REMEDIAL COURSE

COMPUTERISED ACCOUNTING
(TALLY)

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 Module 1
INTRODUCTION TO COMPUTERISED ACCOUNTING
Accounting can be defined as a process of reporting, recording, interpreting and summarising
economic data. The introduction of accounting helps the decision-makers of a company to
make effective choices, by providing information on the financial status of the business.
The American Institute of Certified Public Accountants (AICPA) had defined accounting as
the “art of recording, classifying, and summarizing in a significant manner and in terms of
money, transactions and events which are, in part at least, of financial character, and
interpreting the results thereof”.
DIFFERENCE BETWEEN MANUAL AND COMPUTERISED ACCOUNTING
1. Manual Accounting refers to the accounting method in which physical registers for
journal and ledger, vouchers and account books are used to keep a record of the
financial transactions. On the other hand, computerized accounting implies the
method of accounting, which uses an accounting software or package, to record the
monetary transactions, which happen to an organization.
2. In manual accounting, recording of the transaction can be done through the book of
original entry, i.e. journal day book. Conversely, in computerized accounting, the
transactions are recorded in the form of data, in the customised database.
3. In manual accounting, all the calculations, i.e. addition, subtraction, etc. with respect
to the transactions are performed manually. In contrast, in computerized accounting,
there is no need to perform calculations, as the calculations are performed by the
computer automatically.
4. In manual accounting, a person remains involved all the time, with the accounts, to
enter and update transactions, which is tedious and time-consuming too. As against, in
computerized accounting, once the transaction is entered, it is automatically updated
in all the accounts to which it relates and thus, the process is comparatively faster.
5. In manual accounting method, if there occurs an error while entering and posting the
transaction in the books of accounts, then adjustment entries can be passed, for getting
accurate results. Moreover, adjustment entries are also made to comply with the
matching principle, i.e. the expenses of the accounting period should match the
respective revenues. On the other hand, in computerized accounting, to comply with
the matching principles journal and vouchers are prepared, but adjustments entries are
not passed for rectification of error unless the error is an error of principle.
6. One of the merits of computerized accounting which manual accounting lacks is that
in manual accounting there is no way to back up all the entries and financial
statements, but in computerized accounting, the accounting records can be saved and
backed up.
7. In manual accounting, the trial balance is prepared only when it is required, whereas,
in computerized accounting, instant trial balance is provided on a daily basis.

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 8. In a manual accounting system, the financial statement is prepared at the end of the
period, i.e. financial year. On the contrary, the financial statement is provided at the
click of a button, in the computerized accounting system.

MERITS OF COMPUTERISED ACCOUNTING

1. Reduce the time spent on manual processes
Computerised accounting uses sophisticated software to automate manual accounting
and bookkeeping processes, such as complex calculations. For small to medium-sized
businesses (SMEs), digital accounting will save hours of time and resource by
enabling you to manage your accounts in a fraction of the usual time.
2. Less errors and increased accuracy
Digital accounting ensures all entered data is calculated precisely, which means you
won’t have to manually check your accounts every time you or a member of staff
inputs new data. This includes income, expenses, transactional data, account
reconciliation, period end adjustments, as well as stock and VAT.
3. Real-time financial information
Computerised accounting systems are synchronised and aligned with your online bank
account. This means you will always have access to up-to-date information on
whether invoices are being paid by your customers, as well as your business
outgoings.
4. Automated invoices, credit notes and receipts
Many online accounting systems enable automated invoicing, crediting and receipting
processes, which means you will remove time spent creating manual invoices, credit
notes and receipts. Some systems also send chaser emails if debts have not been paid,
which is a very useful tool for SMEs who usually do not have adequate resources
available for debt recovery.
5. Innovative financial technology
Many computerised accounting systems are cloud-based, which means you can
download apps for mobile phones and tablets. This enables you to check your
accounts at any time, no matter where you are in the world.
6. Save money on resources
By streamlining your accounting and bookkeeping processes by using a computerised
system, you (or a member of staff) won’t need to spend as much time managing your
financial information. This will lead to cost-savings – many computerised
accounting systems can be provided by way of an affordable monthly subscription
fee.
7. Faster record-keeping leads to more business
Due to automated complex calculations, continual awareness of your finances, and
less time spent on processing and checking your accounts, you can spend more time
focusing on your business operations and increasing your profit margin.

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DISADVANTAGES OF COMPUTERISED ACCOUNTING
(i) Heavy cost of installation
Computer hardware needs replacement and software needs to be updated from time to time
with the availability of newer versions.
(ii) Cost of training
To ensure effective and efficient use of computerised system of accounting, newer versions
of hardware and software are to be introduced. These require special training and hence, cost
is incurred to train the staff personnel.
(iii) Fear of unemployment
On account of the introduction of computerised accounting system, the employees feel
insecure that they may lose employment and show less interest in computer related work.
(iv) Disruption of work
When computerised system is introduced, the existing process of accounting and other works
are interrupted. This results in certain changes in the working environment.
(v) System failure
The danger of a system crashing due to some failure in hardware can lead to subsequent
interruption of work. This is more when no back-up is made.
(vi) Time consuming
When there is system failure, an alternative arrangement needs to be made to avoid loss of
work. This consumes some time to bring the regular processes back.
(vii) Unanticipated errors not known
Unlike human beings, computers do not have the capability to judge or detect unanticipated
errors in the system.
(viii) Breaches of security
The danger of viruses and hacking into the system from outside creates a strong need for
security of the system. Similarly, the person who has created the specific programme can
easily defraud by tampering with the original records.
(ix) Health dangers
Extensive use of computers may lead to many health problems such as eye strain, muscular
complaints, back ache, etc. resulting in reducing work efficiency as well as increased medical
expenditure.
FEATURES OF TALLY ERP9
Voucher Entry:
Tally software has the unique voucher entry system that enables diverse transactions at ease.
The feature is also flexible to use. As per the accounting terminology, the voucher is a
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document with the details of various business transactions. Likewise, the software has also
been loaded with several accounting vouchers each used for particular purpose.
Interest Calculation:
The software uses different interest calculation methods that are customized for every
transaction. Once the calculation is done, the user can get a detailed report of the interest
obtained. The report helps in knowing the balance amounts that are ought to receive.
Integration of Ledgers:
Tally software inculcates multiple ledgers including General ledger, Sales ledger, and
Purchase Ledger into a single ledger. The ledgers have been differentiated into groups to get
ease in the account management. Unified ledgers concept helps in entering data and creating
records simultaneously.
Individual Bill Tracking:
The software enables the user to track the bills of trading and non-trading accounts. The user
can track the new bills, receipts, payments and adjustments made against the bills without any
hassles.
Replacing Accounting Codes:
The software replaces the accounting codes with regular names for accounts. It eases up the
maintenance of complex ledger systems. Due to the replacement of accounting codes,
everyone can operate this system without the knowledge of accounting codes.
Control, Audit and Budgeting:
Tally’s superior audit capabilities enable the user to have unlimited periods and budgets.
With the help of this feature, the user can track changes and make corrections at ease. Using
security levels, the user can gain the robust access control.
Billing Information:
Tally software enables the user to handle the top to bottom billing information that is
receivable and payable as well. It helps the organizations in allocating payments regarding
invoices and the overdue ones. The software also helps in segregating good customers and
bad customers using the billing information.
Multiple Currency Support:
Many companies involving in International Trade conduct transactions has increased usage of
multiple currencies. Due to exchange rate fluctuations, companies find it difficult to record
transactions. Tally software renders a great help in easy transaction management involving
foreign currencies.
Company creation
The first and foremost thing to do when we start accounting with tally is to know how to
create a company in Tally ERP 9. If you are operating multiple businesses, you can create
several companies in Tally.ERP 9 software at a single cost.

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Tally.ERP 9 has outgrown from the concept of just accounting software to managing
statutory compliance by updating statutory files available at Tally solution website. Today
one can operate Tally remotely using Tally.net features, process payroll and many more
features are updating regularly by Tally solutions. The most recent improvement is GST)
with compatibility from version Tally.ERP 9 release
To Select a Company

1. Go to the Gateway of Tally > Alt + F3 > Company Info. > Select Company OR Press F1.
Tally.ERP 9 displays the List of Companies screen. All the companies created are displayed
in an alphabetical order. Select the company name from the list given.

2. In case two or more companies are loaded (like East Nation Traders and Indian
Enterprises), click on the company which you need to work on so that the selected company
will be highlighted and will appear on top of the list.
Shut a Company
Go to the Gateway of Tally > Alt + F3 > Company Info. > Shut Company.
Select the Company which you need to shut from the List of Companies. You can also use
Alt + F1to shut a Company from the Gateway of Tally screen.
Alter Company Details

Go to the Gateway of Tally > Alt + F3 > Company Info. > Alter.

Select the company which you need to alter from the List of Companies and press Enter to
view the Company Alteration screen. Alter the company details as required and accept the
screen.
To Delete a Company

Go to the Gateway of Tally > Alt + F3 > Company Info. > Alter.

Select the company which you need to alter from the List of Companies and press Enter to
view the Company Alteration screen. Then Alt + D to delete the company.
F11 FEATURES
F11 Menu consists of the following options:
A. Accounting Features
B. Inventory Features
C. Statutory and Taxation
A. Accounting Features
General
1. Integrate Accounts and Inventory

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This option has a significant effect on the Balance Sheet and Profit & Loss Account. If set to
Yes, it extracts the stock/inventory balance figures from the inventory records and provides a
drill down to the Stock registers from the Balance Sheet.
If set to No, it ignores the inventory books figures and picks up manually entered closing
stock balances from the ledger account created. This facilitates the maintaining of accounts
and inventory separately.
Stock records often contain compensating errors caused by wrong allocation to items. This
feature enables finalization of financial books without waiting for the reconciliation of stocks.
2. Income/Expense Statement Instead of P & L
By Default, this option is set to No.
If set to Yes – Tally.ERP 9 displays Income & Expenses A/c instead of Profit & Loss A/c in
the
Gateway of Tally.ERP 9 Menu. Income and Expenditure statement generally used for
NonTrading accounts and Profit & Loss a/c are used for trading accounts.
3. Allow Multi-Currency
By Default, this option is No.Set this option to Yes, if you want to create multiple currencies
and the Menu Currencies is displayed in Gateway of Tally > Accounts Info menu.
4. Maintain Bill wise Details
The Bill-wise facility is made functional by setting this option to Yes. By activating the Bill
wise feature, the ledger masters under Sundry Debtors and Sundry Creditors automatically
displays an additional option called Maintain balances bill-by-bill. On setting this option to
Yes, an additional option Default Credit Period is displayed.
When you enter details of sales and purchases with the Bill-wise option activated, Tally.ERP
9 prompts you to identify the invoice with an appropriate reference number. The reference
can then be used to allocate payments to the correct invoice to maintain an accurate account
of outstanding.
5. Activate Interest calculation
Set this option to Yes to enable Tally.ERP 9 to calculate interest automatically based on the
interest rate and style of calculation specified. Enabling this option allows interest
calculation on outstanding balances for any ledger account or on each invoice for the period
it is outstanding completely or partly.

6. Use advanced parameters

The advanced parameters are useful when interest rates change from time to time. Set this
option to Yes to enable this function.
7. Maintain Payroll

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Set this option to Yes if you want to maintain Payroll information on Tally.ERP 9 for the
selected company .
8. Maintain Cost Centers
A Cost Centre can be defined as a unit of an organization to which transactions can be posted.
When only costs or expenses are allocated to these units, they are referred to as Cost
Centres.The Cost Centre feature is activated by setting this option to Yes.
9. Use Cost Center for Job Costing
Set this option to Yes to track all income and expenses for a Job/Project.
10. More than ONE Payroll/Cost category
Set this option to Yes to create more than one Payroll or Cost Category.
11. Use Pre-defined Cost Centre Allocations during Entry
Set this option to Yes to define Cost Centre Allocations. Refer Cost Centers and Cost
Categories for details.
12. Show Opening Balance for Revenue Items in Reports
Set this option to Yes to display the opening balance in Cost Centre Report for the cost
centers which are allocated to the Ledgers, grouped under Income and Expenses Group.
13. Allow Invoicing
Set this option to Yes, to create Sales and Purchase vouchers in the invoice format. The
advantage of using the invoice format for sales invoice entry is that it enables auto
calculations of Duties and Taxes accounts.
14. Enter Purchases in Invoice Format
Set this option to Yes, to enable voucher class option in purchase voucher type.
15. Use Debit/Credit Notes
The Debit Note and Credit Note voucher types are made available only if this feature is set to
Yes.
16. Use Invoice Mode for Credit Notes
Set this option to Yes to create Credit Notes in Invoice Mode.
17. Use Invoice Mode for Debit Notes
Set this option to Yes to create Debit Notes in Invoice Mode.
18. Maintain Budgets and Controls
Set this option to Yes, to create multiple budgets. The Budgets menu option is displayed in
Gateway of Tally > Masters Info. > Accounts Info. menu.
19. Use Reversing Journals & Optional Vouchers

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Setting this option to Yes displays the Scenario option in Accounts Info menu. You will now
be able to create and alter Scenarios. You can enter the Reversing Journal and make it
Optional, so that the entries do not to affect the books.
20. Enable Cheque Printing
Set this option to Yes, to enable Cheque Printing. Refer Cheque Printing for details.
21. Allow Zero Valued Entries in Vouchers
Set this option to Yes, to allow Zero valued entries in vouchers.
22. Maintain Multiple Mailing Details for Company & Ledgers
Set this option to Yes, to maintain multiple mailing details for your company and ledgers.
23. Set/Alter Company Mailing Details
If this option is set to Yes, Tally.ERP 9 will allow you to alter the Create/Alter Address
Types.
24. Enable Company Logo
This option allows to print the company’s logo on the selected vouchers, reports and
invoices.Set this option to Yes, the Company Logo screen appears. Specify the path of the
logo image file under Location of Logo (E.g. C:\Tally.ERP9\CompLogo.bmp). The
Company’s logo is printed on the top left of the respective voucher, report or an invoice
F12 Configuration Menu
F12 configurations are application centric configurations that are present across all screens
of Tally.ERP 9. These configuration can be changed and managed any number of times to
suit changing needs. Configuration options, affect all the companies maintained in the same
Tally.ERP 9 directory and setting the configuration for one company will affect the
configuration of other companies in that particular data directory.
● General
● Numeric Symbols
● Accounts/Inventory Info.
● Voucher Entry
● Invoice/Orders Entry
● Payroll Configuration
● Banking Configuration
● Printing
● E-Mailing
● Data Configuration
● Advanced Configuration
● Product & Features
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● Licensing
SCREEN COMPONENTS
1. Title Bar.
Title Bar displays the Tally software that you are using.
2. Horizontal Button Bar.
It's used for choose Language[ALT+G], Control Centre[CTRL+K], Support
Centre[CTRL+H], Help[ALT+H], for Print[ATL+P], for Export[ALT+E], for
E-Mail[ALT+M], for Upload[ALT+O] and Tally Shop[CTRL+S].
3. Close Button.
By clicking on this the Tally will be close.
4. Gateway of Tally.
Gateway of Tally displays the Menus of Tally, Reports and the screens of Tally.
5. Buttons Toolbar.
Buttons Toolbar displays the buttons that helps to interaction with Tally. It's only enable
appropriate windows.
6. Info Panel.
Info Panel displays the details of Tally. It displays Version and Update, License and
Services and Configuration of Tally.
7. Calculation Area.
Calculation Area is used for Calculation functions, It's enable by pressing key Ctrl+N
8. Task Bar.
It displays the task of Tally. Means it displays current position of your task.
9. Date and Time.
It displays the current date and time of your computer.

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 MODULE-2
ACCOUNTS AND VOUCHERS

GROUPS
Groups are collection of ledgers of the same nature. Account groups are maintained to
determine the hierarchy of Ledger Accounts, which is helpful in determining and presenting
meaningful and compliant reports. Using this you can generate reports, which are meaningful
as well as compliant with laws.
At the highest level, accounts are classified into Capital or Revenue – and more specifically
into Assets , Liabilities , Income and Expenditure .
Tally.ERP 9 provides you with 28 pre-defined Groups . Of these 15 are Primary Groups and
13 are Sub-Groups . You can also create your own groups, either as Sub-groups or Primary
groups . Groups can be sub-classified to an unlimited level to give a virtual accounting tree.
The lowest level would be the Ledger Account. All Voucher entries are passed using ledgers.
You can create the required chart of accounts. You can group the Ledger accounts under the
required Groups at the time of creating the chart of accounts or you can alter them at any
time.
Tally.ERP 9 has pre-defined ledgers for Cash (under Cash-in-hand group) and for the Profit
& Loss A/c (under primary group).
● Default Groups
● Pre-defined Groups
● Create, Alter, Delete Account Groups
● Managing Groups in Multiple Companies
● Group with Advanced options
CREATING SINGLE GROUP AND MULTIPLE GROUP
Accounts info-> Groups -> Create
If you want to create any required groups in Tally software then you have to use given way.
If you want to create any single or multiple group in the active company then click on the
GOT (Gateway of Tally) -> Select “Accounts info” option -> Click on the “Groups” option -
> Click on the “Create” option.
Single Group
1. Create: To create a new group in the active company in Tally software.
2. Display: To view any existing group information only. You don’t have permit to change or
delete any group information from the option.
3. Alter: To change any existing group information or you can also delete any existing group
which is created by the user by pressing the Alt+D shortcut key
Multiple Group

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1. Create: To create one or more groups in active company in Tally software.
2. Display: To view any existing group or sub group information only.
3. Alter: To change any existing group information but can’t delete any created or predefined
groups from multi group option in Tally.
create ledger account in Tally ERP 9
Path: Gateway of Tally –> Accounts Info –> Ledgers –> Single Ledger –> Choose Create
Step 1: From Gateway of Tally Screen, click on accounts info
Displaying ledger account
Path-gateway of tally-group/ledger-single/multiple-create
Altering/Deleting group/ledger
Accounts info-group/ledger-sinle/multiple-alter
To delete an account to press Alt+D in the alteration mode
Accounting Vouchers in Tally
• Sales Voucher
• Purchase Voucher
• Payment Voucher
• Receipt Voucher
• Contra Voucher
• Journal Voucher
• Credit Note Voucher
• Debit Note Voucher

1. Sales Voucher in Tally

Sales voucher is one of the most used accounting vouchers in Tally. Users can create this
voucher in two different formats; as an invoice, or as a voucher. The invoice format enables
users to print a copy of invoices for customers. The voucher format can be used to store
transactional records electronically and it doesn’t need a paper copy for the customer.
2. Purchase Voucher in Tally
Like sales vouchers, purchase voucher belongs to the accounting category and is available in
both invoice and voucher formats. Editing and modifying receipt entries in Tally are easy, as
its voucher format helps accountants to do so quickly. Moreover, Tally also helps in
converting a purchase voucher in the invoice format to the voucher format.
3. Payment Voucher in Tally
The payment voucher is another accounting voucher in Tally that helps create and print
cheques against the order. Once the payment voucher gets passed, the corresponding cheque
can be printed by clicking on ‘banking’ and then on ‘cheque printing’.
4. Receipt Voucher in Tally
When accountants make a receipt voucher in Tally, all the invoices which have pending
payments pop up as a reminder. As soon as the client makes the payment through any mode,
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the receipt can be updated with the payment method details. In addition, all the details of this
receipt can be sent to the customer. Thus, receipt vouchers make payment monitoring easy.
5. 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.
6. Journal Voucher in Tally
Unlike other vouchers, a journal voucher in Tally can come under the roof of both accounting
and inventory vouchers. There are multiple uses of a journal voucher in Tally depending on
the type of business it is being used for.
It can be found as an optional voucher in Tally to make sales and purchase by accountants.
Professionals can also use it for the adjustment or transferring of stock from one warehouse
to the other.
7. Credit Note Voucher in Tally
Credit note voucher in Tally has to be enabled manually. It is usually enabled by pressing
F11 and they manually configuring its features. Credit note can also be passed by checking
the original invoice. When a client is selected, Tally shows the transaction invoice histories
that have been raised.
8. Debit Note Voucher in Tally
Debit note voucher is one of the most-used types of voucher in Tally ERP 9, that is used for
managing purchase returns. With the help of this, accountants can generate a debit note for
invoicing as well as a voucher. Like credit note voucher in Tally, debit note too can easily be
configured by pressing F11 and configuring it manually.
Bill wise details
Maintaining details of every bill for trading accounts is possible in Tally.ERP 9 using Bill
wise Details. The same powerful and convenient feature is available for tracking and
managing non- trading accounts like Loans, Advances and Installment Payments etc. as well.
Using this feature, business owners can easily track bills for expenses, any installments to be
paid or loan amounts to be received. ‘Bill wise Details’ hence can be used to track the details
of any already made or due payments and also to generate payables or receivables reports
with minimum effort. How to activate:
Go to Gateway of Tally > Press - F11: Accounting Features > Set ‘Yes’ to ‘Maintain Bill
wise Details (for Non-Trading A/c s also).
Deleting voucher entry
• Open Tally program.
• Select your Company. In our case, we shall select M/s XYZ Limited.
• Select ‘Display’ under gateway of tally.
• Select ‘Account Books’

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 • Since the above voucher is ‘Credit Note’ and ‘Credit Note comes under ‘Journal
Register, therefore, select ‘Journal Register’
• Select ‘Credit Note Register’
• Voucher date is 31.03.12 so select ‘March’
• Now, you can see you voucher on 31.03.12
• Press enter on your voucher which is supposed to be modified
Main Differences between Group and ledger in tally 9

1. Tally provides us 23 automatic groups for ledger creation . But tally provides only 2
ledger account in tally software and its names are cash are profit and loss account .
2. Group is head category or it is base of ledger creation . We can simply take an
example from you day to day field . Suppose you have taken commerce subject and it
can also divide into management theory , accounts , business maths and economics .
So , Main group is commerce and all other are called ledger accounts but under this
commerce group . Same will apply in accounting in tally , We can create several
groups under single ledger .
3. We generally neither create extra groups nor change them which is provided by tally
software but we must create different ledger according to the need of recording of
different vouchers in tally 9
4. If we have changed group from one category to another , all ledger will automatically
change by this . So be serious for making any change in group .
5. Group is most helpful to make final account according the the nature of organisation ,
but ledger creation is not helpful for any redesigning of final account in tally 9. Let
me explain more about it . I need insurance company account not in sundry
debtor account but in sundry insurance account so , I made sundry insurance account
in group for making redesigning my final account .
Bank Reconciliation
A bank reconciliation statement is a document that compares the cash balance on a
company’s balance sheet to the corresponding amount on its bank statement. Reconciling the
two accounts helps identify whether accounting changes are needed. Bank reconciliations are
completed at regular intervals to ensure that the company’s cash records are correct. They
also help detect fraud and any cash manipulations.
Importance of Bank Reconciliation Statement
Generally while making a comparison between the company’s cash book and bank balance,
the balance does not tally. Therefore, it is important to determine the cause for the difference
and display them in the bank reconciliation statement and then tally the two balances. The
bank reconciliation statement helps in explaining the differences in the amount between the
company’s cash book and bank balance. The cash book and the bank passbook differences
are caused by:
• The difference in timing recording the transactions: The difference in timing can be
caused by many factors which are:

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 o Bank-issued cheque but not yet deposited for payment
o Paid cheque in the bank but yet not cleared
o Bank made direct debit from the customer’s side
o Cheque/ amount deposited directly to the bank account
o Dividends and Interest collected by the bank
o Bank made direct payment from the customer’s side
o Cheques deposited/bills discounted dishonoured
• Errors made by the company or by the bank: In a few occasions, the error in two
balances can be made from the bank side or in the company’s cash book. Few errors
are as follows:
o Errors made while registering the transaction by the company
o Errors made while registering the transaction by the bank
Generating reports in Tally.ERP 9
1. Balance Sheet in Tally.ERP 9
The Balance Sheet gives a complete glance at the financial position of a business. The
Balance Sheet in Tally.ERP 9 shows the assets and liabilities of a company. From the
Gateway of Tally screen, a business owner can access the Balance Sheet. The Balance Sheet
can be configured using F12 configuration in Tally.ERP 9. Tally.ERP 9 also offers Schedule
VI Balance Sheet for businesses. The Balance Sheet can be viewed for any given dates.
Multiple valuation types are given for defining stock valuations such as FIFO, LIFO,
Average Cost, Average Price and many more.
2. Profit & Loss Account in Tally.ERP 9
The Profit & Loss report in Tally.ERP 9 shows a company’s net profit or loss in a given
period. By default, this Tally report considers the period starting from the date when the
books begin to the entry date of the last voucher. The Profit & Loss report in Tally.ERP 9 can
be configured with F12 configuration available within the report.
3. Cash Flow/Fund Flow Report in Tally.ERP 9
The Cash Flow report in Tally.ERP 9 has been provided to help get a view of cash inflow and
outflow during an accounting period. This report makes it easy for business owners to
understand the cash flow situation for a specific period and helps make decisions.Similarly,
the Fund Flow report in Tally.ERP 9 provides details on the sources of funds and their net
flow status on a monthly basis.
4. Ratio Analysis Report in Tally.ERP 9
The Ratio Analysis report is a powerful report for financial analysis in Tally.ERP 9. The
multiple ratios in the report give a clear understanding of the financial position of a business.
These are Debt Equity Ratio, Quick Ratio, Return on Working Capital, Return on Investment
and so on. This is one of the key Tally reports.
5. Outstanding Report in Tally

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A business owner can see receivables ledger-wise and bill-wise in Tally.ERP 9. He can see
ageing analysis which can be applied based on due dates or as per the bill dates. Based on the
time that has passed (ageing), a business can accordingly connect with parties or manage
funds to make payments. With the bill wise ageing details, the user can see and understand
the details of bills for which payment is pending.

6. Inventory Reports in Tally.ERP 9/Stock Summary Report in Tally.ERP 9

The Stock Summary report displays the current position of stocks or stock in hand for a
particular date. From this Tally report, a business owner can view item-wise rates, quantity
and value of stocks available. The Stock Summary report in Tally.ERP 9 also enables
business owners to view gross profit at each item level based on landing cost and sales price.
It also shows the status of stocks available across various godowns. The user can see the net
stock position by considering purchase and sales orders which are yet to be processed.
7. Stock Ageing Analysis Report in Tally.ERP 9
This report in Tally.ERP 9 helps businesses understand their slow moving goods versus fast
moving goods. This Tally report helps business owners to make decisions based on
procurement of stocks, or whether to liquidate stocks based on their age. Tally.ERP 9 gives
the flexibility to define various periods like 0-30 days, 31-60 days and so on based on
business requirement. Business owners can see stock valuations as well from within this
report.
8. Statutory Reports in Tally.ERP 9/GST Reports in Tally.ERP 9
In GST, Tally.ERP 9 provides GSTR1,GSTR2, GSTR3B and e-way bill related reports. The
GSTR-1 report in Tally.ERP 9 is designed exactly as the form of GSTR-1 to make life easy
for users.
Business owners can see -
• Details of transactions participating in GSTR-1
• Transactions not relevant for returns
• Transactions not participating because of incomplete information or mismatches
• Serial number-wise details of values as mentioned in GSTR-1
9. E-Way Bill Reports in Tally.ERP 9
Tally.ERP 9 gives comprehensive e-Way Bill reports to make life simpler for users. A
user can view -
• Transactions which have been exported for e-Way Bills
• Transactions which are yet to be exported for e-Way Bills
• e-Way Bill details of all the transactions for which e-Way Bills have already been
generated.
Budgets

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 A budget is a plan prepared for the flow of funds in an organisation. It contains financial
guidelines for the future plan of action for a selected period of time. A budget helps to
refine goals and use funds efficiently. It provides accurate information for evaluation of
financial activities, aids in decision making and provides a reference for future planning.
You can modify a budget using the alter option. You can also delete a budget.

Multiple budgets can be created for specific purposes in Tally.ERP 9. Budgets for Banks,
Head offices, Departmental budgets like Marketing Budgets, Finance Budgets, and so on,
can also be created. The Budgeted figures in Tally.ERP 9 can be compared with Actual
figures and variance report can be generated.
Create a budget

In Tally.ERP 9, you can create a budget for groups, ledger accounts, and cost centres.
1. Go to Gateway of Tally > Accounts Info. > Budgets > Create .
2. Enter a Name for your budget in the Budget Creation screen.
3. Select from the List of Budgets for Under field. You can have a hierarchical setup for
budgets. In the List of Budgets, Primary is at the top of the hierarchy and you can
create more primary budgets. Sub-budgets can be created under Primary budgets.
4. Enter the period of the budget in the From and To fields. The period entered can be a
month, a year or any other period.
5. In Set/Alter Budgets of , select
o Groups - To create a budget for a Group of ledger accounts.
o Ledgers - To create a budget for Ledgers.
o Cost Centres - To create a budget for Cost Centres.
6. Press Ctrl+A to accept .

Alter a Budget
1. Go to Gateway of Tally > Accounts Info > Budgets > Alter.
2. Modify the fields as required, i n the Budget Alteration screen.
3. Change the period or change budgets of Groups , Ledgers , and Cost Centres .
Delete a Budget
1. Go to Gateway of Tally > Accounts Info > Budgets > Alter .
2. Press Alt+D to delete

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 MODULE-3
ACCOUNTS WITH INVENTORY
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, and reduced inventory handling cost and so on.
In simple words, inventory management is all about striking the balance between
overstocking and understocking. Overstocking will lead to cash flow blockage and additional
cost for managing excess stock. On the flip side, understocking leads to loss of sale due to
non-availability of stock at the right time.
NEED FOR INVENTORY MANAGEMENT
An effective inventory management system is the cornerstone of successful eCommerce and
online retail brands. With a strategic plan in place that optimizes the process of overseeing
and managing inventory, including real-time data of inventory conditions and levels,
companies can achieve inventory management benefits that include:
• Accurate Order Fulfilment – Imagine this scenario: A customer places an order and
an eCommerce brand receives the order. The brand sends it to the warehouse only to
discover that the product is out of stock. Or just as bad, the eCommerce brand ships
the wrong item. This isn’t an uncommon story if inventory is poorly managed. Taking
the time to develop a more robust plan can help brands avoid inaccurately filled
orders, high return volumes and a loss of customer base.
• Better Inventory Planning and Ordering – It’s difficult to gauge which products
are needed if there isn’t a clear way to tell what products are already stocked. If online
retailers don’t properly manage the inventory they already have, they can easily
overstock items, and some of these items might not be strong sellers. Detailed
inventory management mitigates these issues, allowing warehouse managers to
refresh inventory only when needed. It’s both space and cost-effective.
• Increased Consumer Satisfaction – Customers that shop online are eagerly awaiting
their orders, and there’s nothing worse than when their orders arrive not-as-described,
late or damaged. When that happens, buyers are less likely to purchase from the brand
again. On the other hand, good inventory management leads to orders being fulfilled
more quickly and shipped out to customers faster. The enhanced processes can help
eCommerce and online retail brands build a strong repertoire with consumers – and
keep them coming back for more.
F12 CONFIGURATION FOR INVENTORY MASTERS
General
• Integrate Accounts and Inventory : Same as in Accounting Features. Enable zero-
valued transactions : If you want to pass an entry with monetary value 0, then enable
it as YES. Eg: Sample Distribution etc.,
Storage and Classification
• Maintain multiple Godowns: YES (If you want to maintain more than 1 Godown)
• Maintain Stock Categories: YES (If your products have more than 1 stock category)

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 • Maintain Batch-wise details: YES (If you want to maintain the stock item batch-wise.
Eg: SE/258/95)
• Set expiry date for batches: Yes (If you want to maintain the Expiry date of products)
useful in Perishable goods,Medicines etc.,
Order Processing
• Enable purchase order processing: YES, if we want to maintain Purchase order
which will be available at Inventory Vouchers.
• Enable sales order processing: YES, if we want to maintain sales order.
Invoicing
• Enable invoicing: YES, to create Sales & Purchase vouchers in the Invoice format
• Record Purchases in Invoice mode: YES, to record purchase voucher in Invoice mode
• Use Debit & Credit notes: YES, to use Debit note & Credit note vouchers
• Use separate Discount column in Invoices: YES, to display separate discount
column in invoices.
Sales Management
• Use multiple price levels: Yes, to use different price levels in Sales
Other features
• Use tracking numbers: YES, to maintain relationship between Delivery notes and
Invoices.
• Use Rejection inward and outward notes: YES, to record Rejection of Goods
separately
• Use material in and out vouchers: YES, to record transfer of item towards party or
transfer material from one Godown to another.
• Use cost tracking for stock item: YES, to create credit notes in Invoice mode.
Create a single Stock Categories
This option allows parallel classification of stock items. Like Stock Groups, Stock
Categories are also classified based on some similar behaviour. This enables you to obtain
reports for alternatives or substitutes of a stock item.
1. Go to Gateway of Tally > Inventory Info. > Stock Categories > Create (under Single Stock
Category). The Stock Category Creation screen is displayed as shown below:
2. Enter the Name of the Stock Category.
3. Specify whether it is a primary category or a sub-category of another category in the
field Under. Select Primary from the list, if you do not have a parent group. Use Alt +C to
create a parent if you do not have the required category in the list.
4. Press Enter to save.
Create Multiple Stock Categories

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Tally.ERP 9 allows you to create Stock Categories using single or multiple options.
1. Go to Gateway of Tally > Inventory Info. > Stock Categories > Create (under Multiple
Stock Category). The Multiple Stock Category Creation screen is displayed as shown below:

2. The field Under Category will display the List of Categories . You can select a category for
which a multiple sub-category can be created.
3. If you select All Items in List of categories , selection of parent category Under column is
possible during creation of sub-category.
4. If you select specific category in List of Categories , that category will get populated
automatically whenever creation of sub-category and cursor skips Under column.
5. Specify the name of the Stock Category .
6. If you have select All Items in Under Category , you must specify a parent category in this
column.
Display a single Stock Category
You can display the existing Stock Category in Single mode and multiple mode, since it is
only display Tally.ERP 9 does not allow you to alter any information in display mode.
1. Go to Gateway of Tally > Inventory Info. > Stock Categories > Display (under Single
Stock Category).
2. Select the Category for which you want to view the display details from the List of
Categories . The Stock Category Display screen shows the details entered in Stock Category
Master.
Alter a Single Stock Category
This option allows you to view the existing Stock Category in edit mode, here you are
allowed to change the various information.
1. Go to Gateway of Tally > Inventory Info. > Stock Categories > Alter (under Single Stock
Category ).
2. Select the Stock Category from the List of Categories .
3. Make the necessary changes and click Yes to accept.
Deletion is possible only in the alteration mode. For deleting the Stock Category,
Press Alt+D .

Stock Items
Stock Item refers to goods that you manufacture or trade. It is the primary inventory entity
and is the lowest level of information on your inventory. You have to create a Stock Item in
Tally.ERP 9 for each inventory item that you want to account for.

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Create 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 similar to ledgers
being used in accounting transactions.
1. Go to Gateway of Tally > Inventory Info. > Stock Item > Create (under Single Stock
Item ).
2. Enter the Name of the Stock Item.
3. Enter the Alias name of Stock Item (if required).
4. The field Under will show the List of Groups . Here you can select the Stock Group to
which the Stock Item belongs. By default, Primary Stock Group appears in this field.
5. This field will show the Unit List . Here you can select the Unit of measure (UoM)
applicable for the stock item. By default, Not Applicable appears in this field.
6. If GST is enabled, set GST Applicable to Applicable and enter the GST details by enabling
the option set/alter GST details
7. Specify the Rate of Duty applicable for the stock item. This field is used for the
calculation of excise duty or if duty is based on item rate. During Invoicing, whenever you
select a Stock Item, the Rate of duty entered here is displayed in the Invoice creation screen.
8. Specify the details of Opening Balance , if any, for the Stock Item as on the date of
Beginning of Books.
o In the Quantity Field, specify the stock item Quantity.
o In the Rate field, specify the stock item Rate.
o In the Value field, Tally.ERP 9 automatically calculates the value by multiplying the
Quantity and Rate. You can also edit the value, Tally.ERP 9 automatically refreshes the Rate
field accordingly.
Create multiple stock items
1. Go to Gateway of Tally > Inventory Info. > Stock Item > Create (under Multiple Stock
Items ).
2. Select a stock group or All Items from List of Groups to create the Stock Item.
3. Enter the Name of the Stock Item.
4. Select the group and Units . Press Alt+C in the Units field if you want to create a unit of
measure.
5. Enter the opening quantity, rate per unit.
6. Press Enter to save.
Alternate Units for Stock Item
To create stock item with alternate unit of measurement, you have to enable the alternate unit
field in stock item master creation screen. Using alternate units you can record a transaction,
and view stock summary in basic and alternate units.

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1. Go to Gateway of Tally > F12: Configure > Accts / Inventory Info.
2. Set the option Use alternate units for stock items? to Yes as shown below:

3. Press Ctrl + A to accept.

Or
1. Go to Gateway of Tally > Inventory Info. > Stock Items > Create.
2. Click F12: Configure.
3. Set the option Use alternate units for stock items? to Yes .
4. Press Ctrl + A to accept.
Use alternate unit in stock item
1. Go to Gateway of Tally > Inventory Info. > Stock Items > Create .
2. Enter Name , select the group and Units of measurement (basic units of measurement.
3. Select the alternate units of measurement for the item in the field Alternate Units .
4. Enter the conversation rate for the alternate unit and basic unit in the field where .
5. Enter the Statutory Information , as required.
6. Enter the Opening Balance , as required.
7. Press Enter to save.
Display Stock Items
You can display the existing Single Stock Item master and Multiple Stock Item masters, since
it is only display you are not allowed to alter any information in display mode.
1. Single stock item: Go to Gateway of Tally > Inventory Info > Stock Items > Display
(under Single Stock Item) . Select the Stock Item you want to display from the List of Items .
2. Multiple stock items: Go to Gateway of Tally > Inventory Info > Stock Items > Display
(under Multiple Stock Item) .

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3. Group of stock items: Select a Stock Group or All Items from List of Groups to display the
Stock Item under the selected group or All Items. The Multi Stock Item display screen
appears.
Alter Stock Items: This option allows you to view and change the details for the
existing Single Stock Item master and Multiple Stock Item masters. If a transaction is
recorded for a stock item, it is not possible to alter the units or delete the stock item.
Alter a single stock item
1. Go to Gateway of Tally > Inventory Info. > Stock Items > Alter ( Single Stock Item ).
2. Select the required Stock Item from the List of Items . The Stock Item
Alteration screen appears.
Alter multiple stock items
1. Go to Gateway of Tally > Inventory Info . > Stock Items > Alter ( Multiple Stock Items ).
2. Select a stock group from the List of Groups to alter the stock item under the selected
group or under All Items . The Multi Stock Item Alteration screen appears.
Inventory Vouchers
Inventory Vouchers perform the function in the inventory system that accounting vouchers do
in the accounting system. Inventory Vouchers are also means of entering transactions.
Accounting vouchers will update only Accounts, but Inventory vouchers will update both
Accounts and Inventory. Inventory vouchers record the receipt and issue of goods/stock
(Movement of goods), the transfer of stock between locations and physical stock adjustments.
They are:
• >> Delivery Note (Alt + F8)
• >> Physical Stock Voucher (Alt + F10)
• >> Purchase Order (Alt + F4)
• >> Sales Order (Alt + F5)
• >> Receipt Note (Alt + F9)
• >> Rejection In ( Ctrl + F6)
• >> Rejection Out (Alt + F6)
• >> Stock Journal ( Alt + F7)
Security Control
Data Security has been a matter of concern to the Business Owner as most businesses depend
on the confidentiality of the information. To secure your business data, TallyPrime offers a
variety security features. You can password protect your company data, define security levels
for different users and do much more with the security feature in Tally. The administrator can
give different permissions to different kind of users based on the company's requirement. The
company data can also be made secure using encryption using TallyVault.
Secure Company Data with Tally Vault

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Tally Vault is a feature in Tally.ERP 9 that will help the business to maintain confidentiality
of information by encrypting the data.
Set the Tally Vault password while creating the company,
1. Load the Company that need to be secured using Tally Vault.
2. Go to Gateway of Tally. Press F3 : Company Info > Change Tally Vault
3. In the Change Tally Vault screen select the required company from the List of Companies.
4. Enter the Password in the New Password field. Tally.ERP 9 displays the strength of the
password entered depending on the combination of alphabets, numbers and special
characters.
Note: To understand the conditions that determine a Password's strength, click password
strength indicator
5. Re-enter the password to confirm in the Repeat New Password field.
6. Accept to change the Tally Vault password.
7. Tally.ERP 9 displays a message Created New Company followed by the new company
number, press any key to return to Company Info. menu.
Backup Data
Taking a backup of your data at regular intervals helps retrieve your backed up data when
your existing data is lost. Using Tally.ERP 9, you can easily take a backup of your company
data any time and restore it when you need.
1. Go to Gateway of Tally > F3 : Cmp Info > Backup to view the Backup Companies on
Disk screen.
2. Source - The folder path where your company data is stored. By default, the folder path of
your existing company data is displayed here.
Note:
♦ If your company uses Tally.Server 9 to maintain data, backup has to be taken from the
server data location. Click S : Server Data Loc in the Backup Companies on Disk screen, and
select the server location as Source .
♦ If the administrator has enabled Security Control , provide authorised Tally.NET
credentials to access the List of Tally.Server Data Locations .
3. Destination - The folder path where the data backup has to be stored. You can store the
backup locally on your computer, on any external storage device, or on a storage space on the
network.
4. Select the required company from the List of Companies . Select All items to back up data
of all the companies.

5. Press Ctrl+A to initiate the backup process.

The backup file is stored in the destination folder as TBK900_10000.001 . Data backup taken
using versions prior to Release 6.0 used to store the data in TBK900.001 format.
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Restore Backup
You can restore the data of companies for which you have taken a backup. When your
current company data is lost or corrupted, you can restore your last backed up data using
the Restore option in Tally.ERP 9.
1. Go to Gateway of Tally > F3 : Cmp Info > Restore to view the Restore Companies screen.
2. Destination - The folder path where your company data is to be restored. Do not restore
backup data in the folder where your company data exists, since it may overwrite the existing
data.
3. Source - The folder path where the backup file is stored. You can restore data stored
locally on your computer, on any external storage device, or on a storage space on the
network.
4. Select the required companies from the List of Companies . Select All items to restore data
of all companies.
5. Press Ctrl+A to restore the data backup.
Auto Backup Status
Auto Backup Status displays the list of companies whose data is backed up at a common
location and the number of entries pending for backup from each company. This report also
displays the path of backup and the number of companies off-line. On completing the auto
backup the status is set to complete.
Inventory Books Reporting @ Tally. ERP9
• Inventory Group Summary. The Group Summary Statement shows the closing
balances of accounts under the selected group up to the current date. ...
• Stock Transfers. This Report displays entries made using Stock Journal Vouchers.
• Physical Stock Register.
• Sales Order Book.
• Purchase Order Book.

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 MODULE-4
ACCOUNTING WITH TAX

TDS (TAX DEDUCTED AT SOURCE)

TDS stands for tax deducted at source. As per the Income Tax Act, any company or person
making a payment is required to deduct tax at source if the payment exceeds certain threshold
limits. TDS has to be deducted at the rates prescribed by the tax department.
The company or person that makes the payment after deducting TDS is called a deductor and
the company or person receiving the payment is called the deductee. It is the dedicator’s
responsibility to deduct TDS before making the payment and deposit the same with the
government. TDS is deducted irrespective of the mode of payment–cash, cheque or credit–
and is linked to the PANo f the deductor and deducted.
TDS is deducted on the following types of payments:
• Salaries
• Interest payments by banks
• Commission payments
• Rent payments
• Consultation fees
• Professional fees
TDS Ledger
A TDS ledger is used for recording duties in TDS related transactions;
1. Go to Gateway of Tally > Accounts Info. > Ledgers > Create .
2. Enter the Name .
3. Select Duties and Taxes as the group name in the Under field.
4. Select TDS as the Type of duty/tax .
5. Select a Nature of Payment from the List of Nature of Payments .
6. Press Enter .
TDS Features in Tally.ERP 9
Tally.ERP 9’s TDS Feature enables you to handle all the functional, accounting and statutory
requirements of your business in an accurate and simplified manner. The TDS functionality
inTally.ERP 9 has the following features
• Simple and user-friendly
• Quick and easy to set up and use
• Create single Expenses Ledger for Multiple Nature of Payment
• Create single TDS Duty Ledger for Multiple Nature of Payment
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 • Book & Deduct TDS in the same voucher
• Single TDS deduction for multiple vouchers
• Single TDS deduction for Multiple Nature of Payments
• TDS deduction on partial applicable value
• Retrospective Surcharge Deduction
• Party wise configuration for Lower / Zero rate
• Party wise configuration to Ignore IT / Surcharge exemption Limit
• Deduction of TDS on advance payments
• TDS deduction on Non-Resident (Sec.195) payments
• Reversal of TDS
• Print TDS Challan (ITNS 281)
• Print Form 16A
• Generate E-TDS Returns
• Print Form 27A
• Print Form 26, 26Q, 27, 27Q with Annexure(s)
• TDS Computation Report
• Generate TDS Outstanding and TDS Exception Reports
TDS Reports Tally
ERP 9 helps the user to generate the TDS Computation Report, TDS Challan, Statutory
Returns and other related reports at the end of a month, quarter or year, as prescribed under
the Act. To view the TDS Reports.
Gateway of Tally > Display > Statutory Reports > TDS Reports
Computation
TDS Computation report displays information about TDS transactions. It includes
information about the total expenses and advances on which TDS is applicable, TDS amount
deducted, balance TDS amount deductible, TDS amount paid and TDS amount pending for
payment. To view TDS Computation report.
Gateway of Tally > Display > Statutory Reports > TDS Reports > Computation
Challan Reconciliation
Reconciliation of Challan Payments made to Bank for TDS accounts is done in Challan
reconciliation.
Gateway of Tally > Display > Statutory Reports > TDS Reports > Challan Reconciliation.
Outstanding
1. TDS Payables: TDS Payable report gives you information on the status of TDS payable
(pending) to Government amounts for a particular Nature of Payment.
2. Ledger outstanding: TDS Ledger Outstanding’s report displays ledger wise TDS
outstanding. This report can be viewed for all the ledgers or for one ledger
3. Nature of payments out standings: TDS Nature of Payment out standings report displays
Nature of Payment wise TDS out standings. This report can be viewed for all the Nature of
Payment or for one Nature of Payments

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4. TDS Not deducted: TDS Not Deducted report displays party wise TDS not deducted
details.

GST Terminologies
GST, the new genre taxation module is imbibed with numerous new terms and
nomenclatures, which you should be aware about. They are
1) GST
Goods and Services Tax, commonly known as GST, is a single, indirect, multi-stage,
destination based consumption tax, which will replace almost all the existing Central and
State taxes, including but not limited to CENVAT, Octroi, Sales Tax and Excise Duty etc.
GST has replaced all existing direct and indirect, Central and State taxes, from 1st July, 2017.
2) GSTIN
GSTIN, i.e. Goods and Services Tax Identification Number is a business’s legal and unique
identity with the government of India in the GST regime. GSTIN is a 15 alphanumeric
character, PAN based distinctive number, allotted state-wise.
3) Reverse Charge
Reverse Charge is a mechanism and supervisory arrangement to monitor and increase the tax
coverage, compliance, synchronization and track-ability amongst unorganized, partly
organized and fully organized sectors.
4) Mixed Supply
A mixed supply is a combination of two or more individual supplies of goods or services or
any other arrangement of goods or services made by a GST payer for a single price. The
components of the mixed supply are not organically bundled but it is an intentional fusion
from business perspective.
5) Composite Supply
A composite supply is an organic combination of two or more individual supplies of goods
and services or any other natural arrangement of goods or services made by a GST payer for
a single price.
A composite supply is further broken into two parts:
Principal Supply: The major and the foremost element in the Composite Supply of goods or
services.
Dependent Supply: This is the depending element and rests on the Principal Supply.
6) ITC
Input tax credit [ITC] is the credit manufacturers receive for paying input taxes towards
inputs used in the manufacture of products. Likewise, a dealer is entitled to input tax credit, if
he has purchased goods for resale.
To avoid double taxation on items used as inputs to make other items, credit of taxes paid on
the inputs can be taken by the maker of the next item while paying tax on the output. If the
tax paid on inputs is higher than the tax on the output, the excess can be claimed as a refund.
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 7) GSTR
GSTR, i.e. GST Return is a document capturing the details of the income, which a tax payer
is supposed to file with the authorities to calculate his tax liability. There are total eleven
types of GST returns, starting from GSTR-1 to GSTR-11, capturing and catering to different
forms of tax payers.
Types of GST
There are four types of GST as explained below, these are:
1. SGST – GST imposed by specific State governments on the intra-State trade and
services or trade within the state is called SGST(State-GST). Here the revenues are
earned by the State govt. due to SGST as the transaction occurred within the state. For
example – Suppose goods manufactured and sold within Haryana state then SGST
will be collected by the Haryana state.
2. UGST – In case of Union territories such as Chandigarh, instead of State govt. the
GST is collected by the Central administration and is referred to as UGST(Union-
GST).
3. CGST – For an intra-State transaction of goods and services, CGST(Central-GST) is
levied by the Central government. It is collected along with the SGST or UGST, and
the revenues collected are distributed between the State and the Central govt. For
example – If the goods or services are provided within State Haryana, then along with
SGST or UGST, CGST will also be collected.IGST – Integrated GST is collected on
goods and services transactions between different states. It is also applied to imports
or exports of goods and services. Here the SGST portion of the tax collected is given
to the state, which is the consumer of the said goods or services. The IGST earned is
then divided between the state and the central government.
TAX COLLECTED AT SOURCE (TDS)
Indian Income Tax act has the provisions for tax collection at source. In these provisions,
certain persons are required to collect a specified percentage of tax from their buyers on
exceptional transactions. Most of these transactions are trading or business in nature. It does
not affect the common man. In this article we will cover:

1. Tax collected at source (TCS)

2. Goods covered under TCS provisions and rates applicable to them
3. Classification of Sellers and Buyers for TCS
4. TCS Payments & Returns
5. Certificate of TCS
6. TCS Exemptions
7. TCS under GST
8. Submission of Form 24G
GST ACCOUNTS IN TALLY
A trader has to maintain the following accounts in tally in addition to purchase and sales. All
the accounts are to be opened under Duties and Taxes.
here is another type of GST called UTGST – Union Territory GST which I will not be
discussing here because it is not much in use.

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So, coming back to the GST ledgers, we need to create the following GST ledgers in Tally.
They are:
• Output CGST Ledger – when you sell goods or services inside your state
• Output SGST Ledger – when you sell goods or services inside your state
• Output IGST Ledger – when you sell goods or services outside your state
• Input CGST Ledger – when you buy goods or services inside your state
• Input SGST Ledger – when you buy goods or services inside your state
• Input IGST Ledger – when you buy goods or services outside your state
Computing GST
Usually, the input tax credit should be reduced from outward tax liability to calculate the
total GST payment to be made. TDS/TCS will be reduced from the total GST to arrive at the
net payable figure. Interest and late fees will be added to arrive at the final amount. Amount
of input tax credit on account of IGST shall first utilized for the Payment of IGST then for
payment of CGST and then payment of SGST or UTGST.

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 MODULE-5
PAYROLL
The payroll feature in Tally.ERP 9 is fully integrated with accounting to streamline payroll
processing.
Organizations can set up and process payroll using simple and complex criteria. A collection
of predefined processes in Tally.ERP 9 enable error-free automation of payroll process.
The payroll feature also provides management related information, statutory forms and
reports in the prescribed formats such as:
● Pay Slip, Payroll Statements, Attendance and Overtime Registers.
● Gratuity, Provident Fund (PF), Employee State Insurance (ESI), National Pension Scheme
(NPS).
● Professional Tax (PT) and Income Tax (IT).
FEATURES OF PAYROLL
• It is fully integrated with accounts to give the benefits of simplified Payroll
processing and accounting
• It has user defined classifications and sub-classifications for comprehensive reporting.
This may be related to the employees, employee groups, pay components,
departments etc.
• It provides the facility to create user-defined Earnings and Deductions Pay Heads
• It allows flexible and user-definable criteria for simple or complex calculations
• It allows the unlimited grouping of Payroll Masters
• It supports user-defined production units i.e., attendance/ production/ time based
remuneration units
• It provides a flexible payroll processing period
• It provides comprehensive cost centre as well as employee-wise costing reports
• It ensures an accurate & timely Salary processing, Employee Statutory Deductions &
Employer Statutory Contributions with the help of predefined processes
• It provides auto-fill facility to expedite the Attendance, Payroll & employer
contributions processes.
• It facilitates an accurate computation and deduction of Income Tax, ESI, EPF,
Professional Tax, Gratuity etc.
• It helps in the generation of Statutory Forms & Challans for Income Tax, EPF & ESI,
as prescribed.
• It allows drill-down facility to voucher level for any kind of alteration
• It facilitates computation of arrears pertaining to prior period(s)
• It helps in tracking employee loan details.
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CREATING PAY HEADS IN TALLY
1. Type Basic Pay as the Name of the Pay Head.
2. Select Earnings for Employees in the field Pay Head Type.
3. Specify the group as Indirect Expenses in the field Under and press Enter.
4. Set Affect Net Salary to Yes.
5. Specify Basic in the field Name to appear in Pay Slip.
Create Employee Groups (Payroll)
Creating Employee Groups helps to classify employees based on different parameters, such
as their job function, department, location, cadre/designation, and so on. You can also define
salary structures at the Employee Group level to apply a common salary structure for an
entire department such as Marketing, R&D, Sales, and Accounts.
Create Single Employee Group
1. Go to Gateway of Tally > Payroll Info. > Employee Groups > Create (under Single
Group ).
2. Select the Employee Category from the List of Categories .
3. Enter the Name of the Employee group.
4. Select the group under which the employee group is to be added.
5. Set the option Define Salary Details to Yes .
6. Press Enter to view the Salary Details Creation screen.
Create Multiple Employee Groups
1. Go to Gateway of Tally > Payroll Info. > Employees Groups > Create (under Multiple
Groups ).
2. Select the employee group under which you want to add the new employee group, in
the Under Employee Group field. If you want to create an independent group, select All
Items in this field.
3. Select the employee category into which you want to add the new group, in
the Category field.
4. Enter the group name in the Name of Employee Group field.
5. Select the employee group under which you want to categorise the new group, in
the Under field.
Create Employees (Payroll)
The employee master in Tally.ERP 9 can be used record all employee-related information.
You can capture not only general information consisting basic details of the employee but
you can also enter Payment, Statutory, Expat and Contract details of employees. To enter

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Statutory related information in the Employee Master, enable the option Show Statutory
Details in the payroll configuration screen.
Create Single Employee
1. Go to Gateway of Tally > Payroll Info. > Employees > Create (under Single Employee ).
2. Enter the Name of the employee. By default, the system displays the same value in
the Display name in reports as .
3. Modify the Display name in reports as , if required.
4. Select the Employee Group in the field Under.
5. Enter the Date of joining.
6. Set the Define salary details? option to Yes , and press Enter to
open Salary Details Creation screen.
7. Enter remarks, if any, in the Notes field.
8. Enter the employee General Information, employee's Bank Details for salary
processing, Payment Details , Statutory Details , Passport & Visa Details and Contract
Details.
Employee Configuration
1. Click F12: Configure to change the default display for the Employee Creation screen.
2. Set the option Provide aliases along with name? to Yes to add aliases for the employee.
3. Set the option Provide language aliases for name? to Yes to add the aliases in other
languages as selected (only while using Multilingual feature)
4. Set the option Add notes for employees? to Yes to add notes or remarks for an employee.
5. Set the option Show statutory details? to Yes to enter the PAN, PF, PR, EPS Account
Number, the Date of Joining and Relieving.
6. Set the option Provide passport and visa details? to Yes to enter the passport and visa
details of the employee.
7. Set the option Provide contract details? to Yes , to enter contract details such as Work
Permit Number, Contract Start Date and End Date.
8. Set the option Show employee display name? to Yes , to print a different name for an
employee while printing reports. This option is useful the same name is shared by a number
of employees.
9. Press Ctrl+A to accept.
Create Multiple Employees
1. Go to Gateway of Tally > Payroll Info. > Employees > Create (under Multiple
Employees).
2. Select the employee group under which you want to create all the employees, in the Under
Employee Group field. If an independent employee is to be created, select All Items in this
field.
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3. Select the employee category in which you want to add the group, in the Category field .
The default category Primary Cost Category appears selected in this field.
4. Specify the name of the employee in the Employee Name field.
5. Select the employee group into which you want to add the employee in the Under field.
6. Select the Regular Tax Regime (old regime) or Tax Regime U/s 115BAC (new regime) in
the Applicable Tax Regime column.
7. Enter the employee's PAN in the Income Tax Number (PAN) column.
8. Enter the joining date of the employees in the Date of Joining field.
9. Press Ctrl+A to accept the changes.
CONFIGURATION OF SALARY DETAILS
Salary structure gives us the components included in an employees pay. However, the tax is
calculated based on the taxable nature of each pay head included in the salary structure of the
employee. Further, the tax regime applicable to the employee will decide the tax slab,
deductions and exemptions to considered to calculate income tax and net salary.
Salary details for an employee
1. Go to Gateway of Tally > Payroll Info. > Salary Details > Define .
2. Select the employee in the Name field from the List of Groups/Employees.
3. Enter the Effective From date.
4. In the Pay Head column, the Start Type list displays three options namely, Copy From
Employee , Copy From Parent Value and Start Afresh.
If the option Allow Copy From Employee is enabled in F12: Configuration , you can select
the option Copy From Employee .
● If you select Copy From Employee , you can select the Salary Details defined of any
Employee, irrespective of the Employee Group.
● If you select Copy From Employee Group , you can view the Salary Details defined for the
Employee Group.
● If you select Copy From Parent Value , you can view the Salary Details defined for the
Employee Group to which the Employee belongs.
● If you select Start Afresh , you must select the Pay Heads from the List of Pay Heads and
enter the values for the necessary Pay Heads, if required.
5. Modify values for the necessary pay heads as per employees' eligibility.
6. Accept the screen
Salary Details Configuration
1. Go to Gateway of Tally > Payroll Info. > Salary Details > Alter .
2. Select the required Employee/ Employee Group from the List of Groups/Employees.
3. Press F12: Configure
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4. Allow to Override Slab Percentage: To prevent changes made to slab percentages, set this
option to No . You can set it to Yes , to override the percentages that are already defined at
the pay head level. For example, you have defined the slab rate for HRA as 40% in the pay
head level, and you want to change the slab rate percentage in the Salary Details screen.
Set Allow to Override Slab Percentage to Yes in Salary Details Configuration screen, and set
the slab rate percentage to the desired percentage
5. Allow Copy From Employee: If you want copy the salary details of an employee who
belongs to a different employee group, set this option to Yes.
6. Show Pay Head Type: If the pay head is an earning or a deduction in the Salary
Details screen, set this option to Yes .
7. Show Calculation Type: To display the method of calculation adopted ( As Computed
Value , As User Defined Value , Flat Rate , On Attendance or On Production ), set this option
to Yes.
8. Show Computed On: To view the computation information ( On Current Deductions
Total , On Current Earnings Total , On Current Sub Total , On Specified Formula , set this
option to Yes.
Create Attendance or Production Types (Payroll)
Attendance/Production Type represents the basic units that is used to compute employees'
pay and to track and represent data on productivity. Attendance/production types are
dependent on the Pay Heads that constitute employees' pay structure, and so you may need to
define multiple types.
Attendance Type
You can define Attendance/Production Types with or without pay.
● Attendance/Leave with Pay: Use this to record the positive attendance and leave with pay
( For example , Present, Sick Leave, and so on.)
● Leave without Pay: Use this to record negative attendance ( For example , Absent, Leave
Without Pay, and so on.)
To record positive attendance type
1. Go to Gateway of Tally > Payroll Info. > Attendance/Production Types > Create .
2. Enter the Name of the attendance type.
3. Select Primary from the list for the field Under.
4. Select the Attendance type as Attendance/Leave with Pay. The Period type appears
automatically.
5. Press Enter to save.
Production Types
Using the production type option, you can record the production details ( for example , Piece
Production, Overtime Hours, and so on).
1. Go to Gateway of Tally > Payroll Info. > Attendance/Production Types > Create
2. Enter the Name of the Production Type.
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3. Select Primary from the list, for the field Under .
4. Select Production as the Attendance Type .
5. Select the appropriate type of unit from the list, in the Unit field.
6. Press Enter to save.
Pay Heads in Tally Payroll
Pay Heads may be broadly considered as Earnings and Deductions from an employee’s point
of view. However, these pay heads would still be Expense and Liability from the employer’s
viewpoint. n Tally.ERP 9, each pay head is to be created as an individual ledger account and
grouped under its respective group i.e., all Earnings pay heads under Indirect Expenses group
or Direct Expenses group and all Deductions pay heads under Current Liabilities, Current
Assets and Duties & Taxes group.
The preset Pay Head types in Tally.ERP 9 are:
1. Earnings for Employees
2. Deductions from Employees
3. Employees’ Statutory Deductions
4. Employer’s Statutory Contributions
5. Employer’s Other Charges
6. Bonus
7. Gratuity
8. Loans and Advances
9. Reimbursements to Employees
Basic Pay Head Creation
Go to Gateway of Tally > Payroll Info. > Pay Heads > Create In the Pay Heads Creation
screen,
1. type Basic Pay as the Name of the Pay Head
2. Select Earnings for Employees in the field Pay Head Type.
3. Specify the group as Indirect Expenses in the field Under and press Enter
4. Set Affect Net Salary to Yes
5. Specify Basic in the field Name to appear in Pay Slip
6. Set Use for Gratuity to Yes
7. Select On Attendance in the field Calculation Type and press Enter
Description of general parameters in Pay Head creation:

Affect Net Salary– If this option is set to Yes, then the Pay Head will appear in the Salary
Slip for calculation of Net salary.
Name to appear in the Pay Slip– If Affect Net Salary is set to Yes, then the required name for
the Pay Head that appears in the Pay Slip should be specified against this field.
Use for Gratuity – This parameter should be set to Yes, for the Pay Head components that
will be used for the Gratuity calculation (e.g. Basic and DA)

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Basic Pay Head Creation - Calculation Type
As Computed Value – This method is used when the pay value is computed based on certain
predefined factors i.e., slab rates, pay heads and so on.
As User-Defined Value – This method is used when the value of pay is not fixed and does not
depend upon any pay components.
Flat Rate – This method is used when the value of the pay heads is fixed for the given month.
This calculation type is not dependant upon attendance/production. For example, conveyance
of Rs. 800 per month.
On Attendance — This calculation type depends upon Attendance records and is used along
with rate per unit of attendance. For example, Overtime of Rs. 25 per hour.
On Production — This method is used when the pay value is measured based on work done
i.e., pieces or numbers produced/manufactured.
8. Select Present in the field Attendance/ Leave with Pay.
9. Select Months in Calculation period field and press Enter
10. Select User defined in the Per Day Calculation Basis field
11. Press Enter to Accept
Calculation Basis refers to the periodicity of the given calculation period. As per
Calendar Period refers to the perpetual calendar month, i.e. if the payroll process is
carried out for the month of March, then the attendance records will be entered for 31
days. User Defined Value refers to the consistent payroll period irrespective of
calendar month, i.e. If an employee’s salary is based on a standard month of 30 days
irrespective of the calendar month, then you can select
Statement of payroll
The following are the various statements of payroll reports.
1. Pay slip: A salary slip is a document issued by an employer to an employee. It
contains a detailed description of the employee’s salary components like HRA, LTA,
Bonus paid etc and deductions for a specified time period, usually a month. It may be
issued on paper or mailed to the employee. Employers are legally bound to issue
salary slips to their employees periodically, as proof of salary payments to employees
and deductions made.
2. Pay sheet: The payroll or wage sheet is a consolidated list of workers, which shows
the gross deductions and net wages payable to them. Moreover, the payroll shows the
details like ticket numbers, trades, grades and rates of pay of the workers. Such details
are collected from the employee’s record card.
3. Pay roll statement: Payroll Statement means (i) a written statement setting forth the
monthly, quarterly and annual (as applicable) payroll at the Facility and the amount of
wages paid to each full-time employee at the Facility, and (ii) such other
documentation as reasonably determined to be necessary by the WFEDC to verify the
number of New Positions created and continuing financial condition of the Company.
4. The Payment Advice: payment advice report is used to generate Payment Advice /
Bank Transfer letters to transfer Salary Amount from a specific bank account to the
respective bank accounts of the employees based on the Salary Payment voucher.
5. Payroll Register Report:Payroll Register is a month-wise transaction summary
report displaying Payroll vouchers, similar to Display Statistics in the accounting

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 module. Though the register primarily displays Payroll vouchers, you can however
add new columns for any other voucher type.
Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll >
Payroll Register .
6. Pay Head Employee Breakup Report (Payroll): This report displays a group wise
summary of the transactions and Closing balance for the selected Employee. Drill
down to specific ledger of the group, to the month wise summary and up to voucher,
is available in this report.

1. Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll > Pay Head
Employee Breakup .
2. Select the Employee from the list, to view the Pay Head Breakup for that employee.
3. You can drill down to Breakup of Employee for each Group , from this report.
4. Drill down further to view the Ledger Monthly Summary report and the Employee
Vouchers.

Expat Reports
The Expat reports provide comprehensive information about foreign nationals who are
employed (as both regular as well as contract employees) on short/long work assignments in
your company. It displays all the relevant information such as Passport/Visa/Contract Expiry
dates along with the date of joining with respective Passport/Visa numbers and so on, both at
an individual employee level as well as at the group level.
Passport Expiry Report
This report provides all the relevant information about the Passport of an Employee such as
Passport number, Country of Issue, Passport Expiry date and other details such as the
Employee’s date of joining the organization and the contact information of the employee in
the form of e-mail address.
● Go to Gateway of Tally > Display > Payroll Reports > Expat Reports > Passport Expiry.
● F5: Employee-wise : Click on F5: Employee-wise or press F5 to view the Passport Expiry
details individually for Employees or toggle to view the report based on the Category.
● CTRL+F7: Employee Filter : Click on CTRL+F7: Employee Filte r or
press CTRL+F7 keys to filter and view the report for the selected Employees.
● F12: Configure: Click on F12: Configure button or press F12 key

Visa Expiry Report

This report is similar to Passport Expiry Report and provides all the relevant information
related to Employee such as Visa Number, Visa Expiry Date, and other details such as
Employee’s date of joining the Organization and his/her contact details.

Go to Gateway of Tally > Display > Payroll Reports > Expat Reports > Visa Expiry .

Select F2: Period to view the Visa expiry details of all the employees during the specified
period.

Click Ctrl+ F7: Employee Filters to view individual Employee/Group Employee Visa expiry
details. On selecting this, a list displays prompting you to select either an employee or their
groups.

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Click F5: Employee Wise to view the Visa Expiry details individually for Employees or
toggle to view the report based on the Category.

Contract Expiry Report

This report provides useful information regarding the Contractual Employees. i.e.,
All the relevant information about the Contract Employee viz., Work Permit Number,
Contract Start and Expiry Date along with some additional details such as Employee’s date of
joining the Organization and Email address are captured and displayed.
1. Select F2: Period to view all details of the report.
2. Click Ctrl+F7: Employee Filters to view the details of an individual employee or group.
3. Click F5: Employee wise to view the Employee Contract Expiry details individuall
Payroll Statutory Reports
1. EPF COMPUTATION REPORTS: Professional Tax (PT) Computation Report is
monthly which provides the details of the PT amount that the employer is liable to pay to the
professional Tax department during the given month.
● Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Professional
Tax > Computation Report .
● Select Professional Tax Ledger and press Enter .Or
● Go to Gateway of Tally > Display > Statutory Reports > Payroll Reports > Professional
Tax > Computation Report .
● Select Professional Tax Ledger and press Enter .
● Specify the Period in the From and To fields as shown above.
● Place : Name of the Place where company located should be specified in this field.
● Employee Category: Select the required Category.
● Employee/Group: Select the required Employee Group or individual Employee.
● Date of Printing : The date of printing the PT Computation report needs to be specified. By
default actual date of printing will be displayed.
● Authorized Signatory Name : Name of the Authorised Signatory should be entered in this
field.
● Print Payment Details : Set this option to Yes to print the Professional Tax Payment Details
like Cheque Number Cheque Date and Drawn On
2. FORM5:
PF Form 5 is a monthly report which provides the details of the employees newly joining the
Provident Fund scheme during the given month.
1. Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Provident
Fund > Form 5 .Or

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Indira Gandhi College Of Arts Science, Nellikuzhi
Go to Gateway of Tally > Display > Statutory Reports > Payroll Reports > Provident
Fund > Form 5 .
2. Enter the Period in the respective fields as shown above.
3. Select the required Employee Category, Employee/Group , and Sorting Method .
4. Enter the Date of Printing .
5. Press Enter .
3. FORM 10:
PF Form 10 is a monthly report that provides the details of the employees exiting from the
Provident Fund scheme during the given month.
To view PF Form 10
1. Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Provident
Fund > Form 10.
2. Specify the Period in the respective fields as shown above
3. Select the required Employee Category, Employee/Group and Sorting Method
4. Enter the Date of Printing .
5. P press Enter
4. FORM12A
PF Form 12A monthly report that provides the details of the PF Payments made to the
respective PF Accounts of the Employees during the given month.
Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Provident
Fund > Form 12A .
● Employee Category : Required Employee Category can be selected.
● Employee/Group : Name of the required Employees or Employee Groups can be selected.
● Name & Address of the Bank : Name of the bank and address where the PF amount was
deposited for the respective month.
● Include VPF Account : Set this to Yes to include the VPF contributions if any to the A/c
No. 1 during the respective month.
● Number of Contract Employees : Enter the total number of Contract Employees which are
not considered for PF.
● Number of Rest (Temporary Employees) : Enter the total number of Temporary staff which
are not considered for PF.
5. PF MONTHLY STATEMENT:
Monthly Statement -PF (Payroll)
PF Monthly Statement is an MIS report which provides the details of the Amounts
contributed by the Employees and Employer towards the PF Accounts during the given
month/period.
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Indira Gandhi College Of Arts Science, Nellikuzhi
● Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Provident Fund
> Monthly Statement.
● Specify the Period in the respective From and To fields as shown above
● Select the required Employee Category , Employee/Group , Sorting Method , and Display
Style for Employee Names and press Enter
6. FORM 3A
PF Form 3A (Payroll)
PF Form 3A is an Employee-wise Annual report for the Amounts deducted/contributed by
the Employee and the Employer towards the EPF, VPF, and EPS Accounts.
To view PF Form 3A
● Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Provident
Fund > Form 3A .
7. FORM6A
PF Form 6A (Payroll)
PF Form 6A is the detailed Annual Statement of contribution towards the different PF
Accounts for the given currency period.
● Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Provident
Fund > Form 6A .

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