Accounting in TallyPrime
Accounting in TallyPrime helps you organise your Chart of Accounts, record business transactions, and analyse financial performance through reports and controls. Start by setting up the accounting structure for your business, recording day-to-day transactions using the appropriate vouchers, and using management and analysis features to monitor performance and make informed decisions.
Setting Up Your Chart of Accounts
Before recording transactions, view the Chart of Accounts, which provides a consolidated view of accounting masters in TallyPrime. TallyPrime provides 28 predefined Groups to classify accounts and two predefined Ledgers—Cash and Profit & Loss A/c—to help you get started. You can also create additional Groups and Ledgers based on your business requirements
Create Groups
Groups help you classify ledgers based on the nature of accounts, such as Assets, Liabilities, Income, and Expenses. TallyPrime provides predefined groups and allows you to create additional groups to organise your accounts according to your business requirements.
Create Ledgers
Create ledgers for customers, suppliers, banks, expenses, income, and taxes. Configure options such as bill-wise tracking, Cost Centre allocation, and interest calculation wherever required, and manage your ledgers from the Chart of Accounts.
Configure Voucher Types
Configure voucher types to define how transactions are recorded, set voucher numbering and entry options, and use Voucher Classes to automate entries, standardise data entry, and improve accounting accuracy.
Recording Day-to-Day Business Transactions
Once your accounting structure is ready, record day-to-day business transactions using the appropriate vouchers in TallyPrime.
Record sales of goods and services, whether cash or credit, and generate invoices based on your business requirements. You can also manage sales orders and deliveries, offer discounts and free items, account for sales returns, and track sales through various reports.
Record purchases of goods and services, manage supplier orders and goods receipts, and track outstanding payments. You can also account for additional purchase costs, discounts, free items, purchase returns, and adjustments in purchase value.
Record money received from customers and other sources through cash or bank accounts. You can also record advance receipts, account for discounts offered during bill settlement, and track transactions using the Receipt Register.
Record payments made to suppliers, employees, and other parties through cash or bank accounts. TallyPrime supports different payment modes, including cheques and e-Fund Transfers. You can also allocate payments to Cost Centres and review transactions in the Payment Register.
Record adjustment entries, provisions, depreciation, and other accounting transactions that do not involve direct cash or bank movement. Journal vouchers help you maintain accurate books by recording the required debit and credit entries.
Recording Transactions in Multiple Currencies
If your business deals with customers or suppliers in different countries, you may need to record transactions in foreign currencies and account for exchange rate differences.
Use Multi-Currency in TallyPrime to record sales, purchases, and other accounting transactions in foreign currencies. You can define exchange rates, account for forex gains or losses, and view reports in your base or foreign currency.
Transferring Funds Within Your Business
Not every transaction affects income or expenses. Sometimes you only need to move money between accounts.
Use Contra Vouchers to record transfers between cash and bank accounts, deposits into bank accounts, withdrawals from banks, and transfers between multiple bank accounts. This helps keep cash and bank balances accurate without affecting profitability.
Recording Provisional or Future Transactions
Business decisions are not always final when they are entered. TallyPrime provides voucher types that let you assess the impact of transactions before committing them to books of accounts.
Record transactions that are under review or awaiting approval. Optional vouchers help you analyse the impact of a transaction before making it a regular accounting entry. You can also configure a voucher type to record vouchers as optional by default.
Record temporary or tentative transactions that you may want to review later before including them in the books of accounts.
Create adjustment entries whose impact should automatically reverse on a specified date. These are useful for provisional accounting and period-end adjustments.
Record transactions in advance with a future date. TallyPrime allows you to track post-dated vouchers separately and account for them on their effective date.
Planning & Controlling Business Performance
In TallyPrime, you can use different analysis and control features to compare plans against actuals, track profitability, and evaluate business decisions.
Create budgets for Ledgers, Groups, or Cost Centres and compare actual business performance against planned figures. You can create multiple budgets for different periods, monitor net transactions or closing balances, and analyse budget variances to identify areas where income or expenses differ from expectations.
Create alternative views of your financial reports by including or excluding provisional transactions such as Optional Vouchers, Memorandum Vouchers, and Reversing Journals. This helps you assess the impact of planned or tentative business decisions and compare projected results with your actual books of accounts.
Tracking Costs and Profitability
Monitor income and expenses across different business units, departments, employees, and projects to understand their contribution to overall business performance.
Track income and expenses for departments, employees, projects, or business units. You can create hierarchical Cost Centres, allocate transactions manually or automatically, and use Cost Centre reports to compare income and expenses across different business units.
Managing Interest Calculations
Calculate and track interest on outstanding amounts, loans, and other financial transactions based on applicable interest terms.
Calculate interest on loans given, overdue customer payments, supplier dues, and bank overdrafts based on the applicable interest parameters. TallyPrime allows you to calculate interest at the Group, Ledger, or invoice level, track accumulated interest, and record interest receivable or payable through vouchers.
Reviewing and Finalising Accounts
When reviewing and finalising client accounts, you can track changes made to vouchers and share them with clients for updating their books.
Track vouchers that are added, modified, or cancelled during account review. Export the marked vouchers in XML, Excel, or JSON format and share them with clients, who can import and verify the changes in their company data.
Accounting Reports
TallyPrime provides a range of accounting reports to help you review business transactions, assess financial performance, and understand your business’s financial position.
Financial Statements
Balance Sheet: View your company’s assets, liabilities, and capital to understand its financial position at a given point in time.
Profit & Loss (P&L) A/c: Review your income and expenses to determine the profit or loss for an accounting period.
Cash and Fund Flow Reports
Cash Flow: Analyse cash inflows and outflows during a period and estimate future cash requirements using the Cash Flow Projection report.
Funds Flow: Review the sources and applications of funds to understand changes in working capital.
Outstanding Reports
Receivables and Payables: Track amounts due from customers and payments due to suppliers. Monitor outstanding amounts, identify overdue bills, manage collections and payments, and settle dues on time.
Accounting and Transaction Reports
Trial Balance: Review debit and credit balances across ledger accounts to verify the arithmetical accuracy of your books.
Day Book: View daily transactions, including accounting and inventory vouchers, for a selected period.
Cash Book and Bank Book: Review receipts and payments recorded through cash and bank accounts.
Statistics: View the number of vouchers recorded under different voucher types and account categories, with the option to drill down to individual transactions.
Financial Analysis Reports
Ratio Analysis: Evaluate your business’s financial position using ratios such as Current Ratio, Debt/Equity Ratio, Gross Profit %, and Quick Ratio.
