What are Groups in Tally ERP 9

The group is a collection of leaders of the same natures. Tally software automatically creates 28 groups that are used
in the account chart. Out of 28 predefined groups in tally, primary groups are 15, and the sub-groups are 13. The
different types of groups are as follows:

1. Primary Group
2. Sub Group

Primary Groups
This group is the main group. Primary groups are at the top of the hierarchy. Among 15 groups, 6 groups are profit and
loss a/c items, and 9 groups are balance sheets items.

List of Primary Group in Tally

1. Branch/Division 6. Current Assets 11. Indirect Income

2. Capital Accounts 7. Fixed Assets 12. Misc. Expenses

3. Loans 8. Investments 13. Purchase Accounts

4. Suspense Account 9. Sales Accounts 14. Direct Income

5. Current Liabilities 10. Indirect Expenses 15. Direct Expenses

2. Sub Groups
This group is part of the primary group. It can be divided into 13 groups.

List of Sub Group in Tally

1. Sundry Creditors 6. Secured Loans 11. Bank Accounts

2. Stock in Hand 7. Deposits 12. Cash in Hand

3. Duties & Taxes 8. Banks OD Accounts 13. Loan & Advances (Assets)

4. Unsecured Loans 9. Provisions

5. Reserves & Surplus 10. Sundry Debtors

Tally follows the single leader concept of accounting, and this leads to direct contrast to subsidiary leader accounting.
Using the ledgers or account heads, all the financial entries can be performed. According to the requirement of the
company, we can group all ledgers and financial statements.
How to Create Groups in
Tally
In Tally ERP 9, maintain the
following Sundry Debtors Ledgers
Accounts:

Step 1: In this step, go to the Gateway

of Tally and then click on Accounts
Info.

Step 2: Choose the option Groups under Accounts Info.

Step 3: In Tally ERP 9, choose the option Create under Single

Group Menu to create a single group.

Step 4: Update the following details on the Group creation screen:

Name: Specify the name of the group and then press enter to
continue.
Under: Under List of Groups, choose the group name
as Sundry debtors.

After entering the required details, press Ctrl+A:

Accept or press enter to save the details.

Tally is used to create any number of groups under all default groups.

Display Group in Tally

In Tally ERP 9, after creating the group,
we can display all the created groups in
detail. However, users are not allowed to
edit/alter the data in display mode.

Step 1: Use the following path to display

groups in Tally

Gateway of Tally → Accounts Info →

Groups

Step 2: Under Single Group, click on the

option display to display groups in Tally.
Step 3: Choose the required group name under List of Groups name and then click on that particular group to display
on the screen as follows:

Step 4: Now the ledger (Bangalore Debtors) display on the screen as:

Step 5: To close the screen, click on Q: Quit.

How to Alter Group in Tally ERP 9

In Tally ERP 9 application, after
creating the group, we can alter the
details as per the requirements. Refer
the following steps to modify/alter
group in Tally:

Step 1: Use the following path to alter

groups in Tally
Gateway of Tally → Accounts Info
→Groups

Step 2: Click on Alter option

under Single Group.
Step 3: From the given search field, we can search the group and then click on that group name to modify the details.

Step 4: Update the required details on the Group Alteration screen and then click on A: Accept to save the details.

Ledger
An account represents a detailed record of changes that have occurred in a
particular asset, liability, expense, loss, gain or capital during the accounting
period. All these separate accounts are kept in a loose leaf binder, and the entire
group of accounts is called a ledger.
Tally automatically creates two ledger accounts, i.e., Profit & Loss account and
Cash in Hand account. As per the requirements of the organization, we can
create the ledger accounts. In Tally, we cannot create another profit & loss
account. We can create any number of cash accounts with different names.
Utility of a Ledger
 The ledger is a master record of all the accounts of a business unit
 It is a principal book of double entry system of accounting which
provides all important information
 Separate accounts are maintained based on their nature, so all
information relating to transactions may be obtained through ledgers,
such as to whom what is payable, from whom what is receivable, what
is the position of assets and liabilities of the business
 Ledger helps us preparing the trial balance to ensure the arithmetical accuracy of the account
 Moreover, ledger assists us in preparing trading, profit and loss account and Balance sheet

How to Create Ledger Account in Tally

 Step 1: Use the following path to create ledger accounts in Tally

 Gateway of Tally → Accounts Info → Ledgers → Single Ledger → Choose Create
 Step 2: Click on Accounts Info under Gateway of Tally screen.

 Step 3: Choose Ledger option under
Account Info.

 Step 4: Under Single Ledger, choose the

option Create
 Step 5: Update the following details on
Ledger creation screen.
 Name: Specify the unique name of the ledger
account.
 Under: Under List of Groups, choose the
group name that pertains to the ledger
account.

 In Tally, choose the "Yes" option under
Accept to save the configured details.

How to Display Single Ledger in Tally

 In Tally, after the creation of a single ledger account, we can view the details of the
ledger by choosing the display option.
 Refer the following steps to show how to display single ledger:
 Step 1: Use the following path to display the single ledger in Tally
 Gateway of Tally → Accounts Info → Ledgers → Single Ledger → Choose Display
 Step 2: Under List of Ledgers, choose the ledger account.

 Step 3: Now, the following screen shows the complete details of ledger accounts.
 How to Alter Single
ledger in Tally

 Step 1: Use the following

path to alter the single
ledger in Tally
 Gateway of Tally →
Accounts Info → Ledgers
→ Single Ledger →
Choose Alter

 Step 2: Under the List of

Ledgers, choose the ledger
account option.

In Tally ERP 9, now

modify/ alter the
required details for
ledger account. To save
the changed details,
click on A: Accept.
 Voucher
A voucher is a document that contains details of a financial transaction and is required for recording the same into the
books of accounts. For every transaction, you can use the appropriate Tally voucher to enter the details into the ledgers
and update the financial position of the company.
Voucher in Tally is a document having all the details of a financial transaction and is required for recording them in the
books of accounts. They can be easily created and modified. You can find types of Tally vouchers option in ‘Gateway
of Tally’ under ‘Transactions’. There are few predefined vouchers in tally and can be viewed as Gateway of Tally >
Display > List of accounts > Ctrl V [Voucher types]. The following screen will appear in the tally vouchers list:

Types of vouchers in Tally

There are broadly two voucher types in tally. They are accounting vouchers and inventory vouchers.
Accounting vouchers in Tally can be further classified as under.

1. Sales Voucher
2. Purchase Voucher
3. Payment Voucher
4. Receipt Voucher
5. Contra Voucher
6. Journal Voucher
7. Credit Note Voucher
8. Debit Note Voucher

Inventory vouchers in Tally can be further classified as under.

1. Physical Stock Verification

2. Material In and Material Out Voucher
3. Delivery Note
4. Receipt Note

Sales Voucher in Tally

Whenever you sell a product or service,

you record sales entries. In tally, the
sales are recorded through the sales
voucher. It is one of the most widely
used accounting vouchers in tally.
There are two modes for accounting in
sales vouchers- Invoice mode and
Voucher mode. You can use either of
them. You can print the copy of your
invoice to the party in Invoice mode. In
Voucher mode, you can record the
transaction for statutory purposes
where you don’t need to print the
invoice document.

Example of Sales Voucher in Invoice

Mode:
Example of Sales Voucher in Voucher Mode:

2. Purchase Vouchers in Tally

Whenever you purchase a product or service, you record the purchase entry. In tally, this is recorded through the
purchase voucher. It is also one of the most widely used vouchers in tally. There are two modes for accounting in
purchase vouchers- Invoice mode and Voucher mode, as mentioned in the sales voucher. You can use either as you see
fit. You can print the copy of your invoice to the party in Invoice mode. Whereas in Voucher mode, you can record the
transaction for statutory purposes, and you don’t need to print the invoice document. You can also change the mode of
transaction like in the sales voucher in Tally.

Example of Purchase Voucher in Invoice Mode:

Example of Purchase Voucher in Voucher Mode:

3. Payment Voucher in tally

All the functions of a payment transaction are available in Tally. You can have all the necessary details like instrument
number, Bank name, balance available, etc. After passing the entry in the payment voucher, you can also print the
cheque. You can look at the list of cheques that need to be printed by going to Banking and clicking on Cheque Printing.
Tally.ERP 9 supports around 500 banks from both India and foreign countries. After the payment is made, you can
generate and share the payment receipt with your supplier and keep them updated regarding payments.
4. Receipt Voucher in Tally

When you receive payment, you can record that transaction in the receipt voucher. You will even get a prompt for the
pending payments from your customers. You can record transactions when you receive the payment and select the
correct mode to receive the payment- cash, cheque or other modes- and mention the relevant instrument number. With
receipt vouchers, now you can maintain transparency of your sales with your clients effectively.

5. Contra Voucher in Tally

Contra Voucher is used when either side of the entry has cash, bank or multiple banks involved. Generally, any cash
deposit, withdrawal, transfer amongst different accounts are recorded in a contra voucher. You can also generate a cash
deposit slip and mention the denominations of the currency involved in such a transaction.
6. Journal voucher in Tally

This voucher can be used for multiple reasons. Some use it for sales, purchases, depreciation; any adjustment entry can
also be done using this voucher in Tally. This voucher is available in both accounting and inventory vouchers in Tally.
In inventory mode, the entry relating to the movement of goods can be passed.

7. Credit Note Voucher in Tally

Credit Note entry is passed when there is a sales return transaction. This voucher usually remains deactivated by default.
You can activate it by pressing F11 and configuring features in invoicing. You can refer to the original sales invoice
against which this entry is passed to keep track of such transactions. When a party is selected, you will come across the
list of invoices against which this credit note voucher is used. Credit notes can also be used either in invoice mode or
as voucher mode as could be used in Sales Voucher.
To Activate the Credit Note and Debit Note feature, you can select F11 and activate the credit and debit note feature as
under:
8. Debit Note Voucher in Tally

Debit Note entry is passed when there is a purchase return transaction. This voucher is deactivated by default. You can
activate it by pressing F11 and configuring its features. You can refer to the original purchase invoice against which
this entry is passed for maintaining track of such transactions. When a party is selected, you will come across the list
of invoices against which this Debit note voucher is used. Debit notes can also be used either in invoice mode or voucher
mode as utilised in Purchase Voucher.

Inventory vouchers in Tally ERP 9

1. Physical Stock Verification Voucher in Tally

This voucher maintains the list of inventories in a company. Generally, businesses count physical stock verification
periodically and keep a record of the same through this voucher. This helps to keep inventory control in check. You
can mention the name, quantity, rates, godown, batch/ lot no, manufacturing date, expiry date, etc. You can easily find
which godown has how many goods and of what value. This can help in management decision making and maintain
the numbers in the physical inventory and accounting books.

2. Material In and Material Out Voucher

This voucher is widely used for those businesses where workers are involved. It helps to keep track of inventory sent
and received from a worker. You can activate this voucher by pressing F11 and configuring features. You can mention
details like the item's name, rate, and quantity for better records maintenance. You can monitor the periodicity for
which the goods have been with the job worker and when they were received. This is necessary for GST compliance
as well.

3. Delivery Note Voucher

This voucher is used to record the delivery of goods. It is also referred to as Delivery Challan. It also has additional
features wherein you can enter the vehicle number, dispatch document number, bill of lading, and other details.

4. Receipt Note Voucher

This voucher is used to record the receipt of goods from the suppliers. It also has additional features wherein you can
enter the vehicle number, dispatch document number, bill of lading, and other details.

Order vouchers in tally

Apart from Tally accounting voucher and Tally inventory vouchers, tally also provides order vouchers. They are
purchase orders and sales order vouchers. They help in managing the whole transaction cycle of an order. You can even
record post-dated sales and purchase order vouchers.
Bill wise Accounting
Generally, accountants use tally to manage their business and compliances, but tally is not only for this. Tally is a broad
software which helps you to manage and reconcile each entry and each statement like bank reconciliation, sundry
creditors, sundry debtors.
Cost Centre and Cost Categories
A cost centre is nothing but a separate department within a business to which costs can be allocated. This also includes
departments which do not produce directly but incur costs to the business. For example, the manager and employees of
the cost centre are not accountable for the profitability and investment decisions of the business but they are responsible
for some of its costs.
Major categories of cost centre
There are two main types of cost centres

 Cost centres related to production - where the products are manufactured or processed. Example of this is an
assembly area.
 Cost centres related to provision of services - where services are provided to other cost centres. A simplest
example for our understanding could be personnel department or the canteen.

To enable cost centre and cost category in Tally.ERP 9

It’s a three step process which can be tabularized as under :

Step 1 Go to Gateway of Tally > F - 11: Features > F - 1:

Accounting Features
Step 2 Set ‘Maintain Cost Centers to ‘Yes’

Step 3 Set ‘More than ONE Payroll/ Cost Category’ to ‘Yes’

Bank reconciliation statement?
Bank Reconciliation Statement is an explanation of the difference between bank balance as per cash book and bank
balance as per Passbook (Bank statement). Sometimes, the bank balance as per cash book and pass book do not tally
with each other, then we can know the difference between them by preparing the bank reconciliation statement.

The process of checking the differences between a bank column of the cash book and the bank statement or passbook
is called Bank reconciliation process in accounting terms. The person preparing BRS Statement has to check all the
transaction recorded in the cash book with transactions recorded in passbook by the bank.
Interest with Tally.ERP 9
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. With Tally.ERP 9 you can obtain
reports on interest calculated based on the configurations made. Interest is calculated on outstanding receivables or
payables.

Enable interest calculation

1. Click F11 > F1(Accounting Features) .
2. Set the option Activate interest calculation to Yes .
3. Press Ctrl+A to save the Company Operations Alteration .
Calculate interest in simple mode
Interest calculation on outstanding balances is allowed for any ledger account. Configure the interest rate and style
of calculation in the ledger master to start calculating interest on outstanding amounts. Interest on outstanding
balances can also be calculated transaction-by-transaction .
1. Go to Gateway of Tally > Accounts Info. > Ledgers > Alter (Single) > XY Bank (bank account)
2. Set Activate interest calculation? to Yes . The Interest Parameters screen appears.
3. In the Calculate Interest Based On? field select the Date Type , as required.
4. Set Include transaction date for interest calculation . This can be enabled For Amounts added and/ or For
Amounts Deducted .
5. Enter the Rate of interest.
6. Select the Interest Style , as required. The rate of interest will be calculated on the basis of the interest style
applied.
Note: If the interest style selected is 365-day Year , then the interest will be calculated for 365 days irrespective of
the number of days in the calendar year. If Calendar Year is selected as the interest style, then the rate of
interest will be calculated on 365 days or 366 days, depending on the number of days as per the calendar.
7. Select required details in other fields of Ledger Creation screen.
8. Press Ctrl+A to save.
Calculate interest transaction-by-transaction
Interest calculation can be done bill-by-bill for accounts grouped under Sundry Debtors and Sundry Creditors .
1. In the party ledger alteration screen, set Activate interest calculation? to Yes . The Interest
Parameters screen appears.
2. Set Calculate Interest Transaction-by-transaction? to Yes .
3. Set Override Parameters for each Transaction? to Yes to change the parameters during voucher or invoice
entry.
4. Enter the rate of interest in the field Rate .
5. Select the Interest Style , as required. The rate of interest will be calculated on the basis of the interest style
applied.
Calculate interest in advanced mode
The advanced parameters are used when interest rates change periodically. Number of days, balance type, and
applicable from date to be considered for interest calculation can be configured using advanced parameters.
Enable advanced parameters
1. Go to Gateway of Tally > F11: Features > Accounting Features
2. Set Activate interest calculation? to Yes .
3. Set Use advanced parameters? to Yes .
4. Press Ctrl+A to accept the changes.
Set advanced configuration for a party
1. In the party ledger master set Calculate Interest Transaction-by-Transaction? to Yes to calculate interest for
each transaction.
2. Set Override Parameters for each Transaction? to Yes t o display the Interest Parameters screen while
recording the transaction. The defined parameters can be modified during voucher entry.
3. Set Override advanced parameters? to Yes.
4. Enter the Rate of interest.
5. Select the Interest Style , as required. The rate of interest will be calculated on the basis of the interest style
applied.
6. Select the balance on which the interest has to be calculated. Interest can be calculated on credit balance, debit
balance or both credit and debit balances.
7. Select the Applicability of the interest as required. If Past Due Date is selected, then the number of days after
which interest has to be applied can be specified.
8. Select the date from which interest is applicable in the Calculate From field.
9. Select the rounding method applicable in the Rounding field. Select Not Applicable for saving values as is
without rounding off.
10. Define multiple slabs with different rates and applicability.
The Interest Parameters screen with multiple slabs appears as shown below:

11. Press Ctrl+A to accept the configuration.

12. Press Ctrl+A to save the ledger.