Accounts Info menu lists the masters through which you can provide Tally the details of your company’s accounts. You can also manage Groups, Ledger and Vouchers from this menu.
Go to Gateway of Tally > Accounts Info.
INTRODUCTION TO GROUPS
Tally follows the modern way of managing accounts called ‘Single Ledger’ concept of accounting. This is in direct contrast to subsidiary Ledger Accounting. All financial entries are made using ledgers or account heads. Ledger accounts are created to identify transactions.
The single ledger concept avoids the need for sub-ledgers and corresponding control accounts in General Ledger. Tally allows you to group ledger information to generate meaningful reports that are compliant with laws. Groups in Tally classify and identify account heads according to their nature. This helps in presenting summarized information.
Gateway of Tally > Accounts Info.>Groups
CLASSIFICATION OF ACCOUNT HEADS
Usually, grouping of accounts is dome only when reports are needed. This may result in delay in preparing the reports. Tally allows you set up chart of accounts.
You can group the ledger accounts while creating them. Tally will enable your reports and statements to reflect the desired classification at any point. In Tally, you can also re-group the ledgers (with some minimal restrictions) if re-classification is necessary. Re-grouping becomes necessary whenever there is a change in the nature of information, however, re-grouping cab be done only by users who have authorised rights.
At the highest level of grouping, accounts are classified are classification into capital or revenue – specifically into assets, liabilities, income and expenditure. Based on mercantile accounting principles, Tally provides a set of reserved groups and allows you to modify their names or create subgroups.
Sub-Groups
A sub-Group behaves exactly like a group and is created under a group.
Concept of Sub-Groups
Groups have a hierarchical structure. The main group of accounts that determine the entire accounting and their presentation are the asset, liability, income or the expenditure. There main groups ascertain whether a ledger affects Profit & Loss Account as a revenue item or if it affects the Balance Sheet.
The Reserved Primary Groups and subgroups are:
Primary Groups of Capital Nature
- Capital Account
a) Reserves and Surplus [Retained Earnings]
- Current Assets
a) Bank Accounts
b) Cash-in hand
c) Deposits (Asset)
d) Loans & Advances (Asset)
e) Stock-in-hand
f) Sundry Debtors
- Current Liabilities
a) Duties and Taxes
b) Provisions
c) Sundry Creditors
d) Fixed Assets
- Investments
- Loans (Liability)
- Bank OD Accounts [Bank OCC Accounts]
a) Secured Loans
b) Unsecured Loans
- Suspense Account
- Miscellaneous Expenses (Asset)
- Branch/Divisions
- Sales Account
10. Purchase Accounts
11. Direct Income[Income Direct]
12. Indirect Income [Income Indirect]
13. Direct Expenses [Expanses Direct]
14. Indirect Expenses [Expanse Indirect
Note: Aliases for the groups are given in square brackets [].
A Discussion no Each of the Reserved Groups
1. CAPITAL ACCOUNT
This records the Capital and Reserves of the company. The ledgers that belong to Capital Accounts are Share Capital, Partners’ Capital A/c, Proprietor’s Capital Account and so on.
Reserves and Surplus [Retained Earnings]
This contains ledgers like Capital Reserve, General Reserve, Reserve for Depreciation and so no.
2. CURRENT ASSETS
Current Assets record the assets that do not belong to either Bank Accounts or Case-in-Hand sub-groups.
Bank Accounts
Current account, savings account, short tern deposit accounts and so on.
Cash-in-hand
Tally automatically creates Cash A/c in this group. You can open more than one each account if necessary.
Note: An account under Cash-in-hand group or Bank Account/Bank OCC A/c group is printed as separate Cash Book in the traditional Cash Book format and does not form part of the Ledger.
Deposits (Asset)
Deposits contain Fixed Deposits, Security Deposits or any deposit made by the company (not received by the company, which is a liability).
Loans & Advances (Asset)
This records all loans given by the company and advances of a non-trading nature (example: advance against salaries) or even for purchase of Fixed Assets. We do not recommend you to open advances to Suppliers’ account under this Group.
Stock-in-hand
This group contains accounts like Raw Materials, Work-in-Progress and Finished Goods. The balance control depends on whether you have selected Integrated Account-cum-Inventory option while creating the company.
Integrated Accounts-cum-Inventory
This option has a significant effect on the Balance Sheet and Profit & Loss Account. If set to Yes, it brings the stock/inventory balance figures from the inventory records and provides a drill down to the Stock registers from the Balance Sheet.
You are not allowed to directly change the closing balance of an account under this group. You are allowed to pas transactions in Inventory records and the account balances are automatically reflected in the Balance Sheet as Closing Stock.
Non- Integrated Accounts-cum-Inventory
If integrated Account-cum-Inventory option is set to No, it ignores the inventory books figures and picks up manually entered closing stock balances from the ledger account created. This provides th facility to maintain accounts separately and inventory separately.
You are not allowed to pass transactions if your accounts that come under this Group. It allows you to hold opening and closing balance only. Since no vouchers can be passed for these accounts, they are the only accounts for which the closing balances can be directly altered (by an authorised user only).
3. CURRENT LIABILITIES
Accounts like Outstanding Liabilities, Statutory Liabilities and other minor liabilities can be created directly under this group. Sub- groups under Current Liabilities are Duties and Taxes, Provisions and sundry Creditors
Duties and Taxes
Duties and Taxes contain all tax accounts like VAT, MODVAT, Excise, Salas and other trade taxes and the total liability (or asset in case of advances paid) and the break-up of individual items.
Provisions
Accounts like Provision for Taxation, Provision for Depreciation and so on are recorded under Provisions.
4. INVESTMENTS
Group your investment accounts like Investment in Shares, Bonds, Govt. securities, long term Bank deposit accounts and so on. This allows you to view the total investments made by the company.
5. LOANS (LIABILITY)
Loans that a company has borrowed, typically long-terms loans.
Bank OD Accounts [Bank OCC Accounts]
Tally provides you with distinct types of Bank Accounts,
Bank OCC A/c
To record the company’s overdraft accounts with banks. For example, Bill Discounted A/cs and Hypothecation A/cs etc.
Note: An account under Bank OCC A/c group is printed as separate Cash Book in the traditional Cash Book format and does not form part of the Ledger.
Secured Loans
Term loans or other long/medium term loans, which are obtained against security of some asset. Tally does not verify the existence of the security. Typical accounts are Debentures, Term Loans, and so on.
Unsecured Loans
Loans obtained without any security. Example: Loans from Directors/partners or outside parties.
6. SUSPENSE ACCOUNT
In modern accounting, many large corporations use Suspense Ledger to track the money paid or recovered, the nature of which is not yet known. The most common example is money paid for Traveling Advance whose details will be known only upon submission of the TA bill. Some companies may prefer to open such accounts under Suspense Account.
Loans and Advances (Asset) group.
The Suspense Account is a Balance Sheet item. Any expense account even if it has ‘suspense’ in its name, it should be opened under Revenue group like Indirect Expenses and not under Suspense Account group.
7. MISCELLANEOUS EXPENSES (ASSET)
This group is typically used for legal disclosure requirements such as Schedule VI of the Indian Companies Act. If should hold incorporation and per-operative expenses. Companies would write off a permissible portion of the account every year. A balance remains to an extent that cannot be written off in Profit & Loss Account. Tally does not show loss, carried forward in the Profit & Loss Account, under this group. The Profit & Loss Account balance is displayed separately in the Balance Sheet
8. BRANCH/DIVISIONS
This maintains ledger accounts of all your company’s branches, divisions, affiliates, sister concerns, subsidiaries and so on. Tally permits Sales and Purchase transactions to take place with accounts. Just treat them as any other party accounts. If you wish to maintain the books of a branch/division on your computer, you must open a separate company. (Tally allows maintenance of multiple company accounts).
Revenue- Primary Groups
9. SALES ACCOUNT
You can classify your sales accounts based on Tax slabs or type of slabs or type of sales. This also becomes a simple mechanism for preparation of Tax returns.
Examples:
- Domestic Sales
- Export Sales
Now under Domestic Sales open the following ledgers:
- Sales (10%)
- Sales (5%)
- Sales (exempt)
You can even open an account as Sales Returns under the group Domestic Sales to view your net sales after returns (or the returns may be directly passed through Journal against the specific Sales account).
- 10. PURCHASE ACCOUNT
This is similar to sales accounts, except for the type of transactions.
- 11. DIRECT INCOME [INCOME DIRECT]
These are Non-trade income accounts that affect Gross Profit. All trade income accounts fall under Sales Accounts. You may also user this group for accounts like Servicing, Contract Change that follow sales of equipment.
For a professional services company, you may not use Sales Account group at all. Instead, open accounts like Professional Fees under this group.
- 12. INDIRECT INCOME [INCOME INDIRECT]
These are miscellaneous non-sale income accounts. Example: Rent Received and Interest Received.
- 13. DIRECT EXPENSES [EXPENSES DIRECT]
These are manufacturing or direct trading expenses. These accounts determine the Gross Profit of the company.
- 14. INDIRECT EXPENSES [EXPENSES INDIRECT]
All administrative, selling or non-direct expenses.
Profit & Loss Account is a reserved primary account in Tally. You can use this account to pass adjustment entries through journal vouchers. For example, transfer of profit or loss account to Capital or Reserve account.
Creating a Group
You can create multiple or single group from create option. In multiple group creation, the sub-groups will automatically inherit the characteristics of their parent groups.
Go to Gateway of Tally > Accounts Info.> Groups > Create (under Single Group)
The Group Creation screen displays
Name of Group
Enter the name of the Group to be created. For example, Administrative Expenses
Alias
Enter an alias name to allow access to the group using the Alias in addition to its name of leave it blank. For example, for Administrative expenses, you can enter Office Expense or even an alphanumeric code, say E001, as an alias.
Under
Specify under which existing (Parent) group the sub-classification is required. If it is a new primary group, select Primary (requirement of a new primary group is very rare, but the option exists). You can also create a new Parent Group by using Alt+C.
Note: Creation of new Primary Group is not allowed if an Allow Advanced entry in Masters is set to No in F12: Configure.
Additional Information
If a group (e.g. Printing) is created under Primary, you must select the appropriate option from the list whether it is an asset, liability, income or expenses. If you select an income or expenses you should specify whether it will affect the gross profits or not by suitably setting the option Does it affect Gross Profits? to Yes/No
You can use this concept when you wish to segregate your profits into Operative Profit and Net Profit. This helps you when you want to consider other revenue accounts in addition to Direct instead of Gross and Net Profit).
Normally, Tally calculates Gross Profit using Opening Stock, Purchase Accounts, Direct Expenses, Sales Accounts, Direct Incomes and Closing Stock only. To make other accounts contribute to this, without classifying under these reserved heads, set this option to Yes.
Group behaves like sub-ledger?
This option is applicable to Sundry Debtors group, you can set this to Yes to display Sundry Debtors without Ledger break-up in statements. Normally, Sundry Debtors will have a large number of ledger accounts under it and it can be expanded during display to show ledger balances. To disable this detailed display set this option to No.
Net Debit/Credit Balances for Repotting?
Setting this option to Yes will display either the net debit or credit balance in the report (whichever is higher). If this is set to No, both debit and credit balances will displayed in the report.
Used for Calculation (e.g. taxes, discounts)?
Set this option to Yes if ledgers under this group would have percentages for discounts/taxes to be used for invoice entry. This gets reflected while passing voucher entry in Invoice mode, it uses the automatic calculation capability.
Method to allocate when used in purchase invoice
Select the appropriate allocation method from the list, this is used to allocate the expense of the Item in the ratio of the quantity or value.
Buttons in single group screens
F3: Company
This button helps you to open a different company. In the creation mode, you can create groups in the other company. In alter mode, you can copy the information by accepting the screen (enter or Ctrl+A). The old company’s information remains. This feature is not available in Display mode.
Groups, Ledgers, Cost Categories, Cost Centers, Voucher Types, Currency, Budgets
This button enables you to switch to the appropriate area without quitting from the current screen.
F11: Features
This allows you to set or modify the company features.
F12: Configure
This enables you to set or modify configuration of the master screen.
Note: Configuration changes affect all companies and changes made in Features affect only the current company.
Displaying and Altering Group
You can display and alter the Group in Single mode or Multiple mode.
Displaying a Single Group
Go to Gateway of Tally > Accounts Info. > Group > Display (under Single Group)
Select the name of the Group from the List of Items. You cannot make any changes in Display mode.
Altering a Single Group
Go to Gateway of Tally > Accounts Info. > Group > Alter (under Single Group)
Select the Group that you wish to alter from the List of Groups. Make the necessary changes and click Yes to save the changes.
Displaying Multiple Groups
Go to Gateway of Tally > Accounts Info. > Group > Display (under Multiple Group)
Select the Group from the List of Groups to display all the Groups under the selected Group or select All Items to display all Groups. The Multi Group Display screen lists Groups and the corresponding details of the Groups.
Altering Multiple Group
Go to Gateway of Tally > Accounts Info. > Group > Alter (under Multiple Group)
Select the Group for which you want to alter from the List of Groups. In Multi Group Alteration screen, make the necessary changes and click Yes to save changes.
Deleting a Group
Gateway of Tally > Accounts Info > Groups > Single/Alter
The Delete function is performed through the single alteration mode. You cannot delete groups form the Multiple Alteration mode.
- Select the group to be deleted.
- Press Alt+D to delete.
Note: You cannot delete a group if it is a reserved group or a group has sub-groups or ledgers in it.
Note: A new group created under primary will not reflect in reports until you pass masters/transactions for that group.
Introduction to Ledgers
A Ledger is the actual account head to which you identify a transaction. In Tally, you pass all accounting vouchers using Ledgers. However, all Ledgers have to be classified into Groups. Hence a thorough understanding of account classifications is important for working with Ledgers.
Go to Gateway of Tally > Accounts Info. > Ledgers
Creating a Ledger
Ledgers can be created in single and multiple modes. In multiple mode you can create multiple ledgers at a time.
Creating a Single Ledger
The creation of Ledger depends on the features you opt for in the F11: Configure screen before creating any Ledgers. You may configure or set your Ledgers to enable or disable advanced mode.
Tally automatically creates two Ledger accounts namely, Cash (Under Cash-in-Hand) and Profit and Loss Account (direct Primary Account). You need to create all other accounts heads. There are no restrictions in Ledger creation except that you cannot create another Profit & Loss A/C. Any number of Cash Accounts may be created in any other name like Petty Cash.
Creating a Ledger Accounts with minimal information:
Go to Gateway of Tally > Accounts Info. > Ledgers > Create (under Single Ledger)
Name
Enter the Name of the account. You can provide the full name of the account. Tally fits it all in. Press Enter to move to the next field. Tally does not allow entry of duplicate names. the uniqueness check is made here itself.
Note that punctuation and other non-relevant information are ignored by Tally in its recognition of a name. Thus, CST, C.S.T. and C.S.T. are all considered as same.
Tally converts the first letter of all relevant words to upper case, which helps you; speed up data entry. You need not bother about changing the case every time it is a different word.
Alias
Enter an alias name if required. You can access the Ledgers using the original name or the alias name.
Under
All accounts must be classified under their appropriate Groups. Select the Group under which the Ledger is created from the List of Groups. To create a new Group from this field press [ALT+C]
A Group is not important by itself, but because it controls the usage of Ledger accounts. A wrong classification would affect the treatment of the Ledger account in final statements and during voucher entry.
You can, alter a Ledger account to change its group classification at any time.
Opening Balance
If yours is an existing company whose books you are entering onto Tally, Opening Balance would be applicable in circumstances such as when the Ledger is an asset or a liability and if it has a balance in the account as on the date of beginning of books in Tally.
Tally recognises normal accounting principles of debit balances for Assets and credit balances for Liabilities. It accepts the reverse for obverse balances. Revenue accounts normally do not have balances. Tally, however, permits you to give balances even for such accounts – You may be transferring your books on to Tally in the middle of the year and may not have closed them in your earlier system. Hence, you may specify whether the balance is Debit or Credit. Simply D or C also would suffice.
Note: Use Ctrl + A at the field following which the information in other fields do not need to be changed.
Creating Multiple Ledgers
You can create multiple Ledgers at a time in this mode. You can first create a Ledger under each group in single Ledger mode and then the rest of the Ledgers in multiple mode. Tally will set the settings of the Ledger created as default for other Ledger to be created in multiple mode.
Go to Gateway of Tally > Accounts Info. > Ledgers > Create (under Multiple Ledger)
The Multiple Ledger Creation screen is displayed. A brief description on each of the fields in the Multiple Ledger Creation screen follows:
Under Group
Select the name of the group under which you want to create the Ledgers from the List of Groups.
Below this field, the other fields are arranged in a table. The cursor rests at the field Name of Ledger.
The other fields in the column are:
S. No
This is auto generated.
Name of Ledger
Enter the name of the Ledger
Under
This field defaults to the parent group selected in Under Group. The selected group in Under Group gets displayed here automatically and the cursor skips this column. However, if you select All Items in Under Group field, the cursor does not skip this column and you have the option to select the group. You can even create a new group from this field by pressing Alt+C.
Opening Balance
This is the balance remaining when you first enter your books on Tally, i.e., the date of beginning of books. If you have opted to maintain balances bill-by-bill, you must give the bill details.
Dr
Specify whether the Opening Balance is Debit or Credit. Tally follows the normal accounting principals of accounting.
Note: While creating Ledgers in multiple mode, the field Cost Centers are applicable, is set to Yes for Revenue accounts and No for Non-Revenue accounts by default. The field Inventory values are affected is set to Yes for Sales and Purchase Accounts and No for the others by default.
Method of Calculation
There are four methods of calculating a duty.
- Duty Based on Items – Tax based on Item Rate
- Additional Duty
- On Total Sales
- Surcharge on Tax
Tax or Duty Based on Items Rate (or Excise Duty)
This type of account is suitable in cases where there are differential rates of duty/tax on items. In India, excise duty accounts would normally adopt this method. In the UK, VAT accounts would do likewise. When creating your Inventory item masters, you might specify Rate of Duty for each item. In your account books, you would open a ledger for the duty, possibly by the name VAT 17.5%or Excise Duty 12.5%. You will select this method to instruct Tally to pick up the Rate of Duty specified in your Inventory item master during master during invoice entry. If one or more items exist with the same rate of duty, then the amount is calculated using the total. Otherwise, it is calculated on total sales. For example,
Your invoice lists,
Item A (Rate 10%) for 10000/-
Item B (Rate 12%) for 15000/-
Item c (Rate 10%) for 18000/-
Duty (VAT or Excise) will be calculated as follows:
Additional Duty
When excise duty is not enabled for invoicing purposes in Company Features [F11] (as applicable for many products in India), Additional Duty and Surcharge function alike. In case it is enabled, then Additional Duty is added to the ‘Duty Based on Items’ in the invoice to reflect the ‘Table Duty payable’. Its method of calculation is explained under ‘Surcharge’.
On Total Sales
As the type suggests, duty will be calculated on the total of individual values of the items. It does not consider the Rate of Duty specified for each item in your inventory masters.
It does not calculate duty on the current sub-total unless you have specifically opted for it in the company features. Hence, the two scenarios could be as follows:
When you have not opted for calculation on current sub-total:
Assuming that there are two items in the invoice:
Item A 10000/-
Item B 15000/-
Tax 2% will be calculated at 2% on total sales of 25000/- = 500/- tax amount following which you obtain a current sub-total of 25500/-.
If you now add another line, Tax 4%, it will calculate 4% also on 25000/- (on total sales) giving another 1000/- as tax.
If you opt for calculating on current sub-total:
The above Tax 4% will be calculated on 25500/- (25000+500) giving 1020/-.
Surcharge on Tax
Surcharge and Additional Duty are charged on the immediately preceding entry. A surcharge is treated as a percentage of the duty levied. Tally expects the preceding line in the invoice to be the duty on which surcharge is to be calculated.
Hence, in the above example if you have added a line Surcharge 10% it will appear as:
| Item A | 10000/- |
| Item B | 15000/- |
| 25000/- | |
| Tax 2% | 500/- |
| Surcharge 10% | 50/- (10% of 500) |
If your invoice is as below:
| Item A | 10000/- |
| Item B | 15000/- |
| 25000/- | |
| Tax 2% | 500/- |
| Surcharge 10% | 50/-(10% of 500) |
| Addl. Surcharge8% | 4/- (8% of 50) |
During invoice creation, this figure is used to calculate tax amount based on the method of calculation as well as specified in invoicing configuration
([F12] configure > Invoice Entry > Calculate tax on current sub-total?).
Though invoicing has been discussed separately in greater detail, we shall touch upon relevant aspects here.
Calculate tax on current sub-total: (Yes/No)
Tax here refers to VAT or sales tax. During voucher entry in Invoicing mode, you may enter additional ledger accounts after giving the list of items in the invoice. Typically, the ledgers would pertain to duties, taxes, delivery charges, other charges and discounts. Sales Tax may be calculated on the total of item values, viz., Inventory sub-total, or you may specify it to calculate on the immediately preceding sub- total. In the latter case, the immediately preceding sub-total could include any entry that you may have passed, e.g. Delivery Charges. Tally does not make any presumptions and would not verify its appropriateness or otherwise.
Normally, you would not answer Yes to this option. The facility of Surcharge being available, the need to calculate on current sub-total is fulfilled by it. Hence, use it sparingly, maybe only when you have both Excise Duty and Sales Tax (on Excise Duty) applicable on an.
Display or Alter a Ledger Account
Information in display and alter is the same, hence only alter is discussed. Display option does not permit any modification. Alter option is accessible only to authorised users.
Gateway of Tally > Accounts Info.>Ledgers > Single Alter > select ledger
You are allowed to alter any information of the ledger master with the exception of the Closing Balance of a ledger account, if any, other than closing balance of accounts under the group ‘stock –in-hand’.
Deleting a ledger account
You can delete a ledger from the alteration mode by pressing <Alt>+<D>. Tally does not allow deletion of accounts that have transactions. Therefore, should you wish to delete an account, which has transactions, you must first delete all its voucher entries.
Interest Calculations
Tally allows you to obtain reports on interest calculated by Tally based on the instructions you furnish. Interest figures are typically desired in the following situations:
- On outstanding balance amounts
- On outstanding bills/invoices/transactions (Received and payable)
Tally gives you an exhaustive capability to obtain interest implications on both.
Activate Interest Calculations
Interest is a legitimate return on money invested and chargeable in the business world on loans and also on delayed payments. Interest can be calculated on the basis of Simple or Compound Interest.
Tally allows you to obtain reports on interest calculated based on the instructions you furnish. Interest figures are typically desired in the following situations:
- On Outstanding Balance amounts.
- On Outstanding Bills/Invoices /Transactions (Receivables and Payables)
The Activate Interest Calculation field is displayed in the Ledger Creation screen only if Activate Interest Calculations is set to Yes in F11: Features.
Set this field to Yes for each specific ledger account for which interest is to be calculated.
Simple Mode (Where advanced parameters are not applicable)
To calculate Interest in the Simple Mode:
- Go to Gateway of Tally > F11: Features > Set Activate Interest Calculation to Yes.>Set Use Advanced Parameters to No.
- In the Ledger Creation screen set Activate Interest Calculation to Yes.
- The Interest Parameters sub screen is displayed. Enter the Rate and select the interest style from the list.
Interest calculations on outstanding balances
Enter Interest details in Vouchers (only in case of transaction by transaction/Bill-by-bill). View Interest reports.
You will have to alter existing ledger accounts to permit interest calculations on them. The same operation will apply when creating a new ledger account.
Interest calculation on outstanding balances is allowed for any ledger account. You simply specify the interest rate and style of calculation. Nothing is required to be done for interest during voucher entry.
Let’s take an example: Interest calculated on Outstanding Balances
- Go to Gateway of Tally> Accounts Info.> Ledgers> Alter (Single)> Bank Ltd (bank account)
- Set Activate4 interest Calculation to Yes.
- On activation, the Interest Parameters must be set. It is the basis on which interest will be calculated for this Ledger account.
- Rate: This is the rate at which the interest has to be calculated. In this case, specify 15%.
- Interest Style: It is the basis on which the rate is applied. Of the four options, select 365-Day Year.
- Accept the screen.
You can now view the amount of interest that could be charged by the Bank.
Report on Interest Calculated on outstanding balances.
The Interest Calculations Report can be displayed and printed.
Go to Gateway of Tally> Display> Statements of Accounts> Interest Calculations> Ledger> Bank Account
Interest calculation transaction by transaction
Activate and specify interest calculations in ledger masters.
Transaction by transaction or Bill-by-bill interest calculation is permitted for ‘Party’ accounts like accounts falling under the groups Sundry Debtors and Sundry Creditors. For example:
- Alter a Customer account (under the group Sundry Debtors or one of its sub-groups).
- Set Activate Interest Calculation to Yes. In the Interest Parameters now you have three lines to answer.
- Set Calculate Interest Transaction-by-transaction to Yes.
- Set Over-ride Parameters for each transaction to No.
If set to No, you are not allowed to change interest parameters in voucher/invoice entry. If set to Yes, you can change the interest parameters during entry.
Report on Interest Calculated on outstanding transactions/bills
To view the Interest calculated
Go to Gateway of Tally> Display> Statements of Accounts> Interest Calculations> Ledger> CP Ltd
The report is similar to the Bill-wise Outstanding Statement. The last column gives the interest amount on the transaction. Select the line to be viewed in detail for its calculations.
How to enter the calculated interest amounts?
Use Debit/Credit Note with Voucher Classes
Use Debit notes for Interest receivable and Credit Notes for Interest Payable. Interest is calculated on Simple or Compound basis and separate classes should be used for them.
Set-up Debit/Credit Note Classes for interest entries
Set up Debit Notes. Credit Notes will behave the same way.
Go to Gateway of Tally > Accounts Info.> Voucher Types> Create/Alter
- Alter the Voucher Type Debit Note.
- Tab down to the field Class.
- Type the name of the Class.
- Type Simple Interest.
Likewise, create a Class – Compound Interest and set Yes to Amounts to be treated as Compound Interest.
Accept the Voucher Type and return to the Gateway of Tally. Create a ledger account Interest Received under Group Indirect Income.
Voucher Entry for booking Interest
- Go to Gateway of Tally> Accounting Voucher> Voucher Entry
- Select F7: Journal > Debit Note
- A Cost Centre Class is also selected if required. Marketing Expenses Class has been selected here.
- There are two situations for interest adjustment:-
Billwise interest
- Simple Interest – Interest amounts are not debited onto the same bills. Create a fresh reference for it.
- Compound Interest – Amounts are auto-debited to the selected bills. Bill-wise details will not appear in this case.
- Interest on balances only
Bill-wise interest entry
Debit CP Ltd
Credit Interest Received
When you debit the party account, a list of bills for which interest is applicable pops up. Select the bills to adjust. Note that even cleared bills appear.
Select the respective interest bills from the list. The debit amount is filled up with the total. Select New Ref in the bill-wise allocations. In the interest sub-screen, ensure that the rate of interest is 0. Now Credit Interest Received. The amount is already filled in.
Your voucher will resemble the one below:
Entries for compound interest are exactly the same as for Simple Interest where all you do is select the Voucher Class Compound Interest. Also the Bill-wise details popup sub-screen does not come up as the amounts are added onto the bills.
Select Demo from the list and complete a Debit Note.
Now display Outstanding for CP Ltd
Note the contents:
The Bill reference Demo/28/01 and Demo/31/01d are invoices onto which interest has been compounded.
A new Reference no 2 has been created for Simple Interest due from CP Ltd.
Entries for Interest on Balances only
Again, the issues are Simple and Compound Interest
Compound Interest
Make the following entries in a Debit note with Compound Interest. Voucher Class Debit Bank Ltd the amount is automatically filled up with the calculated interest
Credit Interest Received
And nothing needs to be dome! The Bank Account has been increased by the amount of inte4rest due and the Income account of Interest Received also credited.
Simple Interest
Make the same entry as above.
However, since it has the effect of increasing the Bank Ltd account with the amount due (compound effect), you must make a journal entry to reverse it. the reversal entry would be something like this:
Debit Interest Receivable (a current asset account)
Credit Bank Ltd
Use a normal Journal voucher for this entry.
We have to necessary go this route to take advantage of the auto filling of the interest amount which can appear only when we use the Bank Ltd account in Debit Note in the first place.
Interest Calculation Reports
Interest Calculation report are automatically produced if the feature is activated In F11: Features and the parameters are set for individual ledger accounts.
There are two types of reports, one pertaining to interest on balances of accounts like loans, and the other interest on overdue invoices.
Interest reports are available for individual ledger accounts as well as for Groups
Interest Calculation on Ledger Balances (e.g. Loans)
You can get a report on the Ledger balances for the interest calculated.
Go to Gateway of Tally> Display> Statements of Accounts> Interest Calculations> Ledger
Select Account E.g. Bank Loan Account.
Interest is re-calculated with every change in balance outstanding. The Cr in the interest amount should not be confused to resemble an Income. It only means that it is payable and is a Liability.
To ease interest recording, Tally has an interest template, a special voucher class in Debit Note and Credit Notes.
Specifying Closing Stock Values
Closing stock values have to be specified when accounts and inventory are not integrated. Tally allows you to specify closing stock values even if your books are integrated. It would simply ignore the specified figure so long as you maintain the integration. If and when you select to separate the books, the specified values would automatically be considered.
To enter the closing stock as on a specific date, you must alter the ledger account. Simply follow the ledger alteration procedure or go from the Balance Sheet via Current Assets.
Go to Gateway of Tally> Balance Sheet> Current Assets> Group Summary
(Or)
Go to Gateway of Tally> Accounts Info.> Ledgers> Alter (Single)
Assuming that you had a ledger account ‘Stock’ under the group Stock-in-hand the information would be as follows
You are allowed to alter the opening balance as well as specify/alter closing balances on different dates. You would typically specify Balance Sheet dates so that the Balance Sheet reflects the amount of that date.
Effective Date for Reconciliation (Bank Accounts only)
The Effective Date for Reconciliation is given for accounts falling under the Bank Accounts Group (or Bank OCC a/c). By default it is the books beginning date.
This is the date from which you can reconcile your bank account in your books with the bank statements. Normally, it would be the books beginning date.
However, you can import data from a previous version of Tally or from any other system (where the reconciliation process was not available or was different). In that case, you may not need to reconcile the bank account with your bank statements from the very beginning. Give the date from which you want the reconciliation facility to be activated. Then, previous entries will not appear for reconciliation.
Indirect Expenses
DISPLAYING AND ALTERING LEDGERS
Displaying and Altering Ledgers can be done in Single mode and Multiple mode. The Multiple mode allows you to display and alter multiple Ledgers at a time.
Displaying and Altering a Single Ledger
You can view the details of the Ledger Masters in Display mode. Display does not permit any modification. However you can make changed to Ledger Masters in Alter mode.
Displaying a Single Ledger
Go to Gateway of Tally> Accounts Info.> Ledgers> Display (under Single Ledger.)
Select the Ledger from the List of Ledgers. The Ledger Display screen in displayed. You will be able to view the details of the selected Ledger Master.
Altering a Single Ledger
Select the Ledger from the List of Ledgers. The Ledgers Alteration screen is displayed.
You are allowed to alter any information. Make the necessary changes and Accept Yes to save.
Specifying Closing Stock Values of a Ledger account the group Stock in Hand
This is possible only in Ledger alteration mode. Closing stock values have to be specified when accounts and inventory are not integrated. Tally allows you to specify closing stock values even if your books are integrated. It would simply ignore the specified figure so long as you maintain the integration. If and when you select to separate the books, the specified values would automatically be considered.
To enter the closing stock as on a specific date, you must alter the ledger account. Simply follow the ledger alteration procedure or go from the Balance Sheet via Current Assets.
Go to Gateway of Tally > Balance Sheet> Current Assets> Group Summary
Assuming that you had a ledger account Stock under the group Stock-in-hand the information would be as follows:
You are allowed to alter the opening balance as well as specify closing balances on different dates. You would typically specify Balance Sheet dates so that the Balance Sheet reflects the amount of that date.
DELETING SINGLE LEDGER
You can delete a Ledger account from the Ledger Alteration screen by pressing ATL+D Tally does not allow deletion of accounts that have transactions. Therefore, should you wish to delete an account, which has transactions, you must first delete all its voucher entries.
DISPLAYING AND ALTERING MULTIPLE LEDGERS
DISPLAYING MULTIPLE LEDGERS
Go to Gateway of Tally> Accounts Info.> Ledgers> Display (under Multiple Ledger.
Select All Items from the List of Groups to view the details of all the Ledgers in Tally. If you want to view the details of all the Ledgers created under a Group select the Group from the List of Groups. The Multiple Ledger Display screen is displayed.
Altering Ledgers in Multiple Mode
Go to Gateway of Tally> Accounts Info.> Ledgers> Alter (under Multiple Ledger.)
Select any Group or All Items from the List of Groups. The Multi Ledger Alteration screen is displayed. Make the necessary changes and Accept Yes to save.
Note: You are not allowed to delete a ledger from this mode. Select single alter mode to delete.
Explanation on Buttons
F3: Company: To work with a different company. In the creation mode, you can create cost categories in the other company. In alter mode, you can copy the information by accepting the screen
(<enter> or <Ctrl>+<A>). The old company’s information remains. Not available in Display mode.
F3: New Cmp: To work on the same report of another company. Available only in display mode.
F4: Parent: To move the cursor to the field ‘Under Group’
F4: New Parent: To bring up the list of Groups to select a new parent Group.
Zero Op Bal: To nullify (change to zero) all opening balances in this group.
F6: Skip names: For faster data entry when you do not need to the names of ledgers. The cursor will not go to that column ‘Under’. Toggle to ‘Edit Parent’.
F7: Skip Parent: For faster data entry when you do not need to alter the parent Group. The cursor will not go to the column ‘Under’. Toggle to ‘Edit Parent’.
F8: Skip Details: the cursor will not go to the columns Opening Balance and Dr/Cr. Toggle to ‘Edit Details’.
F9: Show Closing: Closing Balances replace Opening Balances. This is available only in alter mode. Closing balance is not alterable and the cursor skips the field.
F10: Chg Sort: To display a column of sorting position indices. Toggle to ‘Skip Sort’. You may change display positions of ledger accounts under the group.
Groups, Ledger, Cost Categories, and Cost Centres: To enable you to switch to these areas without having to quit from the current screen.
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