what is Tally

Introduction

The first thing when it comes to operating Tally is that how to create a company in Tally. Obviously, without this step, you cannot move further and do anything in Tally. Everybody says that the creation of a company in Tally is so much easy and in fact, it is absolutely right but there are some of the important aspects hidden behind the creation of the company that is very much important for you to know. Talking about the importance, you can set the security controls in Tally to secure your data. Another important aspect is to select a particular financial year while creating a company in Tally. Tally is popularly known as accounting software for small and medium businesses. It does all the functions of accounting. This is the view of most of the persons who know about Tally.

What is Tally

The very first thing you need to learn about Tally is what actually Tally is. Do you know what is Tally? For most people Tally means just accounting software but Tally is much more than that. Do you know that in Tally you can create budgets also? You can also maintain your employees' details in Tally. There are many more features of Tally which you should know in detail if you want to fully understand Tally. Tally is much more than just accounting. Tally is not just accounting software. After the release of ERP (Enterprise Resource Planning) the version of Tally, the capability and functioning of Tally is much more widened and extended to a great extent. For example, did you know that you can maintain Employees information in Tally? Right from his/her name to everything about duties, work, profile, groups and so on. This could be a great feature if a business has a number of employees. This was just one example and there are hundreds of examples about the functioning of Tally.

So exactly What is Tally?

Now along with the introduction of GST (Goods and Services Tax) in India, Tally will be used by more people than before. The reason for this is for most of the general public, Tally is software for accounting and that is because of the simplicity of the   Tally in itself.   Tally is a complete Enterprise Resource Planning system with an excellent grip on accounting features. Although Tally has many more underlying features that a business requires but its hold in accounting is truly commendable. Therefore Tally is known more for accounting rather than any other of its features. If I have to mention a single software for a business need even if the business is just starting out, Tally is the one which I would recommend. The reason for this recommendation is because Tally does all the things that a business at a time of starting up requires. And, not just business, but you can use Tally for your personal accounting also. For example, let’s say, you are a salaried person and have investments in shares, mutual funds and some other real estate investments.

•  You can easily pass entries for your monthly salaries - Receipt  Entry
• Easily pass the entries for Stock Market and Mutual Fund  Investments (along with capital gains) – Stock Market Entries
• You can also pass entries for investments in Real Estate. –  Payment Entry

And the best thing is that you do not have to prepare Balance Sheet or Profit and Loss Account or any of the reports because they are automatically prepared while you are passing the entries. Now let’s say for example if you are starting up a business of a general store, what would you require?

1.            Accounting

2.            Billing

3.            Sales and profit analysis

4.            Banking

5.            Inventory

6.            Taxation (GST, VAT, TDS, TCS)

I have brainstormed the needs of a newly opened general store which are all covered by Tally. There are even more functions like Audit, Payroll, Manufacturing and so on which if needed can be used. This was just an example of a general store and almost any business that requires software for its functioning.

Accounting in Tally

Of course, accounting is the main function of Tally and that is what it is known for. The first word that comes to the mind of a person when hearing about Tally is accounting. Accounting is a basic function of Tally and most people do not ever use any other functions other than accounting in Tally. At the most, they will use Inventory management and some of the Taxation features.

Because many people do not exactly know how to use those features and in many cases they do not even require them. If we particularly talk about accounting, Tally has segmented it further into 6 different functions. They are:

1.          Contra (Only for cash and bank-related entries)

2.          Payment (For payment entries)

3.          Receipt (For receipt entries)

4.          Journal (For entries which doesn’t include cash or bank and for  closing entries)

5.          Sales (For sales billing)

6.          Purchases (For purchase billing)

There are many more functions related to accounting like Credit Note, Debit Note, Reverse Journal, Memos and so on which helps in performing accounting entries in an easy way.

Billing in Tally

Billing is an inevitable part of any business. Actually, billing is included in the Accounting feature but it has somewhat a separate function rather than accounting. The best thing in Tally is that when you create a billing entry you do not have to create again an accounting entry for that bill. This reduces redundancy in entering a big amount of data. So if you are having a shop and you do billing from Tally, you or your accountant do not have to again perform accounting for the same bills as it was already done by you.

Payroll in Tally

This feature is of use when you are having a good number of employees. For 1 or 2 employees it makes no sense to purchase software like Tally. But if you or your client’s business has a good amount of transactions then you may require Tally. For maintaining Payroll in Tally, there are functions like Employee Categories, Employee Groups, Attendance, Pay Heads and of course Employees. For a manufacturing entity, there are functions such as Units (Work) and Production Types by which information regarding production done by employees in specific units can also be measured. Complex payroll calculations are automatically done in Tally when we use the Payroll function. These calculations often require many hours for the calculation but in Tally, it is executed automatically.

Inventory in Tally

As billing is an inevitable part of a business and so is the inventory. Effective inventory management can save huge amount of costs especially if you are functioning in a manufacturing environment. In Tally, you can classify inventories on the basis of groups, units, tariff, different stock items and godowns in which they are located. Apart from the above, we can also create Pricelist and Reorder Levels for convenience. Inventory management is done via inventory vouchers. If you or your clients have a business in which inventory management is required and if you have Tally then there is no need to worry about inventory management.

Banking in Tally

In this era of digitization, without banking, no business can survive. Banking functionality is very well covered by Tally. Though it was not present in earlier versions of Tally but in Tally.ERP 9 and all of its versions this feature has been included. You can directly print cheques, maintain cheque register, create deposit slips and payment advice in Tally.ERP 9. Most important function in Banking is Bank Reconciliation (BRS). BRS will eliminate the tedious task of reconciling the bank statements with the books of accounts and this will save a lot of your valuable time.

Taxation or GST in Tally

A business cannot operate in isolation. It needs a society to operate which is governed by a government that levies different types of taxes on a business as it is a commercial activity. Well, Taxation is also covered by Tally. Previously Income Tax, VAT, Excise, Customs and Service Tax were taken care of by Tally. Now GST is also included in Tally’s latest version. Now you can also create GST entries in Tally, as well as GST, Returns in Tally without using any other software. The process is simple and easy and almost the same as previous taxation entries. If you are covered under Audit as per Income Tax Act, 1961 then there are different functions for that also such as Form 3CD, Form 3CA, 44AB Audit, Form 3CB and so on. If you have taxation functions enabled, then billing is done including taxes on the sales orpurchases. At the end of the year or a particular accounting period tax credit or tax payable automatically gets calculated by Tally.

Reporting in Tally

Different types of reports are required at different times for making effective business decisions. In Tally, there are reports such as Statutory Reports, Payroll Reports, Job Work In and Out Reports and the most significant Exception Reports.

Exception Reports displays the information what should not have happened and that is what is necessary to take a look at while running a business or simply writing accounts of a client. Reports are not limited to just reports in Tally. In fact, at every screen in Tally, you can print or export it and that can also be called a report in a certain sense. For example, if you are in Sales Register then you can print that which can also be called an essential piece of information in the form of report.

Ratio Analysis in Tally

This option is not used by many people and the simple reason is that not many people are interested in analysis or they do their own analysis. But Tally has included that in it. In the Gateway of Tally there is an option called Ratio Analysis which displays many important ratios on the basis of information that is entered by you at the time of creating vouchers. Some of the common ones which are included in Tally are Current Ratio, Quick Ratio, Debt/Equity Ratio and Inventory Turnover. You can also alter the timing for which you want to have a look at ratios. For example, you want to know the Current Ratio for the first six months of the year which can also be done in Tally. Moreover, Ratio Analysis in Tally helps us to make quick decisions about our business or our client’s business whatever the case may be.

At the end….

This is what Tally is. I have not seen software like Tally which is so simple and still have so much in it. This is why Tally is used in many different countries apart from India. From a personal accounting to shop to manufacturing enterprise, Tally can do all of it.

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