Accounting system.

To activate Bill Wise Details, Press F11 > Accounting Features > Set the option Maintain
Bill wise Details to Yes.

While creating a ledger, set mantain balances bill by bill to yes

Bill Wise Accounting Exercise
1. Debtor A Sales done of Rs 15,000 on 1.4.2020. He paid Rs 5000 next day 2.4.2020 Credit
period- 20 days
2. Debtor B paid an advance of Rs 20,000 on 1.4.2020. Sales done next day 2.4.2020. Credit
period –20 days
3. Debtor C sales done on 1.4.2020 Rs 10,000 and next sales done on 2.4.2020 Rs 5000.
Payment settled on 1.5.2020 to the extent of Rs 12000. Credit period –1 month
4. Debtor D sales done Rs 10,000 1 May 2020. He paid an advance of Rs 15000 2 May 2020.
He was sold goods to the extent of Rs 8000 2 May 2020. Credit period 45 days.
5. Interest due to the Debtor C Rs 500 on 2.5.2020.

The following Ledgers have to be created

INVOICING
Invoicing feature in Tally ERP9 is associated with the day-to-day mercantile transactions and
strengthens the concept of accounting on computers. This option is used to generate & print
Invoice showing details of products or services with their prices and applicable duties and
taxes.
Invoicing feature is very beneficial, as it automatically calculates the tax, discount and freight
values, sums up the Invoice amount and displays the other relevant information such as
Invoice date, Serial Number, Buyer and Seller particulars & dispatch details. Entering data in
invoice format is faster and it reduces possibilities of error during data entry and expedites
invoicing process.

To activate Invoicing, Press F11 > Accounting Features > Set the option Enable Invoicing to
Yes.
Sales Voucher

Item Invoice
BILL OF MATERIALS
Bill of Material is a comprehensive list of raw materials, components, assemblies, sub-
assemblies, parts, or anything which is required to manufacture the finished product. The
finished product or goods may be the final product itself or a semi-finished product which is
later consumed to produce a final or a larger product.
The bill of material for finished goods not only lists the components but also the quantity of
each component required to produce the finished goods. If the finished product has a variant
by color, configuration, size etc., you can choose to have multiple BOM for a single product.
Bill of Material (BoM) is created only for those items that are being assembled in-house.
Therefore, you need to specify a BoM at the time of creating a Stock Item or while altering
the stock item. For trading items, you do not need a BoM.

Single BOM can be created for a stock item where you use standard set of inputs to
manufacture finished goods.
Multiple BOM can be created for a stock items where you use varying set of components to
manufacture a specific finished goods based on the availability of goods or customer
requirements.
The facility to create Multiple Bill of Materials for Stock Item has been provided in
[Link] 9 Release 3.0. Where you can create multiple BOM with different component
list for a stock item & appropriate BOM can be selected in the manufacturing Voucher.
This feature will be useful where you are using different components to manufacture the
same stock item based on the customer requirement.
To enable Bill of Materials, Go to Gateway of Tally > F12: Configure > select
Accts/Inventory Info. > Set Enable component list details (Bill of Materials) to Yes.
INTEREST CALCULATION
Any charge for the privilege of borrowing money and expressed as annual percentage rate
(APR) is referred to as Interest in dictionary of business. It can also refer to as the amount of
ownership a stock holder has in a company, usually expressed as a percentage.

Interest can be broken down as: simple and compound

Simple interest: It is the rate set on the principal amount originally lent to the borrower that
the borrower has to pay for the ability to use the money.
Compound interest: It is the interest on both the principal and the compounding interest
paid on that loan.

Benefits of Calculation of Interest with [Link] 9

If we forget to account any interest receivable or payable, with the help of [Link] 9 now
we can avoid all such uncertainties by generating interest calculation report.
Interest calculation in [Link] 9 is very much suitable for a bank loan, personal loan or
general business loan's interest.
Parameters of calculation of interest satisfy different type of user’s needs. Some may be
interested to calculate interest on current credit balance or some may interest on the total
amount but [Link] 9 provides both facilities in parameters about the calculation of
interest.

Actitvating Simple Interest in [Link] 9

Mapping- From Gateway of Tally navigate to Features Screen by pressing F11 on the
keyboard.
Action to perform- In the company feature screen enable the option activate interest
calculation by typing ‘Yes’ and to set maintain bill-wise details: to Yes. It is important to set
Use advanced parameters to No for Simple interest calculation.
Interest Calculation Exercise
Show the interest calculation for bank loan of Rs 10,00,000. Interest rate-10%- 30days
month.
Display Of Interest Payable

SECURITY CONTROL
Tally ERP 9 allows you to create multiple levels of security as per requirements and
authorise users with individual passwords and rights to access specific functionality only.
The user with an administrator level password is authorised for full access to all features in
set across controls for other users.

Activating security controls

Step 1: Go to Gateway of Tally of the opened company> Press Alt + F3> Select Alter
Step 2: Press enter select the open company to view the company alteration screen as shown
use security control, an additional field appears prompting for the name of the administrator.
In the password field, type admin and repeat the password, [Link] 9 displays the strength
of the password enter depending upon the combination

Step 3: An option Use Tally Audit Feature appears, set this to Yes. An additional option
Disallow Opening in Educational Mode appears said this to no accept the screen
Step 4: Tally ERP 9 prompts the user to reload company said this two years and return to the
company info menu
BACKUP & RESTORE

Backup
Since the data on a computer is vulnerable it is important to take regular backups of data.
[Link] 9 as a flexible backup mechanism for taking a backup of the data into virtually
any storage medium. The commonly used media CD hard disk pen drive and so on installed
either locally or on a network.
[Link] 9 provides you with the capability of taking a backup of one or more companies
or all companies in a single directory.
From the company info screen select the backup option and the screen appears as shown:

Specify the resource, destination. Select the required company from the list of companies
displayed on the right side of the screen. After the required companies are selected choose
end off list. Press enter to accept the screen. The backup file is stored.
Restore
Restore literally means to bring back. [Link] 9 allows the restoration of data from one
medium to another.

To restore data:

Step 1: Go to gateway of tally Alt + F3 Restore

Step 2: Select destination, source and Select the company for data restore
4.1 FINANCIAL STATEMENTS
Statements are reports in statements which comprise of the overall summary of transactions
entered into account books. In [Link] 9, the financial statements are classified as follows:
 Balance Sheet
 Profit and Loss A/c
 Trial Balance

TRIAL BALANCE
Trial Balance is a listing of all accounts with their balances entered as debits or credits in
columns. it is used to determine whether the total amount c debit column equals the total
amount in credit column.
A Trial Balance is typically prepared at the end of an accounting period just before preparing
the adjusting entries in the financial statements.

To view the balance sheet:

 Go to Gateway of Tally >Display > Trial Balance
 Press Alt+F1 to view in Detailed Mode

BALANCE SHEET
Balance Sheet is a financial statement that indicates the financial position on net worth of a
company at any given point. It lists the assets and liabilities of a company for a given period.
The balance sheet in [Link] 9 displays the information entered in the default primary
groups. It is updated in real time with every transaction/voucher entry.

To view the balance sheet:

 Go to Gateway of Tally > Balance Sheet
 Press Alt+F1 to view in Detailed Mode
 Press Alt+S to view in Schedule VI format.

The balance sheet can also be viewed as Schedule VI format.

Balance Sheet (Normal)

Balance Sheet (Schedule VI)

Profit and Loss Statement

The Profit and Loss Account is a financial statement that describes the operational results of
the company or its earning capacity for a given period. It lists the company's income and
expenditures.
Profit and Loss A/c in [Link] 9 displays the information based on default primary
groups. It is updated instantly with every transaction that is entered and saved.

To view the Profit And Loss Statement

 Go to Gateway of Tally >Profit And Loss Statement
 Press Alt+F1 to view in Detailed Mode
 Press Alt+S to view in Schedule VI format.

Profit And Loss Statement (Normal)

Profit And Loss Statement (Schedule VI)

4.2 ACCOUNTING BOOKS
Account books record individual transaction details which you have entered. Though items
are posted in two different ledgers in [Link] 9 brings together all the transaction of one
category into books of accounts for viewing and printing.
[Link] 9 provide you capability to generate various books and registers for any specific
period.

The following basic accounting books can be generated:

 Cash Book
 Bank Book
 Sales Register
 Purchase Register
 Journal Register
 Debit Note Register
 Credit Note Register
 Day Book

Cash Book
Cash Book is a ledger which records all cash receipts and cash payments
To display the Cash Book:
 Go to Gateway of Tally > Display > Account Books > Cash/Bank Book
 Select the Cash Register Account
 Press enter on the required month to view transactions
 Set the period
Bank Book
Bank Book is a ledger which records all bank receipts and Bank payments.
To display the Bank Book:
 Go to Gateway of Tally > Display > Account Books > Cash/Bank Book
 Select the Bank Register Account
 Press enter on the required month to view transactions
 Set the period

Sales Register
Sales Register is a record of all the sales transaction made by an organisation. By default,
this register displays the month wise breakup of sales. However, it can be further configured
to show the sales of any period as per the user's requirement.
To display the Sales Register:
  Go to Gateway of Tally > Display > Account Books >Sales Register
 Press enter on the required month to view transactions
 Set the period

Purchase Register
Purchase Register is a record of all purchase transactions made by an organisation. by
default, this register displays the month wise breakup of purchases. it can be further
configured to show the purchase of any period as per the user’s requirement.
To display the Purchase Register:
 Go to Gateway of Tally > Display > Account Books >Purchase Register
 Press enter on the required month to view transactions
 Set the period

Journal Register
Journal is a date wise record of all the transaction with details of the accounts debited and
credited and the amount of each transaction. Journal vouchers are generated recorded for
making adjustment two ledger accounts.
To display the Journal Register:
 Go to Gateway of Tally > Display > Account Books >Journal register
 Select the Journal Register
 Press enter on the required month to view transactions
 Set the period

Debit Note Register

ADebit Note is prepared by the buyer and it contains the date of goods return, name of the
supplier, details of the goods returned and the reasons for returning the goods and so on. a
Debit Note register records all the Debit Notes passed during the relevant period.

To display the Debit Note Register:

 Go to Gateway of Tally > Display > Account Books >Debit Note Register
 Select the Debit Note Register
 Press enter on the required month to view transactions
 Set the period
Credit Note Register
A Credited Note is prepared by the seller and it contains the date on which goods are
returned, the name of the customer, details of the goods received back, amount of such goods
and reasons for returning the goods. Credit Note register records all the Credit Notes passed
during the relevant period.

To display the Credit Note Register:

 Go to Gateway of Tally > Display > Account Books > Credit Note Register
 Select the Credit Note Register
 Press enter on the required month to view transactions
 Set the period
Day Book
Day Book records all transactions (Accounting, Inventory, optional and Non-Accounting)
entered during the relevant period. By default, the day book displays the last voucher entry
date of a regular voucher. But it can be said to show any date of the user's choice.

To display the Day Book:

 Go to Gateway of Tally > Display >Day Book
 Set the period
4.3 RATIO ANALYSIS
Ratio analysis is a powerful tool for financial analysis. a meaningful analysis of a financial
statement is made possible by the use of ratios.
Ratio set of figures compared with another set. the comparison gives and understanding of
the financial position of a business unit.
There are a number of ratios which can be computed from a single set of financial
statements. The ratios to be computed depend on the purpose for which these ratios are
required.
A single ratio may sometimes give information but to make a comprehensive analysis a set
of interrelated ratios are required to be analysed.

To view Ratio Analysis:

 Go to Gateway of Tally> Ratio Analysis
 Ratio analysis screen is displayed as shown