Tally Accounting – Basic Fundamentals
1. What is Tally?
Tally is an accounting software used by businesses to manage financial transactions, accounts, and inventory. It helps automate various business processes such as billing, payroll, accounting, and taxation.
2. What is Accounts?
Accounts refers to the systematic process of recording, summarizing, and analyzing financial transactions to help make informed decisions about a business’s financial health.
3. Classification of Accounts
Accounts are classified into three main categories:
- Personal Accounts: Related to individuals, companies, or organizations (e.g., creditors, debtors).
- Real Accounts: Related to assets (e.g., machinery, land).
- Nominal Accounts: Related to expenses, losses, incomes, and gains (e.g., salaries, rent).
4. Terminology of Accounting
- Debit (Dr.): An entry on the left side of an account.
- Credit (Cr.): An entry on the right side of an account.
- Voucher: A document that serves as evidence for a financial transaction.
- Ledger: A collection of accounts where transactions are recorded.
5. Golden Rules of Accounting
- Personal Account: Debit the receiver, Credit the giver.
- Real Account: Debit what comes in, Credit what goes out.
- Nominal Account: Debit all expenses and losses, Credit all incomes and gains.
6. General Entry
General entry refers to the process of recording financial transactions in the journal, following the double-entry system.
7. Pre-Define Tally Group
In Tally, groups are predefined categories used to classify accounts. Some common groups include:
- Assets: Fixed and current assets.
- Liabilities: Loans, creditors.
- Income/Revenue: Sales, services rendered.
- Expenses: Rent, wages, etc.
8. Types of Vouchers
Vouchers are documents that represent transactions in Tally. Types of vouchers include:
- Payment Voucher
- Receipt Voucher
- Contra Voucher
- Sales Voucher
- Purchase Voucher
9. Series – Hindi
Tally supports multi-language capabilities, including Hindi, making it easier for users in Hindi-speaking regions to work with the software.
10. Download and Install
To get started with Tally:
- Download the software from the official Tally website.
- Follow the installation instructions to set it up on your computer.
11. Create Company
- Open Tally and select “Create Company.”
- Enter the company’s name, address, financial year, and other details.
- Save the information to create your company profile in Tally.
12. Configurations
Tally allows users to configure various settings, such as:
- Company features
- Security control
- Accounting features
- Inventory features
13. Basic Introduction of Features
Some of the core features of Tally:
- Accounting: Manage all your financial transactions.
- Inventory: Track and manage stock items.
- GST: Integrates GST for tax filing and invoicing.
14. Voucher Transaction Entry
To enter a voucher in Tally:
- Select the voucher type.
- Choose the appropriate accounts (debit/credit).
- Enter the transaction amount and save.
15. View Reports
Tally provides various reports, including:
- Day Book
- Trial Balance
- Profit and Loss Account
- Balance Sheet
Accounting – Case Study 1
Financial Year: 1-Apr-2016 to 31-Mar-2017
16. Debit, Credit – By, To
- Debit: The receiver of a payment (e.g., assets, expenses).
- Credit: The giver of a payment (e.g., liabilities, income).
17. Create Ledger (Under Group)
To create a ledger:
- Select the appropriate group.
- Enter the ledger name and other details.
- Save the ledger.
18. Service Organization General Entry (12 Months)
For a service organization, general entries for 12 months would typically include:
- Sales of services.
- Employee salaries.
- Office expenses.
19. Day Book, Trial Balance
- Day Book: A record of all transactions made during the day.
- Trial Balance: A summary of all ledgers to ensure that the books are balanced.
20. Profit & Loss Account, Balance Sheet
- Profit & Loss Account: Shows the company’s profitability for a specific period.
- Balance Sheet: Shows the company’s financial position, including assets, liabilities, and equity.
21. Closing & Opening Balance
- Closing Balance: The balance at the end of an accounting period.
- Opening Balance: The balance at the start of the next accounting period.
Accounting with Inventory – Case Study 2
Financial Year: 1-Apr-2016 to 31-Mar-2017
22. Create Stock Item, Stock Group, Unit of Measure
Steps to create inventory items:
- Create Stock Items (e.g., products or goods).
- Create Stock Groups (e.g., categories of items).
- Define Units of Measure (e.g., pieces, kg, liters).
23. Trading Organization General Entry (12 Months)
For a trading organization, general entries might involve:
- Purchases and sales.
- Invoices.
- Provision entries (like provisions for bad debts).
24. Purchase, Sales, Invoice
Steps to record:
- Purchase: Goods bought for resale.
- Sales: Goods sold to customers.
- Invoice: A document to record the sale/purchase.
25. Inventory Reports, Stock Summary
Inventory reports include:
- Stock Summary: Shows stock quantities and values.
- Tax Report: Shows GST tax-related information.
Inventory Management with GST – Case Study 3
Financial Year: 1-Apr-2017 to 31-Mar-2018
26. Taxation System – GST
GST (Goods and Services Tax) is a unified tax structure in India, consisting of:
- SGST (State GST)
- CGST (Central GST)
- IGST (Integrated GST)
27. Create Godowns, Stock Item, Stock Group, Unit of Measure
You can manage godowns (warehouses) and organize stock items and groups effectively to ensure efficient inventory management.
28. Discounts, Interest, Purchase/Sales Returns
- Discounts: Reduce the sale price.
- Interest: Charges or earnings on loans/credit.
- Purchase/Sales Returns: Goods returned after purchase/sale.
29. Credit Note, Debit Note – Voucher
- Credit Note: Issued when goods are returned by the buyer.
- Debit Note: Issued when a buyer needs to claim an increase in invoice amounts.
30. Closing & Opening Balance
As with Case Study 1 and 2, closing and opening balances help reconcile financial records at the beginning and end of each period.
Advanced Level Topics
- Service Organization with GST
- Manufacturing with GST
- Payroll Management
Let me know if you’d like further explanation or adjustments! This could serve as an outline or detailed curriculum for Tally accounting training.
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Here’s the continuation of your Tally accounting curriculum:
Advanced Level Topics (Continued)
1. Service Organization with GST
In a service organization, GST needs to be calculated on the services provided. It includes:
- Understanding GST on services: GST is applicable to services rendered by a business to its customers. The rates can vary depending on the type of service (e.g., professional services, consultancy, etc.).
- Recording Service Transactions in Tally:
- Create ledgers for GST input and output.
- Record sales and purchases of services using GST.
- Use the appropriate GST tax rate (CGST, SGST, IGST).
Important Features:
- GST Returns: Understanding how to file GST returns for service organizations.
- GST Adjustments: Adjustments for service-related GST input tax credits.
2. Manufacturing with GST
In a manufacturing organization, GST is applied to both raw materials and finished goods. The process includes:
- Raw Material Purchases: When raw materials are purchased, GST is applied.
- Production Process: When the finished goods are created, they may be subject to GST when sold.
- Finished Goods Sales: The sale of manufactured goods will also be taxable under GST.
Steps in Tally:
- Create Stock Items for Raw Materials and Finished Goods.
- Create Manufacturing Journals for GST Application.
- Track GST Paid on Raw Materials and Collected on Sales.
Important Features:
- GST on Purchases: Input GST credit can be claimed on raw materials.
- GST on Sales: Output GST is collected on the sales of finished goods.
- GST Tax Report: Helps in filing the return accurately, tracking the taxes payable, and maintaining records for GST input and output.
3. Payroll Management
Payroll management involves managing employee salaries, wages, bonuses, and other compensation within an organization. In Tally, payroll management includes:
- Employee Profiles: Setting up employee profiles with their salary structures.
- Salary Components: Define salary components such as Basic Salary, HRA, Bonus, and other allowances.
- Salary Calculation: Automatically calculate deductions (such as Provident Fund) and calculate net pay.
- Tax Deductions: Track tax deductions at source (TDS) as per Indian tax laws.
Steps in Tally:
- Create Payroll Masters:
- Employee Master: Set up details for employees, including their salary, department, and other personal information.
- Salary Head: Define salary components like Basic, HRA, Provident Fund, etc.
- Salary Processing:
- Record salary payments and deductions (taxes, insurance, etc.).
- Tally automatically computes the final salary payable based on predefined structures.
- Generating Payroll Reports:
- Pay Slip: Individual pay slips for employees.
- TDS Reports: Reporting on Tax Deducted at Source.
- Salary Register: A record of all salary payments.
Conclusion of Tally Accounting Course
By now, learners should be able to:
- Use Tally for basic and advanced accounting: From setting up a company, recording transactions, creating ledgers, generating reports to managing inventory and taxes.
- Handle payroll and GST requirements: Understand how payroll processing and GST filing works in a service, manufacturing, and trading environment.
- Work with complex accounting scenarios: Including multiple vouchers, adjustments, and financial year transitions.
Practice and Exercises
To reinforce the learning, you can include multiple exercises and case studies for students. For example:
- Exercise 1: Record transactions for a service organization using GST.
- Exercise 2: Prepare a Profit & Loss Statement and Balance Sheet based on a sample trial balance.
- Exercise 3: Complete an inventory transaction, including purchase, sales, and stock adjustments.
- Exercise 4: Generate payroll for employees, calculate tax deductions, and prepare pay slips.
Exercises With Solutions
Providing students with exercises, followed by solutions, helps them understand the concepts better. Here’s a sample exercise for one of the sections:
Sample Exercise: Creating a Ledger and Recording a Sale (Case Study 1)
Exercise:
- You own a service-based business, and you’ve provided consultancy services to a client worth ₹10,000 excluding GST. The applicable GST rate is 18% (CGST 9%, SGST 9%).
- The client paid ₹11,800 via cheque.
- Record the transaction in Tally.
Solution:
- Create a Ledger for Sales under “Sales Accounts”.
- Create a GST Ledger for Output GST (CGST and SGST).
- Create a Bank Ledger for the payment received.
Voucher Entry:
- Debit: Bank ₹11,800
- Credit: Sales ₹10,000
- Credit: Output CGST ₹900
- Credit: Output SGST ₹900
This ensures the sale and tax collection are properly recorded.
Sample Exercise: Payroll Processing for an Employee
Exercise:
- Employee name: John Doe
- Basic Salary: ₹30,000
- HRA: ₹15,000
- Other Allowances: ₹5,000
- Tax Deduction (TDS): ₹1,500
- Provident Fund (PF): ₹1,800
- Net Salary: ₹46,700
Solution:
- Create Payroll Ledgers for Basic, HRA, Allowances, TDS, PF, and Net Salary.
- Create an Employee Master for John Doe.
- Process the Salary in Tally.