[As Per New CBCS syllabus for B.

Com 3rd Year (5th Semester)

all Streams for various Universities in Telangana State w.e.f 2018-19]

G. Krishna Kavitha M.Com, mba, llb K. Padma Priya M.Com, set

Head, Department of Commerce, Faculty, Department of Commerce,
Omega Degree College, Habsiguda, Indian Institute of Management & Commerce,
Hyderabad. Khairatabad, Hyderabad.

B. Lavanya M.Com, mba K. Deepa M.Com, mba

Faculty, Department of Commerce, Faculty, Department of Commerce,
St. Mary’s Centenary Degree College, Jahnavi Women's Degree College,
St. Francis Street, Secunderabad. Narayanaguda, Hyderabad.

K§H
‘Himalaya cPublishingcHouse
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 Preface
* «» ’ ■
We have great pleasure in presenting the book "Computerized Accounting"written for
students of UG courses. The subject matter is written in a simple and easily
understandable language by considering Indian business perspectives.
This is an endeavor to provide the students with thorough understanding of
computerized accounting concept. While writing this book we have benefited greatly from
the studies of a number of books and the articles written by scholars widen over
diversely.
In writing the book special care has been taken to avoid gaps in the sequential
arrangement of topics in the syllabus and logically developed the various facets of
computerized accounting step-by-step of an integrated approach with a view to make it a
comprehensive and complete volume by itself. Topics covered are discussed, as far as
possible, in a fairly self-contained manner.
The book would not have seen the light, but for the charm of God and the blessings and
support of our family members and friends.
We offer our gratitude to Himalaya Publishing House Pvt. Ltd., who is leader in
Commerce and Management publications. Our sincere regards to Mr. Niraj Pandey, Mr.
Vijay Pandey, Mr. H. C. Pant and also we thank Mr. G. Anil Kumar Asst. Sales Manager,
Hyderabad for interest shown and for the best effort put forth by the matter of
publication of this book.
Finally, we express our sincere thank to SPS, Bangalore for their excellent computer
typesetting work and the printing.
We humbly acknowledge that there is always some scope for further improvement and
to that end, sincerely invite valuable suggestions which would be thankfully incorporated
in the edition to come.

Hyderabad Authors
June, 2018
 Syllabus
SI. No.
Unit - I: Maintaining Chart of Accounts in ERP
Introduction - Getting Started with ERP - Mouse/Keyboard Conventions - Company UNIT - 1
Creation - Shut a Company - Select a Company - Alter Company Details - Company
Features and Configurations - Fll: Company Features - F12: Configuration - Chart of
Accounts - Ledger - Group - Ledger Creation - Single Ledger Creation - Multi Ledger
Creation - Altering and Displaying Ledgers - Group Creation - Single Group Creation -
Multiple Group Creation - Displaying Groups and Ledgers - Displaying Groups - Display
of Ledgers - Deletion of Groups and Ledgers - P2P procure to page.

Unit - II: Maintaining Stock Keeping Units (SKU)

Introduction - Inventory Masters in ERP - Creating Inventory Masters - Creation of
Stock Group - Creation of Units of Measure - Creation of Stock Item - Creation of
Godown - Defining of Stock Opening Balance in ERP Stock Category - Reports

Unit - III: Recording Day-To-Day Transactions in ERP

Introduction - Business Transactions - Source Document for Voucher - Recording
Transactions in ERP - Accounting Vouchers - Receipt Voucher (F6) - Contra Voucher
(F4) - Payment Voucher (F5) - Purchase Voucher (F9) - Sales Voucher (F8) - Debit Note
Voucher - Credit Note (Ctrl+F8) - Journal Voucher (F7).

Unit - IV: Accounts Receivable and Payable Management

Introduction - Accounts Payables and Receivables-Maintaining Bill-wise Details -
Activation of Maintain Bill wise Details Feature - New Reference - Against Reference -
Advance - On Account - Stock Category Report - Changing the Financial Year in ERP

Unit - V: MIS Reports

Introduction - Advantages of Management Information Systems - MIS Reports in
ERP - Trial Balance - Balance Sheet - Profit and Loss Account - Cash Flow Statement -
Ratio Analysis - Books and Reports - Day Book - Receipts and Payments - Purchase
Register -Sales Register - Bills Receivable and Bills Payable.

UNIT - 2
 Contents
SI. No. Unit Name Page No.

UNIT - 1 Maintaining Chart of Accounts in ERP 1-72

Introduction
Meaning and Definitions of ERP
Getting Started with ERP
Mouse/Keyboard Conventions
Company Creation
Shut a Company
Select a Company
Alter Company Details
Company Features and Configurations
Fll: Company Features
F12: Configuration
Chart of Accounts
Ledger-Group
Ledger Creation
Single and Multi Ledger Creation
Altering and Displaying Ledgers
Group Creation
Single Group Creation
Multiple Group Creation
Displaying Groups and Ledgers
Displaying Groups
Display of Ledgers
Deletion of Groups and Ledgers
P2P procure to page
Multiple Choice Questions
Fill in the Blanks
Review Questions
UNIT - 2 Maintaining Stock Keeping Units (SKU) 73 - 106
Introduction
Inventory Masters in ERP
Creating Inventory Masters
Creation of Stock Group
Creation of Units of Measure
Creation of Stock Item
 Creation of Godown UNIT-5
Defining of Stock
Opening Balance in ERP Stock Category
Reports
Multiple Choice Questions
Fill in the Blanks
Review Questions
UNIT - 3 Recording Day-To-Day Transactions in ERP 107 - 148
Introduction
Functions of ERP System
Business Transactions
Source Document for Voucher
Recording Transactions in ERP
Accounting Vouchers
Receipt Voucher (F6)
Contra Voucher (F4)
Payment Voucher (F5)
Purchase Voucher (F9) ------------------
Sales Voucher (F8)
Debit Note Voucher
Credit Note (Ctrl+F8)
Journal Voucher (F7)
Multiple Choice Questions
Fill in the Blanks
Review Questions
UNIT - 4 Accounts Receivable and Payable Management 149 - 182
Introduction
Accounts Payables
Accounts Receivables
Maintaining Bill-wise Detail
Activation ofMaintain Bill-wise Details Feature J
New Reference
Against Reference
Advance-On Account
Stock Category Report
Changing the Financial Year in ERP
Multiple Choice Questions
Fill in the Blanks
Review Questions
 ------------------------------------------ —------------------
UNIT - 5 MIS Reports 183 - 244
............ —
Introduction
Advantages of MIS
"j
MIS Reports in ERP
Trial Balance
Balance Sheet E'S
Profit and Loss Account
Cash Flow Statement
Ratio Analysis
Books and Reports
Day Book
Receipts and Payments
Purchase Register
Sales Register
Bills Receivable and Bills Payable
Multiple Choice Questions
Fill in the Blanks
Review Questions

z
r...........

1U ne

—
• Introdu
• Meanin
• Getting
• Mouse
• Compai
• Shut a <
• Select a
• Alter C<
• Compai
•Fll: Co
•F12: Co
• Chart o!
1U
nit
Maintaining Chart of
Accounts in ERP

Learning Objectives
• Introduction • Ledger-Group
• Meaning and Definitions of ERP • Ledger Creation
• Getting Started with ERP • Single and Multi Ledger Creation
• Mouse/Keyboard Conventions • Altering and Displaying Ledgers
• Company Creation • Group Creation
• Shut a Company • Single Group Creation
• Select a Company • Multiple Group Creation
• Alter Company Details • Displaying Groups and Ledgers
• Company Features and Configurations • Displaying Groups
•Fll: Company Features • Display of Ledgers
• F12: Configuration • Deletion of Groups and Ledgers
• Chart of Accounts • P2P procure to page
7 Computerised Accounting Maintaining

tracking. ER
Enterprise Resource Planning (ERP) integrates internal and external management information finance, accoi
across an entire organization, embracing finance/accounting, manufacturing, sales and service, In 1990
customer relationship management. ERP systems automate this activity with an integrated requirements
software application. Its purpose is to facilitate the flow of information between all business manufacturing
functions inside the boundaries of the organization and manage the connections to outside the evolution
stakeholders. developed fro
ERP systems experienced rapid growth in the 1990s because the year 2000 problem and human resour
introduction of the Euro disrupted legacy systems. Many companies took this opportunity to Beyond coip<
replace such systems with ERP. systems.

Configuring an ERP system is largely a matter of balancing the way the customer wants the Enterpris
system to work with the way it was designed to work. ERP systems typically build many an entire orga
changeable parameters that modify system operation. relationship r
application. It
inside the bou
EVOLUTION OF ERP
ERP sys
ERP (Enterprise Resource Planning) is the evolution of Manufacturing Requirements
employing a d
Planning (MRP) II. From business perspective, ERP has expanded from coordination of
Resource Plan
manufacturing processes to the integration of enterprise-wide backend processes. From
technology. Ir
technological aspect, ERP has evolved from legacy implementation to more flexible tiered client-
corporate hous
server architecture.
most importai
Inventory Management and Control 1960s: Inventory Management and control is the
Specific Busin*
combination of information technology and business processes of maintaining the appropriate
In simple
level of stock in a warehouse. The activities of inventory management include identifying
and distributioi
inventory requirements, setting targets, providing replenishment techniques and options,
units of a busi
monitoring item usages, reconciling the inventory balances and reporting inventory status.
overview of t
Material Requirement Planning (MRP) 1970s: Materials Requirement Planning (MRP) utilizes
productive wa\
software applications for scheduling production processes. MRP generates schedules for the
At the coi
operations and raw material purchases based on the production requirements of finished goods,
Qom and suppl
the structure of the production system, the current inventories levels and the lot sizing procedure
platform.
for each operation.
Informatic
Manufacturing Requirements Planning (MRP II) 1980s: Manufacturing Requirements
functional units
Planning or MRP utilizes software applications for coordinating manufacturing processes, from
can possibly
product planning, parts purchasing, inventory control to product distribution.
performance, sj
Enterprise Resource Planning (ERP) 1990s: Enterprise Resource Planning or ERP uses
The term
multi-module application software for improving the performance of the internal business
crgamzational i
processes. ERP systems often integrate business activities across functional departments, from
companies. The
product planning, parts purchasing, inventory control, product distribution, fulfillment, to order
can be applied i
Maintaining Chart of Accounts in ERP 3
.a 5L2— J t —XL-XCZ-.i

tracking. ERP software systems may include application modules for supporting marketing,
finance, accounting and human resources.
In 1990 Gartner Group first employed the acronym ERP as an extension of material
requirements planning (MRP), later manufacturing resource planning and computer-integrated
manufacturing. Without supplanting these terms, ERP came to represent a larger whole, reflecting
the evolution of application integration beyond manufacturing. Not all ERP packages were
developed from a manufacturing core. Vendors variously began with accounting, maintenance and
human resources. By the mid-1990s ERP systems addressed all core functions of an enterprise.
Beyond corporations, governments and non-profit organizations also began to employ ERP
systems.
Enterprise resource planning integrates internal and external management information across
an entire organization, embracing finance/accounting, manufacturing, sales and service, customer
relationship management. ERP systems automate this activity with an integrated software
application. Its purpose is to facilitate the flow of information between all business functions
inside the boundaries of the organization and manage the connections to outside stakeholders.
ERP systems can run on a variety of hardware and network configurations, typically
employing a database as a repository for information. ERP which is an abbreviation for Enterprise
Resource Planning is principally an integration of business management practices and modem
technology. Information Technology (IT) integrates with the core business processes of a
corporate house to streamline and accomplish specific business objectives. ERP having the three
most important components; Business Management Practices, Information Technology and
Specific Business Objectives.
In simpler words, an ERP is a massive software architecture that supports the streaming
and distribution of geographically scattered enterprise wide information across all the functional
units of a business house. It provides the business management executives with a comprehensive
overview of the complete business execution which in turn influences their decisions in a
productive way.
At the core of ERP is a well-managed centralized data repository which acquires information
from and supply information into the fragmented applications operating on a universal computing
platform.
Information in large business organizations is accumulated on various servers across many
functional units and sometimes separated by geographical boundaries. Such information islands
can possibly service individual organizational units but fail to enhance enterprise wide
performance, speed and competence.
The term ERP originally referred to the way a large organization planned to use its
organizational wide resources. ERP systems were used in larger and more industrial types of
companies. The use of ERP has changed radically over a period of few years. Today the term
can be applied to any type of company, operating in any kind of field and of any magnitude.
 Computerised Accounting Maintaining (

Today's ERP software architecture can possibly envelop a broad range of enterprise wide system integral
functions and integrate them into a single unified database repository. For instance, functions resources etc.
such as Human Resources, Supply Chain Management, Customer Relationship Management,
Enterprise
Finance, Manufacturing Warehouse Management and Logistics were all previously stand alone
as customizabl
software applications, generally housed with their own applications, database and network, but
processes (e.g
today, they can all work under a single umbrella the ERP architecture.
administration
In order for a software system to be considered ERP, it must provide a business with wide
ERP is th
collection of functionalities supported by features like flexibility, modularity and openness,
for integration
widespread, finest business processes and global focus. That integrated approach can have a
concepts aimed
tremendous payback if companies install the software correctly.
ERP is pr
Example: Take a customer order, typically, when a customer places an order, that order
attitudes beliefs
begins a mostly paper-based journey from in-basket to in-basket around the company, often being
keyed and re-keyed into different departments' computer systems along the way. All that lounging ERP is a <
flow of informs
around in in-baskets causes delays and lost orders and all the keying into different computer
of the resources
systems invites errors. Meanwhile, no one in the company truly knows what the status of the
order is at any given point because there is no way for the finance department, for example, to
Meaning of E
get into the warehouse's computer system to see whether the item has been shipped. "You'll have
ERP pack
to call the warehouse" is the familiar refrain heard by frustrated customers.
support the abo
ERP vanquishes the old standalone computer systems in finance, HR, manufacturing and the industry and co
warehouse and replaces them with a single unified software program divided into software sales managers
modules that roughly approximate the old standalone systems. Finance, manufacturing and the recent years, at
warehouse all still get their own software, except now the software is linked together so that rdustry has bee
someone in finance can look into the warehouse software to see if an order has been shipped. on a global level
Most vendors' ERP software is flexible enough that you can install some modules without buying
the whole package. Many companies, for example, will just install an ERP finance or HR module Meaning of E
and leave the rest of the functions for another day. ERP softv.
company, from
Meaning of ERP
company and el
Enterprise Resource Planning covers the techniques and concepts employed for the
reant to talk to
integrated management of businesses as a whole, from the viewpoint of the effective use of
sc organization,
management resources, to improve the efficiency of an enterprise.
reach - a circui
Accounting oriented, relational database based, multi-module but integrated, software system
aany cases, it is
for identifying and planning the resource needs of an enterprise is called Enterprise Resource
arc the task. El
Planning (ERP). ERP is most frequently used in the context of software. As the methodology has
tnr» are capable
become more popular, large software applications have been developed to help companies
rrcess seamless
implement ERP in their organization.

Definitions of ERP
Enterprise Resource Planning is a process by which a company (often a manufacturer)
manages and integrates the important parts of its business. An ERP management information
Maintaining Chart of Accounts in ERP 5

system integrates areas such as planning, purchasing, inventory, sales, marketing, finance, human
resources etc.
Enterprise resource planning systems are commercial software systems that can be defined
as customizable, standard application software which integrates business solutions for the core
processes (e.g. product planning and control, warehouse management) and the main
administration function (e.g. accounting, human resource management) of an enterprise.
ERP is the acronym for enterprise resource planning which provides infrastructure support
for integration management of businesses and function through various tools and techniques and
concepts aimed at optimum utilization of organizational resources.
ERP is primarily an enterprise wide system which encompasses corporate vision, objectives,
attitudes beliefs, values, operating style and people who make the organization.
ERP is a computerized environment with a holistic view of the enterprise, aimed at seamless
flow of information across the departmental barriers where by optimal planning and management
of the resources is possible in the most efficient manner.

Meaning of ERP Packages

ERP packages are integrated (covering all business functions) software packages that
support the above ERP concepts. Originally, ERP packages were targeted at the manufacturing
industry and consisted mainly of functions for planning and managing core businesses such as
sales management, production management, accounting and financial affairs etc. However, in
recent years, adaptation not only to the manufacturing industry, but also to diverse types of
industry has become possible and the expansion of implementation and use has been progressing
on a global level.

Meaning of ERP Software

ERP software is designed to model and automate many of the basic processes of a
company, from finance to the shop floor, with the goal of integrating information across the
company and eliminating complex, expensive links between computer systems that were never
meant to talk to each other. ERP software is a mirror image of the major business processes of
an organization, such as customer order fulfillment and manufacturing. Its success depends upon
reach - a circumscribed ERP system isn’t much better than the legacy system it replaces. In
many cases, it is worse, because the old code at least was written specifically for the company
and the task. ERP systems’ set of generic processes, produce the dramatic improvements that
they are capable of only, when used to connect parts of an organization and integrate its various
process seamlessly.
6 Computerised Accounting Maintaining Cl

CHARACTERISTICS OF ERP ERP syste

affect customer
The characteristics of ERP are:
management de
1. An integrated system that operates in real time, without relying on periodic updates.
government, e-t
2. A common database, which supports all applications. Later, when the I
3. A consistent look and feel throughout each module. ERP H wa
4. Installation of the system without elaborate application/data integration by the Information employees and
Technology (IT) department. Enterprise applic
5. Information and data are held in a common integrated database. Reasons foi
6. It provides one user-interface for the entire organization. 1. Industry be
7. It facilitates product planning. 2_ Easy and fa
8. It helps in materials and parts purchasing. 3. Good cost i
9. It provides the platform for inventory control. J- Existing elk
10. It helps in distribution and logistics. 5. The numbei
11. It helps production scheduling. * ERP clients
12. It helps in capacity utilization. Trend to re|
13. It helps in order tracking. i Manufacturi
14. It helps in planning for finance and human resources. manufacture
Manufacture
have the req

Prior to evolution of the ERP model, each department in an enterprise had their own isolated 10- It provides c
software application which did not interface with any other system. Such isolated framework
could not synchronize the inter-department processes the productivity, speed and performance of
the overall organization. These led to issues such as incompatible exchange standards, lack of
practices
synchronization, incomplete understanding of the enterprise functioning, unproductive decisions
Best practici
and many more.
aerieots the vendc
Example: The financial could not co-ordinate with the procurement team to plan out Snaems vary in
purchases as per the availability of money. Deploying a comprehensive ERP system across an Companies that ir
organization leads to performance increase, workflow synchronization, standardized information k configuration. <
exchange formats, complete overview of the enterprise functioning, global decision optimization, “L 3- when compai
speed enhancement and much more.
The use of
ERP systems experienced rapid growth in the 1990s because the year 2000 problem and Guey. or Basel
introduction of the Euro disrupted legacy systems. Many companies took this opportunity to dcarooic funds tr
replace such systems with ERP. This rapid growth in sales was followed by a slump in 1999 •erware and repl
after these issues had been addressed. ■sarrement.
Maintaining Chart of Ucounts in ERP

ERP systems initially focused on automating back office functions that did not directly
affect customers and the general public. Front office functions such as customer relationship
management dealt directly with customers, or e-business systems such as e-commerce, e-
govemment, e-telecom and e-finance, or supplier relationship management became integrated
later, when the Internet simplified communicating with external parties.
ERP II was coined in the early 2000s. It describes web-based software that allows both
employees and partners such as suppliers and customer real-time access to the systems.
Enterprise application suite is an alternate name for such systems
Reasons for the growth of ERP are as follows:
1. Industry best practices.
2. Easy and faster implementation.
3. Good cost predictions.
4. Existing clients acquire more licenses and modules.
5. The number of employees using the ERP system is increasing.
6. ERP clients who have started with the basic modules are going for subsequent applications.
Trend to replace customized system with standard application packages.
Manufacturing companies are significantly investing in technology solutions to improve their
manufacturing operations.
Manufacturers are increasingly implementing ERP solutions to ensure that decision makers
have the required information visibility across the value chain.
? It provides competitive advantages.

ERP COMPONENTS

rest practices
Best practices are incorporated into most ERP systems. This means that the software
-r'ects the vendor's interpretation of the most effective way to perform each business process.
: stems vary in the convenience with which the customer can modify these practices.
I: mpanies that implemented industry best practices reduced time consuming project tasks such
£.• configuration, documentation, testing and training. In addition, best practices reduced risk by
c when compared to other software implementations.
The use of best practices eases compliance with requirements such as IFRS, Sarbanes-
>Gey, or Basel II. They can also help comply with de facto industry standards, such as
± -.Tronic funds transfer. This is because the procedure can be readily codified within the ERP
-ware and replicated with confidence across multiple businesses who share that business
-irement.
8 Computerised Accounting

Modularity
Most systems are modular to permit automating some functions but not others. Some
common modules, such as finance and accounting, are adopted by nearly all users; others such
as human resource management are not. For example, a service company probably has no need
for a manufacturing module. Other companies already have a system that they believe to be
adequate. Generally speaking, the greater the number of modules selected, the greater the
integration benefits, but also the greater the costs, risks and changes involved.

Connectivity to plant floor information

ERP systems connect to real-time data and transaction data in a variety of ways. These
systems are typically configured by systems integrators, who bring unique knowledge on
process, equipment and vendor solutions.

Direct integration
ERP systems connectivity communications to plant floor equipment as part of their product
offering. This requires the vendors to offer specific support for the plant floor equipment that
their customers operate. ERP vendors must be expert in their own products and connectivity to
other vendor products, including competitors

Database integration
ERP systems connect to plant floor data sources through staging tables in a database. Plant
floor systems deposit the necessary information into the database. The ERP system reads the
information in the table. The benefit of staging is that ERP vendors do not need to master the
complexities of equipment integration. Connectivity becomes the responsibility of the systems
integrator.

WHY ERP IS SO IMPORTANT?

Enterprise Resource Planning is important for the following reasons:
1. Enhance productivity.
2. Enhance flexibility.
3. Enhance customer responsiveness.
4. It maximizes the efficiency of business process across the entire organization.
5. Plant manufacturing can produces product faster.
6. Increase on time delivery.
7. Increase productivity.
8. Increase ability to forecast demand to supplies.
9. Increase order capacity.
10. It improves Customer Relationship Management.
Maintaining Chart of Accounts in ERP 9

11. Eliminate costs.

12. It helps to standardize business processes.
13. It enables company to manage relationship with vendors.
14. It lowers cost for purchased items.
15. Better resource management.
16. Enhances inventory turns.
17. Decrease the level of inefficiencies.
18. It provides data consistency.
19. It helps in making a right decision.
20. Extend business using the Internet.
21. It helps to access information.
22. It helps in communicating to various stake holders.

OVERVIEW OF ERP SOLUTIONS

ERP delivers a single database that contains all data for the software modules, which would
include:
1. Financial: General ledger, cash management, accounts payable, accounts receivable, fixed
assets.
2. Project management: Costing, billing, time and expense, performance units, activity
management.
3. Human resources: Human resources, payroll, training, time and attendance, roistering,
benefits.
4. Customer relationship management: Sales and marketing, commissions, service, customer
contact and call center support, Data warehouse and various self-service interfaces for
customers, suppliers and employees.
5. Manufacturing: Engineering, bills of material, scheduling, capacity, workflow management,
quality control, cost management, manufacturing process, manufacturing projects,
manufacturing flow.
6. Supply chain management: Order to cash, inventory, order entry, purchasing, product
configuration, supply chain planning, supplier scheduling and inspection of goods, claim
processing and commission calculation.

The Ideal ERP System:

An ideal ERP system is when a single database is utilized and contains all data for various
software modules. These software modules can include:
 Ill Computerised Accounting

1. Supply Chain Management: Inventory, supply chain planning, supplier scheduling, claim
processing, order entry, purchasing etc.
2. Projects: Costing, billing, activity management, time and expense etc.
3. Customer Relationship Management: sales and marketing, service, commissions, customer
contact, calls center support etc.
4. Data Warehouse: Usually this is a module that can be accessed by an organizations
customers, suppliers and employees.
5. Manufacturing: Some of the functions include engineering, capacity, workflow management,
quality control, bills of material, manufacturing process etc.
6. Financial: Accounts payable, accounts receivable, fixed assets, general ledger and cash
management etc.
7. Human Resources: Benefits, training, payroll, time and attendance etc.

ERP's best hope for demonstrating value is as a sort of battering ram for improving the
way your company takes a customer order and processes it into an invoice and revenue
otherwise known as the order fulfillment process. That is why ERP is often referred to as back-
office software. It doesn't handle the up-front selling process although most ERP vendors have
developed CRM software or acquired pure-play CRM providers that can do this; rather, ERP
takes a customer order and provides a software road map for automating the different steps
along the path to fulfilling it. When a customer service representative enters a customer order
into an ERP system, he has all the information necessary to complete the order, the customer's
credit rating and order history from the finance module, the company's inventory levels from the
warehouse module and the shipping dock's trucking schedule from the logistics module.
Example: People in these different departments all see the same information and can update
it. When one department finishes with the order it is automatically routed via the ERP system to
the next department. To find out where the order is at any point, you need only log in to the ERP
system and track it down. With luck, the order process moves like a bolt of lightning through the
organization and customers get their orders faster and with fewer errors than before. ERP can
apply that same magic to the other major business processes, such as employee benefits or
financial reporting.

THE IDEAL ERP SYSTEM

An ERP system would qualify as the best model for enterprise wide solution architecture, if
it chains all the below organizational processes together with a central database repository and a
fused computing platform.
Maintaining Chart of Accounts in ERP 11

ERP fix in Business

There are five major reasons why companies undertake ERP:
1. Integrate financial information: As the CEO tries to understand the company's overall
performance, he may find many different versions of the truth. Finance has its own set of
revenue numbers, sales has another version and the different business units may each have
their own version of how much they contributed to revenues. ERP creates a single version of
the truth that cannot be questioned because everyone is using the same system.
2. Integrate customer order information: ERP systems can become the place where the
customer order lives from the time a customer service representative receives it until the
loading dock ships the merchandise and finance sends an invoice. By having this information
in one software system, rather than scattered among many different systems that can't
communicate with one another, companies can keep track of orders more easily and
coordinate manufacturing, inventory and shipping among many different locations at the same
time.
3. Standardize and speed up manufacturing processes: Manufacturing companies especially
those with an appetite for mergers and acquisitions often find that multiple business units
across the company make the same widget using different methods and computer systems.
ERP systems come with standard methods for automating some of the steps of a
manufacturing process. Standardizing those processes and using a single, integrated computer
system can save time, increase productivity and reduce head count.
4. Reduce inventory: ERP helps the manufacturing process flow more smoothly and it improves
visibility of the order fulfillment process inside the company. That can lead to reduced
inventories of the stuff used to make products work-in-progress inventory and it can help
users better plan deliveries to customers, reducing the finished good inventory at the
warehouses and shipping docks. To really improve the flow of your supply chain, you need
supply chain software, but ERP helps too.
5. Standardize HR information: Especially in companies with multiple business units, HR may
not have a unified, simple method for tracking employees' time and communicating with them
about benefits and services. ERP can fix that.
In the race to fix these problems, companies often lose sight of the fact that ERP packages
ire nothing more than generic representations of the ways a typical company does business.
While most packages are exhaustively comprehensive, each industry has its quirks that make it
xmque. Most ERP systems were designed to be used by discrete manufacturing companies that
make physical things that can be counted, which immediately left all the process manufacturers,
:d. chemical and utility companies that measure their products by flow rather than individual
mils out in the cold. Each of these industries has struggled with the different ERP vendors to
- dify core ERP programs to their needs.
 Computerised Accounting
Maintaining C

To help address industry-specific problems and customization needs, ERP vendors have
The Benefits
recently begun to offer specially tailored application sets to take care of each vertical segment's
The benef
needs. There still is customization work to do to satisfy each and every customer, but packaged
applications now target such industries as: retail, media, utilities, high-tech, public sector, higher 1. It wi
education and banking. In addition, ERP vendors have further tailored application to address the 2. It he;
individual concerns within the broad manufacturing space. These range from consumer products 3. It is i
to construction to HVAC to aerospace and defense companies. 4. It he]
5. It hel
6. It enl
Most business houses look up to ERP in India as an investment. The whole concept of
7. Imprc
enterprise resource planning originated in the large industries. The ERP system is used to simplify
processes and workflow. It has evolved as a more comprehensive system. Now it is largely
8. Enhai
available to companies of all types and sizes. It serves and supports a wide range of business 9. It enh
functions. It includes manufacturing, order entry, accounts receivable, general ledger, purchasing, 10. It enl
warehousing, transportation, accounts payable and human resources. 11. It enh
The ERP Scenario in India Justification <
Challenges to the introduction of ERP in India The expec
The challenges to the introduction of ERP in India are as follows: m-esting in ER
mestment decis
1. Change management.
xnmcver and a i
2. Organizational intervention.
macgible benef
3. Replacing outdated software. incenienting EB
4. Shifting from function view to process view. am may be cor
5. Hiring ERP-literate staff. gritge. There
•tocfacturers of
6. Faith in package software in the place of custom-built software.
They c
7. It requires more domain knowledge.
MMimuacturers ms
8. It requires huge investment. *®me~jentecL uns
9. Enhanced infrastructure faculties are required.
Several well-known business houses in India like Cadbury India, Mercedes Benz India,
Siemens, Haldia Petrochemicals, L & T, TISCO and UTI use SAP while Kellogg’s India Ltd., L jiintifiable I
MarutiUdyog Ltd., Sony India Pvt. Ltd. and CESC are Oracle users. India’s most valuable Seiches that
contribution to ERP came in 1980s when the country launched the world class ERP product ace dial comj
Marshall from Ramco Systems, by using the technology of the 80’s. Marshall is the first 1 md small 1
successful large scale software from India and several companies like HDFC Bank, Hyundai, eb manufacn
Nestle Limited and Standard Chartered Bank use this ERP package. Actually, this product is a jsannfiable
formative ERP called virtual split. A virtual splat enables merging of accounting and
I Reducfi
manufacturing practices in an easy-to-use, implemented package and is used by small start-up
companies.
2. Reducth
Maintaining Chart of Accounts in ERP 13

The Benefits of ERP in India

The benefits of ERP in India are as follows:
1. It will provide the companies in India the facility to have information available freely.
2. It helps in generating of enquiry report easier.
3. It is easier for the organization to follow.
4. It helps the businesses to develop refined analysis.
5. It helps in innovation.
6. It enhances employment.
7. Improved customer care service.
8. Enhance product values.
9. It enhances profitability.
10. It enhances asset turnover.
11. It enhances potential effect on stock value.

Justification of ERP in India

The expected return on investment provides the cost justification and motivation for
"vesting in ERP. There are quantifiable benefits as well as intangible benefits in the ERP
- estment decision. The quantifiable benefits have a bottom-line impact on profitability, asset
--lover and a potential effect on stock value. This section discusses the quantifiable and the
-tangible benefits of an ERP system, which compares firm performance before and after
-rlementing ERP. Other scenarios are encountered in justifying ERP investments. For example, a
arm may be considering replacement versus upgrade or re-implementation of an ERP software
-arkage. There are significant costs for not successfully implementing an ERP system.
> ifacturers often pay more for the lack of systems than they would have paid for improved
■ <ems. They carry excess inventory or provide poor customer service, for instance. And
-_:_facturers may invest in ERP without gaining the benefits because the systems are partially
-- ;mented, unsuccessfully implemented or usage deteriorates over time.

*■ - '.cation of ERP Investments is presented in four parts:

.antifiable benefits from an ERP system

Studies that surveyed manufacturers about the impact of ERP systems on firm performance
■c .re that company size and industry do not affect the results. Benefits have been indicated for
■ k ind small firms, whether they make standard or custom products or are in discrete or
■neess manufacturing environments.
C-^ntifiable benefits from an ERP system include:
Reductions in inventory.
2 Reductions in material costs.
 14 Computerised Accounting Maintaining (

3. Reductions in labor and overhead costs. d) Optim

4. Improvements in customer service and sales. e) It elim
5. Improved planning and scheduling practices. f) Impro\
6. It leads to inventory reductions.
4. Effects on
7. It leads to better vendor negotiations.
a) Impro'
8. Reduces material handling.
b) Impro
9. Improve quality and throughput.
c) Shortei
10. It provides the ability to react to changes.
d) Custon
11. Improved accounting controls.
e) E-comi
12. Improved business processes. internet
13. Improved information. f) Custom
14. Enhanced sales. e ■ Reduce
15. Enhanced profits.
i Effects on c
II. The intangible effects of ERP An ERP s
I it
The intangible or non-financial benefits of an integrated enterprise resource planning (ERP) He VCLS functk
system can be viewed from several perspectives. ERP provides a framework for working rahcaboos ba
effectively together and providing a consistent plan for action. ®c±noJc>ey and
The intangible effects of ERP include: «r-elxoer.: hi
» ixirrsd bef<
1. Effect of ERP on Accounting «ar? io focus tt
a) No need of duplicate files. •c pnxes»ooaj
b) Provides a complete audit trail from account totals to source documents il Costs oi
c) Ensures accurate and up to date financial information. * One-Tir
d) Permits tracking of actual versus budgeted expenses. - Or.£.?cis
e) Financial reports can be easily customized to meet the needs of various decision makers.
Casts of it
2. Effects on Product and Process Design
a) Greater control over product and process design.
b) ERP systems offer numerous analytical tools for the engineering function.
c) Bill comparisons can be used to highlight differences between products.
d) Cost estimates and pricing for custom product can be quickly calculated.

3. Effects on Production and Materials Management

a) ERP systems help establish realistic schedules for production.
b) Helps production to prepare for capacity problems.
c) Minimize setup times.
ing Maintaining Chart of Accounts in ERP 15

d) Optimize sequencing.
e) It eliminates many crisis situations.
f) Improved quality of working life.

4. Effects on Sales
a) Improved customer service.
b) Improves job estimating.
c) Shortened delivery lead times.
d) Customer inquiries on order status can be answered immediately.
e) E-commerce capabilities enable customers to place orders and check status over the
internet at any time.
f) Customer convenience.
g) Reduces the time requirement for sales.

5. Effects on the MIS Function

An ERP system implemented as an integrated software package offers several advantages to
ERP) the MIS function. The software package can offer a growth path from simple to comprehensive
>rking applications built on top of a database management system. It provides an upgrade path to
technology and functional enhancements supported by the software vendor. It can reduce the
development time and cost for software, documentation and training classes. These costs would
be incurred before the firm can start obtaining the benefits of an ERP system. It permits the MIS
staff to focus their attention on organizational change and servicing user needs for customization
jid professional assistance. It includes
a) Costs of Implementing an ERP System.
b) One-Time Costs.
c) Ongoing Annual Costs.
akers. HI. Costs of implementing an ERP
Enterprise resource planning implementation costs can be divided into one-time costs and
rngoing annual costs. Both types of costs can be segmented into hardware, software, external
assistance and internal personnel. In addition to the ERP software package, one-time costs may
include systems software, development of customized software, or integration with other
implications.

IV. Replacing or re-implementing an ERP system

An investment analysis focusing on enterprise resource planning (ERP) benefits frequently
_?plies to those firms initially justifying an ERP implementation. It can also be used to justify a
re-implementation” when the initial efforts have failed to produce desired results. Several
-easures have been used to gauge the successful implementation of an ERP system. The impacts
I__
16 Computerised Accounting

on business performance and bottom-line results provide the best measure of success. Another
measure of success is the degree to which the formal ERP system is used to run the business.

VARIOUS MODULES OF ERP

ERP software is made up of many software modules. Each ERP software module mimics a
major functional area of an organization. Common ERP modules include modules for product
planning, parts and material purchasing, inventory control, product distribution, order tracking,
finance, accounting, marketing and HR. Organizations often selectively implement the ERP
modules that are both economically and technically feasible.

ERP Production Planning Module

In the process of evolution of manufacturing requirements planning (MRP) II into ERP,
while vendors have developed more robust software for production planning, consulting firms
have accumulated vast knowledge of implementing production planning module. Production
planning optimizes the utilization of manufacturing capacity, parts, components and material
resources using historical production data and sales forecasting.

ERP Purchasing Module

Purchase module streamlines procurement of required raw materials. It automates the
processes of identifying potential suppliers, negotiating price, awarding purchase order to the
supplier and billing processes. Purchase module is tightly integrated with the inventory control
and production planning modules. Purchasing module is often integrated with supply chain
management software.

ERP Inventory Control Module

Inventory module facilitates processes of maintaining the appropriate level of stock in a
warehouse. The activities of inventory control involves in identifying inventory requirements,
setting targets, providing replenishment techniques and options, monitoring item usages,
reconciling the inventory balances and reporting inventory status. Integration of inventory control
module with sales, purchase, finance modules allows ERP systems to generate vigilant executive
level reports.

ERP Sales Module

Revenues from sales are live blood for commercial organizations. Sales module implements
functions of order placement, order scheduling, shipping and invoicing. Sales module is closely
integrated with organizations' commerce website. Many ERP vendors offer online storefront as
part of the sales module.

ERP Market in Module

ERP marketing module supports lead generation, direct mailing campaign and more.
Maintaining Chart of Accounts in ERP 17

ERP Financial Module

Both for-profit organizations and non-profit organizations benefit from the implementation of
ERP financial module. The financial module is the core of many ERP software systems. It can
gather financial data from various functional departments and generates valuable financial reports
such balance sheet, general ledger, trail balance and quarterly financial statements.

ERP HR Module
HR (Human Resources) is another widely implemented ERP module. HR module streamlines
the management of human resources and human capitals. HR modules routinely maintain a
complete employee database including contact information, salary details, attendance,
performance evaluation and promotion of all employees. Advanced HR module is integrated with
knowledge management systems to optimally utilize the expertise of all employees.

ADVANTAGES OF ERP SYSTEMS

The fundamental advantage of ERP is that integrating the myriad processes by which
businesses operate saves time and expense. Decisions can be made more quickly and with fewer
errors. Data becomes visible across the organization. Tasks that benefit from this integration
include.
1. Sales forecasting allows inventory optimization.
2. Order tracking, from acceptance through fulfillment.
3. Revenue tracking, from invoice through cash receipt.
4. Matching purchase orders, inventory receipts and costing.
ERP systems centralize business data, bringing the following benefits:
They eliminate the need to synchronize changes between multiple systems consolidation of
finance, marketing and sales, human resource and manufacturing applications
Z They enable standard product naming/coding.
They provide a comprehensive enterprise view. They make real-time information available to
management anywhere, any time to make proper decisions.
They protect sensitive data by consolidating multiple security systems into a single structure.
A perfectly integrated system chaining all the functional areas together.
The capability to streamline different organizational processes and workflows.
The ability to effortlessly communicate information across various departments.
Improved efficiency, performance and productivity levels.
Enhanced tracking and forecasting.
Improved customer service and satisfaction.
 18 Computerised Accounting

DISADVANTAGES OF ERP SYSTEMS

1. Customization is problematic.
2. Re-engineering business processes to fit the ERP system may damage competitiveness and/or
divert focus from other critical activities.
3. ERP can cost more than less integrated and/or less comprehensive solutions.
4. High switching costs increase vendor negotiating power vis a vis support, maintenance and
upgrade expenses.
5. Overcoming resistance to sharing sensitive information between departments can divert
management attention.
6. Integration of truly independent businesses can create unnecessary dependencies.
7. Extensive training requirements take resources from daily operations.
While advantages usually outweigh disadvantages for most organizations implementing an
ERP system, here are some of the most common obstacles experienced:
1. The scope of customization is limited in several circumstances.
2. The present business processes have to be rethought to make them synchronize with the ERP.
3. ERP systems can be extremely expensive to implement.
4. There could be lack of continuous technical support.
5. ERP systems may be too rigid for specific organizations that are either new or want to move
in a new direction in the near future.

SCOPE OF ERP

To be able to recast their business in line with the above challenges, organizations are
themselves getting redefined. Operations are becoming decentralized and multi locational. Risks
are being spread over multiple products and various classes of manufacturing discrete, process
and make/engineer to order are coexisting. Some end products are becoming raw materials for
others and manufacturing is getting diffused with distribution across an extended supply chain.
The organization boundaries themselves are getting diffused as more and more stakeholders are
getting tied in to form a synergistic and harmonious business ecosystem, each entity delivering
value to the other.
It is logical to assume from a systemic viewpoint that such a pseudopodia business
landscape needs a very robust underlying infrastructure. An infrastructure that primarily endows
flexibility and agility to respond and readjust to the three Cs on the one hand and on the other,
ensures tight control, checks and balances across all the enterprise resources, functions and
processes. One of the key features of a true ERP system is that the data is captured at the point
of origin and impacts all related subsystems, thereby making it available to every participant in
the process. It is meant to integrate the entire enterprise, starting from supplier / vendor to the
Maintaining Chart of Accounts in ERP 19

customer covering not only financial, inbound and outbound logistics and human resources but
ilso cross-functional supply chain optimization and execution and business intelligence function
sets.
The various areas covered by ERP are:

1. Financials
a) Financial Accounting.
b) Treasury Management.
c) Enterprise Controlling.
d) Asset Management.
e) Portfolio Management.

2, Logistics
a) Production Planning.
b) Materials Management.
c) Plant Maintenance.
d) Quality Management.
e) Project Systems.
f) Sales and Distribution.

Human Resources
a) Personnel Management.
b) Recruitment and Compensation Management.
c) Training and Development.
d) Skills and Management.

•L Supply Chain
a) Planner and Optimizer.
b) E-commerce/Business-to-business Commerce.
c) Sales Force Automation and Business warehouse.

FACTORS FOR THE SUCCESS OF THE COMPANIES

- ■ ■! '
An Enterprise is a group of people with a common goal, which has certain resources at its
z-oosal to achieve that goal. The group has some key functions to perform in order to achieve
goal. Resources included are money, manpower, materials and all the other things that are
: ; aired to run the enterprise. Planning is done to ensure that nothing goes wrong. Planning is
iraing necessary functions in place and more importantly, putting them together. Therefore,
Enterprise Resource Planning or ERP is a method of effective planning of all the resources in an
 Computerised Accounting Maintaining C

organization. Success of the companies depends largely upon the reliable process of information 20. The Budg
gathering and acting accordingly: In this era of cut throat competition, that too, in a hi-tech 21. Facilitates
environment where success of a company largely depends upon the reliability of the processes 22. Collects n
used for information management and taking action accordingly. The role of ERP is to provide in purcha
the infrastructure support for providing information across all the functions and locations in an
23. Enables si
organization. It includes:
24. Auto-gene
1. To respond to the client’s needs.
25. Access co
2. To asses and avail the market opportunities.
3. To coordinate and interact with the supply chain of the company. Applications
4. To improve the quality. The earlie
5. To insure timely delivery of products. system has gor
xganizations ii
6. To achieve a high level of satisfaction among customers.
ERP systems h<
7. To utilize the gathered information for a competitive advantageous situation.
1. Aerb:
2. Defei
3. Auto:
1. Automate purchase requisition and approval processes.
4. Bank
2. Prevent unwanted purchases.
5. Chen
3. Verify prices.
6. Consi
4. Check previously negotiated vendor contracts.
7. Healti
5. Track; monitor; trigger or approve purchase requests.
8. High-
6. Streamline purchasing procedures to business policies.
9. Mech
7. Convenient Workflow Interface to enable triggering
10. Heav
8. Managing and tracking processes accessible through the company’s Share Point Site.
11. Oil ar
9. Attachments to Workflow processes stored in Share Point Portal Server for easy access.
I2_ Proje.
10. Comprehensive integration allows you to use Great Plains to access requests and purchase
13. Public
orders created and approved in the Workflow process.
14. Retail.
Carbon copy options for managers to review requisition details.
15. Telea
Unlimited number of approval levels enabling complete or partial approval.
Automatic purchase order generation upon approval.
Comprehensive audit trail of all tasks performed in the Workflow process.
Workflow forms based on company business template.
Complete integration with directory services.
Officiator approval for unavailable users.
Easy; robust and reliable.
Allows grouping of all purchases form the same supplier.
Maintaining Chart of Accounts in ERP 21

20. The Budget Tracker add-on functionality helps confirm funds availability prior to approval.
21. Facilitates tracking of invoices and payment commitments to suppliers.
22. Collects reorder information from the inventory to enable automatic generation of requisitions
in purchase orders.
23. Enables similar purchase tracking for recommendations and opinions.
24. Auto-generated reminders for requests pending approval.
25. Access control for confidential information. Extremely cost-efficient and competitively priced.

Applications
The earlier MRP systems were meant for the manufacturing organizations. However; ERP
system has gone beyond this barrier. Today; ERP is being implemented in almost all types of
?rganizations irrespective of its mode and spread of operation. Typical lists of segments where
ERP systems have been implemented are
1. Aerospace.
2. Defense.
3. Automotive industry.
4. Banking and insurance.
5. Chemical and pharmaceutical industries.
6. Consumer goods.
7. Healthcare.
8. High-tech and electronics.
9. Mechanical engineering.
10. Heavy construction.
11. Oil and gas.
12. Project oriented manufacturing.
13. Public administration and education.
14. Retail.
15. Telecommunications.

GETTING STARTED WITH ERP

At the start of an ERP project the most important thing is to generate a list of specific,
Measurable goals for the project. But the hard fact is that a lot of ERP failures can be traced
flrectly to the lack of clear, clearly stated and actionable goals.
To put it more succinctly, if you don't know exactly what you're trying to do, your project
» vast Implementing ERP has been compared to riding a rodeo bull. It's hard enough to keep
 Computerised Accounting

things under control when you know exactly what your goals are. Actually you'll probably need
several sheets of paper as the list will go through several different versions in the process of
creating it. That's fine, as long as the finished list is solid, actionable items.
The first step is to push aside all those vendor's brochures, white papers and other literature
touting the benefits of ERP and particular ERP systems. This will figure in later.
Now pull up the numbers and trends on your company and take a long, clear-eyed look at
them. You'll undoubtedly see there are a few things you are doing outstandingly well, a lot of
things that you do passably well and some things that you don't do well at all.
You're most interested in the pain points: The things the company is average or poorer at
that have an impact on your bottom line.
It may take some digging to find the real pain points. Often the trends and averages will
show you where you can improve.
Take some time to analyze what you find. Are profits down? That's obviously a pain point
but why are they down? Are profits down because sales are down? Why are they down? Do you
have fewer customers? Are your customers buying less? Is it a combination of both.
Drill as deep as you can looking for causes. Note that it's seldom you can point to one root
cause. Instead there are several causes interacting.
As much as possible, ignore exterior influences, such as economic downturns, unless you
can develop a strategy to deal with the problem. Concentrate instead on the things you can fix.
Keep the list short. Usually you will find there are four or five things that matter the most
to your bottom line. Those are the conditions you want to improve.
Finally look at auxiliary goals - things that aren't pain points but that you want to
accomplish anyway. Often these are longer term goals, such as retirement or improving the
customer experience. List them off to one side.
Using a fully integrated ERP system such as abas can be a big change. Real-time
information becomes available from the moment you’ve implemented abas ERP. You no longf
need to create offline reports to see inventory levels, shop activity, sales activity, financii
activity, etc. You also have an ERP system with much more functionality and capability
you’ve had in the past, and you may not be sure how to use it. Installing an ERP system is easi
getting it to deliver the expected results is not. That’s where most ERP implementations fail,
you’re just getting started, here are a few useful tips to achieve the desired results:
1. Compare vendors: Don’t get impressed with the big names. Make it a point to do a thorou:
comparison and find out which ones would best suit your need.
2. Mind the timing: An ERP implementation is a demanding process. Don’t initiate it when
are other business priorities, such as start and end of financial year, etc.
3. Not just technology: Constant human input is essential to keep the ERP system run
smoothly. Figure out in advance who’s going to drive the solution.
Maintaining Chart of Accounts in ERP

4. Fewer customizations: The more you customize, the greater the scope for hard-to-track
mistakes. Instead search for a product that fits your requirements.
5. Test beforehand: Before you take the system live, make sure that you have tested the
implementation in actual conditions. This includes load testing as well as functionality.
6. Right training: Ask the vendor what kind of training support is provided. It’s crucial to
ensure sure that your staff can work with the system and the transition is smooth.
Go in phases: Attempting to overhaul the entire system in one go is risky. A better
recommended approach is to create a blueprint and take small steps.
■ Right expectations: Why are you going ahead with ERP? If it’s to see a quick turnaround, you
need to rethink your expectations.
Analyze: The system analysis should first be done at your end before you accept a proposal
from the vendor.
19. Decide on cloud: Identify which type of cloud configuration would suit you best. Ask the
vendor if in doubt.

If you are looking to get started fast with your installation the following areas should be
:-jt concentration in this order:

. Setup your service lines

Service lines are arranged into sections of your service groups which can be
■ independently managed via the attribute manager within ERP, to give yourself the best possible
tart go to Business and then Service Line Setup and proceed to add related services and
_ndard unit sell and unit cost prices to each line, these will be piped into every comer of your
- '-illation discreetly giving you varying level of controls and customization wherever they are
• died upon.

L \dding customer companies for the purpose of asset management

You as the system owner already have all your settings inside Division and System settings
impact who you are and how you will pass down data into things such as Internal contacts,
. adding a company should be your first step, set up a few customers (customers are the
- ;ger that can be added to asset management) and then you are ready for the next step.
:--member to supply information regarding a supplier's coverage region so you can get the
sem running like clockwork when it comes to recommendations in a task.

1 \dding contacts that are internal to you

In house staff, employees, people for payroll, however you name it, this is one of the most
mrertant steps, you should goto 'New Contact' and start adding your internal staff and all of
ner related Service Lines they offer so that you have a better opportunity at generating
II. *
Computerised Accounting Maintaininj

recommended resources for your tasks, this takes tremendous pressure off and turns tasking into with interna
a pure pleasure in ERP. applications
all of the pr
4. Adding contacts to suppliers and customer companies
die over the
It is important to know the contacts within your suppliers and customers, so for a
company to work effectively you need to add at least one contact to a supplier company and a 10. Adding
customer company. Creating these profiles can later be setup up for access to your installation so Now ti
that they can oversee all of their work anytime of the day, which is covered in account Application'.
management. presented
it and it will
5. Adding customer contacts
«ad> to fill i
You may have a database of customers, which are not related to customers that simply
* offered re,
need to be represented, at this point just select them as customers and they will become added
suppliers
and available in all related task operations. Please note we have API insertion tools and ability to
import data, but we cover that on other articles.

6. Set up staff payroll

Setting up staff payroll in your ERP system is essential to making sure that your tasks
generate the right costs so that you can effectively see how your businesses finances are run,
with staff payroll you can add contracts that have starts and expiration's, set salaries or per hour
rates and all other types of goodies that will give your business full financial transparency.

7. Asset management for your internal company and company customers

Asset management is another key area which requires immediate attention, from this section
I
you can start adding your customer's buildings, area assets and more (remember in step 2 you
should have turned asset management on for them). Fill in the address information for buildings,
that is very important, for invoices to work effectively, you need to add addresses and get a
relocation fix, without adding geography the system is at a disadvantage immediately.

8. Again, make sure you input address information

Purposely repeating ourselves, address information is everything, so make sure ALL of you
buildings have their physical location and invoice address inputted as a bare minimum. Even
back to staff payroll and fill in your employee address information, and while you're at it, go
your customers and make sure that's filled in, you will have a much richer interaction by ma
sure address information is covered, and most of all, making sure invoice addresses are inputi
is integral to the entire invoice process, without inputting these, your system can't possibly knc
where to send physical invoices too or who they should be addressed to.

9. Create a new task application

Tasks are the heart and soul of the system, running all of your workload through our c 6er«
Task component will not only lighten the load and give a level of transparency and clarity
have never experienced before in business, but it will provide a full financial tracking coup 'Tilm 3
 Maintaining Chart of Accounts in ERP 25

with internal and external time tracking. First thing is though you need to setup a application,
applications allow operators and field workers to simply click and select then be presented with
all of the pre routine data you supplied and fill in the variables such as time and then allow for
the over the top task management from the assigned contacts.

10. Adding a new task from your newly created application

Now that you have an active task application set as the intended use of 'New Task
t Application', you can go to the menu on the desktop or mobile and select new task, you will then
be presented with categories and can navigate in a click to your application, once located, select
it and it will create the application with all of the settings from your task application leaving you
ready to fill in the blanks and assign accordingly. If you set up everything correctly you should
y be offered recommended contacts for the task in hand and start dishing out work to your staff
d
and suppliers while tracking.
o

MOUSE/KEYBOARD CONVENTIONS
Title bar: Displays the Tally. ERP 9 version number.
ks
m,
1. Horizontal button bar
un­ Selection of Language key, Keyboard Language and Tally. ERP 9 Help.

2. Close button
Performs the standard Windows Operating Systems function (Windows 95 onwards),
ion allowing you to minimise Tally. ERP 9 and work on other applications. To restore Tally. ERP 9,
rou click the Tally. ERP 9 icon on the taskbar.Fundamentals of Tally. ERP 9 19
igs, 1 Gateway of Tally
:t a
Displays menus, screens, reports and accepts the choices and options which you select to
iew data as required.

4. Buttons toolbar
rour
Displays buttons which provide quick interaction with Tally. ERP 9. Only buttons relevant to
1 go
_-.e current task are visible.
0 to
king 5. Calculator Area
Litted Used for Calculator functions.
mow
i. Info Panel
Displays Version number, License details, Configuration details.

ERP Switching between Screen Areas

f you Quitting Tally. ERP 9 While working with Tally. ERP 9, use the following conventions.
upled *aen Tally. ERP 9 first loads, the Gateway of Tally screen displays. To toggle between this
 Computerised Accounting

screen and the Calculator/ ODBC server area at the bottom of the screen, press Ctrl+N or
Ctrl+M as indicated on the screen. A green bar highlights the active area of the screen.
You can exit the program from any Tally. ERP 9 screen, but Tally. ERP 9 requires all
screens to be closed before it shuts down. To quit working on Tally. ERP 9,
Press Esc until you see the message Quit? Yes or No? Press Enter or Y, or click Yes to quit
Tally. ERP 9.
MOUSE/ KEYBOARD CONVENTIONS j
Action Particulars
Click Press the left mouse button.
Double-ctick Press and release the ieft mouse button twice, without
moving the mouse pointer off the item.
Choose Position the mouse pointer on the item and click the
left mouse button.
Select Position the moose pointer on the item and double-
cisck the left mouse button
Press Use the keys on the keyboard in the combination
shown.
Fn Press the function key
Fn Press ALT + function key,
Fn Press CTRL * function key

Alternatively, to exit without confirmation, press Ctrl+Q from Gateway of Tally.

• ftimary ]
You can also press Enter while the option Quit is selected from Gateway of Tally.
• The c
Action Particulars Click Press the left mouse button. Double-click Press and release the left
state ;
mouse button twice, without moving the mouse pointer off the item. Choose Position the mouse
• Select
pointer on the item and click the left mouse button. Select Position the mouse pointer on the item
and double-click the left mouse button. Press Use the keys on the keyboard in the combination • Base
shown. Fn Press the function key. Fn Press ALT + function key. Fn Press CTRL + function key. • Beets an
• F
COMPANY CREATION -Any c

Creating a company in Tally.ERP 9 is a simple, one-time activity. The company data created • Beets
can be modified, exported and other company data can be imported into your company at any 5eid i
given point of time. «ffen

• Seen-.-, i
To create a company in Tally.ERP 9
Tai’- 9
1. Go to Gateway of Tally > Alt+F3 > Create Company
'Ta*. ' W as
Al arina-Ti-*
car* ex
■a* w* 9e recci
Maintaining Chart of Accounts in ERP

Directory: modify the data path, if required.

2. Enter the following details pertaining to your Company

• Primary Mailing and Contact Details
• The correspondence details of your company such as mailing name, address, country,
state and Pincode, telephone number, email ID, and so on can be entered here.
• Select the country for which you require the statutory features in the field Country.
• Base currency symbol is enabled in accordance with the country selected.
• Books and Financial Year Details
• Financial year begins from: Tally.ERP 9 considers a financial year to be of twelve months.
Any date can be entered here.
• Books beginning from: By default, the date provided in the Financial year begins from
field is captured here. However, this can be changed if your book beginning date is
different.
• Security Control
Tally.ERP 9 provides various security options which can be enabled in this section:

Tilly Vault password

An enhanced security system, which allows encryption of your company data. Encryption
r • olves converting normally accessible Tally information into unrecognizable information, which
jc only be reconverted by authorized persons.
28 Computerised Accounting

Use security control

Security control enables you to initiate a password-protected system to control access to
your company data.
Note: The administrator password is case-sensitive, and if forgotten, it cannot be retrieved.
Once Security Control is enabled, in the Company Alteration screen, the fields against
Password and Repeat password will display a single star.

Use Tally Audit features

Tally Audit allows the administrator or an auditor profile user to track changes in accounting
information. For more information refer Tally Audit Feature.

Disallow opening in educational mode

Set this option to Yes, if you do not want the company to be opened in educational mode.
In educational mode, you can record transactions only one the first and last day of a month.
On accepting the company creation screen, if you have specified Tally Vault password,
Tally.ERP 9 prompts you to enter the user name and password.
• Base Currency Information
Base Currency Information varies based on the country selected. The various fields under this
section include:
• Base currency symbol: The currency symbol of the respective country selected appears
in this field.
• Formal name: The name of the currency specified.
• Number of decimal places: This is set to 2, by default. However, it can be specified
up to 4 places.
• Suffix symbol to amount? For countries which specify the symbol after the amount
(value) - this option can be enabled. For example, Yen is specified after the amount (5000
Yen).
• Show amount in millions?: This is useful for companies, which require reporting the
financial statements in millions.
• Add space between amount and symbol?: Enable this option if you require space between
amount and symbol.
• No. of decimal places for amount in words: You can specify the number of decimal places
for printing the amount in words. This number should be equal to or lesser than the
number specified in field No. of decimal places for amount in words.
• Word representing amount after decimal: The name of the decimal portion of amount i
appears based on the country selected. For example, if India is selected as the country
and Number of decimal places is entered, then paise appears by default.
Maintaining Chart of Accounts in ERP 29

3. Press Enter to Create the Company

The Gateway of Tally screen appears as shown below:
■; i! SiWSt£«» •:

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Frtstajh 1 Apr,
till nl Sirtmrf Camjiagfei
msm
Masses
AC€tMJf5|§<
a*«»*h ?r»aing c« (I iVt/4r/.VX flf fi«SM

Accounting Yor^ttnrs
SweMfciy vouchers

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wpOrtOaU
SsM&ing

Report*
PtoM&i.t»SM
SWcK Surwuaty
IWxiArwm

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<H»rt

To maintain company data using Taliy.Server 9

Click S: Server Data Loc.
Note: If the administrator has enabled security access, users need to provide authorised
Tally.NET user ID and password to access the server list.
1 Select the required location from the List of Taliy.Server Data Locations.

Press Enter to continue with company creation.

Maintaining Chart of Accounts in ERP 31

SELECT A COMPANY

Quick Guide to Create Company

Open Tally Software by double clicking on the Tally.ERP 9 icon.
Z If you are opening Tally ERP 9,First time after installation, you will be landed to a menu called
company info menu. (If you are in Gateway of Tally Press Alt+F3 to get that menu).
Select Create Company option in the menu and press enter key.
The screen displayed in-front of you is company creation screen.
Type the name of the company,address,Financial year begins and all other details asked by the
creation screen.
Press Enter Key, Finally the program will ask you the confirmation to Save ,Yes or No.
To save and create company do Press Enter Key, Press Y Key or click on Yes.The program
- D create a company and you will be entered into it.

SELECT COMPANY (IN DETAILS)

Select Company option allows you to load another company from the list of companies
. sted which you may have created earlier.
Press Enter on Select Company or use the button FI: Select Cmp. Tally.ERP 9 displays the
*:Cowing screen:

Select Company

Directory : C:\Tally.ERP9 Data

Name :|
List of Companies

r-2007 to 31-Mar-2BQ9
ABC Company 00003) 1-Apr-2008 to 31-Mar-2009
ABC Company (10005) 1-Apr-2006 to 31-Mar-2007
ABC Company (10006) 1-Apr-2005 to 31-Mar-2000

If your business uses Tally.Server 9 to maintain data,

Click on S: Server Data Loc. or press Alt+S

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 32 Computerised Accounting
i*j.

Note: If the administrator has enabled Security Access, users need to provide the authorised
Tally.NET credentials in order to access the Server List.
The List of Tally.Server Data Locations is displayed. Select the required location

The Companies available on the selected Tally.Server will be displayed:

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Data;

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Tally.ERP 9 displays
1. Company Name (All the companies created are displayed in an alphabetical order).
2. System-generated code for each company displayed.
3. The Financial Year information relating to the number of years data present in the company.
Note: The system-generated code for each company is displayed to assist you in identifying
which company you wish to work on in case you have multiple companies with the same name
(as displayed in the above screen).
Select the required company from the list given to go to the Gateway of Tally for that
company. In case two or more companies are loaded, click on the company which you need to
work on so that the selected company will be highlighted and will appear on top of the list.
Maintaining Chart of Accounts in ERP 33

Alter Company Details

This option allows you to alter information about the existing company; you can modify any
^formation at any time that is set while creating a company.
Go to Gateway of Tally
Select F3: Cmp Info. (ALT+F3) from the button bar
Select Alter and press Enter and the screen appear as shown below:

et Company

|I|I| || |

Select the company from the List of Companies and press Enter to view the Company
- .eration screen.
Make the necessary changes in the required fields and accept the screen.
To change the password if Use Security Control is set to Yes:
Enter the Name of Administrator.
Enter the new password.
Re-enter the password in the Repeat field to confirm.
Enter the Old Password and Accept the screen to alter the company.

Security Control

Use Security Control ? Yes

(Enable Security to avail Tally: NET Features)
Name of Administrator : Ajay
Password
Repeat Password
**************
Old Password
(Password Strength is Strong)

Zzmpany Features and Configurations

Features

• Accounting Features
Enable the various accounting features required for making transactions in your business
■ -g FI: Accounting Features.
To open the Accounting Features screen
Go to Gateway of Tally > Fll: Features > FI: Accounting Features
 34 Computerised Accounting
nr

Company ABC Compont

AccountinaFeaturas
gggSfflJ towfcntfl
integrals Account* end Imssntwy I Allow fowtctng ? Yes
focofte/Expenste Statement instead 01P 41 ’ No Enter Purchase* « Inmio* format ’ Ves
Aftoer Slutti-Currency ’Wo Use iMWCrMK Woles ? No
Use tmcuce mode for Credit Meles ’ No
Use invoice mode for Debit Males ’ Mo
Maintain EW-vnsa Datsls ’ Yes Budgets 4 Scenario Manajjemcnt
(for Mon-Trading Afo» afoo) ’ Wo
M&ifrt&n Mid Cootie'S ’ No
Activate Interest ’ No
isiss advanced parameters) ’ Ho Use Reversing Journals 4 Optional Vouchers ’ Mo

CoeNProfftCenoo* Martoadtnent SH"aa£e«Wf®s

Maintain Payroll ’ No &»tto Cheque Printing ’ Yes
MamtamCost CentiU /Uss Banking Confisurabcw fo Sank ledger
’ Ko. Weafor for CMsiO Phtsfcrtg Cefof-gwratfon?
Uss Cost Centre for Job Costing ’ No
Mors than ONE Paysolf / Cost Category ’ No Alter Banking Features ’Mo
Use PradSeftned Cost Csnwe ABserdtans duiing Entry ’ No
Shm Opening Beteoce for Revenue stents in Reports 0 No Other Features
Ajfow ’era vetoed dfon » Mo
Idfenrais Multiple Mnhfij Betrts for Crwtpmy A Ledgers ’ No
SebAher Company MaSng Detads ’ Mo
Enatte Company Logo ’ Mo

Ft: Ac«ii«S Fife tawtory F3: Statutory Ffc Add-Ons

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There are various settings available under Accounting/Inventory/Statutory & Taxation
Features, which determine the information to be entered in transaction entries.

F2: Inventory Features

This feature enables you to set the Inventory Features required for the transactions.
Go to Gateway of Tally > FI 1: Features > F2: Inventory
£2E£Si ABC
.WsiSjwStMsFiSjg. r-WW«tS

Gvnenrt Woucinft
MtMn accmmt* wfy HR9H •te-ytseaAvSc rr.>.yV\«,-*s Ito ’Yes
?¥«$ Maeord puffihasss in snvotea mode ? yes
Use Income and Esp««tes Afc In stood of Profit amt toss Afc ? Me Use deb! and credit notes ? Ho
Reeoid credit nolei re invtwce moan ? Wo
Enable mulfocuneitey ’Ma MmmI rtafot notes in wwoica mode ? No
Oj&tsndinq l»an»««me»it Sednefo and Scenario Manaijeittiwt
Mainsails Ml-wse details ? Yes MstotsMt tadgst* and emdrete ’No
For noo-taamg accounts also f No
Usd reversing journals and optional voucher* ? No
Activate interest calculator) ? Mo
Use advanced paramatns Sanfcma Fextor**
C»sW>ro«t CeatHK etanansment Enable chegue printing ? Yes
0»n»ongcoo^u-4«vs#t isanfc tasger
Maintain p*y«* ’No wmifor ter erteqtar jWBPtp c&di$«rdtiia>g
Maintain cost centres ’Mo ■fefc-Wtfr r Sz'sS ’No
Usa cost centra for job costing ? No
MsitHaio more than one payis'ii or coat cafogory ? No SeUattw pMFdatad transactor) foahee* ’No
Use pra-dalinad cast centre atfocatinos «transactions ? H«
Stow opening balance for revenue items fo reports ?No tMtorfoatores
r'w-rrS’Vrs.-vPii »rszr*n. '?•??? ’No

? Wo
EnaKa company fogs ?n

O:Aee»b«w F2s Mventety F3t Statutory Ate Add-Ons

Maintaining Chart of Accounts in ERP 35

F3: Statutory and Taxation

This feature enables you to set the Statutory Features required for the transactions.
Go to Gateway of Tally > FI 1: Features > F3: Statutory & Taxation
Company COMPANY

Stawrtaiy and Taxation

Enable Value Added Tax (VAT) ? MSBi Enable Tax Collected at Source (TCS) ? Yes
S«!/atl« VAT details ? Ho Set/altw TCS details ? Mo
Enable sx«ts» ? Yes Enable payroll statutory ? Yes
SWaltw details ? Ho SetZaher paytod staMery details ? Mo
Enable mnm tax ? Ho
SeVaKw service tax delays ? Ho
Enable Tax Deducted at Source (TDS) ? Yes
SeVaHer TDS details ? Ho

TdM

PAMteesww tax •
Corporate identity No (CM)

FT: Accounts FI; inventory > I: Pfc Add-O»»

■ 4: TSS Features
To configure TSS Features
• Go to Gateway of Tally > Fll: Features > F4: TSS Features. The TSS Features screen
is displayed.
Connection Details:
• Connect name: Enter an alternative name for the company to be connected as per
requirements or retain the company name mentioned in the company master.
• Name of contact person: Enter contact person name.
• Contact number: Enter contact number.
■ Configuration for Remote Access
• Allow company to connect: Enable this option when required to establish a connection
with the Tally.NET Server.
• Connect company on loading: Enable this option when the company requires to be
connected to Tally.NET Server on loading the data.
- SMS Access Details
• Enable SMS access: Set this option to Yes to receive company information on SMS
request.
 Computerised Accounting J Maintaining

• Company name for SMS: Enter the name of the company to access information on Go to G
SMS request.
Press Enter to accept.

F5: Audit Features

To enable Statutory Audit features
Go to Gateway of Tally > Fll: Features > F5: Audit Features

Company. ABC Company

Statutory Audit

Enable audit working paper ? Yes

Enable audit priorities and categories ? Yes

Coofigun
set F12

io Gate

F6: Add-On Features

Customers, to meet their accounting requirements may purchase customised solutions from
Tally Partners/any solution provider. Depending on the customer requirement solution provider
formulates the solution. In some cases, a solution may require the introduction of New Feature in
Tally.ERP 9 to support the functionality. F6: Add-On Features is a place holder for the features
provided in the Add-Ons/Local TDLs loaded.
Example: Fixed Assets module is provided by introducing a new feature Enable Fixed
Assets.
On loading this TDL, the related features will be displayed in F6: Add-On Features screen.
From here users can enable or disable the functionality.
I Maintaining Chart of Accounts in ERP 37

Go to Gateway of Tally > Fll: Features > F6: Add-On Features

Company ABC Company

AddQn Features

Cfefc on Shop button to buy Add-Ons

•12: Configurations
To set F12: Configure for Accounts and Inventory Masters
Go to Gateway of Tally > FI2: Configure > Accts/Inv Info.

Mattel Configuration

Allow ALIASES along web Names ?szaHi

Allow Unguage AUAS6S along with Names ? No

ActOWMl* Inventory

Allow ADVANCED entries m Masters t Yes Allow ADVANCED entries in Masters ? No

Use ADDRESSES for ledger Accounts ?Ye» Use PART NUMBERS for Stock Hems ? No
Use CONTACT DETAILS for Ledger Accounts ? No Use Description for Stock items •> No
Add NOTES for Ledger Accounts ? No Use REMARKS for Stock Items '? No
Use ALTERNATE UNITS for Stock Items ? No
Allow Std. Rates for Slock Items ■’ No
Specify Default Ledger Allot atrofl for Iworcing •? No
Aitsw Component tret details (B* of Materials) ? No
Uee ADDRESSES for Godowns ? No

By default, Accounts/Inventory Masters settings are set to No. Features that you require can
-e set to Yes. Typically, they are additional fields that appear during Masters Creation which
sable you to obtain more information and detailed analysis.
Id
38 Computerised Accounting '•fmntaining

F12 Configuration Menu

FI 2 configurations are application centric configuration options that are present across all
This ena
screens of Tally.ERP 9. This configuration can be changed and managed any number of times to
However. you
suit changing needs. For example, if you want to record your purchase transactions in debit/
preference.
credit mode, the same can be set in the F12 configurations. Similarly, if you prefer payments in
To/By format, this can again be configured using the F12 options. For exan

Configuration options, on the other hand, affect all companies maintained in the same Go to Gs
Tally.ERP 9 directory and setting the configuration for one company will affect the configuration
of other companies in that particular data directory.
All the FI 2 configuration options present across various screens of Tally.ERP 9 are provided
together in the Gateway of Tally.
Go to Gateway of Tally > F12: Configure
The FI2: Configure menu appears as shown below:

Gateway of Tally....
Configuration

General
Numeric Symbols

Accts / Inventory Info.

Voucher Entry
Invoice / Orders Entry
PaYroll Configuration
Banking Configuration

Printing
E-Mailing

Data Configuration
Advanced Configuration

ProducT & Features

Licensing

Quit
Maintaining Chart of Accounts in ERP 39

NUMERIC SYMBOLS CONFIGURATION

This enables you to set the number styles. The default styles and symbols are specified.
However, you have the option of changing them in the respective fields according to your
preference.
For example, change negative sign from (-) to (+).
Go to Gateway of Tally > F12: Configure > Numeric Symbols

Configuration of Numeric Symbols

(Use underscore to denote a space)

Symbols to use for Positive Numbers

Symbol before number (prefix) KSH default: '(+F

Symbol after number (suffix) Default: blank

Symbols to use for Negative Numbers

Symbol before number (prefix) : (-) default:'(-)’

Symbol after number (suffix) Default: blank

Symbols to use for Debit Amount

Symbol before number (prefix) Default: blank

Symbol after number (suffix) Dr Default: ’_Dr’

Symbols to use for Credit Amount

Symbol before number (prefix) Default: blank

Symbol after number (suffix) : _Cr Default: ’_Cf

>ucher Entry Configuration

This option allows you to configure the vouchers entries in Tally.ERP9, both the Accounting
xcd Inventory Vouchers can be configured from this menu for additional information.
Go to Gateway of Tally > F12: Configure > Voucher Entry
' T
40 Computerised Accounting

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du?wj t BBSs] ’Ho

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Uw Ce1> Of T<k6v ’Ho ftinn or ewjato* tioik Marc* ”•»
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’Ho Mm <o^ wsoctm ’Ho

’¥« Statutory
Show cott tatowtoytey** a**** ’Vo*
Show Sab* fe» VW'KtXn! ’Y*« Atew moofcau«alia«<Sat*«lsfcrVAT ’Ho
’Vm
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Banking Configuration
This allows you to configure the BRS Report and alter the Reconciled Vouchers.
Go to Gateway of Tally > F12: Configuration Menu > Banking Configuration

Banking Configuration
Show all unreconciled transactions in BRS till date ? Yes
Remove bank date on altering reconciled voucher ? No
(Bank ledger/amount/voucher type)

Location of new bank statements : D:\Tally.ERP9

Location of imported bank statements D:\Taliy.ERP9

Location of payment instuctions D:\Taliy.ERP9

Show details before export ? Yes

Location of new intermediate files : D:\Tally.ERP9

Location of imported intermediate files EHESBEEIM

CHART OF ACCOUNTS
To access your chart of accounts go to Settings > Chart of Accounts. This is where
your accounts and nominal code settings are set and maintained. The settings here impact I
 Maintaining Chart of Accounts in ERP 41

your reports are calculated; these include your primary financial reports sudn as yoatViririx 'ri.
Loss, Balance Sheet and Trial Balance.

Chart of Accounts Details

Your chart of accounts is split into 4 columns:
• Code - This is the nominal code for this account.
• Name - This is the label for the nominal code.
• Type - This is where the balance of the account will appear on your profit and loss report and
balance sheet.
• Area - This is where the nominal code will show within your Tally account when inputting
data.

Type - Profit and Loss codes

• Turnover - this is money taken by a business and is treated as revenue. This is usually used
for sale.
• Cost of Sale - this is money spent (overheads) on generating revenue. A good example could
include a wholesale price of product that you will resell.
• Expenditure - compared to cost of sales, this is operational or administrative expenditure.

Type ■ Balance Sheet Codes

• Fixed Asset - this is an asset that cannot be easily converted into cash. Examples would
include property, vehicles, cash registers and so on.
• Current Asset/Liability - This means that the account should be treated as a current and
variable asset when the balance is a positive, and as a debt (known as a liability) when the
balance is negative. This is normally used for bank accounts. When your bank balance is
positive it’s an asset, however when you’re overdrawn you’re in debt and it’s a liability.
• Capital & Reserves - Capital is the money shareholders have contributed to the company.
Reserves are the profits earned and other resources received by the company that have been
kept for the benefit of shareholders.

Area
This is where this nominal code can be used. By default, the nominal code will be restricted
for use in this area only unless Advanced Settings > Access to Nominal Codes is enabled.
• Sales Type - This nominal code can only be used in the Sales area on invoices.
• Outgoing Type - This nominal code can only be used in the Purchases area on purchase
receipts.
• Bank transaction Type - This nominal code can only be used in the bank area on bank
• | transactions.
how i
 Computerised Accounting

Bills Payable Current Liabilities

Bills Receivable Current Assets
Inward Carriage Direct Expenses
Outward Carriage Indirect Expenses
Purchase Purchase A/c.
Purchase Return Purchase A/c.
Sales Sales A/c.
Sales Return Sales A/c.
Drawing Capital
Motor Car Fixed Assets
Furniture Fixed Assets
Vehicle Fixed Assets
Discount Received Income Revenue
Discount Payable Indirect Expenses
Railway Freight Direct Expenses
Wages Direct Expenses
Bad Debts Indirect Expenses
Depreciation Indirect Expenses
Rent & Taxes Direct Expenses
Opening Stock Stock In Hand
Salary Indirect Expenses
Loan Received Loan Liabilities
Loan Payable Loan Assets
Bank Overdraft Bank Overdraft
Sample
Goods Tempts Sales A/c.
Goods In Fire Sales A/c.
Goods Lost Sales A/c.
Post And Telegram Expenses Indirect Expenses
Discount Received Income Revenue
Discount Paid Indirect Expenses
Maintaining Chart of Accounts in ERP

Commission Received Income Revenue

Commission Paid Indirect Expenses
Printing & Stationary Expenses Indirect Expenses
Machinery Fixed Assets
Repairs Of Machinery Indirect Expenses
Light Bill Of Office Indirect Expenses
Light Bill Of House (Drawing) Capital
Telephone Expenses Indirect Expenses
Telephonebill Of House (Drawing) Capital
Bony Indirect Expenses
Creditors Sundry Creditors
Debtors Sundry Debtors
Insurance Premium Indirect Expenses
Office Rent Indirect Expenses
Office Expenses Indirect Expenses
Advertisement Indirect Expenses
Building Fixed Assets
Office Instrument (equipments) Current Assets
Deposited (Investment) In Share Current Assets
Interest On Bank loan Indirect Expenses
Goodwill Current Assets
Bank Loan Current Liabilities
Interest Received Income Revenue
Unpaid Salary Current Liabilities
Advanced Paid Premium Current Assets
Unreceived commission Current Assets
Advanced Received Interest Current Liabilities
Charity Indirect Expenses
Income Tax Indirect Expenses
Loan In Staff Current Assets
Interest In Loan In Staff Income Revenue
Cheque Return
Goods Loss By Rain Sales A/c.
 Computerised Accounting

Shop Rent Indirect Expenses

Donation Indirect Expenses
Type Writer Fixed Assets
Dharmada Indirect Expenses
Computer Fixed Assets
Loss By Flood Sales A/c.
Royalty Current Assets
Trade Work
Custom Duty Direct Expenses
Conveyance Direct Expenses
Patents Current Assets
Legal Expenses Indirect Expenses
Demurrage Indirect Expenses
Remuneration Indirect Expenses
Professional Tax Paid Indirect Expenses
Dead stock Indirect Expenses
Lease Hold Land Current Assets
Lease Hold Premises Current Assets
Honorarium Indirect Expenses
Rent Received Income Revenue
Rent Paid Indirect Expenses
Compensation Received Income Revenue
Compensation Paid Indirect Expenses
Loss Indirect Expenses
Rent Received In Advanced Current Liabilities

R CREATION
Ledger creation is the preliminary steps to start with Tally ERP 9 just after creating
company. Before creating a ledger you should know what is a ledger according to accounting
concepts a group of account is called a ledger. Whereas an account is a device used to record
the effect of transactions on the assets, liabilities and capital of an enterprise. In accounting
concepts a book with much account is called a ledger.
In Tally perspective an account itself is called ledger. In Tally ERP 9 Account = Ledger. As
per their help documentation says as “A ledger is the actual account head to identify your
Maintaining Chart of Accounts in ERP 45

transactions and are used in all accounting vouchers. For example, purchase, payments, sales,
receipts and others accounts heads are ledger accounts”.
For reporting purpose a ledger is grouped according to its nature. This will help you to
know the summary of specific types of ledger. For example,
Tea expense grouped under Indirect expense. Purchase expense grouped under purchase
account which is a sub group of direct expense. This will help you to understand the total
: indirect expenses as well as individual ledger total.
Here are the examples of grouping of ledger compared with actual accounting groups.

Ledger Group in Tally ERP 9 Group as per accounting

Tea expense Indirect Expense Indirect expense
Purchase A/c Purchase Account Direct expense
ICICI Bank Loan Secured Loan Liabilities
Furniture Fixed Asset Fixed Asset
Customer A Sundry Debtors Debtor
Commission Received Indirect Income Income Indirect
In the above example you can find the purchase account is grouped under a new group
—Led Purchase Account in Tally. But in Reporting (profit and loss account) this will show as
arect expense in Trading Account. Which means the purchase group is the sub group of Direct
opense.

Luck Guide on Creating Ledgers

Those who are in Hurry, Please use below quick guide to creating Ledger.
Go to Gateway of Tally>Account Info>Ledger>Create
Enter Name of The Ledger
* Enter alias (additionalname, code or nick name) if any .This field is not mandatory.
* Select the appropriate group in “Under” Filed.
Inventory Values are affected : If you want the ledger affected in inventory select Yes else No
x Provide Mailing Details if you are creating party ledgers like Sundry Debtors, Sundry Creditors
Provide Bank Details if it is a party ledger.
I Enter Tax registration details PAN/IT No etc.
* Press Enter and accept the screen, A new ledger will have created in Tally database.

♦: * to Ceate Ledger in Tally?

Go to Gateway of Tally> Accounts info>Ledger>Create
Ledger creation screen will look like this
 Computerised Accounting I Maintaini,

Now
Tally

The options in ledger creation screen will vary in accordance with the features selected in
Fll features and F12 Configuration screen.

Let’s fill the required details

Name: Name of the ledger account for example ‘Local conveyance’.
Alias: This is an alternative name; you can enter an alternative name or code number for
this ledger account. For example (IE001).
Under: The group in which the ledger accounts comes under. This is selected in
accordance with the nature of account, whether it is an income, expense, asset, liability account
Here this Local conveyance comes under “Indirect expense”.
Opening balance: Enter the opening balance at the time of entering accounts in tally, leavn Seen
blank if there is no opening balance.
Maintaining Chart of Accounts in ERP 47

Now save the screen you are successfully created a ledger.

Tally will not allow you to create multiple accounts in the same name. If you tried to create
a ledger already existing with same name ,tally will warn you “Duplicate”.

_edger Creation example

Let’s create another ledger of bank loan account. For example ICICI Bank A/c 100005456.
5 bank loan account can be created as follows.
Name: ICICI Bank A/c 100005456
Alias: 5456 (code number)
Under: Secured Loans
.L,,
48 Computerised Accounting Maintaining <

Then go

Nc». jDvi

SINGLE LEDGER CREATION

From Gateway of Tally, go to Accounts Info.
Maintaining Chart of Accounts in ERP 49

Then go to Ledgers.

Gateway of Tally.....

Now, under Single Ledger, select the option Create.

Gateway of Tally....
Accounts Info......

Now you will see a simple Ledger Creation window in which you will have to enter certain
jrails about the ledger.
 Computerised Accounting

It looks like in the picture below:

Name - The first option is the Name of the ledger. Enter the name of the ledger, for
example, Furniture A/c or Building A/c.
Under - Every ledger requires a group to operate in. For example, Furniture A/c and
Building A/c_will be under Fixed Assets group as they are both Fixed Assets.
Youihay&tejSgJ^ct a group that is required as per your ledger.
Inventdr^ values are affected - If you have a ledger which requires inventory or in simple
words, stock to be maintained,'Set this option to Yes.
Fin, example, you are selling sim cards, your ledger will be Sim Cards.
There toast a ^quantity to sell i.e. stock or inventory and so you must set Yes to
Inventory Valuesare affected.
Mailing Details - You have to fill in the mailing details like Name, Address, Country and
Bank Details for the ledger.
It is for the ledgers such as debtors and creditors which require these kind of details.
Ledgers such as Furniture or Building do not require these details because they are not
humans and therefore they do not have any mailing details.
Tax Registration Details - Similar to mailing details, these details are also of people and not
for ledgers like furniture, building etc.
Maintaining Chart of Accounts in ERP 51

Tax registration details include PAN which is required on any tax related documents.
Opening Balance - This is the opening balance of the ledger if any.
Any balance of the ledger which is being carried forward from the previous year will have
to be entered as the opening balance.
This was the last step which was required to create a ledger under Single Ledger Method.
It will not take more than a minute
In this video you will two main methods of creating ledgers in Tally.
You can simply press ALC consecutively and create a single ledger. That is the shortcut for
creating single ledgers in Tally.

MULTI LEDGER CREATION

Like single ledger, it is extremely easy to create multiple ledgers in Tally.

The process is almost same as single ledger method. Only one step is different.
Major advantage of this method is that you can create many ledgers in a very short amount
of time.
It takes only 10 seconds to create a ledger with the help of Multiple Ledger method in Tally.
Let us look at this method step by step.
From the above method, when you go to Ledgers, you will have the option of Multiple
Ledgers.
Under that, you have to select Create.

Gateway of Tally....
Accounts Into......
Ledgers
o^library $>•'
Single Le GENERAL
or
Create
Display 5. 21
Alter

Multiple Ledgers
CReate
Display
AITer

Quit
 Computerised Accounting

Now, you will see a Multi Ledger Creation screen like in the image below:

There are not many options as there were in Single Ledger Method.
Let’s look at it one by one.
Under Group - This option is similar to the Under option under Single Ledger Method.
But under this method, it works a bit differently.
If you select the group on the top as shown in the picture above, then you will not have to
select the group every time you create a ledger.

ALTERING AND DISPLAYING LEDGERS

Information under Display and Alter is the same. Display option does not permit any
modification. Alter option permits you to alter the information.
You are allowed to alter any information of the ledger master with the exception of the
Closing Balance of a ledger account, if any, other than closing balance of accounts under the
groupStock-in-hand.
Go to Gateway of Tally > Accounts Info. > Ledgers > Display or Alter
Modification of Account Ledgers is possible under Single Ledgers as well as Multiple
Ledgers option. However under Multiple Ledgers, all the fields are not available for alteration

Deletion:
You can delete the ledger if no vouchers have been created under this ledger.
Go to Gateway of Tally > Accounts Info > Ledgers > Alter > Press Alt+D
Maintaining Chart of Accounts in ERP

If you want to delete a Ledger for which Vouchers have been created, then you have to
first delete all the Vouchers from that Ledger and then delete the Ledger Account.

Buttons available:

Buttons Keys Description and Usage

G: Groups Ctrl+G You can create “Stock Group” from the Stock Item Creation
screen
E: Currency Ctrl+C Currency You can create “Currency” from the Stock Item
Creation screen
S: Cst Cat Ctrl+S You can create “ Cost Category” from the Stock Item Creation
Screen
C: CstCtr Ctrl+C You can create “Cost Center” from the Stock Item Creation
screen
B: Budget Ctrl+B You can create “Budget” from the Stock Item Creation Screen
V: Vch Types Ctrl+V You can create “Voucher Type” from the Stock Item Creation
screen

GROUP CREATION

The group is the alternative name of schedules. Schedules are the support details of final
recounts. For example, there are 100 customers in an organization. If you prepare the balance
•aeet of that business firm then the individual balances of all 100 customers will be shown in
'Lance sheet. Now, imagine how it will look. It will very lengthy and will be very difficult to
naderstand.
To solve this problem, tally has given you a group namely ‘Sundry Debtors’. It means,
■ - enever, you shall create new account of any customer, it will ask the name of group and you
- put that account under ‘Sundry Debtors’. Now, when you look your balance sheet, you will
icd a heading of ‘Sundry Debtors’ which will give the net balance of all the customers under
~zle figure. We can easily understand with that heading the company has to receive this much
ar xint from the customers.
Suppose, you want to know the detail of every individual customer then press ‘Enter’ on
: .-.dry Debtors’, the list will appear. Similarly, tally has created so many groups keeping in view
ae requirement of business organizations. Mostly, groups are self-explanatory.
It is advisable to study the groups available in tally program thoroughly. Then you can
jerstand very easily the importance of groups.
Now, question arises, suppose, you want to create some more group which are not
» & able with tally program, that can be created very easily. But remember, any new group can
* -eated only under the group given by tally.
 Computerised Accounting

Create the following groups in the books of M/s XYZ Limited:-

ups to be created Under Group
Sundry Debtors - East Sundry Debtors
Sundry Debtors - West Sundry Debtors
Sundry Debtors - North Sundry Debtors
Sundry Debtors - South Sundry Debtors
Solution:
In above illustration it is felt that the business firm wants to keep the track on customers
according to area or region wise. The above groups can be created as follows:-
Open the tally program.
Select M/s XYZ Limited.
Select ‘Accounts Info’ in ‘Gateway of Tally’
Select ‘Groups’
Now, there are two options available (1) Single Groups (2) Multiple Groups
It is advisable to use ‘Single Group Command’. Once you create you group under ‘Single
Group’, you can easily understand the command ‘Multiple Groups’. It depends from person to
person how he uses these commands but the result shall be same.
So, we are going to create groups under ‘Single Group’ creation command.
Now the group creation screen appears.
Under ‘Name’ write ‘Sundry Debtor - East’.
Under ‘Alias’ do not write anything just press ‘Enter Key’. Alias means any other name of
the same group which is being created. In our case there is alias of the group ‘Sundry Debtor-J
East’.
Under ‘Under’ column, you have to select ‘Sundry Debtors’ from the list of existing grouj
given by tally.
Under Groups behaves like sub ledger, write ‘No’ or write ‘Yes’ as per your requirement
Under ‘Net Debit/Credit balance for reporting’ press ‘Enter’ or do whatever yoi
requirement is.
Under ‘Used for calculation (eg, taxes, discounts) press ‘Enter’ key or write as per yo,
requirement. ,
At last, Tally will ask ‘Yes’ or ‘No’, then you check all the details filled up by you.
everything is in order then press ‘Y” or ‘Enter’ key and if you find any mistake, you write ‘N
then you will reach at beginning of the group creation form and correct the mistakes. To sav
the group under tally, finally, you have to write ‘Y’ or press ‘Enter Key. The Screen after filli
up all the details in group creation form but before it is saved, will appear as under:
Maintaining Chart of Accounts in ERP 55

SINGLE GROUP CREATION

You can create a single group in Tally. ERP 9 and configure its details as per your
.wement. You can also view, alter or delete single groups that you have created.

□eating a Group
To create a single group
Go to Gateway of Tally > Accounts Info. > Groups.
Click the option Create under Single Group. The Group Creation screen appears.
Enter the Name of the group.
* Enter the Alias name, if required.
In the field Under, from the List of Groups displayed, select the parent group under which the
group has to be classified. For example, Indirect Expenses.
.Vote; Groups can be created under the group Primary, if required. To classify a group under
Primary, the option Allow Advanced entries in Masters should be enabled in the Master
Configuration screen.
 Computerised Accounting

The Group Creation screen appears as shown below:

Group Creation
Name : Administrative Expenses
(alias) : Office Expenses

Under : Indirect Expenses Accept?

Yes or No
6. Click Yes to accept the screen.
A group can be created for advanced usage, with more options to configure, by setting the
option Allow Advanced Entries in Masters in F12: Configure.

Displaying a Group
To display a group
1. Go to Gateway of Tally > Accounts Info. > Groups.
2. Click the option Display under Single Group.
3. Select the name of the group required from the List of Groups displayed. The ledger display
screen appears as shown below:
Group Creation ABC

Name : Administrative Expenses

(alias) ; (Office Expenses)

Under : Indirect Expenses

Group behaves like a sub-ledger ? No

Nett Debit/Credit Balances for Reporting ? No
Used for calculation (for example: taxes, discounts) ? No
(for sales invoice entries)

Method to allocate when used in purchase invoice ? 0 Not Applicable

Altering a Group
The details entered in a group can be modified when required.
To alter a group
1. Go to Gateway of Tally > Accounts Info. > Groups.
2. Click Alter under Single Group.
Maintaining Chart of Accounts in ERP 57

3. Select the name of the group required from the List of Groups displayed.
4. Make the necessary changes in the Group Alteration screen.
5. Click Yes to save the changes.

Deleting a Group
Groups can be deleted from the alteration screen. Only one group can be deleted at a time.
To delete a group
1. Go to Gateway of Tally > Accounts Info. > Groups.
2. Click the option Alter under Single Group.
3. Select the name of the group required from the List of Groups displayed.
4. Click D: Delete.
5. Click Yes to confirm deletion.
Note: A group cannot be deleted if:
• The group has sub-groups.
• The group has ledgers classified under it.
• The group is a predefined master.

MULTIPLE GROUP CREATION

Gateway of Tally»Accounts info»Groups»Create
Select Create under Multiple groups

Gateway of Tally....
Accounts Info......
58 Computerised Accounting

The next screen is called Multi group creation screen. At top most left of the screen there is
a n option asking “Under group”. This means that in which group the newly creating groups
comes under?
In our example we need sub groups for sales account, so select the “Sales Account” there.
In the next field Name of Group Type New group name “Television sale”. Next field “Under “will
be filled automatically. Enter the entire sub group in the same manner.

sm»s juctww

Haw* at Coup

T*i*vKton Sal*
Rtfngttaoon sal*
Laptop Sal*

AWjpt?

■w ft
< fckWst&e

<»w
—«*cp«Mn««c (}> j

Save the screen by pressing enter. Multi group creation under single Group is completed

Let’s take the following example, Assume that we have already created the sub gro
Television sale, Refrigeration sale, Laptop sale using above method. Now we want to classify
sale group again in accordance with the brand sale as under.
Maintaining Chart of Accounts in ERP 59

New Groups to be created Under (group)

LG TV sales Television sale
Samsung TV sales Television sale
Samsung Fridge sales Refrigeration sale
LG fridge sales Refrigeration sale
Sony Laptop sales Laptop sale
Acer Laptop Sales Laptop Sale

DISPLAYING GROUPS AND LEDGERS

Tally.ERP 9 will be having the 28 pre-defined Primary and Sub-Groups, out of which 15 are
Primary Groups and 13 are Sub-Groups. Apart that we can create our own set of Groups using
rie Group Creation screen.
Gateway of Tally.ERP =» Master Accounts Info & Ledger

In Tally ERP 9 there are two kinds of Groups for Ledgers. The first one is Pre-Defined or
Ze fault Groups for Ledgers which are ready-made. We can neither delete nor change its Group,
we can alter all the options including the Name of the group except Group Head. With my
rractical knowledge i am telling you that do not try to alter the name of the default Group/s.
And the Second one is User-Defined Groups which are created by the user based on his
Esuirement to show in the Financial Statements. In Tally.ERP 9 there is no limit for creating the
. er-Defined Groups for Ledgers.
 You can display the Groups in Single mode or Multiple mode, since it is only display
Tally.ERP 9 does not allow you to alter any information in display mode.

Single Mode:
Go to Gateway of Tally > Accounts Info. > Group > Display (under Single Group)

Gateway of Tally....
Accounts Info. ....

Select the name of the Group from the List of Groups. You cannot make any changes in
the Display mode.
Maintaining Chart of Accounts in ERP 61

Displaying a Single Group

Multiple Modes:
Go to Gateway of Tally > Accounts Info > Group > Display (under Multiple Group)

Gateway of Tally....
Accounts Info......
 Computerised Accounting

Displaying Multiple Groups

Select the Group from the List of Groups to display all the Groups under the selected
Group or select All Items to display all Groups. The Multi Group Display screen lists Groups and
the corresponding details of the Groups.

Button:
F4: New Parent (Ctrl+F4) - You can navigate to select any other Group in the display mode
by selecting this button from the Button Bar.

DISPLAY OF LEDGERS
To view the Ledger Vouchers,
Go to Gateway of Tally > Display > Account Books > Ledger > Ledger account e.g.
Commission account
The list of vouchers for the current month is displayed. You can change the period using
F2: Period button, as required.
Ledger Ai‘,< I
iLesger, Cc-mmssisn 1 -Apr-200*1* 31 -Mar-200*

0«Wt «Mdh

S»«.2IXC Refund Claim Journal 3 1S.460.frtt

30*3008 Supplier C PetARetr 1 108.00
3042X6 Purchase « <*♦ Journal 7 t.ooe.oo
•30*3003 Purchase a 4'- Jewnel $ 23.000.00
3O42GC6 Entry Ta* Jewnel to 4T5.00
3O*2aB csra r, JetMittt H WJOOJ»
30*2003 Special incentive Scheme Output VAT Journal 12 2.000.00
aO-4-itt.K Entry Tax 13 23500,00
*30*2003 Special Incentive Scheme Output VAT Jewnel 14 11500.00
30*2008 Bright industries Pettlbti 3 ss,ooo.M
130 4-2003 Unisys Global Systems Jewnel 15 5.000.00
304-2000 Output VAT a f. Jewnel 17 42,787.00
1520® Bright Industries Pu«h.we H 48.000.00
, 0-7-2008 Bank-Saving Ac Pw dun* 18 28.000.00
Maintaining Chart of Accounts in ERP 63

Configuration

Select vouchers to show All Vouchers

Format : Condensed
Show Billwise Details also ? Yes
Show Cost Centre Details also ? Yes
Show Inventory Details also ? Yes
Show Bank Details also ? Yes
Show Narrations also ? Yes
Show Forex details also ? Yes
Show Forex Transactions only ? Yes
Include Opening Balances ? Yes
(set as 'no' to remove from filtered reports)
Appearance of Names Name Only
Sorting Method Default
Show Running Balance ?BESBI
Set the option Show Running Balance to Yes to see the running balances for Ledger
Voucher Report.

Accept to Save
The Ledger Vouchers report with Running Balance column appears as shown:

Ledger Commission 1-Aj>f-2<X>® to 3f-Ma?-2005

tet Paiidoalars Debit fiiWi

Opening Balance 15.000.00

BBBdMtKlatlrfSTwSSsH

-"-,-3X8 Refund Claim Jeuinal 3 09 400 DO Or

<•4-2308 Supplier C fctWl W«M « ,08.00 S9.292.00 Or
M-.M Purchase .a 4 JamikaI 7 1,000.00 70.292.00 Or
'o-l-XOB Purchase a «•» JeUNMl 9 23.000.00 47292.00 Or
i u.3000 Entry Tax Journal 10 478.00 47,767.00 Or
V4-20OB CST«3’» Jeuinel tt 19.500,00 28.267.00 Dr
TO 4-SC® Special Incentive Scheme Output VAT Journal 12 2.000.00 30.267.00 Or
3O4-.W Entry Tat 13 2.500.00 :! 27.767,00 Or
Special Incentive Scheme Output VAT Journal 14 11.500.00 16.M7.OOOr:
JJ-4-MC6 Bright industries M4ll.lt 3 50.000.00 3».733.00Cr
0 4-2X8 Unisys Ctobal Systems Jeui eat IS 5,000.00 < 44,733.00:0
r-t-20re output vat a i% Jew eat 17 42.787,00 87.520,000
• •- 3X8 Bright Industries Pit. chaw It 48.000.00 35,920.00.0
’ 2006 Bank-Saving A « PwttbMO 16 t,.520.00 Or

CwyitW 1,33.675.00 1^0.335,00

CXntBB. . . . ..... ,ji.i^5.8S
64 Computerised Accounting

You may also access Ledger Vouchers by drilling down from different statements, such as
Group Summary and Monthly Summary.
Buttons available in the Ledger Voucher screen:

Buttons Shortcut Keys Description and Use

F4 F4 To view the list of ledgers
F6 F6 To display daily balances
F7 F7 To view the monthly summary
F8 Alt + F8 To display columnar report which allows you to
compare and analyse the data.
B Alt + B To display Bill wise detail for each transactions.

DELETION OF GROUPS AND LEDGERS

Group Delete function can be done Only in Single Group Alteration Screen and cannot be
done at multiple group alteration screens.
Go to Accounts info>Groups>Alter or Use Hot Key Combination A>G>A from keyboard.

Press “Enter” button, The list of group will be displayed.

Maintaining Chart of Accounts in ERP 65

Type the first few letters of the group, the list will get reduced and only groups starting
rh the letter you typed will be displayed. Select The group to be deleted.
Press “Alt+D” to delete the group. Or you can use Delete Button at the bottom of the
Screen
 Computerised Accounting

Tally will ask a confirmation to delete. The screen will look like this.

Press Enter Key or Press Y from Keyboard to delete. The selected Account group will have
deleted.
Maintaining Chart of Accounts in ERP 67

I
MEANING OF P2P

Procure to Pay (P2P) is an end-to-end financial process that begins with identifying a need
for procuring goods or services, using an approved purchasing method and ends with the
disbursement of funds to the supplier.

PURPOSE AND SCOPE OF P2P

The purpose of P2P is to provide authorized purchasers with guidance on current Procure
to Pay (P2P) methods which support the efficient, timely and compliant acquisition of goods and
services. All purchases of goods and services must be made in accordance with all related
organization policies and procedures incorporated by reference. The procurement and payment of
goods and services for the organization must be conducted in an open and competitive
environment to ensure that prices paid are fair and reasonable.
Purchasing activities are conducted in central Procurement Services as well as by academic
md administrative departmental employees. It is the responsibility of each member of the
rrganization to ensure that the University does not knowingly enter into any purchase
;?mmitment that could result in a conflict of interest. To established purchasing and payment
ttocedures and practices promotes proper transaction documentation fiscal responsibility, ethical
rehavior and Uniform Guidance compliance.

-.ssumption for an effective P2P process:

The P2P process assumes that the following SAP modules are in place:
The described Invoice processing is designed as an SAP Business Workflow/SAP Webflow
zrxess including Optical Archiving for all incoming documents. Therefore a scanning and optical
.living infrastructure needs to be in place to support the workflow functionality. The optical
art hive storage system needs to fulfill legal and tax requirements to enable the storage of ’original
accuments’.

PROCURE TO PAY (P2P) PROCESS

Procuring Goods and Services There are a number of considerations that must be
ic: runted for prior to procuring goods and services on behalf of the organization.
Budget Availability: Always confirm funds are available prior to committing to or making a
purchase.
I Source of Funding: This guide covers all purchases regardless of funding sources. However,
there are additional policies and guidelines for all purchases funded by federally awarded
grants established under the Uniform Guidance.
 68 Computerised Accounting

III. Supplier/Commodity Restrictions and Considerations

a) Debarred Suppliers/Restricted Party Screening: Each new potential supplier must be
screened PRIOR to entering into a financial relationship with organization to ensure that
we do not conduct business, accept research sponsorship, enter into research
collaborations, grant sub-awards or export to individuals, companies or organizations that
appear on federal restricted party lists.
b) Each issue lists of individuals, companies or other organizations whose export privileges
have been restricted or revoked. Screening foreign sponsors, subcontracts, vendors and
other foreign parties involved in activities is a critical component of the organization
efforts to prevent violations of export control laws.
c) Restricted Commodities: The purchase of hazardous materials and animals for research
and teaching requires additional steps prior to their purchase.
i) Due to their critical nature the purchase of hazardous materials may only be ordered
with the guidance of Environmental Health and Safety (EHS). EHS maintains the
University policy on hazardous materials
ii) The University's Division of Laboratory Animal Medicine (DLAM) department
maintains a policy on standards associated with the procurement of animals for research
and teaching. Information about purchasing any live vertebrate animal excluding fish can
be access via the DLAM website.
TV. Supplier Selection: The organisation has entered into a number of preferred supplier
relationships that ensure an open and competitive environment which will provide the best
value at a fair and reasonable price. The organisation is also committed to assisting minority,
women-owned and local business enterprises in their long-term growth and development,
thereby enhancing the economic stability and vitality of the community it serves. It is highly
recommended that any staff or faculty member spending university funds orders products/
services from preferred suppliers who meet the above criteria whenever possible.
V. Establish Supplier Payment: i) Suppliers (companies) = Net-35 days from invoice date ii)
Suppliers (individuals) = Net-0 - next available pay run2 For exceptions to these terms please
contact Procurement Services.
Maintaining Chart of Accounts in ERP 69 n

MULTIPLE CHOICE QUESTIONS (MCQ)

1. Which submenu is used to create new ledgers groups and voucher types in Tally ?
[a] Inventory vouchers
[b] Accounting vouchers
[c] Company info
[d] Account info
2. Tally package is developed by
[a] Peutronics
[b] Tally solutions
[c] Coral software
[d] Vedika software
? To change the current date from gateway of tally press the key
[a] FI
[b] F5
[c] F2
[d] F9
Optional voucher is
[a] Voucher which updates figures
[b] Voucher type is emergency
[c] Temporary voucher which does not update any figure any where
[d] None of the above
Which shortcut key is pressed to view features in Tally
[a] F10
[b] Fll
[c] Alt+Fll
[d] F12
Which short cut key is used to create a new company in Tally
[a] Ctrl+F3
[b] Alt+F3
[c] Ctrl+f4
[d] Alt+f4
Creating a new company in Tally from company info menu is possible by selecting
[a] New company
 Computerised Accounting

[b] Start company

[c] Create
[d] Create company
8. Which shortcut key is used for select company in Tally
[a] FI
[b] Alt +F1
[c] F3
[d] Alt+F3
9. Which options is used to open company created in Tally
[a] Create company
[b] Alter
[c] Select company
[d] Shut company
10. What is the utility if tally vault password
[a] It will lock the period of company
[b] It will lock all voucher entries for that company
[c] It will no show the company name in the company select list
[d] None of these

l.d 2. b 3. c 4. c 5. b 6. b 7. d
" ?' 1 1 y -"
8. c 9. c 10. c
..................... .... —

FILL IN THE BLANKS

ERP stands for
To create a company Goto gateway of Tally >_ > create company.
To activate MRP feature from Gateway of tally initially we need to press
_______________ option is used to open company created in Tally.
To use Dr/Cr instead of To/By during voucher entry or vice versa press .
__ Shortcut key is pressed to display part no. for automobile industries.
Menu appears after starting Tally for the first time.
___ key is pressed to go to Gateway of Tally from company Info.menu.
______________ options are related to company feature are there in Fll features in Tally.
Company Info _________ is used to modify an existing company.
Maintaining Chart of Accounts in ERP 71

Answer:

1. Enterprise Resoucre Planning 2. Alt +F3 3. Fll 4. Select company

5. Fll 6. F12 7. Company info 8. Esc
9. Three 10. Alter

REVIEW QUESTIONS

Conceptual Type

1. What is ERP?

2. What is Tally Software?

3. What is Mouse Convention?

4. What is Keyboard Convention?

5. What is Company Creation?

6. What are Company Features?

7. What is Company Configuration?

8. What is Ledger-Group?

9. What is Ledger Creation?

10. What is Single Ledger Creation?

11. What is Multi Ledger Creation?

12. What is Group Creation?

Descriptive Type

1. Give a brief introduction to ERP.

2. Why ERP is so important?

3. Discuss various components of ERP.

4. Explain reasons for growing ERP solutions.

5. Discuss the process of getting started with ERP.

6. Explain about Mouse/Keyboard Conventions.

7. Discuss the steps of Company Creation.

8. Explain about Shut a Company and Select a Company.

9. Discuss about Alter Company Details.

72 Computerised Accounting

10. Explain about Company Features and Configurations.

11. Discuss about Chart of Accounts.

12. Explain in details about Ledger-Group and Ledger Creation.

13. Discuss about Single Ledger Creation and Multi Ledger Creation process.

14. Explain the process of Single Group Creation and Multiple Group Creation.

15. Discuss about Displaying Groups and Ledgers.

16. Explain about Deletion of Groups and Ledgers.

U
2
nit
Maintaining Stock
Keeping Units (SKU)

Learning Objectives
Introduction • Creation of Stock Item
1 Inventory Masters in ERP • Creation of Godown
■ Creating Inventory Masters > Defining of Stock
> Creation of Stock Group > Opening Balance in ERP Stock Category

> Creation of Units of Measure ■ Reports

74 Computerised Accounting

INTRODUCTION

Stock Keeping Unit (SKU) is a product and service identification code for a store or
product, often displayed as a machine-readable bar code that helps track the item for inventory. A
stock keeping unit (SKU) does not need to be assigned to physical products in inventory.
SKUs are often used in catalogs, physical and online retail stores, warehouses and product
fulfillment centers. Each business creates a different SKU for its goods and services. For
example, businesses selling running shorts create different internal SKUs for the shorts. Stores
use SKUs for determining which items are in stock and which need reordering, as a method of
growing profits.Although SKUs are different from model numbers, businesses may include model
numbers in SKUs. An SKU’s alphanumeric code, usually a combination of about eight characters,
reveals a product’s details, such as color, size, style, price, manufacturer and brand. For
example, the SKU for purple Ugg boots in the Bailey Bow style, size 6, may read UGG-BB-PUR-
06.
SKUs are commonly categorized by products for easier analysis. For example, 25-10xxx is
part of a SKU designated for electric ovens. The rest of the number designates the color or
another product element.
Businesses attach SKUs to different products in one category so that shoppers may
compare characteristics of varying items in that group. For example, Amazon.com suggests
products related to items in shoppers’ electronic carts based on SKUs of the products being
purchased. When a shopper buys a specific DVD, Amazon displays similar movies purchased by
other customers, based on SKU information. This method encourages purchasing additional items
to increase the company’s revenue.

KEY USES FOR AN SKU

8H

1. Track inventory
Products that are received at a business need to be properly tracked to know how many are
available. A product variation, i.e. Laige Red Bucket, can be easily tracked using a cloud
inventory management system. If the products in a warehouse or storage room have SKUs, then
stock availability is easy to determine.

2. Easy stocktakes
Stocktakes should be done at regular intervals (such as an annual stocktake for tai
purposes) to ensure the actual stock levels at a business’ warehouse match the stock levels
recorded in the inventory management system. Every product variation should have a unique
SKU, meaning every item you're selling has its own code. Organizing and identifying produt
using SKUs makes for very straightforward reconciling of stock levels.
Maintaining Stock Keeping Units (SKU) 75

3. Identify shrinkage
One crucial aspect for any business is tracking and identifying inventory shrinkage, which is
the number of items a business cannot sell or are missing. Damaged or missing items can occur
anywhere along the supply chain, and in many cases are lost due to theft. Diligent inventory
categorization with SKUs enables transparency of stock movements and helps pinpoint where and
how stock goes missing - minimizing the opportunity for theft.

4. Replenish inventory
Manually managing large quantities of inventory can be difficult for a small business owner.
Adding an SKU to every product variation means the quantity of on-hand products is easily
known. A threshold limit and reorder point for products can then be set, indicating when a new
purchase order needs to be made. Managing inventory with SKUs means you can keep better
track of your inventory levels, reorder only when you need need to, and cut down on inventory
holding costs.

5. Identify profits
By tracking product variants with SKUs you can report not just on the main product line,
but right down to the individual variation of the product, i.e. color, size, material. These reports
tan help determine which product variants are your best sellers and which are underperforming.
Not only does this give you a clearer picture of your major profit streams, but also helps you
make strategic product decisions to grow your business.

MAINTAINING STOCK KEEPING UNITS (SKU)

It is very easy to maintain inventories in Tally.ERP9. Any type of stocks or inventories can
be maintained in tally software. Before maintenance of inventories in tally, you must keep the
following points in your mind: i.
First of all, when you create a company in which you are working, there is a column in the
format of creation of company - ‘MAINTAIN’. Here you have two options (1) Accounts only
ind (2) Accounts with Inventory. You must select ‘Accounts with Inventory’ for maintenance of
inventories in tally.
For example, you want to maintain the inventories of M/s XYZ Limited. When you create
me company in tally then you shall see the following screen:
I. 76 Computerised Accounting

At the time completing all the columns, write ‘Accounts with Inventory’ in MAINTAIN
column and your final screen shall be as under:
Maintaining Stock Keeping Units (SKU)

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If you are already maintaining the accounts only in tally and you want to start to maintain
re inventories also. That can be done only after you alter the company structure. For example:
appose you have already created a company in the name of M/s XYZ Limited and you are
mmtaining the account of that company. Now, you want to start to maintain the inventory also,
what you have to do is, you must first alter the structure of company in tally. When you
il go for alteration of the company structure, you shall see the following screen after you
eect ‘Accounts with Inventory’ in place of ‘Accounts only’ under the column - ‘MAINTAIN’:
 Computerised Accounting

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Press ‘Y’ key after all above alteration. Now, you can maintain the inventories in tally.
Select ‘Features’ under ‘Gateway of Tally’
Select ‘Inventory Features’
After reaching in Inventory Features, you shall find you will find so many columns to be
filled up. You can fill any thing according to your requirement. But, at least,you must select the
following options to maintain inventories in general
• Integrate Accounts and Inventory - Select - Yes
• Allow Invoicing - Yes
• Enter Purchase in Invoice Format - Yes
• Use Debit/Credit Notes - Yes
• Use Invoice Mode for Credit Notes - Yes
• Use Invoice Mode for Debit Notes - Yes
• Separate Discount Column on Invoice - Yes
Maintaining Stock Keeping Units (SKU) 79

Your screen should as under:

Please note that other columns of above screen can be changed as per the needs of the
company. We have just changed the column in above screen for general inventory system.

INVENTORY MASTERS IN ERP

Inventory accounting includes recording of stock details like the purchase of stock, the sale
of stock, stock movement between storage locations or godowns and providing information on
stock availability. Tally.ERP 9 makes it possible to integrate the inventory and accounting systems
so that the financial statements reflect the closing stock value from the Inventory system. The
inventory system operates in much the same way as the accounting system.
First you set up the inventory details, which is a similar operation to creating the chart of
accounts although, in this case, there are no pre-defined set of stock groups.
Second, you create the individual stock items, which is similar to setting up the ledgers.
In a newly created company the Inventory Info, menu comprises of four types of Masters,
viz. Stock Groups, Stock Items, Units of Measure and Voucher Types.
 Computerised Accounting

Go to the Gateway of Tally > Inventory Info.

The Inventory info.menu is displayed as shown:

Gateway of Tally....
Inventory Info.

Stock Groups
Stock items

Units of Measure

Voucher Types

Quit

The above Inventory Masters types are explained in detailed in the following sections.
Units of Measure
Let us take the example of Indus Enterprises that sells Televisions and Music Systems.
Given below is the structure of items being sold.

Group A - Televisions
A1 - Sony Ala - Sony 29 inches TV
Alb - Sony 25 inches TV
A2 - Philips A2a - Philips 29 inches TV
A2b - Philips 25 inches TV
A3 - Videocon A3a - Videocon 29 inches TV
A3b - Videocon 25 inches TV

Group B - Music Systems

81 - Sony Bla - Sony Tape-Recorder
B1 b - Sony CO Player
82 - Videocon B2a - Videocon Tape-Recorder
B2b - Videocon CO Player

The televisions are sold in numbers. Hence, the Unit of Measure will be Nos.
Indus Enterprises has two Godowns, the Bangalore Godown and the Mumbai Godown.
Maintaining Stock Keeping Units (SKU) 81

The grouping structure in Tally.ERP 9 is as follows:

Stock Group
1. Televisions (main stock group)
Sony TV - stock group under Televisons
Philips TV - stock group under Televisons
Videocon TV - stock group under Televisons
2. Music Systems (main stock group)
Sony Music Systems - Stock Group under Music Systems
Videocon Music Systems - Stock Group under Music Systems
Under the stock group Televisions, let us create stock groups based on the different brands
being sold viz. Sony, Philips and Videocon. This helps to find the total sales of a particular brand
of televisions at any given point of time. In order to compare the total sales of the 29 and 25
inches televisions respectively, Tally.ERP 9's feature of Stock Categories for parallel classification
can be used.
Experiment Creation of Inventory Masters in Indus Enterprises.

CREATING INVENTORY MASTERS

Stock items can be grouped together under Stock Groups to reflect their classification
under a common feature. Grouping would enable them to be easily located and reported in
statements. Hence, items of a particular brand can be grouped together so that you can extract a
stock on all items of that brand. For example, create Stock Groups like Sony, Maxell, and
Verbatim. Your stock items could then be Sony 3.5" disks, Maxell 3.5" disks, Sony tapes, Maxell
apes, etc. Classify the Sony products under the Stock Group Sony. Now you have ready details
of all the Sony products classified appropriately. You may even group your items as Raw
materials and Finished Goods.
All the Stock Items can be classified into Stock Groups based on common features of the
?.em like quality, manufacturer's brand name, type of product etc. The relationship between
Stock Item and Stock Group is similar to that of the Accounts Ledger and Accounts Groups.
You can create Stock Groups to any Level (Unlimited hierarchy).
Recording the inventory include recording purchase and sale of stock, stock movement
retween two or more godown / location and providing information on availability of stocks with
each location, with the help of Tally ERP software it is possible to integrate the inventory and
accounting functions in the financial statements reflecting the closing stock value from the
-•entory system into financial system.
The inventory function is very similar to accounting systems in Tally ERP software. In Tally
ERP ERP accounting system pre-defined groups have been provided, but in inventory system no
□eh pre-defined stock groups or items have been provided.
82 Computerised Accounting

Every individual stock items, behaves similar to a ledger account, where in the inwards,
outwards and balance is recorded during the transactions.
Two functions are very similar in" Tally" ERP software.

Inventory Masters
In Tally ERP gateway under Inventory Info., you will find
a) Stock Groups
b) Stock Items
c) Unit of measure
d) Godown (If it doesn’t appear then Press F-ll and select Multiple godown option)
e) Voucher types

Integrate Accounts with Inventory:

If we set it to Yes the closing stock value displayed in the profit & Loss account is based
on the stock summary. If you set this to No the closing stock value given in the Profit & Loss
Account can be a self-calculated figure, (i.e.:- we can specify our own stock value)
Stock groups (In Tally ERP stock group can be easiely made)
Similar kinds of items have been grouped under single group, these are provided for the
purpose of classification of stock items. Grouping of stock items helps us to identify and locate
the movement of any item.
Stock Items (In Tally ERP stock items can be classifed below different stock groups)
Stock item means those items in which any company is dealing for trading or
manufacturing purpose. In accounting systems ledgers are used to record debit and credit
similarly items are used to record inward and outward movements. Therefore, Stock Items
behaves in the similar manner as ledger behaves in accounting system.
Stock categories (In Tally ERP stock items of parades classification can be clubbed under
categories)
Stock categories help us to classify different items of similar behaviour, it is also an
important tool for classification of different Items. The categorizing of items helps you to
classify stock items (based on functionality) together - across different stock groups.
Location godown (Tally ERP provides godown and multi godownfacilties
For any business organisationgodown or different location plays important role in
determining the locations of stock in the form of raw material or finished goods, with the help of
godown we can obtain movement of each stock located in each godown and also reports on
movement of items from one godown to another godown.
Units of measure (Tally ERP offers to create simple and compound units of measures)
Every Stock Items needs to be measured in some kind of units like rice » in kilogram, Oii
»> litter, Cloth » meter etc. Units can be created as per the requirement of organisation, units
Maintaining Stock Keeping Units (SKU) S3

can be simple or compound. Two units linked together forms a compound unit, like 12 pieces =
1 dozen. Decimal place can be used keeping in view the requirement of business.
The Statistics report displays the Masters created and the number of vouchers types
entered. You can drill down to the transaction level from this report.
To view the Statistics report
Go to Gateway of Tally > Display > Statement of Inventory > Statistics

CREATION OF STOCK GROUP

Creating stock group in Tally ERP9 help you in grouping of products and a store keeper
;an arrange and locate stock item easily with the help of grouping. In Layman’s language, Stock
Group in tally ERP 9 is the classification or grouping of similar nature of Products which will
help in managing products like, storing and replenishing to its optimum level. The store keeper
in assign relative priority to the right product groups. Tally will generate the report for the
stock group,like group statement, item movement based of group’s etc. in-order to help us in
mplementing the most apt inventory management system.
Stock groups are used to classifying products. It helps to enumerate the stock from a
x'.ossal amount of products by viewing the report of a particular group. Let’s consider a simple
- -imple. An electronic goods dealer is classifies the products as follows.
84 Computerised Accounting

They group items based on Product category such as Electronics Goods, Grocery, and
Clothing etc. Again the sub division of products is based on its brands. See the below image for
more clarity.

Television
> V - V
Sony Lg Samsung Sharp
Main group = Television
Sub Group = Sony, LG, Samsung, Sharp etc.
How to create a stock group in tally ERP 9?
Make sure that the company is in Accounts with inventory Mode.If it is not, you can enable
it from Fll Features>F2 Accounting Features>
Disable option ‘Maintain Accounts only‘.or keep the option No
Maintain accounts only: No

General
Maintain accounts only................... '... """"“............. . . ............... ............. ?' Ito |
Integrate accounts and inventory ? No

There are two modes of stock group creation, They are Single Mode and Multiple Mode.
Single stock Group: Only one stock group can be created using this option under a main
group.
Multiple Stock groups: This option helps us to create several groups under a single main
group and ever under various main groups at a time.
Single stock group Creation in tally ERP 9
To create a group in single stock group mode,
Go to Gateway of Tally»Inventory info»Stock Group
Press enter and select Create under single stock group
 "> ■ ■■■ < ; ; - ■ ■ ■ ; <
Maintaining Stock Keeping Units (SKU)

Gateway of Tally....
Inventory Info......
Stock Groups

Single Stock Group

€ reate
Display
Alter

Multiple Stock Groups

CReate
Display
AITer

Quit

Let’s create the first group Television

Name: Television
Under: Primary, (Primary meaning the prime group or the first level group)
Can quantities of item be added? : By enabling this option you can calculate the sum total of
all item quantity. For example, you can find out the total number of TV’s grouped under
’Television” group Which includes the products under its sub groups. The unit of measure must
be same for all items.

Press enter and save the screen. We can call Television as primary group. In this way you
. » create so many groups individually.
Now we want some sub groups under Television group like Sony, LG, Samsung, sharp etc.
 Computerised Account!

Multiple Stock Groups Creation in tally ERP 9

To overcome the difficulty of creating groups individually, We have the multiple stock group
creation option using which, we can create numerous groups in a single screen.
Let’s create the secondary level groups or sub groups using multiple stock group creation,
to do this
Go to
Gateway of Tally»Inventory Info»Stock Group
Select create under Multiple Stock Groups
Gateway of Tally....
_______Inventory Info............... .....
Stock Groups

Single Stock Group

Create
Display
Alter

Multiple Stock Groups

CReate
Display
AITer

Quit

And fill as following

Under Group: Television
Name of Stock Group: Sony
Under: Under field filled automatically with Television, This field would not be active as we
have already selected the under group at the top. It will be active only when we select all iteir
there.
Items are addable: If you want to add the units of the stock items
Press enter to move on to next line, where you can type another stock group, enter all f<
stock groups .The final screen will look like this.
Maintaining Stock Keeping Units (SKU) 87

Press enter and save the screen, so the multiple stock group creation is completed.
Create Multiple stock groups under various main groups.
You can create various stock groups under various main groups.To do this Select all item in
Under Group at the top. The field ‘Under’ will be active in this case and you can select the main
group under which new groups are placed for every single groups. See below image.
88 Computerised Accounting

You can choose the main group under which Sansui stock group comes under. The next
step is editing viewing and deleting of stock group that we will learn in the next lesson.

MHHB CREATION OF UNITS OF MEASURE

In every business dealing with stock item it is very important to keep the accurate stock of
goods. Goods are measured using Units.Every inventory items are sold or purchased in terms of
Unit. The units which are used to measure items are Numbers, Kilograms, Milligrams, Litters,
Milliliters, Pieces, Boxes, bottles etc. While entering an Item invoice we must have a unit to
multiply with the rates to get the total invoice amount.
We can classify the unit of measures based on its nature into two.
1. Simple Unit
2. Compound Unit

It is important that you should activate inventory along with accounts in Tally ERP 9.To
activate inventory in tally ERP 9 go to.
Fll Features>Fl Accounts features
Make sure that the option Maintain Accounts only set to No.
Company ABC Ltd

Accounting Features

General Invoicing
Enable wwoicing
Record purchas
Integrate accounts and irwfery
Use Income and Expenses Afc instead of Profit and Loss Ac Use debt and crec
Record credit ns
Enable wfti-curraney Record debt no

Outstanding Managernent Budgets and Sce

Save to features screen by pressing Ctrl+A

How to create Simple Unit
Examples of Simple units are Numbers, Litters, Pieces, Boxes, bottles etc
Let’s create a simple unit in tally
Go to
Gateway of Tally»Inventory info»Unit of Measure»Create
Or
You can access unit creation screen from the gateway of Tally Press I U C hotkey
your keyword. This means that Press I, Then U, Then C from keyboard to access Unit Cr
Screen
Maintaining Stock Keeping Units (SKU)

Tally. ERP 9

• fc Oft'
Unit Creation

Type Simple
Symbol
Formal Name:

Number <tf Decimal Places 0

In the unit creation screen you can see the following field
Type: By default it is Simple
Symbol: This is the Formal symbol of the units creating, the symbol of Liter Is L ,The
;-mbol of Number is No, Piece is PCS and so on.
Formal Name: In the case of symbol L The Formal Name of L is Liter, No formal name
lumber.
Number of Decimal Places: Suppose you are selling milk 1.325 Liters, in this case the
secimal places are three digits. One set decimal places, you can increase the decimal places to a
iiher number but cannot decrease to a lower number decimal places.
Here we are creating a simple unit of measure Liter, in three decimal places the screen will
kok like this.

Tally. ERP 9
j fc? B-pr-ai
Unit Creation

Type Simple
Symbol : L
Formal Name: Liter

Number of Decimal Places: 0

90 Computerised Accounting

Press enter key or use Shortcut Key Ctrl+A to save and create Unit ‘Liter’
Create Compound Units of Measurement.
Compound units are the combination of two units. In the above example assume that you
are selling Milk. If you are selling Milk in bottles, like bottles of 200 Ml, Bottles of 500 Ml, and
Bottles of 750 Ml etc. In such case you can create such units and fix rate for each type of
Bottles.
The main advantages are that reports are available in both units, that IS IN Milliliter and in
Bottle.The first step to create compound units is
Create Simple unit Bottle (Btl) and Milliliter (Ml) Using the simple unit creation screen as
explained in the beginning.
Then Go to
Gateway of Tally»Inventory Info»Unit of Measure»Create
Now we are in unit creation screen.

Type : Simple
Symbol :|
Formal Name:

Number of Decimal Places 0

And the cursor is in Symbol Field, Press Back space, the cursor will move back to the
field T\pe in which you can select compound unit.
Maintaining Stock Keeping Units (SKU) 91

Tally. E

Unit Creation

Type Idliil’irJM Types of Units

Symbol Compound
Simple
Formal Name

Number of Decimal Places 0

Upon Selecting compound unit type, then the unit creation screen will change like below
image.

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Unit Creation

Type : Compound
Units with Multiplier Factors

In this screen you can see all the simple units we created earlier under option First Unit.
To create Bottle of 200 Ml
• Select the first Unit: Bottle
• Conversion: 200
• Second Unit: Ml
. .i
92 Computerised Accounting

... 2..... .
Unit Creation

Type Compound
Units withMuitipHer factors
fdfcanpfe. Kgs of 1000 gm$)
Units

Press Enter and save the screen, now we have created Compound unit Bottle of 200 Ml
In the same manner you can create Bottle of 500 Ml, Just Type 500 Under conversion in
the screen. See below image.

In the last two lessons we were learning Stock group creation and unit of measure in tally.
Knowledge in both the lessons is mandatory here in creating stock items. Stock items are the
goods we manufactured, purchased and sold. To raise item invoice we must create stock item in
tally, also to using various inventory options stock item is mandatory.
So let’s create the stock item
Stock item in normal mode
To create stock item, go to
Gateway of tally»Inventory Info»Stock Items»Create
Use Hot Key 11 C From the gateway of tally
Here we are going to create stock item of Computer grouped under Brand name Acer, VAT
rate is 5%,
Fill the field as follows:
Name: Type stock item name in our case Computer
Maintaining Stock Keeping Units (SKU) ■

Alias: It is the additional name for the same stock item; you can access this stock item
either by typing name or alias. Commonly people are using Alias to add code like AC-4500 to a
stock item.
Under: Here we are grouping stock items based on its brand, so create a stock group in its
brand name “Acer”. If you don’t know how to create stock group click here
Units: Computer can be sold in the units Numbers or pieces, Lets choose PCS here, if you
don’t know how to create units go here
Rate of Duty: Specify the rate of duty for the item; this option is to calculate excise duty.
Opening Balance: This is the stock in hand at the end of previous financial year or the
stock in hand before you computerizing the accounts.
Enter the opening quantity and rate the value will be calculated automatically, Press enters to
save the stock item created.

Creating Stock item in advance mode

We can also create stock items in advance mode, where there are number of options
-■ailable for various business needs. Here we are discussing the basics of advance stock item
.-eation; each and every item will be discussed in separate posts later.
How to activate advance mode stock item creation?
Go to stock item creation screen
Gateway of tally»Inventory Info»Stock Items»Create
In the item creation screen Press F12 Function key from key board or Click on
. ^figuration buttons on the right bottom of the screen, a stock item configuration screen will
_~-ear. Inside the configuration screen there are several options available, Set Yes or No as per
ot company requirements.
94 Computerised Accounting

Stock item Configuration

Allow ALIASES along with Names ? Yes

Allow Language ALIASES along with Names . ? Yes

'Allow ADVANCED entries m Masters ■ *« M

Use PART NUMBERS for Stock items ? Yes
Use Description for Stock items ? Yes
Use REMARKS for Stock items ? Yes
Specify Default Ledger Allocation for Invoicing ? Yes
Use ALTERNATE UNITS for Stock Items ? Yes
Allow Std. Rates fot Stock items ? Yes
Allow Component list details (Bill of Materials) ? Yes
By enabling “Allow ADVANCED entries in masters” will bring some more advanced feature
like costing method, market valuation method and many more options in to stock item creation
screen.
Now again from stock item creation screen Press Fll, You will get a screen, where
inventory features are available, in this screen you can see some settings like stock items related
features, you can make it available by setting Yes or No.
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Maintaining Stock Keeping Units (SKU) 95

By enabling these options, Stock creation screen will look like below, Each and every
options is required a detailed explanation, that will be following this lesson. Hence I am
concluding this post with the screenshot of stock item creation in advanced mode.

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-3
CREATION OF GODOWN

Godown is a place where stock items are stored. You can specify where the stock items
ire kept. You can obtain stock reports for each Godown and account for the movement of stock
between locations/Godowns.
You can create Locations/Godowns in Single mode and Multiple mode
Creating a Single Location/Godown
To create a Location/Godown,
Go to Gateway of Tally > Inventory Info. > Locations/Godowns> Create (under Single
Eadown)
The Location/Godown Creation screen is displayed as shown:
 96 Computerised Accounting

A brief explanation of each field in the Location/Godown Creation screen is given below:
Name
Specify the name of the Location/Godown.
Alias
Enter an alias name for the Location/Godown name, if required.
Under
Specify the Location/Godown under which the Location/Godown is to be categorised. Use
Alt + C to create the parent Location/Godown if it is not in the list. Select Primary, if it is not a
sub Location/Godown of any Location/Godown.
Use for
This section is provided in Tally.ERP 9 Release 3.0 where users can create the godowns to
*«! store:
The stock of the company lying with third party like Consignment Agent, Bonded Ware
house, Job worker, etc.
Or
Third Party stock lying with the company in case company has received the stock for Job
Work or acting as consignment agent or for any other reason.
Our Stock with Third Party: Set this option to Yes if the godown is used to account the
company's goods lying with the third party.
Third Party Stock with us : Set this option to Yes if the godown created is used to account
the goods received from third party and the stock of third party should not affect the company
stock value.

Creating a Single Location/Godown - Advance Mode:

Advance Mode indicates enabling certain options in Inventory master configuration screen in
order to add or remove field which require in Godown Master.
 Maintaining Stock Keeping Units (SKU) 97
•counting

In the Godown Creation screen, press FI 2: Configure (Godown Configuration) screen is

displayed as shown.

Godown Configuration

Allow ALIASES along with Names ? Yes

Allow Language ALIASES along with Names ? No

Use ADDRESSES for Godowns ?rw

Use Addresses for Godowns: Setting this option to Yes enables the Address field in
Godown Master

Accts / Inventory Info. Configuration

elow: Go to Gateway of Tally > F12: Configure > Accts /Inventory Info.
Allow Advanced Entries in Masters: Setting this option to Yes enables the Allow Storage
: f Materials option in Godown Master.
The Location/Godown Creation in Advance Mode screen is displayed as shown.

sed. Use
. is not a

towns to

ed Ware

for Job

ount the

account
:ompan>

creen in [Img-71A]
A brief description of each additional field in Godown Creation screen is given below.
98 Computerised Accounting

Address
This field is a Multi-Line Field. You can enter the Address for Godown.

Allow Storage of Materials

This option is used for deciding whether storage of material is allowed in this Godown or
not.
The Godown for which the Allow Storage of Materials is selected as No, will not appear in
the Godowns list, during Voucher entry.

Example:
Godown A is under Chennai Location. Here, Chennai is a Location and Godown A is a place
where material is stored.
For Chennai, Allow Storage of Materials is set to No, since this will not store the material.
During Entry, Chennai will not get listed in the List of Godown.
For Godown A, Allow Storage of Material is set to Yes, since this will store the material.
During Entry, Godown A will get listed in the List of Godown.

Creating Multiple Locations/Godowns

Go to Gateway of Tally > Inventory Info. > Locations/Godowns> Create (under
Multiple Godowns)
The Multi Godown Creation screen is displayed as shown.

[Img-72A]

Under Godown
Select the parent group under which you want the new Godowns to be created. If you
select any specific Godown other than All Items, then all the new Godowns will be created unde:
that Godown. Selecting All Items gives you the flexibility of specifying the parent of each ne -
Godown created.

Name
Specify the name of the Godown.

Under
If you select All Items in the field Under Godown, you must specify a parent Godown hers
If you select a specific Godown in the field Under Godown, that Godown will be display
automatically in this column.
Maintaining Stock Keeping Units (SKU) 99

DEFINING OF STOCK
Stock is a type of security that signifies ownership in a corporation and represents a claim
on part of the corporation's assets and earnings. There are two main types of stock: common
and preferred. Common stock usually entitles the owner to vote at shareholders' meetings and to
receive dividends. Preferred stock generally does not have voting rights, but has a higher claim
on assets and earnings than the common shares. For example, owners of preferred stock receive
dividends before common shareholders and have priority in the event that a company goes
bankrupt and is liquidated.

OPENING BALANCE IN ERP STOCK CATEGORY

Opening Balances for stock item master can be entered only from the Books Beginning
Date.
However as a work around, users can record;
Physical Stock Vouchers to affect the inventory reports, if only Quantity has to be updated
to the books.
OR
Stock Journal by specifying the Stock Item details with the Rate on the Destination
(production) side.
For example: Customer who purchases Tally. ERP 9 on 1st of June but the books are
beginning from 1st of April. In this case the user can pass a Physical Stock Voucher or Stock
Journal as on 1st of June.
The opening balances of stock items can be removed as follows:
Go to Gateway of Tally > Inventory Info > Stock Items > Multiple Stock Items > Alter.
The Select Stock Group screen is displayed, Select All Items and press Enter.
The Multi Stock Item Alteration screen is displayed, click on the button Z: Zero Op Bal or
press Alt + Z.
The opening balances of all stock items get removed.

OPENING BALANCE FOR THE SERIALIZED ITEM

Following are the steps to create opening stock balance entry for the Serialized and Batch
item.

Step 1: New Stock Entry

Stock > Stock Entry > New

Step 2: Select Purpose

Stock Entry Purpose should be updated as Material Receipt.
 Computerised Accounting

Step 3: Update Posting Date

Posting Date should be date on which you wish to update opening balance for an item.

Step 4: Update Target Warehouse

Target Warehouse will be one in which opening balance of an item will be updated.

Step 5: Select Items

Select Items for which opening balance is to be updated.

Step 6: Update Opening Qty

For the serialized item, update quantity as many Serial Nos are their.
For the serialized item, mention Serial Nos. equivalent to it's Qty. Or if Serial Nos. are
configured to be created based on Prefix, then no need to mention Serial Nos. manually. Click
here to learn more about Serial No. naming.
For a batch item, provide Batch ID in which opening balance will be updated. Keep batch
master ready, and updated it for the Batch Item. To create new Batch, go to:
Stock > Setup > Batch > New
Click here to learn how Batch wise inventory is managed in ERPNext.

Step 7: Update Valuation Rate an Item

Update valuation rate, which will be per unit value of item. If different units of the same
items toing diSererd. valuation rate, they should be updated iu a separate row, with drttere"'
Valuation Rates.

Step 8: Difference Account

As per perpetual inventory valuation system, accounting entry is created for every stock
transaction. Double entry accounting system requires Total Debit matching with Total Credit in
an entry. On the submission of Stock Entry, system debits Warehouse account by total value of
items. To balance the same, we use Temporary Opening account as a Difference Account.

REPORTS PREPARATION IN ERP

The importance of report writing is often overlooked as a critical step in an enterpr

software implementation. Information is the goal of the ERP implementation, and both strata
and capable resources are required to achieve this goal.
Report writing needs to fall into the following categories:
a) Forms such as invoices, order acknowledgments, purchase orders, receivables stater
payables checks etc.
b) Managed reports produced on a reoccurring basis
c) Ad hoc reports that are usually one-time, “I need this information now” reports
d) Analytical reports that show data and help analyze what is happening
Maintaining Stock Keeping Units (SKU) 101

e) Executive dashboards that provide a snapshot of business performance against the company’s
key performance indicators (KPIs)
All of these items need to be considered in a comprehensive report writing strategy that
identifies needs at all levels, report-writing tools, data deployment (data warehouse versus data
marts) and report deployment methods.

Ultra’s Approach to ERP Reports

The development of ERP reports and forms is a significant task that cannot be taken lightly.
Oftentimes it is access to information that is a key driver of the project.
During the Business Process Improvement (BPI) phase of the project, the project team
should be sure to document forms and reports used in the business process. In addition, the
team should gather key performance indicators used to manage the business.
In the development of the future state, the team will define the reporting strategy.
The strategy will document the following:
Key performance metrics
Transactions and dimensions
Information needs
Analysis needs
In the education phase, the team will understand the many types of reporting tools:
Transaction grid queries
Dashboards
Scorecards
Published reports
Ad hoc reports
The reporting strategy will define how all these reporting tools are used to improve access
to information.

STEPS CAN HELP ENSURE ERP IMPLEMENTATION

These four steps can help ensure ERP implementation success:

1. Take the time to plan

Abraham Lincoln once said, "Give me six hours to chop down a tree and I will spend the
Irst four sharpening the axe."
This is the approach a business should take when planning for an ERP implementation,
'•lost organizations try to move through the planning process as fast as possible out of fear that
ney will do more talking than doing. The truth is that an extra week or two of planning could be
ne difference between a smooth process and one that is hampered by avoidable mistakes. A
102 Computerised Accounting

good rule of thumb is to allocate one week of planning for every month of estimated deployment
time.

2. Establish internal project ownership

The ERP system will affect every functional area of the business, and that means everyone
from senior leadership to middle management and staff-level employees must be involved
throughout the implementation. That's why the very first thing a business can do in preparation is
establish an internal team that will have the influence and authority to get the rest of the company
to buy in.
Ideally, the business will designate a project team consisting of the following members:
The executive sponsor. As a member of senior management, the executive sponsor is the
internal "champion" of the project. The sponsor should provide high-level guidance to the rest of
the team to ensure the ERP system is achieving business goals once it is live.
Project manager. The project manager's primary duties are to manage, plan, control and
coordinate the project from the business' perspective, and his or her sole objective is to ensure
the project is completed on time and on budget. He or she should be a senior or middle manager
who has experience with several different functional areas. Some other tasks involved in this role
are scheduling and planning meetings, develop the project team staff, conduct meetings, identify
problems and track the project's progress.
IT manager. The internal IT manager is responsible for coordinating all IT-related activities
between the business and the ERP vendor, as well as any third-party staff. The day-to-day tasks
of the IT manager involve developing plans, supporting team activities, and acquiring resources.
The user team. The user team fills out the rest of the staff in charge of the implementation,
and will feature users with a mix of authority, company knowledge and temperament. The team
should also include people from every functional area to be affected by the ERP system, such as
manufacturing, sales, finance, engineering, etc. The user team will work with the vendor to find
the best way to use the software to support business objectives, and will be asked to provide
task-level documentation for business process flows in the new system.
A business should know exactly how it will measure success when an ERP implementation
is done. A business should know exactly how it will measure success when implementing an ERP
system.

3. Establish metrics to measure success

Businesses deploy ERP solutions to enhance key processes and improve critical KPIs, such
as greater efficiency, lower costs, etc. But if these aren't defined at the beginning of the project,
it will be impossible to tell if the ERP implementation actually achieved the desired goals.
All stakeholders should know exactly what the expectations are for the project and use
those as a guide during the process to ensure everything is proceeding with the optimal end state
Maintaining Stock Keeping Units (SKU) 103

in mind. At the project's completion, business leaders will be able to use those metrics to gauge
ROI and determine whether or not the new system was a success.

4. Make ERP implementation a focus for the business

ERP Implementation is collaboration between the business and the vendor, but just because
there's a trusted partner doesn't mean the company can completely take its hands off the wheel.
Deploying an ERP system isn't just about installing new software; it's a complete revamp of
every functional area's core operational processes.
Sufficient human resources should be directed solely toward the day-to-day ERP
implementation of the new system. If employees cannot engage with the new system because
they're tied up with other duties, the project may end up taking much longer than planned for. In
addition, workers who are doing too many things at once are more prone to mistakes that have
to be fixed later. Thus, businesses should avoid taking on other major projects until the new
system is completely operational. If a large project is already in process, it's best to wait until it
has been delivered to start deploying an ERP system
Planning for an ERP system deployment isn't just about picking a vendor and letting it do all
the work. With a thorough planning process, businesses can minimize their risk, avoid common
pitfalls and reap the full range of financial and operational benefits the system can bring.
104 Computerised Accounting

HMMMW MULTIPLE CHOICE QUESTIONS l

OsSKs!
1. Which of the following is not compulsory to create while entry I Accounts with Inventory?
[a] Stock groups
[b] Stock items
[c] Stock categories
[d] Units of measure
2. Which options is used to view stock items or group summary?
[a] Account books
[b] Inventory books
[c] Statutory books
[d] Display
3. Which menu is used to create new ledgers, groups and voucher types in Tally?
[a] Reports [b] Import
[c] Transactions [d] Masters
4. With how many types ledger, group and voucher types can be created in Tally?
[a] 2 [b] 3
[c] 4 [d] 5
5. Which option is used to exit Tally?
[a] Exit [b] Close
[c] Quit [d] Shut company
6. Salary account comes under which head
[a] Indirect incomes
[b] Indirect Expenses
[c] Direct incomes
[d] Direct Expenses
7. Which ledger is created by Tally automatically as soon as we create a new company?
[a] Cash
[b] Profit & Loss A/c
[c] Capital A/c
[d] Both a and b
8. Which of the following is the predefined stock category in tally?
[a] Primary [b] Symbol
[c] Stock [d] Main location
Maintaining Stock Keeping Units (SKU) 105

9. Which file in tally is used to record the import activity?

[a] Tally.dat
[b] Tally.ini
[c] Tally.imp
[d] None of these
10. Inventory books is used to view
[a] Stock items
[b] Group summary
[c] Both a and b
[d] None of these

Answer:

1. c 2. b 3. b 4. a 5. c 6. b 7. d

8. a 9. b 10. c

FILL IN THE BLANKS

1. Full form of SKU is________________________ .
2. After selecting ‘Accounts with Inventory’ in place of_________________ under the column -
‘MAINTAIN’.
3. The rate of trade discount varies with the___________purchased.
4. In tally you get currency symbol option from_____________ menu.
5. __________shortcut key is used in company features screen to use inventory features in tally.
6. _____________ option is used to view Stock Items or Group Summary
________ types of measuring units we can create in Tally.
The option Maintain Accounts only set to________ .
9. The multi stock item alteration screen is displayed by click on the button______________ .
10. To view the statistics report Go to Gateway of Tally ___________ Statement of Inventory >
Statistics.

\nswer:

1. Stock Keeping Unit 2. Company creative 3. F2 4. Company creation

5. Inventory books 6. Two 7. Balance Sheet Configuration
8. Alt + 2 9. No Alt+Z 10. Display
 Computerised Accounting

REVIEW QUESTIONS

Conceptual Type
1. What is Inventory?
2. What is Inventory Master in ERP?
3. What is Stock Group?
4. What is Stock Item?
5. What is Godown?
6. Define the term Stock.
7. What is Opening Balance in ERP?
8. What is Stock Category?
9. What is ERP Report?
10. What is ERP implementation?

Descriptive Type
1. Discus an introduction to ERP Inventory.
2. Explain in details about Inventory Masters in ERP.
3. Discuss about Creating Inventory Masters.
4. Explain about Creation of Stock Group.
5. Discuss about Creation of Units of Measure.
6. Explain in details about Creation of Stock Item process.
7. Discuss the process of Creation of Godown.
8. Explain various types of Stocks.
9. Discuss about Opening Balance in ERP Stock Category.
10. Explain about ERP Reports.
U
3
nit
Recording Day-To-Day
Transactions in ERP

Learning Objectives
V
• Introduction • Contra Voucher (F4)
• Functions of ERP System • Payment Voucher <¥51
• Business Transactions • Purchase Voucher (F9)
• Source Document for Voucher • Sales Voucher (F8)
• Recording Transactions in ERP • Debit Note Voucher
• Accounting Vouchers • Credit Note (Ctrl+F8)
• Receipt Voucher (F6) • Journal Voucher (F7)
 108 Computerised Accounting

INTRODUCTION
Financial services companies completely rely on modem and sustainable ERP systems to
ensure amenability with government regulations concerning data, operations and transparency. A
qualitative ERP software system includes solid financial management software which is entirely
integrated with the company’s major structural units of sales order management, shipping and
receiving, and manufacturing. In dynamic ERP systems, the transactional information made up by
these departments can be available for instantaneous review via real-time dashboard data anc
online queries. All these capabilities propose complete financial visibility into the company’s
receivables and payables with state-of-the-art access to sales forecasts and inventory levels, allow
companies to operate bookkeeping functions, obey the fluid regulations, facilitate communication
with clients and staff, and position themselves for excessive profitableness.
Practically each company that operates in today’s quickly changing market should be read}
to adapt itself to new technologies, methods of running business, more effective ways of
communication with the customers and even possible challenges and problems. ERP software
system is a product that can help the company stay always on top and better its working
processes from day to day.

FUNCTIONS OF ERP SYSTEM

Customize ERP solutions with the following number of functions:
a) Client database provides the user with the ability to gain and store all the necessary informatiot
about clients, their credit and financial reports in one place accessible to everybody.
b) Financial accounting system is a special program that reduces paperwork and helps streamline
financial planning process, simplify all the financial procedures and receive full financial
visibility into manifold operations.
c) Fixed asset management system allows easily and quickly control and track non-depreciating
or depreciating financial company assets and provide the workers with comprehensive report
about valuation, assets and depreciation.
d) Financial dashboards, reporting and analytics system helps monitor and operate your business
financial performance utilizing real-time dashboards with expenses, key revenues and
receivables metrics, optimize cash management and easily create various financial reports in
accordance with the requirements of the company.
e) Payment management system, first of all, makes it much easier for the clients to run then-
businesses by accepting a huge variety of payment command options. Moreover, it helps tc
receive more effective payment acceptance and get secure and full financial processing.
f) Budgeting and forecasting module controls workflow management, multi-dimensions
information collection, dynamic assumptions and formulas and full financial planning
statements.
Recording Day-To-Day Transactions in ERP 109

g) Private team collaboration program allows to organize special discussion groups that manage
permanent communication about financial planning and to generate collaborative online
documents on diverse financial procedures.
h) Modeling and administration system has an ability to budget in manifold world currencies,
stores operational and financial metrics and accounts and operates various models for product
planning and complex sales.
i) Billing management and invoicing system helps to automate all the financial procedures,
exclude the risk of errors, provide the clients with the bills as soon as possible and speed up
payment processes.
j) Integration with other systems helps to exchange information with any external applications,
online financial dashboards, e-mail calendar notes, etc.

BUSINESS TRANSACTIONS

Recording a transaction is the first step in the accounting cycle. In this lesson, you will
learn why transactions are recorded, where they are recorded and how they are recorded. A
?umal, which is also known as a book of original entry, is the first place that a transaction is
-ntten in accounting records. Even when you're using a computerized accounting program,
. terns are still recorded in journals; you just don't manually enter them.
Recording business transactions is a multi-step process. The first step in recording business
ransactions is to examine the transaction and decide what accounts will be affected. The second
<ep in recording business transactions is to decide what account will be debited and what
account will be credited. The third step in recording business transactions is to actually
rocument the transaction in a journal.
A journal, which is also known as a book of original entry, is the first place that a
reaction is written in accounting records. Even when you're using a computerized accounting
rrogram, items are still recorded in journals; you just don't manually enter them. The best way to
earn how to record business transactions is to actually record some. So let's look at a few
: samples.
Alex owns a music shop. On August 1, he purchases drum heads from Drummers R Us to sell
in his store. He pays Rs. 875 in cash for the drum heads.
In his first transaction, Alex bought drum heads, which is inventory for his store. He paid for
the drum heads with cash. The two accounts that will be affected are cash and inventory.
For Alex's music shop, the inventory account, which is an asset, is debited the Rs. 875. This
increases the balance in the inventory account by the same amount. Because Alex paid with
cash, the cash account will be credited Rs. 875. A credit made to an asset account decreases
the balance in the account, so the cash account will have an Rs. 875 reduction in its balance.
After you decide what accounts are affected by each transaction, you can record or
journalize, the transaction. To do this, you'll make an entry into the journal. You start by listing
110 i Computerised Accounting

the date, followed by the name of the account that is debited and the debit amount on the first
line. On the next line, and indented slightly, you will put the name of the account that is
credited followed by the credit amount.
2. On August 6, Alex sold all the drum heads to the local high school band for a total of Rs.
1,500 cash.
In this case, what two accounts are affected? Well, because this is a cash sale, the same two
accounts are affected that were affected when Alex purchased the drum heads. The difference
is that they will be affected differently. The cash account will be debited Rs. 1,500 and will
have a balance increase in the same amount. The inventory account will be credited and will
have a balance decrease in the same amount.
3. On August 10, Alex has to pay his monthly rent on the building that his music shop is in. He
writes a check to Thomas Realty in the amount of Rs. 1,000.
4. On August 12, Alex orders more supplies for his shop from Music Central. This time, he buys
his supplies on account. The total amount of musical equipment that he buys from Music
Central is Rs. 4,500.
In this transaction, the accounts that are affected are inventory and accounts payable. The
inventory account is debited Rs. 4,500, which increases the balance. The accounts payable is
credited Rs. 4,500. Because accounts payable is a liability account, a credit to a liability
account increases its account balance; the balance in accounts payable increases Rs. 4,500 for
this transaction.
5. On August 13, Alex sells a trumpet to a customer on account. The total price of the sale is Rs.
985.
In this transaction, the accounts receivable and inventory accounts are affected. Since the sale
was made on account, the accounts receivable account is debited Rs. 985. A debit to an asset
account increases its balance, so the balance in the accounts receivable account is increased
by Rs. 985. The inventory account is credited Rs. 985. The credit to an asset account
decreases its balance, so the inventory account balance is decreased Rs. 985.

SOURCE DOCUMENT FOR VOUCHER

Any document based upon which a financial transaction is recorded in the books of
accounting is known as ‘source documents.’ Among these, the documents which show the
amount and nature of a business transaction are known as ‘vouchers’. Once a business sells its
products, certain invoices are prepared for sending their goods out of the workplace, cash
memos for cash sales and bills for denoting credit sales. While the original copy is sent or
handed over to the buyer, a duplicate copy is set aside for recording it in the books of accounts.
It is these duplicate copies which are known as source documents and are further used for
recording it in the books of accountancy. Similarly, the original copy which a company receives
while purchasing a good from some other company is also termed as source documents.
 Recording Day-To-Day Transactions in ERP Ill

Vouchers are the cash memos, bills, receipts, traveling allowance bills, wage bills, salary
bills, registration deeds, counterfoils of cheques, etc. These vouchers can be any form of written
document which validates that a financial transaction has happened so that it can be considered
as provable documents of that transaction.
Source documents are significant in everyday life too. For example- while paying house rent
to a landlord, a receipt for the received rent is received. Electricity Supply companies, Insurance
companies, Water Works issue a receipt for the received rent to their customers. Employees of a
company affix their signature on salary bills and wages bills when they receive their payments in
the form of salaries and wages. This depicts that monetary receipts are received for every form
of payments in all sectors of life.
Thus, in the case of accountancy, the first step is identifying the foundation of a financial
transaction. This is based on a documentary proof known as source documents.

Source Documents
Accountancy is a subject which deals with facts which take place and are further proved
by written evidence which is termed as source documents. These documents act as evidence
that a financial transaction has taken place. All entries in the books of accounting are based on
the information which has been derived from these documents. It is a must that in the case of
accountancy a financial transaction has to be supported by source documents which are known
as vouchers.

Types of Source Documents

1. Cash Memo
It is a source document which indicates the details, amount and date of cash sales and cash
purchases of a company. It specifies the cash memos which have been issued by that company
on cash sales and the cash memos received on purchases. It is based on this, that cash payment,
cash sales and cash purchases are recorded in the accounting books.

2. Cheques
Cheques can be issued for various payments, either self-withdrawal or payments. For
recording in the books of accounting, it is either the notes on the chequebook or the counterfoil
rf cheques which are taken into consideration. The received cheques are deposited through Pay-
in-Slip into the book.

3. Invoices and Bills

Invoices and bills are documents which are used for credit sales and credit purchases. For
credit sale, invoices and bills are received indicating the amount, date and details of the sale. In
iie case of credit purchases; invoices and bills are received with the details of the credit
i rurchase.
 112 Computerised Accounting

These invoices get prepared in three copies. While the first is sent to the buyer, the second
is send along with the goods and third is used for books of accountancy in the form of a source
document.

4. Credit Note
Credit Notes are issued to customers in the event of sales return. Here, the customer’s
account is credited with the sales return amount. These credit notes are further used as a source
document.

Debit Notes are issued to sellers in case of return of goods which were purchased c*
credit. The seller’s account is debited with the amount of purchase return. Further, this deb:
Recording Day-To-Day Transactions in ERP 113

note is used as a source document for recording about the purchase return in books of
accounting.

6. Pay-in-Slip
Pay-in-slip is filled up while depositing cheques and cash in the bank. While the main body
of pay-in-slip is kept with the bank, the duly stamped and signed counterfoil is given to the
consumer. This is further used for recording it in the accounting book.

7. Receipt
Whenever an amount is received or paid, the receiver issues a receipt to his payer. This
indicates the date, amount and other details like the purpose of payment, payee details, etc. This
receipt is used as a source document for the amount received or paid for recording it in the
books of accounting.

8. Miscellaneous
Other than the ones listed above, there are various other source documents like registration
deeds, bills like electricity, salaries, wages, water, telephones, tickets, counterfoils which are also
used and termed as source documents.

RECORDING TRANSACTIONS IN ERP

Whatever a transaction that has to be recorded in Tally.ERP 9 Accounting Software, one
must use any one of the available Voucher Types in the Business Package. Tally has provided 18
different Voucher Types excluding Payroll Vouchers. And these are called as Pre-Defined Voucher
Types and even we can create as many Voucher Types as we can, such vouchers are called
User-Defined Voucher Types.
For instance Accounting Voucher Creation for Cash and Bank payments are relevant to pre­
defined Payment Voucher. And for distinguishing the Sales as Cash or Credit we can create our
: <n set of customized Voucher Types. The pre-defined Voucher types have been classified into 3
rased on the nature of the Voucher Creation.
114 Computerised Accounting

ACCOUNTING VOUCHERS
As a business owner, you have to continuously record transactions for the purpose of
accounting, inventory management and statutory compliance.
If you are already using Tally.ERP 9, then like many other users of Tally, you must be quite
acquainted with vouchers that are available in Tally.ERP 9. However, if you are new to Tally.ERP
9, then we would like to take you through the basic vouchers to make it easier for you.
Below is an outline of the commonly used vouchers in Tally.ERP 9 with details on how to
use them.

Sales Voucher in Tally

The Sales Voucher is most widely used by the users of Tally.ERP9, it is a type of
accounting voucher. Depending on the nature of your business, it can be created in the Invoice
mode or Voucher mode. In the Invoice mode, you can print and provide a copy of the invoice to
your customers. The Voucher mode can be used when you want to basically record transactions
Recording Day-To-Day Transactions in ERP 115

for statutory purpose only, and when you don’t necessarily have the need to print and share the
information with your customer. Tally.ERP 9 gives you the flexibility to address different needs.

Purchase Voucher in Tally

The Purchase Voucher too can be recorded either in the Voucher or Invoice mode based on
the nature of business operations. It comes under accounting vouchers in Tally.ERP 9.
Suppose you change your mind and decide to change the mode when entering details of a
purchase transaction? What if you have entered all the details and decide to change the mode in
the last second? TallyERP 9 helps you to convert a voucher into an invoice, or vice versa,
without expecting you to re-enter the details. It auto adjusts to your preference. Just use the
Toggle button.

Payment Voucher in Tally

The Payment Voucher in Tally.ERP 9 lets you provide all types of details when creating it.
While making payment to a party you can provide details such as the instrument number, and
even print the cheque. As soon as you pass a Payment Voucher, you can print the corresponding
cheque. To see the list of cheques which need to be printed, go to Banking and click on Cheque
Printing.
Tally.ERP 9 supports over 500 banks from both India and abroad. After making the
payment, you can generate a Payment Advice in Tally.ERP 9 and share it with your supplier as it
will update him with the details of all your payments.

Receipt Voucher in Tally

When you create a Receipt Voucher, Tally.ERP 9 prompts you to take a look at all the
pending invoices for which payments are yet to be received. As and when your customer makes
a payment, you can record details such as against which invoice the payment is made; whether
you received the payment by cash, cheque or via NEFT/RTGS; and what the instrument
numbers are. You can even email this information to your customer. This way, you will never
lose track of the payments.

Contra Voucher
Contra Vouchers are generally used by businesses to withdraw cash from banks or to
deposit cash in banks. With Tally.ERP 9 you can also generate a cash deposit slip. Tally.ERP 9
also provides the denomination of notes to let you track and take a print of the same at the time
of depositing money.

Journal Voucher
The Journal Voucher is used by businesses for multiple purposes, based on their business
y.pes. Some accountants use them for purchases and sales as well. Both accounting and
inventory Journal Vouchers are available in Tally.ERP 9. The Inventory Journal Vouchers can be
,sed to adjust inventory or for movement of inventory from one godown to another.
 116 Computerised Accounting

Credit Note Voucher in Tally

The Credit Note Voucher is used generally for a sales return. By default, the Credit Note is
not enabled in Tally.ERP 9. It can be enabled by pressing on Fll and configuring the Features.
While passing Credit Note, you can refer to the original invoice number as well. Upon selection
of a party, Tally.ERP 9 will by default show you all the invoices which have been raised against
the particular party for easy reference.

Debit Note Voucher in Tally

A Debit Note is used for purchase returns. With Tally.ERP 9, a user can either pass a Debit
Note as a voucher or as an invoice where the inventory values also get affected. The Debit Note
Voucher can be enabled by pressing Fll and configuring the Features. You can provide details of
the original invoice numbers as well.

RECEIPT VOUCHER (F6)

This voucher type is used to record cash receipts through any type of bank instruments like
cheques, DD’s TT’s LCS etc. The receipts may be from customers or borrowing of loans or
sale of any asset or any other incomes like interest or dividends.
In this voucher type either cash or bank A/c should be debited otherwise the system will
display an error message.
Exception: Cash sales should not be recorded using this voucher type.
Post-dated cheque receipts may be recorded giving the maturity date of cheque and clicking
post-dated button. On the maturity date after presenting the cheque with the bank for collection
change the status of the transaction to “Current” position and save it.
Receipt payment voucher is used for received payment from supplier/ buyer or any party or
income received by any other source.
To create receipt voucher - Gateway of Tally - Accounting Voucher - F6 (Receipt)
Recording Day-To-Day Transactions in ERP

MUM

|
Cr. Party name 2,12,500
Dr. Bank 2,12,500
Rs. 2,12,500 deposited in bank through RTGS, Cheque, Cash, NEFT.
Suppose if you sold goods through cash sales then you must enter a receipt voucher
mentioned as above.
How to Print Receipt voucher with Thanks. There is another method to print receipt
voucher or confirmation voucher with vote of thanks.

GST in Tally
Receipt
Receded twtf? iftanksfrom . Debtors

The sum of INR Two Lakh Twelve Thousand

Five Hundred Only

By : Cheque/DD
Remarks

2,12,500.00/- Authorised Signatory

**Sufyect to Realisation
118 Computerised Accounting

For configure Receipt confirmation voucher go to Accounting Info - Voucher Type - Alter -
Receipt
Select yes to "Print Formal receipt after saving."
Now create a receipt voucher and save it.

Receipt

Gctwnti
Select type et wrtw ; Receipt Past wactw after swtofl ? Ito
*•»■#>/? fe > 4 L ■ S:.: 1
Part task »e«pt ate sawsig '? Yes
MrtfeaiS cf wocJw wmtwws . ? AtHornatic

Masced caaiga#*®) ? No
Use efciw dates fer wetas ? Wo
Bake ttss »acfe« type as XJptssai' fey defeatt ? Mo
ABcwtwrtwa voaclw
each ledger ? No

. ? Wo
S«tWs Oefas^ tesasfeg E«taes ? Mo

After save the receipt voucher go to print command, by default 1st print option is normal
receipt voucher and 2nd print is confirmation voucher with thanks.

CONTRA VOUCHER (F4)

Creating contra entry is Tally is same as creating a simple accounting voucher in Tally. I
will show you a step by step process by following which you can easily create contra entries ia
Tally for all the transactions which I described above. In short I will create total four contra
entries in Tally.
With the help of contra voucher you can make entry which is related to cash and bank
both. Like Cash deposited into your bank account, Cash withdrawals from your bank accoink
either from Cheque I DD / ATM or any other media and also you can make entry to transre­
amount from one bank account to another bank account using this voucher.

Example:
M/s XYZ Limited have withdrawn Rs. 10,000 from Syndicate Bank on 05.04.12 vide thead
cheque number 123456.
How shall you enter the above bill in tally program in the books of M/s XYZ Limited?
^counting
I Recording Day-To-Day Transactions in ERP

- Alter - Solution:
First of all, Contra Voucher shall be prepared for the above transaction as below:
M/S XYZ LIMITED

CONTRA VOUCHER

DATE: 05.04.12

PARTICULARS AMOUNTED
RUPEES

DEBIT: CASH ACCOUNT 10,000 =

Ho

7] TOTAL 10,000/=

CREDIT: SYNDICATE BANK ACCOUNT 10,000 =

TOTAL 10,000/=

■ (BEING CASH WITHDRAWN VIDE CHEQUE NUMBER 123456 FOR OFFICIAL USE

Now, we shall enter above Contra Voucher in tally as under:

Open Tally program.
torma.
Select your Company. In out case, we shall select M/s XYZ Limited.
Select ‘’Accounting Vouchers’ under ‘Gateway of Tally’
Now, the following screen will appear:
illy. I
ies in
C''~-

bank
:oum
isfer

her
120 Computerised Accounting

Just read the items written on screen with a concentration. Reply of your all question relating
to voucher entry is available here.
You want to enter a purchase voucher. See in right side. There are lots options available. One
of those options is ‘F4 - Contra’.
Select this icon with the help of mouse or press ‘F4 key’.
Now, select date icon or press’F2’ key.
A box will show ‘Voucher Date’
Write the date of voucher here i.e., 05.04.2011 then press ‘Enter’ key.
Now a blank form will appear. You have to fill up the details as required in that form.
First, in Cr. Particular Column write Syndicate Bank. The moment you type ‘S’ a list aC
account heads started with alphabet ‘S’ shall appear. You have select ‘Syndicate Bank’ out s
that list.
In Credit amount column write 10000 then press ‘Enter, key.
In Dr. Column press ‘Enter’ key.
Recording Day-To-Day Transactions in ERP 121

In Particulars press ‘C’ and select ‘Cash Account’ out of the list given in right side.
In Debit amount write 10000 and press ‘Enter’ key.
In narration column, write any narration which you think fit then press ‘Enter key’
Now the screen will be as under

Finally, Tally asks you ‘Yes’ or ‘No’. Here, you just stop and check that every detail is
correct. If there is any mistake then press ’N’ key otherwise press ‘Y’ or press ‘Enter’ key.
After you press ‘Y’, and all details vanish from the screen and a new voucher appears then
you can say that your voucher is entered and saved.

PAYMENT VOUCHER (F5)

Cash Payment: Cash payments are the transactions that settle through cash. Payments are
nade by cashier through immediate cash. Some examples of cash payments entries are
1. Stationery purchased for Rs. 500.00 (Paid by main cashier)
2. Courier charges paid Rs. 20.00 (Paid by pettycashier)
3. Tea expense Rs. 10.00 (Paid by pettycashier)
 Computerised Accounting

Bank Payment: These are transactions that settle through bank or by way of issuing
cheque. Normally big transactions are settling through cheque. However there is no rule
regarding this, you are free to issue cheques of any amount. This depends on the policy of your
business. An example of bank a payment is
• Cheque issued to ambuja cements for Rs. 1,50,000.00 vide Cheque # 456245, SBI A/c #
651
To enter payment transaction of a company tally has a separate voucher type called
payment voucher. To access this payment voucher
Read This: Cash Payment Voucher in Tally ERP 9
Go to
Gateway of Tally»Accounting Voucher
Now click on F5: Payment Button or use shortcut key F5
Tally open the last used voucher type when you entering in to Accounting Voucher. The
payment button will active only if you are in some other voucher type (like receipt, contra, sales
etc.)

Amount

Now the payment entry can be entered in to two ways as discussed earlier in single mode
and double entry mode voucher.
Let’s enter the above example in payment voucher.

Payment voucher in double entry mode

We are entering the cash payments in to double entry mode, for the example
1. Stationery purchased for Rs. 500.00 (paid by main cashier)
2. Courier charges paid Rs. 20.00 (Paid by petty cashier)
3. Tea expense Rs. 10.00 (Paid by petty cashier)
Recording Day-To-Day Transactions in ERP 123

The journal entry for above transaction is:

Printing and Stationery Dr. 500.00
Postage and Courier Dr. 20.00
Tea expense Dr. 10.00
To Cash Cr. 500.00
To Petty Cash Cr. 30.00
Stationery paid by main cashier hence credited to main cash account, courier & tea paid by
petty cashier hence credited to petty cash.
To activate double entry mode Press FI2 from the payment voucher and set the option
“Use single entry modeforPymt/Rcpt/Contra” to No

Now we are in double entry payment voucher

Enter all the debit aspects just after Dr or By, and credit aspects after Cr or To, just like in

If you want narration for each entry, activate it don’t know how to activate narration for
■ex entry click here.
Bank transactions and cash transactions can be entered in double entry mode payment
124 Computerised Accounting

Payment voucher in Single entry mode

Now we are entering the second payment, the bank payment in to a single entry mode
voucher
1. Cheque issued to ambuja cements for Rs. 1,50,000 vide Cheque # 456245, SBI A/c #
651
The journal for the transaction
Ambuja Cements.............................................. Dr. 1,00,000 (Debit the receiver)
To SBI a/c No 651......................................... Cr. 1,00,000 (Credit what goes out)
Now let’s activate, Single entry mode in payment voucher, don’t know how to do this click
here.
Now enter the credit aspects (bank name) at the top of the screen just after Account: (in
bank payment the credit aspect must be the bank name always.)and the debit aspect Ambuja
cements as in the screen below.

>- »'-r >■ 5a»» •.( s.,.,.-, -;•»

.....fete.
.... ...
<X fcj W

♦«** SSli
.. ' ■ ' • . ' . ■
.»•>*•»«>« is »il
Recording Day-To-Day IVansactions in ERP 125

This Voucher records si the payments made through Bank and Cash, ft is aiso used for payment of fixed
assets, purchases, flues to creditors, loans and advances given, payment of loans and advances given to
you earlier.

Gateway of Tafly AcasMtpg voucher -> CJfcfc on F5-• Payment button present on the Button Panel to
have me Payment Vouch er Creation screen.

Transactions; Paid Salary of Rs.5000 and Office Rent of Rs, 2000 by cheque of SB! dank as on 15-04-
2007,

IflHEBSSBHi ho.1 S54jpr-25f7

Sunday

Account: State Bank Of India (SB»

CtrOer
Particulars Amount

salary 5.000.00
Cu?«s< iWUMOf
Office Rent 2,000,00
Career mwn

7,000,0©*
Narration
Cft Wo J2S456tn M-04-20C7
Accept?

Ye* Mo

PURCHASE VOUCHER (F9)

Purchase vouchers are used to record all types of purchases like Cash & Credit.

Example:
M/s XYZ Limited purchased goods from M/s Morning Place as per details given below:
BILL NO. 121
BILL DATE 10.04.12
LOCAL PURCHASE 5% TAXABLE Rs. 10,000
INPUT VAT @5% Rs. 500
TOTAL BILL VALUE Rs. 10,500
How shall you enter the above bill in tally program in the books of M/s XYZ Limited?

Solution:
 126 Computerised Accounting
WlU.

First of all, Purchase Voucher shall be prepared for the above transaction as below:

M/S XYZ LIMITED

PURCHASE VOUCHER

DATE: 10.04.12

PARTICULARS AMOUNT IN
RUPEES

DEBIT: .LOCAL PURCHSE 5% TAXABLE AC 10,000-=

INPUT VAT® 5^ AC 500 =

TOTAL 10,500./=

CREDIT: MS MORNING PLACE 10,508 =

TOTAL 10,500/=

(BEING GOODS PURCHASED FROM M S MORNING PLACE AS PER THEIR BILL NO.
121 DATED 10.04.12 ENCLOSED

Now, we shall enter above Purchase Voucher in tally as under:

• Open Tally program.
• Select your Company. In our case, we shall select M/s XYZ Limited.
• Select ‘’Accounting Vouchers’ under ‘Gateway of Tally’
• Now, the following screen will appear:
Recording Day-To-Day Transactions in ERP 127

>:Mn! Jfcfejxirt fW i>.»,U>ard

no. 2
I22CESEX3
- CARTAGE S.FR&>;«TEX?Eh6ESA€
4 Cwh
: «MWRCH««W«TtFORiiS« i
Or 1 i
C EWIftAL SALES «, TAXABLE AK
' CENTRALSALESTAXI^AC
CENTRAL SALES TAX 5UAJC
: furniture ak
GIF T HOUSE
$NPUTVAT@125%AfC
5 v

INPUT VAT @5% AC

: toMtSCHlKtlMmiM I
■ l«ALPURCWE $**T»gLeWC i
LOCAL SALES 12,5% TAXABLE M
LOCAL SALES 5% TAXABLE A#C
MASCOT MARKETING
MORNING PLACE
OUTPUT VAT @12 5% «C
OUTPUT VAT g 5% AC
PERFECT FURNISHERS
Njwstot ; WNW«»moi®^6iM®K i
PfO«S LOSS Alt
SALARIES EXPENSES ACCOUNT
SUPPLE ENTERPRISES
SYNDICATE BANK

d
Taty «MN • • A «w «f T«*r Aeawfchs VwxFw OaMSw SW, ti Oct, i 12:22:^
Just read the items written on screen with a concentration. Reply of your all question
relating to voucher entry is available here.
• You want to enter a purchase voucher. See in right side. There are lots options available. One
of those options is ‘F9 - Purchase’.
• Select this icon with the help of mouse or press ‘F9 key’.
• Select the icon ‘As Voucher’. You can enter the bill under ‘As Invoice’ also. But it needs lot of
practice. For beginner to enter the voucher under ‘As Voucher’ is advisable.
• Now, select date icon or press’F2’ key.
• A box will show ‘Voucher Date’
• Write the date of voucher here i.e. 10.04.2011 then press ‘Enter’ key.
• Now a blank form will appear. You have to fill up the details as required in that form.
■ First, in Cr. Particular Column write Morning Place. The moment you type ‘ M’ a list of
account heads started with alphabet ‘M’ shall appear. You have select ‘Morning Place’ out of
that list.
 Computerised Accounting

In Credit amount column write 10500 then press ‘Enter, key.

In Dr. Column press ‘Enter’ key.
In Particulars press ‘L’ and select ‘Local Purchase @ 5% taxable’ out of the list given in right
side.
In Debit amount write 10000 and press ‘Enter’ key.
Again in Dr. Column press enter and in particular column select Input Vat @ 5% out of the list
and in Debit amount write 500
In narration column write any narration which you think fit then press ‘Enter key’
Now the screen will be as under:

>.ptre i'E.por! MW* iI; s^a!

Suppte sswtewe 121 Pate : ».«ja »ii Saturday

Pnrttajtais Wtf Credit

Cr MORMWS PLACE 10.500,00

Or IW.At PURCHASE 5% TAXMBtE AC 10,000.00

Dr WPUIVAT t> 5CA< 500.00

CfUffet

GOODS PURCHASED FROM MS MORNING PUCE AS PER

Accept 7

¥« - - No

■>-OcA ;A: Accept '' j

T«fc Wy Vducher CbhMW WWWWH t it :S®«Si

Finally, Tally asks you ‘Yes’ or ‘No’. Here, you just stop and check that every detail is
correct. If there is any mistake then press ’N’ key otherwise press ‘Y’ or press ‘Enter’ key.
After you press ‘Y’, and all details vanish from the screen and a new voucher appears then
you can say that your voucher is entered and saved.
Recording Day-To-Day Transactions in ERP

SALES VOUCHER (F8)

Entry of sales is done in tally in two ways:
1) As Voucher - It means that bill is not prepared in tally package. The sale bill is made
either made manually or in some other software. The accountant prepares the voucher with the
help of sales bill then he enters the voucher tally accounting software.
2) As Invoice - It means that invoice is to be generated in tally software and no separate
voucher is to be prepared for the same.

A) Entry of Sales ‘AS VOUCHER’

Example:
How will you enter the following Sales Voucher in tally program in the books of M/s XYZ
Limited:

Date Particulars Amount

(In Rupees)
31.03.12 Goods sold to M/s Gift House vide sales invoice
number 1 as details given below: 21,000
Local Sales 20,000
Local Sales Tax 1,000

Solution:
We shall enter this bill as ‘Sale Voucher’
Following entries shall be made for above transactions:
Date: 31.03.2012
Debit: Gift House Rs. 21,000
Credit: Local Sales Account Rs. 20,000
Credit: Local Sales Tax Rs. 1,000
(Being goods sold to M/s Gift House as per our invoice number 1100 enclosed)
Note: In above example, we have presumed that the sales bills are not created through tally
package. We are just doing the entry of sale bill. ‘Sales Voucher’.

Now, we shall enter above Sales Vouchers in tally as under:

• Open Tally program.
• Select your Company. In our case, we shall select M/s XYZ Limited.
• Select ‘’Accounting Vouchers’ under ‘Gateway of Tally’
• Now, the following screen will appear:
130 Computerised Accounting

Just read all the items written on screen with a concentration. Answers of your all questions
relating to voucher entry is available here.
Presently, you want to enter a receipt voucher. See in right side. There are lots of options
available. One of those options is ‘F8 - Sales’. Select this icon with the help of mouse or
press *F8 key’.
Select ‘As Voucher’
Now, select date icon or press’F2’ key.
A box will show ‘Voucher Date’
Write the date of voucher here i.e. 31.03.2012 then press ‘Enter’ key.
Now a blank form will appear. You have to fill up the details as required in that form.
In Ref., write any thing as required by your management or just press ‘Enter’ key.
First, in Dr. Particular Column write Gift House. The moment you type ‘G’ a list of account
heads started with alphabet ‘G’ shall appear. You have select ‘Gift House’ out of that list.
 Recording Day-To-Day Transactions in ERP 131

In credit amount column write 21000 then press ‘Enter, key.

In Dr. Particulars press ‘L’ and select ‘Local Sales Account’ out of the list given in right side.
In Credit amount write 20000 and press ‘Enter’ key.
Now, in Cr. column press ‘Enter’
In Credit Particulars press ‘L’ and select ‘Local Sales Tax Account’ out of the list given in
right hand side.
In Credit Amount write 1000
In narration column write any narration which you think fit then press ‘Enter key’
Now the screen will be as under:

Ml »?« 6W aw

SI-WW

£>»frrt Cf»<«t!

ft SIFT HOUSE jiooodo

CwB* U.WB.WOr
ft LOCAL SALES ACCOUNT 2B.BOOJB
06* SUW.MCf
& LOCAL SALES TAX ASCOUMT 1J0«X»
OS* ».«*,#» c.

is
w

Mrrjosn 21 JOB
<3O9»S0(OBW$e«Hoi»e»pef WUMWeHB ?S5»»S»W,12

Ha
. &«
'* ’ S¥w. >, cf t A- > ■ntt» <nUr. w;^WiiKsh»w;,j-w^afas,w,yti»
Correct. If there is any mistake then press ’N’ key otherwise press ‘Y’ or press ‘Enter’ key.
After you press ‘Y’, and all details vanish from the screen and a new voucher appears then
you can say that your voucher is entered and saved. After it you can enter another voucher in
same way.
Recording Day-To-Day Transactions in ERP 133

Your sale bill is created.

If you take the print out of the above sale invoice, this will look like below:
 134 Computerised Accounting
t
£.

Example:
M/s XYZ Limited returned the material to M/s Morning Place and send the following debit
note to them:

DEBIT NOTE NO. 82

DATE OF DEBIT NOTE 31.03.12

AMOUNT 5,250

How shall you enter the above bill in tally program in the books of M/s XYZ Limited?
Solution:
Debit Note is the part of journal voucher. All entries relating to debit notes, are made as
journal voucher.
Recording Day-To-Day Transactions in ERP 135

First of all, Debit Note shall be prepared for purchase returns above transaction. Though,
journal voucher also can be prepared for the above mentioned transaction but to keep separate
details of purchase returns, it is advisable to prepare debit notes. Debit notes are the part of
journal voucher only. The entry for above transaction will be prepared as follows:

M SXYZ LMTED

DEBIT NOTE

DATE: 31.03.12

PARTICULARS AMOUNTIN
RUPEES

DEBIT: MORNING PLACE 5250/=

TOTAL 5250/=

CREDIT: PURCHASE RETURN ACCOUNT 5250 =

TOTAL 5250/=

(BEING GOODS RETURNED TO MS MORNING PLACE AS PER OUR DEBIT NOTE NO. 82
DATE 31.03.12)

Now, we shall enter above Purchase Voucher in tally as under:

• Open Tally program.
• Select your Company. In our case, we shall select M/s XYZ Limited.
• Select ‘’Accounting Vouchers’ under ‘Gateway of Tally’
Now, the following screen will appear:
I Ji L
136 Computerised Accounting

• Just read the items written on screen with a concentration. Reply of your all question relating
to voucher entry is available here.
• You want to enter a Debit Note. See in right side. There are lots options available. One of
those options is ‘CTRL F9 - Debit Note’
• Select ‘Debit Note’.
• Now, select date icon or press’F2’ key.
• A box will show ‘Voucher Date’
• Write the date of voucher here i.e. 31.03.12 then press ‘Enter’ key.
• Now a blank form will appear. You have to fill up the details as required in that form.
• First, in Dr. Particular Column, you have to write Morning Place. The moment you type ‘M’
a list of account heads started with alphabet ‘M’ shall appear. You have to select ‘Morning
Place’ out of that list. Debit amount column write 5250 then press ‘Enter, key.
• In Cr. Column press ‘Enter’ key.
• In Particulars press ‘P’ and select ‘Purchase Returns Account’ out of the list given in right
side.
Recording Day-To-Day Transactions in ERP 137

• In Credit amount write 5,250 and press ‘Enter’ key.

• In narration column write any narration which you think fit then press ‘Enter key’
• Now the screen will be as under:

B: &SM safe
xv/
aeS’SEOTS»-1
a«s. *2

Pjrtiiufsr; MWt Cw«

Dr mtmws tuses 5.259.M
CmhM !Wfr
© PURCHASt SETURN 4CCMJNT S.2SS.M

6, IfAjM
»«5 GOODS REW® TO MS WRWS PUCE. OS
£S®W« W «0A»»?»12

UK? « ?*■»«« m. wu i«mb sa ww, rum*

• Finally, Tally asks you ‘Yes’ or ‘No’. Here, you just stop and check that every detail is
correct. If there is any mistake then press ’N’ key otherwise press ‘Y’ or press ‘Enter’ key.
• After you press ‘Y’, and all details vanish from the screen and a new voucher appears then
you can say that your voucher is entered and saved.

CREDIT NOTE (CTRL+F8)

Credit note is an accounting document Issued by the seller to the buyer informing that his
account has been credited due to sales return made by him.
For example, a buyer bought goods for 1000 and returned goods worth 500. For seller it is
a sales return. He has to give back the money 500 to the buyer or he has to deduct 500 from his
account.
 138 Computerised Accounting

Let’s take the example which I have explained in the video itself.
I have sold goods worth 15,000 to Amit.
But he doesn’t like certain goods and he is returning the goods to me worth 5,000.
For this, I won’t give the 5,000 back because I am a true businessman and therefore I will
issue Credit Note to Amit.
Here is what I will do it Tally.
From Gateway of Tally, I will go to Accounting Vouchers.

After I am in the Accounting Vouchers, I will go and select Credit Note.

I can select Credit Note in 2 ways. Either by clicking on it or by shortcut which is
CTRL+F8.
If you are already in the Credit Note voucher than it is okay but if you are not, you can go
by just pressing CTRL+F8.
After you are in the credit note voucher, the screen in Tally would look something like this.
Now, I will pass the entry for Credit Note of 5,000.
I have already passed the Sales Entry in one of the posts.
You can go there and know how to create a sales and purchase entry both.
Here is what the Sales Entry looks like in Tally.

Now, here is what the Credit Note entry in Tally for 5,000 looks like.
 Computerised Accounting

Credit Note entry in Tally

I would like you to pay attention to some of the important things about the entry.

Firstly, the Current Balance shows Rs. 15,000 by which we can take a decision on how
much the credit note should be made.
In simple words, we can easily know that the credit note would not be made up of above
Rs. 15,000 because that is what the total sales.
Secondly, I would look at the Narration which is in the bottom left comer of the the image.
You can write the narration so that next time you see the entry, you will be able to know
for what reason the goods were returned.
When you are completed with the entry, just press Yes and the Credit Note entry will be
created.
Let us have a look at the sales entry as well as the credit note entry together in Profit and
Loss Account in Tally.
Recording Day-To-Day Transactions in ERP 141

Sales and Credit Note Comparison in Tally

You can clearly see that Credit Note makes a debit amount and therefore reduces our sales.
This is because, Amit has returned the goods and therefore in reality the goods have not
been sold so the sales has been reduced.
Now, let us look at this example from the point of view of Amit.
Which is why we are going to pass a Debit Note entry.
Journal Voucher (F7)

Example:
M/s XYZ Limited purchased stationery items form M/s Prince Stationers as per details given
below:

BILL NO. 105

BILL DATE 31.03.12

AMOUNT 5,250

How shall you enter the above bill in tally program in the books of M/s XYZ Limited?
aion:
First of all, Journal Voucher shall be prepared for the above transaction because the
aery is not a trading item and the stationery is purchased on credit also. The entry will be
sared as follows:
142 Computerised Accoun

MS XYZ LIMITED

JOURNAL VOUCHER

DATE: 31.03.12

PARTICULARS AMOUNTIN
RUPEES

DEBIT: PRINTING & STATIONERY EXPENSES AC 5,250

TOTAL §450

CREDIT: MS PRINCE PRINTERS 5450

TOTAL 5450

(BEING STATIONERY PURCHASED FROM M S PRINCE PRINTERS AS PER

THEIR BILL NO. 105 DATE 31.03.12 ENCLOSED)

Now, we shall enter above Purchase Voucher in tally as under:

Open Tally program.
Select your Company. In our case, we shall select M/s XYZ Limited.
Select ‘’Accounting Vouchers’ under ‘Gateway of Tally’
Now, the following screen will appear:
Recording Day-To-Day Transactions in ERP 143

Just read the items written on screen with a concentration. Reply of your all question relating
to voucher entry is available here.
You want to enter a Journal Voucher. See in right side. There are lots options available. One of
those options is ‘F7 - Journal’.
Select this icon with the help of mouse or press ‘F7 key’.
Now, select date icon or press’F2’ key.
A box will show ‘Voucher Date’
Write the date of voucher here i.e. 31.03.12 then press ‘Enter’ key.
Now a blank form will appear. You have to fill up the details as required in that form.
First, in Dr. Particular Column, you have to write Printing & Stationery Expenses A/c. The
moment you type ‘ M’ a list of account heads started with alphabet ‘P’ shall appear. You have
to select ‘Printing & Stationery Expenses A/c’ out of that list.
In Debit amount column write 5250 then press ‘Enter, key.
In Cr. Column press ‘Enter’ key.
144 Computerised Accounting

In Particulars press ‘P’ and select ‘Prince Printers’ out of the list given in right side.
In Credit amount write 5250/= and press ‘Enter’ key.
In narration column write any narration which you think fit then press ‘Enter key’
Now the screen will be as under

Finally, Tally asks you ‘Yes’ or ‘No’. Here, you just stop and check that every detail is
correct. If there is any mistake then press ’N’ key otherwise press ‘Y’ or press ‘Enter’ key.
After you press ‘Y’, and all details vanish from the screen and a new voucher appears then
you can say that your voucher is entered and saved.
Recording Day-To-Day Transactions in ERP 145

MULTIPLE CHOICE QUESTIONS (MCQ)

1. To print a voucher from tally we need to press

[a] Ctrl + P
[b] Shift + P
[c] Alt + P
[d] None of these
2. We can see working capital figure changing
[a] Profit and Loss Configuration
[b] Balance sheet configuration
[c] Voucher configuration
[d] Ledger configuration
3. We can see list of Memorandum Vouchers form
[a] Cash/ Bank books
[b] Exception Reports
[c] Accounts Books
[d] Trail balance
4. What is MRP
[a] Market Price
[b] Maximum Retail Price
[c] Marginal Price
[d] Minimum Retail Price
5. We can use Stock Journal for
[a] Production and consumption
[b] Inter Godown transfer for stock
[c] Both A and B
[d] None of these
6. Default invoice mode is on for sales or purchase enry. Which key should be pressed forentry
of sales or purchase as a voucher
[a] Alt + V
[b] Ctrl + V
[c] Alt +F8
[d] Alt + F9
 Computerised Accounting Ree

7. Which shortcut key is pressed for voucher entry or deleting a ledger

[a] Alt + A
1.
[b] Alt + C
2.
[c] Alt + X
3.
[d] Alt + D
4.
8. By default, which mode is on in Purchase and sales voucher
5.
[a] Normal Mode
6.
[b] Item Invoice Mode
7. 1
[c] Particulars Mode
8. 1
[d] None of these
9.
9. A credit note is sent by________ to__________
F
[a] Seller, buyer
10.
[b] Buyer, seller
[c] Customer, seller
[d] Creditor, seller
10. To create a salesvoucher in taally, you have to press
[a] F5
[b] F7
[c] F8
[d] F9

Answer;

1. c 2. c 3. b 4. b 5. c 6. b 7. d

8. b 9. a 10. c
 147

1. In tally you get currency symbol option from______________ menu.

2. _____________ gives the balance for each day for the voucher type has been selected.
3. For stock journal entry we press_____________ in tally.
4. _______________ option lists inventory valuation method in tally.
5. _______________ is used for voucher entry.
6. To appear voucher date should select_______________ .
7. Shortcut for credit note_________________ .
8. Purchase vouchers are used to record all types of purchases like_______________________ .
9. _______________________ prompts to take a look at all the pending invoices for which
payments are yet to be received.
10. ______________ voucher type is used to transfer amount from one bank to another.

Answer:

1. Company Creation 2. Daybook 3. Alt +F7 4. Stock Summary

5. Fedger Account 6. Select date icon or F2 7. Ctrl + F8
8. Cash and Credit 9. Receipt Voucher 10. Contra
Conceptual Type
1. What is Financial Service?
2. What is Business Transaction?
3. What is Voucher?
4. What is Source Document?
5. What is Accounting Voucher?
6. What is Receipt Voucher?
7. Give the meaning of Contra Voucher?
8. What is Payment Voucher?
9. What is Purchase Voucher?
10. What is Sales Voucher?
11. Give the meaning of Debit Note Voucher?
12. What is Credit Note?
13. What is Journal Voucher?

Descriptive Type
1. Explain in details about Business Transactions.
2. Discuss various Source Documents for Voucher.
3. Explain about Recording Transactions in ERP.
4. Discuss in details about various Accounting Vouchers.
5. Explain the process of Receipt Voucher (F6).
6. Discuss about Contra Voucher (F4).
7. Explain about Payment Voucher (F5) in ERP.
8. Discuss about Purchase Voucher (F9) in ERP.
9. Discuss about Sales Voucher (F8) in ERP.
10. Discuss Debit Note Voucher and Credit Note.
U
4
nit
Accounts Receivable and
Payable Management
HB

Learning Objectives
• Introduction • New Reference
• Accounts Payables • Against Reference 1
• Accounts Receivables • Advance-On Account
• Maintaining Bill-wise Detail • Stock Category Report
• Activation ofMaintain Bill-wise Details Feature • Changing the Financial Year in ERP
J
 Accounts receivable refers to the outstanding invoices a company has or the money the
company is owed from its clients. The phrase refers to accounts a business has a right to
receive because it has delivered a product or service. Receivables essentially represent a line of
credit extended by a company and due within a relatively short time period, ranging from a fee
days to a year.
Most companies operate by allowing some portion of their sales to be on credit. In some
cases, business offer this type of credit to frequent or special customers who are invoiced
periodically. The practice allows customers to avoid the hassle of physically making payments as
each transaction occurs. In other cases, businesses routinely offer all of their clients the ability to
pay after receiving the service. For example, electric companies typically bill their clients after the
clients have received the electricity. While the electricity company waits for its customers to pay
their bills, the unpaid invoices are considered accounts receivable.
If a company cannot collect its accounts receivable, it may decide to take the debtor k
court over the unpaid debt, or it may outsource the debt collection activity to a third-party1 bil
collector. These companies typically charge a set fee or a percentage of the amount they colled
In other cases, businesses sell their accounts receivable for pennies on the dollar to a factoring
company that then collects the debt. Factoring companies often offer some cash up foooL
making them an attractive option for companies that need a boost to their working capital.
If a business has reported an account receivable as income and it does not receive payme~_
it has a bad debt. The Internal Revenue Service (IRS) allows businesses to subtract bad dets
from their gross income on their income tax returns, as long as they reported the debt as incoce
on a previous return. When a company owes debts to its suppliers or other parties, these
known as accounts payable. Accounts payable are the opposite of accounts receivable. 7»
illustrate, imagine company A cleans company B's carpets and sends a bill for the servicas
Company B owes the money, so it records the invoice in its accounts payable column. Compar«
A is waiting to receive the money, so it records the bill in its accounts receivable column.
Accounts payable (AP) is money owed by a business to its suppliers shown as a liability an
a company's balance sheet. It is distinct from notes payable liabilities, which are debts created M
formal legal instrument documents.
An accounts payable is recorded in the Account Payable sub-ledger at the time an invoice
vouched for payment. Vouchered, or vouched, means that an invoice is approved for payn
and has been recorded in the General Ledger or AP subledger as an outstanding or open, liabi
because it has not been paid. Payables are often categorized as Trade Payables, payables for
purchase of physical goods that are recorded in Inventory, and Expense Payables, payables
the purchase of goods or services that are expensed. Common examples of Expense Payables
advertising, travel, entertainment, office supplies and utilities. AP is a form of credit that suppl
offer to their customers by allowing them to pay for a product or service after it has airs
Accounts Receivable and Payable Management 151

been received. Suppliers offer various payment terms for an invoice. Payment terms may include
the offer of a cash discount for paying an invoice within a defined number of days. For example,
2%, Net 30 terms mean that the payer will deduct 2% from the invoice if payment is made
within 30 days. If the payment is made on Day 31 then the full amount is paid.
In households, accounts payable are ordinarily bills from the electric company, telephone
company, cable television or satellite dish service, newspaper subscription, and other such regular
services. Householders usually track and pay on a monthly basis by hand using cheques, credit
cards or internet banking. In a business, there is usually a much broader range of services in the
AP file, and accountants or bookkeepers usually use accounting software to track the flow of
money into this liability account when they receive invoices and out of it when they make
payments. Increasingly, large firms are using specialized Accounts Payable automation solutions
(commonly called ePayables) to automate the paper and manual elements of processing an
organization's invoices.
Commonly, a supplier will ship a product, issue an invoice, and collect payment later, which
describes a cash conversion cycle, a period of time during which the supplier has already paid
for raw materials but hasn't been paid in return by the final customer.
When the invoice is received by the purchaser, it is matched to the packing slip and
purchase order, and if all is in order, the invoice is paid. This is referred to as the three-way
match. The three-way match can slow down the payment process, so the method may be
modified. For example, three-way matching may be limited solely to large-value invoices or the
matching is automatically approved if the received quantity is within a certain percentage of the
amount authorized in the purchase order.

Account Payable
Accounts Payable is a short-term debt payment which needs to be paid to avoid default.
When a company purchases goods on credit which needs to be paid back in a short period of
time, it is known as Accounts Payable. It is treated as a liability and comes under the head
current liabilities’.
Accounts Payable is a liability due to a particular creditor when it order goods or services
without paying in cash up front, which means that you bought goods on credit. Accounts
Payable as a term is not limited to companies. Even individuals like you and me have Accounts
Payable.
We consume electricity, telephone, broadband and cable TV network. The bills get generated
awards the end of the month or a particular billing period. It means that the service provider
gave you some service and sends the bill which needs to be paid by a certain date or else you
ill default. This becomes Accounts Payable. Accounts payable are amounts a company owes
:ecause it purchased goods or services on credit from a supplier or vendor.
 Computerised Accounting

Account Receivable
Accounts Receivable (AR) is the proceeds or payment which the company will receive from
its customers who have purchased its goods & services on credit. Usually the credit period is
short ranging from few days to months or in some cases maybe a year.
The word receivable refers to the payment not being realized. This means that the company
must have extended a credit line to its customers. Usually, the company sells its goods and
services both in cash as well as on credit. When a company extends credit to the customer, the
sale is realised when the invoice is generated, but the company extends a time period to the
customers to pay the amount after some time. The time period could vary from 30-days to a
few months.
Account Receivables (AR) are treated as current assets on the balance sheet. Let's
understand AR with the help of an example. Suppose you are a manufacturer M/S XYZ Pvt Ltd
and you manufacture tyres.
A customer gives you an order of Rs. 1,00,000 for 100 tyres. Now, when the invoice is
generated for that amount, sale is recorded, but to make the payment the company extends the
credit period of 30-days to the customer.
Till that time the amount of Rs. 1,00,000 becomes your account receivable because the
customer will pay that amount before the period expires. If not, the company can charge a late
fee or hand over the account to a collections department.
Once the payment is made, the cash segment in the balance sheet will increase by Rs.
1,00,000 and the account receivable will be decreased by the same amount, because the
customer has made the payment.
The amount of account receivable depends on the line of credit which the customer enjoys
from the company. Usually, this is offered to customers who are frequent buyers.

MAINTAINING BILL-WISE DETAIL

Bill wise detail of goods and services are maintained according to the date and bill no
therefore, we can have details of all the bills received and all the bills made to customers. Nov
here let’s take an example and in the example
• Mohan started business with cash Rs. 10,000
• Purchase following stock item items from Ravi on 1 oct 2015.

Bill no Item Purcahse price /unit Unit purchase

No/001 Dove soap 100 gm Rs. 50 100
No/001 Dove soap 200 gm Rs. 100 50
No/001 Lux soap 100 gm Rs. 22 100
No/001 Lifebouy 100 gm Rs. 20 200
Accounts Receivable and Payable Management

Purchse following stock item from sudha trader on 2 oct 2015

Bill no Item Purchase price /unit Unit purchase

No/002 Maggi 100 gm Rs. 8 100
No/002 Maggi 400 gm Rs. 35 50
No/002 Top remen 100 gm Rs. 12 100
No/002 Top remen 400 gm Rs. 40 200
Go to gateway of tally > press Fll Key > Press Fl> maintain bill wise detail set to
YES
Company Abe Ltd

Accounting Feaeutas

Geneiat iwofeina

iMegtate Accounts and teemary ? Yes A0(W ? Yes

BtePwfcasas w feoke Format ? Yes
StMWsfW P t ? Mo
Use PeteCwM Mete ? No
AJlsw IMs-Cwency Y Ho
Use twotce mode lot Credt Notes ? Mo
Use Immc« mode for Debit Mote ? Wo
Outstandings Management

Mante* S**M Petes ’PSBB 8

(tes IteTtaMfNu stajJ 1 No
? Mo
Maintain SwAjeU and Centfots
? Ho
Y Mo Use fteetetg jewwts 4 Opbwwl Vsocbet* ? Mo

SanUnn Features
CosVPraftt Centres Management
Y Yes
Maarten Payto# ? Wo
fUse Banfong ConAgetation m Bank L&lget
Masntei Cast Censes ? Wo Mas&r for Qsegse Ftefesgt Cariftguntiian)
y» Cost CenUe fer Jeb Costing ? Mo
Hi? 3it ? no
Mow Hte OWE Payte 1 Cast CMegtay ? No
t&« Cast AlbcM^ns *> Ho
Other Faatorw
for Rtww 7 Ho
Atow 2am vafoed ante* in*
^$31*15 " Si 1 7 H-cs
$«#'«« Ctmwy Maui) Details f Me
EneMe Company Logst ? no

Now create the following ledger in accounts info > ledger > create

Ledger Under Maintain bill wise Inventory value are

detail Yes affected
Ravi Sundry creditor YES No
Sudha trader Sundey creditor YES No
Purchase A/c Purchase YES
Now create inventory as given above:
First of all create Unit of measurement:
 Computerised Accoun tins

Go to gateway of tally > inventory info > unit of measurement > create > type =
simple > In symbol >type :nos>In formal name > type : number >number of decinu.
places : 0

ft Pfirt- B Export

Unit Creation

Type : Simple
Symbol : no
Formal Name; Number
—

Number of Decimal Places : 0

Now create inventory

Go to Gateway of Tally > Inventory info > Stock Item create > press F12 >
• Set Allow advance entries in Master set to >NO
• Set calculate Vat on MRP margin Set to > NO
• Use part no for stock item set to > No
• Use description of the stock item set to > No
• Use remark for stock item set to > No
• Specify default ledger allocation for invoicing No
• Use alternate unit for stock item set to No
• Allow standard rate for stock item > YES
• Allow component bill detail > No
• Allow Alias along with name > No
• Language Alias along with name > No

Name of stock item Under Units Set standard Standard cost Selling rate
Rate
Dove soap 100 gm Primary nos YES 50 70
Lux soap 100 gm Primary nos YES 22 25
Dove soap 200 gm Primary nos YES 100 120
Lifebuoy 100 gm Primary nos YES 20 25
Accounts Receivable and Payable Management 155

Maggi 100 gm Primary nos YES 8 12

Maggi 400 gm Primary nos YES 35 40
Top Remen 100 gm Primary nos YES 12 15
Top Remen 400 gm] Primary nos YES 40 55

Go to gateway of tally > inventory info stock item > create >

now set standard rate set to Yes all fill in the standard cost: Applicable from 1/4/15 and rate
to be fill Rs. 50.
standard selling rate applicable from 1/4/15 and rate to fill Rs 70.
Simi salary create ledger of all inventory as described above
Now make accounting entry in purchase voucher
Go to Gateway of tally > accounting voucher > press F9 or select purchase from the list >
lew press CTRL + V to got item invoice mode and then press ALT +1 after pressing ALT +1
lume of the item should be written in place of particular.
Press FI2 and set all the details Set to NO
In the party name press space bar and select party name forms the list.
 Computerised Accounting

now select inventory from the list to be purchased by pressing space bar which we have
created earlier.

and in the bill wise detail scree type the bill no bill/001

Bill-wise Details for: Ravi

Upto: ? 19,200.00 Cr
Type of Ref Name Due Date, or Amount Dr/
Credit Days Cr
(wef: 1 -Apr-2015)

New Ref 19,200.00 Cr

now to open the detail of our payable or outstanding go to the gateway of tally > display
statement of accounts outstanding > payable >
now you can check the detail of your payable.
Customized bill creation in Tally ERP 9 for purchase of goods
To create bill no as per need we have to create class in tally ERP 9
suppose we have created bill no such as Billn0/01/17-17
the steps to follow are following
Go to gateway of a tally > Accounts info > voucher class >alter > purchase >
• Use advanced configuration set to YES
• A new window (screen)will appear
• Starting Number Type 1
• Width of numerical part Type 3
I Accounts Receivable and Payable Management 157

• Prefill with zero Type Yes

• Restarting number Applicable from 1/4/14 select 1 year
• Prefix detail: Applicable from 1/4/14 : Type : Billno\
• Suffix no: Applicable from 1/4/14 Type : \16-17
AAA
i Starting Humber ? 1
mW of Numeral Part 3
■Pre® with ZERO ~ Yes

Restart Numbering Prefix Details Suffix Details

Appfesbfe Staitmg Particular Appficabfe Particulars Apeicable PsrtlClHSiS

j FfOffi From From

l-Apr-2014 1 Yearly 1-Apr-2014 Bttnei 1-Apr-2014 11S-1T

ACTIVATION OF MAINTAIN BILL-WISE DETAILS FEATURE

Maintain bill-wise details in Tally ERP 9 are used to maintain outstanding reports of
customers and suppliers. That is, Tally ERP 9 helps to maintain and track Accounts
RECEIVABLE and Accounts PAYABLE based on every bill. Tally is providing the flexibility of
maintaining Bill-wise details of Non trading accounts also. That is if you are trading machinery
and purchasing stationery. In such case purchase of machinery falls under Trading A/c and
purchase of Stationery falls under Non Trading a/c.

Example: Transactions for Maintain bill-wise details in Tally ERP 9

In this Guide We are Using Following Sales and receipt transactions for Bill-wise details:
 Computerised Accounting

g teipt
«Ms<4. BW«
iM«. taw* tee -
i
tew* 8 I
!$o»n [ W»«
Wwrt isttap, r
i ««rsa« B ®S*0 |
Eayt j I/7/2BW

Opening Balance Bill-wise details of customers

------ ------- ------------------ 1 ............. ......-....................... - ■•
Opening Balance details.

Opening
BilSwise breakup WMKWS ■MB
....... ■......... Balance Bill date Bill No Bill amoui Bill date Bill No Bill amount
15000 1/2/2016 AB215 10000 2/3/2016 AB520 5000

.... : - '.. '... . 12000 1/1/2016 AB85 6000 2/2/2016 AB32O 6000
0
Customer 0 0
Customer E 12000 1/3/2015 AB852 12000

How to activate Maintain bill-wise details in Tally ERP 9?

The first step is activation of bill-wise details. To do this
Go to Gateway of Tally > FI 1
II

S:: M6«Sil Oj iMMSsy KWWff Ki.£3«Ms

Accounts Receivable and Payable Management 'Scf 159

Enter and accept the screen. Now the bill-wise details in Tally ERP9 activated.
Create Customer Ledger with Bill-wise details activated.
To Create customer Ledger, Go to
Gateway of Tally>Accounting Info Ledger>Create.
Here is a complete guide on how to create Ledger.
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iiT0S0«te;W»
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Cj)«,niiig Mam : (aa :HHH

sstfsassosaa

to. » Sa»«*vo'Tjiy'> ActorsWs

Fill all details as usual. I will explain some points that are specifically focused for maintain
bill-wise details.
Maintain balance bill-by-bill: This option will automatically activated by displaying ‘Yes*
.as we have activated Maintain bill-wise details in Fll Features.
Check for credit days during voucher entry: If you set this option ‘Yes’.Tally will warns
you if the party exceeds the credit period and about pending outstanding.
Now enter the opening balance in the column at the end of the screen.
160 Computerised Accounting

Opening Balance } on 1-Apr-2016} : 15.000,00 PM

Press enter, You will have a new screen, in which you can enter the bill-wise details of
opening balance of that particular customers.
That is CUSTOMER A’s Opening balance is 15,000 which includes 2 bills, Bill No AB215 =
10,000 + Bill No AB 520 = 5,000.

Bill-wise Breakup of CUSTOMER A

Upto: ? 15,000.00 Dr
Date Name Due toe, or Amount Dr/
Credit Days Cr

1/2/2016 AB215 30 Days 10,000.00 Dr

<2-Mar-2016}
2/3/2016 AB 520 30 Days 5,000.00 O
{1Apr-2D161

15,000.00 Dr
On Account__________________
15,000.00 Dr

Q Quit | j

Tally MAIN—> Gateway cf Tally —> Accounts Info. —> Ledgers --> Ledger Creatio

In the screen you can find the following options.

Date: enter the bill date, the date in which bill was generated in previous Financial Year.
Name: Here name refers the bill number.
Accounts Receivable and Payable Management 161

Due date or credit days: enter bill due date or total credit period, here we are giving 30 days
as credit period, the system will automatically calculate the due date and display just below of
credit days.
Press enter and save both the screen.
Create all customer ledger as explained above.

How to enter sales Voucher entry when Maintain bill-wise detail is activated?
Sales Transactions of Customer A.
On 1-4-2016 sold goods for 5000
Go to Gateway of Tally >Accounting Vouchers> F8 -Sales
Remember ,Customer A has an outstanding balance of 15000 as opening balance, which is
already overdue.
In the sales voucher entry screen, when selecting customer A, Tally display a warning
message which is the effect of activating ‘Check for credit days during voucher entry1 in the

Press enter, if you still ready to give some more goods on credit. Enter sales voucher details
162 Computerised Accounting

Enter all customers’ transactions chronologically or in the order as it is happened.

Enter Receipt voucher When bill-wise details is activated.
Receipt Transaction of Customer B.
We all know what is receipt and how to enter receipt transactions in Tally ERP9.
On 2/04/2016 Cash Received from customer B 14500.
Accounts Receivable and Payable Management 163

After entering receipt amount, press enter key you will get a bill-wise details of customer,
In which bill you can allocate amount received.

Bill-wise Details for: CUSTOMER B

Upto ? 14,500.00 Cr
Type of Ref Name .Due Date, or Amount Dr/
Method of Adj. :redit Days Cr
T 2-Apr-201Sj
Advance
Aqst Ref st Ref
New Ref
On Account

In the screen You can see a small dialogue box in which four options are available.
Advance: This option is selected when you receive an advance from customer.
Agst Ref: This is used when you are adjusting receipt amount against a pending bill.
New Ref: This option is used when you are creating a new bill, used when entering sales
voucher.
On Account: This option is used when you are not sure,against which bill the payment
received. You can use On Account for keeping adjustment as pending ,and later you can adjust
against correct bill.
Here choose Agst Ref and press enter you will get a list of pending bills.
I 1 164 Computerised Accountiai
r F

Bffl-wtse Details for CUSTOMER B

Upto 7 14,500.00 Cr

AgsfRef AB320 5,0000 Dr 6,000.00 Dr

AB85 1-Jan-2O16 600000 Dr 6,00000 Dr
SK,001002/2016-17 2Apr^2016 2.50000 Dr 2,500 00 Dr

Select First in first out until total amount, 14500 expires, here the total of total of three bills
tallies receipt amount.

CUSTOMER B
8i«-wtse Details for
upto ? 14,500.00 Cr
Type of Ref Name Due Date w Amount Of/
Ctecfet Days Cr
(wef 2-Apr-»16)

Agst Ret AB320 25 Days 6.000.00 Cr

AgstRer 25 Days 6,000.00 cr

(26-Jan-2016)
SHf#0*«Sl'201S-17 2,500.00Icr

"14,800 00 Cr

Total amount Tallies 3 bills.Which means there is not part payment against bills.each bills
cleared in full.
Here is the final screen shot of Receipt voucher.
Accounts Receivable and Payable Management 165

Save the voucher by pressing Enter Key or Short-cut key Ctrl + A.

Note: Part payment adjustment.
If a customer is giving a round amount which is not equal to bill amount. For example,
Customer E has 12000 pending amount Against bill no AB852 And customer is giving 1000 only,
in such case allocate 1000 against bill AB852, That bill shows a pending of 11000 only in report.
Enter all receipt voucher as in the example table.
Viewing outstanding bill-wise report.
Next and the ultimate of aim of bill-wise entry is getting report for a better outstanding
management.
Using these report you can analyse Outstanding receivables and Outstanding Payables. The
benefits are.
Can view Pending bills
Can view overdue bills only
Can view age-wise analysis report of receivables and payables.
Can view ledger-wise pending bills
Can view Group wise outstanding summery.
To View reports of Receivable
Gateway of Tally >Display>Statement of Accounts>Outstanding>Receivable
Change the period of Report by pressing F2
This is a typical Bill-wise outstanding Report of Receivables.
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In this report you can view bill date, number customer name, pending amount, Due dae
and also showing over due by days. That is how many days passed after due day is over.
You can access view party-wise outstanding report by clicking Bill-party wise button or ~
from this report.

How Prepare Age-wise Analysis Report?

To Age-wise analysis report Click on Age wise Button on the right button panel.

On Clicking the button You will get a screen where you can define the ageing methods.
Accounts Receivable and Payable Management 167

Ageing Analysis

Method of Ageing :| '

Ageing by Due Date

There are two option:

Ageing by Bill Date: Bill age calculated from bill date
Ageing by Due Date: Bill age calculated from due date
Lets Select Ageing by bill date.
You will get an ageing alteration screen, enter date range like
•0-30
• 30-60
• 60-90

You can set any range. Press Enter and save, You will get age-wise analysis report like
below image.
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By looking at this report, We can easily analyse the best paying customers and worst paying
customers, so that accelerate the collection process.
To View outstanding reports of Payable
Gateway of Tally >Display>Statement of Accounts>Outstanding>Payable.
In this tutorial we have not created any Payable outstanding, That amount pending to
supplier. But you can create bill-wise details of sundry creditors using the same method.
View Customer Ledger wise Outstanding
To view ledger wise outstanding
Gateway of Tally >Display>Statement of Accounts>Outstanding>Ledger
Select the Customer Ledger, In our example Let’s select Customer A, the Report look like
this.
■ Accounts Receivable and Payable Management

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Group wise outstanding report
Gateway of Tally >Display>Statement of Accounts>Outstanding>Group
Select the Group, Say Sundry Debtors.
You will get a summary of outstanding in that particular Group, Here you will get summary
of Receivables. Here is the screen shot of Group-wise outstanding report.
170 Computerised Accounting

When you enter a purchase voucher and provide an invoice number as the reference no..
Tally.ERP 9 automatically captures the reference no. as the invoice no. to display in the invoice
wise listing of the supplier balance. This is because the voucher number is used as the sequence
number for filing purpose. The Reference no. is normally used for numbering the invoice
received from your creditors.
In the report of creditors' outstanding, the invoice number is required not the voucher
number while in the report of debtors' outstanding, the invoice number (voucher number) enterec
by you is required for reference. That is the reason why Tally.ERP 9 picks up the voucher
number in the report of debtors' outstanding.
If your sales voucher number starts from 1 (which is automatically set in Tally.ERP9) and
your sales bill number starts from 5001, you can alter the sales voucher type and set starting
number as 5001. This is based on the fact that we consider the sales bill number as reference in
the outstanding report of the customers.
Sale is the most important part of every business. Sale entry or sales voucher entry is a par
of daily routine.Sale is revenue account in nature hence termed as the main income steam of
organisation.In this lesson we will learn how to enter sales transaction in Tally ERP 9. A sale can
be classified into two.
Sale is the most important part of every business. Sale entry or sales voucher entry is a part
of daily routine.Sale is revenue account in nature hence termed as the main income steam of
organization.In this lesson we will learn how to enter sales transaction in Tally ERP 9. A sale can
be classified into two.

AGAINST REFERENCE

Advanced usage in voucher entry involves using more features of Tally. This would mean
entering of data in various pop-up sub-screens depending on the context and configuration (both
F12 and Fll) settings.

Bill-wise details
Bill-wise details are available, firstly when activated in Fl kCompany Features, and secondly
when set to Yes in the ledger.
Bill-wise details are pertinent only for party accounts, viz., ledger accounts classified under
Sundry Debtors, Sundry Creditors and Branch/Divisions.
You would activate Bill-wise details if you wish to track each invoice to its conclusion and
you wish to adjust the bills and payments bill by bill.
Moreover, you want to obtain such information as outstanding analysis, ageing analysis,
pending, due and overdue bills, etc. (These are available through Display—> Statement of
Accounts—>Outstandings).
A .counts Receivable and Pin able Management

** You give bill details during voucher entry itself. This has the advantage of immediate
reconciliation of bills/invoices with payments/receipts.
** Your outstandings position is correct and available at all times.
Hence, bill wise details sub-screen comes up for party accounts during receipt/payment
voucher entry or purchase/sale voucher entry or debit note/credit note entry.
** Bill-wise details sub-screen does not come up for inventory vouchers. It is relevant only
for accounting purposes.
Let us take an example of a Purchase Voucher where we credit the supplier Peutronics with
15,000. After the amount field, the bill-wise sub-screen pops up. The sub-screen will appear as
below:

Type of Reference
Bill reference can be of four types:
• Advance
• New Reference
• Against Reference
• On account
You must select one or more of these to adjust the amount. The amount can be broken up
and different references given. Example: the 15,000 above could have been firstly 5,000 where it
is due on 8 Aug 97 and then 10,000 where it is due on, say, 31 Aug 97.

Advance
This is relevant where you receive or pay monies in advance. You can adjust this advance
when making the sale or purchase entry. At that time, it will be available for adjustment.

New Reference
You select this for new transactions, e.g.
For a new bill raised by you on your customer or raised on you by your supplier.
If you mark the bill as a new reference, it is add to the list of outstandings.
In the field, you can give the voucher number, the reference number or any alphanumeric
set of characters that would identify the reference and help set it off later using against
 Computerised Accounting

reference. You are not allowed to give the same name for two new references. In other words,
new references must be unique.

Against Reference
Select this when adjusting against a previous reference, i.e.; adjust against a bill marked new
reference. Typically, You would mark a bill new reference and adjust its payment by marking the
payment against reference. When selecting against reference, a list of pending references (bills)
for the party comes up from which you select. You may adjust the whole bill or part of it. The
rest of the bill remains unadjusted. You can use Against Reference even to adjust advance with an
invoice. This you would do when entering a purchase or sales voucher. If there are no pending
bills, the option will not be available.

On account
On Account is selected when you are unable to mark a payment or a receipt against specific
pending references. Typically, you would do this in cases of lump sum payments where a
number of bills are pending but you are not instructed against which bill the money should be
adjusted.
I
Name
In the field, you can give the voucher number, the reference number, or any alphanumeric
set of characters that would identify the reference and help set it off later using against
reference. You are not allowed to give the same name for two new references. In other words,
new references must be unique. We have given New Bill as new reference (this is actually not a
good unique name).

Due date or credit days

This is applicable for new reference. Give the credit period for the bill or the date when it is
due for payment. Give either, Tally will calculate the other.

Amount
Give the amount for the adjustment. You can break up the amount and adjust it in several
instalments giving different references.

DrJCr.
Specify whether the adjustment is debit or credit.
It is usually Dr for sales new references and Cr for Purchase New references. It is usually
the same as the voucher entry.

Cost centre allocations

Cost centre allocations would be relevant if you have opted for cost centres in [Fll]:
Company Features. Moreover, it applies to only those ledgers for which you have activated cost
centres. You may wish to display relevant ledgers through Gateway of Tally—> Accounts Info ->
Ledgers.
Accounts Receivable and Payable Management 173

By allocating ledgers to cost centres at the time of voucher entry, you do away with the
need to reconcile them - they are reconciled from that very moment. Hence, you save time and
effort when you wish to use the information for analysis. Cost centre analysis is a powerful tool
that enables you to know the performance of the cost centres. Display cost centre information
through Gateway of Tally—>Display—> Statement of Accounts—> Cost Centres.
Assuming that you have created cost centres and cost categories in Accounts Info
(masters) as below, we shall see how they appear.

STOCK CATEGORY REPORT

Stock Category gives a parallel dimension for categorizing or arranging stock items apart
from stock group. For example, For a grocery trader is dividing things by adopting the following
strategy. He groups the commodity with Brands and categorize with weight as follows:

Vo. Stock Item S,ock Group Stock Category

1 Basmathi Rice Kohinoor Brand 25 Kg bag
2 Sushi Rice Indus valley Brand 50 Kg bag
3 Red Rice Classic Brand 75 Kg bag
4 Rissotto Rice Amira Brand 50 Kg bag
5 Par Boiled Rice India Gate Brand 25 Kg bag
The stock category will give you a third dimension report for the Inventory. That is the
first level report is the report of stock item it self. Second level report is the stock group level
report and the stock category report is also a second level report which is parallel to the group
level report.

How to activate stock categories in Tally ERP 9?

To be able use this option in tally erp 9, You have to activate it, For activation of stock
categories go to
Fll Features > F2 Inventory Features
Activate the option Maintain Stock categories

Enable zero-valued transactions ? No

Storage and Classification

Maintain multiple Godowns ? No
Maintain stock categories ?EZ£Hi
Maintain batch-wise details > Wo
Set expiry dates for batches ? No
Use separate actual and billed quantity columns ? No
Press enter key and accept and save the screen.
174 Computerised Accounting

How to create stock categories Single mode?

To create stock category, Go to
Gateway of Tally>Inventory Info>Stock Categories>Create
• Enter the stock category name. In our example let’s create 25 Kg bag.
• Under: Primary, When you create a category under primary, That becomes the first level
category.
Stock Category Creation

Name Kg Bag
fatfas)

Under J Prima

Save the screen by pressing Ctrl+A.

Create Stock Categories under Multiple Stock Categories

Go to
Gateway of Tally>Inventory Info>Stock Categories>Create (Under Multiple Stock
Categories)
Accounts Receivable and Payable Management 175

How to edit stock category?

To edit a stock category, go to.
Gateway of Tally>Inventory Info>Stock Categories>Alter.
Select the category you want to edit,Make necessary changes required and save.

How to delete a stock category?

To delete a stock category, go to
Gateway of Tally>Inventory Info>Stock Categories>Alter.
Select the stock category you want to delete.
Press Alt+D or click on delete button on the bottom of the screen. Accept the confirmation
for deletion.

How to use stock category in tally ERP 9?

If you want to use,the stock category, you have to add the proper category with each and
every product. Let’s see how.
Let’s create the First stock item in the above example.
Gateway of Tally> Inventory Info>Stock items>Create
 Computerised Accounting

Select the apt category for stock item as shown in the image, and save, create all stock
item in the example.
Now you can start all items to be entered in the sales voucher or in purchase voucher.
Category-wise report in tally erp 9
The following category-wise reports are available in tally erp 9.
Movement analysis based on category
Gateway of Tally> Display > Inventory Books > Movement analysis > Category analysis.
By selecting Primary, you can view all stock items categorized under primary group. You
can view the individual item report by selecting individual items.
Stock category summary report
Category-wise stock group report is available at
Gateway of Tally> Display Statements of Inventory>Categories.
You can get the summary of 25 kg bags or 50 kg bags stock summary, its total value, total
inflow of item, total outflow of the item.

CHANGING THE FINANCIAL YEAR IN ERP

To change the date of Tally Voucher you have to do the following.Before we start,You
should know Tally ERP 9 Educational version have some date restriction. You are allowed to
make entries on 1st,2nd and last date of a month. The free version are for educational purpose
and you have to buy a licensed version of Tally ERP 9 for enjoying full options and voucher
entry on all date.

How to change the date of a voucher in Tally ERP 9?

Assume that you are in payment voucher
Gateway of Tally> Accounting Voucher>F5 Payment
Tally will show you the date of last voucher entry in the payment voucher screen, in my
tally it is 1-05-2016
Accounts Receivable and Payable Management 177

right hand top of the screen.

On clicking this the date button a voucher date option will pop up showing the next date ,if
you want to use this date ,press enter.
178 Computerised Accounting

Or if you want to make entry on another date, suppose 1-06-2016. Just type 1-6-16 or 01-
06-2016 in the box and press enter, Instead of typing full date you can type 1-6, tally will
automatically find the year and display full date. Use any of the date separators like”/ or * or - or

How to change the period in tally?

Period are required for a report, for example, if you want to view the ledger statement from
01-05-2016 to 31-05-2016. do the following.
Go to
Gateway of TalIy>DispIay>Account Book >Ledger
Select the ledger, and on the top on the report you will see the current period automatically
selected by tally as shown in the picture.

To change the period You can use Alt + F2 or click on Period button provided on the top.
Enter the starting date and end date in the box and press enter as shown in the image.
Accounts Receivable and Payable Management 179

Book, trail balance, balance sheet and profit and loss account.
1
Computerised Accounting

MULTIPLE
Purchase of machinery falls under
[b] Non Trading A/c
[c] Both a and b
To Maintain bill-wise details in Tally ERP 9
[a] Go to Gateway of Tally Fll
[bl Go to Gateway of Tally Accounting Info > Ledger > Create.
[c] Go to Gateway of Tally Accounting vouchers > F8- Sales.
[d] Go to Gateway of Tally Accounting Voucher >F6 Receipt.
Which among the following comes under Bill reference
[a] Advance & Against Reference
[b] Amount & On account
[c] New references & Voucher number
[d] Voucher number & Amount
Maintaining bill wise details Go to Gateway of Tally press Fll key Press FI
[a] Integrate accounts and Inventory set to No
[b] Maintain Cost Centers set to Yes
[c] Maintain bill wise details set to No
[d] None of these
Option is used to adjusting receipt amount against a pending bill,
[a] Advance [b] New Ref
[c] Agst Ref [d] None of these
Accounts Receivable and Payable Management

[c] Use part no for stock item set to No

[d] All the above
9. Single Entry mode is applicable for
[a] Receipt Voucher [b] Contra Voucher
[c] Payment Voucher [d] All of These
10. Goods returning to a creditor after challan but before bill we need to pass
[a] Debit note [b] Receipt Note
[c] Rejection Out [d] Rejection In

Answer:

1. a 2. b 3. a 4. d 5. c 6. b 7. c

8. d 9. d 10. c

ALL IN THE BLANKS

1. When a company purchases goods on credit which needs to be paid back in a short period of
time is known as________________ .
2. To create inventory Gateway of Tally > Inventory info______________ press__________.
3. Tally ERP 9 helps to maintain and track accounts___________________ on every bill.
4. To change the date of a voucher in Tally ERP 9 Go to Gateway of Tally Accounting Voucher
F5 Payments and then press___________.
5. Dr./Cr. is usually the same as the_______________ .
6. _____________ is the proceeds or payment which the company will receive from its
customers who have purchased its goods & services on credit.
7. To Maintain bill wise detail we can have details of all the bills______________ .
8. When a Customer A has an outstanding balance of X as opening balance then tally display a
warning message_____________________________ .
9. If we choose Agst Ref and press enter we will get a______________________ .
10. _____________ option is pressed to delete a stock category.

Answer:

1. Account Payable 2. Stock Item Create >, F12 3. Account Receivable and Payable
4. F2, 5. Account Receivable 6. Voucher Entry
7. Bills Received and made to Customer 8. Check for Credit days during Voucher Entry
9. Pending Bills 10. Alt + D
82 Computerised Accounting

■ ~ '■ ' :•......, ■ ■

REVIEW QUESTIONS

Conceptual Type
1. What is Accounts Payable?
2. What is Account Receivable?
3. What is Bill-wise Detail?
4. What is New Reference?
5. What is Against Reference?
6. What is Advance-On Account?
7. What is Stock Category Report?
8. What is Financial Year?

Descriptive Type
1. Discuss about Accounts Payables and Receivables.
2. Explain in details about Maintaining Bill-wise Detail.
3. Discuss about Activation of Maintain Bill-wise Details Feature.
4. Write note on: New Reference in ERP.
5. Discuss about Against Reference in ERP.
6. Explain in details about Advance-On Account.
7. Discuss about Stock Category Report.
8. Explain in details about Changing the Financial Year in ERP.
$$$$$
 U
5 nit
MIS Reports

X" Learning Objectives

• Introduction • Ratio Analysis
• Advantages of MIS • Books and Reports
• MIS Reports in ERP • Day Book
• Trial Balance • Receipts and Payments
• Balance Sheet • Purchase Register
• Profit and Loss Account • Sales Register
• Cash Row Statement • Bills Receivable and Bills Payable
 Computerised Accounting

II- INTRODUCTION

A management information system is a subset of the overall internal controls of a business

covering the application of people, documents, technologies and procedures by management
accountants to solving business problems such as costing a product, service or a business-wide
strategy. Management information systems are distinct from regularinformation systems in that
they are used to analyze other information systems applied inoperational activities in the
organization. Academically, the term is commonly used to referto the group of information
management methods tied to the automation or support of human decision making, e.g. Decision
Support Systems, Expert systems and Executive information systems.

At the start, in businesses and other organizations, internal reporting was made manually
andonly periodically, as a by-product of the accounting system and with some additional statistics
and gave limited and delayed information on management performance. In their infancy, business
computers were used for the practical business of computing the payroll and keeping track of
accounts payable and accounts receivable. As applications were developed that provided
managers with information about sales, inventories, and other datathat would help in managing
the enterprise, the term "MIS" arose to describe these kinds of applications. Today, the term is
used broadly in a number of contexts and includes (but is notlimited to): decision support
systems, resource and people management applications, project management and database
retrieval application.

Meaning of MIS
An Management Information System is a planned system of the collecting, processing,
storing and disseminating data in the form of information needed to carry out the functions of
management.

Definitions of MIS

According to Philip Kotler "A marketing information system consists of people, equipment
and proceduresto gather, sort, analyze, evaluate and distribute needed, timely and accurate
information tomarketing decision makers".

A proper Management Information System is “structured to provide the information needed

when needed and where needed”, further, the system “represents the internal
communication network of the business providing the necessary intelligence to plan, execute
and control”. - Frederick B. Cornish

Canith defines MIS as an approach that visualize the business organization as a single entity
composed of various interrelated sub-systems working together to provide timely and
accurate information for management decision making, which leads to the optimization of
overall enterprise goals.
 “Management Information System is a system of people, equipment, procedures, documents
and communications that collects, validates, operates on and transfers, stores, retrieves and
presents data for use in planning, budgeting, accounting, controlling and other management
processes”. - Schwartz

Computers have become a very vital component of today’s management information

system, so many authors consider computer inseparable from computers.

“MIS as a computer based network containing one or more operating systems, provides
relevant data to management for decision making purposes and also contains necessary
mechanism for implementing changes of responses made by management in the decision
making”. - Thomas R. Prince

GB. Davis defines, Management Information System as an “integrated man-machine system

for providing information to support the operations, management and decision making
functions in an organization”. The system utilizes computer hardware and software, manual
procedures, management and decision models and a database.

GOALS/BENEFITS OF MIS

Advantage or benefit using MIS is that it helps midlevel managers make more effective
decisions. MIS is designed to get right information to the right person at the right time to help
them make better decisions. Thus, Management Information Systems (MIS) -

1. Provides managers with reports and in some cases, on-line access to the organisations current
performance and historical records.
2. Focus entirely on internal events, providing the information for short-term planning and
decision-making.
3. Summaries and report on the basic operations of the organisation, dependent on the underlying
TPS for their data.

OBJECTIVES OF MIS

The objectives of MIS are as follows:

Support business process and operations.
2. It helps in decision.
? It provides competitive advantage.
To provide essential information.
To provide right information at the right place and right time.
: It is designed to take care of the needs of the managers in the organization.
To integrate the information generated by various departments of the organization.
 186 Computerised Accounting
IP ‘ • • --

8. It helps in identifying a proper mechanism of storage of data.

9. To establishing mechanism to eliminate redundancies in data.
10. To understand the various phases of development.

NEEDS FOR MIS

■ ■ •vsss ' < " ' 'r '
1. Business driven: The purpose of MIS is to meet information needs of the organisation and its
stakeholders.
2. Management oriented/ directed: MIS is designed to meet the information needs of the
management at all levels so that the organisational objectives are achieved.
3. Flexibility and ease of use: The MIS is designed flexible enough to accommodate new
requirements. The system is easy to operate so that not much computer skills are required on
the part of the user to access database or for carrying out special analysis of data.
4. Common database: MIS stores transaction data for present and future uses. Applications
access this database for relevant data to process transactions or to generate information. The
system maintains general databases so that any functional subsystem can access the database
5. Integrated system: MIS views organisation’s information needs from a system’s point of view
It blends together databases of all subsystems of the business system and through informatior
interchange integrates the organisation.
6. Avoids redundancy in data storage: Since MIS is an integrated system, it avoids unnecessar
duplication and redundancy in data gathering and storage.
7. Distributed systems: Most organisations have their offices, sales outlets etc. geographical?
spread over a wide area. These offices work mostly independently of their headquarters. B a
information has to be routinely exchanged between offices. Most big organisations develop
distributed systems to meet the information processing requirements of their varia
constituents.
8. Heavy planning: Design and implementation of MIS require detailed and meticulous planr_-_
of such activities as acquisition and deployment of hardware and software, hiring and trair
of personnel, planning data processing operations, information presentation and feed back

SCOPE OF MIS

It is the most common and widely used form of management support systems. The
of MIS is as follows:

(i) To provide a variety of reports and displays to management.

(ii) To provide managerial end users with information products that support much of their i
day decision making needs.
(iii) To provide information on the contents of the information products specified in advance
managers.
MIS Reports 187

(iv) To obtain data about the business environment from external sources so as to process them to
serve the managers in a better way.

STEPS INVOLVED IN EVALUATION OF MIS SYSTEM

The steps involved in evaluation of MIS system are:

The process of evaluation of MIS aims at comparing the actual performance with
predetermined objectives. The steps involved in evaluation of MIS system are as follows:

1. Technical Evaluation
These are the issues relating to information technology tools that have been used in the
implementation of information system. The findings of technical review activities are used as an
important input for planning for future. It includes:

a) Hardware.
b) Software tool.
c) Software design criteria.
d) Reported bugs in software.
e) Database design.
f) Data structure selection.
g) Operating system features.
h) Data security.
i) Built in checks and controls.
j) Fault tolerance levels.

2. Utility Evaluation
These activities are aimed to know whether the information generated by MIS is actually
used by the managers in their activities. These are to ascertain:

a) The usefulness of the information.

b) The accuracy of information.
c) Correctness of the information support provided by the system.

3. Economic Evaluation
These activities are aimed at identifying the actual results of costs and benefits and compare
them with what was expected. During the design of the MIS, certain benefits are expected. The
exercise is carried out as cost benefit analysis. It includes

a) Comparison of actual with that of standards.

 Computerised Accounting

b) The cost related to implementation delays.

c) The cost related to time overrun.

STRUCTURE OF MANAGEMENT INFORMATION SYSTEM

The term organizational function information systems is used to describe a variety of

information system that support an organizational function such as accounting, finance,
production, marketing, human resource management etc. MIS is a typically an integrated
combination of functional information systems that is designed to meet the information
requirements of the functional subdivisions of an organization. It includes

1. Production Information System

Production information system supports the production function. It includes all activities
concerned with the planning and control of the processes that produce goods or service. It
includes:

a) Transaction processing.
b) Operation control.
c) Managerial control and
d) Strategic planning.

2. Marketing Information System

Marketing is another important function of an organization. The success of an organization
depends on the efficiency of marketing. It includes:
a) Planning.
b) Promotion.
c) Sale of existing products.
d) The development of new products
e) Customer satisfaction.
f) Market information.

3. Human Resource Information System

Every organization must maintain correct record of its employees. It includes:
a) Recruitment.
b) Placement.
c) Compensation.
d) Development of employees.
e) Record keeping
f) Employee evaluation.
MIS Reports

4. Finance and Accounting Information System

Financial subsystem undertakes the function of arranging adequate finance to the business at
minimum cost. It includes:
a) Granting credit to customers.
b) Cash management.
c) Financial arrangement.
d) Record and report of the flow of funds.
e) Profit and loss account.
f) Balance sheet.
g) Planning and control of business operations.

5. Logistics Information System

The logistic subsystem includes activities like purchasing, receiving, inventory control &
distribution. The transactions to be processed are
a) Purchase requisitions.
b) Manufacturing orders.
c) Receiving reports.
d) Shipping orders.
e) Reports related to stock.

ADVANTAGES OF MANAGEMENT INFORMATION!

An MIS provides the following advantages:
I. It facilitates planning: MIS improves the quality of plants by providing relevant information
for sound decision-making. Due to increase in the size and complexity of organizations,
managers have lost personal contact with the scene of operations.
2. In minimizes information overload: MIS change the larger amount of data in to summarize
form and there by avoids the confusion which may arise when managers are flooded with
detailed facts.
MIS encourages decentralization: Decentralization of authority is possibly when there is a
system for monitoring operations at lower levels. MIS is successfully used for measuring
performance and making necessary change in the organizational plans and procedures.
4. It brings co-ordination: MIS facilities integration of specialized activities by keeping each
department aware of the problem and requirements of other departments. It connects all
decision centers in the organization.
5. MIS assembles, process, stores, Retrieves, evaluates and disseminates the information.
190 Computerised Accounting

6. It makes control easier: MIS serves as a link between managerial planning and control. It
improves the ability of management to evaluate and improve performance. The used
computers has increased the data processing and storage capabilities and reduced the cost.

DISADVANTAGES OF MANAGEMENT INFORMATION SYSTEM

1. Unemployment
While information technology may have streamlined the business process it has also crated
job redundancies, downsizing and outsourcing. This means that a lot of lower and middle level
jobs have been done away with causing more people to become unemployed.

2. Privacy
Though information technology may have made communication quicker, easier and more
convenient, it has also bought along privacy issues. From cell phone signal interceptions to email
hacking, people are now worried about their once private information becoming public
knowledge.

3. Lack of job security

Industry experts believe that the internet has made job security a big issue as since
technology keeps on changing with each day. This means that one has to be in a constant
learning mode, if he or she wishes for their job to be secure.

4. Dominant culture
While information technology may have made the world a global village, it has also
contributed to one culture dominating another weaker one. For example it is now argued that US
influences how most young teenagers all over the world now act, dress and behave. Languages
too have become overshadowed, with English becoming the primary mode of communication for
business and everything else.

MIS Reports are reports required by the management to assess the performance of the
organization and allow for faster decision-making. Business documents, business information are
core source to MIS (Management Information System) that lays foundation to management
decision-making process. Availability of advanced computing algorithms, custom applications,
makes processed business information readily available to the decision-makers at few clicks.
Logic enterprise leverages on multiple reporting and business intelligence tools. Logic MIS
module handles large amount of business data with efficient data flow architecture for enhanced
management of business reports. It caters to the business needs of data acquisition, extraction,
processing, mining, reporting and modeling.
MIS systems automatically collect data from various areas within a business. These systems
are capable of producing daily reports that can be sent to key members throughout the
organization. Most MIS systems can also generate on-demand reeves MB Tsmnrj
allow managers and other users of the system to generate an MIS nxvr - w =r ney t—. <
Many large businesses have specialized MIS departments. »h;se :c_ v .jBBer
cr
business information and create MIS reports. Some of these businesses ennsocaes
computing technology and software to gather information. However, the method : . leans:
information does not have to be that complex. Smaller businesses often use simple
programs and spreadsheets for their MIS reporting needs.

There can be as many types of MIS reports as there are divisions within a business. For
example, information about sales revenue and business expenses would be useful in MIS reports
for finance and accounting managers. Warehouse managers would benefit from MIS reports
about product inventory and shipping information. Total sales from the past year could go into an
MIS report for marketing and sales managers.

Types of MIS Reports in Tally.ERP 9

1. Accounting Reports: To obtain information on the financial position, operational performance
and economic activities of the business.
2. Financial Reports: To determine the financial condition of an organisation as required by
shareholders, creditors and government units.
3. Inventory Reports: To manage the Inventory effectively since the actual status of stock items
is obtained.
4. Management Control Reports: To utilise budgets, cost centre reports, scenario reports etc.
for controlling activities.

Few of the Financial MIS reports are listed below:

1. Bills Receivables
Bills receivables is nothing but the amount receivable from the customers for which the
negotiable instrument in the form of bill of exchange is received from the customer. Bills payable
is nothing but the payable to the suppliers for which the negotiable instrument in the form of bill
of exchange is given to the suppliers.

2. Bills Payables
A bill payable is a document which shows the amount owed for goods or services received
on credit. Examples of a bill payable include a monthly telephone bill, electricity bill, a bill for
repairs or maintenance, the bill for merchandise purchased by a retailer on credit, etc. The
provider of the goods or services is referred to as the supplier or vendor. Hence, the bill payable
is also known as an unpaid vendor invoice.

3. Cost Centre Reports

A cost center is a department within an organization that does not directly add to profit but
still costs the organization money to operate. Cost centers only contribute to a company's
192 Computerised Accounting

profitability indirectly, unlike a profit center, which contributes to profitability directly through ie
actions.

4. Ratio Analysis
A ratio analysis is a quantitative analysis of information contained in a company’s finance,
statements. Ratio analysis is used to evaluate various aspects of a company’s operating aod
financial performance such as its efficiency, liquidity, profitability and solvency.

5. Cash Flow Statement

Cash flow statement, also known as statement of cash flows, is a financial statement
shows how changes in balance sheet accounts and income affect cash and cash equivalents. anc
breaks the analysis down to operating, investing and financing activities.

i. Funds Flow Statement

Funds Flow Statement is a statement prepared to analyze the reasons for changes in zt
Financial Position of a Company between 2 Balance Sheets. It shows the inflow and outflo- dE
funds i.e., Sources and Applications of funds for a particular period.

7. Exceptional Reports
Exception Reports in Tally.ERP 9 provides a single interface to track the transactions wtmdi
are not regular in nature or bring the attention of the user to any exceptional items. The following
exception reports can be generated in Tally.ERP 9.

TRIAL BALANCE
Trial balance is a bookkeeping worksheet in which the balances of all ledgers are compZed
4
into debit and credit columns. A company prepares a trial balance periodically, usually at the eat
of every reporting period. The general purpose of producing a trial balance is to ensure re
entries in a company's bookkeeping system are mathematically correct.
Preparing a trial balance for a company serves to detect any mathematical errors that have
occurred in the double-entry accounting system. If the total debits equal the total credits, the trial
balance is considered to be balanced, and there should be no mathematical errors in the ledgers
However, this does not mean there are no errors in a company's accounting system. Far
example, transactions classified improperly or those simply missing from the system could still be
material accounting errors that would not be detected by the trial balance procedure.
Companies initially record their business transactions in bookkeeping accounts within re
general ledger. Depending on the kinds of business transactions that have occurred, accounts a
the ledgers could have been debited or credited during a given accounting period before they as
used in a trial balance worksheet. Furthermore, some accounts may have been used to record
multiple business transactions. As a result, the ending balance of each ledger account as sho^-t
in the trial balance worksheet is the sum of all debits and credits that have been entered to rr
account based on all related business transactions.
 MIS Reports 193

At the end of an accounting period, the accounts of asset, expense or loss should each have
a debit balance, and the accounts of liability, equity, revenue or gain should each have a credit
balance. However, certain accounts of the former type may have been also credited and certain
accounts of the latter type may have been also debited during the accounting period when related
business transactions reduce their respective accounts' debit and credit balances, an opposite
effect on those accounts' ending debit or credit balances. On a trial balance worksheet, all the
debit balances form the left column, and all the credit balances form the right column, with the
account titles placed to the far left of the two columns.
After all the ledger accounts and their balances are listed on a trial balance worksheet in
their standard format, add up all debit balances and credit balances separately to prove the
/ equality between total debits and total credits. Such a uniformity ensures there are no unequal
debits and credits that have been incorrectly entered during the double-entry recording process.
However, a trial balance cannot detect bookkeeping errors that are not simple mathematical
mistakes. If equal debits and credits are entered into the wrong accounts, a transaction is not
recorded or offsetting errors are made with a debit and credit at the same time, a trial balance
would still show a perfect balance between total debits and credits.

FEATURES OF TRIAL BALANCE

The following are its main features:
1. It is a tabular statement having separate sides/columns for debit balances and credit balances.
2. Closing balances of the various ledger accounts are brought to this statement.
3. It can be prepared at any date on which accounts are closed and balanced. But it is usually
prepared at the end of the accounting year.
4. Trial balance is not an account. It is only a statement.

ADVANTAGES OF A TRIAL BALANCE

The important advantages of a trial balance are:
1. It presents to the businessman a consolidated list of all ledger balances.
2. It is the shortest method of verifying the arithmetical accuracy of entries made in the ledger.
3. If the total of debit side/column is equal to the total of credit side/column, the trial balance is
said to agree. Otherwise, it is implied that some errors have been committed in the preparation
of accounts.
4. It helps in the preparation of the final accounts i.e., Trading a/c. Profit and loss a/c and
Balance Sheet.
 194 Computerised Accounting
J

DISPLAY TRIAL BALANCE IN TALLY

A Trial Balance is a summary of all ledger balances to check whether the figures are correct
and balanced. Considering that the journal entries are error-free and posted correctly to the
general ledger, the total of all debit balances should equal the total of all the credit balances.

Example:
In the books of M/s XYZ Limited you have been asked to see the Trial Balance for the
month of April, 2011’. How shall you view the Trial Balance?

Solution:
We shall check the Trial Balance M/s XYZ Limited as under:
Open Tally program.
Select your Company. In our case, we shall select M/s XYZ Limited.
Select ‘Display’ under gateway of tally.
Select ‘Trial Balance’
Press ‘Enter key’
MIS Reports 195

• Suppose, you want to check the trial balance for the month of April’2011. Just select ‘F2 or
Period’ and give the date from 01.04.11 to 30.04.11. Your screen will be appearing as under:

When we see this trial, it seems much conciliated. To see it in detail select ‘Detailed’
command. After you select ‘Detailed’, your screen will be as under:
 Computerised Accounts

To see the trial balance ‘Ledger-wise’ then select ‘Led-wise’ command. Now or screen will
be as under:
 3 Thu, 2S0cM H«8B
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Now, try to see so many commands yourself. Screen shall tell you the answers of your all
questions in respect of trial balance. Do more and more practice.
You can reach to gateway of tally by pressing ‘ESC’ key till you reach the gateway of tally.

BALANCE SHEET
Balance sheet reports a company's assets, liabilities and shareholders' equity at a specific
point in time, and provides a basis for computing rates of return and evaluating its capital
structure. It is a financial statement that provides a snapshot of what a company owns and
owes, as well as the amount invested by shareholders.
The balance sheet adheres to the following equation, where assets on one side, and liabilities
plus shareholders' equity on the other, balance out:
Assets = Liabilities + Shareholders Equity
This is intuitive: a company has to pay for all the things it owns (assets) by either
borrowing money (taking on liabilities) or taking it from investors (issuing shareholders' equity).
 Computerised Accountii

For example, if a company takes out a five-year, Rs. 4,000 loan from a bank, its assets -
specifically the cash account - will increase by Rs. 4,000; its liabilities - specifically the long­
term debt account - will also increase by Rs. 4,000, balancing the two sides of the equation ?
the company takes Rs. 8,000 from investors, its assets will increase by that amount, as will .
shareholders' equity. All revenues the company generates in excess of its liabilities will go into th:
shareholders' equity account, representing the net assets held by the owners. These revenues r 2
be balanced on the assets side, appearing as cash, investments, inventory, or some other asset.
Assets, liabilities and shareholders' equity are each comprised of several smaller accoure
that break down the specifics of a company's finances. These accounts vary widely by industr
and the same terms can have different implications depending on the nature of the business
Broadly, however, there are a few common components investors are likely to come across.

BALANCE SHEET IN TALLY

Example:
In the books of M/s XYZ Limited you have been asked to see the Balance Sheet for
Financial Year 2011-12. How shall you check the same?

Solution:
We shall check the Balance Sheet of M/s XYZ Limited as under:
Open Tally program.
Select your Company. In our case, we shall select M/s XYZ Limited.
Select ‘Display’ under gateway of tally. /
Sometime an option is shown under gateway of tally as Final Account. In this case select
‘Final Accounts’.
Select ‘Balance Sheet’. After you select ‘Balance Sheet’ then the screen shall appear as
under:
MIS Reports 199

If you see the Balance Sheet in above format, you will find that all the ledger accounts are
shown in groups. For example, Fixed Assets, Investments etc. Now’ you want to see the
Balance Sheet in more detailed manner then you just select ‘Detailed’ on screen. Now, your
screen shall appear as under:
 Computerised Accounting

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Above format is much clearer than previous one.

You can see the Balance Sheet relating to any period. To see the balance sheet for any period,
just Select ‘Period’ and by mentioning your period, you can view the balance sheet for any
period.
Balance sheet is presented in two methods i.e. horizontally or vertically. In above case you
have seen the balance sheet in horizontal method. To see in vertical manner you have to
following the following procedure
Select ‘F-12’ key or configuration while viewing the balance sheet. Now, the following screen
will appear:
MIS Reports 2i

In ‘Show Vertical Balance Sheet’ Column you have to write ‘yes’ then press ‘Enter ‘key till
last. Now, you will find the balance sheet in following format:
r
202 Computerised Accounting

Regarding period and detailed etc. you can follow the same procedure as explained earlier.
Now, try to see so many commands yourself. Screen shall tell you the answers of your all
questions in respect of trial balance. Do more and more practice.

PROFIT AND LOSS ACCOUNT

The profit and loss statement and the balance sheet are two of the three financial statements
that companies issue regularly. Financial statements provide an ongoing record of a company's
financial condition and are used by creditors, market analysts and investors to evaluate a
company's financial soundness and growth potential. The third financial statement is called the
cash-flow statement. Although the balance sheet and the profit and loss statement (P&L) contain
some of the same financial information including revenues, expenses, and profits, there are
important differences between the two of them.
The profit and loss statement, commonly referred to as the income statement, is one of
three financial statements every public company issues quarterly and annually, along with the
MIS Reports 2i

balance sheet and the cash flow statement. The income statement, like the cash flow statement,
shows changes in accounts over a set period of time. The balance sheet, on the other hand, is a
snapshot, showing what is owned and owed at a single moment. It is important to compare the
income statement with the cash flow statement, since under the accrual method of accounting,
revenues and expenses can be logged before cash actually changes hands.
The income statement follows a general form as seen in the example below. It begins with
an entry for revenue, known as the "top line," and subtracts the costs of doing business,
including cost of goods sold, operating expenses, tax expense and interest expense. The
difference, known as the bottom line, is net income, also referred to as profit or earnings. Many
templates for creating a personal or business profit and loss statement can be found online for
free.
It is important to compare income statements from different accounting periods, as the
changes in revenues, operating costs, research and development spending and net earnings over
time are more meaningful than the numbers themselves. For example, a company's revenues may
be growing, but its expenses might be growing at a faster rate.

PROFIT AND LOSS ACCOUNT IN TALLY

Example:
In the books of M/s XYZ Limited you have been asked to see the Profit & Loss Account
for Financial Year 2011-12. How shall you check the same?

Solution:
We shall check the Profit and Loss Account of M/s XYZ Limited as under:-
Open Tally program.
Select your Company. In our case, we shall select M/s XYZ Limited.
Select ‘Display’ under gateway of tally.
Select ‘Profit & Loss Account’. After you select ‘Profit & Loss Account’ then the screen
shall appear as under:
 Computerised Account

In above Profit and Loss Account, Trading Account and Profit & Loss Account are not
shown separately. To see gross profit and net profit separately, you have to do following job:-
You can see an icon on gateway of tally i.e. ‘Configuration’. Select the same or pres F-12.
After you select ‘configuration’, you will see the following screen:
MIS Reports 2i

,»«M,X^M »»?H».O.. -| tiffed

Now, Select the commands as follow:

Show Vertical Profit & Loss If you want to see P&L in vertical form then write ‘yes’.
Account In our case we want to see only in horizontal form. So
you select ‘No’. You can see the profit and loss account
in vertical form also after selecting ‘Yes’ under this
column.

Show Percentage Select ’No’.

Show with Gross Profit Select ‘Yes’ because we want to see trading account
separately.

Appearance of Name Select ‘Names only’

Scale Factor for Values Select ‘Default’

206 Computerised Accounting

• Now your screen shall appear as under:

• After you press enter on last command then format of your profit and loss account will
change in to parts i.e. it will show trading account and profit & loss account in two parts. Now,
you can see gross profit and net profit separately. This screen will appear as under:
MIS Reports 207

If you see the Profit & Loss Account in above format, you will find that all the ledger
accounts are shown in groups. For example, direct expenses, indirect expenses etc. Now’ you
want to see the profit and loss account in more detailed manner then you just select ‘Detailed’ on
screen. Now, your screen shall appear as under:
208 Computerised Accounting

• Above format is much clearer than previous one.

• You can see the profit and loss account relating to any period. For this, just Select
‘Period’
• Now, try to see so many commands yourself. Screen shall tell you the answers of your all
questions in respect of trial balance. Do more and more practice.

CASH FLOW STATEMENT

Cash Flow Statement is a report that gives the movement of cash during the period under
consideration. It gives an idea about the inflow and outflow of cash from operating, investing
and financing activities.
Statement of cash flows is one of the three basic financial statements, along with Balance
Sheet and Income Statement. These three statements help the investors gauge the performance ofl
the company in terms of the profitability, financial position and movement of cash.
According to Khan and Jain, “Cash Flow statements are statements of changes in finance
position prepared on the basis of funds defined as cash or cash equivalents.”
MIS Reports

The Institute of Cost and Works Accountants of India defines Cash Flow statement as “a
statement setting out the flow of cash under distinct heads of sources of funds and their
utilization to determine the requirements of cash during the given period and to prepare for its
adequate provision.”

FEATURES OF CASH FLOW STATEMENT

The features or characteristics of Cash Flow Statement may be summarized in the following
way:
1. It is a periodical statement as it covers a particular period of time, say, month or year.
2. It shows movement of cash in between two balance sheet dates.
3. It establishes the relationship between net profit and changes in cash position of the firm.
4. It does not involve matching of cost against revenue.
5. It shows the sources and application of funds during a particular period of time.
6. It records the changes in fixed assets as well as current assets.
7. A projected cash flow statement is referred to as cash budget.
8. It is an indicator of cash earning capacity of the firm.
9. It reflects clearly how financial position of a firm changes over a period of time due to its
operating activities, investing activities and financing activities.

OBJECTIVES OF CASH FLOW STATEMENT

Some of the main objectives of Cash Flow Statement are:
1. It shows the cash earning capacity of the firm.
2. It indicates different sources from which cash been collected and various purposes for which
cash has been utilised during the year.
3. It classifies cash flows during the period from operating, investing and financing activities.
4. It gives answers to various perplexing questions often encountered by management, such as
why the firm is unable to pay dividend instead of making enough profit? Why is there huge
idle cash balance in spite of loss suffered? Where have the proceeds of sale of fixed assets
gone? etc.
5. It helps the management in cash planning and control so that there are no shortage or surplus
of cash at any point of time.
6. It evaluates the ability of the firm to meet obligations such as loan repayment, dividends, taxes
etc.
7. A prospective investor consults the cash flow statement to ensure that his investment gets
regular returns in future.
210 Computerised Accounting

8. It discloses the reasons for differences among net income, cash receipts and cash payments.
9. It helps the management in taking capital budgeting decisions more scientifically.
10. It ensures optimum use of funds for the maximum benefit of the enterprise.

Cash Flow Statement is useful for short-term planning and control of cash. A business
entity needs sufficient amount of cash to meet its various obligations in the near future such as
payment for purchase of fixed assets, payment of debts, operating expenses of the business etc.
It helps the financial manager to make a cash flow projection for the immediate future
taking the data relating to cash inflows and cash outflows from past records. As such, it
becomes easy for him to know the cash position which may either result in a surplus or a deficit
one. Thus, cash flow statement is another important tool of financial analysis for the
management.
Its main advantages are:

1. Evaluation of Cash Position

It is very helpful in understanding the cash position of a firm. Since cash is the basis for
carrying on business operations smoothly, the cash flow statement is very useful in evaluating the
current cash position of the business.

2. Planning and Control

A projected cash flow statement enables the management to plan and co-ordinate the
financial operations properly. The financial manager can know how much cash is needed, from
where it will be derived, how much can be generated internally and how much could be obtained
from outside.

3. Performance Evaluation
A comparison of actual cash flow statement with the projected cash flow statement will
disclose the failure or success of the management in managing cash resources. Deviations will
indicate the need for corrective actions.

4. Framing Long-term Planning

The projected cash flow statement helps financial manager in exploring the possibility of
repayment of long-term debts which depends upon the availability of cash.

5. Capital Budgeting Decision

A projected cash flow statement also helps the management in taking capital budgets
decisions.
MIS Reports 21

6. Liquidity Position
Liquidity position of a firm refers to its ability to meet short-term obligations such as
payment of wages and other operating expenses etc. From cash flow statement the financial
manager is able to understand how well the firm is meeting these obligations.
At the same time the ability of the firm in cash earning can be known from cash flow
statement. As a matter of fact, a firm’s profitability is ultimately dependent upon its cash earning
capacity.

7. Answers to Different Questions

Cash flow statement is able to explain some questions often encountered by the financial
manager such as, why is the firm not able to pay dividend in spite of making huge profit? Why
there is huge cash balance in spite of loss etc.

LIMITATIONS OF CASH FLOW STATEMENT

Cash Flow Statement is, no doubt, an important tool of financial analysis which discloses
the complete story of cash management. The increase in or decrease of cash and reasons
thereof, can be known, However, it has its own limitation.
These limitations are:
1. Since cash flow statement does not consider non-cash items, it cannot reveal the actual net
income of the business.
2. Cash flow statement cannot replace fund flow statement or income statement. Each of them
has a separate function to perform which cannot be done by the cash flow statement.
3. The cash balance as disclosed by the projected cash flow statement may not represent the real
liquid position of the business since it can be easily influenced by the managerial decisions, by
making certain payments in advance or by post ponding payments.
4. It cannot be used for the purpose of comparison over a period of time. A company is not
better off in the current year than the previous year because its cash flow has increased.
5. It is not helpful in measuring the economic efficiency in certain cases e.g., public utility
service where generally heavy capital expenditure is involved.
In spite of these limitations, it can be said that cash flow statement is a useful
supplementary instrument. It helps management in knowing the amount of capital blocked up in a
particular segment of the business. The technique of cash flow analysis when used in
conjunction with ratio analysis serves as a barometer in measuring the profitability and financial
position of the business.

A cash flow statement concentrates on the transactions that have a direct impact on cash. It
deals with the inflow and outflow of cash between two Balance Sheet dates. That is, it explains
 Computerised Accounting

the changes in cash position between the two periods. Here the term cash stands for cash and
I MIS Rej

analysis
bank balances. Horizonti
set of sta
Cash flow statements can also be used as receipts and payments statement. This is
particularly useful for businesses such as Non Profit Organizations where receipts and payments Ratii
statements need to be generated. statement
Follow this instruction to view Fund Flow Statement. compared
a managei
1. Go to Gateway of Tally
them keen
2. Go to Display Menu
3. Enter on Cash / Funds Flow
4. Press Enter on Funds Flow Menu
5. Now Select any month as you want to watch Fund Flow Statement
6. Then Press Enter

.;S%«

Ratio <
statement is
• •
Ratios
anderstandin
can be comf
ie purpose
Ratio analysis is the process of examining and comparing financial information by
ciformation,
calculating meaningful financial statement figure percentages instead of comparing line items from
analysed.
each financial statement.
To view
Go to G
MIS Reports 213

analysis a company’s performance are horizontal analysis, vertical analysis, and ratio analysis.
Horizontal and vertical analyzes compare a company’s performance over time and to a base or
set of standard performance numbers.
Ratio analysis is much different. Ratio analysis compares relationships between financial
statement accounts. This means that one income statement or balance sheet account is being
compared to another. These relationships between financial statement accounts will not only give
a manager or investor an idea of the how healthy the business is on a whole, it will also give
them keen insights into business operations.

Example:
Take inventory turns for example. Inventory turnover is the ratio between cost of goods
sold and average inventory. Inventory turnover tells managers and investors not only how much
inventory the company maintained, it also tells them how efficient the company was with its
inventory. A high inventory turnover ratio means that the company is lean and is able to move its
inventory quickly. This could indicate proper management and thoughtful inventory purchasing.
The opposite is true about a low inventory turnover. A low inventory turnover usually means
either those companies buy too much inventory or they have problems selling it. Neither of these
facts indicates a healthy business.
Managers and investors use a ton of different ratios in this analysis. Here are a few:
Current Ratio
Acid Test Ratio
Accounts receivable turnover
Inventory turnover
Total asset turnover
Debt-to-equity ratio

Ratio analysis is a powerful tool for financial analysis. A meaningful analysis of a financial
statement is made possible by the use of ratios.
Ratios are a set of figures compared with another set. The comparison gives an
understanding of the financial position of a business unit. There are a number of ratios which
can be computed from a single set of financial statements. The ratios to be computed depend on
the purpose for which these ratios are required. A single ratio may sometimes give some
information, but to make a comprehensive analysis, a set of inter-related ratios are required to be
analysed.
To view the Ratio Analysis
Go to Gateway of Tally> Ratio Analysis
 Computerised Accounting

The Ratio Analysis screen is displayed as shown.

The screen is divided into two parts:

Principal Groups
Principal Ratios
The Principal Groups are the key figures that give perspective to the ratios.
Principal Ratios relate two pieces of financial data to obtain a comparison that is meaningful.

BOOKS AND REPORTS

Accounting reports are compilations of financial information that are derived from the
accounting records of a business. These can be brief, custom made reports that are intended for
specific purposes, such as a detailed analysis of sales by region or the profitability of a specific
product line. More commonly, accounting reports are considered to be equivalent to the financial
statements. These statements include the following reports:
Income statement. States the revenues earned during a period, less expenses, to arrive at a
profit or loss. This is the most commonly used accounting report, since it is used to judge the
performance of a business.
Balance sheet shows the ending asset, liability and equity balances as of the balance shee:
date. It is used to judge the liquidity and financial reserves of a business.
MIS Reports 215

Statement of cash flows. Shows the sources and uses of cash related to operations,
financing, and investments. Can be the most accurate source of information regarding the cash
generating ability of an entity.

DAY BOOKS IN TALLY

The Day Book lists all transactions made in a particular day and by default displays the last
voucher entry date of a regular voucher. It could also be set up to list all the transactions made
over a certain period. Transactions include all financial vouchers, reversing and memorandum
journals as well as inventory vouchers.
In Tally.ERP 9, the Day Book is by default displayed for the current date (as on the last
date of voucher entry). However, you may specify the required period, as per your
requirements.
To view the Day Book,
Go to Gateway of Tally > Display > Daybook
Press F2: Period on the button bar or press the key Alt+F2
Specify the required period
The Day Book for a specified period will display as shown:

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3-42008 t Jwwtl 3 2M»
4 KXJ83 Customer B TarbfWt 2 88.4SS.00
54X88 CwNMMH C R««tpi 1 2SJXMI0O
54 2008 Cmtcmn C IsHi! 1 i2.ew.oo
54-3088 A 8»0lw0t» 3 5,25.000.00
S Customer A 4 2.57X50.00
543X» piudtaw 6 1M2400.«®
54-2008 Equipment Sjlet, toipoi.Kion Pwth.Be 7 JM.W0M
64-2008 1 esnpMstb Pvt I «il„ fk«B teste s 2,tO.OeO.OO
7 4-2008 Customer A 6 [email protected]
M-2008 StipplUt A Ptillh.Be 8 4,10,000.00
10 43006 EnttyTjx Payment 2 475.00
,0-43X8 Cmmmm C 2 IA25.00
10-42306 Sttyplie. A Fttltibane 9 SjO2.0SS.OO
1543X8 GtHM(.«t ExptMM P.IJtlUltll 3 ».mw
1&4OQ0B Capital Accuiml Receipt 2 8.00.000.00
1542088 Putitewt SO l.lljOOO.W
1542008 ? MS RAM Sticks 2 1,300 tfek
1143008 CtwMmw B < «4t test 3 55.5it.ee
\ti IB61« ...

To view Day Book for a particular voucher type, you can press F4: ChgVch button from
the button bar
 216 Computerised Accounting MIS Rep

•l-iitr/.M

All Sales vouchers

- A# stock Journal vouchors
Contra
Croat Nwe
Defift Note
Delivery Note
, Jemmas
; «»tf«ursrg journal
Voucher Tyg* Memorandum
f Payment
Physical Stock
Purchase
Purchase Order
Receipt
: Rocwptme
Pejectartt in
ReMttsns O«
Resat unvote e
; RtMmtgJswnM
Sales
Sates Otter
Stack Journal
- WkMtsee

Receipts
To vie
Select the required Voucher Type to display. The screen is displayed as shown:
Go to
Hot e( Retell Invoke Vencbon 1 Apt 2W»P. 31-«.«•»»!!
The R,

bw P.W«»CMl4»5
QBSflEJUg
Vch Type VefiNp IM>» Ctedb
Amount Amount

'*4- 2-4 2003

54-2009
tmtetnet C
CmteMet A
0l4to««
tMdthonv
2
3 5,2500000
gtssess^
54<3EG8 Customer A 6i4t«n« 4 2,57,250 ea SrKfeuKlIflcwa*,
64-2008 rilebal t»m|nn«1i Pvt ltd.. 5 2,10.900,00
7-4 ^6 Customer A 6 OAO.MOOO
134-2838 Ontemei A iSmdboiw 7 3.50.200,00
244208} Ctateinei B batteb 8 0.30.00000
304-2006 Bfcw Hde StMtoitMlet 10 1,7600000
»4.38» Curtemet C MIim 11 90.00000
304-2006 84u» HH» St.Ml®nrii«* 12 64.37500
16-2008 Olebel t ompiletfc Pvt ltd.. 646-kr 13 1.75.000.00
>6-2008 r.lsl'tl CempMerb Pvt ltd., &UJbs»i«» 14 74500000
16-2006 C.bk>bi»i A taftwka 15 56,000.00
162008 CiHtemet A 16 50.00000
’5-2008 IfH Mission 17 1760.000 00
16-2008 CoMemer A 3&&S fessto 19 16.800.00
3O-5-2OCB bmevMkv. Pvt ltd fe&Sfemtai 19 17,500.00
162006 SilvHtins! lidding 5'«p»i*tl«B 2B 95.000.00
2&2CW 8-lue Mtl« Sl.Mtoirerie'S 3«t41«i« 21 1.25,000.00
362038 S11v«i«n« lidding < #i|.»i.ttl«B '^u4tr»4*,s» 22 2,50.09000
463008 Bank Saving A c 23 2,50,00008
6620G3 <«h 24 1,2500000
f,6 2033
Cindernei A .¥^tes4«« 25 1450000
762008 Oitky* Global System* 26 1.10.00000
66200-3 I tKtemvi C >«:4b«k. 27 tjsoooooo
962003 Innwalivv SeMett* Pvt ltd teitossig* 28 55.00000
1062903 bmevetive SelutSon* Pvt ltd 29 1,10.00000
1162806 Owtomei C 30 66.000,00
The Recei
S HW ....
opening of boot
W: W84M580
MIS Reports 217

RECEIPTS AND PAYMENTS IN TALLY

Receipts and Payments Account is a report of Cash and Bank transactions during a period.
It is used in place of an Income and Expenditure Statement when it is not considered appropriate
to distinguish between Capital and Revenue transactions or to include accruals.
In other words,
It is a consolidated summary of Cash Book, prepared for the required period.
It starts with opening balance of Cash and Bank and ends with closing balance of Cash and
Bank.
It does not take into account outstanding receivables and payables.
It may be of Capital or Revenue in nature relating to the current, previous or subsequent
year, so long as they are actually received or paid, they must appear in this account.
The Receipts and Payments Account in Tally.ERP 9 displays the information based on the
default primary groups. It is updated instantly with every cash/bank transaction/voucher that is
entered and saved. No special processing is required to produce a Receipts and Payments
Account in Tally.ERP 9.

Receipts and Payments

To view the Receipts & Payments Account of ABC Company,
Go to Gateway of Tally > Display > Receipts and Payments.
The Receipts and Payments Account is displayed as shown:

The Receipts & Payments account is generated and updated immediately from the date of
opening of books till the date of last entry.
 218 Computerised Accounting

Press F2: Period to change the period as required.

Select the required group and press Enter to go to Receipts and Payments Summary reports
and further drill down to go to Ledger monthly summary, Ledger Vouchers and finally to the
Voucher Alteration mode.
Note: The Receipts & Payments Account is displayed according to the configuration set up
in the F12: Configure.
The Receipts & Payments A/c, by default is in horizontal form. However, you may
configure the same to view in Vertical form by enabling it in FI 2: Configure. You can view
additional information or toggle to another report using the options available in the Button Bar.
Some of the Button Bar options are:
FI: Detailed: View the Receipts & Payments Account in detailed format, as shown:

*ec *BCC<Knp*rty

CWwlisOtltOw
■ (
indirect Expwkm

1, j
i Sundry Creators
Closing Balance 3S.SO0.W
j C««i<iss!e>e Bsva a«»!85
j OWAsesm** ».W.® easb-n-hira’S
Ciawisj Balance 5,086.® J
8s* OC Afe s.sSft®

01.S00.OO Tot*l 01,000.®

Note: This button toggles between Detailed and Condensed.

The Cash/Bank balances under Opening/Closing Balance displayed in Red indicate the
negative/credit balances.
F2: Period: Change the date of the Receipts & Payments Account.
F3: Company: Select a Company from the list to view the Receipts & Payments Account of
the selected company.
Note: This button will be active only when more than one company is loaded.
F5: Led-wise: Receipts & Payments Account is displayed based on the default primar
groups. Click this button to view the report ledger-wise.
MIS Reports

Note: This button toggles between Led-wise / Grouped.

ABC Company UK Cisnspaniy

Paymams s-AyJWlo 3W9H

15,OOM# J.OSS.Cft
sow so PftmngA Sal(£fMW}
5 NWC&Wl A
18.OCft.00 Cloning Balance »,SO0.8ft
bififtieiMS ».«M0 Csss
A 1.SOO.OO
‘CSoste# Satom* mom# • •
MB.#

Totll s,.a».ce ratal

C: New Column: Select this button for the following:
Display the Receipts & Payments Account for a different period to compare with the
current one.
Display the Receipts & Payments Account in a different currency.
Select and compare Receipts & Payments Account of different companies.

PURCHASE REGISTER IN TALLY

A Purchase Register displays the information on the periodic purchases of a business
concern. Purchase register helps in analyzing the details of movement of purchased goods to
various godowns, on the basis of which the stock movement at each godown is determined.
Go to Gateway of Tally > Display > Account books > Purchase Register
The following screen is displayed.
 Computerised Accounting

ABC Coflipanv
F’ 4«t i e »I j i«

-------------------------------------- —iO-_.... ., ■

M,».s9aeo ?J3«£C®£»
■oVy a.jjseoose MS>8KtflS£»
t3M«S»99 5®M5M8»
WMO
OchSbn UACtSW
maw
««»«
smoraec*
&NMN»

6»a» 4..f« t'«i. ....L..................... ............ \ ' .. ... . .~

tiMWWJ

Aj>i M.I)- Jitn J,it Am) S«j» CM N»v B»t J«w tcb M.11

Purchase returns made during a year can also be traced. The parties to whom the purchase
returns have been made and the causes thereof can be analysed to draw conclusions on the
supplier and the quality of purchases made.
A Purchase Register can be configured using the Ctrl+F12: Value button to view the
following information.
Actual Quantity Billed Quantity
Date Bill Name
Cost Centre Cost Category
Voucher Number Narration
Stock item Godown Name
Note: All reports and configurations for Purchase Register are similar to as explained in far
Sales Register.

SALES REGISTER IN TALLY

' ' ' '■ ' ' ' ' •
Sales Register displays the monthly summary of sales transactions and closing balana.
The list of transactions pertaining to each month can be viewed by selecting that month rti
viewing its details. Tally.ERP 9 permits you to change the display according to the inforauaaq
required.
MIS Reports 221

The period of the report and the content details can be modified. Columnar periodic reports
can be generated using Alt+N: Auto Column button for different periods as shown by the
columnar details list. Tally.ERP 9 also allows you to compare similar data of two or more
companies stored in the same data directory.
Uses of Sales Register
The periodic turnover can be analysed using the F2: Period button.
The periodic taxes on such turnovers can be easily computed.
Errors made while recording the transactions can be easily traced.
Sales returns during the year can be analysed and timely action can be taken to remove the
undesirable causes.
Performance analysis of godown, salesperson, sales area etc. can be done with the help of
cost centre and cost category report
Sales register displays the monthly summary of sales made during the selected period.
To view Sales Register,
Go to Gateway of Tally > Display >Account books > Sales Register
The Sales Register screen is displayed as shown:

By default, all registers display Monthly Summary with transactions and closing balances.
 Computerised Account!

Drill down into each month to view the sales voucher register for that month, which finally
takes the user to the accounting voucher alteration (secondary) screen.
Select a month and press Enter to see the Sales Voucher Register.

A list of all sales vouchers pertaining to the month you selected is displayed. You can use
the options in the button bar to change the display according to your preferences. You can
change the period of the report as well as the depth of information.
Use F12: Configure to see the report with some or all of the following information, namely
Narrations, Bill-wise details. Cost Centre details and Inventory details.
MIS Reports 223

Configuration
Show Extract of Register ? Ho

Show Columnar Register Ho

Show Grass Profit estimates Ho
Format Condensed
Show Narrations also Ho
Show Biltesso Details also Ho
Show Cost Centre Details also Ho
Sorting Methods
Show Inventory Details also Ho
Show Bank Details also Ho
Alphabetical (Decreasing)
Show Entered/Altered By Ho Alphabetical (Increasing)
Show Forex Transactions Ho Amount-wise (Decreasing)
Amount-wise (Increasing)
Appearance of Names Hame Only Currency (Decreasing)
Sorting Method Default Currency (inc reasin
JS3aESMBBL_
itt sequence of Entry
voucher Number (Numeric Decreasing)
voucher Number (Numeric increasing)
voucher Number (Sequence of A -2)
Voucher Number (Sequence of 2 - A)

Click on FI: Detailed to view the reports in detailed format from within the Sales
Voucher Register screen.

1 tel «f AM Sale* 1~A|m2MW M » Ap, -HKW

t>MB PartkaUtt VchTypa W) Mo

Amsysl Anwant

E MX05 Cvafcem*tM
$■»!♦» 2m*
Mar® c j
Saks - Tax Fite ttJSKM &
Outlet.,»i a I« towkt 1 44&.MO9
Saks « 4% lAMMCr
Otrtptrt VAT a IS «JK».W C,
4-4-2008 B » 4* Hfr*0|C “ 2 S8.40008
Sate* -a 4% tiMlM Ci
QiWfMrt VAt « 4% 3.MMI O
S-4-2008 Vw>t«BiM A *aUw*» 3
Sat** Experts S2TJMMO
5 4-2008 Gretomet A 4 2572»J»
$5250 (M ft #r4W
Sates Export* 25J2»3»Ct
$525000 © ftt 4SV$
64-M« filial ( .Mtonno,), Pvt 1,4.. <au4Mo 5 tiew-w
Svki - $<«ik4 E>9mI UUMIO
A4-3003 A ’‘MatUsa&s 6
Saks InkltsMM OMBWCr
CST «'■ 3% 1M0M4 c,
■»4-ajeS:,B»«tt.s«vi»«.A ,« hiM, 3 M4W4W
Sales a W.S». ujarttCi
OhAmii VAI -a 125'. SWMIHt
19-4-2006 » A r
Saks - t&feisSdiW UtJtMIU
CST «> JS
J4
Ttttai: 7?,4S.4»J»
224 Computerised Accounting

Export Sales/Purchase Register in Excel to generate Pivot Table

The Sales/Purchase Register can be exported in excel to be compatible to generate pivot
table so that the user may generate reports of various combinations based on specific
requirements. This will eliminate the need for customisation of the existing reports to prepare
sales/purchases data in the required format.
To export the Sales Register for Pivot Table,
From the Sales Voucher Register screen,
Click E: Export or press Alt+E, the Exporting Sales Register screen appears.
Select the required language from the list of Languages displayed.
Select Excel (Spreadsheet) under Format from the list of Formats displayed.
By default, the exported file will be stored in C:\Program Files\Tally.ERP9 for Windows 7
and C:\Tally.ERP9 for Windows XP operating systems.
Press Enter to accept the default Output Filename or type the filename of your choice in
order to save the file with a different name.
Press Enter to accept the default Output Sheet Name.
To update the existing file select Yes in Update Existing File.
Set Yes to the option Export for Pivot Table.
Note: This option appears only when the Sales/Purchase Voucher Register/Extract is
exported and when the Company is maintaining Accounts withlnventory.
To update the existing file select Yes in Update Existing File.
To format the contents of the file select Yes in Excel (Spreadsheet) formatting.
Select Yes for the Field with Colour, to retain the background colour in the exported file.
Set the following options that appear only when the option Export to Pivot Table is enabled,
especially to configure them while generating pivot table reports, i.e.,
Set Yes to Show Company Name in case you want the Company Name column to be used.
Set Yes to Show Item Properties to show the item properties, such as, Alias, Part No,
Description, Remarks, etc.
Set Yes to Show Ledger Properties to show the ledger properties, such as, Alias, Group,
Notes etc.
Set Yes to Show Statutory Details to show the VAT / TCS details.
MIS Reports 225

Exporting Sates Register

Language Default (All Languages)

Format Excel {Spreadsheet)
Export Location CAProgram FilestTally.ERPS
Output File f lame 0ay8ook.xls
Output Sheet Name Sales Register
Export for Pivot Table Yes
Update existing file Yes
Excel (Spreadsheet) Formatting Yes
with Colour No

Show Company Name ? Yes

Show Item Properties ? Yes
(Alias. Part No. Descnptw. Remarks.
Stock Group, Category Standard Cost.
Standard Pnce, Etc. j
Show Ledger Properties ? Yes
(Alias GfOi.a Nates State Namei
Show Statutory Details ? Yes
(VAT. TCS}
Export ?

Yes No
Accept to export the Sales Register Vouchers to an excel file for pivot table.
Open the exported file from the specified folder.

BILLS RECEIVABLE IN TALLY

You can view details of the goods receivables, goods payables, ledger outstanding report,
group outstanding report, ageing analysis report and bill party-wise outstanding report in
Tally.ERP 9.
To know more, click the links below:
• Display Receivables
• Display Payables
• Ledger Outstandings Report
• Group Outstandings Report
• Ageing Analysis Report
• Bill Party-Wise Outstanding Report
 Computerised Accounting

■
DISPLAYING OF RECEIVABLE
' . . ■ ■ ■ ■ .. . ■ . . ■ ■ -
Bills receivable is a bill of exchange on which payment is expected to be received at a later
date.
Bills receivable report in Tally.ERP 9 displays all the outstanding receivables during a
specified period.

To view the Receivables screen

Go to Gateway of Tally > Display > Statements of Accounts >Outstanding> Receivables
The Bills Receivable screen is displayed as shown below:
MOTHS'7
Bills Recelvstote 1-Apr-a»9 to 31-Mar-2010
d«» Re? Fartys"Hae»* Pestling Bweon P»3)
Aroewt s®»k

/. n- Blue Ml* Stanenerlea mSB w-sw

3 ItaP 5T^r’* ■* Ftv vamlwldw !,»,»» W-»
WW 3 easterner B 8,20000 .SiSuon
SKpW IO Patel CftemKatt Pvt ltd,, sates®
IMp-SMt 1 Supplier C J.B08.® »*•»
m2 Unisys Clefcrt Systems 8,000 02 W-!» >388 86 0'
(Slebal Camputeefe Pyt Ltd-, 1.7SWW W2» ,®8M»
www warns «ie»i Cemputeco Pvt Ltd,, 2,dS,®8,®
t.rL445 UH tHplewatte Mission OM«i
***,»* <3004 (WteveBve SeUXtent Pvt Ltd 12 883 02 TMWfW’ sMMeft
tdurCOM 15 tUteifee Trading eorpotatton 95,S«» l«n»8 §,««£»
18 Blue Mil* Stattenerte* ?,38,0®,08
idimdMS 1? Silveriin* Trading Corporation » .MB-39M S»»»»
: Unisys atonal Systems ,,10,W9» »R»8 A«»»
nukum 29 Customer C 8 59,868® OrLM «8«®
Sdvn-W 30 innovative Sototlotw Pvt Ltd 58,0061» MitiRM «a®»
WttrtSUl fttetMW Solutions Pvt Ltd .wwb»
IIJeedK* 32 Customer C 66 00BTC lWmSW ««»»
34 tenovattvo Solution'. Pvt Ltd A,SMB® aaawstt
teMeiKt 35 customer c 2 10 05600 VirnMR ■<s®»
IMWWMS » Customer C
SJdteW 3? Customer C 2,18,048 OS XM©8t
Customer C i6?.<WCtffi 1-W-2WJ »»«
ecossst Customer C «„3sS8.« l>W-2083 saatw
M5.M8OB $M««* ,«»«»
4 Customer 8,000,® iflttWft
tSTOifl® »«*•»»
ATE«J32 Customer A 6100002 K-mOT
10 -
13MS3SS® ia«M»
This report displays all outstanding receivables invoice-by-invoice, till date. This report takes
into consideration only those party ledgers for which the option Maintain balances Bill-by-Bill
option is enabled.
• Date: This is the Effective date of the invoice and not the actual date. Hence, if your invoice
date is 15th November but the effective date is 30th November, and then 30th November will
be displayed here. Credit period is calculated from the effective date.
• Reference Number: This is the bill reference number entered in the Bill-wise Details screen.
• Party’s Name: The party ledger name appears in this field.
• Pending Amount: This is the outstanding balance on a particular invoice. To see the breakup
press Shift + Enter. To view the complete breakup of all the bills, press the FI: Detailed
button. This view toggles with the button FI: Condensed.
MIS Reports 227

• Due On: This is the due date of the bill (with reference to the Effective date) specified during
voucher entry.

Button options in Bills Receivables report

• FI: Detailed: Click FI: Detailed button or press Alt+Fl key to display details such as Voucher
Date, Voucher Type(s), Voucher Number(s), and Amount of each voucher.
• F2: Period: Click F2: Period button or press F2 key to change the period.
• F4: Payable: Click F4: Payable button or press F4 key to display the Bills Payable report.
• F6: Age wise: Click F6: Age wise button or press F6 key to display the Age wise analysis of
the Bills Receivable report. For more information, refer Ageing Analysis report.
• F7: Bill-Party wise: Click F7: Bill-Party wise button or press Alt+F7 key to display the party-
wise breakup of the Bills Receivable report. For more information, refer Bill-Party wise
report.
• F12: Configure: The F12: Configuration screen for Bills Outstanding report is displayed as
shown below:

Configuration
Include Post-Dated Transactions

Show Bills in Foreign Exchange ? No

Show Opening Amount ? No
Show Due On ? Yes
Show Overdue days/Age of Bill in days ? Yes
Show overdue using Bill Date ? No

Range of Bills to show : Pending Bills

Show Order Number in Detailed Format ? No
Show Qty Info in Detailed Format ? Yes
Show Narrations also ? No
Appearance of Names : Name Only
Sorting Method : Default

For complete information on FI 2: Configuration, click here.

F12: Range: Click F12:Range or press Alt+F12 to use the Range Filter option to search for
specific bills from the list of bills outstanding. Users may filter the transactions based on the
Date, Original Amount, Pending Amount, Ledger, Reference number and so on, as shown below:
 Computerised Accounting

Range of Information in Report

(Filter to view only those lines that satisfy the below conditions)

Is Advance
Ledgers
Original Amount
Pending Amount
Ref. Number

This is a useful tool, as it makes the process of finding specific bills fast, easy and simple.
R: Remove Line: Click R: Remove Line button or press Alt+ R key to remove a line item
from the Bills Outstanding report.

. . . BILLS PAYABLE IN TALLY

Bills payable is a bill of exchange due for payment at a future date.
Bills payable report in Tally.ERP 9 displays all the outstanding payables during a specified
period.
To view the Bills Payable screen
Go to Gateway of Tally > Display > Statements of Accounts >Outstanding> Payables.
MIS Reports 229

Ledger Outstanding Report

This report displays the outstanding receivables or payables for a particular party ledger
during a specified period.
To view the Ledger Outstanding Report
1. Go to Gateway of Tally > Display > Statements of Accounts > Outstanding > Ledger
2. Select a ledger from the list. The Ledger Outstanding report appears as shown below:

You can print or export Reminder Letters from the Ledger Outstanding report by enabling
the option Print Reminder Letter in the Print Report or Export Report accordingly.
Button options in Ledger Outstanding report
C: Contact: Click C: Contact or press Alt+C to view the ledger contact details.
 231) Computerised Accounting

I Ledger Contact Details ABC Comnanv

Ledger: Customer A

Mailing Name : Customer A

Address 301 Regency Buildings,
2134 Colba Seaface
Mumbai
State Maharashtra
Contact Mr. Kumar
Phone No.. ; 23893434
Mobile No, 9898122237
Fax No. ; 23893434
E-Mail kuma r@xy ze nterprises.com
Website ; www.xyzenterprises.com
PAN / Income Tax No ABPFP1299F
TIN/Sales Tax No. : 3928723023

Notes :

B: Bill Settlement: The Bill Settlement option helps to settle the selected or all bills from the
Ledger Outstanding report.
To settle the required bills
1. Select the bills to be settled by pressing Spacebar.
2. Click B: Bill Settlement button or press Alt+B key.
Fortt 1 »6iB. -X i ■ '«$ CotftalC**. ) f H*5C •■ES8HB
us."33
CifeemrA i-Mtfm »,-up-3«o* ■■MB

AmOisKW

CVST’SK
» Or w*
«S>5»2 S,S0..S3»® XWJKWBr *W»0®
«cw « OCO K D-
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• z. xxi » y ut«M.wo>«» rat
s ».«««»» Or
B 3f3.M0a»O SWB3ME

fSWSi
MIS Reports 231

3. In the Bill Settlement screen

• In the field Voucher Type, by default Receipt or Payment, based on the final outstanding
amount of the selected bills, will be pre-filled.
Note: The Payment/Receipt Voucher Types (other than the default voucher types) created
by the user along with the Voucher Class will also be available for selection if any, from the Bill
Settlement screen.
• In the field Voucher Date, enter the date of Receipt/Payment voucher
• In the field Account, select the required Bank or Cash ledger from the List of Ledgers
• Specify the required remarks in the Narrations field

Bill Settlement

f for Customer A Amount. 9.97.000.00

Voucher Type Receipt

Voucher Date 30-Sep-2009
Account Bank of Baroda
Narration Ch Ho .234565 received towards the outstandings dills for
Customer A Accept ?

Yes No

Press Enter to Accept the Bill Settlement sub screen and pre-fill the Receipt/Payment
Voucher as shown:
 Computerised Accounting

4. Press Enter to save the Voucher

Note: Cost Centre Allocation can also be made while creating the Payment/Receipt Vouchers.
Once the Bills are settled, the Ledger Outstanding report will be updated accordingly.
For information on other button options in this report, click here.

GROUP OUTSTANDING REPORT

This report displays the outstanding receivables or payables during a specified period for an
entire group - Sundry Creditors or Sundry Debtors.
To view the Group wise receivables Report
1. Go to Gateway of Tally > Display > Statements of Accounts > Outstanding > Group.
2. Select the Group from the list. The Group Outstanding report is displayed as shown below:

Button options in Group Outstanding report

• FI: Detailed: Click FI: Detailed button or press Alt+Fl key to view the report in detailed
mode.
• F2: Period: Click F2: Period button or press F2 key to change the period.
• F4: Group: Click F4: Group button or press F4 key to display the list of groups. Select the
required group to view outstanding for the selected group.

9
MIS Reports |

• FS: Led-wise: Click F5: Led-wise button or press F5 key to display only the ledgers and their
debit & credit balances.
• F6: Age wise: Click F6: Age wise button or press F6 key to display the Age wise analysis of
the Group Outstanding report. For more information, refer Ageing Analysis report.
• F7: Billwise: Click F7: Billwise button or press F7 key to display all the bills outstanding from
the ledgers falling under the selected group.

F7: Bill-Party wise: Click F7: Bill-Party wise button or press Alt+F7 key to display the
party-wise breakup of the Group Outstanding report. For more information, refer Bill-Party wise
report.
• C: New Column: Click C: New Column button or press Alt+C key to add a new column and
compare the outstanding of different periods or different groups.
• A: Alter Column: Click A: Alter Column button or press Alt+A key to alter an existing column
displayed in the report.
• D: Del Column: Click D: Del Column button or press Alt+A key to delete a column added
using the button C: New Column.
• N: Auto Column: Click N: Auto Column button or press Alt+N to view a Daily, Weekly,
Fortnightly, Monthly, 4 Week Month, Half Yearly, Quarterly or Yearly outstanding report.
• R: Remove Line: Click R: Remove Line button or press Alt+ R key to remove a line item
from the Ledger Outstanding report.
 234 Computerised Accounting

F12: Configure: Press F12 key to configure the Group Outstanding report. For more
information, click here.

AGEING ANALYSIS REPORT

Ageing analysis of bills outstanding is done to identify the bills for which amount is due for
a long period of time. These bills can be classified as bad debts or provisions can be created for
such losses in the books of accounts depending on the results of ageing analysis.
In Tally.ERP 9, the ageing analysis can be applied on Ledger or Group Outstanding and Bills
Receivables or Payables screen.
Age-wise Analysis of a Single Ledger Account
1. Go to Gateway of Tally > Display > Statements of Accounts > Outstanding > Ledger.
2. Select the ledger account.
3. Select F6: Age wise from the button bar in the Ledger Outstanding screen.
4. Select the Ageing method.

Ageing Analysis Ageing Methods

Method of Ageing
Ageing by Due Date

5. Set the age periods required for the report.

551
Company Aueinu Alteration
Company ABC Company

From 0 To 30
From : 30 To 60
From SO TO 90
From ; 90 To 120
From 120 TO 0

Accept ?

Yes or No
The Ledger Outstanding report appears with the applied ageing method.
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Age-wise Analysis for a Group

1. Go to Gateway of Tally > Display > Statements of Accounts > Outstanding > Group.
2. Select, a Group, e.g. Sundry Debtors
3. Click F6: Age-wise button and select one of the two Methods of Ageing: Ageing by Bill Date
or Ageing by Due Date. Set the age periods required for the report.
The Group Outstanding report appears with the applied ageing method.
4. Click FI2: Configure button and set the option Show Nett Balances to Yes.
Age-wise Analysis for a Group will be displayed as shown below:

Age-wise Analysis for Bills Receivable/Payable report

Let us consider Bills Receivable report for example.
1. Go to Gateway of Tally > Display > Statements of Accounts >Outstandings> Bills Receivable.
2. Click F6: Age-wise button and select one of the two Methods of Ageing: Ageing by Bill Date
or Ageing by Due Date. Set the age periods required for the report.
236 Computerised Accounting

The Bills Receivable report appears with the applied ageing method, as shown below:

BILL-PARTY WISE OUTSTANDING’S REPORT

This report displays the party-wise details of all the bills during a specified period. Bill-Party
wise outstanding report can be viewed from Bills Receivables, Bills Payables and Group
outstanding reports.

Bill-Party wise report for Bills Receivable/Payable

Let us consider the Bills Receivable report as an example.
To view the Bill- Party wise Receivables Report
1. Go to Gateway of Tally > Display > Statements of accounts > outstanding > Receivables
2. Click the button F7: Bill-Party wise button or press Alt+F7. The Bill-Party wise receivables
report appears as shown below:
MIS Reports

In this report, the list of all bills receivable for every party is displayed.
In the above screen, for the party Bellary Municipality, five reference numbers with the total
amount to be received, the due date and the number of days the amount is due is displayed.
Pressing Enter will display the details of the vouchers recorded against a particular reference
number.
 23S Computerised Accounting

The button options for this report are similar to that of Bills Receivable report other than the
F12 Configurations.
• Include Post-Dated Transactions: Post-dated transactions are those with voucher dates
beyond the end date of the period of display.
On setting this option to Yes, the amount of postdated transactions will be listed in the Post-
Dated Amount column.
• Show Bills in Foreign Exchange: If this option is set to Yes, the Bills Outstanding report will
show only those bills raised in foreign currency. The bills raised in base currency will be
excluded.
• Show Opening Amount: If this option is set to Yes, the Bills Outstanding report will show the
opening balance amount column.
• Show overdue using Bill Date: On setting this option to Yes, the invoice date will be
considered for calculation of overdue days, instead of due date.
Here, due date refers to the date mentioned in the Bill-wise details screen.
Note: While calculating the overdue, the outstanding days (Age of Bills in Days) are
calculated from the due date to the end date of report. If you use Bill date for calculating
Overdue, then the credit days are ignored and delay days are calculated from the bill date to the
end date of report.
MIS Reports

• Range of Bills to show: By default, the Bills Outstanding report will display only the Pending
bills. Select Overdue Bills in the field Range of Bills to show to view only the overdue bills for
a definite period.
Note:
Based on the selection of range of bills, the report for all Pending or Overdue bills as on date
specified for the Report can be viewed.
1. Pending Bills: This will display the bills which are pending as on a particular date.
2. Overdue Bills: This will display the bills which are not paid or due beyond their credit period
or days.
• Show Qty info in Detailed Format? Set this option to Yes to display the item quantity
details for each transaction.
• Appearance of Names: Select the required option from the list to view the party ledger
names as per the name style chosen i.e., Name only, Alias only, Name (Alias) or Alias
(Name).
• Party Sorting Method: Select either of the sorting methods Party (Decreasing) or Party
(Increasing) to sort the report based on ascending or descending order of the party ledger
name.

Configuration
Include Post-Dated Transactions ? No

Show Bills in Foreign Exchange ? No

Show Opening Amount ? No
Show overdue using Bill Date ? Yes

Range of Bills to show Pending Bills

Show Qty Info in Detailed Format ? No
Appearance of Names Name Only
Party Sorting Method ■ Default
Bills Sorting Method Default Party (Decreasing)
Party (increasing)

Bill Sorting Method: Select one of the sorting methods from the list to sort the report
based on Amount (Decreasing or Increasing), Currency (Decreasing or Increasing), Date
(Decreasing or Increasing), Due Date (Decreasing or Increasing) and Ref No. (Decreasing or
Increasing).
 240 Computerised Accounting

Configuration

include Post-Dated Transactions ? No

Show Bills in Foreign Exchange ? No

Show Opening Amount ? No
Show overdue using Silt Date ? Yes
Sorting Methods
Range of Bills to show Pending Biits
Show Qty info in Detailed Fermat ? No Amount (Decreasing)
Amount (increasing)
Appearance of Names Name Only Currency (Decreasing)
Party Sorting Method Default Currency (increasing)
Bills Sotting Method Default Date (Decreasing)
Date (inc reasing)
E3Z3S3HMHHI
Due Date (Decreasing)
Due Date (Increasing)
Ref No (Decreasing)
Ref No (Increasing)

Bill-Party wise report for Group outstanding

To view the Bill- Party wise report for Group outstanding
1. Go to Gateway of Tally > Display > Statements of accounts > outstanding > Group.
2. Click the button F7: Bill-Party wise or press Alt+F7. The Bill-Party wise report for Group
i
outstanding appears as shown below:
MIS Reports 24

The button options for this report are similar to that of Group outstanding report except for
FI2: Configurations.
For information on FI2 Configurations, click here.
Age wise Analysis in Bill-Party wise outstanding report
For Age wise analysis of bills receivable - party wise,
• Press F6 or click F6: Age wise
• Select Ageing by Bill Date or Ageing by Due Date as per requirement
• Specify the period for which this report is viewed

The bill-party wise receivables report appears with the applied ageing method.
242 Computerised Accounting

MULTIPLE CHOICE QUESTIONS (MCQ)

1. How many types of MIS Reports in Tally.ERP9
[a] Three
[b] Two
[c] Four
[d] Five
2. ____________ doesn’t comes under Financial MIS reports
[a] Bills receivables
[b] Exceptional reports
[c] Cash flow statements
[d] None of the above
3. Can we see gross profit and net profit simultaneously
[a] Yes
[b] No
4. Which among the following are the features of cash flow statement
[a] Relationship between net profit and changes in cash position
[b] Involve matching of cost against revenue
[c] Indicator of cash earning capacity of the firm
[d] Both a and c
5. All transactions made in particular day and by default display the last voucher entry date of a
regular voucher is displayed in
[a] Principal groups
[b] Principal ratios
[c] Daybook
[d] Accounting report

Answer:

1. c 2. d 3. b 4. d 5. c

FILL IN THE BLANKS

1. ______________ is a book keeping worksheet in which the balances of all ledgers are compiled
into debit and credit columns.

2. Assets = Liabilities +
MIS Reports 243

3. While viewing the balance sheet select F 12 then we can see_________ column appears on
screen.

4. _______________ gives an idea about the inflow and outflow of cash from operating, investing
and financing activities.

5. A projected cash flow statement is referred to as______________ .

6. Ratio analysis compares relationship between_______________________ .

7. ________________ displays the information on the periodic purchases of a business concern.

8. To appear exporting Sales register we have to press________ .

9. ______________ is the outstanding balance on a particular invoice.

10. To view the bill-party wise receivable report Go to Gateway of Tally > Display >__________
> outstanding >___________ .

Answer:

1. Trail Balance 2. Shareholders Equity 3. Vertical Balance Sheet

4. Cash Flow Statement 5. Cash Budget 6. Financial StatementAccounts

7. Purchase Register 8. Alt + E 9. Pending Amount

10. Statement of Accounts & Receivables

244