How to send an Email from tally

The E-mail is the most widely used facility on the Internet. It saves time and cost of postage. Use the email feature in Tally.
• E-mail any Tally report or document like invoices or purchase orders
• Post reminder letters and statement of accounts
The following example illustrates the use of this feature in Tally
E-mail a Invoice
To send a Invoice to a customer by email:
1. Gateway of Tally > Display > Accounts Books> Sales Register >
2. Select the required Invoice from the sales Vouchers
3. Click on Email from the button bar or press Alt+M

1. The fields on the Mailing Invoice form are automatically completed if you have given the required information during creation of the master records. Select No or press Backspace to change/modify the entries. Select Yes to accept.
2. The E-mail Server field is highlighted next. This is a mandatory field. The first time you use this feature in Tally, enter the name of your SMTP server, example: mail.btinternet.com. Subsequently, Tally will automatically display the SMTP server name. Refer to your Internet Service Provider (ISP) or network administrator for further queries.
3. The From field displays the name of your company entered in the Company Creation screen and stored in the Company Information Master records. You can also modify the default information. Press Enter.
4. The From E-mail Address field displays the e-mail address entered in the Company Information Master data. Enter your email address, if you have not done so while creating a company, or if you want to change the id.
• Enter the user name and password in Authentication User Name (Only if required) and Password field respectively if the mail server requires authentication.
• In the Format field a pop-up screen lists the three formats in which you can generate your email:
o ASCII (Comma delimited)
o HTML (web-publishing)
o XML (data interchange)
Select the type that suits your recipient.
1. To E-mail Address field is a mandatory field.

It displays the recipient’s email address as entered in the Mailing and Related details during ledger creation. Enter the address if you have not done so while creating the ledger or if you want to modify the information.
1. Type the email address of another recipient to whom you want to send a carbon copy of the email in the CC (if any) field.

1. The Subject field is filled by default and displays the subject of your mail. You can change it to a subject of your choice.
• Any text you enter in the Additional Text field precedes the report in the recipient’s mail program. You can use this field to type a message to the recipient.
• Additional Options provided in the form are:
o Include Post-Dated Transactions?- Set this option to Yes to include post-dated transactions.

Note: Additional Options may vary depending upon the type of report you want to email.
1. Print Preview: Use the Print Preview screen to view the document before emailing. This shows how the document appears in the recipient’s email

Sales Item Invoice

Invoicing is generally used for sale of stock where the details of the items sold are listed. Selecting the Item Invoice allows you to select the stock items to be invoiced. This format is more commonly used by trading and manufacturing organisations.

On the Sales invoice screen - click on the button (Item Invoice) on the right-hand side of the screen and the Sales Item Invoice appears as:

Tally's Item Invoice mode - displays the list of stock items, which can be invoiced as required.

The Item Invoice button toggles with Account Invoice.

Procedure

1. Enter the date of sale
2. Enter the ref; if any other wise skip it
3. Select party account name from pop up window. If it new one then create the party there it self by pressing ALT+C.
4. Select the type of sale. Like sales @ 4%, sales @ 12.5% etc.
5. Select the vat tax class, Like 4%, 12.5% etc.
6. Select the item to be sold from pop up window. ( list of items).If it new one then create the item there it self by pressing ALT+C. .
   
7. Enter the quantity to be sold.
8. Enter the rate of item in your currency.
9. More items are there, then repeat the procedure from 6 to 8.
10. After items are over then enter.]
11. Select the corresponding tax ledger from pop up window.If it new one then create the ne tax class there it self by pressing ALT+C. .
    
12. Enter the any packing & forwarding charges or freight charges if any.
13. Enter addition or subtraction amount for rounding of total value.
14. Enter the narration / Remarks if any.
15. Press enter to accept the details.

your sales voucher is saved.
if you you can take print out of that.

Sales Entry (F8)

When a sales transaction takes place, a document, detailing the transaction (item name, tax, etc) has to be given to the buyer (debtor) as proof of purchase by him. This document is called "Invoice" or "Bill" or "Cash Memo". The practice of issuing an Invoice, which is in vogue, is available in Tally.

Gateway of Tally > Accounting Vouchers > selecting F8, Tally displays the Sales Invoice screen. The Invoice mode is default. To enter details of sale transactions – use Tally's Sales entry (F8 – in Accounting Vouchers).

Sales entries can be made in the Voucher as well as Invoice Formats.

Invoicing or sales invoicing is not very different from sales voucher entry. The advantage of using the invoice format for sales invoice entry is that, automatic calculations of taxes and duties (ledger accounts classified under the group 'Duties & Taxes') is possible.

The default Sales Invoice screen appears as:

Tally prompts for the Sales Ledger to be allocated to - at the beginning of the entry. There after, any number of stock items or account ledgers can be selected one after another – enabling faster data entry. This is possible as the option Use Common Ledger A/c for Item Allocation in F12: Configure on the invoice entry screen is set to YES (by default)

There are two types of Invoices, namely,

Item Invoice > you can select ITEMS for invoicing

Account Invoice > you can select LEDGERS for invoicing

Contra Entry (F4)

Gateway of Tally > Accounting Vouchers > selecting F4: Contra > displays the Contra voucher entry screen. As per accounting rules, Contra Entry is a transaction indicating transfer of funds from:

1. Cash account to Bank account

2. Bank account to Cash account

3. Bank account to Bank account

Contra Entry screen appears in the Single Entry Mode by default. You are prompted to choose the account, which will receive the amount (the debit ledger).

For example, you wish to transfer of funds from Cash Account into Bank Account – you will debit the Bank Account and credit the Cash Account > the entry appears as:

The ledger selected in "Account" (Axis bank ltd) is the destination ledger – debited.

Advantages of Single Entry Mode:

1. Faster data entry!

2. Selection of Multiple Ledgers to be credited with a Single Ledger to be Debited OR Multiple Ledgers to be debited with a Single Ledger to be Credited -> depending on the nature of transaction.

Receipt Entry (F6)

Gateway of Tally > Accounting Vouchers > selecting F6, we get the Receipt voucher screen. Similar to Payment and Contra vouchers – the Single Entry Mode appears for Receipt Entry as well.

Transactions accounting for money received are entered into Tally through the receipt voucher.

For example, your company receives money from a customer for an earlier transaction. The customer account has to be credited and if cash is received – debit the cash account. If cheque is received debit the bank account where you will deposit the money received.

The entry in single-entry mode is displayed as:

First enter date of voucher ...................................29.1.2009
Then is it cash account or bank account..... select from pop up window ..............Cash
Then from whom cash / cheque is received....... select from pop up window .............Furniture Grace.
Then enter the amount................................................................... 500
Then enter narration .................Being discount amount received.

Then.............. Accept ok ..................... Enter

Your receipt voucher is saved.

On the Receipt entry screen, access F12: Configure -> activate the option "Use Payment/Receipt as Contra" – the behaviour is similar to that of Payment entry as Contra.

Important:
1. Use the buttons on the right-hand side of the screen to Explore the Potential of Tally.
2. Press [Enter] wherever the cursor is placed to know the Depth of Tally!

Payment Voucher

Gateway of Tally > Accounting Vouchers > selecting F5: Payment > displays the Payment voucher entry screen. Payment transactions can be entered using Tally's Payment Voucher.

The Payment Entry screen appears in Single Entry Mode by default (as the option "Use Single Entry mode for Pymt/Rcpt/Contra" is set to YES > in F12: Configure from Payment Voucher).

For example, the company settles expenses of conveyance, staff welfare, postage, Furnitures and stationery through cash. The entry is displayed as:

First you have to enter Date of voucher / transaction (26.1.2009)

You are prompted to choose the cash or bank ledger, which will pay the amount (the credit ledger). ( Cash)

Then whom payment to be made (Furniture Grace)

Amount ----------------------(5500.00)

Then entry in narration column particulars of payment (Being advance amount paid for supply of computer furnitures 2 sets)------.> accept( Enter)
your payment voucher is saved

Depending upon type data entry, you can select receptive screens using function buttons shown in RED (F5, F6,F8 etc)

MY WORLWIDE VISITERS as on 27.1.2009

Voucher entry

A voucher is the basic recording document. To input any data into Tally, you must use a voucher. Inputting data through the voucher entry mode may be called creating a voucher or voucher entry. You may create a voucher on-line on Tally and print it for hard copy and authentication

Vouchers/Transactions are used to enter/record a transaction in Tally.

Gateway of Tally > Accounting Vouchers

This will open the Accounting Voucher Creation screen


Tally is pre-programmed with a variety of accounting vouchers, each designed to perform a different job. The standard vouchers are:

Payment Voucher

Receipt Voucher

Contra Voucher

Sales voucher

Sales Orders

Sales Vouchers/Invoices

Delivery Notes

Rejection In

Purchase Voucher

Purchase Orders

Purchase Vouchers

Goods Receipt Notes

Rejection Out

Journal Voucher

Credit Notes

Debit Notes

Journal

Memo Voucher

Reversing Journal

Stock Journal

Physical Stock

You can alter these vouchers to suit your company, and also create new ones. For example, if you wish to distinguish between cash and bank payments you can create vouchers to do this.

The function of each voucher type explained next posts.

Create a Voucher Type

Create a new voucher type

Gateway of Tally > Accounts Info. > Voucher Type > Create





Note: a new voucher type must assume the functions of a predefined voucher type



Name
Give the name of the new voucher type, e.g., Bank Payment Voucher.

Type of Voucher
The type of voucher should be any one of the predefined voucher types (already listed in introduction). The new voucher type would inherit the properties of this predefined voucher type. It would function exactly like the predefined voucher.

Abbreviation
An abbreviation is required particularly for unformatted reports, which do not use compressing techniques. (Tally allows printing of both formatted and unformatted reports). In this example, give 'BPymt' as the abbreviation. Though there is no restriction on the length of the abbreviation, it should preferably be five characters or less.

Method of Voucher Numbering
This is, perhaps, one reason for your opting for a new voucher type. There are three methods available:

Automatic - instructs Tally to number the vouchers of this type incrementing automatically.

Manual - if you wish to number the vouchers yourself.

None - if you do not want any voucher numbers for vouchers of this type.

Advanced Usage

A further discussion on these options is necessary:

None
This will disable numbering of such vouchers. If you select this method, no further information is required.

Manual
This method will allow you to number vouchers of this type yourself. It does not check for sequence of the numbers and permits you to specify anything you wish in the voucher number field. However, you may choose to prevent entry of duplicate numbers. If you do, enable the next field 'Prevent Duplicates'.

Prevention of Duplicates is possible if you enable the option at the time of creation. You may enable it later (by alteration) only if there are no transactions of this voucher type.

If you face difficulty because transactions now exist, simply create another voucher type for preventing duplicates of subsequent voucher numbers.

No further information is required for manual numbering method.

Automatic
This method is both flexible and exhaustive. Use it carefully to give you your desired numbering system. Select this option to let Tally number the vouchers automatically for you. You must give the following additional information:

Starting number
Give the number for the first voucher. Usually it is 1. You can set it to any number you want. Tally will auto-increment from this number for subsequent vouchers. However, the numbering of vouchers also depends on other variables supplied by you, which follow hereafter.

Width of Numerical Part
You may leave it blank to let Tally automatically adjust the width according to the number. However, for more aesthetically aligned look in reports, you may keep a fixed width, e.g., 3.

Prefill with ZERO?
When the width is specified, the digits before the number is blank if 'No' and zeroes if 'Yes'.

E.g. 001 1

010 10

PEU/001/96-97

PEU/1/96-97

PEU/ 1/96-97

Use common narration?
Select Yes to give a common narration for the entire voucher. Tally vouchers can have multiple entries. Hence, you may wish to give a common narration for all the entries of the voucher or a separate narration for each entry or both. Select Yes even when you want both. Select No if you do not want a common narration.

Example of common narration in a voucher:

Select Yes if you want to give a separate narration for each entry of a voucher. This would be applicable for a multiple entry voucher where you want separate details for each entry. Select No if you do not want separate narration for each entry.

Example of separate narration for each entry: -



Print after saving voucher?
If you want to print every voucher after entering it, select Yes, else select No. This is suitable for an online environment where you use the Tally printed voucher as the formal voucher. Remember, however, that the



transaction is already recorded and posted and should you wish to make corrections to the printed voucher, you must alter the Tally voucher online and print it out again.

Use EFFECTIVE dates for vouchers?
Select Yes if you want to enter effective dates for vouchers. You would opt for this if you have instances where a transaction under consideration for overdue/ageing analysis is recorded currently but will take effect from another date. If effective date is entered, the overdue/ageing will be considered from the effective date and not from voucher date.

Restart Numbering
Voucher Numbering may be restarted with the starting number (as specified) at intervals selected by you - Monthly, Yearly or Never. You must give the date whence numbering should restart under the field Applicable from. The date must be the first day of the month. You may specify more than one Restart dates. For example, should you wish to renumber your vouchers from 01 June 96 on yearly basis, you must specify it in the next field. This would retain the numbering system in the prior period. If, however, you want to change the numbers from the beginning from monthly to yearly basis, simply alter the first field itself.

Prefix Details
If you want the voucher numbers to be prefixed with some fixed information, give the information here. Examples of prefix details are:

month of the voucher as given above- 'April/'

company info like 'TSPL/'

even fixed number series like '1000'

Note: The numeric portion begins immediately after the prefix information. Therefore, be sure to give a space or a slash '/' or some such character should you want a separation, e.g. we have specified April/. The slash would cause the voucher number to appear as April/001, otherwise it would be April001. This facilitates simple usage for fixed number series appearing as 200100001 where 2001 is the prefix, and 00001 is the starting number with a width of 5, and with leading zeros.

You can choose different prefix information for different periods or let one continue. The prefix continues from the date you mention under 'Applicable from' till the next date that you may give under 'Applicable from'. Hence, we have chosen to change the prefix from April to May when the month changes. Please note, however, that if we omit to change the prefix for the subsequent months (i.e. do not give 'Applicable from' date for the month), your voucher numbers for even June, July etc would contain the prefix 'May/'.

Suffix Details
You can also give fixed suffix information for the voucher number. The same rules and effects as for Prefix Details apply.

How to Manage and Operate Voucher Types?

Tally acknowledges the special requirements of some users for more voucher types. These arise in cases like when you need the same voucher but in different names or separate series of numbers.

Examples include Cash Payment Vouchers and Bank Payment vouchers where the relevant predefined voucher is Payment Voucher. You may have two or more sets of Sales Vouchers for different kinds of sales transactions e.g. Credit Sales, Cash Sales, etc.

You would need to alter a voucher type to change default settings for different information appearing in vouchers. Using [F12] can further configure a voucher.

Alter a predefined voucher type
Even if you do not need extra voucher types, you would normally alter the predefined voucher types to customize them according to your needs, e.g., to control their numbers.

Display or alter each voucher type (by pressing or double clicking) after Gateway of Tally > Display > List of Accounts > + [Voucher Types]

We shall create a new voucher type to explain the different features. It would also be applicable to alteration of voucher types including predefined types.

More:

Create a Voucher Type

Voucher types

Accounts Information - Voucher Types - Introduction

A voucher is the primary online document for recording transactions. Transaction recording and analysis are greatly facilitated by having specific formats for different types of transactions. Tally provides 16 different predefined voucher formats or what it calls predefined types of vouchers. These are used for recording various transactions. A payment voucher is used for all types of payments, a receipt voucher for all types of money receipts, a sales voucher for recording sales transactions, and so on.

These predefined vouchers fulfil your normal transaction needs. They pertain to both accounting and inventory. Some of these vouchers can also be used differently according to the situation, e.g., sales vouchers can be used as invoices, vouchers can be post-dated, etc. Such use can be decided at the time of voucher entry by selecting the appropriate button.

The predefined voucher types can be displayed as follows:

Gateway of Tally > Inventory info > Voucher Types > Display

Creation of stock item

Creating a Stock Item >

Gateway of Tally > Inventory Info > Stock Item > Single Create

Name

Give the name of the stock item. Here we wish to create an item DVD RW 4.5 GB sony make

Alias

This is for alternative names of stock items.

Under

Specify the group to which it belongs. The different that we had created is Computer accessories .

Use Alt+C to create a parent if you do not have the item you want in the list.

Units

Give the unit of measurement of the item here. You would normally use this unit for trading in this item. Select Nos from the popup list. Please refer to the section 'Unit of measure' for explanation of units. As usual, use [alt]+[C] to create a new unit.

Advanced Users and administrators

The unit 'Packs of 10 Pcs' is a compound unit. Tally has the concept of simple and compound units. To create a compound unit, you would first create its components as simple units and then give their relation. In this case, 'Nos' and packs were created as simple units. Then a compound unit 'Packs of 10 Nos' was created separately. While creating a compound unit, if the cursor goes straight to the field 'Symbol' and you find the field 'Type' stating 'Simple', backspace to the 'Type' field to select 'Compound'.

Rate of VAT (Sales Tax/ Duty) (e.g. 12.5 or 4)

Give the rate of tax applicable for the item. The rate specified here would be picked up when invoicing, if you selected the method of calculation as Tax Based on Item Rate for your relevant accounting ledger account. Typically, this accounting ledger account would be 'VAT Account' under the Group Duties & Taxes. In such cases, the VAT or duty in invoice entry will be automatically calculated.

Opening Balance

If you already have stock of this item at the time of creating its account in Tally, give its balance particulars, i.e., quantity, rate, unit and amount.

Stock group And Stock Item creation

To create new stock group go to Gate way of tally ----> Invetry info ----> stock group ---> create
you will see above screen,
Enter stock group name
Can be quantities of items added give YES
Then Accept

Your stock group created.

Now we will create Unit of measure
To create new Unit of Measure go to Gate way of tally ----> Invetry info ---->units ----> create
you will see below screen,

Ledgers under which group?

It is very important while creating ledgers where ledgers to be placed under which group, The following are the common ledgers under the specified groups

1 Sales accounts group Sale @ 4% vat, Sale @ 12.5 %, sale @ 1% etc
2 Purchase accounts group purchase @ 4% vat, sale @12.5%, Sale @ 1% etc
3 Duties & tax account group Input tax @ 4%, output tax @4%, Input/ouput tax @12.5%
4 Sundry debtors group All clients accounts like Abc industries, Industrial traders etc.
5 Sundry creditors group All supplier accounts like Xyz tools, Abc Enterprises Etc.
6 Expenses group Telephone, Petrol, Rent, transport Etc.
7 Bank accounts group SBI, ICICI Bank, Axis Bank, City bank Etc.

If you opted for Tally for accounts only than it is ok, If you opted for Tally Accounts & Inventry than you have create
1 Stock group
2 stock categories
3 Stock items
4 Unit of measure
and modify voucher type as per your requirements.

Opening Balance

(As on date of beginning of books)

If yours is an existing company whose books you are putting onto Tally, this would be applicable in the following circumstances:

If 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. Of course, 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 would suffice.

Tip to speed up data entry: You may use Ctrl key +A at the field following which the information in other fields do not need to be changed.

Creation of a Ledger Account

The information required for creation of ledgers depends on the features opted by you. If the setting of the Accounting Features [F:11] of your company is No for all options, your ledger creation screen would need minimal information.

It should be noted that Tally automatically creates two ledger accounts, viz., Cash (under Cash-in-hand) and Profit & Loss Account (direct Primary account). It does not make any other presumptions. You must create all other account

heads. There are no restrictions in ledger creation except that you cannot create another Profit & Loss A/c (actually an account that behaves like one). You may create any number of Cash accounts (by another name like "Petty Cash" ).

You will, now, be guided to create a ledger account with minimal information. For discussions on additional features, please refer to 'Advanced Usage'.

Gateway of Tally > Accounts Info. > Ledgers > Single Create



Name
Feel free to give the full name of the account. Tally fits it all in. Press to move to the next field. Tally does not allow duplicate names. The uniqueness check is made here itself instead of after you have entered all other information.

You will find 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 identical.

You will now actually experience the small conveniences, which you would soon take for granted. You notice that Tally converts the first letter of all relevant words to upper case which helps you speed up your data entry. You need not bother about changing the case every time it is a different word.

Group
All accounts must be classified in their appropriate groups. (You should go through the post on Groups now if you not already done so). You must specify which group the ledger falls under.

Note: You may always create a new group by pressing +.

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, of course, alter a ledger account to change its group classification at any time.

Note: alter a ledger or a group from any display by +.
If your group is sundry creditors/debitors than tally ask whether Maintain balance bill by bill, If it yes than it ask credit period in day, enter the details.
Enter the relevent details like address, state, pincode, phone/fax no, income tax no, sales tax / tin no, contact person etc.
then it ask accept yes or no, If you give yes ledger account is saved else it go for editing the details.

Video Class

Common and Possible Errors in Grouping and Account Classification

Debtor/Creditor classification
Placing individual party accounts under Sales or Purchase Accounts groups
Accounts of parties with whom your company has trade relationship must be opened under any of the following groups (or sub-groups under them) only:

Sundry Debtors

Sundry Creditors

Branch/Divisions

Sales and Purchase account groups are meant for revenue accounts and would be reflected in the Profit &Loss Account. If you open party accounts under these groups, you will find it difficult to pass sales or purchase voucher transactions. For example, in a sales voucher transaction entry, you must debit an account which is a sundry debtor, branch/division or even a sundry creditor (why a creditor? - it will be explained soon). Moreover, other facilities like bill-wise allocation and tracking would not become available unless the accounts belong to one of these groups.

Opening two accounts of the same party
Tally has separately classified debtors, creditors and branch/divisions only for convenience. There is no operational distinction except for the purpose of keeping the accounts of a particular group together during displays and analysis. Thus you can pass both sales and purchase entries for a party account placed under Sundry Debtors.

We recommend that you use the classification depending on the most natural group for the party. For example, parties from whom you buy more frequently then you sell to, could be placed under Sundry Creditors, as that would be the natural place for you to look for his account. Tally does not restrict the accounts from having obverse balances. Thus, a Sundry Debtor can have a credit balance depending on the state of his account.

You would, therefore, note that you need not open two accounts of the same party - one under Sundry Debtors and another under Sundry Creditors. Remember, Tally restricts you from opening two identical ledger accounts. Of course, you may decide to circumvent by marking one account as "A & Co - S/Dr" and another "A & Co - S/Cr". Doing this would allow you to have two accounts of the same party under two groups, but you would lose the advantage of analysing his net position in one place. We recommend that you maintain a single account to obtain best benefits.

Placing expenditure items under a Liabilities group, e.g., the expenditure item 'Rates & Taxes' under the group 'Duties and Taxes'.

The group Duties and Taxes is specifically meant to handle taxation liabilities of your company. Rates & Taxes and other statutory expenses should be placed under Indirect Expenses.

Simply adhering to the reserved groups may be sufficient for many organisations. For greater diversity, Tally allows you to create your own groups, either as sub-groups or primary groups. Groups can be sub-classified to practically an unlimited level, to give a virtual accounting tree. At the lowest level, of course, would be the ledger account. An example of sub-groups would help illustrate the power of this facility:

The group Indirect Expenses can be sub-classified as under (ledgers given in italics):



Remember, that during voucher entry, only the ledger accounts are used, - and the grouping structure remains transparent, irrespective of the use of sub-classification.

This idea can be easily extended to other areas like Sundry Debtors, Sales Accounts, Purchase Accounts, etc. For example, Debtors and Creditors are very useful when sub-grouped according to geographical areas:



You may prefer to classify creditors according to their tax status, e.g.,



You can see that unlimited levels of sub-grouping is a convenience to be used thoughtfully. Use it to give a never before depth to your presentation of accounting information but take care to not carry it too far. Too many levels of sub-groups may make their use redundant and their management unwieldy. A simple guideline could be to create branches of sub-groups or ledgers only if they are two or more than in number. A situation where you have created groups as follows should be avoided:



Obviously, you could have done with simply creating ledgers directly under Marketing Expenses.

Note: While it is necessary to assign every ledger to a group/sub-group, it is not essential to have your own sub-classification of accounts; you may simply use the reserved groups for grouping your ledger accounts.

A Discussion on Each of the Reserved Groups

1. Capital Account
This holds the Capital and Reserves of the company. Examples of ledgers that may be opened under this group are Share Capital, Partners' Capital A/c, Proprietor's Capital Account.

Reserves and Surplus [Retained Earnings]
Open ledgers like Capital Reserve, General Reserve, Reserve for Depreciation, etc.

2. Current Assets
Directly under Current Assets, you may find place for assets that do not fall under the following sub-groups:

Bank Accounts
For Current, savings, short term deposit accounts, etc.

Cash-in hand
Tally automatically opens one Cash A/c under this group. You are permitted to open more cash accounts, if necessary.

Note: An account under Cash-in-hand group or Bank Accounts/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)
In essence, a place for Fixed Deposits, Security Deposits, or any deposit made by the company (not received by the company, which is a liability).

Loans & Advances (Asset)
For all loans given by the company and advances of a non-trading nature, e.g., advance against salaries, or even for purchase of Fixed Assets. We do not recommend you to open Advances to Suppliers account under this group. Doing so gives rise to the difficulty in ascertaining advance position of a particular supplier and to adjust future bills against such advances. For further details, please refer to the section on Common Errors.

Stock-in-hand
This is a special group. You may wish to open accounts like Raw Materials, Work-in-Progress and Finished Goods. How the balances are controlled depends on whether you opted to maintain an integrated account-cum-inventory system in the company features. (refer to Company creation section for more details) Let's consider the options:

Integrated Accounts-cum-Inventory
You are allowed transactions in Inventory records and the account balances are automatically reflected in the Balance Sheet as Closing Stock. You are not allowed to directly change the closing balance of an account under this group.

Non-integrated Accounts-cum-Inventory
Accounts that fall under this group are not permitted any transactions. It allows you to hold opening and closing balances 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)

Sundry Debtors
For your customer accounts. Do not open them under the Sales Account group, which is a revenue account. For more information on common and possible errors in grouping of accounts, please refer below to the separate paragraph on the topic.

3. Current Liabilities
You may open accounts like Outstanding Liabilities, Statutory Liabilities and other minor liabilities directly under this group. Sub-groups under Current Liabilities are Duties and Taxes, Provisions and Sundry Creditors

Duties and Taxes
For all tax accounts like VAT, MODVAT, Excise, Sales and other trade taxes. A convenient place to find the total liability (or asset in case of advances paid), as well as the break-up of individual items.

Provisions
For provision accounts like Provision for Taxation, Provision for Depreciation, etc.

Sundry Creditors
For trade creditors of the company. Do not open your supplier accounts under the Purchases Account group, which is a revenue account. For more information on common and possible errors in grouping of accounts, please refer below to the separate paragraph on the topic.

4. Investments
To group your investment accounts like Investment in Shares, Bonds, Govt. securities, long term Bank deposit accounts, etc. A convenient place to view the total investments made by the company.

5. Loans (Liability)
For loans, typically long term, taken by the company.

Bank OD Accounts [Bank OCC Accounts]
Tally gives two distinct types of Bank Accounts, The Bank OCC A/c is meant to record the company's overdraft accounts with banks. e.g., Bill Discounted A/cs, 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
For term loans and other long/medium term loans that have been obtained against security of some asset. Tally does not verify the existence of the security. Typical accounts would be Debentures, Term Loans, etc.

Unsecured Loans
For loans obtained without any security .e.g., Loans from Directors/partners or outside parties.

6. Suspense Account
Theoretically speaking, this group should not exist. However, in modern accounting, many large corporations use a Suspense Ledger to track moneys paid or recovered, the nature of which is not yet known. The most common example is money paid for Travelling Advance whose details would be known only upon submission of the TA bill. Some companies may prefer to open such accounts under

Loans and Advances (Asset) group.
Please note that Suspense Account is a Balance Sheet item. Any expense account even if it has 'suspense' in its name, should be opened under a Revenue group like Indirect Expenses and not under Suspense Account group.

7. Miscellaneous Expenses (Asset)
This group is typically used more for legal disclosure requirements, like Schedule VI of the Indian Companies Act. It should hold incorporation and pre-operative expenses. Companies would write off a permissible portion of the account every year. A balance would remain to the extent not written off in Profit & Loss Account. Tally does not, however, show a loss, carried forward in the Profit & Loss Account, under this group. The Profit & Loss Account balance is shown separately in the Balance Sheet.

8. Branch/Divisions
This group is provided to keep the ledger accounts of all companies that are your company's branches, divisions, affiliates, sister concerns, subsidiaries, etc. This is a group of convenience. You may not wish to utilise it in this manner. Note that Tally permits Sales and Purchase transactions to take place with accounts opened here. Remember, these are their accounts in your books and not their books of accounts. Just treat them as you would any party account. If you wish to maintain the books of that branch/division on you computer, you must open a separate company. (Tally allows maintenance of multiple company accounts).

Revenue Primary Groups
9. Sales Account
For different sales accounts. The natural segregation of your sales accounts could be based on Tax slabs or type of sales. This also becomes a simple mechanism for preparation of Tax returns.

An example of such classification may be helpful:

Classify under Sales Accounts the following sub-groups

Domestic Sales

Export Sales

Now under Domestic Sales open the following ledgers:

Sales (10%)

Sales (5%)

Sales (exempt)

You may even open an account 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).

Please do not open customer accounts under this group. For more details on possible errors in this regard, please refer to the paragraph given below.

10. Purchase Account
This is similar to sales accounts, except for the purpose of the transaction.

11. Direct Income [Income Direct]
For non-trade income accounts that affect Gross Profit. All trade income accounts would naturally fall under Sales Accounts. You may wish to use this group for accounts like Servicing Contract Charges that follow sales of equipment.

If yours is a professional services company, you may not use the Sales Account group at all. Instead, open accounts like Professional Fees under this group.

12. Indirect Income [Income Indirect]
For miscellaneous non-sale income accounts, e.g., Rent Received and Interest Received.

13. Direct Expenses [Expenses Direct]
For manufacturing or direct trading expenses. These accounts determine the Gross Profit of the company.

14. Indirect Expenses [Expenses Indirect]
For all other administrative, selling or non-direct expenses.

Tally automatically opens the Profit & Loss Account which is a reserved primary account. You may use this account to pass adjustment entries through journal vouchers .e.g., transfer of profit or loss to Capital or Reserve account.

Classification of Account-heads

Tally follows the 'Single Ledger' concept of accounting, which is the modern way of managing accounts. This is in direct contrast to Subsidiary Ledger Accounting. Thus, all financial entries are performed using ledgers or account heads. Ledger account heads are created to identify transactions.

The single ledger concept does away with the need for sub-ledgers and corresponding control accounts in General Ledger. Ledger balances by themselves do not convey much without some form of classification. Tally, therefore, gives you a powerful way to group ledger information, which is meaningful in reports and compliant with laws. Groups, in Tally, serve to both classify and identify account heads according to their nature and enable presentation of summarised information.

Traditionally, grouping of accounts is a post-accounting activity that is done only when reports are needed. This has an inherent drawback of delayed reports that are not available at hand when required. Tally gives you great flexibility in setting up your chart of accounts.

It allows you to group your ledger accounts right at time of creating your accounts chart. Your reports and statements will reflect the desired classification at all times. Further, Tally permits you to re-group your ledgers anytime (with some minimal restrictions), should re-classification be necessary. We acknowledge that re-grouping is always possible and would, in practice, be resorted to, when there are changes in the nature of information. However, re-grouping can be done only by a user account that has requisite authority under the access control list.

At the highest level of grouping, accounts are classified into capital or revenue - more 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 sub-groups.

The concept of sub-groups
Groups have a hierarchical organisation. At the top of the hierarchy are Primary Groups. These are the main asset, liability, income or expenditure groups of accounts that determine the entire accounting and their presentation, i.e., whether a ledger affects Profit & Loss Account (as a revenue item) or goes into the Balance Sheet. The Reserved Primary Groups and subgroups (shown indented) are:

Aliases for the groups are given in square brackets [ ].

1)Primary Groups of capital nature
Capital Account

a)Reserves and Surplus [Retained Earnings]

2) Current Assets

a)Bank Accounts

b)Cash-in hand

c)Deposits (Asset)

d)Loans & Advances (Asset)

e)Stock-in-hand

f)Sundry Debtors

3) Current Liabilities

a) Duties and Taxes

b) Provisions

c) Sundry Creditors

d) Fixed Assets

4) Investments

5) Loans (Liability)

a) Bank OD Accounts [Bank OCC Accounts]

b) Secured Loans

c) Unsecured Loans

6) Suspense Account

7) Miscellaneous Expenses (Asset)

8) Branch/Divisions

9) Sales Account

10)Purchase Account

11)Direct Income [Income Direct]

12)Indirect Income [Income Indirect]

13)Direct Expenses [Expenses Direct]

14)Indirect Expenses [Expenses Indirect]