Financial Accounts System Overview

Multiple Company of same Name in Tally Accounting System: Multiple Companies of same Name may be created in Tally. If Data are kept in same data Directory, the Company numbers would be different. Two Compnaies with same name cannot be selected simultaneously.

Opening Balance Figures in Master Record in Tally Accounting System : Tally recommends to enter Opening Balance (e.g. Ledger Opening Balance, Stock Item Opening Balance etc) in Master record itself. However, organisation may prefer to enter Opening balance as first Journal Entry, instead of entering in respective Master record. That is how the Classical Accounting text books teach us (but not taught by Tally). The Master record would then be independent of Financial Year. Creation of First Year Masters or Moving to next Financial Year would be easier.

Closing Stock Value entry in Tally Accounting System: Contrary to the normal Book keeping system, Closing Stock Value is not entered as Journal entry in Tally, but kept out of the books as a memo figure in the fly, in Ledger Account Master. So, Closing Stock value may be altered at any point of time, without any change in Books of Accounts. The Financial Statements like P L Account and Balance Sheet are created by carrying the figure f Opening Balance in from the fly (not from Voucher data). This allows to change Stock Value at any stage, in desired way. The Closing Stock figure does not appear in Trial Balance, as it created as memo figure on the fly, in Tally Accounts.

Payment Request and QR Code in Tally Accounting System : The new Payment request feature enables the organisation to generate  and share QR Code links of receivables, with the Debtor, for quick settlement through UPI Gateway.

• Create Payment Gateway Merchant Profile : The organisation should register with the Payment Gateway of the preferred Payment Gateway / UPI service provider, create Merchant Profile and set up relevant details in Tally Prime.
• Generate & Share Payment Link : Now record and save  transactions in Tally prime as usual. The Payment links and QR Code would be auto generated, and shared with Customer.  No need to add Recipient in your Bank System. To make payment, customer would scan the QR Code, or click the

Payment link may be generated at any point of time, for a specific transaction, or multiple selected Transaction or for all transactions in report (like an outstanding report or reminder letter), for full or partial Payment, as desired. Such Voucher, Report with QR Code may be printed and sent to customer, or shared over email.   The Payment Code may be generated from anywhere (from Exchange Menu).   The Payment link QR/Code may be tracked (using Basis of Value option). These may also be reconciled, Using the Payment Reconciliation statement, generated by Tally, to match the Bills and Payments, make payment settlement of a bunch of transactions and Refunds, where applicable.   The Generated Payment link / QR Code saved in the transaction may be viewed.   The Payment system is secured with Payment Gateway prominent providers (like Razorpay, PayU etc), for complete security of Payments.  

Bank OD/ OCC Account in Tally Accounting System : Bank Cash Credit / Overdraft accounts allows to withdraw money to sanctioned limit.  These accounts are normally used as normally Bank Accounts for Banking Transactions. Tally places such Accounts under Bank Accounts, though such accounts are secured Loan Accounts.

Cheque Printing from Tally Accounting System : Cheques may be written manually and then recorded in Voucher. Alternately, Cheques may be printed in Banks’ Cheque stationery, from recorded entries in Voucher. To print cheques from Tally, the Bank’s Cheque Format must be set up. For convenience, Tally provides Cheque Format for most of the Common Banks. You may even create customised format as per Bank’s Cheque Stationery. Organisations requiring to print large number of cheques every day, may prefer Cheque Printing in Tally. Cheque printing involves complex additional process like setting up stationery in printer, proper printing, Paper jam while printing, damaged cheques etc. In such case, the Cheque numbers are to be properly entered / edited in voucher. Organisation may need a dedicated printer for Cheque printing, to avoid stationery change. With gradual growth of digital payments, Cheque Printing are reduced.

Bank Reconciliation in Tally Accounting System :  Th Bank transactions in your books would also be reflected in the respective Customer Ledger Account in Books maintained by Bank. So, the Balance in Customer Ledger in Banker’s Books (called Pass Book) and the Balance  in Bank Books of the Bank Account Holder, would match. But often, the Balance differs due to time lag in time in entry of Books, missing entries in Books of Customer and other reasons. Through Bank Reconciliation, such missing / mismatch entries are traced and to prepare Bank Reconciliation statement, to ensure that the Bank Accounts in the Books of Accounts are correct and also in conformity with the customers Account maintained by the Bank

• Manual Bank Reconciliation in Tally Accounting System : In Manual Bank Reconciliation system, the entries in Bank statement received from Banker is matched with the corresponding entries in bank Book and date of entry in Bank Book to mark the Matched entries. The Unmatched entries of Bank Statement (Called Bank Pass Book) are traced. In the same way, entries in Bank Book not reflected in Bank Pass Book are traced. These sets of entries are then compiled to compile Bank Reconciliation statement.
• Automatic Bank Reconciliation in Tally Accounting System: In Automatic Bank Reconciliation, the Bank entries from Bankers system get imported in Tally Bank Reconciliation system, for Net Banking Account, through proper authentication. Entries of same amount and reference number (like Cheque Number) in imported Bank records and Bank book are auto matched (instead of manual matching). Entries having common reference and amount would only be matched. Otherwise Auto reconciliation would leave them, if the entries are in reality matchable. Such entries are to me manually matched as explained. Hover, the matching work load may get reduced.

Open Accounts Adjustment  in Tally Accounting System: When money is received from Debtor, or  money paid to Creditor against Open Bills, the Bill reference details are recorded and the Open Account is adjusted. Sometimes, ‘On Account Payment’ or ‘Advance Payment’, without any reference of specific Bills are recorded. Later on, such ‘On Account / Advance Payments’ may be adjusted against single or multiple Open Bills. Apart from that, open bills of various transactions, including ‘On Account Payments’ may be mutually adjusted.  

Bill Settlement in Tally Accounting System : Tally offers mutual adjustment of such multiple open balances of Bills, Payments and Receipts; On Account Payments & Receipts, Advance Payments & Receipts. Multi voucher type (like Payment / Receipt Vouchers, Sales / Purchase, Credit Note & Debits Note Vouchers), open balances are matched and squared off to get correct and accurate Accounts Receivable & Accounts Payables Statements and Age Analysis of Open Bills.

Debtors Follow up & Tracking : Tally provides Outstanding reports of Open Bill, Reminder letters to Debtors for Payment of Dues and summarised Age Analysis Report for Debtors Tracking. However, it does not offer mechanism of on-line integrated through Tally System of communication with Debtors, revision of Due Date and other memo. It does not integrate chronological history records of communication of SMS, email, phone notes, email, letters, etc, relating to Open Bills with Debtor. So, the follow up system focus on paper reports, rather than actions.

Payment Performance Report: Tally does not provide any statistical report highlighting the payment performance of Debtor in due date, payment date extensions, Payment delays. It does not provide overall customer rating in respect of timely payment of dues.

Current Year P L figures in Tally Accounting System : Tally shows the current year P L Amount figure, computed from P L Statement, in a separate Reserved Account called P L Account, in the Liabilities side of Balance Sheet (not under Capital Account). Net Profit / Loss amount to be transferred to Capital Accounts, Reserves Account etc, through Voucher entry. The Balance in P L Account, may be carried in opening balance of P L Account of the next financial Year, as brought forward.

Final Accounts Format in Tally Accounting System : Final Accounts Format, and treatment of Net Profit, Provisions, Taxation, etc, vary as per constitution of Firm. Tally creates a standard general format of Chart of Accounts, for all types of Constitution of the organisation. Consequently, you don’t get Balance Sheet in proper format, as per customs and rules. Often, the Final Accounts created from Tally may have to be retyped conforming to desired format.

Depreciation Computation & Fixed Asset schedule in Tally Accounting System:  Tally also does not provide auto computation of Depreciation of Fixed Asset. Tally does not even provide proper Depreciation chart of Assets.

Duties and Taxes Accounts in Tally Accounting System: Tally imposes its own rules for Duties & Taxes Accounts. All Government Duties on Goods / services, Taxes (like GST, TDS, TCS) must be placed under Duties & taxes heads, in specific manner. Such organisation of Account may not be in conformity of presentation of Final Accounts of the organisation.

Cash Ledger Account as Pre created Reserved Accountin Tally Accounting System: After new Company creation, you should create all ledger accounts, except Cash Ledger Account. Tally pre creates a reserved Cash Ledger Account under Cash in Hand reserved Group. You must use this pre created Cash Account in Vouchers. Do not create ay any Cash Account. If you do so, the both the accounts would get mixed up and you may not get proper Cash Book, Cash Ledger etc.

Financial Reports details in Tally Accounting System : Higher level Account Groups details (Schedules) are not available in one statement . The detailed schedules are to be printed separately and individually.

Accounts Structurein Tally Accounting System: Tally pre creates some Reserved Accounts Groups, mainly of Balance Sheet Accounts, to get Accounts Statements in well organised manner, and to get key performance figures instantly. However, it does not provide reserved Accounts, particularly for P L Accounts, Long & Short Term Interest, Depreciation, Taxation, Dividend etc, to get more organised Financial statements with figures of Operating Profit, Profit after Depreciation, Interest, Taxation, Dividend, often required for Financial Institution. These are to be compiled manually by Accountants.

Key Financial performance figures in Tally Accounting System : Tally provides very rudimentary key financial performance figures for a specific period/ date. Tally does not provide periodic comparative Table of key Performance figure of selected elements, for Multiple Period or Multiple Companies. The computation details of performance figures are not illustrated / explained. Tally also does not allow to create user defined key performance figures, with interpretation.

Time Value of Money based features in Tally Accounting System: Tally does not provide Computation PV (Present value of Money), FV (Future value of Money), Annuity, Sinking Fund, Financial Planning & Capital Budgeting. Features for Hire Purchase Accounting, EMI computation etc are not available.

Cash Flow and Funds Flowstatementin Tally Accounting System: Tally provides Cash Flow and Funds Flow statements in its own way.  Use and interpretation of Tally created Cash & Funds flow are quite different from what Accounting text Books explains, professional accountants follow, and Auditors report in Financial Statements. So, the Report name may misguide professional Accountants.

Cash Budget in Tally Accounting System in Tally Accounting System: Cash Budget is a critical management planning report. It shows Cash Inflows, Outflows and Balance to highlight excess cash (to make gainful deployment), Cash shortage (to find resources or alternate plans). Tally does not provide any practical useful report in this specific aspect.

Budgets / Scenario in Tally Accounting System in Tally Accounting System : Budgets / Scenario reports are too simplistic of practical significance. The Formats differ from what we study and learn in Accounting Books and courses. No Budget parameters or computation rules may be defined. No concept of Activity Levels, Variable Budget, Fixed Budget, etc.

Cost Centre / Profit Centre Allocation in Tally Accounting System: Tally provides a very rudimentary feature to break up transaction figures into Cost Centres and get Cost Centre wise reports. It does not provide features of  allocation / reallocation of Direct, Indirect and Overhead Costs, formula / rules  for allocation of elements of cost to Production Departments, Machines, Processes, Service Departments and General overheads, etc.

Money Currency in Tally Accounting System : Country Base money currency is set for India, but may be changed as desired. Entry of currency symbols like €, £,  ¥ etc from keyboard (keys not normally available in keyboard), may be difficult to type in Voucher entry. Only simple cases of Forex Gain Loss are correctly computed in Tally. Complex cases may require manual computation.

Interest Computation in Tally Accounting System: Interest Calculation methods are provided for Ledger Running Balance and Specific transaction, but computation for EMI, PV, FV, Annuity, minimum and max Balance based Interest computation, etc, are not available.

Data Records Counts in Tally Accounting System : Data Records counts (called Statistics) of each Master and  Voucher type are available, for control of Vouchers and track additions, alteration etc. This report may be useful for Accounting Service organisations charging for their accounting services, based on work volume in terms of records.

Masters Data in Tally Accounting System: Single Master record may be entered / Altered with complete details through individual master entry Form.  Through Multiple Masters Mode, essential data (and some additional info) of Multiple Masters records may be quickly entered. Masters Opening Balance figures, like Account Ledger Opening balance, Stock Item Opening Balance may be conveniently entered through Multiple Masters entry. However, complete Data would be entered through Single master mode only.

List of Masters in Tally Accounting System : List of Masters show the records of Master listed in specified order (Alphabetical / Hierarchical).  All sorts of operations of masters (like Add, Duplicate, Delete, Alter etc.) can be conveniently done from the centralised place of List of Masters through respective buttons.

Masters Check List in Tally Accounting System: Tally dos not provide option to print Masters check list all elements of each Masters record, in preferred format, to check data off line. Such lists are indispensable to manually check the Masters data, entered piecemeal or imported from external data.

List of Unused Masters in Tally Accounting System: You may list unused Masters (master records which have not been referred in any Voucher). If Masters Data is carried from previous year Data (by Company splitting), or imported from other companies, you may find many extra unused masters. You may delete such unused masters not required any more in current financial year, quite conveniently through filtered list of unused Masters.

Sorting of Masters in Lists & Chart of Accounts in Tally Accounting System :  The Account Heads in most of reports (e.g Trial Balance) are arranged primarily in alphabetical order (computer view), but not as per Accounting Practice (Accountant View). Tally does not provide options to specifically set the sort view of element in individual reports. Using Edit Sot value of Masters, you may sometimes mange the sequence of Masters & Voucher Types in reports.

Splitting of Company Data in Tally Accounting System: Normally it takes few months to finalise the accounts, even after end of Financial Year close date. During such period, the previous financial year and current financial year account work continue simultaneously. To enable simultaneous entry of 2 financial Data in same Company, Tally offers temporary extension of Financial Year and continue entry for next Financial Year also. On finalisation of pervious year accounts, the combined Company data of both the financial years may be split into 2 parts for the 2 Financial Years, based on Financial Year close date. On splitting, the individual financial year data file is properly named. The combined file is deleted (or preferably backed Up).

Chart of Accounts in Tally Accounting System: Chart of Accounts displays the proper hierarchy of Masters. The top level Accounts groups are listed accordance with Accounting Practices. Under each top level accounts, the subordinate accounts are properly listed in hierarchical order. The chart of Accounts should always be referred to create new Masters and place under proper parent group. In case of Audit Log enabled Company, Masters list may be filtered based on Basis of status like Unchanged, Altered, Deleted etc.

Zero Opening Balance in Tally Accounting System: Sometimes, Masters may be imported from similar Tally Accounts. In such case, Opening Balance of all ledger Account / stock Item may be zeroed in one click. However, users should be careful about this option to inadvertently (or mischievously) removing Opening Balance.

Credit Limit of Debtors in Tally Accounting System: You may set Credit Limit of Debtors in respective Ledger Account master. You may set Credit Limit of multiple parties through Multiple Ledger Master screen. Seles Voucher cannot be entered for a Debtor causing the Ledger Balance exceeding the Credit Limit.

Party Contact Details in Tally Accounting System : Contact Details may be entered through Single Mater entry / Alter or Multiple Master screen. Blank Contact Details records may be filtered and filled up through Exception Report. Some details may be partly filled up in Master record, during Voucher entry. However, statutory Info like PAN / IT et cannot be filled up / edited during voucher entry / alteration.

Auditors’  Features in Tally Accounting System: Auditors owning Tally Audi module, may connect to clients Tally system. They may perform audit of their Client Accounts maintained in Tally, through assigned login / password, from anywhere. Its dashboard shows voucher/ledger verification status, for quick and Easy-to-spot-errors via exceptions. Auditors may check transactions, mark, share marked vouchers with client,  track marked vouchers, unmark vouchers, for fast Audit work.

Customer Payment follow up : Tally provides tons of reports in respect of Sales, Outstanding Bills, Reminder for due & overdue bills, summarised Age analysis, etc. But Tally does not provide for actions based features, like calling customer from within the Customer Ledger / outstanding Bills report, viewing past communication with customers, commitment of payment when not paid on due date, recording of notes of communication with customer, calling of customer from within tally Outstanding reports and noting the discussion in the system. Tally focuses on reports, not actions.