Accounting Cash Sale of Services

While purchasing or selling services one can decide on the nature of transaction - Credit or Cash. Usually cash transactions will have attractive offers over credit transactions as there is immediate flow of cash. Because of cost effectiveness some organisations may prefer to carry out the cash purchase or cash sale of services.

Tally.ERP 9 facilitates users in recording cash purchases and sales along with the details of Service Provider and Service Receiver.

Example: On 14-07-2012 ABC Company sold event management services on Cash to CreativeIn Ad Agency for Rs. 6,00,000 on which Service Tax is charged @ 12.36%

Record the Transaction in Sales Voucher

Set up:

In F12: Sales Invoice Configuration screen

To create Sales Voucher

Go to Gateway of Tally > Accounting Vouchers > F8: Sales

  1. In Accounting Voucher Creation screen, press Alt+I or click on I :Account Invoice if the Voucher is in Item Invoice mode

  2. Press F2 and change the date to 14-07-2012

  3. In Party’s A/c Name field select Cash

  4. In Party Details screen, you can enter the Customer Name and Address. If you have customer ledger which is already created, then select the same from the List of Ledger Accounts to auto fill the details. To select the ledger click M: Party List button or press Alt+M.

Note: Customer Name and Address details provided here will be printed on the Sales Invoice instead of Cash, which helps in identifying the customer even though the services are sold on cash.

 

  1. Under Particulars select the Service (sales) Ledger e.g. Sales- Event Mgt Services and press Enter to view Service Tax Details screen

  2. In Service Tax Details screen

Note: In cases where the invoice received from the service provider is inclusive of tax, you can enter the invoice amount in the Amount (Incl. of Tax) field. Tally.ERP 9 back calculates the amount to arrive at the Service amount and Tax portion. The service amount will be displayed in Service Amount field and Tax details against the Tax Head.

  1. In Amount field the Service Amount of Rs. 6,00,000 will be defaulted automatically

  2. Under Particulars select Service  Tax Ledger e.g. Service Tax @ 12%. Service Tax amount will be calculated and displayed automatically.

  3. Under Particulars select Education Cess Ledger e.g. Education Cess @ 2%. Education Cess amount will be calculated and displayed automatically.

  4. Under Particulars select Secondary Education Cess Ledger e.g. Secondary Education Cess @ 1%. secondary Education Cess amount will be calculated and displayed automatically.

The completed service Sales Voucher is displayed as shown:

  1. Press Enter to Accept the Voucher.

Print Sales Invoice

The Print Preview of Sales Invoice is displayed as shown.  In the invoice the party selected in party details will be printed

 

More:

To record services purchased on cash refer the topic - Accounting Cash Purchase of Services