Last Updated on: 5th July 2024, 01:47 pm
Planning for moving to Computerised Accounting System
First time implementation of Computerised Accounting System requires thorough pre-planning of all data to be entered into the Computer System to start.
Computerised Accounting implementation in New organisation
Where a new born organisation starts Computerised accounting from the very first year, there is no previous year data. So, starting the system from scratch is easier. Plan the Masters Data, compile all related info and then start Masters data entry in the system. It is simpler, as there is not previous year opening balance to be entered.
Starting Computerised Accounts of running organisation
On the other hand, when an existing organisation moves from Manual System to Computerised Accounting system, it has to enter previous year Closing Balance data of Ledger Accounts and other details of Assets and Liabilities, as Opening Balance in the current financial year accounts.
To enter Opening Balances of current financial year accounts, previous Financial Year Accounts must be completed, However, finalisation of accounts may take a few months to complete. Assuming that the organisation maintains financial accounts from 1April to 31March, it often happens that the Accounts are finalised sometimes by July to October of the next year. So, Opening Balance data may not be available on start of Financial Year.
So, when to start Computerised Accounts ? How to collect and properly compile all necessary input data ? How to enter data in the system ? How to check the data for correctness and rectify mistakes. These are the initial challenging tasks for introducing a Computerised Accounting system for the first time.
In the beginning of Financial year, Accounts people remain overburdened for previous Financial Year Accounts finalisation. So, there may not be enough manpower to take extra burden of introducing a new computerised accounting system, from the very beginning of Financial Year.
When to Start first year Computerised Accounts?
The most natural scheme would be start the new system of Computerised Accounts from the beginning of the Financial Year. So, you must plan about 4-5 months ahead of the start of Financial Year.
The core Financial Accounting (General Ledger) system. must be started first. So, First create all the Masters, like Accounts Group, Accounts Ledgers.
For other supplementary functionalities, for Financial Accounting, like Banking, Accounts Receivables & Payables, Cost Centres, Budgets etc, additional Masters and related info are to be entered.
If Inventory system is also to be introduced simultaneously, Stock Item Groups, Stock Items, Godowns Masters, etc, are to be created.
If Taxation modules like, TDS, TCS, GST etc, are also to be maintained, many more Masters to be created and related info are to be set.
If Payroll System is to be implemented, Employee Master. Employee Group, Pay Heads, and may other associated details, as per desired areas of implementation, are to be recorded.
Depending on the areas of Accounts to be computerised, huge data to be created, even before start of transaction data. The Data collection, compilation and correct entry of data would be enormous.
So, Organsiation should chalk out a phased plan of implementation.
Input data compilation to start Computerised Accounting system
The Input data to be entered into the Computerised Accounting system may not be available in proper format, in one place. Such data may be scattered over many manual records, For example, for Accounts Ledger Master, you may need data of Clients like, Address, PAN, GST Numbers, email, mobile numbers, contact person details, and many related info. Similarly, lot of Data for other masers also. The data Customers, Suppliers, Stock Items, Employees and other masters may be huge, scattered over many records & books. So, there are 2 ways to and collect and compile input data info for Masters entry.
- Compile data manually in centralised place: The input data may be written manually in tabular form conforming to input form, and then entered in one shot. However, this involves additional manual work of data collection, in addition to data input tasks.
- Piecemeal Masters Data entry : The other way, is to enter piecemeal data in master record, as available from each type of Input source. For example enter the Customer Name from Ledger Books, Address and contact details from another source, PAN from another source, GSTIN from another source, details of Opening balance of oustanding Bills from yet another source. The data have to be entered in multiple steps, fetching the master record multiple times, filling up the blank info.
- Transfer Data from Digital records: On the other hand, organisations may have lot of organised data in digital form like spreadsheet and other format in their system. However, Tally have no inbuilt system, to map and import data from external source, into its own database. However experts may be able to import data in digital form, like spreadsheet.
If data is huge, and considerable part of required Data is available in digital form, transferring such data into Tally database may be better option
Masters Data Entry using Free Tally Educational Version
As we pointed out, you should plan 3-6 months ahead of start of Computerised Accounts to create Masters Data. You do not need to buy the software license to create Masters data. Just download the FREE educational version, and start entry of Masters Data. When all masters are ready are ready, and you plan to start voucher entry, you may buy / rent the license.
Data of Current Financial Year Opening Balance
You need to enter the details in respect of each element of Closing Balances of Previous Year, in current Financial Year as Opening Balances. However, previous year final balances are available only after accounts of previous year is closed, which takes few months, for example Closing Balances of 31st march may be available only after July.
Just create all the Master records, with all data filled up correctly. Take a printout of the Data List and check them. Mark wrong entries on the Printout. Then edit the records rectifying the mistakes.
So, starting computerised financial Accounts in Tally, is really a challenging job and required lot of pre planning.
Transaction Entry for Current Financial Year
You should create the Masters without Opening Balance before the beginning of Financial Year. Now you may start in 2 ways. Either enter the Opening Balance with the latest data as per Financial Accounts. Rectify the Opening Balance when Final Accounts of pervious year is ready. Alternately, you may start Current year Data entry without Opening balance. But both method have limitations. For example, to make payment of previous year Bill be adjusted properly, you need the complete data of pervious year in the system. So, the alternative is to maintain parallel system for a few months at the beginning of the first Financial year, as explained next.
Parallel Accounts maintenance in First year
The better solution would be to continue manual accounts till the previous year Accounts are finalised. The Masters data without Opening Balance must be created in the Computer System, before start of Financial Year, as explained. When the Manual Accounts of previous Year is finalised, enter the Opening Balance data in the Computerised System from the Closing Balance of previous year Manual Accounts. Now start data entry for the current year in Compuerised System form the manual records. Check the Compuerised Accounts for the current year with Manual Accounts. When the Accounts agree, and Accounts people feel confident that they can maintain computerised system correclty, you may discontinue the manual System.
Otherwise, continue both Manual & Computerised System in parallel, for the first year and check the accounts thoroughly.
