Lesson 1: Basics of Accounting
Lesson 1: Basics of Accounting
Lesson 1: Basics of Accounting
Lesson Objectives
On completion of this lesson, you will be able to understand
1.1 Introduction
Accounting is a process of identifying, recording, summarising and reporting economic informa-
tion to decision makers in the form of financial statements. Financial statements will be useful to
the following parties:
Suppliers
Customers
Employees
Banks
Suppliers of equipments, buildings and other assets
Lenders
Owners
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Basics of Accounting
Real Accounts
Real Accounts are Accounts relating to properties and assets, which are owned by the business
concern. Real accounts include tangible and intangible accounts. For example,
Land
Building
Goodwill
Purchases
Cash
Personal Accounts
Personal Accounts are Accounts which relate to persons. Personal Accounts include the follow-
ing.
Suppliers
Customers
Lenders
Nominal accounts
Nominal Accounts are Accounts which relate to incomes and expenses and gains and losses of a
business concern. For example,
Salary Account
Dividend Account
Sales
The above classification is the basis for generating various financial statements viz., Balance
Sheet, Profit & Loss A/c and other MIS reports. The Assets and liabilities are taken to Balance
sheet and the Income and Expenses accounts are posted to Profit and Loss Account.
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Basics of Accounting
Revenue Realisation
According to Revenue Realisation concept, revenue is considered as the income earned on the
date, when it is realised. As per this concept, unearned or unrealised revenue is not taken into
account. This concept is vital for determining income pertaining to an accounting period. It
reduces the possibilities of inflating incomes and profits.
Matching Concept
As per this concept, Matching of the revenues earned during an accounting period with the cost
associated with the respective period to ascertain the result of the business concern is carried out.
This concept serves as the basis for finding accurate profit for a period which can be distributed to
the owners.
Accrual
Under Accrual method of accounting, the transactions are recorded when earned or incurred
rather when collected or paid i.e., transactions are recorded on the basis of income earned or
expense incurred irrespective of actual receipt or payment. For example, a seller bills the buyer at
the time of sale and treats the bill amount as revenue, even though the payment may be received
later.
Going Concern
As per this assumption, the business will exist for a long period and transactions are recorded
from this point of view.
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Basics of Accounting
Accounting Period
The users of financial statements required periodical reports to ascertain the operational and the
financial position of the business concern. Thus, it is essential to close the accounts at regular
intervals. viz., 365 days or 52 weeks or 1 year is considered as the accounting period.
Accounting Entity
According to this assumption, a business is considered as a unit or entity apart from its owners,
creditors and others. For example, in case of a Sole Proprietor concern, the proprietor is treated
to be separate and distinct from the business, which he controls. The proprietor is treated as a
creditor to the extent of his capital and all the business transactions are recorded in the books of
accounts from the business stand point.
Money Measurement
In accounting, only business transactions and events of financial nature are recorded. Only trans-
actions that can be expressed in terms of money are recorded.
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Basics of Accounting
The following chart explains the way in which accounting transactions are recorded in the Double
Entry system and financial statements are prepared.
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Basics of Accounting
Voucher
A voucher is a document in support of a business transaction, containing the details of such trans-
action.
Receipt
When a trader receives cash from a customer against goods sold by him, issues a receipt con-
taining the name of such customer, details of amount received with date.
Invoice or Bill
When a trader sells goods to a buyer, he prepares a sales invoice containing the details of name
and address of buyer, name of goods, amount and terms of payments and so on. Similarly, when
the trader purchases goods on credit receives a Invoice/bill from the supplier of such goods.
Account
An account is a statement of transactions affecting any particular asset, liability, expense or
income.
Ledger
A Ledger is a book which contains all the accounts whether personal, real or nominal, which are
entered in journal or subsidiary books.
Chart of Accounts
A chart of accounts is a list of all accounts used by an organisation. The chart of accounts also
displays the categorisation and grouping of its accounts.
Posting
Posting is the process of transferring the entries recorded in the journal or subsidiary books to
the respective accounts opened in the ledger i.e., grouping of all the transactions relating to a par-
ticular account to a single place.
Accounting Period
Generally, the financial statements are generated for a regular period such as a quarter or a year,
for timely and accurate ascertainment of operating and financial position of the organisation.
Trial Balance
Trial balance is a statement which shows debit balances and credit balances of all Ledger
accounts. As per the rules of double entry system, every debit should have a corresponding
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Basics of Accounting
credit, the total of the debit balances and credit balances should agree. A detailed trial balance
has columns for
Account name
Debit balance
Credit balance
Trading Account
Trading refers to buying and selling of goods. The trading account displays the transactions per-
taining to buying and selling of goods.
The difference between the two sides of the Trading Account indicates either Gross Profit or
Gross Loss. If the credit side total is in excess of the debit side total, the difference represents
Gross Profit. On the other hand, if the total of the debit side is in excess of the credit side total, the
difference represents Gross Loss. Such Gross Profit / Gross Loss is transferred to Profit & Loss
Account. The Gross Profit is expressed as :
Gross Profit = Net Sales – Cost of Sales
Net Profit = (Gross Profit + Other Income) – (Selling and Administrative Expenses + Depre-
ciation + Interest + Taxes + Other Expenses)
A key element of the Profit and Loss Account, and one that distinguishes it from a balance sheet,
is that the amounts shown on the statement represent transactions over a period of time, while
the items represented on the balance sheet show information as on a specific date.
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Basics of Accounting
All revenue and expense accounts are closed once the profit and loss account is prepared. The
Revenue and Expenses accounts will not have an opening balance for the next accounting
period.
Balance Sheet
The balance sheet is a statement that summarises the assets and liabilities of a business. The
excess of assets over liabilities is the net worth of a business. The balance sheet provides infor-
mation that helps in assessing
The balances of all the real, personal and nominal (capital in nature) accounts are transferred
from trial balance to balance sheet and grouped under the major heads of assets and liabilities.
The balance sheet is complete when the net profit/ loss is transferred from the Profit and Loss
account.
1.1.7 Transactions
A transaction is a financial event that takes places in the course or furtherance of business and
effects the financial position of the company. For example, when you deposit cash in the bank,
your cash balance reduces and bank balance increases or when you sell goods for cash, your
cash balance increases and your stock reduces.
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Basics of Accounting
The Accounting information is useful to various interested parties, both internal and external viz.,
Suppliers, who supply goods and services for cash or on credit
Customers, who buy goods or services for cash or on credit
Employees, who provide services in exchange of salaries and wages.
Banks, with whom accounts are maintained
Suppliers of equipment, buildings and other assets needed to carry on the business.
Lenders from whom, you borrow money to finance your business
Owners, who hold a share in the capital of your business
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Basics of Accounting
Points to Remember
Accounting is a comprehensive system to collect, analyse and commu-
nicate financial information.
Double Entry accounting is a system of recording transactions in a way
that maintains the equality of the accounting equation.
The three types of accounts maintained for transactions are real
accounts, personal accounts and nominal accounts.
Entity is the organisational unit for which accounting records are main-
tained.
Journal entry is a record of a single business transaction.
Voucher is a document evidencing the details of a financial transaction.
Ledger is a book in which accounts are maintained.
Trial balance is a list of the balances of all the ledger accounts.
Profit and loss statement shows the performance of the company in
terms of profits or losses made by it over a specified period.
Balance sheet gives an overview of the financial position of a company
as on a specific date.
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Lesson 2: Fundamentals of Tally.ERP 9
Lesson Objectives
On completion of this lesson, you will be able to understand
2.1 Introduction
Tally.ERP 9 is the world's fastest and most powerful concurrent Multi-lingual business Accounting
and Inventory Management software. Tally.ERP 9, designed exclusively to meet the needs of
small and medium businesses, is a fully integrated, affordable and highly reliable software.
Tally.ERP 9 is easy to buy, quick to install, and easy to learn and use. Tally.ERP 9 is designed to
automate and integrate all your business operations, such as sales, finance, purchasing, inven-
tory, and manufacturing. With Tally.ERP 9, accurate, up-todate business information is literally at
your fingertips anywhere. The powerful new features and blazing speed and power of Tally.ERP 9
combined with enhanced MIS, Multi-lingual, Data Synchronization and Remote capabilities help
you simplify all your business processes easily and cost-effectively.
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Fundamentals of Tally.ERP 9
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Fundamentals of Tally.ERP 9
Auditor's Edition : Tally.ERP 9 offers a special Auditors' Edition of Tally.ERP 9, which pro-
vides auditing and compliance capabilities exclusively for Chartered Accountants.
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Fundamentals of Tally.ERP 9
Daily balances and transaction values/ Interest Excise/ VAT/ Central Sales Tax (CST)/
calculations Tax Collected at Source (TCS) related
Inventory transactions and reports
Percentage-based reporting
Ratio analysis
Value Added Tax (VAT)
Service Tax (ST)
Fringe Benefit Tax (FBT)
Tax Deducted at Source (TDS)
Tax Collected at Source (TCS)
Excise
Payroll
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Fundamentals of Tally.ERP 9
along with the name of the user, who has altered the entry, and the date and time of the
alteration.
TallyVault: Tally.ERP 9 offers a data encryption option called TallyVault. Without the valid
TallyVault password, the data cannot be accessed. Tally.ERP 9 follows the DES (Data
Encryption Standard) encryption method to safeguard the data.
Removal of data into a separate company: Tally.ERP 9 allows users to maintain a com-
pany for any number of financial years. Once the books of accounts have been completed
for the earlier financial years, the user can split the company data into multiple companies
as per financial periods required. Tally.ERP 9 also has a feature to split company data. The
user can specify the date from which the company has to be split and Tally.ERP 9 will split
the company to form two companies as per periods specified. Once the data has been
split, the closing balance of the first period (first company) becomes the opening balance
for the next period (second company).
Multi-directory for company management: The user can create multiple directories to
store data. The data stored in these directories can be accessed directly in Tally.ERP 9, by
specifying the path.
Import/ Export of data: Any transaction can be exported and imported to other software
after suitably altering the current structures to accept the Tally.ERP 9 data structure. Data
can also be imported to Tally.ERP 9 by writing a TDL program. The data which is to be
exported from Tally.ERP 9 can be in XML, HTML or ASCII format.
Tally.ERP 9 Synchronization: Synchronization is the process of exchanging Tally.ERP 9
data between two or more locations. This process enables a branch office to send its data
to the head office, over the Internet or a private network.
Graphical analysis of data: Tally.ERP 9 provides graphical analysis of data which helps
the user to perform deeper analysis. The user can generate graphical analysis reports such
as Sales register, Purchase register, Ledgers, Funds flow, Cash flow, Stock Item registers
and so on. This helps the management to quickly judge performance and be better pre-
pared for difficult times.
ODBC (Open Database Connectivity) compliance: It allows other programs to use data
from Tally.ERP 9, directly. Thus, any program such as MS-Excel or Oracle, which is ODBC
compliant, can use data from Tally.ERP 9. Data connectivity is dynamic, which means that
any update in Tally.ERP 9 is reflected in real time in other ODBC compliant software. The
user can also extract data from Tally.ERP 9 and design his/ her own report formats in other
ODBC compliant software.
Protocol support: Tally.ERP 9 provides protocol support for HTTP, HTTPS, FTP, SMTP,
ODBC and raw sockets with data interchange formats such as XML, HTML with XML
islands, SOAP and related formats. Protocol refers to a mechanism by which information
(data) can be put into or taken from Tally.ERP 9. Formats refer to the standard for informa-
tion to be generated from Tally.ERP 9 or from other applications which can exchange data
with Tally.ERP 9.
Direct web browser access: While working on Tally.ERP 9, the user can directly log on to
the Tally website, provided he/ she has access to the Internet. The website lists details of
all the facilities offered by Tally.ERP 9. The user can also download the latest release of
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Fundamentals of Tally.ERP 9
Tally.ERP 9 as and when it is available. The Tally website also offers Tally Chat, by which a
user can communicate with a Tally representative and get required information.
Ability to preview and publish reports and documents on the Internet: Companies
which want to publish reports and price lists on their website can do so directly from
Tally.ERP 9.
E-mail Facility: Tally.ERP 9 facilitates the mailing of any Tally.ERP 9 report or document.
Multilingual capability: Tally is the world's first accounting and inventory software with
multilingual capability. Currently, Tally.ERP 9’s multilingual capability extends to 12 lan-
guages which include nine Indian languages (Hindi, Gujarati, Punjabi, Tamil, Telugu, Mar-
athi, Kannada, Malayalam and Bengali), Bahasa Melayu and Bahasa Indonesia. Tally.ERP
9 enables you to enter data in one language and have it transliterated into different lan-
guages. You can generate invoices, purchase orders or delivery notes in the language of
your choice after entering data for the same in any of the nine specified languages. Also,
the phonetic keyboard allows you to spell the term phonetically based on how it sounds
and Tally.ERP 9 displays the data in the language selected after transliteration.
Point of Sale (POS) : POS is an acronym for Point of sale. Point of Sale can be a retail out-
let, a check out counter ina shop, or any other location where a sales transaction takes
place. It is a computorised cash register which adds up the sales totals, calcutates the bal-
ance to be returned to buyer and automatically adjusts the inventory level to reflect the
quantity sold. The equipment required for POS to work effectively are cash registers, card
readers, bar-code scanners and so on.
2.1.4 Payroll
Tally.ERP 9 Payroll is integrated with Accounting and benefits the user by simplifying Payroll
processing and accounting. Tally.ERP 9 Payroll enables users to set up and implement salary
structures, ranging from simple to complex, as per the organisation’s requirements. The user can
also align and automate payroll processes and directly integrate them with main stream account-
ing applications. Tally.ERP 9 Payroll also supports configurable formats for payslip printing;
flexible salary/wage, attendance, leave and overtime registers; gratuity and expat reports.
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Fundamentals of Tally.ERP 9
The welcome screen Tally.ERP 9 – Power of Simplicity appears while the software loads. You
will be ready to explore Tally.ERP 9, the moment the Tally.ERP 9 start up screen appears.
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Fundamentals of Tally.ERP 9
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Fundamentals of Tally.ERP 9
Gateway of Tally: Displays menus, screens, reports and accepts the choices and options
which you select to view data as required.
Buttons toolbar: Displays buttons which provide quick interaction with Tally.ERP 9. Only
buttons relevant to the current task are visible.
Calculator Area: Used for Calculator functions.
Info Panel: Displays Version number, License details, Configuration details.
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Fundamentals of Tally.ERP 9
Each field in the Company Creation screen is explained below. To navigate between the fields,
use the enter key or the tab key or arrow keys or the mouse.
Fields Description
Directory Tally.ERP 9 assumes that the company is to be created in the data
path given in the Tally.INI file, which is displayed by default. This
field is skipped by default. However, you can change this path, if you
want to, by using the backspace key, so that Tally.ERP 9 saves the
data to a different directory specified by you.
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Fundamentals of Tally.ERP 9
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Fundamentals of Tally.ERP 9
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Fundamentals of Tally.ERP 9
Base Currency Information is set to the default values as given in the Table.
However, if the Multi-currency feature of Tally.ERP 9 is activated - then
Tally.ERP 9 allows the user to alter the Base Currency Information as
required.
Let us create a company in Tally.ERP 9 taking the example of National Traders who purchases
computer equipments, components and softwares and sells it to other companies and to the direct
customers. Create a Company as per information provided below :
E-mail sales@national.com
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Fundamentals of Tally.ERP 9
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Fundamentals of Tally.ERP 9
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Fundamentals of Tally.ERP 9
Figure 2.5 Gateway of Tally with the New Company — Indus Enterprises
Notice that Indus Enterprises is highlighted. This indicates that it is the currently selected
company from the list of open companies.
You can now practice selecting, closing and altering company information.
While working with Tally.ERP 9, you can press Esc to exit from any screen
before the changes you have made take effect.
Practice Exercise
1. Select a Company
2. Shut a Company
3. Alter a Company
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Fundamentals of Tally.ERP 9
To Select a Company
1. Go to the Gateway of Tally > Alt + F3 > Company Info. > Select Company OR Press F1.
Tally.ERP 9 displays the List of Companies screen. All the companies created are displayed
in an alphabetical order. Select the company name from the list given.
2. In case two or more companies are loaded (like National Traders and Indus Enterprises), 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.
To Shut a Company
Go to the Gateway of Tally > Alt + F3 > Company Info. > Shut Company. Select the Company
which you need to shut from the List of Companies. You can also use Alt + F1 to shut a
Company from the Gateway of Tally screen.
You can also access these functions, by selecting the appropriate button
from the button bar.
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Fundamentals of Tally.ERP 9
Points to Remember
Tally.ERP 9 pioneered the ‘no accounting codes’ concept.
Tally.ERP 9 mimics the human thought process.
Tally.ERP 9 is multi-platform compatible and supports multi-user acces-
sibility.
Tally.ERP 9 has multilingual capability and new features such as Payroll
and Point of Sale.
Tally.ERP 9 is ODBC compliant.
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Lesson 3: Creating Accounting Masters in
Tally.ERP 9
Lesson Objectives
On completion of this lesson, you will be able to understand
After creating a Company with the required information, you can now enable/ modify Accounting
& Inventory features and configurations.
3.1 F11:Features
The F11: Features are Company-specific and the F12: Configurations are applicable to all the
companies in a data directory. The F11: Features is divided into the following major categories:
Accounting Features
Inventory Features
Statutory & Taxation
Tally.NET Features
You can press F11 (functional key) from any screen of Tally.ERP 9 or you may also click on the
F11: Features button available in the button bar, to enable the required features. The F11:
Features are specific only to the company currently in use (for which the said feature is enabled),
thereby allowing flexibility of independently enabling different features for each of the company.
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Creating Accounting Masters in Tally.ERP 9
There are various settings available under Accounting Features, Inventory Features and Statutory
& Taxation Features, which facilitates the additional information to be entered during voucher
entry.
Go to Gateway of Tally > F11: Features > Accounting Features or click on F1: Accounts
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Creating Accounting Masters in Tally.ERP 9
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Creating Accounting Masters in Tally.ERP 9
Go to Gateway of Tally > F11: Features > Inventory Features or click on F2 : Inventory
The Inventory Feature screen is displayed as shown.
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Creating Accounting Masters in Tally.ERP 9
Payroll
Go to Gateway of Tally > F11: Features > Statutory & Taxation or click on F3 : Statutory
The Statutory & Taxation screen is displayed as shown.
Go to Gateway of Tally > F11: Features > Tally.NET Features or click on F4 : Tally.NET
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Creating Accounting Masters in Tally.ERP 9
In Tally.ERP 9, the F12: Configurations are provided for Accounting, Inventory & printing options
and are user-definable as per your requirements.
The F12: Configurations are applicable to all the companies residing in that Tally.ERP 9 Data
Directory. The F12: Configuration options vary depending upon the menu display. i.e., if you
press F12: configure from Voucher entry screen, the respective F12: Configurations screen is
displayed.
Go to Gateway of Tally > press F12: Configure
The Configuration screen is displayed as shown.
There are numerous settings available under various menus in the F12: Configurations screen,
which may be configured for any additional information required to be entered during master cre-
ations, voucher entry and printing.
3.2.1 General
You can configure Country Details, Style of Names, Dates and Numbers in the General configura-
tion screen.
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Creating Accounting Masters in Tally.ERP 9
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Creating Accounting Masters in Tally.ERP 9
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Creating Accounting Masters in Tally.ERP 9
Master Configuration
Additional information can be configured by setting the options to Yes which will accordingly
appear in the masters.
Allow ALIASES along with names: This configuration helps in identifying an account by
another name.
Allow Language ALIASES along with names: This configuration helps the user to give
an alias in any local language.
Accounts Masters
Allow ADVANCED entries in Masters: This configuration displays the additional fields in
the Accounting Masters such as:
Group behaves like a Sub-Ledger ?
Set to Yes, the group behaves like a Control Account for the ledgers it contains,
wherein only the group balance is displayed. This is useful while working on groups
like the Sundry Debtors and Sundry Creditors (pre-set to Yes), where the ledger items
are numerous.
Nett Debit/Credit Balances for Reporting?
Set to Yes, this configuration displays the amount as a net figure instead of separate
debit and credit balances as shown in the reports.
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Creating Accounting Masters in Tally.ERP 9
Use ADDRESSES for Ledger Accounts: This Field can be used for giving the address
and Income Tax Number of the ledger accounts.
Use CONTACT DETAILS for Ledger Accounts: This Configuration gives the user an
opportunity to fill details like Contact person, Telephone, Fax, E-Mail etc.
Add NOTES for Ledger accounts: This field helps the user to add the additional notes for
ledger accounts.
Inventory Masters
Allow ADVANCED entries in Masters: This Configuration will display additional field in
Inventory masters.
Use PART NUMBERS for Stock Items: You can enter the Part Number of the item being
created for easy identification. (In certain industries, such as automobiles, their part num-
bers identifies various parts). You can alternatively use this field for the Bin Card Number,
Code Number etc.
Use Description for Stock Items: You can enter the description of the Stock Item that
would appear in your invoices.
Use REMARKS for Stock Items: This helps to identify the product and its applications.
You can give some particulars of the Stock Item created. This will help you later when you
post a query for the stock of this item, while you decide whether the item is suitable for a
particular requirement or not.
Use ALTERNATE UNITS for Stock Items: This is another unit, apart from the main unit,
which you can use instead of the Stock Item. This is particularly useful when you need to
handle different units at different times. For example, you buy Data Cables in pieces but
sell them in packets of 5 pieces each. For alternate units, you are asked to give a conver-
sion factor (e.g. 5) so that a link is maintained between the two. What you give here is sim-
ply a conversion factor that comes up as default during a voucher entry. You may specify a
different factor during voucher entry.
Allow Std. Rates for Stock Items: Standard rates enable the valuation of an inventory at
standard purchase or standard sales prices. Moreover, these prices come up by default
during voucher entry (you may choose to override them if required). The standards are
effective from the specified dates and they continue to be used at these rates until the next
date, where the standard rate changes.
Specify Default Ledger Allocation for Invoicing: This configuration allows the user to
allocate the ledgers to be used for Purchase and Sales Invoice.
Allow component list details (Bill of Materials): The Bill of Materials contains a list of
items that are required to make up another item. In other words, it is a list of constituent
items.
Use ADDRESSES for Godowns: This configuration enables the user to give the address
for locations.
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Creating Accounting Masters in Tally.ERP 9
Accounting Vouchers
Skip Date field in Create Mode (faster entry!): Set to Yes, the Tally.ERP 9 cursor goes
directly to the Dr or Cr field depending on the voucher type. However, if set to No, the
Tally.ERP 9 cursor goes to the Date field. It is advantageous to set this option to Yes for a
faster entry if there are many entries to be made on the same date.
Use Single Entry mode for Pymt/ Rcpt/Contra: This configuration helps in selecting multiple
debits or credits depending on the type of entry.
Use Payment/Receipt as Contra: To indicate the transfer of funds from bank to cash,
bank to bank and cash to bank, Tally.ERP 9 provides a voucher type called ‘Contra’. This
configuration is activated while using payment and receipt vouchers for a ‘Contra’ transac-
tion.
Use Cr/Dr instead of To/By during Entry: This configuration gives the flexibility to use Cr/
Dr or To/By in Vouchers as per the requirement or the understanding of the user.
Warn on Negative Cash Balance: This option in Tally.ERP 9 displays a warning if the
cash balance is NIL.
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Creating Accounting Masters in Tally.ERP 9
Pre-Allocate Bills for Payment/Receipt: This Configuration enables the user to select the
bills first before the total amount can be updated in the amount field. This option is
extremely useful while Cheque Printing.
Allow Cash Accounts In Journals: Journals are adjustment entries. However, in many
cases companies require journals to account for day-to-day transactions involving cash or
bank accounts.
Allow Expenses/Fixed Assets in Purchase Vouchers: This configuration helps the user
to enter the details of purchase of fixed assets in the Purchase Voucher.
Allow Income Accounts in Sales Vouchers: This configuration helps the user to allocate
the income accounts in the sales voucher.
Show Inventory Details: This configuration when set to Yes shows the name of the stock
item, quantity, rate and value details.
Show Table of Bills Details for Selection: This configuration displays a table which lists
out the references of the pending bills
Show Bill-wise Details: This configuration enables the user to view the bill-wise details in
the voucher.
Expand into multiple lines: This configuration displays the due date of repayment based
on the credit days given.
Show Ledger Current Balances: This configuration displays the current balance of the
ledger selected while an entry is made. This is a convenient feature to use since it helps to
get the information without referring to the report.
Show Balances as on Voucher Date: Set to Yes, a voucher that is viewed in the alteration
mode displays the ledger balances on the voucher screen based on the voucher date.
Inventory Vouchers
Use Ref. Number in Stock Journal: This configuration provides an additional field called
Ref. in the Stock journal, where the user can enter the reference number.
Warn on Negative Stock Balance: This configuration warns the user in cases where the
item selected reaches a negative balance in the Invoice mode.
Honor Expiry Dates usage for Batches: This configuration hides the batch details that
are redundant and have expired.
Show Balances as on Voucher Date: This configuration enables the user to view the
inventory balances according to the voucher date
Show Godownwise Details : This configuration enables the user to view Godown details.
Show Batchwise Details : This configuration enables the user to view Batch details.
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Creating Accounting Masters in Tally.ERP 9
3.2.6 Printing
This configuration helps the user to configure the printing screens for the reports and transac-
tions.
3.2.10 Licensing
This configuration helps the user to update, surrender, reset license and also configure existing
License.
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Creating Accounting Masters in Tally.ERP 9
Among the 15 predefined groups, 9 Groups are Balance Sheet items and the remaining 6 groups
are Profit & Loss A/c items. However, you may also alter the nomenclature of these predefined 28
Groups
The List of Accounts screen is displayed as shown
1. Capital Account
Reserves & Surplus [Retained Earnings]
2. Current Assets
Bank Accounts
Cash-in-hand
Deposits (Asset)
Loans & Advances (Asset)
Stock-in-hand
Sundry Debtors
3. Current Liabilities
Duties & Taxes
Provisions
Sundry Creditors
4. Fixed Assets
5. Investments
6. Loans (Liability)
Bank OD A/c [Bank OCC A/c]
Secured Loans
Unsecured Loans
7. Suspense A/c
8. Misc. Expenses (Asset)
9. Branch/Divisions
Out of the 15 pre-defined primary groups, the following are the six pre-defined groups that
appear in the Profit & Loss Account.
1. Sales Accounts
2. Purchase Accounts
3. Direct Incomes [Income (Direct)]
4. Indirect Incomes [Income (Indirect)]
5. Direct Expenses [Expenses (Direct)]
6. Indirect Expenses [Expenses (Indirect)]
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Creating Accounting Masters in Tally.ERP 9
The Items in square brackets are aliases for the Group Names. This is
another powerful feature of Tally.ERP 9, which allows you to refer to the
same item under several different names.
Make sure all the options in the F12: Configure (Master configuration) are
set to No. The function of each option will be explained as and when the
topic is covered.
Ledger account heads are the actual account heads with which we identify the transactions. All
voucher entries have to be passed using ledgers. To Understand the concept of Groups and
Ledgers, let us create Ledgers and Groups in Indus Enterprises.
1. Proprietor's Capital Account – under Capital Account with an opening balance of
Rs.25000.
2. Land & Building – under Fixed Assets with an opening balance of Rs.60000.
3. Milton & Co – under Sundry Debtors because we have sold some goods to them – with an
opening balance of Rs.15000.
4. Kaltronic Ltd – under Sundry Creditors – because we have purchased some goods from
them with opening balance of Rs. 85000.
5. Local Sales – under Sales Account with no opening balance.
6. Local Purchases – under Purchase Account with no opening balance.
7. State Bank of India – under Bank Accounts with an opening balance of Rs. 35000.
8. Conveyance – under Indirect Expenses with no opening balance.
9. Bank Interest – under Indirect Income with no opening balance.
Notice that we have mentioned ledger names under groups i.e., under Capital Account, under
Sundry Debtor, etc. which are referred to as GROUP names.
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Creating Accounting Masters in Tally.ERP 9
Practice Exercise
Two of the nine ledger accounts will be created by us. As a practice exercise you will be creating
the remaining seven ledgers.
1. Proprietor's Capital Account under Capital Account with an opening balance of Rs.
25000.
Enter Name as Proprietor's Capital Account.
Select Capital Account from the List of Groups.
Enter 25000 in the Opening Balance (on 1-Apr-2009) field.
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Creating Accounting Masters in Tally.ERP 9
2. Land & Building under Fixed Assets with an opening balance of Rs.60000.
Enter Name as Land & Building.
Select Fixed Assets from the List of Groups.
Enter 60,000 in the Opening Balance (on 1-Apr-2009) field.
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Creating Accounting Masters in Tally.ERP 9
Tally.ERP 9 displays the total debit and credit opening balances while the ledgers are being
created in the Ledger Creation screen. This is to avoid differences in the opening balance.
So far, we have used the default groups provided in Tally.ERP 9, but Tally.ERP 9 does allow us to
create our own groups. To know how to do so, let us explore the options available under the
creation of Groups using Tally.ERP 9's pre-defined groups.
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Creating Accounting Masters in Tally.ERP 9
You can create one group at a time by pressing Enter on Create under
Single Group menu. In case, you want to create multiple groups simultane-
ously, you can create them by pressing Enter on Create under Multiple
Groups.
Solution
The solution is to first create two sub-groups North India Debtors and South India Debtors
under Sundry Debtors.
Go to the Gateway of Tally > Accounts Info. > Groups > Create.
Enter Name as North India Debtors
Against the field Under select Sundry Debtors from the List of Groups
The Group Creation screen appears as shown below :
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Creating Accounting Masters in Tally.ERP 9
Tally.ERP 9 allows you to create any number of groups under all the default groups. We have now
created two sub-groups under Sundry Debtors viz. North India Debtors and South India Debtors.
Additionally, we have created two sub-groups each under North India Debtors and South India
Debtors as per the requirements.
Let us now create the ledgers for Renison & Co and Milton & Co under North Delhi Debtors.
Go to the Gateway of Tally > Accounts Info. >Ledgers > Create (Multiple Ledgers).
Create Renison & Co and Milton & Co under North Delhi Debtors.
Select North Delhi Debtors from List of Groups.
Enter Renison & Co in the Name of Ledger field.
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Creating Accounting Masters in Tally.ERP 9
North Delhi Debtors is automatically prefilled in the Under field, press Enter to accept
Press Enter to accept the screen.
We have learnt to create ledgers in both the single and multiple mode under Tally.ERP 9's default
pre-defined groups. We have also created our own sub-groups under Tally.ERP 9's predefined
groups.
Return to the Gateway of Tally and shut Indus Enterprises and select National Traders.
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Creating Accounting Masters in Tally.ERP 9
Given below is the Trial Balance of National Traders extracted from the Books of Accounts at
the close of business on March 31, 2009.
Trial Balance
Particulars Debit Credit
Bank account 35000
Deposit Account 40000
Petty Cash 500
Opening Stock 286150
Sundry Debtors (Total) 57300
Compu Care Systems 5400
Data Link Technologies 26000
Spectrum Computers 12400
Supreme Computers 13500
Buildings 75000
Buildings Accum Deprn 8000
Office Equipment 25000
Office Equip Accum Deprn 4500
Tax Deducted at Source 4780
Sales tax 13600
Sundry Creditors (Total) 156000
Challenger Systems 65650
Horizon Enterprises 44750
Silverplus Computers 45600
Mutual Trust Loan 50000
Equity Capital 250000
Profit & Loss A/c 32070
Total 518950 518950
The Chart of Accounts to be prepared is based on the above Trial Balance of National Traders.
This is to assist you in understanding the classification of ledgers. To help you, each account has
been marked as :
P - Pre-defined Tally.ERP 9 Group (no action)
L - Ledger account required
NG - New Group required
NPG - New Primary Group required
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Creating Accounting Masters in Tally.ERP 9
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Creating Accounting Masters in Tally.ERP 9
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Creating Accounting Masters in Tally.ERP 9
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Creating Accounting Masters in Tally.ERP 9
You can now use the Page Up and Page Down keys to view different groups.
Let us now view the List of Groups in the Multiple Display Mode.
Go to the Gateway of Tally > Accounts Info. > Groups > Display (Multiple Groups) > Select
All Items
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Creating Accounting Masters in Tally.ERP 9
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Creating Accounting Masters in Tally.ERP 9
We can access all the configuration options for the Masters from the Gateway of Tally > F12:
Configure > Accts / Inventory Info.
Go to the Gateway of Tally > Accounts Info. > Groups > Create (Single Group).
Accept the configuration screen and Tally.ERP 9 displays the Group Creation Screen in which you
will notice additional information like:
1. Alias – This is a simple mechanism of identifying an account by another name.
2. Group behaves like a Sub-Ledger – The group behaves like a Control Account for the ledg-
ers it contains when set to Yes. Only the group balance will be displayed, not the individual
ledger balances. It is useful for groups such as Sundry Debtors and Sundry Creditors (which
are pre-set to Yes) where there can be numerous ledger items.
3. Nett Debit/Credit Balances for Reporting – By setting this to Yes, amounts will be displayed
as a net figure instead of separate debit and credit balances in reports.
Create Group
1. Name: Depreciation
2. (alias): Type Deprn and press Enter. This allows you to refer to the group by either name. You
will notice that there is a field to enter a second alias if required. If you enter a name here,
another alias field will be displayed, and so on. Tally uses the main name on all displays and
reports, but this multiple alias facility is extremely useful for data entry.
3. Under: Select Primary from the list of Groups
4. Nature of Group: Select Expenses
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Creating Accounting Masters in Tally.ERP 9
For Primary Income and Expenses Groups, the field Does it affect
Gross Profit? tells Tally.ERP 9 whether the item is above or below the
line in the Profit & Loss A/c in terms of its effect on the gross or net
profit. Direct items are pre-set to Yes and indirect items to No.
Altering Groups
Once created, groups can be altered by selecting the Alter option for single or multiple groups.
The procedure is the same as used earlier to display groups, except that, here the data can be
altered.
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Creating Accounting Masters in Tally.ERP 9
Deleting Groups
You can delete a group via the Group Alteration (Single Mode) screen by pressing Alt+D.
However, you cannot delete Tally.ERP 9’s pre-defined groups, or groups with sub-groups or
groups containing ledgers. The lowest level must be deleted first.
Go to the Gateway of Tally > Accounts Info. > Ledgers > Create.
Adding Single Ledgers
1. Name: Mutual Trust Loan
2. Alias: Skip this field
3. Under: Secured Loans
4. Inventory values are affected ?: No
5. Opening Balance (on 1-April-2009): 50000 Cr
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Creating Accounting Masters in Tally.ERP 9
Deleting Ledgers
You can delete a ledger, by pressing Alt+D in the Ledger Alteration screen.
You will not be able to delete a ledger, once the financial transactions (vouchers) have been
entered (excluding the Opening Balance). If there is a need to delete a ledger with any financial
transactions the lowest level must be deleted first by pressing Alt+D.
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Creating Accounting Masters in Tally.ERP 9
To ease your walk-through, the following Multi Ledger Alteration screen is taken from Tally.ERP
9 after entering the data. You can use them to verify your ledger accounts:
Go to the Gateway of Tally > Accounts Info. > Ledgers > Multiple Alteration > Select All
Items.
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Creating Accounting Masters in Tally.ERP 9
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Creating Accounting Masters in Tally.ERP 9
Points to Remember
F11: Features are company-specific. You are allowed to specify options
that are specific to the selected company only.
The Accounting Features helps the user to create Budgets & Scenarios,
Currencies, Cost Centres, Cost Categories etc. in addition to Groups
and Ledgers.
The Inventory Features helps the user to create Stock categories, Multi-
ple Godowns, Use Tracking Numbers, Order Processing, Price levels
etc. in addition to Stock Groups, Stock Items and Units of Measure.
The Statutory & Taxation Features helps the user to enable Value
Added Tax (VAT), Excise, Service Tax, Tax deducted at Source(TDS),
Tax Collected at Source (TCS), Excise Duty along with Tax information
such as Local Sales Tax Number, Inter-state Sales Tax Number, PAN/
Income - Tax Number.
F12: Configuration options are applicable to all the companies in the
same data directory.
All financial entries are performed using ledgers or account heads.
Group is a collection of Ledgers of the same nature.
You can delete a ledger by pressing Alt+D in the Ledger Alteration
screen.
62
Lesson 4: Creating Inventory Masters in
Tally.ERP 9
Lesson Objectives
On completion of this lesson, you will be able to understand
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.
Go to the Gateway of Tally > Inventory Info.
The Inventory info. menu is displayed as shown:
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Creating Inventory Masters in Tally.ERP 9
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 A1a – Sony 29 inches TV
A1b – 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
The televisions are sold in numbers. Hence, the Unit of Measure will be Nos.
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Creating Inventory Masters in Tally.ERP 9
Indus Enterprises has two Godowns, the Bangalore Godown and the Mumbai Godown.
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 tele-
visions at any given point of time. In order to compare the total sales of the 29 and 25 inches tele-
visions respectively, Tally.ERP 9's feature of Stock Categories for parallel classification can be
used.
Experiment Creation of Inventory Masters in Indus Enterprises.
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Creating Inventory Masters in Tally.ERP 9
Practice Exercise
Create the following Stock Groups in the similar manner
Name Under Can Quantities
of items be
ADDED
Philips TV Televisions Yes
Videocon TV Televisions Yes
Sony Music Systems Music Systems Yes
Videocon Music Systems Music Systems Yes
Set Yes to Maintain Stock Categories in F11: Features (F2: Inventory Features) to get
an additional option Stock Categories under Inventory Info.
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Creating Inventory Masters in Tally.ERP 9
Set Yes to Maintain Multiple Godowns in F11: Features (F2: Inventory Features) to get
additional option like Stock Categories under Inventory Info.
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Creating Inventory Masters in Tally.ERP 9
Type
Tally.ERP 9 has the option to create simple units as well as compound units. Examples: box, nos,
pcs, etc. A Compound Unit is a combination of two simple units of measure. Example: A box of
10 pcs is a compound unit of measure.
Symbol
It is the abbreviated form by which a stock item is identified. For example, the abbreviation pcs
indicates – pieces.
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Creating Inventory Masters in Tally.ERP 9
Formal Name
This represents the complete or formal name of a symbol used while creating a unit. Different
companies use different symbols to represent the same units. Formal names help you to match
the symbols with their respective units. For example, the symbol for numbers (formal name) can
be nos or num.
Number of Decimal Places
A unit can be expressed as fractions. For example, a 3.15 Kg refers to 3Kg and 150 grams. The
number of digits expressed in grams after the decimal places are three. Likewise, fractions up to
four decimal places can be expressed in the same manner. For expressing numbers, without a
decimal place, specify 0 in this option.
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Creating Inventory Masters in Tally.ERP 9
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Creating Inventory Masters in Tally.ERP 9
i. Create a Stock Item Sony 29 inches TV, under the Group Sony TV.
Ensure that the details appear as shown below:
Practice Exercise
Similarly, create the following Stock Items under Televisions
Name Under Category Units
Sony 25 inches TV Sony TV 25 inches TV Nos
Philips 29 inches TV Philips TV 29 inches TV Nos
Philips 25 inches TV Philips TV 25 inches TV Nos
Videocon 29 inches TV Videocon TV 29 inches TV Nos
Videocon 25 inches TV Videocon TV 25 inches TV Nos
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Creating Inventory Masters in Tally.ERP 9
Let us now use Tally.ERP 9 to set up the basic inventory details for National Traders that sells
computers, Printers and Peripherals. Create the stock groups and sub-groups as shown:
Stock Group Under
Computers Primary
Printers Primary
Peripherals Primary
Accessories Peripherals
Components Peripherals
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Creating Inventory Masters in Tally.ERP 9
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Creating Inventory Masters in Tally.ERP 9
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Creating Inventory Masters in Tally.ERP 9
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Creating Inventory Masters in Tally.ERP 9
To Create a Godown, go to the Gateway of Tally > Inventory Info. > Godowns > Create.
1. Name: Warehouse
2. alias: Skip the field
3. Under: Primary
4. Allow Storage of materials: Yes
You can delete a stock Godown via Single Godown > Alter by pressing Alt+D. However, you
cannot delete a stock Godown with sub-godowns. The lower levels must be deleted first.
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Creating Inventory Masters in Tally.ERP 9
Create the stock items as on 1-4-2009, with the information provided below:
Stock Cost Ware- On - Total Total Retail
house Site Qty Value Price
COMPUTERS
HCL PIV 17,500 1 4 5 Nos 87,500 21,500
IBM PIV 17,100 0 4 4 Nos 68,400 24,785
PERIPHERALS
Accessories
CD ROM Disks 100s 450 0 5 5 Box 2,250 500
Dust Covers 35 2 8 10 Nos 350 40
USB Pen Drives 64MB 1,250 0 10 10 Nos 12,500 1,600
Wireless Keyboard 490 10 15 25 Nos 12,250 700
Wireless Mouse 250 10 10 20 Nos 5,000 430
Printers
HP Laserjet 1010 Series 8,200 0 7 7 Nos 57,400 9,500
Samsung Laserjet 1500 8,100 0 5 5 Nos 40,500 9,850
Total 2,86,150
Ensure that Allow ADVANCED entries in Masters is set to Yes in the F12: Stock Item Configu-
ration.
Create the stock item HCL PIV with the following details:
1. Name: HCL PIV
2. alias: Skip this field
3. Under: Computers
4. Category: HCL
5. Units: Nos
6. Alter Standard Rates?: Yes
7. Enter the details in the Standard Rate screen as shown below:
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Creating Inventory Masters in Tally.ERP 9
Figure 4.13 Standard Rate screen for Stock Item — HCL PIV
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Creating Inventory Masters in Tally.ERP 9
10. The Stock Item Creation screen for HCL PIV appears as shown below:
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Creating Inventory Masters in Tally.ERP 9
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Creating Inventory Masters in Tally.ERP 9
Once you have entered all the stock items, return to the main Gateway of Tally menu and select
the Stock Summary. This should show a grand total of 2,86,150, the break-up of which is,
Computers - Rs. 1,55,900, Peripherals - Rs. 32,350, Printers - 97,900 = Rs. 2,86,150.
Ensure that the Stock Summary appears as shown :
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Creating Inventory Masters in Tally.ERP 9
Points to Remember
Inventory accounting includes recording stock details like the purchase
of stock, the sale of stock, stock movement between storage locations
or godowns and providing information on stock availability.
Stock Groups are provided for the purpose of classification of stock
items.
Stock Items refers to goods that you manufacture or trade.
Godowns/Location are places where stock items are stored.
82
Lesson 5: Voucher Entry in Tally.ERP 9
Lesson Objectives
On completion of this lesson, you will be able to
In accounting terms, a voucher is a document containing the details of a financial transaction. For
example, a purchase invoice, a sales receipt, a petty cash docket, a bank interest statement, and
so on. For every such transaction made, a voucher is used to enter the details into the ledgers to
update the financial position of the company. This feature of Tally.ERP 9 will be used most often.
Tally.ERP 9 follows the Golden Rule of Accounting :
Real Accounts Personal Accounts Nominal Accounts
Debit What Comes in The Receiver Expenses and Losses
Credit What Goes out The Giver Incomes and Gains
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Voucher Entry in Tally.ERP 9
You can alter these vouchers to suit your company, and also create new ones. Read ahead to
understand the function of each voucher type. The following exercises are sample enteries for
understanding Voucher entry in Tally.ERP 9, do not make these entries.
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Voucher Entry in Tally.ERP 9
Payment Voucher
Description Records all bank and cash payments
Voucher Entry Account Amount Amount
Ledger account paid Debit
Kaltronic Ltd.
(Sundry Creditors)
Bank or cash account Credit
State Bank of India
(Bank Account)
85
Voucher Entry in Tally.ERP 9
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Voucher Entry in Tally.ERP 9
The entry made in the single entry mode appears as shown below:
The advantage of a single entry mode is that you can select multiple debits or credits depending
on the type of entry. Similarly the transactions can be recorded in single entry mode even in
Receipt and Contra vouchers.
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Voucher Entry in Tally.ERP 9
In addition to the warning, Tally.ERP 9 also displays the negative balance amount in Red.
Receipt Voucher
Description Records all receipts into bank or cash accounts
Voucher Entry Account Amount Amount
Ledger account receiving Bank Credit
Interest
(Indirect Incomes)
Bank or cash account Debit
Deposit Account
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Voucher Entry in Tally.ERP 9
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Voucher Entry in Tally.ERP 9
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Voucher Entry in Tally.ERP 9
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Voucher Entry in Tally.ERP 9
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Voucher Entry in Tally.ERP 9
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Voucher Entry in Tally.ERP 9
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Voucher Entry in Tally.ERP 9
Go to the Gateway of Tally > Accounting Vouchers > F10: Reversing Journal.
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Voucher Entry in Tally.ERP 9
Memo Voucher
Description Records the voucher entries in a memo register, without
affecting the ledger accounts and financial statements
Voucher Entry Account Amount Amount
Ledger account Debit
Ledger account Credit
Optional Voucher
Description Records voucher entries temporarily, to help visualise the effect
on reports, without affecting the ledgers
Voucher Entry Account Amount Amount
Ledger account Debit
Ledger account Credit
96
Voucher Entry in Tally.ERP 9
Go to the Gateway of Tally > Accounts Info. > Voucher Types > Create.
1. Name: Bank Payment
2. Type of Voucher: Payment (Specify the default Tally.ERP 9 voucher, whose functions the new
voucher should copy).
3. Abbr.: Bank Pymt (Specify the abbreviation to denote this new voucher in reports)
4. Method of Voucher Numbering: Automatic
You can choose one of the following methods for numbering from the pop-up:
Method of Numbering Purpose
Automatic For Tally.ERP 9 to do it for you.
Manual You do it. You can also specify if you wish to prevent
duplicates.
None To disable numbering for this voucher type.
The voucher date is taken from the current date mentioned at the
Gateway of Tally.ERP 9. However, the effective date for the voucher
may be different. For example, entering a post-dated cheque.
Tally.ERP 9 displays the narration field which applies to the whole
voucher. By setting Use Common Narration option to No, we can
have separate narration fields for each line on the voucher. Reversing
Journals are used for Scenario Management.
The Name of Class field enables creation of Voucher Classes for the
respective voucher types. (The Voucher class is a template to custom-
ise voucher data entry).
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Voucher Entry in Tally.ERP 9
Practice Exercise
Create a Petty Cash Payment Voucher Type
Ensure that the details in the Voucher Type Creation screen are as shown below:
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Voucher Entry in Tally.ERP 9
The above exercises are sample enteries for understanding Voucher entry
in Tally.ERP 9, do not make these entries.
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Voucher Entry in Tally.ERP 9
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Voucher Entry in Tally.ERP 9
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Voucher Entry in Tally.ERP 9
Narration
Here you type whatever appropriately describes the transaction. Remem-
ber, you can have a separate narration for each line of particulars, if you
configure the voucher type in that way.
For Payment Vouchers, where a bank account has been credited, Tally.ERP
9 pre-sets the narration to Ch.No. expecting a cheque number to be
entered. This can be over written if required.
Once the narration is complete, press Enter to bring up the Accept?
box.
Once you accept the data, Tally.ERP 9 presents another data entry
screen.
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Voucher Entry in Tally.ERP 9
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Voucher Entry in Tally.ERP 9
Figure 5.14 Trial Balance From April 1, 2009 to June 30, 2009
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Voucher Entry in Tally.ERP 9
5.2.4 Rejections In
A Rejections In entry is passed to record the rejected goods. The Rejections In entry is a pure
inventory voucher. For example a customer has rejected goods that was sold earlier.
Rejections In (Sales Returns)
Description Records rejected stock details received from customers
Details recorded Ledger account, Customer's name and address, stock item, tracking
details, order details, Godown, Quantity, Rate, Amount, Narration.
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Voucher Entry in Tally.ERP 9
Stock Journal
Description Essentially records the transfer of stock from one Godown to another.
Details recorded Names of from and to godowns, name of stock item, quantity, rate,
amount, narration.
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Voucher Entry in Tally.ERP 9
Setup :
To enable Delivery Note and Receipt Note, set Yes to Use Tracking Numbers and Use
Rejection Notes in F11: Features (F2: Inventory Features).
Go to the Gateway of Tally > F12: Configuration > Invoice/Orders Entry – Set Com-
plete Accounting Allocations in Order/Delivery Note to Yes.
Make sure that Inventory Values are affected? is set to Yes in all ledger accounts under
the groups Sales Accounts and Purchase Accounts.
An entry made in a purchase voucher can update the stocks. It is not necessary to make a
separate entry in a Goods Receipt Note. This holds true for the goods delivered and recorded in
the Sales Voucher itself.
We shall now learn how to enter pure inventory vouchers.
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Voucher Entry in Tally.ERP 9
Practice Exercise
Create the following transactions in the books of National Traders.
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Voucher Entry in Tally.ERP 9
Voucher 2
Voucher type Alt +F9: Receipt Note
Current date 7-4-2009
Ref: USC/12089/Del
Ledger Account Silver Plus Computers
Order Details Accept the default
Name of item HP Laserjet 1010 Series
Tracking Number Not Applicable
Godown On-site
Quantity 2
Rate 8,200 / Nos
Amount 16,400
In Accounting Details Screen Printer Purchase
Narration Printer received
Accept? Yes or No Yes
Voucher 3
Voucher type Alt +F7: Stock Journal
Current date 9-4-2009
Source (Consumption)
Name of item HCL PIV
Godown On-site
Quantity 2
Rate 17,500 / Nos
Amount 35,000
Destination (Production)
Name of item HCL PIV
Godown Warehouse
Quantity 2
Rate 17,500 / Nos
Amount 35,000
Narration Transfer of stock
Accept? Yes or No Yes
Voucher 4
Voucher type Alt +F6: Rejection Out
Current date 13-4-2009
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Voucher Entry in Tally.ERP 9
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Voucher Entry in Tally.ERP 9
Figure 5.15 Stock Summary from April 1, 2009 to April 30, 2009
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Voucher Entry in Tally.ERP 9
Accept the default rates that appear for each item, as specified in the
Standard Cost and Standard Selling Price of the Stock Item.
If the godown has not been specified in the table above, select On -
Site.
Figure 5.16 Stock Summary from April 1, 2009 to June 30, 2009
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Voucher Entry in Tally.ERP 9
The Total Stock value should be 2,35,350 made up of Computers - 1,03,800, Peripherals -
41,950 and Printers - 89,600.
Apart from the Sales and Purchase Vouchers that record the inventory movements, the following
vouchers are used to record the stock movements.
Debit Note for Goods rejected and returned to supplier.
Credit Note for Goods rejected and returned by customer.
Debit Notes and Credit Notes are used to record the return of goods and the corresponding
reversal of sales and purchases.
Given below are examples of Purchase, Sales, Debit Note and Credit Note vouchers with
inventory details :
Purchase voucher
For example: the company receives new stock from a supplier.
Purchase Voucher
Description Records receipt of new stock with invoice from suppliers.
Details recorded Reference, ledger account, supplier’s name and address, name of
stock item, godown, quantity, rate, amount, purchase ledger, other
ledgers (if required), narration.
Sales voucher
For example: the company delivers goods from its stock to a customer.
Sales Voucher
Description Records the delivery of goods and invoice to customers.
Details recorded Reference, ledger account, customer’s name and address, name of
stock item, godown, quantity, rate, amount, sales ledger, sales tax
ledger (if required), narration.
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Voucher Entry in Tally.ERP 9
Debit Note
For example: the company rejects and returns goods to the supplier.
Debit Note
Description Records the delivery of goods and debit note to supplier.
Details recorded Reference, ledger account, supplier’s name and address, name of
stock item, godown, quantity, rate, amount, purchase ledger, other
ledgers (if required), narration.
Credit Note
For example: the company receives rejected goods from a customer.
Credit Note
Description Records receipt of rejected goods with advice from customer.
Company issues credit note.
Details recorded Reference, ledger account, customer’s name and address, name of
stock item, godown, quantity, rate, amount, sales ledger, sales tax
ledger (if required), narration.
Tally.ERP 9 permits the entries of these vouchers in Voucher Mode as well as in invoice mode. In
this section, you will learn how to enter them in Voucher Mode.
Set up :
Set Yes to Use Debit/Credit Notes in F11: Features (F1: Accounting Features). Do not
activate the invoice mode.
Make sure that Inventory Values are affected? is set to Yes in all ledger accounts under
the groups Sales Accounts and Purchase Accounts.
Set Use Tracking Numbers to No in F11: Features (F2: Inventory Features).
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Voucher Entry in Tally.ERP 9
i. Sales voucher
Select F8: Sales from the button bar and enter.
Field Details
Date 1-7-2009
Ref: Blank
Dr Supreme Computers
Debit Amount 21,500
Cr Computer Sales
Inventory Allocation Name of Item - HCL PIV
Godown - On-site
Quantity - 1
Rate -21,500
Credit Amount 21500
Narration Sales made
Accept? Yes or No Yes
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Voucher Entry in Tally.ERP 9
Ensure that in the F12: Payment Configuration, Use Single Entry mode
for Pymt/Rcpt/Contra is set to No.
5.3 Invoicing
Tally.ERP 9 has an in-built system to create and print sales invoices. You will now record sales
and purchase invoice details, adjust accounting and inventory balances.
To enable the option of invoicing, set Yes to Allow Invoicing, Enter Purchases in Invoice
Format and Separate Discount Column in invoices in F11: Features (Accounting Features/
Inventory Features).
Ensure that the Inventory values are affected? is set to Yes in Purchases Ledger.
Ensure that the Inventory values are affected? is set to Yes in Parts Sales, Software
Sales and Computer Sales.
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Voucher Entry in Tally.ERP 9
Enter the following data as on 1-7-2009 to record the sale of 2 Nos of USB Pen Drives 64
MB to Supreme Computers. (at the standard price) and update the accounting and stock
records:
Field Details
Ref:
Dr Supreme Computers.
Debit Amount 3,200
Cr Component Sales
Name of item USB Pen Drives 64 MB
Godown On-site
Quantity 2 Nos
Rate 1,600 (accept)
Per Nos (accept)
Amount 3,200.00
Narration —
Accept? Yes or No Yes
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Voucher Entry in Tally.ERP 9
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Voucher Entry in Tally.ERP 9
You already know how to enter an item invoice. Now, let us go to the Gateway of Tally to learn
how Account Invoices are entered.
5. Select the Consulting Fees (create one if it is not displayed under Direct Income).
6. Specify the amount as Rs. 45000 and press Enter.
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Voucher Entry in Tally.ERP 9
Points to Remember
A voucher is a document containing the details of a financial transac-
tion.
As per accounting rules, any transaction indicating the transfer of funds
from cash account to bank account; bank account to cash account and
bank account to bank account is referred to as a Contra Entry.
Reversing Journals are special journals that are automatically reversed
after the date of the journal.
A Memo Register is a non-accounting voucher and the entries made
using it will not affect your accounts.
An Optional voucher is not a voucher type. All other voucher types
(except non-accounting vouchers) can be marked Optional during
voucher entry.
Inventory vouchers perform the same function in the inventory system
as accounting vouchers in Tally.ERP 9.
Tally.ERP 9 allows to create and print sales invoices.
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Lesson 6: Advanced Accounting in Tally.ERP 9
Lesson Objectives
On completion of this lesson, you will be able to
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Advanced Accounting in Tally.ERP 9
On activation of this feature, all the ledgers previously created under the Groups Sundry Debtors
and Sundry Creditors will automatically have their Bill-wise details set to Yes.
Let us view the ledger master of Supreme Computers.
1. In the above ledger alteration screen, the option Maintain balances bill-by-bill is displayed.
This option helps to maintain details of our debtors and creditors at the invoice level.
2. An additional option termed Default Credit Period is displayed when the option Maintain bal-
ances bill-by-bill is set to Yes. This allows us to keep a track of the credit period allowed to
sundry debtors and reminds us of our payables to the sundry creditors.
In the process of recording transactions when the bill-wise details is set to Yes, Tally.ERP 9
prompts you to enter any of the following methods of adjustments:
New Ref - This is selected for new financial transactions.
Advance - This is selected when you receive or pay money in advance. Typically, when a
bill is raised, part of the bill is adjusted against the advance (using Agst Ref) and the bal-
ance amount is carried as New Ref while making the sale or purchase entry.
Against Ref - This is selected to set-off payments against the previously entered New Ref.
On Account - This is used when you are not instructed about the bill against which the
money should be adjusted.
Let us make a purchase entry for a new stock item HP - 27 Printer Cartridges and then a sales
entry to sell the same. This will be purchased from a new supplier named Power Line Computers
and sold to a new customer FirstCom Solutions.
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Advanced Accounting in Tally.ERP 9
Setup :
Create a new supplier account Power Line Computers under Sundry Creditors with
Maintain balances bill-by-bill set to Yes.
Create a new stock item with the following details:
Name Under Category Units Standard Standard
Cost Price
HP - 27 Printer Cartridges Printers Not Applicable Nos 850 1150
The Bill-wise Details screen in the Purchase voucher is displayed as shown below:
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Advanced Accounting in Tally.ERP 9
4
Advanced Accounting in Tally.ERP 9
The details regarding the reference, name of the stock item, quantity, rate and value helps us to
know what is being entered. These details can be printed, as per your requirements.
Setup :
Create new customer FirstCom Solutions (Under Sundry Debtors with Maintain bal-
ances bill-by-bill set to Yes and set Default Credit Period as 7).
In F12: Configure and set Yes to Accept Supplementary details to view despatch
details, buyer details etc.
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Advanced Accounting in Tally.ERP 9
5. In the Credit period field, notice that 7 days appears automatically (this is 7 days from the
effective date of the invoice) as we have specified the same in the ledger master.
6. Accept the bill-wise allocation, and type the details of the transaction in the Narration field.
7. Press Y or Enter to accept the voucher.
Set Inventory Values are affected to Yes in the Sales Printer ledger and
then specify Inventory allocations.
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Advanced Accounting in Tally.ERP 9
Practice Exercise
Let us now create one purchase and one sales voucher with the following data:
1. On 15-07-09, purchased 5 nos HP - 27 Printer Cartridges @ Rs. 850 from Power Line Com-
puters with the invoice number - PLC1. Credit period allowed - 30 days.
2. On 16-07-09 sold 4 nos HP - 27 Printer Cartridges to FirstCom Solutions @ Rs. 1,150. Credit
period allowed - 45 days, select New Ref and enter FC 2 in Name field of Bill wise details
screen. Allocate to Sales - Printer.
Power Line Computers now has two outstanding purchase invoices and FirstCom Solutions
has two outstanding sales invoices. This data can be viewed in Ledger outstanding statement.
Go to Gateway of Tally > Display > Statements of Accounts > Outstandings > Ledger
Select Power Line Computers from List of Ledgers to show the outstanding purchase
invoices.
Press Alt + F1 or F1: Detailed to show the Ledger outstandings in detail.
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Advanced Accounting in Tally.ERP 9
Press F4: Ledger and change to FirstCom Solutions to view the outstanding sales
invoices.
Setup :
Click on F12: Configure. Set Show Table of Bills for selection (to view the list of pending
bill references) and Use Single Entry mode for Pymt/Rcpt/Contra to Yes
Go to Gateway of Tally > Accounting Vouchers > F5: Payment > select Bank Payment.
1. In the Account field, select Bank Account (note that we are crediting ‘Bank Account’)
2. Under Particulars, select Power Line Computers.
3. Enter Rs. 8,500 in the amount column.
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Advanced Accounting in Tally.ERP 9
4. In the Bill-wise details screen, select Agst Ref and press Enter
5. Tally.ERP 9 displays list of pending bills. The screen appears as shown below:
6. Select PLC and keep pressing Enter until the Narration field is highlighted.
7. In the Narration field, type Ch. No. 1234.
9
Advanced Accounting in Tally.ERP 9
The Invoice References created during invoice entry are listed now at the
time of payment entry for adjustments. Using the Agst Ref option in
Tally.ERP 9, you can adjust the outstanding amounts.
To ensure that the payment has been recorded against the correct invoice,
Go to Gateway of Tally > Display > Statements of Accounts > Outstandings > Ledger
> Power Line Computers. You will see that there is only one entry.
In order to view the history of settled invoices, press F12: Configure and tab down to
Range of Bills to show and select All Bills. Select Detailed in the button bar.
Return to the Gateway of Tally main menu.
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Advanced Accounting in Tally.ERP 9
Practice Exercise
Delete the bank payment entry of 22-07-09 and make the same entry.
In F12: Configure, set Yes to Pre-allocate Bills for payment, you will notice that the list
of pending bills is displayed immediately after selecting Power Line Computers.
Select PLC in bill-wise details and accept the entry (This feature is useful for cheque print-
ing).
Now, after completing the above entry, set the option Pre-allocate Bills for payment to
No.
Setup :
In F12: Configure, set Use Single Entry mode for Pymt/Rcpt/Contra to No.
A detailed Ledger Outstanding screen of FirstCom Solutions with a history of all bills appears as
shown below :
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Advanced Accounting in Tally.ERP 9
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Advanced Accounting in Tally.ERP 9
6. Press Alt+F1 and view the Age-wise Analysis for Power Line Computers in Detailed mode.
7. Press F12: Configure and set the option Show Qty Info in Detailed Format to Yes and
Range of Bills to Show as All Bills.
The Age-wise Analysis for Power Line Computers for the period 1-4-09 to 22-07-09 appears
as shown below :
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Advanced Accounting in Tally.ERP 9
Practice Exercise
Display Outstandings - Receivables for different periods to see the changes.
View the Age-wise Analysis for receivables, payables and ledger.
6.1.4 Advance
On 01-07-2009, make a Bank Payment (State Bank of India Account) for Rs. 15,000 against
a purchase order PO/001/2009-10 raised on New Stocker.
Go to Gateway of Tally > shut National Traders and select Indus Enterprises
Setup :
Create New Stockers Ledger under Sundry Creditors and set the option, Maintain bal-
ances bill-by-bill to Yes.
Create Purchase Account under Purchase Accounts and set Inventory Values are
Affected to Yes.
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Advanced Accounting in Tally.ERP 9
To view all bills including settled bills, select ‘All Bills’ as Range of Bills to
show in F12: Configuration.
6.1.5 On Account
On 1-07-2009, raise a sales invoice on New Buyer for 1 Nos of New Stock Item @ Rs. 1,000
vide Bill/001.
Go to Gateway of Tally > shut National Traders and select Indus Enterprises
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Advanced Accounting in Tally.ERP 9
Set up :
Create a ledger New Buyer under Sundry Debtor; Set Yes to Maintain balances bill-by-
bill; Credit Period - leave it blank.
Create an item New Stock Item under Primary Stock Group with an opening balance of
100 Nos and rate Rs. 500 stored in the Bangalore godown.
Go to Gateway of Tally > Display > Account Books > Ledger > select New Buyer.
Select the Bill-Wise button to view the bill-wise details of the customer.
The Billwise Outstandings Report of the New Buyer appears as shown below :
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Advanced Accounting in Tally.ERP 9
The ledger outstandings report shows the details of four sales bills marked with a bill-wise
reference and one receipt entry marked as On Account (On Account is displayed as we have
not received details of the bill against which the payment has been received). To print statements
of accounts, press P: Print button from the display screen.
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Advanced Accounting in Tally.ERP 9
Select Recv. Turnover in days (It shows the amount of sales locked up with debtors in
terms of sale days).
Press Enter to view the list of sundry debtors.
Select FirstCom Solutions to view the Ledger Payment Performance report.
The ledger payment performance report gives the details of all invoices raised on the debtor and
the dates when the payments were made, with the analysis of delays.
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Advanced Accounting in Tally.ERP 9
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Advanced Accounting in Tally.ERP 9
Allocate Revenue Items: Enable this option to allocate all sales, purchase,
expenses and income related transactions to cost centres and cost catego-
ries.
Allocate Non-Revenue Items: Enable this option to allocate capital items
to cost centres. This helps in monitoring the capital expenditure incurred on
cost centres and measuring them against the revenue earned.
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Advanced Accounting in Tally.ERP 9
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Advanced Accounting in Tally.ERP 9
Tally.ERP 9 displays only Amar and Barry (Cost centres under Salesmen
Cost Category) to faciliate error free selection during Voucher Entry.
22
Advanced Accounting in Tally.ERP 9
The cursor moves to the Cost Category field, press Enter and the Voucher screen
appears.
4. Credit Petty Cash Rs. 50
5. Type the Narration as Paid to Amar for travel to Brigade Road for the Buildings Project.
6. Before accepting the voucher, press F12: Configure and ensure that the option Show Cost
Centre Details is set to Yes.
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Advanced Accounting in Tally.ERP 9
5. Type the Narration as Received cash for work done by Amar on the Buildings project.
The Screen appears as shown:
Practice Exercise
1. On 16-07-09, purchased for Projects, 2,50,000 worth Cement from Navketan Cement to be
shared equally between Roads and Buildings on credit for 30 days.
2. On 20-07-09, purchased for Projects, 3,50,000 worth Steel from Monnet Steels. Allocate
50,000 to Roads and the rest to Buildings. Credit received for 45 days.
3. On 20-08-09, project sales of Buildings were made to WinLab Technologies for Rs.
9,00,000. 10% receivable after 5 days and balance after 15 days.
4. The next day, Roads project was completed and an invoice was raised on Civic Centre
Association for Rs. 15,00,000. Credit period allowed - 25% with 7 days and the balance after
60 days of the date of the invoice.
Setup :
Create ledgers Project Sales under Sales Account and Project Purchases under Pur-
chase Accounts. Set the options as shown below for both the accounts:
Set Cost Centres are applicable to Yes.
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Advanced Accounting in Tally.ERP 9
Setup :
Ensure that in F12: Accts/Inventory Info. Configuration, Allow Advanced Entries in
Masters is set to Yes.
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Advanced Accounting in Tally.ERP 9
Category Summary
This report displays the summarised position of the cost centres. You can drill down to the list of
vouchers. In the above exercises while entering the vouchers, we held 'Amar' responsible for
some of the expenses and incomes and 'Barry' for some. The purpose of mentioning their names
in the Narration was to record their performance for later analysis and possible bonus payments.
The Cost Category Summary report for the period 1-4-2009 to 20-10-2009 appears as shown
below:
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Advanced Accounting in Tally.ERP 9
Select Buildings and press Enter. You are now drilling down into the Month-wise Cost
Centre Statement of Buildings. You have the option to add a new column, select another
cost centre, access F12: Configure and view the configured details.
Press Enter on any month (select December here) and you will get the Cost Centre
Vouchers report. This displays the list of vouchers pertaining to a cost centre for the
selected month.
Click on F12: Value and filter the information by using vouchers having
narrations containing Amar. Similarly give the filter condition Voucher
having narration containing Barry.
Experiment with the different button options, such as New Column,
Auto Column, and F12: Configure.
Cost Centre Break-up
This report displays a summarised information on Ledgers and Groups for the selected cost
centre. You can drill down to the list of vouchers.
Now, go back to the Display Cost Centres menu > select Cost Centre Break-up
Select Buildings, from the list of Cost Centres
Press F2 and change the period from 1-4-2009 to 20-10-2009.
The screen appears as shown below :
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Advanced Accounting in Tally.ERP 9
In this report we shall display the net profits made by the selected Cost Centre Buildings.
Click on F1: Detailed button or [Shift]+[Enter] keys on Indirect expenses to explode the
group.
Now click on New Column button to bring up data for Roads alongside Buildings.
With your cursor on Indirect Expenses under the Particulars column, drill down to view
further details. Are the columns retained?
Ledger Break-up
This report displays the summarised information of all Cost Centres for the selected Ledger. You
can drill down to the list of vouchers.
Now, go back to the Display Cost Centres menu
Select Ledger Break-up
Select Conveyance Ledger.
The screen appears as shown below:
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Advanced Accounting in Tally.ERP 9
From the above report, you can press Alt+C, to insert a new column and display the cost centre
details for Consulting Fees.
Group Break-up
This report displays the summarised information of all Cost Centres for the selected Group. You
can drill down to the list of vouchers.
Similar to Ledger Break-up explore the Group Break-up of Cost Centres.
Practice Exercises
1. Alter the conveyance and consulting fees vouchers created for cost centre allocation. Allocate
to the relevant salesmen mentioned in the voucher narration.
2. Display the Category Summary.
3. Display the Cost Centre Break up and see the individual Salesmen performance.
4. Can you bring up each salesman's figures side by side to see who is performing better?
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Advanced Accounting in Tally.ERP 9
Receipt Note
Stock Journal
Setup :
Go to Gateway of Tally > select Indus Enterprises and shut National Traders.
In the F11: Features (Accounting Features), activate Invoicing for both sales and pur-
chase vouchers (for Indus Enterprises).
In the F11: Features (Inventory Features) set Maintain Multiple Godowns to Yes.
In the Local Sales ledger, set Inventory Values are affected to Yes.
Create Bangalore godown under Primary and set Yes to the field Allow Storage of mate-
rials.
Press F12: Accts / Inventory Info and set Specify Default Ledger Allocation for Invoic-
ing to Yes.
Create the following stock items with unit of measure as Nos and Cost Category as Not
Applicable:
Name Opening balance Godown Rate Set/Modify
Default Ledgers
for Invoicing
Monitor 10 Nos Bangalore 5000 No
Keyboard 10 Nos Bangalore 1250 No
CPU 10 nos Bangalore 15000 Yes
Specify the details for stock item CPU in the Stock Default screen as shown below :
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Advanced Accounting in Tally.ERP 9
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Advanced Accounting in Tally.ERP 9
4. Press Enter after typing Sales Class and the class screen appears.
5. The Voucher class table of Sales voucher type comprises of three sections.
Restriction of groups for which Class can be used.
Default accounting allocation for each item in invoice.
Additional accounting entries.
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Advanced Accounting in Tally.ERP 9
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Advanced Accounting in Tally.ERP 9
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Advanced Accounting in Tally.ERP 9
Value Basis – Give the amount, which is to be used for the Type of
Calculation. For percentage, you must use the symbol %.
Rounding Method and Rounding Limit – Rounding method and
Rounding Limit have been explained already.
Remove if Zero – This is a question to be answered as Yes or No,
essentially to permit Tally.ERP 9 to ignore the account and not make
any entry if its value is Zero. Select Yes.
6. Enter the details as displayed below in the Sales Class screen
7. Accept the voucher class and press Enter to accept the voucher type screen.
35
Advanced Accounting in Tally.ERP 9
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Advanced Accounting in Tally.ERP 9
The Sales Account ledger is automatically credited in the voucher for Monitor and Keyboard. To
display the Sales Account ledger: Go to Gateway of Tally > Display > Account Books > Ledger
> Sales Account.
Total Sales Account allocation in the invoice is Rs. 10,000 (Monitor Rs. 7500 + Keyboard Rs.
2,500).
Use Alt+R keys to hide the other entries, if required from the screen
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Advanced Accounting in Tally.ERP 9
The total Local Sales allocation in the invoice is Rs. 22,500 (CPU Rs. 22,500). This is the
advantage of setting Override using Item Default to Yes. A different sales ledger had to be
credited only for one item out of 3.
The balance of Rs. 3,250 (Rs. 35,750 - Rs. 32,500) will appear in the VAT ledger. The VAT ledger
appears as shown below:
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Advanced Accounting in Tally.ERP 9
The Voucher Class layout for Purchase Voucher Type is similar to Sales. Record a purchase
entry in Indus Enterprises, with additional accounting entries. Choose the stock items to be
purchased and view the reports.
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Advanced Accounting in Tally.ERP 9
4. Accept the Voucher Class and the Voucher Type screen by pressing Enter.
The Payment voucher screen with Voucher Class appears as shown below :
40
Advanced Accounting in Tally.ERP 9
The Voucher Class for Receipt and Contra voucher types is similar to the
Payment voucher type. Explore with more entries.
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Advanced Accounting in Tally.ERP 9
To get the Voucher Class facility for Stock Journal, ensure that you
have atleast 2 godowns.
In this above case, create a new godown as Delhi.
Voucher class for Stock Journal voucher type is available only for the
purpose of an Inter-godown Transfer.
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Advanced Accounting in Tally.ERP 9
2. Accept the entry and re-enter the same using voucher class.
3. Reselect the Stock Journal voucher type
4. Tally.ERP 9 prompts for the voucher class selection, select Stk Jrnl Voucher class
The completed Stock Journal Voucher with voucher class appears as shown below:
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Advanced Accounting in Tally.ERP 9
With Voucher Class, the destination godown is selected only once. But
whereas in the default Stock Journal without Voucher class, you have the
option to select different source godowns (godowns from where we are
transferring the stock).
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Advanced Accounting in Tally.ERP 9
Setup :
Activate the Cost Centre feature in the F11: Features (Accounting Features).
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Advanced Accounting in Tally.ERP 9
6. Press Enter to accept the allocations and go to Gateway of Tally after accepting the F11: Fea-
tures (Accounting Features) screen.
Go to Gateway of Tally > Display > Statement of Accounts > Cost Centres > Category Sum-
mary
Press F2 and change the period from 1-4-2009 to 16-5-2009.The report appears as shown
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Advanced Accounting in Tally.ERP 9
The cost centres are allocated automatically in the percentage of 45%, 35% and 20% for Market-
ing, Finance and Administration respectively.
Practice Exercises
Go to Gateway of Tally > Shut Indus Enterprises and select National Traders
Make an Invoice Entry on 21-11-2009 with voucher class selected for FirstCom Solutions for sale
of HP - 27 Printer Cartridges - 1 nos at Rs. 300. Select godown as On-site.
Setup :
In National Traders, create a sales ledger New Sales with Inventory values are affected
and Cost Centres are applicable set to Yes.
Create a Voucher Class – NewSales for Sales Voucher Type and select New Sales ledger
for Default Accounting allocations.
The cost centres to be allocated to are AMAR and BARRY - 45% and 55% (of the sales
amount) respectively.
Tally.ERP 9 uses the term base currency for the currency in which your account books are main-
tained (typically in the home currency). Foreign Exchange is used interchangeably with foreign
currency.
Setup :
Ensure that you are at the Gateway of Tally of National Traders.
Activate the feature Allow Multi-Currency in F11: Features (Accounting Features).
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Advanced Accounting in Tally.ERP 9
48
Advanced Accounting in Tally.ERP 9
49
Advanced Accounting in Tally.ERP 9
While entering the amount in foreign currency, use the Currency Symbol. Any
amount without a symbol will be assumed to be in the base currency.
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Advanced Accounting in Tally.ERP 9
The Gain/Loss is calculated because the transacted rate is Rs.46/$ whereas the current standard
rate is Rs. 45/$. The difference between the transaction rate and the current standard rate is
Re.1/$ i.e., Rs. 2500. [$2500 X (46 -45)] = 2500 X 1 =Rs. 2500 Cr.]
Setup :
Before making the receipt entry, ensure that the cost centre option is disabled in Bank
Charges ledger.
Go to Gateway of Tally > Accounts Info. > Currencies > Alter > Select $ and change the
rate to Rs. 48/$ on 15-12-09
Now, display the foreign exchange gain/loss again as explained earlier. The Unadjusted Gain/
Loss in the Balance Sheet is 5,000 (Dr)
Press Enter and you will see Current Assets with 5,000 in the credit column.
Drill down on Current Assets and the screen appears as shown below:
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Advanced Accounting in Tally.ERP 9
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Advanced Accounting in Tally.ERP 9
We first raised a sales invoice for $2500 @ Rs. 46/$ and received $2500 @ Rs.
48/$ against it. The difference of Rs. 2/$ (48-46) is a gain. The calculation is done
as: $2500 x Rs. 2/$ = Rs. 5000 Dr. Therefore, the unadjusted forex gain/ loss for
the ledger at this point is Rs. 5,000 Dr.
Setup :
Create a ledger account Forex Gain/Loss under the group Indirect Expenses (do not
activate Cost Centres)
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Advanced Accounting in Tally.ERP 9
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Advanced Accounting in Tally.ERP 9
The completed Forex Gain / Loss Adjustment entry using Voucher Class appears as shown
below :
Practice Exercise
1. On 12-12-09, purchased 200 bags of wheat from Mirage Systems Pvt Ltd. @ £5 /bag. The
Rupee was being traded @ Rs. 82/£.
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Advanced Accounting in Tally.ERP 9
2. On 21-12-09, paid Mirage Systems Pvt Ltd., £1000 at the rate of Rs. 83/£. The bank charges
incurred were Rs. 2,000. Adjust the outstanding bill 'Wheat' with the payment from your Bank
Account.
Setup :
In the currency alteration screen for Pound, enter these rates as on 1-12-09:
Standard rate - Rs. 80/£
Selling Rate - Rs. 81/£
Buying Rate - Rs. 82/£
For Purchase Voucher on 12-12-09 :
Select the Godown as Warehouse
In Accounting allocation, select Purchases, New Ref as Wheat
Type Credit period as 15 days
For Payment Voucher on 21-12-09 :
Enter Forex amount as £1000 = Rs. 83,000 in the amount field.
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Advanced Accounting in Tally.ERP 9
You will note an Unadjusted forex Gain / Loss of Rs. 1,000 in the Balance
Sheet. Since, we first passed a purchase invoice for £1000 at Rs. 82/£ and paid
£1000 at Rs. 83/£ against it. The difference of Rs. 1/£ (83-82) is a loss. The calcu-
lation is done as: £1000 x Rs. 1/£ = Rs. 1000 Cr.
Practice Exercise
To adjust Forex Gain/Loss, make a Forex Gain/ Loss adjustment entry using a voucher class on
December 31, 2009.
To view and reconcile the transactions relating to Bank Account for the month of April 2009 :
Go to Gateway of Tally > Display > Account Books > Cash/Bank Book(s) > Bank Account
1. Select April 2009.
2. Press F12: Configure and activate Show Narration to view the cheque numbers and other
details of all the transactions of April 2009.
3. Click F5: Reconcile (In Bank Account ledger display, an additional button F5: Reconcile will
be available on the button bar).
4. The display now becomes an Edit screen in the reconciliation mode. The primary components
are:
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Advanced Accounting in Tally.ERP 9
6. Leave the dates blank for other vouchers and press Enter till you accept the screen.
7. To view the reconciled vouchers, press F12: Configure and activate Show reconciled vouch-
ers also.
When you view the Bank Reconciliation again, only the vouchers which
are unreconciled will appear.
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Advanced Accounting in Tally.ERP 9
Practice Exercises
The following is the Bank Statement of National Traders received for the period 1-05-09 to 31-
05-09:
Bank Account for May 2009 :
Date Particulars Deposits Withdrawals Balance
1-5-09 Balance b/f 36,700.00
9-5-09 Data Link Technologies 5,000.00 38,900.00
9-5-09 Petty Cash 200.00 38,700.00
19-5-09 Salaries 2,500.00 36,200.00
Setup :
Ensure that you have selected National Traders and set Activate Interest Calculation to
Yes in F11: Features (Accounting Features).
Do NOT activate use advanced parameters (under Interest Calculations), accept the
changes and return to the Gateway of Tally.
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Advanced Accounting in Tally.ERP 9
Setup :
In National Traders,
Go to Gateway of Tally > Accounts Info. > Ledgers > Alter (Single mode) > Bank Account.
Set Activate Interest Calculation? to Yes and press Enter.
Now you have to set the Interest Parameters, on the basis of which interest will be calcu-
lated for this ledger account. The screen appears as shown below:
Rate - This is the rate at which the interest has to be calculated. Specify a rate of 15%.
Interest Style - Select 365-day Year and accept the screen (This is the basis at which
the rate is applied).
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Advanced Accounting in Tally.ERP 9
Experiment by changing the period of the above report and notice the difference. Tally.ERP 9
automatically calculates the interest amount! (Remember that the interest is calculated with
respect to changes made in the balance figures).
Practice Exercise
1. Set up interest calculation for Mutual Trust Loan Account @ 2% per 30-day month. View the
interest for the period 1-4-09 to 30-6-09.
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Advanced Accounting in Tally.ERP 9
Setup :
Create class for Debit Notes Voucher Type, go to Gateway of Tally > Accounts Info. >
Voucher Types > Alter > Debit Note
Tab down to Name of Class field.
Type Simple Interest and press Enter.
In the Class screen, set the other options as shown in the figure above. You will return
to the the Debit Note Voucher Type Alteration screen.
Type Compound Interest for the second class and press Enter
In the Class screen, set Yes to both Use Class for Interest Accounting and
Amounts to be treated as Compound Interest.
Accept the Voucher Type and return to the Gateway of Tally.
Create two classes, Simple Interest and Compound Interest for Credit Notes.
Create the following ledger accounts by setting Cost Centres, Inventory and Interest cal-
culation to No –
Interest Accrued under Group Indirect Income.
Interest Due under Group Indirect Expenses.
Interest Receivable under Group Current Assets.
Interest Payable under Group Current Liabilities.
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Advanced Accounting in Tally.ERP 9
Practice Exercise
1. Make an entry for booking the compound interest of Rs. 3,033.33, due to Mutual Trust Loan
account upto 30-6-09.
Setup :
For calculating Interest Transaction-by-Transaction (bill-by-bill),
Go to Gateway of Tally > Accounts Info. > Ledgers > Alter > FirstCom Solutions.
Set Activate Interest Calculation to Yes.
In the Interest parameters screen, set Calculate Interest Transaction-by-Transaction
to Yes.
Set Override Parameters for each Transaction to No (This option when set to No does
not allow you to change interest parameters in voucher/ invoice entry. You can change the
interest parameters during an entry when it is set to Yes. Any vouchers entered before acti-
vating the feature of interest calculation will not be considered unless they are modified)..
Specify Rate as 1% per 30-Day Month. The Interest parameters screen appears as
shown below:
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Advanced Accounting in Tally.ERP 9
This report is similar to the Bill-wise Outstandings Statement. The last column gives the interest
amount on the transaction. Press Alt+F1 to view the calculations in detailed mode.
Practice Exercise
1. Book Interest entries (Transaction-by-Transaction) for Power Line Computers from 13-7-09
to 31-12-09.
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Advanced Accounting in Tally.ERP 9
Reaccept the Purchase Voucher dated 13-07-09 for Rs. 8,500 from
Power Line Computers. and accept all information including interest
fields, by pressing Enter at each field (this is required since the Interest
calculation is activated after passing the entry).
Now display the interest calculations again for Power Line Computers
upto 31-12-09. Do you notice anything?
Adjust the interest amount by entering a Credit Note for Compound
Interest on 31-12-09.
The completed Credit Note Voucher for adjusting the interest amount appears as shown below :
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The opening balance of the debtor Data Link Technologies is Rs. 26,000. The interest is calcu-
lated for 5 days (31-3-2009 to 4-4-2009) because we received Rs. 5,000 (on 5-4-2009) and the
resultant balance became Rs. 21000. Interest on Rs. 26,000 is displayed as Rs. 35.62 Dr (to be
received by us from our debtor) ' (26000 * 5/365 * 10/100). Likewise, the interest is calculated for
the rest of the transactions based on the parameters given in the ledger master.
We have viewed the interest calculation reports in National Traders. Let us now shut National
Traders and select Indus Enterprises.
1. Make a receipt entry on 5-4-2009 for Rs. 5,000 received by cheque against the opening bal-
ance (of Rs. 15,000 vide Bill No. OB New Consumer).
2. As on 10-4-09, sold 3 nos of Computer-PIII @ Rs. 30,000 each to New Consumer (vide Bill
No. NB/001, Credit Period - Nil).
3. As on 16-4-09, sold for 4 nos of Computer-PIII @ Rs.30,000 each to New Consumer (vide
Bill No. NB/002, Credit Period - Nil).
Setup :
Create a debtor account New Consumer.
Ensure that Maintain balances bill-by-bill is set to Yes
Enter the opening balance as Rs. 15,000 Dr
Enter the bill-wise reference name as OB New Consumer and accept the screen.
Create a Stock item with the following details:
Item Name Stock Category Units Quantity Rate Godown
Group
Computer-PIII Primary Not applicable Nos 10 Nos 25,000 Bangalore
Select Second Sales in the Sales Ledger field (Create the ledger using
Alt+C, if does not exist).
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Advanced Accounting in Tally.ERP 9
Now, in order to calculate Interest using advanced parameters, go to Gateway of Tally and alter
the ledger of New Consumer
Set Calculate interest Transaction-by-Transaction to Yes
Set Override Parameters for each Transaction to No
Enter Rate as 10% per 365-day year on All balances
Select Due date of Invoice/Ref in Calculate From field
Go to Gateway of Tally > Display > Statement of Accounts > Interest Calculations > Ledger
> New Consumer.
Use Alt+F1 to view the interest calculation report in detailed mode for the period 1-4-2009
to 17-4-2009.
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Advanced Accounting in Tally.ERP 9
The interest in this report is reflected separately for every transaction for the specified period. This
is because we have defined that the interest has to be calculated transaction-by-transaction in the
debtor Master.
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Practice Exercise
1. On 21-08-2009, a Sales Invoices for 15,00,000 Project Sales with two reference namely, CCA
for Rs. 3,75,000 and CA1 for Rs. 11,25,000. Calculate Interest from Dates Specified during
Voucher Entry.
Setup :
Go to Gateway of Tally, select National Traders and shut Indus Enterprises
Go to Ledger alteration screen of Civic Centre Association (Customer Account) and set
Activate Interest Calculation to Yes
Set up the Interest Parameters (ensure that the advanced parameters are activated in
F11: Features (Accounting Features) as shown below:
In the Calculate From field to obtain the option Date Specified during
Entry, set Override advanced parameters to Yes. This option is used
when the interest is to be calculated at different rates for different peri-
ods.
Options to Override parameters when set to Yes during voucher/
invoice entry, results in the information on interest being provided after
the bill-wise details have been entered.
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Advanced Accounting in Tally.ERP 9
Set the interest parameters for New Ref. CA1 of Rs. 1125000 as shown below:
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Advanced Accounting in Tally.ERP 9
Press F1: Detailed to view the calculation and the period details
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Advanced Accounting in Tally.ERP 9
Practice Exercise
1. Make an entry on 21-09-09 in debit note voucher to adjust the interest accrued from Civic
Centre Association (Compound Interest).
Setup :
To activate Budgets,
In F11: Features (Accounting Features), set Maintain Budgets and Controls to Yes
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Advanced Accounting in Tally.ERP 9
In Tally.ERP 9, you can create Budgets for Groups of ledger accounts or for Ledger accounts
individually or for Cost centres or all of them
3. Specify the period of the Budget as 1-4-2009 to 31-3-2010 (The period could be a Month, a
Year or any period starting from one date to the other).
4. Under the column Set/ Alter Budgets of, type Yes under Groups.
You can create budgets under budgets i.e sub - budgets under each
Primary budget.
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Practice Exercise
1. Create another Budget with the following Details
Budget Name - New Corporate Budget
Group - Indirect Expenses Group
Type of Budget - On Nett Transactions
Period - 1-4-2009 to 31-3-2010
Budget Amount - Rs. 500.
Set/Alter Budgets of Ledgers and Cost Centres to No.
In the earlier section, we have created Corporate Budget. Let us now view the report displaying
the Budget values and the variances (difference between actual transactional valules and the
budgeted figures) for that Budget.
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Advanced Accounting in Tally.ERP 9
Before displaying the New Corporate Budget in the Trial Balance, press F12:
Configure and set Show Transactions, Show Nett transactions only to Yes
and Show Closing Balance to No, as the type of budget selected is On Nett
Transactions.
The Budget amount is Rs.20,000 and Actuals is Rs. 6,722.83 (which is 33.61% of budgeted
amount). The variance (difference) is also displayed i.e Rs.13,277.17 which is 66.38% below the
budgeted amount.
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Advanced Accounting in Tally.ERP 9
The Corporate Budget (Ledger) with Variances will appear as shown below:
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Advanced Accounting in Tally.ERP 9
The Budget amount for Office Costs is Rs. 250, Closing Balance and the Actuals is Rs. 635
(which is 254% of budgeted amount of Rs. 250 - [(254/100) x 250]). The variance (difference) is
also displayed i.e Rs. 385 which is 154% in excess of the Budgeted amount of Rs. 250.
Practice Exercise
1. Create an Office budget under Primary Budget.
Specify the period of the Budget as 1-4-09 to 31-12-09.
Select Yes for Groups.
Enter the details as given below:
Group Cost Centre Type of Budget Amount
Capital Account Not Applicable On Closing Balances 1,50,000
Loans (Liability) Not Applicable On Closing Balances 50,000
Fixed Assets Not Applicable On Closing Balances 1,00,000
Current Assets Not Applicable On Closing Balances 1,00,000
Press Enter on the next blank field and accept the settings for Groups.
Select Yes for Ledgers and enter the details as given below:
Ledger Cost Centre Type of Budget Amount
Salaries Not Applicable On Nett Transactions 25000
Wages Not Applicable On Nett Transactions 10000
Conveyance Not Applicable On Nett Transactions 4500
Office Costs Not Applicable On Nett Transactions 12000
Profit & Loss A/c Not Applicable On Closing Balance 50000
The Balance Sheet with the Office Budget column appears as shown below:
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Advanced Accounting in Tally.ERP 9
Alternatively, you can view the above budget from Trial Balance also,
Go to Gateway of Tally > Display >Trial Balance (National Traders)
Specify the period as 31-12-09.
Select Indirect Expenses and press Enter.
Press F12: Configure and set
Opening and Closing Balances to No
Transactions and Nett transactions to Yes
Set Show Percentage to No
Use Alt+R to hide the ledgers which are not appearing as per this screen (Advertising,
Bank charges, Forex Gain/Loss and Interest due).
Use the Budget Variance button to see the Office budget figures and the variances.
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From this report we can understand that the budget for conveyance is Rs. 4,500 on Nett Trans-
actions while our Actuals is Rs. 70. Therefore, we have a balance of Rs. 4,430.
3. Alter Office Budget and change the amount for Conveyance ledger to Rs. 50 and view the
report.
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Advanced Accounting in Tally.ERP 9
You will find that Rs. 20 is over-spent, which is 40% in excess of our budgeted amount. Display
the Group Summary of Indirect Expenses and bring up the budget variance. Experiment by drill-
ing down each account.
4. Create a new budget named as Office Balances Budget for the period 1-4-2009 to 31-12-
2009.
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Advanced Accounting in Tally.ERP 9
5. Display the Balance Sheet as on 31-12-09 with a new column for Office Balances Budget.
6. Display variances for Indirect Expenses from the Office Balances Budget.
For example, it is 30th June and you want to view the Balance Sheet as of today but the salaries
for the month of June are not paid until the first week in July. There is, therefore, a large liability,
which would not be reflected in the Balance Sheet as on 30th June.
Through Tally.ERP 9’s scenario, you can make the required provisional entry and retain it even
after printing the generated report because the entry will not reflect in your books of accounts.
In order to explore the Scenario Management tool you need to first make entries which will not
affect the books of accounts. Tally.ERP 9 provides the vouchers: Reversing Journal, Memoran-
dum Voucher and Optional vouchers for this purpose. You have to then create a scenario for the
vouchers to be used and finally, generate the required report. For example, Balance Sheet, Trial
Balance, etc. You have to use the New Column facility to generate a new column with the Sce-
nario details.
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Advanced Accounting in Tally.ERP 9
Reversing Journals
Reversing Journal is a separate voucher type - like a journal voucher.
Reversing Journal, similar to journal, is an adjustment entry, but unlike a
journal it reverses its effect in the books of accounts after one day
(Tally.ERP 9 allows you to specify the date of applicability at the time of
entry as per your requirements (any number of days, or weeks, etc.).
By default, Reversing Journal entries do NOT affect your books of accounts.
They are non-accounting vouchers. Tally.ERP 9 does not post these entries
to ledgers. It stores them in a separate register called Reversing Journal
Register. For example, you make a reversing journal debiting a customer
account and crediting miscellaneous income. This entry will not appear in
both the ledgers. It is recorded in the Reversing Journal Register.
Reversing journals are special journals which are effective only when called
for in reports, like the Balance Sheet, Trial Balance, etc. Applicability is
specified during the entry and they affect the reports only till that specified
date. Reversing Journals are used in interim reporting in the course of the
financial year where accruals are required to be reported. These accruals
are usually short term and are cleared in the subsequent period. However,
to get a proper perspective, decision makers require the reports with full
impact of all aspects and transactions.
Another example is the provision for depreciation. Depreciation is usually
provided for at the end of the year. However, for monthly reporting, including
it would give a more accurate status.
In order to include Reversing Journals in Reports, you need to create Sce-
narios.
Memorandum Vouchers
Like Reversing Journal, Memorandum is a separate voucher type which is a
non-accounting voucher. The entries made using it will not affect your books
of accounts. Tally.ERP 9 does not post these entries to ledgers but stores
them in a separate Memo Register. You can alter and convert a Memo
voucher into a regular voucher type when you decide to pass an entry in
your books. However, if you wish to include these entries temporarily, you
can do so, by creating Scenarios.
Optional Vouchers
Optional voucher is NOT a separate Voucher Type. Several voucher types
in Tally.ERP 9 (Payment, Receipt, Sales, etc.) can be marked optional.
Optional vouchers are non-accounting vouchers, i.e, the entries made using
it will not affect your books of accounts. Tally.ERP 9 does not post these
entries to ledgers but stores them in a separate Optional Register. You can
alter and convert an Optional voucher into a regular voucher when you
decide to bring the entry into your books. However, if you wish to include
these entries temporarily, you can do so by creating Scenarios.
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Let us now create a Scenario. We have a liability of Salaries - Rs. 45,000, to be accounted for as
on February 7, 2010. However, we need to generate a report as on January 31, 2010. Since the
entry of 7th February will not reflect in our books of accounts as on 31-1-2010, we will be making
an incorrect analysis. To temporarily include the entry of 7th February 2010 we have to create a
scenario.
To create a scenario,
Go to Gateway of Tally > Accounts Info. > Scenarios > Create and enter the following details:
1. Name: New Scenario
2. Include Actuals: Yes
3. Exclude Forex Gain / Loss Calculations: No (this appears if Multi-currency is activated and
Unadjusted Forex Gain/Loss appears in the reports)
4. INCLUDE: Select Bank Payment (Optional Vouchers only), Only provisional vouchers are
available for selection.
5. EXCLUDE: Select End of List (displays the list of vouchers that you DO NOT want to affect
this scenario) and press Enter.
6. Accept the screen. The screen appears as shown below:
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Advanced Accounting in Tally.ERP 9
7. Press Y or Enter to accept the screen and return to the Gateway of Tally.
Proceed to create an optional bank payment voucher with cost centre class - not applicable
on January 31, 2010.
Debit Salaries ledger account (press Ctrl+Enter on salaries ledger to ensure that cost
centre option is activated)
Type Amount as Rs. 45,000 Dr
Credit Deposit Account ledger for Rs. 45,000 Cr
Allocate the amount to Cost Centre - Amar.
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Advanced Accounting in Tally.ERP 9
The procedure to enter a payment voucher does not change, you can mark it as optional by click-
ing on the Optional button or use of Ctrl + L keys. Accept the entry and return to the Gateway of
Tally.
Now, verify whether the payment entry is appearing in the ledger Salaries or not.
Go to Gateway of Tally > Display > Account Books > Ledger > Salaries
Press Alt + F2 to view the entries for the entire year 1-4-2009 to 31-3-2010.
There should be only one entry for Rs. 2,500 in the month of June i.e., the optional vouchers do
not affect the books of accounts and are displayed only in Day Book as Optional Vouchers. To
view Day Book,
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This voucher is stored in the Optional Voucher Register. To view Optional Voucher Register, go
to Gateway of Tally > Display > Exception Reports > Optional Vouchers.
Now let us learn how to temporarily include this optional voucher transaction in our books for gen-
erating provisional reports. Since we have credited the deposit ledger account, proceed to view
the Cash/Bank Books statement.
Go to Gateway of Tally > Display > Account Books > Cash/Bank Book(s) and the report dis-
plays these values as on 31-1-2010.
1. Petty Cash – Rs. 10,695 Dr.
2. Bank Account – Rs.1,39,961.07 Dr
3. Deposit Account – Rs.46,000 Dr
Press Alt+C (New Column) and specify the details as shown below:
Accept the settings for the new column and the Cash/Bank Summary appears as shown
below.
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The Deposit Account shows a debit balance of Rs. 46,000 excluding the Optional Voucher. On
the inclusion of the Optional Bank Payment entry of Rs. 45,000, there is a debit balance of Rs.
1,000 (46,000 Dr - 45,000 Dr = Rs. 1,000 Dr).
Practice Exercise
1. Create Scenarios in Indus Enterprises using Memorandum Vouchers, Reversing Journals
and other Optional Vouchers and experiment !
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Points to Remember
Bill-wise details are specified while creating vouchers to allocate pay-
ments to invoices. The Outstandings Statements can be generated
using bill-wise details.
A Cost centre is a unit of an organisation to which expenses as well as
incomes are allocated. Cost categories are used when the organisa-
tions have to allocate resources to parallel sets of cost centres.
Accounting ledgers can be automatically allocated to transactions with
the help of Voucher Class facility. The voucher class also enables inter-
godown transfer of stocks, adjustment of forex gain / loss, interest cal-
culations etc.
The Cost centre class enables automatic allocation of cost centres,
while recording transactions.
Tally.ERP 9’s multi-currency feature allows the recording of transactions
involving more than one currency and also helps in adjusting the foreign
exchange gain/ loss.
Bank reconciliation refers to the reconciliation of company’s bank
accounts with the bank statement. In Tally.ERP 9 the vouchers can be
reconciled by just entering the appropriate dates in the reconciliation
screen.
In Tally.ERP 9, the interest can be calculated by specifying the interest
parameters in the ledgers masters, which can be altered while entering
the transactions. The interest can be recorded using debit / credit notes
with the help of relevant voucher classes.
Budgets are used to control the expenditure. In Tally.ERP 9 budgets can
be created for any account group, ledger and cost centre to generate a
budget variance statement.
Scenario reports are used for the comparison of actual as well as pro-
jected provisional figures of accounts related information.
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Lesson 7: Advanced Inventory in Tally.ERP 9
Lesson Objectives
On completion of this lesson, you will be able to
In this lesson, you will learn the method of recording and linking purchase orders to purchase
invoice and sales orders to sales invoices. You will also learn how to display outstanding orders
and the effect of orders on stocks.
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Advanced Inventory in Tally.ERP 9
Setup :
Ensure that you are at the Gateway of Tally of National Traders. In the F11: Features (Inven-
tory Features), activate the following features:
Allow Purchase Order Processing.
Allow Sales Order Processing.
Use Tracking Numbers (Delivery / Receipt Notes)
Setup:
Create a Supplier - Navketan Bricks Under Sundry Creditors with Maintain Balances
bill-by-bill set to Yes.
Create a Stock Item - Bricks under Building Materials Stock Group, and select Not
Applicable for the Stock category and specify the unit of measure as Pcs (If not listed cre-
ate using Alt+C).
Press F12: Purchase Order Configuration and ensure that:
Accept Supplementary Details is set to No.
Complete Accounting Allocations in Order/Delivery Note is set to Yes.
Use Common Ledger for Item allocation is set to No.
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Quantity, Rate and Amount - 5,000 Pcs @ 3 per Pcs (The amount is calculated automat-
ically but is modifiable to enable rounding off)
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8. Press Y or Enter to accept the screen and return to the Gateway of Tally.
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Select Building Materials field and drill down to the Order Details screen, by pressing
enter twice.
In the Sales Order Outstanding screen. Press Alt+F1 to view the report in detailed for-
mat.
The Order Details report is generated as on December 20, 2009. Change the period to a different
month and observe what happens. You will discover that the entry appears in the report based on
the due date given in the order.
The report now shows the Outstanding positions of the Sales and Purchase Orders for the
stock item Bricks.
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Advanced Inventory in Tally.ERP 9
The Sales Order Outstanding screen, by default will show the report
as on last date of the voucher entry. Hence, change the period to view
the report of the desired period
The value and magnitude of information changes online depending on
the date filter you use. This is Tally.ERP 9's Power of Real Time Report
Generation.
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Advanced Inventory in Tally.ERP 9
6. In the Receipt Details screen, select 1 from the List of Orders in the Order No(s) field and
accept the screen.
7. The stock item Bricks appears automatically. Press Enter and the Item Allocations sub-
screen is displayed with the quantity details.
8. Tracking number: Not Applicable (as goods are accompanying the bill) and re-accept the
order number.
9. Select Purchases in the Accounting Allocation screen.
10.Select Freight at 3% on the item values.
11.Enter the rest of the details and accept the screen.
Practice Exercise
1. Enter a sales invoice on 27-12-2009 and link it to the sales order of 16-12-2009 and view the
Orders position (including the cleared orders).
2. Raise a Purchase Order on 20-12-2009 on Navketan Bricks with the order number - PO/001.
Give the due date as 28-12-2009 and quantity as 4500 pcs (godown - Warehouse) @ Rs. 4
per brick piece. Add Freight charges @ 3%.
3. Enter another Purchase Order on 26-12-2009 on Navketan Bricks with the order number as
PO/002, due date as 31-12-2009 and quantity as 5500 pcs (godown - Warehouse) @ Rs. 4
per Pc. Add Freight charges @ 3%.
4. On 22-12-2009 and 27-12-2009 raise two Sales Orders on WinLab Technologies (WT/001
and WT/002). Give the due date as 29-12-2009 and 3-1-2010 and quantity as 3000 pcs and
4,250 pcs respectively @ Rs. 6 per Pc. Tax @ 17.5% for both orders.
5. View the Order Position and then return to the Gateway of Tally.
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Advanced Inventory in Tally.ERP 9
The Reorder Level screen appears based on the books beginning from and
the date of last entry.
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Advanced Inventory in Tally.ERP 9
The Advanced parameters allow you to specify the quantities for the Reor-
der level and the minimum order quantity. The reorder and minimum
order quantity is defined based on consumption patterns.
Consumption patterns are decided based on a stipulated time period.
Tally.ERP 9 allows you to choose from the time parameters of Days,
Weeks, Months and even Years.
Set the Reorder Level and Minimum Order Quantity for the stock item Bricks using
advanced partameters as shown below :
Set the Reorder level at 4,500 pcs (user-defined) or you may also consider the consump-
tion pattern for the last 5 Days and accept the value computed as the Reorder Level.
Press Ctrl+A to accept the screen and return to the Gateway of Tally.
Go to Gateway of Tally > Display > Statements of Inventory > Reorder Status
Select Building Materials
Press F2 and change the period from 1-4-2009 to 30-1-2010
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Advanced Inventory in Tally.ERP 9
Click the A: Reorder Only button (A: Reorder Only button toggles with the A: Show All
button).
A report is displayed giving the details of only Bricks, since the report is configured to display only
those items which are below the reorder level. To analysis the Inventory Reorder Status Report,
place the cursor on any of the details given in the above report and press Enter. You can view the
details to verify its correctness.
i. Name of Item
The list of stock items are displayed which are grouped under the selected
stock group. Highlight the required item and press Enter to arrive at the
Movement Inward details. This gives us the details of the stock items in
terms of the quantity, rate and value. You can drill down to the last level of
voucher details.
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Advanced Inventory in Tally.ERP 9
Practice Exercise
1. In Indus Enterprises experiment by giving your own values for reorder level and minimum
order quantity and observe the report as on various dates (depending on the entry dates). Dis-
cover and analyse the stock status.
In the earlier sections, we have recorded two Purchase Orders on 20-12-2009 and 25-12-2009
with due dates 28-12-2009 and 31-12-2009 respectively. The above receipt of 1,000 pcs is
received against the ordered quantity of 4,500 pcs.
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Advanced Inventory in Tally.ERP 9
Let us raise a Receipt Note for the PO/001 raised on 20-12-2009 with due date 28-12-2009.
Setup:
In the F11: Features (Inventory Features), activate
Use Tracking Numbers to enable the Receipt Note (Goods Receipt Note) and Delivery
Note (Delivery Challan).
Use Rejection Notes to enter Rejections In vouchers and Rejections Out vouchers.
Tally.ERP 9 tracks down the details of goods received for which bills have not been received. To
view effect of above report,
Go to Gateway of Tally > Profit & Loss Account and view the Purchase Accounts.
You will find that the value of goods received (recorded through Receipt Note) are included in the
Purchase Accounts under Purchase Bills to come, for ascertaining the profits accurately. Also
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Advanced Inventory in Tally.ERP 9
view Sundry Creditors from Balance Sheet, you will find that liability is created under Purchase
Bills to come.
On 28-12-09, you receive the purchase Bill No. NB/15 from Navketan Bricks for their
Delivery Note No. GRN/NB for 1,000 Pcs of Bricks @ Rs.4 /Pc. A credit of 30 days is
allowed.
Setup :
Activate Cost Centre for Freight charges Ledger
Step 1: Create Purchase Voucher
Go to Gateway of Tally> Accounting Vouchers > F9: Purchase
1. Ref: NB/15
2. Credit Navketan Bricks: Rs. 4,120
3. Bill-wise Details: NB/15 30 days 4,120
4. Debit Purchases: Rs. 4,000
5. Tracking Number: Select GRN/NB and give the required inventory allocation.
6. Debit Freight Charges: Rs. 120
7. Select Projects and Assignments Category and Buildings Cost centre
8. Accept the Purchase voucher.
Practice Exercise
Make the following voucher entries:
1. On 1-2-2010, you received an order from FirstCom Solutions for 25 Nos of HP - 27 Printer
Cartridges to be delivered on 15-2-2010 @ Rs. 250 each. Order number FCS/9. You propose
to deliver from On-Site, allocate to Sales-Printer, Cost Centre Amar.
2. On 13-2-2010, received 22 Nos of HP - 27 Printer Cartridges @ Rs. 200 from Power Line
Computers and stored in On-Site. The invoice PLC12 was also received. Credit period was 30
days.
3. On 15-2-2010, National Traders delivered 20 Nos of HP - 27 Printer Cartridges from On-Site
to FirstCom Solutions against their Order FCS/9.
Since you will raise the invoice later, give a new tracking number as Ex1.
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The terms are Credit period of 45 days from the date of invoice. The sale price is Rs. 250
each. No interest is to be charged.
4. On 17-2-2010, FirstCom Solutions returned 2 defective pcs of HP - 27 Printer Cartridges,
track it against Ex1.
5. On 1-3-2010, National Traders raised the invoice for the 18 pcs of goods retained by FirstCom
Solutions. Link the invoice with the delivery note.
Display Sales Bills Pending on 28-2-2010. and view Profit & Loss A/c on 28-2-2010 to
view changes in Sales Bills to make.
Change the date to 2-3-2010 and check, are there any Sales Bills to Make
6. Prepare a Purchase invoice on 13-2-2010 and track it against the receipt note dated 13-2-
2010.
Once entries are recorded using Rejections In and Rejections Out Notes,
the option Use Rejection Inward/Outward Notes in F11: Features (Inven-
tory Features) cannot be set to No.
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Manufacturing Date & Expiry Date for Batches is useful for busi-
nesses that deal in goods that have expiry dates like medicines, food
and other perishables.
During Voucher entry, the date of manufacture of the product, by
default takes the date of the voucher, this can however be changed
subject to
Date of Manufacture is not later than the Voucher Date.
Expiry Date is not earlier than the Date of Manufacture.
Setup:
Create GetWell Pharmacy Ledger under Sundry Creditors
Create the following Stock Item
Name: Saridon
Under: Medicines (create the group under primary)
Category: Pain Killers (create the category under primary).
Maintain in Batches: Yes.
Track date of Mfg: Yes
Use expiry dates: Yes
Alter Standard Rates: No
Rate of Duty: 5
Retain all the other fields as default and accept the stock item creation screen.
Return to the Gateway of Tally.
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During Voucher entry, press F12: Purchase Invoice Configuration and set Honor Expiry
Dates usage for Batches to Yes.
Step 1: Create Purchase Voucher
Go to Gateway of Tally > Accounting Vouchers > F9: Purchase
1. Enter the item as per the transaction details.
2. After you enter Saridon, an Item Allocation screen will appears,
Enter the batch no. as ST/101 having manufacturing date as 15-8-09 and Expiry Date as
14-8-10.
3. Select Onsite in Godown field. The Batch details appears as shown below :
4. Allocate it to Purchase account (not project purchases). Purchase invoice number NM. Credit
period 60 days.
5. Press Enter and accept the voucher.
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Go to Gateway of Tally > Stock Summary > Medicines > press F1:
Detailed as on 15-12-2009. You will see the batch details of Saridon 250
nos with the rate and the total closing value.
Setup :
Create Cash Ledger under Cash-in-Hand group
Activate Cost Centre for Export Saes Ledger
Practice Exercise
1. On 28-12-09, raise another purchase invoice on GetWell Pharmacy with the following details
Batch No. : ST/102
Quantity : 300 nos
Rate : Rs. 6 per nos
Godown : On-site
Manufacture date : 15-8-09
Expiry date : 31-12-09
Purchase Ledger : Purchases
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You may not be able to display the batch ST/102, use backspace key and go back to the
invoice screen and change the invoice date to 31-12-2009.
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Tally.ERP 9 does not display batch ST/102 when we make the entry on 1-1-2010 because the
expiry date of ST/102 was 31-12-2009. But when we changed the entry date to 31-12-2009 the
batch is displayed! This is because the option Honor Expiry Dates usage for Batches is set to
Yes in the F12: Configuration.
When Honor Expiry Dates usage for Batches is set to Yes in the F12:
Configuration, Tally.ERP 9 does not allow selection of expired batches
during voucher entry (i.e., Batches for which, the expiry dates falls before
the voucher date).
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Create a new group Expenses on Purchases under the default group Purchase
Accounts and select Not Applicable for Method to Allocate when used in Purchase
Invoice.
The option Method to Allocate, when used in Purchase Invoice will not
appear, if the feature Enter Purchases in Invoice format is set to No in
F11: Features (Accounting Features).
Create the following ledgers under the newly created group Expenses on Purchases with
the option Inventory Values are Affected and Maintain Cost centres set to No.
Packing Charges on Purchases
Cartage Charges
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13.Select the Item Stapler Pins in the Item Allocation screen and
Order number: Not Applicable
Godown: On-Site
Quantity: 200 nos
Rate: Rs. 25 each
Press Enter till you reach the additional cost details screen.
14.Select Packing Charges on Purchases and enter the balance amount of Rs. 180.
15.Select the ledger Cartage Charges and enter the balance amount of Rs. 120.
16.Press Enter till you reach the narration field.
In the invoice, we have incurred the total packing charges of Rs. 290
for both items. Out of which Rs. 110 is already specified the previous
stock item Stapler. Hence, Rs. 180 is entered for Stapler Pins.
(In the invoice, we have incurred a total of Rs. 210 as cartage charges
for both items. Out of which Rs. 90 is entered for the previous stock
item Stapler. Hence, Rs. 120 is entered for Stapler Pins.
Ensure that the option Show Inventory Details is set to Yes in the
F12: Configuration.
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You will notice an additional line displaying the actual value of the item. The item value appearing
here will also be appearing in the stock reports.
17.Press Y or Enter to accept the screen and return to the Gateway of Tally.
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Purchased Stapler 100 nos at Rs. 20/no., total being Rs. 2000.Additional
expenses of Rs. 200 i.e.,
Packing Charges - Rs. 110
Cartage Charges - Rs. 90
The total Purchase Cost is arrived as shown below :
Purchase total + Additional Expenses total (Rs. 2,000 + Rs. 200) = Rs.
2,200. This is divided by quantity of 100 nos > Rs. 2,200/100 nos = Rs. 22/
nos.
The Additional Cost details option will be available only in the Purchase
Voucher and not in Purchase Invoice.
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3. Press Y or Enter to accept the screen and return to the Gateway of Tally.
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To use the Appropriate by Qty option, ensure that the items in the
purchase invoice have the same unit of measure.
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Alter the ledger Packing Charges on Purchases and set the option Inventory Values are
Affected to Yes.
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4. Credit Bank Account for the same amount (Rs. 900) and accept the entry.
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Practice Exercise
Ensure that you are in Indus Enterprises,
1. Enter a purchase invoice on 15-10-2009 for 10 Nos of Item One @ Rs. 100 each and 20 nos
of Item Two - @ Rs. 200 each from the Supplier.
Setup :
Create two stock items Item One and Item Two with the unit of measure as nos.
Create the ledgers - Supplier (Sundry Creditors), Delivery Charges on Purchases and
Tax on Purchases (under Purchase Accounts).
Alter the group Purchase Accounts and select Appropriate by Value as the method of
appropriation.
National Traders is engaged also in the business of assembling and manufacturing Televisions.
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In the Components of: Television Flatoron, enter the Unit of manufacture (the number
of items to be manufactured) as 1.
In the Item details section, create these items without any opening balances. Select 1 unit
of these items and store them in the On-site godown.
Name of the Item Stock Group Standard Cost (in Rs.) Units of
Applicable from Measure
1-12-2009
VDU Television Flatron 2,000 Nos
Picture Tube Television Flatron 3,750 Nos
IC Chips Television Flatron 5,000 Nos
Sound card Television Flatron 500 Nos
Aerial Television Flatron 300 Nos
The Bill of Material component screen of Television Flatoron appears as shown below :
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5. Press Ctrl+A to accept the above screen and return to the Gateway of Tally.
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The total purchase invoice value amounted to Rs. 1,15,500. The above goods are stored in On-
Site. A Cheque was paid from Bank Account immediately.
On the same day, 5 Nos of Television Flatoron is manufactured in On Site godown. Additional
expenses of Rs. 3,000 and Rs. 2,000 was incurred towards Wages and Power respectively.
5. Under Additional Cost Components, specify additional cost of Wages - 3,000 and Power -
2,000 (If the ledger accounts for these expenses do not exist, create them under Direct
Expenses).
The additional costs entered for the ledgers, do not reflect in the relevant
ledgers with the amount but only add to the cost of the item.
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You will find that the closing quantity, rate and value details for the stock item - Television
Flatoron.
Practice Exercise
Load Indus Enterprises, make the following entries
1. Create a Manufacturing Journal for manufacturing 1 Nos of Computer from the following
components :
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Tally.ERP 9 takes you to the Company Price Levels screen, type different price levels for
National Traders as
Retail Sales
Export Sales
Wholesale
Accept the screen and return to the Gateway of Tally.
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The explanation of the fields appearing in the Price List is given below:
Under Group – The screen displays the name of the selected Stock
Group (Components) whose stock items are being displayed.
Price Level – Tally.ERP 9 displays a pop-up list displaying the price
levels defined in the F11: Features (Inventory Features). The price lev-
els displayed are Export Sales, Retail Sales and Whole Sale. We have
selected Retail Sales.
Applicable From – The date from which the defined Price List is appli-
cable. For example, we have designed two Price Lists - one as on 1-3-
2010 and the second as on 15-3-2010. The Invoices raised during the
period 1-3-2010 to 14-3-2010 will reflect the price list details of 1-3-
2010. Similarly, the invoices raised on or after 15-3-2010 will reflect the
price list details of 15-3-2010. Any number of Price Lists can be defined
for any of the stock items.
Quantities – There are two columns: From and Less Than. Here you
can define the quantity range of the items as per your requirements.
Rate – The Rate for the item based on the quantity range given.
Discount % (if any) – You can define a discount percentage in the
Price List which will be taken automatically in the sales invoice.
Historical Details – There are two columns: Rate and Disc %.
Tally.ERP 9 provides the historical details of the sale rate and discount
percentage of any previously created Price Lists. Therefore, you can
define the current price details based on the information given in the
Historical details.
Cost price – In this column, Tally.ERP 9 displays the cost price of the
item calculated based on the stock valuation method given in the item
master. This has been provided to assist the user in giving the appro-
priate sale price. By viewing the historical price details of an item, we
can accordingly define the sale price for the new Price List.
For the discount percentage to be taken in the Price List, you should
activate the feature Separate Discount Column on Invoices in the F11:
Features (Inventory Features).
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Setup:
Create a New customer called Beltron Computers with the following details.
Pricing Level Applicable Maintain Cost Centres Activate
balances are applicable Interest
bill-by-bill Calculation
Retail Sales Yes No No
In the F11: Features (Inventory Features) activate Separate discount column on
invoices.
Tally.ERP 9 provides you flexibilty to select items with and without the Price
List in the same invoice. For example, in the above case, for the item which
had the Price List defined, Tally.ERP 9 took the details automatically.
Whereas for the stock item which did not have a Price List defined,
Tally.ERP 9 prompted for the same.
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Tally.ERP 9 automatically applies the Price list for the specific period. For
example, when we entered the invoice as on 2-1-10, Tally.ERP 9 displayed
the discount percentage as 7.5% and as on 5-1-10, 10% is displayed.
4. Ignore the negative stock and allocate to Sales- Components. Select Amar as Cost Centre.
5. Accept the quantity details of the USB Pen Drives 100MB stock item
6. Select another item, Sound Card and give the quantity as 10 nos
7. Specify Rs.100 as the Rate.
8. Tally.ERP 9 prompts for the discount information. Let us leave it blank (you already know that
you can specify as required or simply leave it blank).
9. Allocate to Sales- Components ledger
10.Give the bill-wise details as required.
11.Accept the entry
The party details, item details, and quantity details provided are the same,
different rates have been taken automatically by only changing the date of
the invoice.
After completing the above exercise, go to Gateway of Tally > F11:
Features (Inventory Features) and set Separate Discount column on
Invoices to No.
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Average Cost
At Zero Cost
First In First Out (FIFO)
Last Purchase Cost
LIFO Annual (Last In First Out Annual)
LIFO Perpetual (Last In First Out Perpetual)
Monthly Avg. Cost
Standard Cost
Depending on the Market Valuation Method defined in the stock item master, Tally.ERP 9
displays the rate/ price automatically at the time of Invoice entry. The Market Valuation Method
is set as Average Price by default. The Average Price displays the average of all the sales
prices given in the previous sales entries, as the selling rate/ price while the current sales entry is
being made.
Let us now examine the result of the different stock valuation methods.
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The closing balance of stock as per Default and FIFO stock valuation methods are shown below :
Tally.ERP 9 displays the closing stock of 6 nos of HP - 27 Printer Cartridges as per different
stock valuation methods. Since there are 11 columns in the report the same is displayed in six
screens as shown below:
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Advanced Inventory in Tally.ERP 9
The closing balance of stock as per LIFO Perpetual and LIFO Annual stock valuation methods
are shown below:
The closing balance of stock as per Std. Cost and Avg. Cost stock valuation methods are shown
below :
The closing balance of stock as per Last Purchase Cost and the Std. Price stock valuation
methods are shown below:
The closing balance of stock as per Avg. Price and the Monthly Avg. Cost stock valuation meth-
ods are shown below:
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The closing balance of stock as per Monthly Avg. Cost and the Last Sale Price (Monthly Avg.
Cost is repeated) stock valuation methods are shown below:
Let us now discover how the above figures are calculated. To analyse the same, press Enter on
the Default column till you reach the report displaying the vouchers. The screen appears as
shown below :
We have a purchase entry first, followed by a sale and again another purchase and a sales entry
as given below:
Purchased 10 nos HP - 27 Printer Cartridges @ Rs. 850 = Rs. 8,500
Sold 5 nos HP - 27 Printer Cartridges @ Rs. 1,150 = Rs. 5,750
Purchased 5 nos HP - 27 Printer Cartridges @ Rs. 850 = Rs. 4,250
Sold 4 nos HP - 27 Printer Cartridges at Rs. 1150= Rs. 4600
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We have purchased a total of 15 nos for Rs. 12750. The average now is Rs. 12,750 / 15 = Rs.
850 with a closing balance of 6 nos x 850 = Rs. 5,100 (Average cost method of valuation)
FIFO
FIFO Stands for First-In-First-Out. This is one of the systems of costing
where the value is calculated after an outward (consumption or sale) is
made for the first purchase entry. The outwards consumption is taken from
the stock that is purchased first.
LIFO Perpetual & LIFO Annual
LIFO stands for Last-In-First-Out which means that the outwards (consump-
tion or sale) quantity is taken out from the stock that is purchased last.
LIFO Annual: All the entries of the current financial or specified year
are considered.
LIFO Perpetual: All the entries of the company i.e from the books
beginning date specified while the creation of a company are consid-
ered.
For example: Suppose a company's books begin on 1-4-2009 and the data
is present till 31-3-2010. LIFO Perpetual considers the entries from 1-4-
2009 onwards, whereas LIFO Annual considers the entries for the year
selected/ current year.
Average Cost & Average Price
Average Cost is calculated after each purchase or sale entry for whole year.
Total Inward Value/Total Inward Quantity = Average Cost
Average Price is the average of all the outward entries which are displayed
at the time of recording a new sales entry.
At Zero Cost
The stock is valued at zero cost.
Last Purchase Cost / Sale Price
Last Purchase Cost: The stock is valued based on the last purchase
cost given in the Purchase entry.
Last Sale price: The stock is valued based on the last sales price
given in the Sales entry.
Monthly Avg. Cost
This is the Average Cost where the period is month-wise. Tally.ERP 9 calcu-
lates the average value after each purchase or sale for the whole month.
Standard Cost
Standard Cost is a pre-determined cost, based on which you would like to
value your closing stock. The standard cost details have to be given in the
stock item master.
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You can decide which method of stock valuation is most appropriate for your business and
accordingly define that in the item master. FIFO (First In First Out) and Average Cost are the
most popular stock valuation methods used in today’s business.
Setup:
In National Traders,
Activate the feature Allow Zero valued entries in the F11: Features (Inventory Fea-
tures) and accept the other settings.
Create a ledger account Samples under the group Sales Accounts and set Cost Centres
are applicable to No and Inventory values are affected to Yes.
After passing the above zero valued entries, if you display the Sales Register you may not find
this entry. But however, if you display the Television Flatoron Stock Item, you will find the
quantity sold.
Zero valued entries do not reflect in accounting books but affect only our
inventory books.
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You will find that the Ageing Periods are displayed as <45 days, 45-90 days, 90-180 days and
>180 days. These are the ageing period that Tally.ERP 9 displays by default. However, you
change the ageing period by using F6: Ageing Periods.
The Ageing period for Negative Stock Items cannot be determined and
are shown in separate column.
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You can view Inventory ageing report based on the following Ageing
Styles :
By Date of Purchase
By Expiry Date
By Mfg. Date
To Be Expired
Monthwise Inward/Outwad Quantity Report : Press Enter on Total
Quantity to view the month-wise inward, outward and closing
quantity report.
Item Inward Details : Press Enter on any of the Ageing Period col-
umns to view the Item Inward Details. This report shows the inward
movement of the item for the date range calculated from the age
period. Ageing Analysis is done for the stock-in-hand based on when
they were purchased. Hence, while viewing the Ageing Analysis
Report, the Item Inwards details statement is very useful and relevant.
It provides further information of aged stock like date of purchase and
supplier. It also provides a drill down facility to the actual transaction
voucher.
Experiment by choosing different ageing styles and observe the changes in the report.
Practice Exercise
1. Select By Mfg. Date as Ageing Style and view the report as on 31-12-2009.
Setup:
Ensure that you are in the Gateway of Tally of National Traders.
Go to F11: Features (Inventory Features) and set Use Different Actual & Billed Qty to
Yes.
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On 3-3-2010, make a purchase invoice from Parvathi Stockers for the following items :
Name of the Item Actual Qty Billed Qty Rate
(in Rs.)
Rice 100 Kgs 90 Kgs 10
Wheat 50 Kgs 50 Kgs 100
Setup :
Create a new stock item as Rice with the following details :
Group it under stock group Foodstuffs.
Stock category - Not Applicable
Unit of Measure - kgs (kilos) with decimal places - 3 (create if not present).
Accept the master creation without any opening balance and return to the Gateway of
Tally.
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Tally.ERP 9 displays 100 kgs of Rice stock item because this is the quantity that we have actually
received from the party. In case of Wheat the quantity appears as 150 kgs.
Go to Gateway of Tally > Display > Account Books > Purchase Register
Select March month
Press F12: Value button,
Specify the range as Voucher - Having - Ledgers - With - Name - Containing - Par-
vathi stockers (party name in purchase entry of 5-3-2010)
Press Enter.
Press Alt+F1 to display the stock summary in detailed format
Press F12: Configure and activate the option Show Inventory Details also
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The inventory details display 90 kgs for the stock item Rice, because this is the quantity that the
party has billed us for. (We have received 100 kgs of Rice i.e, the actual quantity. We will be
making the payment for only 90 kgs i.e., the billed quantity). Therefore, the actual quantity affects
the inventory books while the billed quantity reflects in the accounting books.
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Points to Remember
Order processing includes purchase and sales order processing. Here
the details of purchase orders placed and sales orders received can be
obtained.
Reorder level and order processing are linked to each other. The pur-
chase orders are placed and sales orders are accepted based on the
reorder level specified.
Tracking numbers are used to track the delivery or receipt of inventory
against the sales and purchase bills respectively. Tracking numbers are
required to know the status of pending sales and purchase bills.
Batch-wise details are maintained mainly for perishable goods. The
manufacturing and expiry dates can be set for batch-wise details.
Tally.ERP 9 has an option to display only those batches which have not
expired and hide the expired batches.
The additional costs which add to the cost of the actual cost of purchase
of an item can be recorded in Tally.ERP 9. Hence, the additional costs
on purchases can be apportioned based on the purchase value as well
as on the purchase quantity. Additional cost details can be specified
even for goods which require batch-wise details.
Bill-of-Material is a term generally associated with the manufacturing of
goods. Tally.ERP 9’s Manufacturing journal records the item manufac-
tured with the use of bill-of-material and enables an automatic reduction
in the quantity of stock items consumed.
Price list is generally used by organisations which deal in multiple prod-
ucts. It can be created for different dates and can be maintained for dif-
ferent kinds of buyers. Tally.ERP 9 facilitates the setting of different
price levels while creating price lists for multiple stock items.
For the valuation of inventory, Tally.ERP 9 provides various stock valua-
tion methods. It values stocks based on the costing methods. The rate/
price of the item will be displayed depending on the market valuation
method defined in the stock item master.
Inventory ageing analysis is an important aspect of working capital man-
agement. It helps in knowing the age of stocks. Tally.ERP 9 displays
stock ageing analysis for items with respect to the date of purchase,
expiry date, manufacture date and stocks to be expired.
Tally.ERP 9’s feature of recording transactions with different actual and
billed quantities updates the accounting books based on the value of
invoice and inventory books based on the actual quantity purchased or
sold.
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Lesson 8: Value Added Tax (VAT)
Lesson Objectives
On completion of this lesson, you will be able to understand
Value Added Tax (VAT) is an indirect tax on goods, introduced in lieu of sales tax, to ensure
transparency and greater compliance. The basic premise of VAT is to levy tax on the ‘true value’
added to the goods, at each stage in the transaction chain. This ultimately reduces:
Tax paid to the government.
Cost/ tax passed on to the consumer.
VAT is a multi-point tax as against sales tax, which is a single-point tax. Under the sales tax
regime, the ‘value’ of goods to be taxed at each stage is computed as basic cost + profit margin +
sales tax paid at the earlier stage. The advantages of implementing VAT are:
Enhancement of competitiveness by the removal of the cascading effect of taxes.
Simplifying the process of taxation.
Self-regulatory mechanism ensuring greater compliance.
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Value Added Tax (VAT)
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Value Added Tax (VAT)
In this screen you have to select the State, the type of dealer and specify the date of appli-
cability to view the VAT classifications of the required specifications.
In F11: Features (Accounting Features), set Maintain Bill-wise details to Yes.
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Value Added Tax (VAT)
Purchases - Exempt
Purchases from Composition Dealers
Purchases - From Unregistered Dealers
Inter-state Purchases
Depending on the type of business, type of transaction, and statutory requirements of your state,
you need to select the appropriate classifications from the list.
You can define your classification:
At the time of ledger creation.
At the time of voucher entry.
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Value Added Tax (VAT)
The drop down list in the VAT/Tax Class of purchase ledgers consists of the
purchase classifications pertaining to your state. If you do not wish to select
a classification at the ledger level, you can set this field to Not Applicable.
Practice Exercise
Create the following purchase ledger
Ledger Under Inventory Used in VAT/Tax Class
values are VAT
affected Returns
Purchase @ 12.5% Purchase Yes Yes Purchases @ 12.5%
Accounts
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Value Added Tax (VAT)
The Percentage of Calculation field displays the VAT rate that you have selected in the VAT/Tax
Class field and the Method of Calculation displays On VAT Rate if you have selected VAT under
Type of Duty/Tax.
After entering the details as displayed in the above ledger creation screen, press Ctrl+A to
accept the screen.
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Value Added Tax (VAT)
On enabling TDS and Service Tax in the F11: Features (Statutory &
Taxation Features), the list will also include TDS and Service Tax.
Practice Exercise
Create the following ledgers:
1. Input VAT @ 12.5%
Name: Input Vat @ 12.5%
Under: Duties & Taxes
Type of Duty/Tax: VAT
VAT/Tax Class: Input VAT @ 12.5%
Percentage of Calculation: 12.5%
Method of Calculation: On VAT Rate
Inventory values are affected: No
2. Output VAT @ 4%
Name: Output Vat @ 4%
Under: Duties & Taxes
Type of Duty/Tax: VAT
VAT/Tax Class: Output VAT @ 4%
Percentage of Calculation: 4%
Method of Calculation: On VAT Rate
Inventory values are affected: No
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Value Added Tax (VAT)
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Value Added Tax (VAT)
Practice Exercise
Create the following Stock Items under the stock group Bulbs with units of measure as Nos.:
Philips Lamps with a VAT rate of 4%.
GE Lamps with a VAT rate of 12.5%.
Bajaj Lamps with a VAT rate of 4%.
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Value Added Tax (VAT)
Setup :
Select As Invoice and press F12: Configure button to set the options as under:
Accept Supplementary Details – No.
Use Common Ledger A/c for Item Allocation – No.
Allow selection of VAT/Tax Class during entry – No.
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Value Added Tax (VAT)
8.3.3 Creating Purchase Invoice with Selection of VAT Class during Entry
On 3-6-09, Universal Traders purchased from Sujan Ltd. Bangalore, Philips lamps 10 Nos.
at Rs. 300 each. VAT @ 4% was charged additionally.
Setup :
Click on Item Invoice button and change the following settings in the F12: Configure screen:
Use Common Ledger A/c for Item allocation – Yes.
Allow selection of VAT/ Tax class during entry – Yes.
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Value Added Tax (VAT)
Setup :
Click on Item Invoice button and change the following settings in F12: Configuration.
Use Common Ledger A/c for Item allocation – No.
Allow selection of VAT/Tax class during entry – No.
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Value Added Tax (VAT)
In the Accounting Details screen of GE Lamps, select Purchase 12.5% under Particu-
lars. Purchase @ 12.5% will be selected automatically in the VAT/Tax Class.
In the Accounting Details screen of Bajaj Lamps, select Purchase @ 4% under Particu-
lars. Purchase @ 4% will be selected automatically in the VAT/Tax Class.
Select the ledgers Input VAT @ 12.5% and Input VAT @ 4%. The Input VAT amount
would be automatically calculated and displayed in the amount columns.
The completed Purchase Invoice appears as shown :
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Value Added Tax (VAT)
4. Select End of List in the Inventory Allocation screen since you will not be entering any
inventory details.
5. On selecting the Output VAT Ledger, you will see a screen with pre-filled VAT/Tax class as
Output VAT @ 4% (the VAT/ Tax Class may be manually modified by selecting other options
from the pop-up window). Select the same and enter the Assessable Value as Rs. 3500.
6. The Amount column will automatically display the Output VAT amount as Rs. 140. (4% of
3500). However, this may also be modified manually.
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Value Added Tax (VAT)
1. In the Accounting Details screen of Surya Lamps and Philips Lamps, select Sales @ 4%
under Particulars. VAT/Tax classification entered in the Sales Ledger is displayed.
2. Select the ledger Output VAT @ 4%. The screen VAT/Tax Class appears. Select Output VAT
@ 4% in the VAT/Tax Class.
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Value Added Tax (VAT)
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Value Added Tax (VAT)
On configuring the settings, the following new sections appear in all the VAT
invoices:
i. VAT Amount (in words)
ii. Company's VAT TIN No.
iii. Company's CST No.
iv. Buyer's TIN/Sales Tax No.
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Value Added Tax (VAT)
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Value Added Tax (VAT)
8.3.8 Creating Sales Invoice with Selection of VAT Class during Entry
On 16-6-09, Universal Traders sold to Chahak Traders, Bangalore, Philips lamps 3 Nos. at
Rs. 550 each. VAT @ 4% was charged additionally.
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Value Added Tax (VAT)
You can use multiple ledgers pre-defined with a different VAT rate, or choose to select each rate
at the time of voucher entry.
Setup :
Press F12: Configure and change the following settings:
Use Common Ledger A/c for Item allocation – No.
Allow selection of VAT/Tax class during entry – No.
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Value Added Tax (VAT)
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Value Added Tax (VAT)
Go to Gateway of Tally > Display > Statutory Reports > VAT Reports > VAT Computation.
The VAT Computation report appears as shown below:
The VAT Computation screen is divided into two sections: Output and Input Tax. Each section is
further subdivided into VAT Classifications: Output VAT @12.5%, Output VAT @ 4%, Input VAT
@12.5% and Input VAT @ 4%.
Here the Input VAT is Rs. 1,537.50 and the Output VAT is Rs. 659.50. Therefore, Rs. 878 is the
VAT Refundable/ Carried Forward.
173
Value Added Tax (VAT)
Accept the screen to view the printed VAT Form 100 for the quarter ending 30th June 2009
as shown below :
174
Value Added Tax (VAT)
175
Value Added Tax (VAT)
176
Value Added Tax (VAT)
177
Value Added Tax (VAT)
Setup :
To enable Debit/Credit, set the following fields to Yes in F11: Features (Accounting Features)
screen:
Use Debit/Credit Notes
Use Invoice Mode for credit note
Use Invoice Mode for debit note
178
Value Added Tax (VAT)
In the Accounting Details screen of Surya Lamps, select Sales @ 4% under Particulars.
The Sales @ 4% will be selected in the VAT/Tax Class.
Press Y or Enter to accept the screen.
179
Value Added Tax (VAT)
In the Accounting Details screen of Surya Lamps, select Purchases @ 4% under Particu-
lars. The Purchases @ 4% will be selected in the VAT/Tax Class.
Press Y or Enter to accept the screen.
180
Value Added Tax (VAT)
Sales Returns Entry – The Assessable Value reduces by Rs. 350 (the
price of the returned item) and the Output VAT by Rs. 14 (4% of Rs. 350).
Therefore Output VAT is now Rs. 645.5 (659.5 - 14) and the Assessable
Value is Rs. 12,950 (13,300-350).
Purchase Returns Entry – The Assessable value reduces by Rs. 300 (the
price of the returned item) and the Output VAT by Rs. 12 (4% of 300).
Therefore the Input VAT is now Rs. 1,525.5 (1,537.5 - 12) and Assessable
Value is Rs. 34,950 (35,250 -300).
The VAT Refundable is Rs. 880, press Enter on Input VAT @ 4% in the VAT Computation
report.
The VAT Classification Vouchers screen with Input VAT @ 4% appears as shown below:
181
Value Added Tax (VAT)
Return to the VAT Computation report. Press Enter on Output VAT @ 4% in the VAT Com-
putation report.
The VAT Classification Vouchers screen with Output VAT @ 4% appears as shown below:
182
Value Added Tax (VAT)
183
Value Added Tax (VAT)
184
Value Added Tax (VAT)
185
Value Added Tax (VAT)
186
Value Added Tax (VAT)
187
Value Added Tax (VAT)
Create the following purchase voucher for the Inter-state Purchase transaction
Date Party Item Quantity Rate Tax
24-06-09 Saarthak Enterprises Surya Lamps 50 Nos 200 CST 4%
(Kerala)
Setup :
Create the following Ledgers :
188
Value Added Tax (VAT)
189
Value Added Tax (VAT)
In the Accounting Details Screen, select the Inter-state Purchase ledger with the Inter-
State Purchase as the VAT/Tax Class.
Press Y or Enter to accept the screen.
Create the following Sales voucher for the Inter-state Sales transaction
Date Party Item Quantity Rate Tax
26-6-09 Business Automation Surya Lamps 25 Nos 350 CST 4%
Setup :
Create the following ledgers.
190
Value Added Tax (VAT)
i. Sales Ledger
Name Under Inventory Values Used in VAT VAT/Tax Class
are affected Returns
Inter-State Sales Sales Accounts Yes Yes Inter-State Sales
191
Value Added Tax (VAT)
192
Value Added Tax (VAT)
You will find that the Tax Amount column is nil in Interstate Purchases but Rs. 350 is seen under
the heading Inter-state Sales.
193
Value Added Tax (VAT)
Setup :
Create the following ledgers,
i. Purchase Ledger
Name Under Inventory Used in VAT/Tax
values are VAT Class
affected Returns
Purchase Purchase Yes Yes Purchases
Exempt Accounts Exempt
ii. Party Ledger
Name Under Inventory Values
are affected
Anil Book Depot Sundry Creditors No
iii. Create the following Stock Items under Primary group with units of measure as Nos.:
World of Cutting Tools.
World Book Encyclopedia.
194
Value Added Tax (VAT)
Setup :
Create the following ledgers:
i. Sales Ledger
Name Under Inventory Values Used in VAT VAT/Tax Class
are affected Returns
Sales-Exempt Sales Accounts Yes Yes Other Exempt
Sales
195
Value Added Tax (VAT)
196
Value Added Tax (VAT)
In the VAT Computation screen, the value of exempted Purchases and Sales will appear under
Others (VAT not applicable) column. It will not form part of the taxable turnover in VAT Computa-
tion.
197
Value Added Tax (VAT)
Setup :
Create the following ledgers :
i. Purchase Ledger
Name Under Inventory Used in VAT/Tax Class
values are VAT
affected Returns
Purchase from Purchase Yes Yes Purchases - From
Unregistered Dealers Accounts Unregistered Dealers
198
Value Added Tax (VAT)
Setup :
In the F11: Features (Accounting Features) set:
Maintain Bill-wise Details to Yes.
for Non-trading A/cs also (under Maintain Bill-wise Details.) to Yes.
This ledger is used to record the tax set aside for future amortization.
199
Value Added Tax (VAT)
This ledger is created and used for the purpose of debiting monthly instal-
ments of input credit allowed on Capital goods, over a period of 12 months.
200
Value Added Tax (VAT)
Step 2: Create Journal Voucher (to record the installment amount to be claimed as input credit)
1. Go to Journal voucher.
2. Date: 30-6-09.
3. Debit Tax paid on Capital Goods: Rs. 30,000 (amount allowed as credit by the tax authori-
ties).
4. In the Bill-wise Details screen,
Select New Ref under Type of Ref,
Instalment Number under Name
Enter Rs. 2,500 (i.e. 30,000/12) under Amount.
5. Similarly, create 12 new references for the monthly installments.
6. Credit Laser Marking M/c: Rs. 30000.
201
Value Added Tax (VAT)
202
Value Added Tax (VAT)
As mentioned before, you will need to do this if the Journal entry is to be considered in VAT
Computation.
Press Enter and return to the Voucher class screen and save it.
203
Value Added Tax (VAT)
204
Value Added Tax (VAT)
Setup :
Create the following Ledgers
i. Branch Ledger
Name Under Inventory values Maintain balances
are affected bill-by-bill
Universal Traders - Branch / Division No Yes
Mumbai Branch
Universal Traders - Branch / Divisions No Yes
Hyderabad Branch
Create a purchase voucher for the purchases made from Sujan Ltd.
205
Value Added Tax (VAT)
After passing the Sales Transfer Out entry, pass the journal entry illustrated below to account for
the disallowed amount:
206
Value Added Tax (VAT)
Go to Gateway of Tally > Accounting Vouchers > F7: Journal and select VAT Adjustment
Class.
1. Change the date to 30-6-09. Select Others in the field Used for.
2. Debit Tax paid on purchases: Rs. 60 (1,500 * 4%).
3. Credit Input VAT @ 12.5%. Select Input VAT @12.5% in the VAT/Tax Class column.
4. Enter the amount as Rs. 60 in the credit column.
207
Value Added Tax (VAT)
208
Value Added Tax (VAT)
Only the total value will be shown in both the Transfer Outward and
Transfer Inward fields.
209
Value Added Tax (VAT)
210
Value Added Tax (VAT)
211
Value Added Tax (VAT)
212
Value Added Tax (VAT)
The exported file will be saved in the path specified in the output file name. Similarly, you can
export other annexures required for efiling.
213
Value Added Tax (VAT)
214
Value Added Tax (VAT)
Practice Exercise
Create a new company called Aman Motors, an Automobile dealer and also a manufacturer of
Automobile Spare parts. Create the following masters and VAT related transactions:
i. Party Ledgers
Ledger Under Maintain Inventory Used in VAT
balances values are Returns
bill-by-bill affected
Jyoti Automobiles Sundry Creditors Yes No No
Joy Autos Sundry Creditors Yes No No
Susmit & Son's Sundry Creditors Yes No No
Impact Automation Sundry Debtors Yes No No
Purchases @ 4% Purchase Accounts No Yes Yes
Sales @ 4% Sales Accounts No Yes Yes
215
Value Added Tax (VAT)
216
Value Added Tax (VAT)
217
Value Added Tax (VAT)
1. Enter the details in the company creation screen for United Traders as shown below :
The completed F11: Features (Statutory & Taxation Features) screen appears as shown below:
218
Value Added Tax (VAT)
If the turnover exceeds the threshold limit of Rs. 5 lakh in the current
financial year, in that case the dealer is automatically registered as a regular
VAT dealer.
In such cases, specify the date of application in the Regular VAT Applica-
ble From field and the new TIN number in the VAT TIN (Regular) field.
219
Value Added Tax (VAT)
Go to Gateway of Tally > Display > Statutory Info. > VAT Classifications.
Classification for Purchases
Name Rate Is Sales Type of Tax Used in
Composite
Returns
Purchase from URDs - Taxable 0% No Exempt Yes
Goods (Composition)
The Purchase from URDs - Taxable Goods (Composition) screen appears as shown below:
220
Value Added Tax (VAT)
Only when Composition VAT is enabled in the F11: Features (Statutory &
Taxation Features) and Used in Composite Return is set to Yes in the VAT
Classifications, can the classifications be assigned to the ledgers.
i. Purchases Ledger
Ledger Under Inventory Values Used in VAT VAT/Tax
are affected Returns Class
Purchases Purchases Accounts Yes Yes Not Applicable
On setting Used in VAT Returns to Yes, only VAT Classifications pertaining to the compo-
sition scheme is displayed in the VAT/Tax Class list.
221
Value Added Tax (VAT)
Press Enter to accept the VAT/Tax class and then press Ctrl+A to accept the Purchase
ledger.
222
Value Added Tax (VAT)
For Composite dealers, the VAT charged on purchases is generally grouped under direct
Expenses or Purchases as they are not allowed Input Credit on their purchases. Hence, it is
appropriated to the purchases cost. Ultimately, a Composite Tax on Sales ledger has to be
created under the Indirect Expenses group for the composite tax payable on the total sales
turnover.
v. Stock Item
Name of Item Under Units
Cadburys Hazelnut - 150g Primary Nos
The following illustration explains the purchase and Sales transactions of a VAT Composite
dealer.
On 5-4-2009, United Traders purchased the following items from Galaxy Confectioneries
vide B.No. 586.
Item Description Quantity Rate
Cadburys Hazelnut - 150g 100 Nos 35
The rates are inclusive of 4% VAT.
223
Value Added Tax (VAT)
Setup :
In F12: Configuration, set Use common ledger A/c for Item Allocation to Yes.
224
Value Added Tax (VAT)
225
Value Added Tax (VAT)
Setup :
Create the following masters :
i. Stock Item
Item Description Group Units
Cadburys Fruit & Nut - 200g Primary Nos
226
Value Added Tax (VAT)
In the bill-wise allocation screen select New Ref as the type of reference
and type the name as 422.
In F12: Configuration, set Allow selection of VAT / Tax class during entry to Yes.
Go to Gateway of Tally > Accounting Vouchers > F8: Sales
The completed Sales Invoice appears as shown below:
227
Value Added Tax (VAT)
Type the details of the transaction in the Narration field and accept the screen.
In the bill-wise allocation screen select New Ref as the type of reference
and type the Name as 423.
Go to Gateway of Tally > Display > Statutory Reports > VAT Composition Reports > VAT
Composition Computation.
Press F12: Configure and Set Show Purchase VAT Classifications to Yes to view pur-
chases from unregistered dealers.
The VAT Composition Computation Report of M/s. United Traders for April 2009, appears as
shown below :
228
Value Added Tax (VAT)
You will find that the computation report shows the Sales turnover taxable at various rates under
composition scheme of VAT. In this case, the total sales turnover taxable @ composition 1% and
4% amounts to Rs. 1800 and Rs. 1560 respectively. The composite tax at 1% & 4% is automati-
cally computed on the respective turnover and reported in the tax amount column (i.e. Rs. 18 and
Rs. 62.40 respectively). The computation report also displays other items which are non-taxable
under the composition scheme i.e purchases made from unregistered dealers during the given
period.
The report provides a drill down facility for each item right down to the voucher level. The VAT
Classification Vouchers for Sales Composition tax @ 1% appears as shown below:
229
Value Added Tax (VAT)
To print the computation report, press Alt+P. You can further drill down to the voucher level
in the alteration mode by pressing Enter on the required voucher listing.
The Composition Monthly Return Form VAT 120 of M/s. United Traders for April 2009 appears
as shown below:
230
Value Added Tax (VAT)
231
Value Added Tax (VAT)
232
Value Added Tax (VAT)
233
Value Added Tax (VAT)
Practice Exercise
Create a Company Alokmala Agency a famous Tea House in Ooty who is a dealer of Tea and
Coffee products. Create the following masters and pass the following transactions for a VAT
Composite Dealer:
234
Value Added Tax (VAT)
i. Party Ledgers
Ledger Under Maintain Inventory VAT/Tax Class
balances values are
bill-by-bill affected
Darjeling Plantation Sundry Creditors Yes No Not Applicable
BEC Foods Sundry Creditors Yes No Not Applicable
Chanchal Tea House Sundry Debtors Yes No Not Applicable
Chennai Tea Hubs Sundry Debtors Yes No Not Applicable
HDFC Bank Bank Account No No Not Applicable
Purchases Purchase No Yes Not Applicable
Accounts
Sales Sales Accounts No Yes Sales - Compo-
sition Tax @ 1%
Composite Tax on Indirect Expense No No Not Applicable
Sales
iii. Transactions
S.No Date Particulars
1. 6-4-09 Purchased Tea Bags 100 nos at Rs. 55 each (inclusive of VAT)
from Darjeling Plantation vide Bill .No. 786.
2. 8-4-09 Sold Tea Bags 50 nos at Rs. 75 each to Chanchal Tea House,
VAT/Tax class as Sales-Composition Tax @1%.
3. 12-4-09 Purchased Coffee Tin 200 nos at Rs. 219 each from m/s BEC
Foods (an Unregistered Dealers) vide bill no.BEC009 Vat/Tax
Class as Purchase from URDs-taxable goods (Composition)
4. 21-4-09 Sold Coffee Tin 165 nos to Chennai Tea Hubs at Rs. 254 each
(inclusive of VAT), VAT/Tax class as Sales-Composition Tax @4%
5. 29-5-09 Payment of Composite VAT through HDFC bank vide cheque
no.20414263
235
Value Added Tax (VAT)
Points to Remember
Value Added Tax (VAT) is an indirect tax on goods, introduced in lieu of
sales tax.
Tally.ERP 9 provides State specific classification as per VAT Act for all
sales and purchase transactions. You can select the classification at the
time of ledger creation or at the time of voucher entry.
Interstate purchases attract Central Sales Tax (CST), which is not set
off against Output VAT on sales within the state or Output CST in inter-
state sales. The CST paid is treated as a part of procurement cost.
Branch transfer transactions can be both Transfer Inwards and Transfer
Outwards. Tally.ERP 9 provides specific VAT classes for these transac-
tions.
Tally.ERP 9 calculates VAT Refundable or Payable depending on the
Input VAT paid during purchases and the output VAT availed on sales.
The dealer whose gross annual turnover does not exceed the pre-
scribed limit can opt for the Composition Scheme of VAT.
VAT Composite dealers are not entitled to input tax credit.
Tally.ERP 9 provides State specific classifications in VAT Composition
scheme for dealers.
The VAT Composition computation report as well as VAT Composition
Returns Form can be generated and printed in Tally.ERP 9.
236
Lesson 9: Central Sales Tax (CST)
Lesson Objectives
On completion of this lesson, you will be able to understand
Sales Tax is a tax levied on the sale of goods. In India, the law for levying sales tax is provided in
the Central Sales Tax Act of 1956 which applies to the entire country.
Generally, the CST Act does not deal with intra-state or import or export sales. However, with
respect to certain declared goods such as oil seeds, sugar, pulses, crude oil etc., the CST Act
imposes restrictions on the powers of state governments to levy sales tax even in the case of
intra-state sales.
Accordingly, sales can broadly be classified into three categories.
Intra-State sales, i.e, sales within the state.
Sales during import and export.
Inter-State sales.
The Act also provides for the levy, collection and distribution of taxes on sale of goods in the
course of inter-state trade or commerce.
237
Central Sales Tax (CST)
Inter-State Sale
Inter-state sale is deemed to take place if there is:
(i) Movement of goods from one state to another or
(ii) Transfer of documents of title to the goods during their movement from one State to another.
The above two modes are mutually exclusive.
Declared Goods
Declared Goods means goods declared under Section 14 to be of special importance in inter-
state trade or commerce. Some of the important items are cereals, iron and steel, jute, oil seeds,
pulses, man-made fabrics etc.
238
Central Sales Tax (CST)
Figure 9.1 Chart Showing Incidence of Various Forms in the Course of Inter-state Trade
Form C
As per CST Act, sales tax on inter-state sales is 4% or sales tax rate for sale within the state,
whichever is lower, is applicable, when the sale is made to a registered dealer and the goods are
covered in the registration certificate of the purchasing dealer. Otherwise, the tax is higher, i.e
10% or tax leviable on sale of goods inside the state, whichever is higher. This concessional rate
is applicable only if the purchasing dealer submits a declaration in prescribed C Form.
One C Form covers all the transactions in a whole financial year, irrespective of the total amount
or value of transactions during the year. However, for transactions exceeding one financial year
separate C Form is required for each financial year.
Forms E1 and E2
According to Section 6(2) of the CST Act, only the first inter-state sale is taxable and the subse-
quent sale during movement of goods by transfer of documents is exempt from tax, if the purchas-
ing dealer is a registered dealer.
Usually, the transfer of a document refers to the document of title to goods which is endorsed and
transferred in favour of the purchaser and is duly signed by the endorser. The document can be
further transferred by subsequent endorsements.
239
Central Sales Tax (CST)
The subsequent sellers have to obtain a declaration in C Form from the dealers who sold them
the goods. The selling dealer has to make a declaration in E1 Form in case of the first sale and
E2 Form in case of subsequent sales.
Form F
Under CST Act, F Form is used for Branch transfers and Consignment transfers. Goods when
transferred from one place to another under the same principal, is known as Branch Transfer and
when it is transferred to agents, it is termed as Consignment Sale. Here the dealer has to furnish
a declaration in F Form received from the consignment agent or branch office in another state to
prove that the interstate movement of goods is not a sale.
One F Form covers all transactions in one month, irrespective of the number of transactions and
the total amount.
Form H
A sale during the course of export is exempt from CST and also the penultimate sale is deemed to
be in course of exempt from CST under the CST Act. The dealer exporting the goods must have
documents in proof of export such as an airway bill, bill of lading, shipping bill, customs docu-
ments, bank certificate etc. However, if the penultimate seller is not having any proof evidencing
that the sale is exempt, the actual exporter is required to issue a certificate in H Form to the
penultimate seller.
Form I
Special Economic Zone (SEZ) is a specifically delineated duty free enclave and shall be deemed
to be foreign territory for the purposes of trade operations, duties and tariffs.
Under the CST Act, supplies made by a registered dealer to a unit in the Special Economic Zone
(SEZ) will not be subject to CST, provided such unit furnishes a declaration in I Form.
240
Central Sales Tax (CST)
Enable VAT, by activating Enable Value Added Tax (VAT) and Set/Alter VAT details in
the F11: Features (Statutory and Taxation Features). Once VAT is enabled, Statutory
Masters related to VAT and CST are also automatically loaded in Tally.ERP 9.
241
Central Sales Tax (CST)
v. Stock Items
Name of Item Under Units of
measure
Black Matt Primary Kgs
Golden Yellow Primary Kgs
Metallic Blue Primary Kgs
242
Central Sales Tax (CST)
243
Central Sales Tax (CST)
In the bill-wise details screen select New Ref and type 2458/08-09.
The above Purchase Invoice can also be recorded in Double Entry
mode.
You can also fill the Form No. during the Voucher Entry, if the forms are issued at the time of
purchase. But usually, they are submitted at the end of the year covering all the transactions from
that dealer during the year.
244
Central Sales Tax (CST)
245
Central Sales Tax (CST)
During the movement of goods, Swastik Associates subsequently sold the goods to M/s.
Rainbow Colours in West Bengal and Rainbow Colours ultimately sold the goods to M/s. Star
Power Controls in Orissa.
On the same day, Oriental Traders received C Form vide No. TC-2K-15023 dt. 13-4-09 from
Swastik Associates and issued E1 Form vide no. TE-1Q-0130 dt. 13-4-09.
In this case, sale from Swastik Associates to Rainbow Colours and Rainbow Colours to Star
Power Controls is by way of transfer of documents. Oriental Traders has to receive C Form from
Swastik Associates and will issue an E1 Form to Swastik Associates. Later, Swastik Associates
will issue E2 Form to Rainbow Colours and receive C Form. Finally, Rainbow Colours will issue
E2 Form to Star Power Controls and receive the C Form.
246
Central Sales Tax (CST)
The entries to be made in the books of M/s. Oriental Traders with regard to the above transaction
are given in the following pages.
247
Central Sales Tax (CST)
248
Central Sales Tax (CST)
Setup :
In F11: Features (Accounting Features) set (for Non-Trading A/cs also) under Main-
tain Bill-wise details to Yes.
Create the following Masters
Branch Ledger
Ledger Under Maintain Inventory
balances values are
bill-by-bill affected
Oriental Traders - U.P Branch/Division Yes No
Sales Ledger
Ledger Under Used in VAT/Tax class Inventory
VAT values are
returns affected
Branch Transfers Sales Accounts Yes Consignments / Yes
Outward Branch Transfer
Outward
The completed Sales Invoice for Branch Transfer appears as shown below:
249
Central Sales Tax (CST)
250
Central Sales Tax (CST)
251
Central Sales Tax (CST)
Setup :
i. Party Ledger
Ledger Under Maintain Inventory values
balances are affected
bill-by-bill
Track Innovations (P) Ltd. Sundry Debtors Yes No
252
Central Sales Tax (CST)
On 20-5-2009, M/s. Oriental Traders paid an amount of Rs. 7,308 towards CST payable of
April 2009 vide Cheque No. 015630 dt. 20-5-09.
253
Central Sales Tax (CST)
Go to Gateway of Tally > Display > Statutory Reports > CST Reports > Forms Receivable >
Ledger > Sunrise Industries > press Enter.
The Forms Receivable Report of M/s. Sunrise Industries appears as shown below:
The above report shows that the C Form is to be received from the said customer for the supplies
made during the respective period. In this report, you can fill the Form No. and Date when
received.
View M/s. Surya Exports ledger for the forms to be received from them. You will notice that the
report appears blank as the prescribed declaration in H Form was received at the time of sale and
entered in the sales invoice during the voucher entry. However, you can view the vouchers for
which forms have been received in advance or at the time of transaction.
To view all vouchers, press F12: Configure and change the following setting:
254
Central Sales Tax (CST)
Press Alt+F5, if there are many transactions and type the Form No. and
Date to auto-fill the same in all the transactions pertaining to the related
form.
In the same manner, you can view other Forms Receivable from the rest of the dealers during the
required period.
255
Central Sales Tax (CST)
Go to Gateway of Tally > Display > Statutory Reports > CST Reports > Forms Issuable >
Ledger > Unique Paints (P) Ltd > press Enter.
The Forms Issuable Report of M/s Unique Paints (P) Ltd. appears as shown below:
View the Forms Issuable report of M/s. Swastik Associates ledger, where the movement of
goods affected the transfer of documents.
Go to Gateway of Tally > Display > Statutory Reports > CST Reports > Forms Issuable >
Ledger > Swastik Associates > press Enter.
Press F12: Configure and change the following settings:
Set Show All Vouchers to Yes.
Select E1 Form in the Show Vouchers of field and press Enter.
Even though the C Form has been received and the transaction has been reflected in the Forms
Receivable Report, as per the rules the declaration in Form E1 must be furnished. This is there-
fore, shown in the Form Issuable report.
256
Central Sales Tax (CST)
Practice Exercise
M/s Jaykanth Agency is a registered dealer under the CST Act and is one of the leading distrib-
utors of refractory materials. Create the following masters and pass the following transactions as
per the CST Act:
i. Party Ledgers
Ledger Under Maintain balances Inventory values
bill-by-bill are affected
M/s Bhim Traders Sundry Creditors Yes No
Kirti Engineering Sundry Debtors Yes No
M/s Shobha Fabrica- Sundry Debtors Yes No
tion Ltd.
M/s Virendra Exports Sundry Debtors Yes No
HDFC Bank Bank Accounts No No
Freight Charges Indirect Expense No No
257
Central Sales Tax (CST)
258
Central Sales Tax (CST)
Points to Remember
CST is levied on inter-state sales transactions.
Various CST Forms are issued/ received in the course of inter-state
trade which are mandatory to be produced while paying tax.
Tally.ERP 9 facilitates the creation of invoice for inter-state purchase
and sales with an additional field for specifying the type of Forms to be
issued/ received while recording transactions.
The Forms Receivable and Forms Issuable reports relating to CST for
any period can be generated and printed in Tally.ERP 9.
259
Lesson 10: Point of Sale (PoS)
Lesson Objectives
On completion of this lesson, you will be able to understand
POS or PoS is an acronym for point-of-sale. Point of Sale can be a retail outlet, a checkout
counter in a shop, or any other location where a sale transaction takes place.
POS system is a computerised cash register which adds up the sales totals, calculates the
balance to be returned to buyer and automatically adjusts the inventory levels to reflect the
quantity sold. The equipment required for POS to work effectively are cash registers, card
readers, bar-code scanners and so on.
261
Point of Sale (PoS)
Tally.ERP 9’s point of sale application can search your inventory database not only on item
description or SKU but also by alias name, part number, keywords and so on. Stock summary
reports can be used for viewing group-wise, category-wise, godown-wise, batch-wise and
supplier-wise details of the stock items.
Create a new company City Super Market in Tally.ERP 9, maintaining Accounts with Inventory.
The completed Company Creation screen appears as shown in figure.
262
Point of Sale (PoS)
263
Point of Sale (PoS)
264
Point of Sale (PoS)
Go to Gateway of Tally > Inventory Info. > Stock Items > Create
1. Name: Olive Oil
2. Under: FMCG. (Press ALT+C to create stock group FMCG under primary)
3. Units: Bottle. (Press ALT+C to create a simple unit of measure Bottle)
4. Set Standard Rates?: Yes. Tally.ERP 9 displays a screen where the standard rates can be
specified.
Applicable from: 1-4-2009.
Under Standard Cost, specify the rate as 125 and under Standard Selling Price specify
the rate as 150.
265
Point of Sale (PoS)
To view the field Set Standard Rates, set Allow Standard Rates for
Stock Items to Yes in F12: Configure.
In the alias column, the bar code details can be captured by simply
scanning the bar code of the stock item using a bar code reader.
266
Point of Sale (PoS)
6. Name of item: Olive Oil, Tally.ERP 9 displays the Item Allocation for Olive Oil screen
Enter the details as shown in the table.
Name of Item Quantity Rate Per Amount
Olive Oil 100 125 Bottle 12,500
7. Press Enter, Tally.ERP 9 displays the Accounting Details for Olive Oil screen
8. Accept the default screen.
267
Point of Sale (PoS)
By default, for the first time, the POS Invoice screen will appear in Single
Mode Payment.
If Set Standard Rates is activated, Tally.ERP 9 does not allow manual entry
of rate for stock items.
10. In the columns pertaining to payment details, Tally.ERP 9 shows the amount receivable,
1,350. In the field Cash Tendered, enter the cash tendered by the customer, which is 1,500.
Tally.ERP 9 automatically calculates and displays the balance amount to be refunded as 150
in the Balance field.
11. Enter the narration if required.
268
Point of Sale (PoS)
The customer pays Rs.900 by credit card, Rs.750 by cheque and Rs.150 by cash
i. Make an entry of the transaction in a sales voucher.
Go to Gateway of Tally > Accounting Vouchers > F8: Sales
1. Select the voucher type as POS Invoice.
2. Press F2 and change the date to 9-4-2009.
3. Enter the POS Invoice No.
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Point of Sale (PoS)
270
Point of Sale (PoS)
271
Point of Sale (PoS)
You can configure the printer to alter paper dimensions. The standard
paper size for a POS invoice is 4 inches by 11 inches.
To accelerate the process of recording the sales invoice entries, create
a voucher class by specifying the default ledger allocations for the pay-
ment details. If voucher classes are defined, Tally.ERP 9 will automati-
cally display the ledger accounts for gift vouchers/ card/ bank/ cash in
the POS Invoice.
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Point of Sale (PoS)
In Tally.ERP 9, you can create a voucher type with voucher class as shown :
The options to enable various Multi-mode Payment Ledgers are set to Yes
by default. But you need to create necessary ledger as applicable. The
ledgers Sodexo Gift Coupons and Citibank have not been created before.
You need to create the ledgers Sodexo Gift Coupons under Sundry
Debtors and Citibank under Bank Accounts in secondary ledger creation
mode.
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Point of Sale (PoS)
16. Under Default Accounting Allocations for each Item in Invoice enter the following details.
Ledger Name: Create Ledger Sales @ 12.5% under Sales Account by selecting the
appropriate VAT/Tax Class.
VAT/Tax Class: Sales @ 12.5%
Percentage %: 100
The options Rounding Method and Rounding Limit are automatically skipped.
Override using Item Default: No
17. Under Additional Accounting Entries to be added in Invoice, enter the following details.
Ledger Name: Create ledger Output VAT @ 12.5% under Duties and Taxes. Select the
Type of Duty/Tax as VAT and VAT/Tax Class as Output VAT @ 12.5%.
Type of Calculation: On VAT Rate
Value Basis:12.5%
Rounding Method: Not Applicable
Rounding Limit: Automatically Skipped
Remove if Zero: Yes
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Point of Sale (PoS)
ii. Create Stock Item Milk 500ML under FMCG with opening balance of 50 Nos.
1. Name: Milk 500ML
2. alias: Leave it blank
3. Under: FMCG
4. Units: Nos
5. Alter Standard Rates ?: Yes
6. The Standard Rates screen for Milk 500ML displays. Set the Standard Cost as Rs.75 per
Nos and Standard Selling Price as Rs.95 per Nos, all applicable from April 2009.
7. Under Tax Information, enter the Rate of VAT(%) as 12.50
8. Enter the quantity as 50.
9. Tally.ERP 9 displays the Stock Item Allocation of: Milk 500ML. Select the Godown as Main
Location and Quantity as 50 Nos. Leave the other fields blank.
10. Accept the screen to complete stock item creation.
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Point of Sale (PoS)
276
Point of Sale (PoS)
277
Point of Sale (PoS)
POS Register option will appear, only if the option Use for POS Invoicing
is activated in Voucher Type and at least one entry has been made.
278
Point of Sale (PoS)
You can also view the inventory details in POS Register by setting Show
Inventory Details also to Yes in F12: Configure.
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Point of Sale (PoS)
280
Point of Sale (PoS)
Points to Remember
POS, an abbreviation for Point-of-Sale can mean a retail shop, a check-
out counter in a shop, or a variable location where a sales transaction
occurs.
Tally allows the generation of POS Invoice with / without the use of a
voucher class.
In single-mode payment, the POS invoice will consist of only fields
petaining to cash.
In multi-mode payment, any number of modes can be created for
recording the amount received from the customer.
The POS invoice will display the amount allowed as a discount with a
negative sign.
The POS invoice will display the rate as ‘0’ when the items are given
free of cost to the customer.
When items with batch details are sold the same is displayed in the
POS invoice.
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Lesson 11: Job Costing
Lesson Objectives
On completion of this lesson, you will be able to
Job Costing applies to specific jobs undertaken according to customer requirements and specifi-
cations. Tally.ERP 9 enables the tracking of cost and revenue information down to the smallest
detail.
In order to determine the actual costs incurred, every job is assigned a job number or a job name.
Job costing systems determine the costs separately for each product or service, based on the
jobs undertaken.
In a typical job costing environment:
Many non-standard (customised) products/ service are produced/ rendered.
Orders are executed based on customer requirements.
Cost records are maintained for each distinct job.
Costs are traced or allocated to jobs.
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Job Costing
Computer Associates received two orders from SimplyC Solutions to upgrade existing
systems and deliver new systems.
The order details are given in the table.
S.No Order Description Terms of Contract Amount
1. Servicing and Upgrading of Lump sum contract, inclusive of 3,75,000
existing machines. replacement of parts
2. Installing new systems as Rate contract based on requirement 20,000
per specifications of systems
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Job Costing
Other Details
The company has given the servicing and upgrading job collectively to Raj and Archana.
The Service Charges amounts to Rs. 62,500 and Travel Expenses for visits made onsite
are Rs. 25,000
The company has given the job of installing new systems job to Rajesh
Service Charge Rs. 62,500 and Travel Expenses for visits made onsite-Rs. 25,000
The company has a stores godown and regularly purchases items from Reliable Comput-
ers.
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Job Costing
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Job Costing
The Parallel allocation of cost to regular cost centres takes place when
more than one cost category is enabled.
287
Job Costing
Create a Capital Account under the Capital Account group and enter
Rs.10,00,000 as the Opening Balance for the Capital and alter the Cash
account to a opening balance of Rs. 10,00,000.
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Job Costing
In this lesson, godowns have been created in the names of persons respon-
sible for stock handling.
Create a Dedicated Godown allotted to holding stocks for a default job and a normal Godown,
used regularly and not assigned to any particular job.
Similarly, create the following Godowns with the details given below:
Godown Name Under Allow Storage Default Job Name
of materials
Raj Primary Yes Upgrading Job
Archana Primary Yes Upgrading Job
Rajesh Primary Yes New Systems Job
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Job Costing
290
Job Costing
291
Job Costing
292
Job Costing
293
Job Costing
Create one new Voucher Type and two Voucher Classes to deal with the scenarios in a manufac-
turing as well as non-manufacturing environment.
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Job Costing
Voucher classes are available when stock journals are not used as manu-
facturing journals. The options available are as follows:
Use class for inter Godown transfers : Create this class to record
transfer of materials from one godown to another.
Use class for Job Costing consumption : Create this class to record
the consumption of materials at godown level.
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Job Costing
8. Press Enter and set Use Class for Inter-Godown Transfers to Yes.
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Job Costing
8. Press Enter. Set Use Class for Inter-Godown Transfers to No and set Use Class for Job
Costing Consumption to Yes.
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Job Costing
Go to Gateway of Tally > Inventory Vouchers > Alt + F9 to view Receipt Note entry screen
1. Press F2 to change voucher date. Type 1-4-2009.
2. In the Party’s A/c Name select Reliable Computers from the List of Ledgers Accounts.
3. Press Enter to view the order details screen and accept the default screen.
4. In the Purchase Ledger field, select Purchases from the List of Ledger Accounts.
5. Select Mother Boards from List of Items.
6. The Item Allocation screen appears. Enter the details as shown below:
Tracking No Godowns Quantity Rate Amount
Select 1 (from List of Track- Stores 12 Nos 3,000 36,000
ing Numbers)
Tracking Numbers
Many businesses deliver stock with a delivery note or a challan and the bill
is raised later. There may be a situation where a bill is raised first and the
goods are delivered against it or the goods are received later against a pur-
chase bill.
In either case, it is important to ‘track’ the delivery or receipt of inventory
against the bill. Tally.ERP 9 provides a facility called Tracking Numbers to
achieve the same.
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Job Costing
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Job Costing
If the Bill-wise Allocation screen does not appear then in F12: Configuration set
Use Defaults Bill for Allocations to No.
300
Job Costing
301
Job Costing
302
Job Costing
Similarly, make an entry in a Transfer Journal, selecting Archana as the Destination Godown
and ensure that the date is 4-4-2009.
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Job Costing
On recording the above entry, the stock available in the godowns decrease.
This value is considered for the consumption of materials during a job work
analysis.
A Manufacturing Journal can also be used to obtain the same result, but in
this, a voucher class cannot be used and the voucher should not have any
output.
Both direct and indirect expenses can be recorded through accounting vouchers by assigning
them to job cost centres.
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Job Costing
6. Select Travel Expenses from List of Ledger Accounts, enter 20000 in the Amount field and
press Enter to view the Cost Allocations screen.
7. Select Upgrading Job from List of Cost Centres.
8. Press Y or Enter to accept the screen.
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Job Costing
Select Primary
Press Alt+F1 to view the Godown summary in detailed format.
In the F12: Configuration, set Show All Items (incl. zero balance) to Yes.
In the F12: Configuration, set Use Common Ledger A/c for Item Allocation to
No.
1. In the Party’s A/c Name select SimplyC Solutions from the List of Ledger Accounts.
2. Press Enter to view the Despatch Details screen and accept the default screen.
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Job Costing
3. Select Sales from List of Ledger Accounts, enter 3,75,000 in the Amount field and press
Enter once to view Cost Allocations for the Sales screen.
4. Select Upgrading Job from List of Cost Centres.
5. In the Bill-Wise Details for SimplyC Solutions,
Select New Ref
Type the Name as SS-1
Enter the amount as Rs. 4,25,000
6. Press Y or Enter to accept the screen.
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Job Costing
i. The stock value remains the same, since there is no consumption involved in
the process of transfer of material. T
ii. he job work analysis will indicate a reduction of stock in the Godown from
which the transfer was made.
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Job Costing
Practice Exercise
Similarly, let us record transactions for New Systems Job.
1. On 7-4-2009, the following components are issued to Rajesh from the stores. This is for the
installation of New Systems for SimplyC Solutions. The details of Stock issued to Rajesh are
given below:
Name of the Item Godown Quantity Rate Value
CPU Stores 15 2,750 41,250
Monitor Stores 15 7,500 1,12,500
Keyboard Stores 15 725 10,875
Mouse Stores 15 250 3,750
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Job Costing
Ensure that the Voucher Type is a Transfer Journal and the Voucher Class is
Transfer.
2. Using the above components, Rajesh produced 15 computer systems on 8-4-2009. A manu-
facturing entry was passed when the components were converted into fully assembled compu-
ter systems for the job.
Go to Gateway of Tally > Inventory Vouchers > Alt + F7: Select the Voucher Type as Manu-
facturing Journal
Enter the details as shown below:
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Job Costing
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Job Costing
3. On 8-4-2009, Computer Associates paid Rajesh Service charges of Rs. 31,250 and Travel
Expenses of Rs. 20000.
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Job Costing
4. On 8-4-2009, Rajesh delivered 15 new systems to SimplyC Solutions. The agreed price was
Rs. 20000 per system.
In the F12: Configuration, set Use Common Ledger A/c for Item Allocation to
Yes.
In the Party’s A/c Name select SimplyC Solutions from the List of Ledger Accounts.
Press Enter to view the Order Details screen and accept the default screen.
Select Computers from List of Items and press Enter once to view the Item Allocation
screen for computers.
Select Tracking No: 1 and accept the Item Allocation screen. Ensure that the Item Alloca-
tion screen for computers is as shown:
Godown Quantity Rate Amount
Rajesh 15 Nos 20,000 3,00,000
5. On 8-4-2009, Computer Associates raises a sales invoice of Rs. 3,00,000 at the rate of Rs.
20,000 per system for 15 New systems delivered by Rajesh.
In the F12: Configuration, set Common Ledger A/c for Item Allocation to No.
In the Party’s A/c Name select SimplyC Solutions from the List of Ledger Accounts.
In the Despatch Details screen, select Delivery Note No. 1 and accept the default details.
The Item, Quantity, Rate and Amount fields are updated automatically.
Accept the default Item Allocation screen.
In the Accounting details screen select Sales from List of Ledger Accounts.
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Job Costing
In the Cost Allocation for Sales screen, select New Systems Job.
In the Bill-Wise Details screen, select the New Ref and enter the Name as SS-2. Enter the
amount as Rs. 300000.
Press Y or Enter to accept the screen.
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Job Costing
Go to Gateway of Tally > Display > Statement of Accounts > Job Work Analysis
Press Enter on Consumption
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Job Costing
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Job Costing
The Godown Summary viewed through the menu, displays all godowns whereas
the Godown Summary viewed by drilling down from Job Work Analysis report,
displays only the godowns specific to the job.
To view Job Work Analysis report of New Systems Job, Go to Gateway of Tally > Display >
Statement of Accounts > Job Work Analysis
Select New Systems Job
The Job Work Analysis report of New Systems Job appears as shown :
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Job Costing
Similar to the Upgrading Job, the Material Consumption Summary and the Godown
Summary can be viewed, by drilling down the report.
318
Job Costing
Accept the Configuration screen to view the summary of Jobs performed for SimplyC
Solutions.
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Job Costing
Points to Remember
Job Costing is evaluating the cost of each specific job order.
Tally.ERP 9 permits you to create a Godown / Location where you need
not store materials but treat it as a virtual godown.
Tally.ERP 9 allows a stock journal voucher type to be used as a manu-
facturing and as a non-manufacturing journal.
A Manufacturing journal voucher type is used to track the list of compo-
nents used, its value and the additional cost of manufacture associated
with each product.
A stock journal voucher type that is not used as a manufacturing jour-
nal, can be used to create voucher classes for the purpose of inter-
godown transfers and for job costing consumption records.
There are two levels of reports generated in job costing viz., Job Work
Analysis and Material Summary Report
A Godown summary displays consumption and other transfer details of
all the godowns.
320
Lesson 12: Multilingual Capabilities
Lesson Objectives
On completion of this lesson, you will be able to understand
The multilingual functionality of Tally.ERP 9, allows you to interact with the software in the
language of your choice. It offers you tremendous freedom in communication. You can maintain
your accounts in an Indian language, view them in another and print them in yet another Indian
language.
All Indic languages are unicode. They are presently supported only on Windows ME/ Windows
NT/ Windows 2000 and Windows XP operating systems. You can enable Indic languages support
at the operating system level or at the time of installing Tally.ERP 9.
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Multilingual Capabilities
Follow the steps given below to experience the multilingual capabilities of Tally.ERP 9.
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Multilingual Capabilities
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Multilingual Capabilities
Tally.ERP 9 automatically loads the relevant dictionary for the configured language and the
interface (menus and prompts) is accordingly translated into the selected language.
324
Multilingual Capabilities
The Name of the company, the Unit of Measure and the Currency are
neither translated nor transliterated, but are displayed in the language in
which they were created.
325
Multilingual Capabilities
Show tables with Masters only in Current Language when set to Yes, displays the pre-defined
and user-defined masters only in the language selected. Otherwise, the pre-defined and user-
defined masters are displayed in English or in the selected language along with defined aliases of
other languages, if any.
When Show tables with Masters only in Current Language is set to Yes,
displays the pre-defined and user-defined masters only in the language
selected. Otherwise, the pre-defined and user-defined masters are dis-
played in English or in the selected language along with defined aliases of
other languages, if any.
326
Multilingual Capabilities
based on their nearest phonetic equivalents. Spell the word in English for Tally.ERP 9 to display it
in the selected language.
By using Tally.ERP 9, you can now enter data in any Indian language using a phonetic keyboard
to generate bills, vouchers, invoices, receipts, reports and ledgers, confirmation letters, reminder
letters and so on.These reports are displayed in the language selected after transliteration.
Examples:
English Word Keys to be used for phonetic
representation in Indic
languages
Purchase Parachej
Sales Sels
Item AiiTam
Inventory invenTrii
Conveyance Kanveyans
Salary Selarii
Postage & Telegram posTej end Teligram
Commission Kamiishan
Discount DiskaunT
Debtors DeTars
Creditors kreDiiTars
Capital KaipiTal
Ledger lejar
Ramjilal rAmajiilAl
Cash Kaish
Shyamlal ShyAmalAl
Godown GoDAun
Branch Branch
Loan lon
Customer kasTamar
Supplier SaplAyar
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Multilingual Capabilities
Company Kampanii
Accounts ekaauMTs
This allows you to create ledger masters and stock items with their respective aliases in Indic lan-
guages.
Go to Gateway of Tally > Inventory Info. > Stock Item > Create.
1. Name of the Item: Type as chaaval and press Enter (Tally.ERP 9 automatically interprets the
name in Hindi).
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Multilingual Capabilities
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Multilingual Capabilities
The User Interface when configured in any Indian language, results in the phonetic keyboard to
automatically use that language. However, you can define the phonetic keyboard by pressing
Alt+K and selecting the phonetic keyboard as shown below:
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Multilingual Capabilities
331
Multilingual Capabilities
332
Multilingual Capabilities
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Multilingual Capabilities
Select Kannada as the second language and type Suma TrEDrs as Ledger Name.
Select English as the third language and type Suma Traders as Ledger Name.
Select End of list and press Enter.
2. Under: Sundry Creditors.
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Multilingual Capabilities
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Multilingual Capabilities
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Multilingual Capabilities
337
Multilingual Capabilities
All the numbers entered in Tally.ERP 9 will appear in English only (i.e.,
1, 2, 3…).
338
Multilingual Capabilities
339
Multilingual Capabilities
The Print Preview of the Sales Invoice in Hindi is displayed as shown below:
340
Multilingual Capabilities
341
Multilingual Capabilities
The Print Preview of the Sales Invoice in Kannada is displayed as shown below :
342
Multilingual Capabilities
The Name of the company, the Unit of Measure and the Currency
are neither translated nor transliterated, but appear in the language in
which they were created.
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Multilingual Capabilities
12.4 Transliteration
In Tally.ERP 9, the masters created with aliases in more than one Indic language can be dynami-
cally converted or transliterated. Transliteration is based on the phonetic behaviour of Indian lan-
guages. Tally.ERP 9 permits the transliteration of strings across all Indian scripts. However, such
transliteration is possible because of the in-built Language Precedence feature in Tally.ERP 9.
The order of Language Precedence in Tally.ERP 9 is as follows:
1. English
2. Hindi
3. Gurumukhi (Punjabi)
4. Gujarati
5. Tamil
6. Kannada
7. Malayalam
8. Marathi
For instance, if a master is created in Hindi, with aliases in Kannada, the resultant report
displayed will be in the language selected. However, if you want to view the report in another Indic
language, then the transliteration of the Name of the Master is in the script selected. The pronun-
ciation is Hindi-based since Hindi precedes Kannada in the language precedence order.
344
Multilingual Capabilities
Press Alt+G from display Day Book and select Tamil as the language.
345
Multilingual Capabilities
In the report, the ledger names in Hindi are transliterated into Tamil because Hindi comes before
Kannada in the language precedence order.
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Multilingual Capabilities
You can view the Stock Summary displayed above in the language of your choice, by pressing
Alt+G and selecting the required language from the list of languages.
Select Kannada
347
Multilingual Capabilities
Masters and Ledgers (i.e., the Stock Item names) are automatically translated into Kannada
based on the predefined language alias in the masters.
348
Multilingual Capabilities
349
Multilingual Capabilities
350
Multilingual Capabilities
You can print the above Confirmation Letter in the language of your choice, by defining the print
language at the time of printing.
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Multilingual Capabilities
Points to Remember
You can maintain your accounts in any one of the Indian languages that
Tally.ERP 9 supports, view them in another and print the same data in
yet another Indian language.
Tally.ERP 9 permits the transliteration of strings across all Indian scripts.
352
Lesson 13: Technological Advantages of
Tally.ERP 9
Lesson Objectives
On completion of this lesson, you will be able to understand
TallyVault a Company
Activate Security Control for a Company
Create Security Levels and Assign Passwords
Activate TallyAudit and View the TallyAudit list of Vouchers/Ledgers
Backup and Restore Tally.ERP 9 Data
Split Company Data
Export and Import Data and Vouchers
Export Reports using ODBC
Use Web-Enabled, Print Preview and Online Help Features
Print Reports and Cheques
Tally.NET Features
Control Centre Capabilities
Advantages of Support Centre
13.1 TallyVault
The Security of Data, is always a matter of concern for businesses since most organisations
depend on the confidentiality of information. The Tally Vault feature is an enhanced security
system which allows for encryption of the company data.
TallyVault ensures that the original information is under no circumstances made available to
another user. This technique is similar to encryption-decryption, and the decrypted form of data
is never stored in the system. Apart from this, it uses the non-stored password mechanism. This
is done by using highly advanced mechanisms to validate a new user who does not have a prior
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Technological Advantages of Tally.ERP 9
knowledge of the original password. The combination of all these facilities makes, TallyVault one
of the most secure means of information storage.
Press Alt+F3 to view the Company info. menu, highlight Change TallyVault and press
Enter.
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Technological Advantages of Tally.ERP 9
Enter the Password as NTC (all in capitals) in the New password field and repeat the
same in the Repeat New Password field.
Press Enter to accept.
Tally.ERP 9 prompts change – Yes or No.
Press Enter once again and Tally.ERP 9 displays the Information screen as shown below:
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Technological Advantages of Tally.ERP 9
After TallyVaulting a company, Tally.ERP 9 retains the original company and creates a new
encrypted company to allow you to decide whether you want to retain the encrypted com-
pany or not.
The number 10000 is displayed to help you identify your company. This differs based on
the number of companies already existing in the data directory.
Accept by pressing any key.
Tally.ERP 9 brings you back to the Company Info. menu.
Use Alt+F1 to Shut the Company and press Enter on Select Company and the screen
appears as shown below
You cannot see the name of the encrypted or TallyVaulted company. This ensures that
nobody has access to your data.
Press Enter and select the company 10000.
Tally.ERP 9 prompts for the TallyVault Password as shown below :
356
Technological Advantages of Tally.ERP 9
Do not forget your TallyVault password because the data once lost cannot
be retrieved.
357
Technological Advantages of Tally.ERP 9
Give the details according to what you had entered in the Company Alteration screen and
accept.
Tally.ERP 9 loads the company and displays the Gateway of Tally on entering the correct user
name and password. Now that we have activated the Security Control for National Traders, let us
create the Security Levels.
The password is case sensitive. Any variation in the case will not allow you to
login to Tally.ERP 9.
The menu allows you to define the security level under the field Types of Security. The user
name and password for that access level is defined under the field Users and Passwords.
Press Enter on Types of Security.
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Technological Advantages of Tally.ERP 9
Under List of Security Levels, the default value is Data Entry, Tally.NET User and
Tally.NET Auditor
Press the Down Arrow Key to create a new security level.
Enter Manager in the List of Security Level field.
Press Enter to view the Level definition screen.
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Technological Advantages of Tally.ERP 9
Figure 13.10 Security level Definition screen with Allow and Disallow Facilities
Once the above details are entered, the screen is divided into two broad columns having
two sub – columns. The left side is to disallow access to the various options of the systems.
The right side allows the security level, different facilities.
The sub-columns are Types of Access and the List of Reports under both Allow and
Disallow facilities Enter the type of access you wish to give and the option to be control-
led. Once the entry is completed select End of List from the Type of Access field to com-
plete the allocation.
Press Enter after specifying the cut-off date as 31-Dec-2009 under Disallow the following
Features
Select Full Access (from the Type of Access list):
Select the Balance Sheet from the List of Reports as per this screen:
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Technological Advantages of Tally.ERP 9
In order to make any modifications in any of the reports, select the option Back-dated
Vouchers under the field Full Access select Create/Alter Back Dated Vouchers.
Verify with the screen shown below:
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Technological Advantages of Tally.ERP 9
Once you accept the above settings you are taken back to the Security Levels for Company
screen. The cursor rests at the blank field following the recently created one. Follow the same
procedure if you require to create another Security level else accept and return from this screen to
the Security Control Menu.
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Technological Advantages of Tally.ERP 9
You would need to create different users who belong to one or more different Security Levels or
Types of security. Select the option at the Security Control menu to define users, give their
passwords and their security levels.
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Technological Advantages of Tally.ERP 9
Let us shut National Traders and re-select it with the Manager user name and password.
Notice that the report Balance Sheet is not appearing in the menu. This is because the access
was denied while defining the security level. Practice this by disallowing other reports and make
your observations.
364
Technological Advantages of Tally.ERP 9
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Technological Advantages of Tally.ERP 9
Only a portion of the actual report has been displayed for your reference. Since the password
feature was not activated when these entries were made, the field Entered By appears as
Unknown.
Place the cursor on the relevant voucher, click on F7: Accept One to accept the voucher
as valid and remove it from the list.
Click on F7: Accept All option, If you are satisfied that all the vouchers are valid.
To view the Ledger Audit list, select Ledger from the Tally Audit.
A screen showing the Id, Ledger Names and the Opening Balance is displayed as shown below:
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Technological Advantages of Tally.ERP 9
Make changes to any two Ledger Accounts these will be shown in the list of new or altered Ledger
Accounts. Notice that their Id does not change. Hence it is useful to track them. The user who
changed the accounts and when it was done, can be identified. Once you are satisfied with the
changes made in the ledger click on F7: Accept One or F7: Accept All. This would accept the
ledger as valid and it will be removed from the list.
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Technological Advantages of Tally.ERP 9
Specify the source (where Tally.ERP 9 has to take the data from).
Specify the destination (where you want Tally.ERP 9 to store the data backup).
Tally.ERP 9 then displays the list of companies created – select one.
Backup Precautions
As we are already aware, data on a computer is vulnerable to data loss. It is
therefore important that we do not overlook the importance of taking a regu-
lar backup of data, however strong the database may be. The maintenance
of important data can be made continuous and hassle-free with a little plan-
ning and forethought.
Depending on the volume of data entry, an appropriate backup mechanism
is devised. This can be done by maintaining a backup directory in the local
hard disk or server. External storage media such as floppy disks and zip dis-
kettes can also be used. We can have sub-directories for every day of the
week under the main backup directory. Regularly data backups, depending
on the day of the week can be taken in the following manner:
Monday – C:\TallyBackup\Monday
Tuesday – C:\TallyBackup\Tuesday
Wednesday– C:\TallyBackup\Wednesday and so on till Saturday
The above procedure ensures that there exists a reliable data backup at any given time. The
Restore option is used to bring back data from the data backup.
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Technological Advantages of Tally.ERP 9
13.4.2 Restore
Restore literally means ‘to bring back’. Tally.ERP 9 allows the restoration of data from one
medium to another. In Tally.ERP 9’s context, restore means we have a Tally.ERP 9 backup and
we want to work on the data backup instead of the current data. This can be done from the
Company Info screen by selecting the Restore field.
The Select Companies to Restore screen appears as shown below:
You have to specify the destination (where Tally.ERP 9 has to store the data backup).
Then specify the source (where you want Tally.ERP 9 to take the data from).
Tally.ERP 9 then displays the list of companies you have in the source. Select the required
companies to be restored as desired.
Restore Precautions
It is preferable not to restore a backup on the original data directory prima-
rily to ensure that no data is unintentionally overwritten.
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Since National Traders has data only for one year (April 1, 2009 to March 31, 2010).The
split will take place from the mid-point (September 1, 2009).
You can change the date given in the Split From.
Press Enter and accept to the split. Tally.ERP 9 creates two new companies.
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We will now learn about Tally.ERP 9’s export and import capabilities, which enables Tally.ERP 9 to
interact globally. Statements and data from Tally.ERP 9 can be exported to other programs like
spreadsheets and databases. Only data from Tally.ERP 9 can be imported and not data from
other systems. Importing from other systems involves the usage of ‘Tally.ERP 9’s Definition
Language’ TDL and this is outside the scope of this training.
For example, since we have selected XML, the filename displayed will be Master.xml
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Technological Advantages of Tally.ERP 9
Type of Masters – Any of the mentioned master types can be exported. Select All Mas-
ters and accept it to Export.
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Technological Advantages of Tally.ERP 9
Tally.ERP 9 first asks for the language. Select Default (All Languages), then convert it into
the export format. The different formats are: ASCII, EXCEL, HTML and XML. The filename
extension will take the default format. For example: Selecting ASCII, results in the filename
being displayed as Daybook.txt.
Specify the other details as desired.
Accept to export, Data exported from a company can be imported into another.
The opening balance can be modified from the exported source file. Carefully select, Modify with
new data.
Data can be imported from the previous version, provided the Import
filename is in the XML format, since Tally.ERP 9 supports only the XML
format.
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Tally.ERP 9 ODBC extracts data from Tally.ERP 9 and submits the reports in MS Excel format.
A brief exercise will explain the process. We wish to send greeting cards to all our customers. The
customer (local debtors) database exists in Tally.ERP 9. These names and addresses can be
printed out on MS Excel.
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Technological Advantages of Tally.ERP 9
Let the option Use the Query Wizard to create/edit queries remain checked.
The Query Wizard displays the Tally.ERP 9 fields that are selected. You can also give filter
conditions to limit the data to only those that match your criteria
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Technological Advantages of Tally.ERP 9
Select the ledger and move it by clicking the > button to the right of the following fields:
$Name, $Parent, $Address (move all the other address fields as well.)
Click on Next.
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Technological Advantages of Tally.ERP 9
Then in the next Query Wizard Screen, filter the data to limit all ledger accounts belonging
to the group that contains the name Sundry Debtors. We want to print the List of Sundry
Debtors only.
Select Return Data to Microsoft Excel from the last window of the Query Wizard and click
on Finish. Then the process in the domain of MS-Excel is complete.
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There are various options that are automatically filled in provided the information had been
supplied in the master records. Check if the details are all right. Select Yes, If they are, and if not
select No to change the options. The cursor first goes to the To E-mail address field as it saves
time by skipping standard information. However, to change the standard information, use a
backspace and retype.
The fields that appear in the Mailing Outstading Ledger screen is briefed
below:
E-mail Server: Give the name of your E-mail SMTP server, e.g.
mail.btinternet.com. It should be a valid and compatible SMTP server
to send your mail. Ask your Internet Service Provider or network
administrator for help, if required. This information is entered only once
and thereafter use it by default.
From: Your Company name is picked up from the Company Informa-
tion Master records.
From E-Mail Address: Your own e-mail address. Tally.ERP 9 picks up
the address given in the Company Information master data. Fill this
option, if it does not exist.
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Technological Advantages of Tally.ERP 9
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13.8.3 Upload
Any report, statement or data can be published on the internet. Publishing is carried out by
uploading the report to an Internet Server that has been configured to accept files in specific pro-
tocols. A Site is basically a specific directory space allotted on that server. Protocols are sets of
rules and specifications on how data and files are transferred over a network. It covers all aspects
of communication between computers including the content, its formatting and error control.
For example: You want to publish your Price List on your Website. Select the Price List from
Inventory Information. Click the Upload button. The first time you upload, fill up the dialogue box
with the information required. Select No initially, in the upload window to edit information on the
screen.
The fields that appear in the Upload screen are briefed below:
Upload to FTP Site: FTP or File Transfer Protocol, is the most com-
mon choice of transferring data or files of any type to an Internet site.
An FTP site is a directory space in a server that accepts FTP connec-
tions called the FTP Server.If you know that your server is set up for
HTTP/HTTPS, then use this option, else choose FTP.
Upload to Web Page – HTTP/HTTPS: HTTP - short for Hyper Text
Transfer Protocol is a standard for the transfer of HTML files over the
internet. HTTP Servers are pre-programmed to accept HTTP connec-
tions. HTTPS sites are Servers that are configured to accept secure
connections. They conform to standard security protocols (e.g. SSL
and SET) to ensure that your data and files are not tampered.
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URL: Stands for Universal Resource Locator, identifies the server
address where you want your report to be published. In order to use
FTP you will need to know the FTP server name and directory path.
The FTP server name is the domain name of the Web server to which
you are publishing (for example, ftp.server.com). The directory path is
the folder on the server where your web page is stored (for example, /
public_html). For a web page, an URL will typically be in the form
www.myweb.com/public_html.
Secure Server: In order to upload a Web Page a secure connection is
required. Select Yes, in this option if you think your data is sensitive. A
secure site is one that has an ‘s’ prefixed with http. You will know it is a
secure site when you see in your browser URL like: https:/
/www.mybank.com/myaccount/stats.htm.
User Name and Password: The Internet server would require an Id
proof before allowing you to upload data and files on site. Contact your
Internet service provider if you have forgotten your user name, pass-
word or FTP location.
File Name: A file name is given to an FTP Site to where the content is
uploaded. Accept it as it is or modify it, if necessary.
Format: There are four formats that have already been explained ear-
lier under the e-mail section.
The button With Preview toggles with No Preview and the last saved
setting is retained.
The Tally.ERP 9 Reference Manual, displays the content for the particular screen. This facility is
available on all screens in Tally.ERP 9.
Print? Yes or No. The report will be printed using the options specified on the screen on selecting
Yes. However, the options before printing can be changed by selecting No, if required.
There are two types of print configuration options. They are Common Print-
ing Options and Dynamic– Report Specific Options.
Common printing options
Common printing options affect the printing of all reports and are changed
by selecting the appropriate button which are explained below as follows:
Print Language: Reports can be printed in the language supported by
Tally.ERP 9.
With Preview: To view the report in print preview mode before actual
printing.
Titling: To change the title of the report.
Page Nos.: To specify the page number range.
Pre - Printed / Plain Paper: Toggle to make the selection.
Print Format: A pop-up list displays the printing formats available in
Tally.ERP 9. The formats provided are, Dot-Matrix Format, Neat For-
mat and Quick (Draft) Format.
With Colour: This option is only relevant if you have a colour printer.
Copies: To specify the number of pages to be printed.
Printer: To change the printer. This also displays the default paper size
that you have set for the printer.
Dynamic - Report specific options
Options specific to a report, are displayed in a sub-screen when you select
to print it. You are permitted to change various options before you finally
print. Tally.ERP 9 supports printing of reports in various languages.
Notice the Standard Options in the button bar on the right hand side. The
specific options for printing the Balance Sheet appears in the sub-screen.
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Technological Advantages of Tally.ERP 9
Neat Mode and Quick/Draft Mode print formats are compatible with most of the printer drivers
installed on the Windows Operating System. Dot Matrix Format in Tally.ERP 9 is a special print
format which allows you to print Tally.ERP 9 reports in text format using the Blazing speed of Dot
Matrix printers.
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Technological Advantages of Tally.ERP 9
In today's hi-technology software environment, most GUI-based softwares do not provide Dot
Matrix printing capabilities. On the selection of a Dot- Matrix Format, the screen appears as
shown below :
The Epson printer drivers have been defined by default. You may install Epson Printer drivers in
Windows for any Dot Matrix printer and use this format for faster report printing.
Any Dot Matrix printer may be used, but ONLY the Epson printer drivers (LQ
and FX series) should be used for the Dot Matrix Format printing of
Tally.ERP 9.
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Technological Advantages of Tally.ERP 9
to be printed directly. Cheques are printed only when printing a Payment Voucher. Since the
cheque formats differ from bank to bank, Tally.ERP 9 facilitates cheque printing according to user
defined cheque dimensions.
Let us activate the Cheque Printing capability in the F11: Features (Accounting Feature).
Press Enter after setting the feature Set Alter Cheque Printing Configuration to Yes.
Tally.ERP 9 displays the Company Cheque Details screen according to this screen:
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Technological Advantages of Tally.ERP 9
Company Name on Cheque: Many banks give cheques with the company name
already printed on it. To print Tally.ERP 9 on the cheque beneath the signature, give the
name e.g. Indus Enterprises to print the name, or leave the option blank if you don’t
want to utilise this option.
Name of Banks: Press the space bar and you will get a pop-up list of the bank ledger
accounts created in the company. There are two ledgers viz. the Deposit Account and
the State Bank of India.
Select the bank for which you want to specify the user-defined cheque dimensions. Here
select State Bank of India and press Enter.
You can now fill in the dimensions of the cheque in the Cheque Printing Configuration screen.
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Technological Advantages of Tally.ERP 9
In case of a cheque with two signatories, both can be specified. Both could be the same salutation
or different, e.g., one could be Director, the other could be Secretary.
Give whatever you currently use. Many banks pre-print both the company name and the saluta-
tion.
Take the bank's cheque book and measure the dimensions of a cheque
carefully in millimetres and fill the form. You may need to correct it after
trying out a couple of cheques so that the positioning is accurate. The
placing of the cheque in the printer also determines the printing. Trials could
be made on photocopies of a cheque before using an actual cheque leaf.
All the fields are self-explanatory. The Salutation fields, are for signatures
and naturally follow the Company name (that you might have chosen to
print), e.g. Director.
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Technological Advantages of Tally.ERP 9
Here, after crediting the State Bank of India account, two additional fields appear. They are: Name
on Cheque and Cross Cheques explained below:
Name on the Cheque: On selection of the Party Account, the Name on the cheque is filled
with the Party’s account name. Thus, instead of the Party Account, if any other expense
head is selected, the expense head will not appear as the name on the cheque.
Cross Cheque using: This is filled in by the most common words used - Account payee.
However, you can change it.
After accepting the voucher, Tally.ERP 9 immediately prompts you to print the cheque! Click on
the button Print Preview and then accept the print command to view the printed cheque.
Check the dimensions given in the F11: Features. Ensure that you
have not left any field, other than the salutation fields, blank.
Trial and error is the only way to get the printing in the right positions.
Therefore do not panic if some words do not print in the correct posi-
tions. Change the set-up a couple of times to set it right. This is neces-
sary to be able to print on the many different cheque styles used by
different banks.
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Technological Advantages of Tally.ERP 9
Points to Remember
Tally.ERP 9 has a customisable security control for company’s data.
Tally.ERP 9 has a flexible backup mechanism where in you can take a
backup of the data and can restore the same data.
Tally.ERP 9 Audit provides the capability to the administrator/auditor to
track changes in the accounts.
Data exported to a spreadsheet can be reorganised and used for statu-
tory presentations.
ODBC (Open Database Connectivity) compliance allows other pro-
grams to use data from Tally.ERP 9 directly.
E-mail, internet publishing and web browser are the web-enabled fea-
tures available in Tally.ERP 9.
Tally.ERP 9 provides an online help system, which is context sensitive.
TallyVault feature is an enhanced security system
Tally.ERP 9 Print Preview facility helps you check printed report formats
and layouts before actual printing takes place.
Tally.ERP 9 allows us to print cheques directly.
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Lesson 14: Tally.NET and Remote Capabilities
Lesson Objectives
On completion of this lesson, you will learn how to
Tally.NET Features
Tally.NET is a default feature available in the product and provides the following host of capabili-
ties.
Connect companies from Tally.ERP 9
Create and maintain Remote Users
Synchronization of data (via Tally.NET)
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Tally.NET and Remote Capabilities
As discussed above, Tally.NET is enabled in Tally.ERP 9 but however, certain configurations are
required to be setup for enabling Company data to get connected. Follow the steps given below :
1. Configuring Tally.NET features
2. Creating and Authorising Remote Users
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Tally.NET and Remote Capabilities
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Tally.NET and Remote Capabilities
A message Company connected successfully is displayed in the Calculator panel. In the same
way to disconnect a Company from Tally.NET,
Go to Gateway of Tally,
Press F4: Disconnect
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Tally.NET and Remote Capabilities
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Tally.NET and Remote Capabilities
Enter the required Account ID in the Your E-Mail ID field and Password in Your Tally.NET
Password field. The password is sent by e-mail separately to the email address provided
while activating Tally.ERP 9.
Press Enter
The Control Centre screen appears as shown:
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Tally.NET and Remote Capabilities
To view User Management screen, select User Management and press Enter
401
Tally.NET and Remote Capabilities
Accept to save the new Tally.NET User that has been created
402
Tally.NET and Remote Capabilities
403
Tally.NET and Remote Capabilities
404
Tally.NET and Remote Capabilities
405
Tally.NET and Remote Capabilities
Select the required company and press Alt+O or click O:Open or press Enter.
The Gateway of Tally for the selected company appears displaying the Remote User
Details
In the Select Remote Company screen, the companies that are Offline
does not appear against the Company Name when the company is
connected to Tally.NET Servers.
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Tally.NET and Remote Capabilities
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Tally.NET and Remote Capabilities
Points to Remember
Tally.NET allows to access Company data Remotely
408
Lesson 15: Application Management and
Controls
Lesson Objectives
On completion of this lesson, you will learn how to
409
Application Management and Controls
Before we start using Control Centre in Tally.ERP 9, it is recommended to understand the process
of installation of Tally.ERP 9 as explained.
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Application Management and Controls
In the same way, you can install Tally.ERP 9 Multi-User. In Multi-User installation, select the
required programs (Tally.ERP 9 / License Server) to install at Server and client locations and
specify other required details.
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Application Management and Controls
The Activate License has three options which allows you to activate the license based on your
requirements.
1. First time activation for your organization: allows you to activate a single site license.
2. Activation of an additional Site for your organization: allows you to activate the next or
consecutive site licenses for your organization.
3. Activation of Promotional Rental License : allows you to activate promotional rental license.
Select First time activation for your organization
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Application Management and Controls
The Activate License Form appears, Enter the required License Serial Number in the
Serial Number field
Enter the required Activation Key in the Activation Key field
Enter your E-Mail ID in the E-Mail ID of Administrator field
Repeat the Email-ID in the Repeat (E-Mail ID of Administrator) field
An unique account identification is created using this E-Mail Id and the license serial number is
linked to this account. The License Key, Password and Account related information are mailed
to the E-Mail Id provided in the activation form.
Press Enter, Tally.ERP 9 searches for the availability of Internet Connectivity on your com-
puter.
If Internet Connection is Available, Tally.ERP 9 displays a message Congratulation! Your
activation Request has been processed.
The Tally_lck.lic file is created and placed in the default Tally.ERP 9 directory.
You can also Activate License in Offline Mode, if Internet Connection is not Available. To activate
License in Offline Mode, generate the License File Offline and paste the license file onto the
system where internet is available and Tally.ERP 9 is installed, go to the licensing menu, select
send External request, the license file will be generated, copy the file and paste it where the
license is to activated.
Step 2 : Unlock License File
Access your mail and retrieve the unlock key
In the Startup screen, select Unlock License
Type the Unlock Key in unlock field and press Enter
On successfully unlocking the license file, Tally.ERP 9 displays the message Congratula-
tions! Your License is successfully activated.
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Application Management and Controls
Start Tally.ERP 9, the License Serial Number and Account ID are displayed under the Ver-
sion and Licensing sections of the information panel respectively.
In the same way, you can activate license for Multi-Site, by selecting Activation of an Addi-
tional Site for your Organisation in the Activate License screen and providing Site Name, Site
Administrator Email ID and other related details.
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Application Management and Controls
Based on the authentication received from Tally.NET you can access the Control Centre.
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Application Management and Controls
The Control Centre screen displays the options available which are briefly described below
My Tally.NET Account use this option to configure, activate / deactivate sites, create
users and assign security levels and manage your Account details. The My Tally.NET
Account has the following sub-options:
Licensing & Configuration enables you to configure and surrender a site belonging to
an account. The configuration set can be created for each site by the Account / Site
administrator. Further, the Account Administrator may allow or restrain the site adminis-
trator from making any changes to the configuration set locally.
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Application Management and Controls
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Application Management and Controls
The My Tally.NET Accounts screen displays the User ID against Tally.NET ID field, the Account
ID, Security Level, permission to access Tally.NET, Site ID (for Multi Site only), permission to
administer the Account and the account status. It also displays the Account IDs associated with
your Account, based on your requirement you may disassociate your Account ID.
Site ID will not appear when you have a Single Site Account.
To disassociate from another account, select the required Account ID
and press Alt+D.
The Account/Site Administrator ID cannot be disassociated from
associated accounts.
Select the required Site Account ID and press Enter, the Control Centre of an Account
appears
You can use this option to configure, activate / deactivate sites, create users and assign security
levels and manage your Account details. The options available are briefly explained below :
Licensing & Configuration: Allows you to configure and activate/ deactivate a site
User Management: You can create Remote Users and assign security controls
Profile Management: Maintain details related to your account
My Activity History: Display the list of accounts where your ID is used
Change Account Admin: Allows the Account Administrator to change the Account Admin-
istrator's User ID
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Application Management and Controls
By default, the status is Active, based on your requirement you can surrender the license by
selecting Surrender from the list of Status. The license status are briefly explained for your
benefit:
Active: indicates that the site is in operation
Surrender: indicates that the site has been surrendered
The Licensing & Configuration screen displayed above is for Single Site
Account. The Site ID will be displayed for Multi-Account Site.
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Application Management and Controls
General Configuration
To create configuration set for a Site, follow the steps given below
In the Licensing & Configuration screen
Click on F6: Show Config or press F6
The General Config and TDL Config fields appear
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Application Management and Controls
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Application Management and Controls
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Application Management and Controls
User Management
You can administer users belonging to an account by assign security levels with predefined per-
missions in order to enable remote access, assign users to a site and maintain the active users as
required.
To administer the users within an account follow the steps shown:
In the Control Centre screen
Select User Management and press Enter
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Application Management and Controls
By default, the Security Level for the User ID, Permission to access Tally.NET and the
Status is displayed.
To create the required user:
Select the required Security Level from the list of Security Level
The options which appear in the Secuirty Level field are explained below :
Owner: has the capability to manage Sites/Users belonging to an
account. The Owner is not permitted to change Account/Site Admin
ID, Site Status and Account Profile.
Standard User: Created with predefined permissions. All users other
than the Owner are created under this security level.
Enter the required E-Mail ID in the Tally.NET ID field. Using the E-Mail ID provided a
Tally.NET ID is created and the Password is emailed.
Set Tally.NET User field to Yes when you want the user to access data from a any-
where using Tally.NET.
In the Status field, select the required status from list of Status
The options which appear in the Status field are explained below :
Active: Set the status to active when you want the user to be in opera-
tional mode.
Deleted: Set the status to deleted when you want the user to be
removed permanently.
In-active: Set the status to In-active when you want the user to be non-
operational mode. You can change the status to Active as required.
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Application Management and Controls
The User Management screen also displays the number of Tally.NET Users created for an
account. To view in Detailed mode,
In the User Management screen,
Click F1: Detailed or press Alt+F1
The User Management screen appears displaying the user details as shown
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Application Management and Controls
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Application Management and Controls
By default, the Standard User is authorised to access the Support Centre only, based on
your requirement select the access controls from the list of Access Rights as shown.
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Application Management and Controls
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Application Management and Controls
Profile Management
The user can enter the essential information related to the Account/Site ID in Profile Manage-
ment. To enter the details regarding the organisation follow the steps shown:
In the Control Centre screen
Select Profile Management and press Enter
The Profile Management screen appears
By default the E-Mail ID of the Account Administrator appears in the Account ID field.
Select the required account type from the list of Account Types
Enter the details related to the Account as shown.
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Application Management and Controls
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Application Management and Controls
Enter the required Account Administrators ID in the Old Account Admin ID field
Enter the new Account Administrators ID in the New Account Admin ID field
Accept the create a new Account Administrators ID
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Application Management and Controls
15.4.3 My Profile
You can manage the Tally.NET User's profile by providing the required details for further commu-
nications. To change the user profile the user has to follow the steps shown:
In the Control Centre screen
Select My Profile or press Alt+P
The My Profile screen appears displaying the Tally.NET ID
In the Salutation field select the required salutation from the list of Salutation.
Enter the required name in the Name field.
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Application Management and Controls
15.4.4 My Password
This options allows the user to change the password as required.
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Application Management and Controls
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Application Management and Controls
Points to Remember
Control Centre allows us to manage and centrally configure Tally.ERP 9.
435
Lesson 16: Online Help and Support
Lesson Objectives
On completion of this lesson, you will learn how to
Tally.ERP 9 provides a new capability to its users known as Support Centre, wherein a user can
directly post his support queries on the functional and technical aspects of the Product. Using
Support Centre feature, the user can view all the support queries reported via Support Centre and
also through other modes viz., Email, Chat, Calls, etc.
The Support Centre features facilitates viewing queries for a activated license alongwith the
Status i.e., Closed / Pending and Ticket Summary. The report is viewed based on Date, Status
and Location and so on.
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Online Help and Support
then interacted over phone, even in such cases, the complete discussion will be available
to you.
Access issues of any Location/Site : In Multi-site License, using the Support Centre fea-
ture you can view details of issues of any location /site from any of your Location(s).
Reach out to your nearest Service Partner instantly : You can search for a service part-
ner and post your queries instantly.
Access your Support Centre remotely from any Tally.ERP 9 : The Support Centre fea-
ture can also be accessed remotely from any Tally.ERP 9 from anywhere with Tally.ERP 9
installed and activated or in Educational mode, as an authorised Tally.NET user.
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Online Help and Support
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Online Help and Support
Press Enter
The Select Account appears displays the list of User Accounts. The list of User
Accounts will appear when your E-mail ID is linked to one or more accounts.
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Online Help and Support
Press Alt + L or click on L: Logout button, if you wish to logout from the Support Centre.
The selected Account ID will be displayed on the top left hand corner
of the screen and your User ID will be displayed in the top right hand
corner of the screen.
Using Alt + L, you can toggle between Login/ Logout.
In case you forget the Tally.NET Password, click on F5: Reset
Password or press F5. The new password will be sent to your E-mail
address.
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Online Help and Support
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Online Help and Support
You can also view the content in zoom in content mode which gives an expanded view of the
Ticket Summary.
To view the query/ issue horizontally:
Highlight the required query/ issue and press Enter.
The detailed query appears in the bottom part of the Support Centre screen
You can also click B: Go to Browser to browse the Ticket View in detail.
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Online Help and Support
Send to: Select a New Service Partner or Tally Solutions Pvt Ltd.
New Service Partner the query is directed to the Service Partner.
Tally Solutions Pvt Ltd., the query is directed to Tally (Customer)
Support.
Select New Service Partner from Send your query to, the New Service Partner screen
appears. Enter the Partner Account ID or Name in the Tally Service Partner field
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Online Help and Support
The New Partner Details screen will appear displaying the Name of the Partner
Select the required Partner and press Enter
Press Alt + F1 or click on F1: Detailed button to view the contact details of
the partners.
If you have selected Tally Solutions Pvt. Ltd. under Send to, the Post Your Support Query
form will be displayed as shown:
When you login remotely the Send to field will display the E-mail address of
the account to which you have logged in, under the Send your query to list.
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Online Help and Support
Subsequently when you send a New Query, the Send to field in the Post
Your Support Query form will display the service partner selected earlier in
the Send your query to list suffixed with Preferred service partner in
brackets.
To reply to a query:
Go to Company Info menu or Gateway of Tally
Click H : Support Centre or press Ctrl + H
Select the query that has to be replied/forwarded
Click R: Reply or press Alt + R
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Online Help and Support
The Post Your Response screen appears, in the Description field, type the response to
the query posted.
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Online Help and Support
As the query is linked to the reply using the ticket number, you can view the reply along with the
query raised.
To view the query and its reply select the subject under Ticket Interaction or Thread View or
Zoom in Content or Go to Browser
The ticket number of the query/ issue to which a reply has been
posted, will automatically be displayed on top of the form, as shown in
the image.
When the Reply button is pressed, the cursor will blink at the Descrip-
tion field automatically in the Post Your Response form.
The Send to and Subject fields will automatically be pre-filled with the
recipient address and the subject, respectively. You may change the
same by pressing back-space if required.
You may also select the required Subject under Ticket Interactions
available in the Zoom Out Content mode (default query list) or in the
Zoom in Content mode and press Enter, to Reply.
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Online Help and Support
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Online Help and Support
You can toggle between the detailed and the condensed mode by pressing the F1 button. It is
active when you opt to view the list in Status wise or Site wise mode. The Detailed report
displays a list of queries whereas the Condensed report displays the count of queries based on
their Status.
Period
By default, the query listing is displayed for the last 7 days. To change the period follow the steps
shown:
Go to Company Info menu or Gateway of Tally
Click H : Support Centre or press Ctrl + H
Click F2: Period or press F2
Enter the number of Days/Weeks/Months/Years in the Default Period field to display the query
listing for the mentioned period.
Group by
To view the query list by organising them based on the Date, Site and Status, you can also set
the Default Grouping using this option.
450
Online Help and Support
Press Ctrl + Z to toggle between the Zoom In Content and Zoom Out Content view.
Browser View
The Browse mode displays all the additional information that is not displayed in the Zoom In
Content option, such as Reported by, Issue type, Priority, Product, Product Serial No.,
Status, etc., under Ticket Summary
Similarly, the content area in the Support Centre is limited and when the content displayed
exceeds the limit, the Browse Issue mode will display the entire content and their properties
under interaction details .
To view the content in Browse mode, click B: Go to Browser or press Alt + B.
Site Filter
You can use the site filter to view the queries posted for each on a site. To arrange the queries
based on each site follow the steps shown:
451
Online Help and Support
Status Filter
You can view the queries posted based on their status,
Page Size
You can use this option to set the page size or the number of queries that can be displayed per
screen, by default the page size is set to display 10 queries per screen.
Go to Company Info menu or Gateway of Tally
Click H : Support Centre or press Ctrl + H
Click F10: Page Size or press F10
The Configuration screen appears
In the Page Size field enter the required number, so as to display the number of queries
per page.
F12: Configure
Allows the user to configure the support centre based on their requirement. The configuration
settings are also as buttons on the horizontal toolbar.
452
Online Help and Support
Default Grouping
This option allows you to view the list of queries based on the Grouping
options selected.
Default Grouping - Date : In cases where Date is selected from the
Default Grouping list, the queries are displayed in a chronological
order (Date wise).
Default Grouping - Site : In cases where the Site option is selected
from the Default Grouping list, the queries are displayed Site/ Loca-
tion wise. The option Site under Default Grouping will not be listed
for Single Site users.
Default Grouping - Status : In cases where the Status is selected
from the Default Grouping list, the queries are displayed on the basis
of the Status (All / Pending / Closed).
Default Status : This option allows you to set the default Status, i.e., All,
Closed or Pending, for any Group by option selected.
Default View
You can opt to view the list of queries either in a List View or in a Thread
View mode.
Default View - List : In cases where the option List View is selected,
the query list can be viewed in List View mode.
453
Online Help and Support
You can change the configuration as required in the Configuration screen or individually click on
the required buttons available on the Horizantal tool bar.
454
Online Help and Support
Points to Remember
Support Centre features facilitate viewing queries for a activated license
along with the Status.
455
Lesson 17: Service Tax
Lesson Objectives
On completion of this lesson, you will be able to
Service Tax is a tax on services rendered. The person, one who renders the service, is liable to
pay service tax. Service tax was imposed for first time in 1994 and its scope is increasing every
year.
1
Service Tax
Taxable Service
Service tax is payable on 'taxable service'. The definition of taxable service is different for each
class of services, e.g. in case of advertising agency, any service provided to a client, by an adver-
tising agency in relation to advertisement, in any manner will be 'taxable service'.
Service Provider
As defined u/s 65(105) a service provider is one who provides taxable service.
2
Service Tax
Assuming the buyer pays the seller only Rs. 5,000 the Service Tax payable is calculated as
below:
Particulars Rs.
a. Charge paid on service (10,000 x 5,000)/11,030 4,533
b. Service Tax on Rs.5000/- is (1,000 x 5,000)/11,030 453
c. Cess on Service Tax is (20 x 5,000)/11,030 9
d. Sec Cess on Service Tax is (10 x 5,000)/11,030 5
Total Payment Received 5,000.00
Abatements
Abatement refers to the percentage of tax exemption provided by the government on the value to
be considered for calculation of Service Tax. It is either a percentage of the service charges or a
lump sum amount.
Particulars Rs.
a. Charge on Service 10,000
b. An abatement of 30% amounts to: 3,000
c. Here, the assessable value is (a-b) 7,000
Therefore, Service Tax @ 10% on Rs. 7,000, Cess @
2% and Sec Cess @ 1% on Service Tax
Cenvat Credit
Service provider can avail Cenvat credit of service tax paid on input services and excise duty paid
on inputs and capital goods. The credit can be utilised for payment of service tax on output
services. However, in cases where the assessee is providing both taxable and exempt services
and if input services are common, Cenvat credit can either be taken on proportionate basis or 8%
'amount' is required to be paid on exempted services.
3
Service Tax
Create a company called FirstC Services to understand the Service Tax feature of Tally.ERP 9.
4
Service Tax
5
Service Tax
Press Enter to view the Company Service Tax Details screen and enter the details as
shown below:
The fields that appears in the Company Service Tax Details screen are briefed below:
1. Service Tax Registration No.: Enter the registration number allotted to you by the Service Tax
Department.
6
Service Tax
2. Date of Registration: Enter the date of registration of Service Tax for your service.
3. Assessee Code: Enter the code given to your company by the Service Tax Department.
4. Premises Code No. – Enter the Premises code/Location code. It is the identification number
provided to the service tax payers.
5. Type of Organisation: Select the type of your organisation from the List of Organisations
menu.
6. Is Large Tax Payer – This field is set to Yes/No base on the amount of tax paid by the asses-
see.
Large Tax payers are those assesses who pay large amount of Tax. They
are the eligible taxpayer for the purposes of being served by the LTU. For
e.g.: Rs.5,00,00,000.
7. Large Tax payer Unit : Enter the name of the unit where the large tax payers pay tax.
8. Division: Enter the code and name of the division your company falls under.
9. Range: Enter the code and name of the range your company falls under.
10.Commissionerate: Enter the code and name of the Commissionerate of Service Tax Depart-
ment, under which the address of your Company’s registered office is located.
Go to Gateway of Tally > Display > Statutory Info. > Service Categories > Advertising
Agency
7
Service Tax
The Service Category screen has a Name field showing the category, followed by the
Country Code, Accounting Code, Category Code and Sub-Clause No. fields.
The Applicable From column displays the date from which the Abatement (%), Service
Tax Rate (%), Cess Rate (%) and Secondary Cess Rate (%) are applicable.
Each service category has a predefined master in Tally.ERP 9 which can also be updated for
statutory changes from the Tally website (www.Tallysolutions.com). You can view the values for
each of these categories in Tally.ERP 9.
8
Service Tax
8. Under Mailing Details enter the Address, State and PIN Code details
9. Under Tax Information enter the PAN/IT No.
10.Enable the field Set/Alter Service Tax Details to Yes
11.In Service Tax Details screen enter the Service Tax Registration details
9
Service Tax
In the Service Tax No. field enter the service tax registration number of the party
In the Service Tax Reg. Date field enter the service tax registration date
10
Service Tax
7. Under Mailing Details enter the Address, State and PIN Code details
11
Service Tax
12
Service Tax
Similarly, create a ledger for Global Business House under the Sundry Debtors group.
.
A Service Tax Ledger is used to predefine the rate of Service Tax and the
rate of Cess on each transaction. Tally.ERP 9 gives you the option to prede-
fine these values or directly select them during voucher entry.
13
Service Tax
Practice Exercise
Create the following ledgers.
Ledger Under Type of Category Opening
Balance
Duty/Tax Name
Output Service Tax Duties & Taxes Service Tax Advertising Nil
Agency
Input ST-TELEPHONE CHRG Duties & Taxes Service Tax Telephone Nil
Service
HSBC Bank Accounts - - 5,00,000
14
Service Tax
15
Service Tax
16
Service Tax
Tally.ERP 9 allows you to make the necessary changes in the Service Tax
Details screen.
6. In The Bill-wise Details screen, select New Ref and type the Name as KC-1.
Select INPUT Service Tax from the List of Service Tax Ledgers.
17
Service Tax
18
Service Tax
In the F12: Configuration, set Use Single Entry mode for Pymt/Rcpt/
Contra to Yes.
19
Service Tax
Select KC-1 from the List of Pending Bills and accept the Bill-wise Details screen.
6. Enter Narration, if any.
20
Service Tax
21
Service Tax
7. The Bill-wise Details screen, select New Ref from the Method of Adj.
22
Service Tax
8.Enter the Name as 1 and select the Service Tax ledger as Output Service Tax.
23
Service Tax
In the F12: Configuration, set Use Single Entry mode for Pymt/Rcpt/
Contra to No.
24
Service Tax
4. Select the Sales Voucher from the List of Pending Bills to default Service Tax Ledger and
Amount.
5. Accept the Bill-wise Details screen.
6. In Debit field select HSBC Bank from the List of Ledger Accounts, Amount is defaulted auto-
matically.
7. In Narration field enter the Cheque Number.
25
Service Tax
The Service Tax Payables report displays the pending service tax payables for the selected
period.
26
Service Tax
The Service Tax payable report displays Rs. 72,100 as the Service Tax due
On 27-4-09, FirstC Services receives an advance of Rs. 70,000 for a service rendered by it
from Global Business House as on 29-4-2009.
On 29-4-2009, FirstC Services, completed the contract and raised an invoice on Global
Business House towards Advertising Agency Services with 10% Service Tax, 2%
Education Cess and 1% Secondary Education Cess for a total amount of Rs 1,70,000 of
which Rs 70,000 was received as an advance. Service tax, Education Cess and Secondary
Cess is calculated on the total assessable value of Rs. 1,70,000.
27
Service Tax
4. Type the Name as GBH and select Output Service Tax as the Service Tax Ledger.
5. In Debit field select HSBC Bank from the List of Ledger Accounts, Amount is defaulted auto-
matically.
6. In Narration field enter the Cheque Number.
28
Service Tax
29
Service Tax
In Service Tax–Bill Wise Details for section, the Bill-Wise Details are
defaulted automatically. The Bill-Wise details can also be changed to the
required reference number.
30
Service Tax
31
Service Tax
32
Service Tax
On 30-4-09, FirstC Services decided to pay Service Tax to the government. Information
pertaining to the Previous year is given below:
Input Service Tax Credit for Rs. 1,030 on 10,000 bill value
Service Tax payable of Rs. 2,060 on 20,000 bill value
Setup :
Create the following ledgers:
BSNL under Sundry Debtors. Set Is Service Tax applicable to Yes.
Service Tax Credit under Duties and Taxes with an opening balance of Rs. 1030. Select
the Type of Duty/Tax as Others.
33
Service Tax
Service Tax Payable under Duties & Taxes with an opening balance of Rs. 2060.
The completed Service Tax Payable ledger creation screen appears as shown below:
34
Service Tax
5. In the Service Tax Opening Bill Details screen, enter the details as shown below:
35
Service Tax
Enter the bill reference number associated with the Tax Ledger in the Bill
Name field. Select Not Applicable in case there is no bill reference
number.
36
Service Tax
37
Service Tax
38
Service Tax
Figure 17.38 Service Tax Bill Details for Output Service Tax
3. In the Service Tax Bill Details screen, select all the bills in the List of Service Tax Bills.
4. Select the INPUT Service Tax in the credit field.
The Service Tax Bill Details for INPUT Service Tax appears as shown below:
39
Service Tax
Figure 17.39 Service Tax Bill Details for Input Service Tax
The period for which the payment is made is specified in the above screen.
40
Service Tax
7. Specify the Service Tax Period with Challan No., Date, Bank Name, Cheque/Draft/Pay
Order No. and Cheque Date.
8. Enter the cheque no. in Narration field.
41
Service Tax
Use the Print Preview Option (ALT+I) to view the print preview of the challan.
42
Service Tax
43
Service Tax
Go to Gateway of Tally > Display > Statutory Reports > Service Tax Reports > Service Tax
Payables.
Select the period for the report using the F2: Period option.
Set the period from 1-4-2009 to 30-4-2009.
The Service Tax payable for the selected period displays various details as shown below:
44
Service Tax
Use the Alt+P key or click on Print option to print the report.
The fields which appears in the Service Tax Payable report are briefed
below:
Date - The date of the sales invoice is displayed.
Ref. No.: The reference number given to the sales invoice.
Party’s Name: The name of the customer to whom the sale is made.
Category Name: The name of the category of service selected from
the list of service categories.
Bill Value: The total invoice amount.
Assessable Value: The assessable value for the service.
Service Tax: The total Service Tax calculated on the assessable
value.
Cess: The total cess on the Service Tax.
45
Service Tax
46
Service Tax
17.8.3 ST 3 Report
Go to Gateway of Tally > Display > Statutory Reports > Service Tax Reports > ST3 Report
1. In the Service Tax Reports menu, select ST3 Report.
2. In Period For field, select the period for which ST3 Report to be printed.
3. Specify the Place and Date for Printing ST3 Report.
47
Service Tax
48
Service Tax
49
Service Tax
50
Service Tax
51
Service Tax
52
Service Tax
53
Service Tax
Create a Service Tax payment voucher debiting Output Service Tax and
crediting the Input ST Telephone Chrg and HSBC for the balance Service
Tax payable, if any.
Practice Exercise
1. ProC Advertising Agency, earns its major income from advertising service, which comes
under the category Advertisement under Service Tax.
Create the following ledgers in the masters and select/enter the fields as given in the table.
Name of the Group Maintain Is Service Inventory Type Category
Ledger under balance Tax Values are of
bill-by- Applicable affected Duty/
bill Tax
Manoj Videos Sundry Yes Yes No N.A. N.A.
Creditors
Pur - Video & Purchase No Yes No N.A. Photogra-
Graphic A/c phy
Create the following ledgers for Service Tax and enter them as given in the table below:
Name of the Ledger Under Type of Category Inventory values
Duty/Tax are affected
Output ST - Advertisement Duties & Service Tax Advertising No
Taxes Agency
Input ST - Video & Graphic Duties & Service Tax Photography No
Taxes
54
Service Tax
Given below, are transactions from 3-05-09. Create ProC Advertising Agency and pass the
following transactions :
SNo Date Particulars
1. 3-5-09 Sales Bill raised on Nexus Solutions Pvt. Ltd., after completing their
advertisement order no. DL-010 for Rs. 30000 + Service Tax @ 10% +
Cess @ 2% + Sec Cess @ 1%.
2. 7-5-09 Payment received from Nexus Solutions Pvt. Ltd., for Rs. 33,090 vide
Ch.No. 7564121.
3. 12-5-09 Received the bill towards photography charges from Manoj Video Ref.
No. SV-09 for Rs. 15000 [Service Tax @ 10% + Cess @ 2% + Sec Cess
@ 1%].
4. 15-5-09 Payment made through Canara Bank to Sonia Video for their bill no.
SVB-09 for Rs. 16,545 vide Ch.No. 6665261.
5. 19-5-09 Sales bill raised for Outdoor Advertisement charges for Rs. 6000 + Serv-
ice Tax + Cess to Nexus Solutions Pvt. Ltd.
6. 20-5-09 Manoj Video sent their Video recording charges Bill [SV-012] for Rs.
8979.20 [Video Charges Rs. 8000, Service Tax @ 10% + Cess @ 2% +
Sec Cess @ 1%].
7. 21-5-09 Payment made to Manoj Video for their bill no. SV-012 for Rs. 4000 vide
Ch.No. 675510
8. 25-5-09 Received Rs. 5000, from Nexus Solutions Pvt. Ltd., towards outdoor
advertisement bill.
9. 28-5-09 Advance payments of Rs. 10000 received from Nexus Solutions Pvt.
Ltd., vide Ch.No. 7565551 towards their advertisement work order no.
DL-028. Deposit the same in the Canara Bank A/c.
10. 30-5-09 Sales Bill raised on Nexus Solutions Pvt. Ltd., after completing their
advertisement works towards order no. DL-028. for Rs. 40000 + Service
Tax @ 10% + Cess @ 2% + Sec Cess @ 1%.
11. 31-5-09 Make a payment to Canara Bank towards Service Tax Payable for the
month of May’09.
55
Service Tax
Points to Remember
Service Tax is an indirect tax levied on certain categories of services
provided by a person, firm, agency etc
Avail of the input credit on Service Tax paid on purchases by deducting
the Service Tax payable.
Service Tax is calculated on the assessable value but is payable on the
value realised on the invoice.
Tally.ERP 9 calculates the Service Tax payable and the Input Credit on
each bill by tracking it bill-wise.
The Statutory Masters in Tally.ERP 9 maintain a category-wise informa-
tion on Service Tax.
Tally.ERP 9 gives you the option to bill for services as an item.
Account for Service Tax on the receipt of advance and make adjust-
ments when an invoice is raised.
Transfer the Service Tax balance payable and input credit from previous
year to current year. The Service Tax Payable report displays the net
Service Tax payable, after availing the input credit.
Print the Form GAR-7 Challan from Tally.ERP 9 to pay your Service Tax.
Print and File Statutory Reports from Tally.ERP 9, for the half-yearly fil-
ing of returns with details in Form ST3 and the Input Credit Form.
56
Lesson 18: Tax Deducted at Source
Lesson Objectives
On completion of this lesson, you will learn how to
Tax deducted at source is one of the modes of collecting Income-tax from the assessees. Such
collection of tax is effected at the source when income arises or accrues. Hence, where any
specified type of income arises or accrues to any one, the Income-tax Act enjoins on the payer of
such income to deduct a stipulated percentage of such income by way of Income-tax and pay only
the balance amount to the recipient of such income.
The tax so deducted at source by the payer has to be deposited in the Government treasury to the
credit of Central Government within the specified time. The tax so deducted from the income of
the recipient is deemed to be payment of Income-tax by the recipient at the time of his assess-
ment.
The person responsible for deducting Tax at source is liable to issue a certificate to the person
from whom the tax is deducted, so that the person can submit the same to Income Tax authorities.
57
Tax Deducted at Source
Deemed Dividend
Interest other than interest on securities
Winnings from Lottery or Crossword Puzzles
Winnings from horse races
Payment to contractors (Other than Advertisement)
Payment to contractors (Advertisement Contractors)
Payment to Sub-contractors
Payments to non-residents
Payment to non-resident Sportsmen or Sports Association
Payment in respect of deposit under NSS
Payment on Account of Re-purchase of Units by Mutual Fund or UTI
Payments in Respect of Units to an Offshore Fund
Payment of Compensation on Acquisition of Immovable Property
Insurance Commission
Commission etc. on sale of Lottery tickets
Commission, brokerage etc
Rent of Land, Building or Furniture
Rent of Plant, Machinery or Equipment
Royalty Agreement is MAde on Or After June 1, 2005
Short-Term Capital Gains U/s 111A
Fees for professional or technical services
Fees for Tech. Services Agreement is Made on Or After June 1, 2005
Income in Respect of Units of Non-Residents
Income from foreign currency bonds or shares of Indian company
Income of Foreign Institutional Investors From Securities
Income From Foreign Exchange Assets Payable to an Indian Citizen
Income by Way of Long Term Capital Gains Referred to in Section 115E
Any other Interest on Securities
Interest on 8% Savings (Taxable) Bonds, 2003
What is TAN?
TAN is the Tax Deduction Account Number issued by the Income-tax Department to all persons
deducting tax at source. TAN has to be quoted in all relevant challans, tax deduction certificates,
TDS returns and other notified documents. To obtain TAN, all persons or organisations are
required to apply in Form 49B to the TIN Facilitation Centres of NSDL.
58
Tax Deducted at Source
Who is a Deductee ?
As per Income Tax Act, the Tax will be deducted at source based on the prescribed rate on
payments made to the third parties, who are Assessees (includes individual & HUF as covered U/
S 44AB) carrying on business of following types.
Such Tax will be deducted at time of payment or credit, whichever is earlier.
Individual
Hindu undivided Family (HUF)
Body of Individual (BOI)
Association of person (AOP)
Co-Operative society
Local Authority
Partnership firm
Domestic company (Indian company)
Foreign company
Artificial Judicial Person
59
Tax Deducted at Source
60
Tax Deducted at Source
61
Tax Deducted at Source
62
Tax Deducted at Source
Specify the Name of person responsible and his/her designation details as shown
Enable VAT and specify VAT TIN Number, if Value Added Tax (VAT) is applicable in the
State or otherwise specify the Local Sales Tax Number & Interstate Sales Tax Number
Specify the PAN details as shown
63
Tax Deducted at Source
The completed F11: Statutory & Taxation Features screen appears as shown :
Tally.ERP 9 conforms to all statutory provisions and in case of any changes / amendments in
Income Tax laws, the same can be updated by downloading the Stat.900 file from the Tally
Website.
64
Tax Deducted at Source
Deductee Types
Go to Gateway of Tally > Display > Statutory Info.> Deductee Types
65
Tax Deducted at Source
66
Tax Deducted at Source
Inventory Is TDS
Default Nature of
Values Applica-
Ledger Under Payment
are ble
affected
Consultancy Charges Indirect No Yes Fees for Professional
Expenses Or Technical Services
Advertisement Expenses Indirect No Yes Payment to Contrac-
Expenses tors (Advertisement
Contractors)
Rent Indirect No Yes Rent of Land, Building
Expenses Or Furniture
Commission Charges Indirect No Yes Commission or
Expenses Brokerage
67
Tax Deducted at Source
68
Tax Deducted at Source
Similarly, create other Expenses Ledgers with the required TDS Nature of Payments.
69
Tax Deducted at Source
Select Fees for Professional Or Technical Services from the list, in the Nature of Pay-
ment field
70
Tax Deducted at Source
71
Tax Deducted at Source
Similarly, the completed TDS on Advertisement Expenses ledger will appear as shown :
72
Tax Deducted at Source
73
Tax Deducted at Source
74
Tax Deducted at Source
75
Tax Deducted at Source
76
Tax Deducted at Source
Select Company - Resident from the list, in the Deductee Type field
77
Tax Deducted at Source
78
Tax Deducted at Source
79
Tax Deducted at Source
Type the Mailing address, State, PIN Code and Tax information of the party
Set/Alter VAT Details to No
Similarly, create other Sundry Creditors ledgers with appropriate Deductee types.
80
Tax Deducted at Source
81
Tax Deducted at Source
Particulars Rate
TDS 10%
Surcharge -
82
Tax Deducted at Source
The TDS Nature of Payment Details screen displays the Nature of Payment and the Assessa-
ble Value of the expenditure.
Press Enter to accept Fees for Professional or Technical Services as Nature of Pay-
ment.
The amount in the Assessable Value is defaulted to 27,000.
83
Tax Deducted at Source
4. Select Evergreen Consulting Services in the Credit field and press Enter.
84
Tax Deducted at Source
Type the Reference Number in the Name field (By default Jrnl / 1-1 is prefilled)
Select Fees for Professional Or Technical Services in Nature of Payment field.
Select TDS on Consultancy Charges from the list of TDS Duty Ledgers
The Assessable Amount field is defaulted with the amount specified against the
expenses ledger
Set Yes in Deduct Now field (This field will be set to Yes or No depending on the tax
deduction, if the deduction has to be done later, this option can be set to No).
The Tax amount deducted at source is displayed in the TDS Amount field.
The amount (after deducting TDS) payable to the Party is displayed in the Payable
Amount field.
85
Tax Deducted at Source
86
Tax Deducted at Source
In the above screen, the amount payable to the party after deduction of TDS is displayed sepa-
rately and the TDS deducted amount is displayed separately for easy identification of Bill amount
in the outstanding statement.
8. Select TDS on Consultancy Charges in the Credit field and press Enter to accept the
amount.
9. Enter the details of the transaction in the narration field.
87
Tax Deducted at Source
Example 2:
On 13/04/09, M/s. National Enterprises received a Bill (Vide No. SAA/102) for Rs. 36,000/-
from Star Advertisement Agency towards Advertisement Expenses.
The applicable Income tax rates for ‘Advertisement Expenses’ payable to ‘Contractors’ is
given below :
Particulars Rate
TDS 1%
Surcharge -
88
Tax Deducted at Source
The TDS Nature of Payment Details screen displays the Nature of Payment and the Assessa-
ble Value of the expenditure.
89
Tax Deducted at Source
90
Tax Deducted at Source
91
Tax Deducted at Source
92
Tax Deducted at Source
93
Tax Deducted at Source
94
Tax Deducted at Source
5. Select Silverplus Enterprises in the Credit field and press Enter, the TDS Details screen
appears,
6. In TDS Details screen, enter the following details
Select New Ref in Type of Ref field
In the Name field, accept the default TDS reference number as Jrnl / 2-1
Select Commission Or Brokerage in Nature of Payment field
Select TDS on Commission in the TDS Duty Ledger field
Set Deduct Now to No (in order to deduct the TDS later).
The Payable Amount field displays the amount payable to the Party.
95
Tax Deducted at Source
96
Tax Deducted at Source
Example 4:
On 23/04/09, M/s. National Enterprises paid Rs. 35,640/- to Star Advertisement Agency
towards Advertisement Expenses (vide Ch. No. 145687).
Setup:
In F12: Configure, set Use Single Entry mode for Pymt/Rcpt/Contra to Yes.
97
Tax Deducted at Source
98
Tax Deducted at Source
Example 5:
On 23/04/09, M/s. National Enterprises paid Rs. 24,300/- (vide Ch. No. 145690) to Evergreen
Consulting Services towards final settlement of Bill No. ECS/001/09-10 dt. 10/04/09.
99
Tax Deducted at Source
100
Tax Deducted at Source
Example 6:
On 24/04/09, National Enterprises received a bill for Rs. 45,000/- from Prompt Consultancy
towards commission charges.
Prompt Consultancy has been granted a lower deduction certificate for deduction of Tax @
5% on commission.
Set Up:
In F12: Configure (Ledger Configuration)
Set Allow Advanced entries in TDS Masters to Yes
101
Tax Deducted at Source
102
Tax Deducted at Source
Type the Mailing address, State, PIN Code and Tax information of the party
103
Tax Deducted at Source
The TDS Nature of Payment Details screen displays the Nature of Payment and the Assessa-
ble Value of the expenditure.
Press Enter to accept Commission or Brokerage as Nature of Payment.
The amount in the Assessable Value is defaulted to 45,000.
104
Tax Deducted at Source
105
Tax Deducted at Source
106
Tax Deducted at Source
In the above screen, the amount payable to the party after deduction of TDS is displayed sepa-
rately and the TDS deducted amount is displayed separately for easy identification of Bill amount
in the outstanding statement.
8. Select TDS on Commission in the Credit field and press Enter to accept the amount.
9. Enter the details of the transaction in the narration field.
107
Tax Deducted at Source
Example 7:
On 25/04/10, National Enterprises received a bill for Rs. 9,000/- from Crown Advisory
Services towards Fees for Professional Services.
Crown Advisory Services has been granted a No Deduction Certificate.
Set Up:
In F12: Configure (Ledger Configuration)
Set Allow Advanced entries in TDS Masters to Yes
108
Tax Deducted at Source
109
Tax Deducted at Source
Type the Mailing address, State, PIN Code and Tax information of the party
110
Tax Deducted at Source
The TDS Nature of Payment Details screen displays the Nature of Payment and the Assessa-
ble Value of the expenditure.
Press Enter to accept Fees for Professional Or Technical Services as Nature of Pay-
ment.
The amount in the Assessable Value is defaulted to 9,000.
111
Tax Deducted at Source
4. Select Crown Advisory Services in the Credit field and press Enter.
5. In the TDS Details screen, provide the following details
Select New Ref as the Type of Ref. field
Type the Reference Number in the Name field (By default Jrnl / 4-1 is prefilled)
Select Fees for Professional Or Technical Services in Nature of Payment field.
112
Tax Deducted at Source
In Is Zero/ Lower Rate field, select section 197A for zero deduction
113
Tax Deducted at Source
114
Tax Deducted at Source
Example 8:
On 30/04/09, M/s. National Enterprises deducts TDS at the following rates on Commission
payable to Silverplus Enterprises (vide B.No. 024/09 dt. 20/04/09 - Refer Example 3).
The applicable Income tax rates for Commission is as follows :
Particulars Rate
TDS 10%
Surcharge -
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Tax Deducted at Source
4. The TDS amount with the respective bill details will be prefilled automatically
116
Tax Deducted at Source
117
Tax Deducted at Source
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Tax Deducted at Source
Particulars Rate
TDS 15%
Surcharge -
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Tax Deducted at Source
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Tax Deducted at Source
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Tax Deducted at Source
Example 10:
On 05/05/09, M/s. National Enterprises paid Rs. 2,700/- to Government towards TDS on
Consulting Charges for the month of April 2009.
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Tax Deducted at Source
Setup:
In F12: Configure (Payment Configuration), ensure Use Single Entry mode for Pymt/Rcpt/
Contra is set to Yes.
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Tax Deducted at Source
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Tax Deducted at Source
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Tax Deducted at Source
126
Tax Deducted at Source
127
Tax Deducted at Source
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Tax Deducted at Source
Example 11:
On 05/05/09, M/s. National Enterprises paid Rs. 360/- to Government towards TDS on
Advertisement Expenses for the month of April 2009.
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Tax Deducted at Source
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Tax Deducted at Source
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Tax Deducted at Source
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Tax Deducted at Source
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Tax Deducted at Source
Example 12:
On 05/05/09, M/s. National Enterprises paid Rs. 3,150/- to Government towards TDS on
Commission for the month of April 2009.
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Tax Deducted at Source
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Tax Deducted at Source
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Tax Deducted at Source
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Tax Deducted at Source
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Tax Deducted at Source
18.5.1 Computation
The TDS Computation report displays information about TDS transactions. It includes information
about the total expenses and advances on which TDS is applicable, TDS amount deducted,
balance TDS amount deductible, TDS amount paid and TDS amount pending for payment.
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Tax Deducted at Source
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Tax Deducted at Source
You can configure the Party wise report, by pressing F12: Configure
In F12: Configure, Show Tax Deductible, Show Balance to be deducted, Show Bal-
ance Payable to Government options are set to Yes
In F12: Configuration,
Set Show Tax Deducted to Yes
Show Tax Deductable Break-up to Yes
Set all other options to No
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Tax Deducted at Source
Now, the Expenses & Advances report will display the complete break up of Tax, Surcharge,
Education Cess, Secondary and Higher Education Cess details for the tax deducted amount.
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Tax Deducted at Source
143
Tax Deducted at Source
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Challan Reconcilia-
tion >
Press F5: Challan Reconcile
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Tax Deducted at Source
In our case study (National Enterprises) the challan details for the TDS
Payment entries are entered in the respective Payment Vouchers. Hence,
the details are prefilled in the Challan Reconcilliation Report. However,
where challan details are not entered during payment entry, are required to
be updated in Challan Reconcilliation report before generating Form
16A.
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Tax Deducted at Source
18.5.3 Return
Corporate & Non- Corporate entities (deductors) responsible for making payments (specified
under Income Tax Act) to third parties (deductees) and deducting tax at source at the prescribed
rates on such payments are required to furnish TDS returns containing details of deductee(s) and
the payment details relating to the deposit of such tax to Income tax department.
The following statutory returns have to be filed by the tax deductors :
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Tax Deducted at Source
Tally.ERP 9 allows you to generate and print statutory Returns in physical as well as uploadable
formats as prescribed by the government. In Tally.ERP 9, you can generate the following
Quarterly/Annual Returns
Form 16A
Form 26Q
Annexure to 26Q
Form 27Q
Annexure to 27Q
Form 26
Annexure to 26
Form 27
Annexure to 27
Form 16A
Every person deducting tax at source from payments (as specified in the Income Tax Act) other
than salaries, is required to furnish a certificate in Form 16A to the person on whose account such
tax is paid to the credit of Central Government within the prescribed time and specifying the
amount so deducted, the rate at which the tax has been deducted and any other particulars as
may be prescribed.
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Tax Deducted at Source
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Tax Deducted at Source
Form 26Q
Form 26Q is a Quarterly return for deduction of tax in respect of payments made to residents
other than salary. To print Form 26Q
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Form 26Q
In Printing TDS Form 26Q, press Backspace and enter the following details
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Tax Deducted at Source
151
Tax Deducted at Source
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Tax Deducted at Source
The second page will be printed for the next deductee with the TDS breakup details.
Form 27 Q
Form 27Q is a Quarterly return for deduction of tax in respect of payments made to non-residents
other than salary. To print Form 27Q
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Form 27Q
In Printing TDS Form 27Q screen, press Backspace and enter the required details
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Tax Deducted at Source
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Tax Deducted at Source
Annexure to 27Q
As per Income Act, the annexures in respect of each deductee with breakup of TDS is required to
be furnished alongwith the Quarterly/Annual Returns. Annexure for each deductee should be
generated in separate page.
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Tax Deducted at Source
Form 26
Form 26 is an Annual return for deduction of tax in respect of payments made to residents other
than salary. To print Form 26,
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Form 26
In Printing TDS Form 26, press Backspace and enter the required information
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Tax Deducted at Source
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Tax Deducted at Source
Annexure to Form 26
To Print Annexure to Form 26,
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Annexure to
Form 26
In Printing TDS Form 26, press Backspace and enter the required details
The printed Annexure to Form 26 appears as shown
Similarly, the annexure for the subsequent nature of payment will be printed in the next page.
Form 27
Form 27 is an annual return for deduction of tax in respect of payments other than salary made to
Non-residents. To print Form 27
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Form 27
In Printing TDS Form 27, press Backspace and enter the required details
Press Enter to print
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Tax Deducted at Source
Annexure to 27
To print Annexure to Form 27
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > Return > Annexure to
Form 27
In Printing TDS Form 27, press Backspace and enter the required details
Press Enter to print
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Form 26Q
Form 26Q is a Quarterly return for deduction of tax in respect of payments made to residents
other than salary. To export Form 26Q
Go to Gateway of Tally > Display > Statutory Reports > TDS Reports > E-Return > E-TDS >
Form 26Q
In Exporting eTDS Form, press Backspace and enter the following details
By default, the Language and Format is preset as Restricted (ASCII Only) and SDF
(Fixed Width) respectively.
In Export Location field enter the details of the path to where the txt file to be exported.
In the Output File Name field specify the file name as Form 26Q.txt
Press Enter to accept the Person Responsible Details (The Address details are auto-
matically defaulted from the Company masters in the Person Responsible Details col-
umn)
Select Yes or No as applicable, in Is Change in Address since last Return field.
Under Other Details, In Category (deductor/Collector) field select the Deductor Cat-
egory and specify the applicable date in the From and To fields
Specify 30-06-2009 in the Challan Date Till field (i.e., Challan date to be considered for
TDS payments made for the respective quarter/period)
In Form Name field, Form 26Q is defaulted
Specify the Place and Date of Filing Returns
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The exported file (Form 26Q) is required to be validated with the File Validation Utility (a freely
downloadable utility from NSDL website) and after validation, the returns should be submitted to
the department in CD along with Form 27A in Physical Form.
The completed Printing TDS Form 27A configuration screen is displayed as shown.
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164
Tax Deducted at Source
Form 27Q
Form 27Q is a Quarterly return for deduction of tax in respect of payments made to non-
residents other than salary.
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18.5.5 Outstandings
In Tally.ERP 9, you can generate TDS outstandings on the following
TDS Payables
Ledgerwise TDS Payable
Nature of Payment
TDS Not Deducted
TDS payables
The TDS Payables report gives you information on the TDS payable (pending) to Government
for a particular Nature of Payment.
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Ledger
TDS Ledger Outstandings report displays ledger wise TDS outstandings. This report can be
viewed for all the ledgers or for one ledger.
Select All Items, to view Ledger Outstandings for all the ledgers
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Tax Deducted at Source
Select One Item, to view TDS Ledger Outstandings for particular ledger
Select Ramesh Kumar and press Enter to view TDS Ledger Outstandings Report
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Tax Deducted at Source
Nature of Payment
TDS Nature of Payment Outstandings report displays Nature of Payment wise TDS outstandings.
This report can be viewed for all the Nature of Payment or for one Nature of Payments.
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Tax Deducted at Source
Select All Items, to view Nature of Payment Outstandings for all the Nature of Payment
The TDS Nature of Payment Outstandings report is dispayed as shown
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Tax Deducted at Source
Select One Item, to view TDS Nature of Payment Outstandings for Particular Nature of
Payment
From the List of TDS Nature of Payments, select Commission Or Brokerage
Press Enter to view TDS Nature of Payment Outstandings report
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Tax Deducted at Source
In our case study (National Enterprises), the TDS Not Deducted Report
will be blank, since TDS is deducted on all the transactions. In such cases,
you may press F7 to display all TDS related transactions.
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Tax Deducted at Source
To Print TDS Payables report, press Alt+P from the above screen.
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Tax Deducted at Source
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Tax Deducted at Source
You can also update the PAN Details of the Party from the above screen. This report is useful in
tracking the party ledgers for which the PAN Details are not available before filing the e-returns.
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Tax Deducted at Source
You can also update the Deductee Type Details of the Party from the above screen. This report is
useful in tracking the party ledgers for which the Deductee Type Details are not available before
filing the e-returns.
Migrate Tool
The Migrate Tool comprises of the following reports
Track Migrate Voucher : The Track Migrate Vouchers reports displays Date-wise
Migrated and Non-migrated vouchers. Tally.ERP 9 displays the Non Migrated vouchers'
Amount in Bold for easy identification.
Track Migrate Bills : The Track Migrate Bills report displays Tax bill name wise migrated
and non-migrated voucher. In this report, you can identify migrated/non- migrated vouchers
by comparing the previous deduction amount and new deduction amount and previous
payment amount and new payment amount are same. If the Deduction Amounts (Previous
and New) and Payment Amounts (Previous and New) are same then, it is understood that
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the vouchers are successfully migrated. On the other hand, if the Deduction Amounts (Pre-
vious and New) and Payment Amounts (Previous and New) are not same then it is under-
stood that the vouchers are not migrated.
Track Masters : The Track Masters Report displays TDS Ledger wise Lower Deduction,
Zero Deduction and IT Exemption details.
Re-Migrate : The Re-Migrate option, first un-migrates all the TDS vouchers and then re-
migrates all the vouchers. If the migration is not complete then the application displays the
message - TDS Migration did not complete sucessfully. If the migration is complete you
can continue to record TDS transactions and generate required reports.
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Tax Deducted at Source
Points to Remember
Tax Deducted at Source is one of the modes of collecting income tax.
The buyer/service and receiver/payer of income files annual returns
electronically or in physical form.
Tax Assessment Number is a ten-digit alphanumeric number issued by
the Income Tax Department to the deductor.
The Statutory Masters are of two types Deductee Type and Nature of
Payments.
Tally gives you the option of booking of expenses either using a journal
voucher or a purchase voucher.
Tax transactions for a particular party providing services is recorded in a
journal voucher using the TDS Deduction button.
TDS payment is done in two ways - Manual bill selection and Auto-fill
selection (using TDS Helper).
TDS payment voucher is printed as a TDS Challan.
The TDS amount on advance payments is adjusted only when the final
settlement of accounts for a contract is made.
The TDS Computation Report provides you with a list of party and TDS
Ledger names for which the TDS bills are deducted.
TDS Payables Report gives the status of TDS payable (pending)
amounts for a particular TDS Ledger account.
Ledger Outstandings Report is used to find out the outstanding status of
a particular tax ledger account.
The reconciliation of challan payments made to the Bank for TDS
accounts is done in the Ledger Voucher Report.
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Lesson 19: Tax Collected at Source
Lesson Objectives
On completion of this lesson, you will be able to understand
Tax Collected at Source means tax being collected from the source by the seller (collector) from
the buyer (collectee/ payee) for goods traded u/s 206C (1) of the Income Tax Act, 1961. It is
collected when accrued or when paid whichever occurs earlier. It is prescribed for any business or
trade dealing with alcoholic liquor, forest produce, scrap, etc. It also includes lease, license or
contract related to parking lots, toll plaza, mines and quarry, etc., as defined in Section 206C of
the Income Tax Act, 1961. The following brief description covers the applicability of Act.
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5 Any other forest product apart from timber or Tendu leaves 2.5
6 *Scrap 1
*Scrap means waste. These are damaged materials obtained from manufacturing units that are
of no further use.
Seller
A seller can refer to any one of the following:
The Central Government.
A State Government.
Any Local Authority.
Corporation or Authority established by or under a Central, State or Provincial Act.
Any Company.
Firm.
Co-operative Society.
It also includes Individuals or Hindu Undivided Family (HUF) running businesses or professions.
The total sales, or turnovers of these businesses must exceed the monetary limits specified under
Clause (a) or Clause (b) of Section 44AB of Tax Audit of Income Tax Act, 1961 . This must be
done during the financial year immediately preceding the financial year in which the goods of the
nature specified above are sold.
Buyer
A Buyer is a person who has the right to receive or obtain goods specified above by means of a
sale, auction, tender, or any other mode. The buyer does not include:
A public sector company, the central government, a state government, an embassy, a high
commission, legation, commission, consulate and the trade representation of a foreign
state and a club; or
A buyer in the retail sale of such goods purchased by him for personal consumption.
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The TCS is collected from the licensee at the rates specified in the following table:
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Tax Collected at Source
19.1.8 Returns
Forms and periodicity
The revised forms for e-TCS returns and periodicity thereof prescribed under income tax laws are
as follows:
Financial Form No. Particulars Periodicity
Year
2004-05 Form 27E Annual return of collection of tax under Section Annual
206C of Income Tax Act, 1961
Form 27B Physical control charts containing control totals With each e-
mentioned in TCS returns furnished electroni- TCS returns
cally. Form 27B in physical form to be submitted Form 27E.
along with e-TCS annual return Form 27E.
2005-06 Form 27EQ Quarterly return of collection of tax. Quarterly
Form 27B Physical control charts containing control totals With each e-
mentioned in TCS returns furnished electroni- TCS returns
cally. Form 27B in physical form to be submitted Form 27EQ.
along with e-TCS quarterly return Form 27EQ.
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Setup:
In the F11: Features (Statutory & Taxation Features),
Set the option Tax Collected at Source to Yes.
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Tax Collected at Source
186
Tax Collected at Source
In order to know the Collectee TCS Details, select a Collectee from the above list. For example,
select Association of Persons. The screen displays details such as the Date from which the rate
is applicable, Surcharge Exemption Limit, Surcharge and Additional Surcharge.
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Tax Collected at Source
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Tax Collected at Source
Select a TCS Type from the above list, in order to obtain the TCS Details. For example, select
Timber Obtained Under Forest Lease. The screen displays details such as Collectee Type, the
TCS rate and the Date from which the rate is applicable.
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Tax Collected at Source
Figure 19.8 Ledger Creation – Bhima Timbers with List of Collectee Types
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Tax Collected at Source
191
Tax Collected at Source
Retain the other fields as default and accept the ledger creation screen.
Practice Exercise
Similarly, create the following Masters:
1. Sales Ledger under Sales Accounts.
2. Freight under Indirect Expenses.
3. HSBC Bank under Bank Accounts with an opening balance of Rs. 2,00,000.
4. Timber as a Stock Item with the unit of Measurement as MT (Metric Ton).
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The TCS rate is taken from the TCS Nature of Goods Display based
on the Collectee Type and Applicable period. In this case, it is Timber
Obtained Under Forest Lease selected at the time of Creation of TCS
ledger.
Surcharge and Cess are taken from the Name of Collectee Types
based on the nature of Buyer/Lessee. In this case, it is a Body of Indi-
viduals selected at the time of the Creation of Bhima Timbers.
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Tax Collected at Source
194
Tax Collected at Source
4. The TCS payable amount will be auto-filled with the respective bill details.
5. Select HSBC Bank in the Account field.
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Tax Collected at Source
6. Once a payment is made, the challan can be printed using the Print option available on the
buttons bar.
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Tax Collected at Source
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Tax Collected at Source
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Tax Collected at Source
Enter the Cheque/DD No., Name of Bank, A/c No., Branch Name, BSR Code, Challan
No, Challan Date, Transaction ID and set Is PAN Valid to Yes
Challans can be reconciled by entering the appropriate data.
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Tax Collected at Source
Tally.ERP 9 allows you to export the ETCS Forms in NSDL compliant formats. The ETCS forms
available in Tally.ERP 9 are Form 27E and Form 27EQ. To export ETCS Forms,
Go to Gateway of Tally > Display > Statutory Reports > TCS Reports > ETCS Forms
In the Exporting eTCS Forms Printing configuration screen, enter the required informa-
tion as shown :
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Tax Collected at Source
The exported file will be saved in the path specified in the output file name. The file can be
validated through NSDL’s freely downloadable utility called ‘File Validation Utility’. This can be
used to verify whether the ETCS return filed by the deductors conforms to the prescribed format.
Similarly, you can export other eTCS forms.
Form 27B is a physical form to be attached with annual e-TCS returns Form 27E.
Go to Gateway of Tally > Display > Statutory Reports > TCS Reports > Print Form 27B
The Print configuration options available for Form 27B are displayed as shown below:
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Tax Collected at Source
Practice Exercise
ParkView Agency dealing in modern parking lots, earns its major income by providing the best
parking lots in the city. This leads to a collection of TCS from their customers and paying it to the
concerned department respectively.
Given below are transactions for the month of April 2009, create a company in the name of
ParkView and pass the following transactions :
i. Create the following ledgers
Name of the Group Is TCS Maintain Inven- Type TCS Details
ledger Under appli- balance tory val- of
cable bill by bill ues are Duty/
affected Tax
Sheetal Sundry Yes Yes NA NA Company -
Super Bazaar Debtors Resident
Parking Lots Sales A/c NA NA No NA NA
Lease
Income
TCS on Park- Duties & NA NA NA TCS Contrac-
ing Lots Taxes tors\License\
Lease Lease Relat-
ing to Parking
Lots
IDBI Bank Bank NA NA NA NA NA
Accounts
ii. Create the following transactions
Date Particulars
10-4-09 ParkView Agency provided Sheetal Super Bazaar with a 3000 sqft of parking
lot on lease for 2 years the invoice was raised for 950000.
5-5-09 TCS paid to the concerned authority
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Tax Collected at Source
Points to Remember
TCS refers to the collection of tax at source by the seller (collector) from
the buyer (collectee/payee) for the trade of goods specified u/s 206C (1)
of the Income Tax Act, 1961.
The term ‘Seller’ refers to the Central Government, a State Govern-
ment, any local authority, Corporation or authority established by or
under a Central, State or Provincial Act, any Firm or Co-operative soci-
ety.
The term ‘Buyer’ refers to a person who obtains goods from any sale,
auction, tender, or any other mode.
TCS collected shall be paid to the credit of the Central Government
within one week from the end of the month in which the collection is
made.
To ensure proper checks and balances on TCS collections and subse-
quent credit taken there of by the collectee/payee, the collectors are
required to file TCS returns with the Income Tax Department.
205
Lesson 20: Excise for Dealers
Lesson Objectives
On completion of this lesson, you will be able to understand
Excise duty or Duty of Excise is a tax on goods produced or manufactured in India and intended
for consumption in India. The Excise duty is levied at the time of production or manufacturing but
for convenience is collected at the time of removal.
It is an indirect tax on the manufacturer or producer which is passed on to the ultimate consumer.
The levy and collection of duty of Excise is provided under the authority of the Central Excise Act,
1944, at the rates specified under the Central Excise Tariff Act, 1985. The duty is commonly
referred to as the Basic Excise Duty. Certain items like fibre, yarn and so on also attract Additional
Excise Duty under the Additional Duties of Excise (Textiles and Textile Articles) Act, 1975.
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Excise for Dealers
Registration of Dealers
Every Dealer or Importer issuing Cenvatable Invoices should be registered with the jurisdictional
Range Superintendent as per the procedure prescribed in Rule 9 of the Central Excise (No. 2)
Rules 2001. The registration is valid only for the premises for which it is granted. In cases where
the manufacturer or dealer, has more than one premise, it is necessary to obtain a separate regis-
tration for each premise.
The registration numbers are PAN based 15 digit alpha numeric. The first part denotes 10
character (alpha numeric) Permanent Account Number issued by Income tax authorities and the
second part comprises of a fixed 2 character alpha code which is as follows:
S.No. Category Code
1. Central Excise Manufacturers XM
2. Registered Dealers XD
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Excise for Dealers
This is followed by three character numeric codes – 001, 002, 003, which denotes the number of
premises registered by the manufacturer or the dealer.
CENVAT Credit
A manufacturer or producer of final products is allowed to take tax credit known as CENVAT credit
on the following payments:
i. Duty of excise specified in the First and Second Schedule to the Excise Tariff Act (ED).
ii. Additional duty of Excise leviable under Additional Duties of Excise (Textile and Textile Articles)
(AED [T and TA]).
iii. Additional duty of Excise leviable under Additional Duties of Excise (Goods of Special Impor-
tance) (AED [GSI]).
iv. The National Calamity Contingent duty (NCCD) leviable under Finance Act.
v. Education Cess on excisable goods.
vi. Additional Duty leviable under Customs Tariff Act.
A manufacturer of excisable goods can avail of CENVAT credit for duty paid on the inputs
purchased and utilise the same for the payment of excise on any final product.
209
Excise for Dealers
210
Excise for Dealers
Setup:
Go to Gateway of Tally of Monnet Ispat & Energy Ltd. and press F11: Features (Statutory &
Taxation Features).
Set Enable Dealer – Excise to Yes
Set Set/Alter Dealer Excise Details to Yes
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Excise for Dealers
4. Unit Mailing Name: The Mailing Name entered in the company creation will be displayed as
the Unit Mailing Name. If required, it can be altered.
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Excise for Dealers
Name entered in the Unit Mailing Name will be used in all Excise Reports.
5. Excise Registration (ECC) No.: Enter 15 digits Excise Registration Number (ECC) of the
Company/Unit, e.g. MIEBA3201RXD001
6. Date of Registration: Enter the date of Excise registration, e.g. 01-05-2001
7. Other Details: In this section enter Range, Division and Commissionerate details
Range: Enter the code Name and Address of the range under which your company is reg-
istered.
Code: Enter Range Code as 060372
Name: Enter Range Name as Yelanka II
Address: Enter the Range Address
Division: Enter the code Name and Address of the division under which your company is
registered.
Code: Enter Division Code as 0903
Name: Enter Division Name as Division II
Address: Enter the Division Address
Commissionerate: Enter the code Name and Address of the Commissionerate under
which your company is registered.
Code: Enter Commissionerate Code as 06
Name: Enter Commissionerate Name as Bangalore IV
Address: Enter the Commissionerate Address
213
Excise for Dealers
214
Excise for Dealers
Specify the VAT TIN No., Inter-state Sales tax and Company’s PAN / Income – Tax No
details.
215
Excise for Dealers
216
Excise for Dealers
217
Excise for Dealers
The completed Excise Sales Voucher Type screen is displayed as shown below:
Step 1:
Go to Gateway of Tally > Accounts Info. > Ledgers > Create
1. Enter the Name of the Supplier in the Name field. E.g. Bhargavan Steels.
2. Select Sundry Creditors as the group name in the Under field.
3. Set Maintain Balances Bill by Bill to Yes and enter the Default Credit Period if any.
4. Set Inventory Values are affected to No
5. In the Mailing Details and Tax Information section enter the supplier contact details, Income
Tax and the Sales Tax numbers.
6. Enable Set/Alter VAT Details to Yes to display the VAT Details sub screen.
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Excise for Dealers
The default type of purchases depends upon the status of the supplier,
whether he is a Manufacturer / First Stage Dealer / Importer / Second Stage
Dealer/ Agent of Manufacturer/Purchase from Importer.
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Excise for Dealers
220
Excise for Dealers
Ensure that the completed Sales – Excisable Goods ledger appears as shown below:
Inventory
Ledger Under Type of Duty/Tax VAT/Tax Class values are
affected
Input VAT @ 4% Duties & VAT Input VAT @ 4% No
Taxes
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Excise for Dealers
222
Excise for Dealers
Set/Alter Duty Details: Set this field to Yes to view the Duty Details screen.
223
Excise for Dealers
224
Excise for Dealers
The following chart shows the flow of purchase and sales between the Manufacturer, Agent of
Manufacturer, First Stage Dealer or Second Stage Dealer and the passing of CENVAT Credit by
the Selling Dealer.
225
Excise for Dealers
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Excise for Dealers
227
Excise for Dealers
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Excise for Dealers
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Excise for Dealers
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Excise for Dealers
The Excise Duty, Education Cess and Secondary Education Cess amounts are auto-
matically calculated on the basis of the configuration in the stock item master.
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Excise for Dealers
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Excise for Dealers
14.In the Bill-wise Details screen, specify the Type of Ref as New Ref and type BS/101 in the
Name field.
15. Press Enter to accept the screen.
16.Type the details of the transaction in the Narration field.
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Excise for Dealers
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Excise for Dealers
4. The dealer is required to issue only one invoice per consignment ,if all the packages in the con-
signment are despatched in one lot. However, in cases where the consignment is despatched
in batches either on the same day or different days or loaded on more than one vehicle, a sep-
arate invoice is made for each lot or consignment.
5. Each Cenvat Invoice issued by the location bears a printed serial number, beginning from the
1st of April of the year. The starting serial number as well as formats for recording the excise
can be easily intimated to the commissioner, whose jurisdiction the company falls. An acknowl-
edgement of such an intimation can be obtained.
6. Records and Invoice generated through computer are also recognised. The serial number
likely to be used in the forthcoming quarter should be intimated to the Assistant Commisioner.
A revised intimation is sent when the serial numbers are exhausted.
Setup:
Create a ledger – Output VAT @ 4%.
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Excise for Dealers
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Excise for Dealers
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Excise for Dealers
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18. Press Enter to accept the Voucher and print the Sales Invoice.
The default sales voucher type can be used for invoicing non-excisable
goods.
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Excise for Dealers
2. Press F12: Configure (Invoice Printing Configuration) and Set the following to Yes.
Print Date and Time
Print Trader Supplier Info
Print Purchase Excise Duty details
Print Purchase Assessable Value
The completed Printing Configuration screen is displayed as shown below:
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Excise for Dealers
The print preview of First Stage Dealer's Sales Invoice of Excisable Goods to a second stage
dealer is displayed as shown below:
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Excise for Dealers
This Invoice displays the Excise details of the buyer, seller and manufacturer in accordance with
the Excise rules. It reveals the Item history, including the details of the purchases with their
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Excise for Dealers
respective tariff and duties. This serves as an evidence for the passing of CENVAT Credit to the
subsequent dealer/ manufacturer.
It also specifies the manufacturer’s name, address and Excise details besides recording the date
and time of the removal of goods from the dealer’s premises. The Invoice is marked as the First
Stage Dealer, depicting the position of the selling dealer and has to be authenticated by the
authorised signatory in the relevant space provided in the document.
Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Dealer > Excise
Stock Register
Select Hot Rolled Coils and press Enter to display the stock register.
To print the Stock Register press Alt+P
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Excise for Dealers
Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Dealer > Excise
Purchase Bill Register
In Selected Excise Unit screen
By default, Monnet Ispat & Energy Ltd appears in Name of Excise Unit field
Select Hot Rolled Coils from the List of Excise Stock Items and press Enter
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Excise for Dealers
The Excise Purchase Bill Register of Monnet Ispat & Energy Ltd., is as shown.
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Excise for Dealers
Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Dealer > Sales and
Purchase Extract
In the Sales and Purchase Extract printing screen,
Press Backspace and in Excise Unit field select Monnet Ispat & Energy Ltd. from the
List of Trader Excise Unit
Specify the From date as 1-4-2009 and To date as 30-4-2009
Specify Place and Date
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Excise for Dealers
The printed Sales and Purchase Extract of Monnet Ispat & Energy Ltd. is as shown.
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Excise for Dealers
Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Dealer > Form RG
23D > Select All Items to view Form RG 23D for all Items
In Selected Excise Unit screen
By default, Monnet Ispat & Energy Ltd appears in Name of Excise Unit field
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Excise for Dealers
Sales Returns
On 25-4-09, Jaykanth Engineering returned Hot Rolled Coils, the details of which are as
given below:
Item Description Quantity Rate VAT
Hot Rolled Coils. 5 MT 600 4%
Setup :
In the F11: Features (Accounting Features),
Set Use Debit/Credit Notes to Yes
Set Use Invoice mode for Credit Notes to Yes
Set Use Invoice mode for Debit Notes to Yes
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Ensure that the completed Excise - Sales Returns Voucher Type appears as shown below:
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Excise for Dealers
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Excise for Dealers
Select BS/101 as the Supplier Invoice No. from the List of Purchases.
Type the returned Quantity as 5 in the Quantity Return column.
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Excise for Dealers
In the case of Debit Notes/ Credit Notes, the accounting and VAT ledgers
used earlier to account for purchases / sales entries, should be used in a
reverse order. This will reverse the effect of the sales/ purchase transaction.
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Excise for Dealers
Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Dealer> Excise
Stock Register
The Excise Stock Register after the Sales Returns will appear as shown below:
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Practice Exercise
1. Jayanth Industries Pvt Ltd., dealing in cold rolled coils, has a bank account in SBI with an
opening balance of Rs. 800000.
Given below are the transactions for the month of May 2009. Create Jayanth Industries Pvt Ltd.
and pass the following transactions:
In the F11: Features (Statutory & Taxation Features), Enable Excise for
Dealers and VAT to Yes.
Create the following Voucher types and select/enter the fields as given in the table:
Name of Voucher Type of Abbr. Method of voucher Use for
Types Voucher Numbering
Dealer Excise
Excise - Purchases Purchase Ex - Purc Automatic Yes
Excise - Sales Sales Ex- sal Automatic Yes
Excise-Sales Returns Credit Note Ex-C/Note Automatic Yes
Create the following Ledgers in the masters and select/ enter the fields as given in the
table:
Name of the Ledger Under Maintain balances Excise
bill-by-bill Details
Vishveshwara Steel Industries Sundry Creditors Yes Yes
Ashok Engineers Sundry Debtors Yes Yes
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Create the following Ledgers in the masters and select/ enter the fields as given in the
table:
Name of the ledger Under Inventory Used in VAT/Tax
Values are VAT Class
affected Returns
Purchases - Excisable Goods Purchase Yes Yes Purchases @
Accounts 4%
Sales - Excisable Goods Sales Yes Yes Sales @ 4%
Accounts
Create the following Ledgers for VAT and enter the fields as given in the table below:
Name Of the ledger Under Type of VAT/Tax Class Inventory
Duty/Tax values are
affected
Input VAT @ 4% Duties & VAT Input VAT @ No
Taxes 4%
Output VAT @ 4% Duties & VAT Output VAT @ No
Taxes 4%
Create the following Units of Measure and enter the fields as given in the table below:
Type Symbol Formal Name Number of
Decimal Places
Simple MT Metric Tonnes 0
Create the following Stock Items and enter the fields as given in the table below:
Name Under Units Excise Details
Cold Rolled Coils Primary MT Yes
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Points to Remember
Excise duty is tax charged on goods manufactured and consumed
within India.
Goods to be Excisable must satisfy the three basic conditions i.e, it
must be movable, marketable and specified in the Central Excise Tariff
Act.
CENVAT Credit is the set-off of duty paid on inputs used in the manufac-
ture of final products, against the duty liability on such final products.
Only the registered dealers are eligible to pass on or avail as the case
may be the CENVAT Credit.
Tally.ERP 9 permits you to create specific voucher types like Excise-
Purchase & Excise-Sales for entering the excise related transactions.
Supplier/ Buyer details can be entered during invoice entry.
Tally.ERP 9 permits you to generate & print both Cenvatable & Non-
Cenvatable Sales Invoice.
A Registered Dealer is required to maintain Statutory Reports like Stock
Register of the cenvatable goods & Quarterly Return of the Excise Duty
paid. Tally.ERP 9 permits you to generate and print these Statutory
Reports.
Tally.ERP 9 also allows you to make adjustments in the records for the
sales return of Cenvatable goods and view its effect in the Statutory
Reports.
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Lesson 21: Excise for Manufacturers
Lesson Objectives
On completion of this lesson, you will learn how to
Excise duty or Duty of Excise is a tax on goods produced or manufactured in India and intended
for home consumption i.e, sale in India. The Excise duty is chargeable at the time of production or
manufacturing, but for convenience it is charged at the time of removal.
It is basically an indirect tax on the manufacturer or producer which is passed on to the ultimate
consumer. The levy and collection of duty of Excise is provided under authority of the Central
Excise Act, 1944 at the rates specified under Central Excise Tariff Act, 1985. The duty is
commonly referred to as the Basic Excise Duty. Certain items like fibre, yarn and so on also
attract Additional Excise Duty under Additional Duties of Excise (Textiles and Textile Articles) Act,
1975 in addition to Basic duty of Excise.
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Excise for Manufacturers
The goods must be marketable i.e., saleable in the market as such goods. Actual sale of
goods in the market is not necessary as excise duty is chargeable on manufacture and not
on sale.
The goods must be specified in the Central Excise Tariff Act.
Who is a Manufacturer ?
Manufacturer is a person who actually manufactures or produces excisable goods, i.e. one that
actually brings into existence a new and identifiable product.
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Excise for Manufacturers
among various States. Revenue from this duty is distributed among State Governments on the
basis of percentages given in the second schedule to the Act. Some items covered are textile
articles like cotton fabrics, silk and wool fabrics, man-made fibres, terry fabrics, metallised
yarn, embroidery; sugar, branded tobacco, pan masala containing tobacco and cigarettes.
8. Duty on Medical and Toilet preparations: An duty of excise is imposed on medical prepara-
tions under Medical and Toilet Preparations (Excise Duties) Act, 1955.
9. Additional duty on mineral products - Additional duty on mineral products (like motor spirit,
kerosene, diesel and furnace oil) is payable under Mineral Products (Additional Duties of
Excise and Customs) Act, 1958.
10.Additional Customs Duty commonly known as countervailing Duty (CVD): Countervailing
duty (CVD) is imposed on the Imports.
11.Special Additional Duty of Customs (Special CVD): Special CVD is being imposed on items
bound under the Information Technology Agreement (except information technology software),
and also on specified inputs/raw materials for manufacture of electronics/IT goods.
12. Additional Duties of Excise (Textiles and Textile Articles) [AED (TTA)]
13. Additional Duty of Excise (Tea and Tea Waste) [AED (TTW)]
14. Secondary Higher Education Cess
3. Value determined on the basis of Maximum Retail Sale Price: Retail sale price means the
maximum price at which the excisable goods in packaged form may be sold to the ultimate
consumer and includes all taxes local or otherwise, freight, transport charges, commission
payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and
the like, as the case may be, and the price is the sole consideration for such sale.
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Excise for Manufacturers
The following factors need to be considered while determining the value on the basis of maximum
retail sale price
Where, on the packages of any excisable goods, more than one retail sale price is
declared, the maximum of such retail sale price shall be deemed to be the retail sale price
Where, the retail price, declared on the package of any excisable goods at the time of its
clearance from the place of manufacture, is altered to increase the retail sale price, such
altered retail sale price shall be deemed to be the retail sale price.
Where, different retail sale prices are declared on different packages for the sale of any
excisable goods in packaged form in different areas, each such retail price shall be the
retail sale price for the purposes of valuation of the excisable goods intended to be sold in
the area to which the retail sale price relates.
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Excise for Manufacturers
The registration numbers are PAN based 15 digit alpha numeric. The first part denotes 10
character (alpha numeric) Permanent Account number issued by Income tax authorities and the
second part comprises of a fixed 2 character alpha code which is as follows:
Category Code
Central Excise Manufacturer XM
(Including registered warehouses)
Registered Dealer XD
This is followed by a three character numeric code - 001, 002, 003 etc., i.e, where a manufacturer
has only one factory / dealer's premise / warehouse, the last three character will be 001. If there
are more than one factories / dealer's premises / warehouses of such a person holding common
PAN for all such premises, the last three characters would be 002, 003 etc.
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Excise for Manufacturers
The serial numbers of the invoices to be used are to be intimated to the respective jurisdic-
tional Assistant Commissioner of Central Excise and obtain a dated acknowledgement of
such intimation.
Records and Invoice generated through computer are also recognized. In that case, the
serial number likely to be used in the f0.orthcoming quarter should be intimated to the Asst.
Commissioner. As soon as the said serial Nos. are exhausted, a revised intimation may be
sent. Such registered Location should also send details of the software used including the
format for information of the Asst. Commissioner in case he demands.
In case of Records and Invoice generated through computer, the serial number likely to be
used in the forthcoming quarter should be intimated to the jurisdictional Assistant Commis-
sioner of Central Excise. The details of software used including a format used for informa-
tion, is also required to be sent to the Assistant Commissioner.
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Excise for Manufacturers
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Excise for Manufacturers
Generate Excise Reports viz., Excise Computation Report, PLA Register, CENVAT Credit
Register, ER-1 & ER-3 returns.
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Excise for Manufacturers
Unit Mailing Name: The Mailing Name entered in the company creation will be displayed
as the Unit Mailing Name. If required, it can be altered.
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Excise for Manufacturers
Name entered in the Unit Mailing Name will be used in all Excise Reports.
Excise Registration (ECC) No.: Enter 15 digits Excise Registration Number (ECC) of the
Company/Unit, e.g. KABCC3220DXL003
Date of Registration: Enter the date of Excise registration, e.g. 01-05-2001
Type of Manufacturer: select the appropriate Manufacturer Type from the list of Types of
Manufacturer, e.g. Regular
Large Tax Payer Unit (LTU) Code: Enter the LTU code, if your company/unit is a large tax
payer and has opted for assessment in Large Tax Payer Unit. Skip the Large Tax Payer
Unit (LTU) Code field.
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Excise for Manufacturers
Large Tax Payers are those assessees who pay large amounts of Tax.
They are the eligible taxpayer for the purposes of being served by the LTU.
For e.g.: Rs.5 Crores.
Excise Book Name (as per Rule 11): Enter the Excise Book Name which is allowed by
the Commissioner of Central Excise for the company/unit.
Select the option New Number from the List of Excise Books, to view Serial Number
Alteration (Secondary) screen.
Name: Enter the excise invoice book name allowed by the Commissioner of Central
Excise for the company/unit, e.g. MCE/Rule11/Book-1/09-10
MCE - Denotes Company Name.
Rule 11: Denotes that invoice book is maintained as per Rule 11 of Central
Excise Rules.
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Excise for Manufacturers
Book-1: Denotes the Book Number, which is allowed for the current financial year.
09-10: Denotes the financial year.
Method of Numbering: By default Automatic (Manual Override) is displayed as the
method of numbering.
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Tally.ERP 9 allows you to create more than one Excise Book Name for the same company or Unit.
To create more serial numbers, you can either follow the steps given above or go to Serial
Number option in Accounts info menu.
7. Other Details: In this section enter Range, Division and Commissionerate details
Range: Enter the code Name and Address of the range under which your company is reg-
istered.
Code: Enter Range Code as 090506
Name: Enter Range Name as Hosur
Address: Enter the Range Address
Division: Enter the code Name and Address of the division under which your company is
registered.
Code: Enter Division Code as 0905
Name: Enter Division Name as Division II
Address: Enter the Division Address
Commissionerate: Enter the code Name and Address of the Commissionerate under
which your company is registered.
Code: Enter Commissionerate Code as 06
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Excise for Manufacturers
8. Press Enter to accept and save Excise Registration Details and go back to F3: Statutory and
Taxation Screen
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Excise for Manufacturers
Press Enter to save and go back to F11: Statutory & Taxation features screen
Enter VAT TIN e.g. 11567844129
Enter Inter-state Sales Tax Number e.g. 32457841339
Enter Company's PAN / Income - Tax No. e.g. AHEPN5342B
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Inventory Used In
Ledger Under values are VAT VAT/Tax Class
affected Returns
Purchases @ 4% Purchase Yes Yes Purchases @ 4%
Accounts
Purchases @ 12.5% Purchase Yes Yes Purchases @ 12.5%
Accounts
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When the option Assessable Value Calculation (for Excise /VAT) is set to
Yes, the Value given against this ledger will be used to calculate the
assessable value of the stock item to compute the excise duty or VAT.
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Excise for Manufacturers
Inventory
Used In VAT
Ledger Under values are VAT/Tax Class
Returns
affected
Sales @ 4% Sales Yes Yes Sales @ 4%
Accounts
Sales @ 12.5% Sales Yes Yes Sales @ 12.5%
Accounts
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Excise for Manufacturers
When the option Assessable Value Calculation (for Excise /VAT) is set to
Yes, the Value given against this ledger will be used to calculate the
assessable value of the stock item to compute the excise duty or VAT.
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Excise for Manufacturers
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Excise for Manufacturers
5. In Mailing Details and Tax Information sections enter the supplier contact details, Income
Tax and the Sales Tax numbers.
6. Enable Set/Alter Excise Details to Yes to display the Excise Details sub screen.
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Excise for Manufacturers
Press Enter
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Excise for Manufacturers
The Set/Alter Excise Details option appears for ledgers created under
Sundry Creditors and Sundry Debtors .
291
Excise for Manufacturers
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Excise for Manufacturers
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Excise for Manufacturers
Inventory
Type of values
Ledger Under Duty Head
Duty/Tax are
affected
Basic Excise Duty @ 16% Duties & Excise Basic Excise Duty No
Taxes
Education Cess @ 2% Duties & Excise Education Cess No
Taxes
Secondary Education Duties & Excise Secondary No
Cess @ 1% Taxes Education Cess
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Excise for Manufacturers
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Excise for Manufacturers
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Excise for Manufacturers
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Excise for Manufacturers
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Excise for Manufacturers
Percent-
Type of Excise
age of Method of
Ledger Under Duty/ Account- Duty Head
Calcula- Calculation
Tax ingCode
tion
Basic Excise Current CENVAT 00490027 Basic 16% On
Duty (CENVAT) Assets Excise Assessable
Duty Value
Education Cess Current CENVAT 00490028 Education 2% On
(CENVAT) Assets Cess Total Excise
Duty
Secondary Current CENVAT 00490029 Secondary 1% On
Education Cess Assets Education Total Excise
(CENVAT) Cess Duty
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Excise for Manufacturers
Similarly, create Education Cess (CENVAT), Secondary Education Cess (CENVAT) under
Current Assets Group.
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Type of Inventory
Ledger Under Duty/ VAT/Tax Class values are
Tax affected
Input VAT @ 4% Duties & Taxes VAT Input VAT @ 4% No
Input VAT @ 12.5% Duties & Taxes VAT Input VAT @ 12.5% No
Output VAT @ 4% Duties & Taxes VAT Output VAT @ 4% No
Output VAT @ 12.5% Duties & Taxes VAT Output VAT @ 12.5% No
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Excise for Manufacturers
Similarly, create Input VAT @ 12.5%, Output VAT @ 4%, Output VAT @ 12.5% under Current
Duties & Taxes group.
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Excise for Manufacturers
When the option Assessable Value Calculation (for Excise /VAT) is set to
Yes the Value given against this ledger in the sales/Purchase voucher will
be used to calculate the assessable value of the stock item to compute the
excise duty or VAT.
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Excise for Manufacturers
Based on Value
If Based on Value method of apportion is selected, the expenses will be
apportioned based on the Value of the Stock item.
For e.g.
Packing charges is 1,000
Value of Item X is 10,000
Value of Item Y is 5,000
Then,
Apportionment of Packing Charges to Item X: 1,000*10,000/15,000
=666.67
Apportionment of Packing Charges to Item Y: 1,000*5,000/15,000 = 333.33
Assessable Value of Item X (10,666.67) = Value of Item X (10,000) +
Packing Charges (666.67)
Assessable Value of Item Y (5,333.33) = Value of Item Y (5,000) + Packing
Charges (333.33)
Based on Quantity
If Based on Quantity method of apportion is selected, the expenses will be
apportioned based on the quantity of the Stock item.
For eg.,
Packing charges is 1,000
Quantity of Item X is 100 and Value is 10,000
Quantity of Item Y is 75 and Value is 5,000
Then,
Apportionment of Packing Charges to Item X: 1,000*100/175 = 571.43
Apportionment of Packing Charges to Item Y: 1,000*75/175 = 428.57
Assessable Value of Item X (10,571.43) = Value of Item X (10,000) +
Packing Charges (571.43)
Assessable Value of Item Y (5,428.57) = Value of Item Y (5,000) + Packing
Charges (428.57).
8. Press Enter
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Excise for Manufacturers
Similarly, create Freight Charges and Labour Charges under Indirect Expenses Group.
The Excise Voucher Types for Purchase, Sales, Sales Returns, Purchase Returns and Manu-
facturing Journal has to be created before creating the invoices.
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Excise for Manufacturers
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Excise for Manufacturers
The Use for Excise option will be available in Purchase, Sales, Debit
Note and Credit Note Voucher Types, only if the Excise Feature is
enabled in the F11 : Statutory & Taxation.
In case, where a company has more than One Excise Unit, it is rec-
ommended to create Voucher types for each Excise Unit separately.
Similarly, create Excise Sales Voucher Type, Excise Debit Note and Credit Note Voucher
Types.
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Excise for Manufacturers
You may also create a separate Stock Journal for Manufacturing Journal
with the option Use as a Manufacturing Journal.
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Excise for Manufacturers
The Tariff Classification created with the option Both will be available
during creation of Stock Items, when Excise as well as VAT are appli-
cable.
Selecting any one i.e., either VAT or Excise will restrict display of Tariff
classification only for the Stock items for which it is applicable.
When the option VAT or Both is selected, you will be able to enter
details of Schedule Number and Schedule Serial Number.
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Excise for Manufacturers
Set/
Stock Rate
Tariff Clas- Alter Valuation
Name Group UOM Of
sification Excise Type
Name VAT
Details
Iron Bars Raw Kgs 72221111 Yes MRP 4%
Materials Based
Steel Sheets Raw Kgs 72221191 Yes Ad 12.5%
Materials Quantum
Hot Rolled Beams - Finished Nos 72221199 Yes Ad 4%
25mm Goods Valorem
Cold Rolled Channels Finished Nos 72221992 Yes Ad 12.5%
- 10 mm Goods Valorem
Slotted Angle - 10mm Finished Nos 72221166 Yes Ad 12.5%
Goods Valorem
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Excise for Manufacturers
3. Select the unit of measurement as Kgs (Kilograms) of the stock item in the Units field (Use
Alt + C to create Unit of Measurement)
4. In Tariff Classification field, select the applicable tariff classification e.g. 72221111 from the
List of Tariff Classifications
5. Enable Set/Alter Excise Details to Yes to display the Excise Details sub screen
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Excise for Manufacturers
Reporting UOM: Select Kgs as Reporting UOM (All the reports will display the Stock item
details based on the reporting UOM selected).
As per Central Excise Act, the stock items are required to be reported in
the prescribed unit of measurements.The Applicable Unit of Quantity for
Iron Bars is Kgs (Kilograms). Hence, select Kgs (Kilograms) as the
Reporting UOM.
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Excise for Manufacturers
Set/Alter Duty Details: Set this field to Yes to view the Duty Details screen.
315
Excise for Manufacturers
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Excise for Manufacturers
7. Rate of VAT (%): in this field enter the Rate of VAT applicable for the Stock Item e.g. 4%
317
Excise for Manufacturers
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Excise for Manufacturers
7. Rate of VAT (%): in this field enter the Rate of VAT applicable for the Stock Item e.g. 12.5%
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Excise for Manufacturers
Go to Gateway of Tally > Inventory Info. > Stock item > Create
1. Enter the name of the Stock Item e.g. Hot Rolled Beams - 25mm in the Name field.
2. Select the Stock Group Name e.g. Finished Goods in the Under field (Use Alt + C to create
Unit of Measurement)
3. Select the unit of measurement e.g. Nos (numbers) of the stock item in the Units field
4. Enable Set Components (BoM) to Yes and press enter to view Stock ltem Components (BoM)
screen
5. In Stock ltem Components (BoM) screen
In Unit of manufacture field enter as 1
Under Item and Quantity field enter the details as shown
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Excise for Manufacturers
6. In Tariff Classification field, select the applicable tariff classification e.g. 72221199 from the
List of Tariff Classifications (Use Alt + C to create Tariff Classifications)
7. Enable Set/Alter Excise Details to Yes to display the Excise Details sub screen.
8. In the Excise Details Screen
Excise Unit Name: By default Tally.ERP 9 displays Metal Craft Engineering as Excise
Unit Name.
Reporting UOM: select Nos (numbers) as Reporting UOM. All the reports will display
the Stock item details based on the reporting UOM selected.
Set/Alter Duty Details: Set this field to Yes to view the Duty Details screen.
In Duty Details screen
In Valuation Type select Ad Valorem from List of Valuation Type.
Select the Basic Excise Duty in the Type of Duty field from the List of Excise Duty
classifications
Specify the Rate of Duty as 16%
Select the Education Cess as the second duty in the Type of Duty field from the List
of Excise Duty classifications
Specify the Rate of Duty as 2%
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Excise for Manufacturers
Select the Secondary Education Cess as the third duty in the Type of Duty field from
the List of Excise Duty classifications.
Specify the Rate of Duty as 1%
In Excise Details screen, under Stock Item Type select as Finished Goods from the List
of Item Types
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Excise for Manufacturers
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Excise for Manufacturers
Specify the Stock Item Components (BOM) under the option Set/ Alter
Reporting BOM, only when the Stock item has different components list
other than those defined under the BOM for Production. The Bill of Materials
(BOM) defined under this option is used only for reporting purpose.
9. Rate of VAT (%): in this field enter the Rate of VAT applicable for the Stock Item e.g. 4%
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Excise for Manufacturers
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Excise for Manufacturers
6. In Tariff Classification field select the applicable tariff classification e.g. 72221992 from the
List of Tariff Classifications (Use Alt + C to create Tariff Classifications)
7. Enable Set/Alter Excise Details to Yes to display the Excise Details sub screen.
8. In the Excise Details Screen
Excise Unit Name: By default Tally.ERP 9 displays Metal Craft Engineering as Excise
Unit Name
Reporting UOM: select Nos (numbers) as Reporting UOM. All the reports will display the
Stock item details based on the reporting UOM selected
Set/Alter Duty Details: Set this field to Yes to view the Duty Details screen
In the Duty Details screen
In Valuation Type, select Ad Valorem from List of Valuation Type.
Select the Basic Excise Duty in the Type of Duty field from the List of Excise Duty
classifications
Specify the Rate of Duty as 16%
Select the Education Cess as the second duty in the Type of Duty field from the List
of Excise Duty classifications
Specify the Rate of Duty as 2%
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Excise for Manufacturers
Select the Secondary Education Cess as the third duty in the Type of Duty field from
the List of Excise Duty classifications.
Specify the Rate of Duty as 1%
In Excise Details screen, under Stock Item Type field select as Finished Goods from the
List of Item Types
Set the option Set/ Alter Reporting BOM to Yes.
Reporting BOM screen is displayed as shown
9. Rate of VAT (%): in this field enter the Rate of VAT applicable for the Stock Item e.g. 12.5%
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Excise for Manufacturers
The above items are subject to Basic Excise Duty @ 16%, Education Cess @ 2%, Sec. Edu-
cational Cess @ 1% and VAT @ 4%.
Setup :
In F12: Configuration (Purchase Invoice Configuration), ensure the option Use Com-
mon Ledger A/c for Item Allocation is set to Yes
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Excise for Manufacturers
7. In the Purchase Ledger field, select the ledger Purchase @ 4% from List of Ledger Accounts
8. VAT/Tax Class field automatically gets updated with the VAT/Tax class as selected in the pur-
chase ledger, which can be changed.
9. In Name of Item field select the Stock Item i.e. Iron Bars
10.In Quantity field, enter the quantity as 1,000
11.In Rate field, enter the rate as Rs. 35. The Amount will be displayed automatically
12.Select Duty Ledger i.e. Basic Excise Duty @ 16%. Amount will be calculated and displayed
automatically.
13.Select Education Cess @ 2% and Secondary Education Cess @ 1% ledgers. Amount will
be calculated and displayed automatically
14.Select Input VAT @ 4%, the Amount will be displayed automatically
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Excise for Manufacturers
15.Set the option Show Statutory Details to Yes to view Statutory Details screen
16.In Statutory Details screen, press Alt + F1: Detailed to view details of duty calculation.
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Excise for Manufacturers
In Statutory details screen, Item/ ledger wise assessable value and Duty/
Tax calculations are displayed.
17.In Bill-wise Details screen, select Type of Ref as New Ref and in other fields retain the
default details.
331
Excise for Manufacturers
332
Excise for Manufacturers
Example 2:
On 03/04/09, M/s. Metal Craft Engineering purchased the following Excisable goods from
Beekay Engineering Corporation
The above items are subject to Basic Excise Duty @ 16%, Education Cess @ 2%, Sec. Edu-
cational Cess @ 1% and VAT @ 12.5%.
The Duties of Excise payable in the above purchase are claimable as CENVAT Credit.
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Excise for Manufacturers
In order to avail Cenvat Credit, create the duty ledgers under Current
Assets with Duty/Tax type as CENVAT.
12.The Amount for Basic Excise duty (CENVAT) ledger will be displayed automatically
13.Similarly, select Education Cess (CENVAT) and Secondary Education Cess (CENVAT)
ledger subsequently
14.Select Input VAT @ 12.5%, the Amount will be displayed automatically
15.Set the option Show Statutory Details to Yes to view Statutory Details screen
In Statutory Details screen, press Alt + F1: Detailed to view details of duty calculation.
The Statutory Details screen is displayed as shown
334
Excise for Manufacturers
16.In Bill-wise Details screen, select Type of Ref as New Ref and in other fields retain the
default details.
17.Enter the Narration, if required
335
Excise for Manufacturers
To Manufacture 1 Nos of Hot Rolled Beams - 25mm, the following inputs are required at the
given proportions.
Item Description Qty (Kgs)
Iron Bars 2
Steel Sheets 1
Labour Charges of Rs. 1,000/- was incurred during the process of manufacturing.
336
Excise for Manufacturers
337
Excise for Manufacturers
Example 4:
On 07/04/09, M/s. Metal Craft Engineering manufactured the following excisable goods
To Manufacture 1 Nos of Cold Rolled Channels - 10mm, the following inputs are required in
the given proportion.
Labour Charges of Rs. 1,500/- was incurred during the process of manufacturing.
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Excise for Manufacturers
Example 5:
On 10/04/09, M/s. Metal Craft Engineering sold the following excisable goods to Simplex
Casting Limited (vide Invoice No. MCE/101/09-10).
339
Excise for Manufacturers
The above goods are subject to Basic Excise Duty @ 16%, Education Cess @ 2%, Sec.
Educ. Cess @ 1% and VAT @ 4%.
340
Excise for Manufacturers
9. In Nature of Removal field, select the option Domestic from the list of Types of Removals
10.Select Sales @ 4% from the List of Ledger Accounts in Sales Ledger field. The VAT/Tax
Class field is defaulted automatically
11.In Name of Item field.
Select the Stock Item i.e. Hot Rolled Beams - 25mm
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Excise for Manufacturers
Enter the quantity as 200 and Rate as 360, the Amount will be displayed automatically
12.Select Basic Excise Duty @ 16%, the Amount will be calculated and displayed automatically.
13.Select Education Cess @ 2% and Secondary Education Cess @ 1% ledgers. Amount will
be calculated and displayed automatically
14.Select Output VAT @ 4%, the Amount will be displayed automatically
15.Set Yes in the Show Statutory Details field and press Enter
16.In Statutory Details screen, press Alt + F1: Detailed to view details of duty calculation.
342
Excise for Manufacturers
17.In Bill-wise Details screen, select Type of Ref as New Ref and retain the default details in the
other fields .
343
Excise for Manufacturers
344
Excise for Manufacturers
345
Excise for Manufacturers
The printed Excise Sales Invoice as per Rule 11 of Excise Rules is displayed as shown.
346
Excise for Manufacturers
347
Excise for Manufacturers
Example 6:
On 16/04/09, M/s. Metal Craft Engineering sold the following excisable goods to General
Fabricators (vide Invoice No. MCE/102/09-10).
Qty Rate
Item Description Total Value VAT (%)
(Nos) (Rs.)
Hot Rolled Beams - 25mm 100 360 36,000 4%
Cold Rolled Channels - 10mm 100 300 30,000 12.5%
The above goods are subject to Basic Excise Duty @ 16%, Education Cess @ 2%, Sec.
Educ. Cess @ 1%.
Additionally, Packing Charges of Rs. 5,000 was incurred during transit and the same is
also subject to Excise Duty as applicable on the goods.
In order to create Excise Sales Invoice for Stock Items subject to multiple VAT rates, ensure that
Use Common Ledger A/c for Item Allocation is set to No in F12: Configuration (Sales
Invoice Configuration).
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Excise for Manufacturers
9. In Nature of Removal field, select Domestic from the list of Types of Removals
10.In Name of Item field,
Select the Stock Item as Hot Rolled Beams - 25mm
Quantity as 100 and the Rate as 360, the Amount will be displayed automatically
11.In Accounting Details for screen, select Sales @ 4% from the List of Ledger Accounts. The
VAT/Tax Class field is automatically defaulted
12. Similarly, select Cold Rolled Channels - 10mm as the second Stock Item
13.Enter 100 as Quantity and 300 as Rate
14.In Accounting Details for screen, select Sales @ 12.5% from the List of Ledger Accounts.
The VAT/Tax Class field is automatically defaulted
15.Select Packing Charges ledger and specify the amount as 5000
16.Select Basic Excise Duty @ 16%, the Amount will be calculated and displayed automatically.
17.Select Education Cess @ 2% and Secondary Education Cess @ 1% ledgers. Amount will
be calculated and displayed automatically
18.Select Output VAT @ 4%, the Amount will be calculated and displayed automatically.
19.Select Output VAT @ 12.5%, the Amount will be calculated and displayed automatically.
20.Set Show Statutory Details to Yes and press Enter
21.In Statutory Details screen, press Alt + F1: Detailed to view details of duty calculations.
349
Excise for Manufacturers
22.In Bill-wise Details screen, select Type of Ref as New Ref, Name as GEN/332 and in other
fields retain the default details.
23.Enter the Narration, if required
350
Excise for Manufacturers
In the above case, the Method of Apportion for Packing charges ledger
is selected as Based on Value. Thus, The value of Packing Charges of Rs.
5,000/- is apportioned based on the value of the goods. i.e., Rs. 2,727.27
(5,000*36,000/66,000) is subject to Excise Duty at applicable rates and VAT
@ 4% for the respective item and Rs. 2,272.72 (5000*30,000/66,000) is
subject to Excise Duty at the applicable rates and VAT @ 12.5% for the
respective item.
351
Excise for Manufacturers
The printed Excise Sales Invoice as per Rule 11 of Excise Rules is displayed as shown.
352
Excise for Manufacturers
353
Excise for Manufacturers
Example 7:
On 21/04/09, M/s. Metal Craft Engineering manufactured the following excisable goods
To Manufacture 1 Nos of Slotted Angle - 10mm, the following inputs are required in the
given proportions.
Item Description Qty (Kgs)
Steel Sheets 1
Additionally, Labour Charges of Rs. 300 was incurred.
Create necessary Stock Items with the required Bill of Materials (BoM) and create the Manufactur-
ing Journal as discussed in Example 3.
The completed Excise Manufacturing Journal is displayed as shown:
354
Excise for Manufacturers
Example 8:
On 22/04/09, M/s. Metal Craft Engineering sold the following excisable goods to Simplex
Casting Limited (vide Invoice No. MCE/103/09-10).
355
Excise for Manufacturers
20.In Bill-wise Details screen, select Type of Ref as New Ref and in other fields retain the
default details.
21.Enter the Narration, if required
356
Excise for Manufacturers
The printed Excise Sales Invoice as per Rule 11 of Excise Rules is displayed as shown
357
Excise for Manufacturers
358
Excise for Manufacturers
Example 9:
On 28/04/09, M/s. Simplex Casting Limited returned the following goods to Metal Craft
Engineering.
Go to Gateway of Tally > Accounting Vouchers > Ctrl + F8: Credit Note
1. Select Excise - Credit Note as the voucher type
2. Ensure that the Credit Note Voucher is in Item Invoice Mode
3. Enter the Date as 28-4-2009
4. Enter the Ref details as SCL/CN/001
5. Metal Craft Engineering is automatically selected by default in the Excise Unit field
6. Select Goods Sold Returned as the type of VAT Adjustment in the Used for field and press
Enter
7. Select Simplex Casting Limited in Party A/c Name field
8. In Name of Item field, select Hot Rolled Beams - 25mm
9. Enter the Quantity as 10 and Rate as 360
10.In Accounting Details for screen, select Sales @ 4% and press Enter, the VAT/Tax Class is
automatically selected by default
11.Select Basic Excise Duty @ 16%, Education Cess @ 2% and Secondary Education Cess
@ 1% ledgers subsequently and press Enter. The Amount will be calculated and displayed
automatically
12.Select Output VAT @ 4%, the Amount will be displayed automatically
13.Set Show Statutory Details to Yes and press Enter
14.In Statutory Details screen, press Alt+F1 to view in detailed mode
359
Excise for Manufacturers
15.In the Bill-wise Details screen, select Type of Ref as Agst Ref and select SCL/321 dated 10-
4-2009.
360
Excise for Manufacturers
361
Excise for Manufacturers
Similarly, in case of Purchase Returns you can create the required Debit Note Voucher Type and
pass the Debit Note Voucher with the returned goods.
Example 10:
On 30/04/09, M/s. Metal Craft Engineering Pvt. Ltd., availed CENVAT Credit on Duties of
Excise paid on purchases, during the month of April 2009.
362
Excise for Manufacturers
The details of available CENVAT Credit for April 2009 are as follows
363
Excise for Manufacturers
364
Excise for Manufacturers
4. Press Alt + L or click on L: Excise Helper button to view CENVAT Adjustments screen
365
Excise for Manufacturers
On specifying the Payable From and To date, the duty payable for the period specified
will be displayed in Payable Amount column
Rs. 9,600 is the CENVAT Credit (Basic Excise Duty amount) availa-
ble for adjustment towards excise duty payable
Rs. 1,200 is the CENVAT Credit (Education Cess amount) available
for adjustment towards excise duty payable. Credit of Education Cess
on Excisable goods and imported goods can be utilised only for pay-
ment of education cess on final products.
Rs. 600 is the CENVAT Credit (Secondary Education Cess amount)
available for adjustment towards excise duty payable. Credit of SHE
Cess on Excisable goods and imported goods can be utilised only for
payment of education cess on final products.
366
Excise for Manufacturers
367
Excise for Manufacturers
As per Excise Rules, the duty paid on account of Excise Duty, Education
Cess and Higher Education Cess can be adjusted / availed only against the
dues on account of Excise Duty, Education Cess and Higher Education
Cess payable respectively.
The CENVAT adjustment entry can be passed depending upon the periodic-
ity of payment of Excise Duty to Government by the Manufacturer i.e., on
monthly or quarterly basis depending upon the type of manufacturer.
368
Excise for Manufacturers
Example 11:
On 04/05/09, M/s. Metal Craft Engineering Pvt. Ltd., paid Excise Duty for the month of April
2009 vide Cheque No.156387.
The excise duty details are as follows :
369
Excise for Manufacturers
370
Excise for Manufacturers
Press Enter to accept the payment details screen, Based on the period selected duty
ledger with the tax amount due for payment will be displayed automatically.
371
Excise for Manufacturers
372
Excise for Manufacturers
373
Excise for Manufacturers
374
Excise for Manufacturers
375
Excise for Manufacturers
The Excise Computation report is divided into three broad sections, namely:
Excise Duty Payable: This section displays the details of Excise Sales, Payable from the
previous period and Excise Duty Payments/ Credit Adjustment.
Excise Sales: This section displays the details of Excise sales at regular rate and
Exempt
Payable from previous period: This section displays the duty amount payable from
the previous period.
Excise Duty Payments/ Credit Adjustments: This section displays the details in
respect of G.A.R. 7 Payments and Credit Adjustment made during the given period
Other Charges: This section displays the details of other charges viz., Interest Penalty and
Arrears amount paid during the period.
Balance Input Credit: This section displays the details of balance CENVAT credit in
respect of Inputs, Capital goods and Service Tax Input Credit.
376
Excise for Manufacturers
377
Excise for Manufacturers
This report allows you to drill down from any document reference to voucher level for kind of
reference/verification. In the same way, you can generate Daily Stock Register for Multiple
Exciseable Items from Multi Item menu.
378
Excise for Manufacturers
Secondary Education Cess (Credit, Debit and Balance secondary Education Cess amount)
21.5.4 Form ER 1
As per Excise Rules, every Manufacturer (Regular / Large Tax Payer Unit) of Excisable Goods is
required to file returns in Form ER 1. Form ER 1 is a monthly return containing the details of pro-
duction, removal of Goods, CENVAT Credit and other relevant particulars. in Tally.ERP 9, you can
generate Form ER 1 in the prescribed format.
379
Excise for Manufacturers
Go to Gateway of Tally > Display > Statutory Reports > Excise Reports > Manufacturer >
Form ER 1
The Printing Configuration screen is displayed, press Backspace and enter the informa-
tion as shown.
380
Excise for Manufacturers
381
Excise for Manufacturers
382
Excise for Manufacturers
383
Excise for Manufacturers
Credit Summary
The CENVAT Credit Summary displays the details in respect of opening and closing balance of
CENVAT credit available for the selected Excise Unit for different types of Stock Item Types.
384
Excise for Manufacturers
Press Enter
385
Excise for Manufacturers
Credit Availed
The Credit Availed report displays the details of CENVAT credit availed in respect of Principal
Input or Capital Goods for the selected period.
The Credit Availed report displays information such as Excise Unit Name, Stock Item Type, Date
of Entry, Inv/Adj Reference, Type of Document, Supplier Name, Supplier ECC No., Assessable
Value, Basic Excise Duty, Education Cess, Sec Ed Cess and so on.
386
Excise for Manufacturers
The CENVAT Credit Availed report for Principal Input is displayed as shown:
RG 23 Part II
RG 23A Part II report displays the details of Fresh Credit allowed documents, Fresh Credit
Allowed Amount, Total Credit Available, Credit Adjusted with Opening and Balance Credit of
Principal Inputs (RG 23A Part II)/Capital Goods (RG 23A Part II) for the Period selected.
387
Excise for Manufacturers
388
Excise for Manufacturers
Annexure 10
Annexure 10 is a monthly return under Rule 7 of the cenvat credit rules, 2001. This report
displays the details of CENVAT credit availed for the Main Item.
389
Excise for Manufacturers
Abstract
This report displays the details of Credit Availed on Inputs/capital goods/inputs services, Credit
Utilised for Payment of Duty on Goods/Services, Credit Utilised When the Goods are removed as
such with Opening and Closing Balance of Credit.
390
Excise for Manufacturers
391
Excise for Manufacturers
Points to Remember
Excise duty is tax charged on goods manufactured and consumed
within India.
Goods to be Excisable must satisfy the three basic conditions i.e, it
must be movable, marketable and specified in the Central Excise Tariff
Act.
CENVAT Credit is the set-off of duty paid on inputs used in the manufac-
ture of final products, against the duty liability on such final products.
Tally.ERP 9 permits you to create specific voucher types like Excise-
Purchase & Excise-Sales for entering the excise related transactions.
Manufacturer / Supplier/ Buyer details can be entered during invoice
entry.
Tally.ERP 9 permits you to generate & print Excise Invoice as per Rule
11 of Excise Rules.
Tally.ERP 9 permits you to generate and print Excise Reports and Statu-
tory Returns
Tally.ERP 9 also allows you to make adjustments in the records for the
sales return of Cenvatable goods and view its effect in the Statutory
Reports.
392
Lesson 22: Payroll Accounting and Compliance
Lesson Objectives
On completion of this lesson, you will learn,
The term Payroll refers to a series of accounting transactions involved in the process of paying
employees for the services rendered after taking all the statutory and non-statutory deductions
into account, in conformance with the terms of employment, company policy and the law of the
land i.e., payment of payroll taxes, insurance premiums, employee benefits and other deductions.
An efficient payroll system facilitates an error-free, accurate and timely employee payment while
ensuring that the employment is well within the valid work permit.
1
Payroll Accounting and Compliance
It supports user-defined production units i.e., attendance/ production/ time based remuner-
ation units
It provides a flexible payroll processing period
It provides comprehensive Cost Centre as well as employee-wise costing reports
It ensures an accurate & timely Salary Processing, Employee Statutory Deductions &
Employer Statutory Contributions with the help of predefined processes
It provides auto-fill facility to expedite the Attendance, Payroll & Employer Contributions
processes.
It facilitates an accurate computation and deduction of ESI, EPF, Professional Tax, Gratuity
etc.
It helps in the generation of Statutory Forms & Challans for EPF & ESI, as prescribed.
It allows drill-down facility to voucher level for any kind of alteration.
It facilitates computation of arrears pertaining to prior period(s).
It helps in tracking employee loan details
Let us consider M/s. Indus Solutions Pvt. Ltd., which is engaged in the business of Software
services. It is based at Bangalore with the following three major departments:
Sales
Administration
R&D
2
Payroll Accounting and Compliance
3
Payroll Accounting and Compliance
The option More than ONE Payroll / Cost Category is set to Yes, when
separate cost categories are created to allocate Employee cost. In cases,
where only one cost category i.e., primary cost category is used to allocate
multiple cost centres, this option may be set to No.
Once the Payroll feature is activated in Tally.ERP 9, the following two new options get activated in
the F11: Statutory & Taxation Master
4
Payroll Accounting and Compliance
Press Enter
5
Payroll Accounting and Compliance
Provident Fund :
Company Code : This field denotes the Provident Fund Code of the
Company allotted by the Department.
Company Account Group Code : This field denotes the Provident
Fund Group Code of the Company allotted by the Department.
Company Security Code : This field denotes the Security Code of the
Company allotted by the Department.
Press Enter to Accept the screen and go back to F11: Statutory & Taxation Features
screen
Press Ctrl+A to Accept the screen
Essentially, Payroll involves the calculation of amounts due for an employee on the following
basis.
On hourly wages
Pay on a fixed basis such as certain amount per week, per month and so on
Pay to sales persons on commission
Reimbursement of expenses such as travel expenses, either as paid by the employee or
based on per item rate
Pay on number of pieces produced/ manufactured/ sold
6
Payroll Accounting and Compliance
It is therefore essential to quantify the following payroll information for the purpose of computation
of payments to employees. For this purpose the following Payroll masters are required to be
created in Tally.ERP 9 in the manner as discussed:
Employee Masters
Payroll Masters
Pay Heads
Salary Details
7
Payroll Accounting and Compliance
Similarly, create the other Employee Groups such as Administration and R&D.
Employee Master
Now that you have created the Employee Groups, create individual Employee Masters, with or
without grouping them, under the Employee Group Master.
In Tally.ERP 9, you can record all the necessary information of the employees in the Employee
Masters. Tally.ERP 9 also allows you to enter the Statutory, Expat and Contract details of the
employees.
To display the options for entering the Statutory, Expat and Contract details, enable these options
from the Company Configuration screen as explained below:
8
Payroll Accounting and Compliance
9
Payroll Accounting and Compliance
The Date of Leaving and Reason for Leaving option will be available only
in the Alteration mode.
Similarly, create the Employee Masters for other employees with their respective departments.
10
Payroll Accounting and Compliance
Payroll Units
A payroll unit refers to a unit of measurement based on which pay heads are calculated. Payroll
units can be classified into two types viz., Simple Payroll Units and Compound Payroll Units.
Simple Payroll Units refer to individual units such as Day, Week, Month, Hours, Pcs, Box, Nos
etc., Whereas, Compound Payroll Units refer to Units which are combination of two simple units,
i.e., an Hour of 60 Minutes, Month of 26 days, Day of 8 Hrs.
Usually, the Pay components are computed based on a single or compound payroll units.
Sometimes an employee may be paid on the basis of a combination of two or more units. For
example, an employee is paid a regular salary and an hourly rate for the overtime hours. In this
case, the two likely units are Calendar Month and Hours. In Tally.ERP, you can create simple as
well as compound units.
By default, Tally.ERP 9 contains four preset Calculation Periods – Days, Fortnights, Months &
Weeks. However, you can also create new Payroll Units based on your business requirements.
Name Type Symbol
Hours Simple Hrs
Minutes Simple Mins
Hrs of 60 Mins Compound Hrs of 60 Mins
11
Payroll Accounting and Compliance
Types of Units:
Simple Units are individual units with no relationship with other units
i.e., Hrs, Nos, Pieces and so on.
Compound Units are a combination of two simple units, where the
two units have an arithmetical relationship with each other. For exam-
ple, an Hour of 60 Minutes.
Create the following Attendance Types for M/s. Indus Solutions Pvt. Ltd.,
Name Under Attendance/Production Type Period Type
Present Primary Attendance/ Leave with Pay Days
Absent Primary Leave without Pay Days
Overtime Primary Production Hrs of 60 Mins
12
Payroll Accounting and Compliance
Attendance/Production Types :
13
Payroll Accounting and Compliance
In the same way, create Overtime as the Production Type with Production as the Attendance
Type.
14
Payroll Accounting and Compliance
3. Select User Defined Calendar Type as the Attendance Type and the Period Type appears
as Days, by default.
15
Payroll Accounting and Compliance
Present Attendance Type may be used when the pay value is meas-
ured on the basis of positive attendance units, i.e. number of days
present.
Absent Attendance Type may be used when the pay value is meas-
ured on the basis of negative attendance units, i.e. number of days
absent.
Production Attendance Type may be used when the pay value is
measured on the basis of units produced, for e.g., number of boxes
produced.
Calendar Month Attendance Type may be used when the pay value
is measured on the basis of positive attendance units (i.e. number of
days present) in a user defined calendar period.
In Tally.ERP 9, each pay head is to be created as an individual ledger account and grouped under
its respective group i.e., all Earnings pay heads under Indirect Expenses group or Direct
Expenses group and all Deductions pay heads under Current Liabilities, Curent Assets and
Duties & Taxes group.
16
Payroll Accounting and Compliance
The pay heads marked with the above pay head types will be available during payroll processing,
and if the Pay Head Type is marked as Not Applicable, will not be available. The Salary Payable,
PF Payable, ESI Payable ledgers are required to be created, by selecting Not Applicable as Pay
Head Type.
Create the following pay heads in the books of M/s. Indus Solutions Pvt. Ltd.
17
Payroll Accounting and Compliance
Figure 22.16 Basic Pay Head Creation – Pay Head Type Selection
3. Specify the group as Indirect Expenses in the field Under and press Enter
4. Set Affect Net Salary to Yes
5. Specify Basic in the field Name to appear in Payslip
6. Set Use for Gratuity to Yes
7. Select On Attendance in the field Calculation Type and press Enter
18
Payroll Accounting and Compliance
The Pay Head Creation screen with the List of Calculation is displayed as shown:
19
Payroll Accounting and Compliance
The Pay Head Creation screen with the List of Attendance Types is displayed as shown below:
Figure 22.18 Pay Head Creation screen with List of Attendance Types
The Pay Head Creation screen with the List of Calculation Periods is displayed as shown:
20
Payroll Accounting and Compliance
10. Select User defined in the Per Day Calculation Basis field
21
Payroll Accounting and Compliance
22
Payroll Accounting and Compliance
23
Payroll Accounting and Compliance
14.Specify 1 as the rounding Limit (The Rounding limit allows the value to be in multiples of the
limit specified and is based on the Rounding Method selected)
24
Payroll Accounting and Compliance
25
Payroll Accounting and Compliance
Figure 22.24 HRA Pay Head Creation screen - Calculation Type selection
8. Select Normal Rounding as the Rounding Method and 1 as the rounding Limit and press
Enter
9. In the Computation Info screen, select On Specified Formula in the Compute field.
26
Payroll Accounting and Compliance
Computation on details:
On Current Deductions Total – This calculation type is used when
the value of a pay head depends upon the total of the deductions pay
heads previously defined.
On Current Earnings Total – This calculation type is used when the
value of a pay head depends upon the total earnings pay heads previ-
ously defined.
On Current Sub Total – This calculation type is used when the value
of a pay head depends upon the net totals of earnings and deductions
previously defined.
On Specified Formula – This calculation type is used when the pay
head value is computed on the value of one or more pay heads already
defined in the pay structure. (Tally.ERP 9 allows the addition and sub-
traction of pay heads already defined in the pay structure and multipli-
cation and divisions using attendance types. For example, HRA is
computed as 40% of the basic salary.)
27
Payroll Accounting and Compliance
The pay head drop-down box contains pay heads already created. If any pay head(s) is a
component for the given Pay Head, you may create the required Pay Head by pressing Alt+C
from the above Pay Head field and make the necessary alterations in the required pay head.
28
Payroll Accounting and Compliance
29
Payroll Accounting and Compliance
15. Specify 40% in the Value Basis field and press Enter
30
Payroll Accounting and Compliance
The completed House Rent Allowance (HRA) Pay Head Creation screen is displayed as
shown.
31
Payroll Accounting and Compliance
32
Payroll Accounting and Compliance
33
Payroll Accounting and Compliance
34
Payroll Accounting and Compliance
35
Payroll Accounting and Compliance
36
Payroll Accounting and Compliance
3. Select PF Account (A/c No. 1) in the Statutory Pay Type field as shown
37
Payroll Accounting and Compliance
4. Specify the group as Current Liabilities in the field ‘Under’ and press Enter (In Tally.ERP 9,
only relevant groups appear during selection, to reduce erroneous data inputs)
5. Set Affect Net Salary to Yes
6. Specify EPF @ 12% in the field Name to appear in Payslip
7. As Computed Value appears in the field Calculation Type by default
8. Select Normal Rounding as the Rounding Method. Specify 1 as the rounding Limit and
press Enter
9. Select On Specified Formula as the Compute method and press Enter
10. In the Compute sub-screen, select Basic Pay as the Add Pay Head function and press
Enter
38
Payroll Accounting and Compliance
39
Payroll Accounting and Compliance
40
Payroll Accounting and Compliance
Figure 22.38 Deduction Pay Head Creation screen with Value Basis
The completed Employee’s PF Contribution @ 12% Pay Head Creation screen is displayed as
shown:
41
Payroll Accounting and Compliance
42
Payroll Accounting and Compliance
Figure 22.40 Employee's ESI Pay Head creation screen - Compute On Selection
43
Payroll Accounting and Compliance
Figure 22.41 Employee's ESI Pay Head creation screen - Add Pay Head selection
Any income of a regular nature will be subject to ESI calculation viz., Basic
Pay, Dearness Allowance, House Rent Allowance, Conveyance, Overtime
etc.
44
Payroll Accounting and Compliance
Figure 22.42 Employee's ESI Pay Head creation screen – Slab Rate
The completed ESI – Employee’s Contribution Pay Head Creation screen is displayed as
shown:
45
Payroll Accounting and Compliance
Figure 22.43 Completed ESI – Employee’s Contribution Pay Head Creation screen
The completed Professional Tax Pay Head Creation screen is displayed as shown:
46
Payroll Accounting and Compliance
22.2.5 Gratuity
Apart from the above Pay Heads, create Gratuity Expenses (Provisional) Account in order to get
provisional Gratuity liability report for the employer at any given period.
Gratuity refers to the monetary benefit given by the employer to the employee at the end of the
employment for the services rendered over a period of employment either by law or otherwise. It
is calculated provisionally at the end of each financial period to assess the possible liability of the
company towards its employees. A Gratuity Provisional Account is created to capture the details
required for the calculation of gratuity. Gratuity is calculated based on select salary components.
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
The Slab Rate Details for Gratuity calculation screen is displayed as shown.
5. Specify the group as Provisions (Current Liabilities) in the field Under and press Enter
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Payroll Accounting and Compliance
The completed Gratuity Expenses (Provisional) Pay Head Creation screen is displayed as
shown.
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Payroll Accounting and Compliance
1. Select Rohit Roy from the List of Employees and press Enter
In the Salary Details screen,
The Effective date is entered as 01-04-2009 by default based on the Date of Joining
entered in the Employee Master
Select Basic Pay as the Pay Head from the List of Pay Heads
Specify 7,000 as Rate
The Attendance units, Pay Head Type and Calculation Type appear by default, based
on the pay head definitions.
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Payroll Accounting and Compliance
2. Select House Rent Allowance as the second Pay Head and press Enter
3. Select Conveyance as the next Pay Head
4. Specify 500 as Rate and press Enter
5. Select Overtime Pay as the Pay Head
6. Specify 40 as the Rate and press Enter
7. Select Variable Pay as the Pay Head and press Enter
8. Select Professional Tax against the Pay Head and press Enter
9. Select Employee’s PF Contribution @ 12% and Employee’s ESI Contribution @ 1.75% as
Pay Heads and press Enter
10.Select the Gratuity Expenses (Provisional) ledger and press Enter
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Payroll Accounting and Compliance
The completed Salary Details Creation screen for Mr. Rohit Roy is displayed as shown:
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Payroll Accounting and Compliance
Similarly, create the pay structure for the other employees as per the details given in the following
table:
Pay Head Preeti Atul Ramesh
Sinha Sharma Arora
Basic Pay 12,000 20,000 18,000
House Rent Allowance 40% 40% 20%
Conveyance — 2,500 2,000
Overtime Pay — — 150
Variable Pay User — defined
Professional Tax Applicable as Slab Rates
Employee’s PF Contribution @ 12% Applicable as Slab Rates
Employee’s ESI Contribution @ 1.75% Applicable as Slab Rates
Gratuity Expenses (Provisional) Only for reporting purpose
Salary Details for Ramesh Arora can be created similar to the Salary Details creation for Rohit
Roy. Since Ramesh Arora and Atul Sharma work for Sales Department, we may create the Salary
Details for the Sales Group and inherit the same for the Employees (Ramesh Arora and Atul
Sharma).
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Payroll Accounting and Compliance
The Pay structure created above can be inherited for all the employees belonging to Sales Group.
This feature helps in eliminating the repititions while creating the Salary Details and expedites the
pay structuring process.
To define the Salary Details for Mr. Ramesh Arora belonging to Sales Group, follow the steps
given below:
Go to Gateway of Tally > Payroll Info. > Salary Details > Create
1. From the List of Group / Employees select Ramesh Arora and press Enter
2. Select Copy From parent Value from the Start Type options under Pay Head
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Payroll Accounting and Compliance
3. The Pay Structure (comprising of Earning & Deductions pay heads) defined for Group is
prefilled automatically.
4. Enter the values for each Pay Head for Ramesh Arora as per the details mentioned earlier.
5. Press F12: Configure, set the option Allow to Override Slab Percentage to Yes, since the
HRA calculation percentage is 20%.
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Payroll Accounting and Compliance
6. Now, you will be able to enter the user-defined pay rates to compute the HRA, specify 20% and
press Enter
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Payroll Accounting and Compliance
The completed Salary Details screen of Mr. Ramesh Arora is displayed as shown.
Similarly, you can create the Salary Details for Atul Sharma.
There are three types of Payroll Vouchers namely Attendance Voucher, Payroll Voucher and
Payment Voucher, which are by default preset in Tally.ERP 9 to record above Payroll transactions.
Payroll Vouchers are used for the purposes of operating your payroll and also records the attend-
ance of the employees for a given period. These vouchers are basically used to input information
pertaining to Payroll processing.
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Payroll Accounting and Compliance
Example 1:
On 30th April, 2009 the attendance records of Indus Solutions Pvt. Ltd., displayed the
following details :
Attendance/ Produc- Rohit Roy Preeti Atul Ramesh
tion Types Sinha Sharma Arora
Present Days 26 18 20 22
Overtime hours 720 Mins - 360 Mins -
In the above scenario, separate attendance vouchers are required to be entered for recording
Present days and Overtime hours.
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
The Attendance Auto Fill with Employee Filters screen is displayed as shown:
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
The Attendance Voucher Creation screen with the attendance details screen is displayed as
shown:
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Payroll Accounting and Compliance
8. Press Enter
9. Enter the details of the transaction in the Narration field
The completed Attendance Voucher Creation for Present Attendance is displayed as shown:
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Payroll Accounting and Compliance
Days with Loss of Pay (LOP) are treated as a Deductible with respect to
the Earnings Pay Head type and as a Payable with respect to the Deduc-
tions Pay Head type. For example, LOP is deducted from the Basic salary
(Earnings Pay Head) and Canteen expenses (Deductions Pay Head) are
treated as a payable.
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Payroll Accounting and Compliance
You can also record Overtime in hours, provided the Unit of Measure-
ment for the Payroll unit is defined as Hrs.
After creating the Attendance Voucher, you can change any attendance value for a particular
employee, if required, in the Voucher Alteration mode.
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Payroll Accounting and Compliance
In Tally.ERP 9, the disbursement of salaries can be effected in any of the following modes.
Direct Remittance – in cash or by cheque
Bank Transfer – a direct transfer is made to an employee’s bank account and the list of
disbursement is printed separately.
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
All the pay values are calculated for the applicable pay heads for each employee grouped under
the selected group.
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Payroll Accounting and Compliance
5. Press Enter and specify the pay values for the pay heads defined as user-definable values
against each employee (in this case, define the Variable Pay)
Specify 1000 as Variable Pay for Atul Sharma
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Payroll Accounting and Compliance
Similarly, specify 1500 as Variable Pay for Rohit Roy and press Enter
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Payroll Accounting and Compliance
Example 3:
On 31st May, 2009 Indus Solutions Pvt. Ltd., disbursed Salaries payable for the month of
May 2009 through Bank Transfer. The attendance records displayed the following details :
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Payroll Accounting and Compliance
:
Attendance/Produc- Rohit Roy Preeti Atul Ramesh Arora
tion Types Sinha Sharma
Present Days 25 20 26 21
Overtime Hours - 120 Min
(2hr x 60min)
On 31st May 2009, Indus Solutions Pvt. Ltd., processes Payroll for all the employees and
entitled the following employees for Variable Pay.
Particulars Rohit Roy Preeti Atul Ramesh Arora
Sinha Sharma
Variable Pay 500 - 1200
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
Go to Gateway of Tally > Payroll Info. > Pay Heads > Create
The completed Salary Payable Ledger creation screen is displayed as shown:
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
5. Press Enter (All the pay values are calculated for the applicable pay heads for each employee
grouped under the selected group).
6. Press Enter and specify the pay values for the pay heads defined as user-definable values
against each employee
Specify 1200 as Variable Pay for Ramesh Arora
Specify 500 as Variable Pay for Rohit Roy
The completed Payroll Voucher for the month of May 2009 is displayed as shown:
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Payroll Accounting and Compliance
After passing the above entry, the salaries payable for the month of May 2009 are transferred to
the Salary Payable Ledger, at the time of payment of salaries, the amount is reversed.
Example 4:
On 31st May 2009, Indus Solutions Pvt. Ltd., paid the salaries due for the month of May
2009.
Before passing the payment voucher, necessary Bank Accounts should be created. To make the
Salary payment, follow the steps given below:
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
The Contribution payable by the Employer is not allowed to be deducted from the wages of the
employee. However, the employer has to deduct employee's share from their Salaries and pay
the same in EPF scheme. The deduction can be only from the wages pertaining to a period for
which contribution is paid. However, if there is an accidental omission, the amount can be
recovered later.
Out of employer's contribution of 12% or 10%, the Employer's contribution of 8.33% is diverted to
Employees' Pension Scheme and the balance is retained in the EPF scheme. On retirement, the
employee gets his full share plus the balance of Employer's share retained to his credit in EPF
account.
Once an establishment is covered under PF, all its departments and branches wherever they are
situated are also covered.
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Payroll Accounting and Compliance
pension. Benefit of pension to children or orphan is only restricted for two children/orphans. If the
person is unmarried or has no family, pension is available to nominee for a specified period.
As discussed earlier, the statutory features viz., EPF & ESI etc., are required to be configured in
F11: Statutory & Taxation Features. In this section, we will discuss, recording of transactions
related to computation and contribution of Provident Fund.
Example 5:
On 30th April, 2009 M/s. Indus Solutions Pvt. Ltd., processed Provident Fund contributions
for the month of April 2009 and paid the amount in full to EPFO.
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Payroll Accounting and Compliance
3. PF Payable Ledger
4. PF Admin Expenses Ledger
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Payroll Accounting and Compliance
4. Specify the Group as Indirect Expenses in the Under field and press Enter
5. Set Affect Net Salary to No
6. The Calculation Type is defaulted automatically as As Computed Value and Calculation
Period as Months
7. Select Normal Rounding as the Rounding Method and 1 as the rounding Limit and press
Enter
8. In the Computation Info section,
Select On Specified Formula in the Compute field
Press Enter, the Compute subscreen appears
In the Compute Sub screen,
Select Basic Pay as the Add Pay Head function from the list of Pay Heads as shown.
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Payroll Accounting and Compliance
The completed Employer EPS @ 8.33% Pay Head Creation screen is displayed as shown:
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
4. Specify the group as Indirect Expenses in the Under field and press Enter
5. Set Affect Net Salary to No
6. The Calculation Type is defaulted automatically as As Computed Value and Calculation
Period as Months
7. Select Normal Rounding as the Rounding Method and 1 as the rounding Limit and press
Enter
8. In the Computation Info section,
Select On Specified Formula in the Compute field
Press Enter and the Compute On subscreen displays
In the Compute sub-screen,
Select Employee’s PF Contribution @ 12% from the List of Pay Heads as the Add
Pay Head function and press Enter
Select Subtract Pay Head in Function and under Pay Head select Employer EPS @
8.33% from the List of Pay Heads.
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Payroll Accounting and Compliance
The completed Employer EPF @ 3.67% Pay Head Creation screen is displayed as shown:
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Payroll Accounting and Compliance
Alternatively, you can also define the criteria for computation of Employer
PF Contribution @ 3.67% Pay head, by selecting Basic Pay in the Com-
pute subscreen. and defining the percentage as 3.67%.
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Payroll Accounting and Compliance
Pay Head Name Pay Head Statutory Pay Under Affect Calcula-
Type Type Net tion Type
Salary
EDLI Contribution Employer’s EDLI Contribution Current No As com-
@ 0.5% Other (A/c No.21) Liabilities puted value
Charges
EDLI Admin Employer’s EDLI Admin Current No As com-
Charges @ 0.01% Other Charges (A/c Liabilities puted value
Charges No.22)
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Payroll Accounting and Compliance
4. Specify the group as Current Liabilities in the Under field and press Enter
5. Set Affect Net Salary to No
6. The Calculation Type is defaulted automatically as As Computed Value and Calculation
Period as Months
7. The Rounding Method is defaulted to Normal Rounding and 1 defaulted as the rounding
Limit
8. In the Computation Info section,
On PF Gross is selected automatically in the Compute field
Specify 1-4-2009 as the Effective From date
Specify 6500 in the Amount Upto column
Select Percentage as the Slab Type and specify 1.10% in the Value Basis field and press
Enter
The completed PF Admin Charges @ 1.10% Pay Head Creation screen is displayed as shown:
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Payroll Accounting and Compliance
4. Specify the group as Current Liabilities in the field Under and press Enter
5. Set Affect Net Salary to No
6. In the Computation Info screen,
In the Compute field, On PF Gross is selected by default.
Specify 1-4-2009 as the Effective From date (In case of a revision in pay structure, you
can define the revised computation information for the given pay head, by giving the effec-
tive from date)
The From Amount column is automatically skipped, assuming it to be zero. Enter 6500 in
the Amount Upto column.
Select Percentage as the Slab Type from the List of Slabs
Specify 0.5% in the Value Basis field and press Enter
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Payroll Accounting and Compliance
The completed EDLI Contribution @ 0.5% Pay Head Creation screen is displayed as shown:
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Payroll Accounting and Compliance
4. Specify the group as Current Liabilities in the field Under and press Enter
5. Set Affect Net Salary to No
6. In the Computation Info screen,
On PF Gross is selected in the Compute field, by default
Specify 1-4-2009 as the Effective From date
The From Amount column is automatically skipped, assuming it to be zero. Enter 6500 in
the Amount Upto column
Select Percentage as the Slab Type from the List of Slabs
Specify 0.01% in the Value Basis field and press Enter
The completed EDLI Administrative Charges @ 0.01% Pay Head Creation screen is displayed
as shown.
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
Go to Gateway of Tally > Payroll Info. > Salary Details > Alter
1. Select the Rohit Roy one by from the List of Groups / Employees
2. Add the Pay Heads Employer EPS @ 8.33% and Employer EPF @ 3.67%
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Payroll Accounting and Compliance
Similarly, include Employee Contribution Pay Heads in the Salary Details Masters of other
employees.
While, including the Employer Contribution Pay Heads in the Salary Details
master, the order of precedence in which the Pay Heads are included must
on the basis of their calculation criteria i.e.,
Earning Pay Heads
Deduction Pay Heads
Professional Tax or Income Tax Pay Heads (if any)
Employee PF Contribution Pay Heads
Employer PF Contribution Pay Heads
Gratuity (Gratuity is calculated on Basic Pay + DA, hence Gratuity Pay
Head can be sequenced in the Salary details of an Employer in any
order after Earnings Pay Heads).
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
Specify 1-4-2009 and 30-4-2009 in the From and To Date fields respectively
Select Primary Cost Category in the Cost Category field
Select All Items as Employee/ Group field (To process, for a particular group /
Employee select the respective Employee / group, as required)
Select PF Payable Ledger from the list of Ledger Accounts drop down in the Payroll
Ledger field as shown
The values for the Employer PF contributions are prefilled in the Payroll Voucher for PF Contribu-
tion process.
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
Select PF Admin Charges @ 1.10% Ledger in the Admin Charges (A/c No. 2) field as
shown
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Payroll Accounting and Compliance
Figure 22.97 Employer’s Other Charges screen – Admin Charges Ledger Selection
Similarly, select EDLI Contribution @ 0.5% and EDLI Admin Charges @ 0.01% in the
EDLI Contribution (A/c No. 21) and EDLI Admin Charges (A/c No. 22) fields respec-
tively.
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Payroll Accounting and Compliance
Press Enter
4. Type the details of the transaction in the Narration field
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Payroll Accounting and Compliance
Example 7:
On 30th April, 2009 M/s. Indus Solutions Pvt. Ltd., made the payment in respect of EPF,
EDLI Admin Expenses, EDLI Contribution and PF Admin Charges for the month of April
2009.
To process the payment of Provident Fund, follow the steps given below:
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Payroll Accounting and Compliance
Enter 1-4-2009 and 30-4-2009 in the From and To Date fields respectively
Specify 30-4-2009 in the Voucher Date field (This field is prefilled, if the voucher date is
specified during Voucher Entry)
Select Primary Cost Category in the Cost Category field
Select All Items in the Employee/ Group field
Select HDFC Bank in the Bank / Cash Ledger field
Select PF Payable Ledger in the Payroll Ledger field
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Payroll Accounting and Compliance
4. Press Enter to prefill PF Payable Amount in respect of Employer Contributions during the
relevant month
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Payroll Accounting and Compliance
5. Press Enter again, to prefill the amount of Employee Contributions during the relevant
month
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Payroll Accounting and Compliance
6. Press Enter thrice to again, to prefill EDLI Admin Expenses, EDLI Contribution and PF
Admin Charges during the selected month as shown:
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
The completed PF Payment Voucher screen for the month of April 2009, is as shown:
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Payroll Accounting and Compliance
In the Voucher printing screen, select Yes in the Print Challan field
Enter Total No. of Subscribers (A/c.1)
Enter Total No. of Subscribers (A/c.10)
Enter Total No. of Subscribers (A/c.21)
Press Enter to Print
The printed PF Combined Challan for the month of April 2009 of M/s. Indus Solutions Pvt. Ltd.
is as shown:
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
As discussed earlier, the statutory features viz., EPF & ESI etc., are required to be configured in
F11: Statutory & Taxation Features. In this section, we will discuss, recording of transactions
related to computation and contribution of Employee State Insurance.
Example 8:
On 1st June 2009, the list of new joinees with their Salary details are given below:
The Salary details for the above new employees is listed in the table below:
Pay Head Tamanna Dinesh
Basic Pay 9,000 10,000
House Rent Allowance 40% 40%
Conveyance 800 700
Overtime Pay — —
Variable Pay User — defined
Gratuity Expenses (Provisional) Only for reporting purpose
Employee’s PF Contribution @ 12% Applicable based on Slab Rates
Employee’s ESI Contribution @ 1.75% Applicable based on Slab Rates
Profession Tax Applicable based on Slab Rates
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Payroll Accounting and Compliance
The Attendance details for the month of June 2009 are given as shown:
Attendance/ Pro- Rohit Preeti Atul Ramesh Tam- Dinesh
duction Types Roy Sinha Sharma Arora anna
Present Days 26 24 26 20 17 18
Overtime hours 120 Min 600 Min
Pay Head Pay Head Type Statutory Pay Under Affect Calculation
Name Type Net Type
Salary
Employer ESI Employer’s Employee State Indirect No As Com-
@ 4.75% Statutory Contri- Insurance Expenses puted Value
butions
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Payroll Accounting and Compliance
4. Specify the group as Indirect Expenses in the Under field and press Enter
5. Set Affect Net Salary to No and press Enter
6. In the Calculation Type and Calculation Period fields, As Computed Value and Months are
defaulted automatically based on the Statutory Pay Type selected.
7. Select Normal Rounding as the Rounding Method and 1 as the rounding Limit and press
Enter
8. In the Computation Info screen,
Select On Specified Formula in the Compute field and press Enter
In the Compute subscreen,
Select Basic Pay as the Add Pay Head function and press Enter
Select House Rent Allowance as the second Pay Head in the Add Pay Head Func-
tion
Similarly, select Conveyance and Overtime Pay in the Add Pay Head function
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Payroll Accounting and Compliance
Specify 1-4-2009 in the Effective From date field and press Enter, the From Amount col-
umn is automatically skipped, assuming the amount to be zero
The Amount Upto field is skipped and automatically defaulted with the amount specified in
the Payroll Statutory Details screen in F11: Satutory & Taxation
Select Percentage in the Slab Type field
Specify 4.75% as the Value Basis Percentage in the Value Basis field and press Enter
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Payroll Accounting and Compliance
In Tally.ERP 9, the Earning Payheads which are selected for computation of Employer ESI contri-
bution are listed in the Specified Formula for easy reference. You can alter / modify the criteria
for calculation, by Enter in the Compute field and redefining the Function Pay components.
Specify 4.75% as the Value Basis Percentage in the Value Basis field and press Enter
Press Enter to accept
The completed Employer ESI Contribution Pay Head Creation screen is as shown:
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Payroll Accounting and Compliance
Go to Gateway of Tally > Payroll Info. > Pay Heads > Create
1. Type ESI Payable in the Name field
2. In the Pay Head Type field select Not Applicable
3. Specify the group as Current Liabilities in the Under field and press Enter
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
Similarly, include Employer ESI @ 4.75% Pay Head in the Salary details of all other Employees.
Example 9:
On 30th June, 2009 M/s. Indus Solutions Pvt. Ltd., processed Employer ESI Contribution
for the month of June 2009.
Specify 1-6-2009 and 30-6-2009 in the From and To Date fields respectively
Select Primary Cost Category as Cost Category field
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Payroll Accounting and Compliance
The completed Employer ESI Contribution Voucher Creation screen will appear as shown:
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
Example 10:
On 30th June, 2009 M/s. Indus Solutions Pvt. Ltd., processed the payment of ESI for the
month of June 2009.
To process the payment of ESI and generate ESI Challan, follow the steps given below:
Specify 1-6-2009 and 30-6-2009 in the From and To Date fields respectively
Specify 30-6-2009 in the Voucher Date field (This field is prefilled, if the voucher date is
specified during Voucher Entry)
Select Primary Cost Category in the Cost Category field
Select All Items in the Employee/ Group field
Select HDFC Bank in the Bank / Cash Ledger field
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Payroll Accounting and Compliance
128
Payroll Accounting and Compliance
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7. Press Enter again, to prefill the Employee’s ESI Contribution amount against the eligible
Employees
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Figure 22.122 ESI Payment Voucher with both Employee and Employer Contributions
The completed ESI Payment Voucher for the month of June 2009 will appear as shown:
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
In the Voucher printing screen, select Yes in the Print Challan field
Press Enter to Print
The printed ESI Payment Challan for the month of June 2009 of M/s. Indus Solutions Pvt. Ltd.
is as shown:
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Payroll Accounting and Compliance
Example 11:
On 30th April, 2009 M/s. Indus Solutions Pvt. Ltd., made payment of Professional Tax for
the month of April 2009.
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Payroll Accounting and Compliance
Specify 30-4-2009 in the Voucher Date field (This field is prefilled, if the voucher date is
specified during Voucher Entry)
Select Primary Cost Category in the Cost Category field
Select All Items in the Employee/ Group field
Select HDFC Bank in the Bank / Cash Ledger field
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Payroll Accounting and Compliance
Press Enter to accept the screen and go back to Payment Voucher Screen
Press Enter to Prefill the Professional Tax amount in the Payment Voucher
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Payroll Accounting and Compliance
137
Payroll Accounting and Compliance
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Payroll Accounting and Compliance
We will discuss each report in detail in the coming sections as explained below :
Payslip
A Payslip refers to a document issued to an employee, which itemises each component of his/ her
earnings and deductions and the net amount paid for a given pay period. It provides particulars on
how the net amount has been arrived at i.e., how much money has been earned and how much
tax / deductions have been made.
Display Payslip
Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll > Payslip >
Single Pay Slip
In Tally.ERP 9 Payroll, the Payslip can be configured to vertically display the details of attendance,
in terms of attendance or production, with Year to Date Values (YTD).
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
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The Payslip now displays the Attendance with Present / Overtime details, Year to Date balance,
and so on. To view the Payslip in vertical form, press F12: Configure and set Show Vertical
Payslip to Yes.
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Payroll Accounting and Compliance
You can further view additional information in the Payslip, by pressing Alt+F1.
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Payroll Accounting and Compliance
The voucher number, date and the number of attendance or payroll records are displayed as
shown in the screen above. This is very useful where multiple attendance/payroll vouchers are
entered for the same payroll period. You can drill down to the voucher level for reference or to
effect an alteration by pressing Enter on the required record.
Period Button – By default, the Payslip for the current month displays.
However, you can change the period by pressing F2: Date and defining
the required date. This button can be used to display multiple period
payroll information to view/print a consolidated Payslip.
Employee Button – From the existing Payslip of an employee, you can
toggle between employees by pressing F4: Employee.
Printing Payslip
Press Alt+P from the Payslip screen, the Printing Payslip screen appears
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Payroll Accounting and Compliance
Some of the configuration in the Printing screen, are similar to F12: Configure and can be config-
ured from either of the screens. In addition, Show Authorised Signatory option is available in
the above screen.
In the Printing Payslip screen, press backspace and enable the required option as
required
Press Enter to Print
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Payroll Accounting and Compliance
Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll > Payslip >
Multiple Pay Slip
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Payroll Accounting and Compliance
Press Enter to print the payslips of all employees in alphabetical order in separate sheets.
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Payroll Accounting and Compliance
The subsequent pages will print the Payslips for the remaining employees in the alphabetical
order.
Emailing Payslip
Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll > Payslip >
Single Pay Slip
Select the required Employee and press Enter
Press Alt+M, the Mailing Payslip screen is as shown:
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
The emailed Payslip when viewed from the mail box of the employee is as shown:
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Payroll Accounting and Compliance
Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll > Payslip >
Single Payslip
Select the required Employee and press Enter
Press Alt+E, the configuration screen to select the required format appears as shown:
In the Export screen,
Select the required Format in the Languages field
Select the Excel as Format from the drop down list of Formats
Output File Name is defaulted to Payslip.xls, however you can modify the same
Output Sheet Name is defaulted to Payslip, however you can modify the same
Complete the remaining options as shown
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Payroll Accounting and Compliance
Pay Sheet
A Pay Sheet is a columnar report which displays the Group/Department-wise employees’ break-
up of earnings and deductions for the selected month.
Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll > Pay Sheet
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You can further configure the Pay Sheet to display the net amount, column subtotals, Category/
Group subtotals, user-defined payslip names, Employee names and sort it by Employee number
in the F12: Configure.
The F12: Configuration from the Pay Sheet screen displays as shown:
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Payroll Accounting and Compliance
The F12 :Configuration options in the Pay Sheet are explained as follows.
Appearance of Pay Head Types – Set All Items to view Deductions and
Earnings.
Show Net Amount Column – Set this option to Yes to display the Net
Payable Column.
Show Column SubTotals – Set this option to Yes to display the subto-
tals of Earnings/Deductions pay head columns.
Remove Zero Entries – Set this option to Yes to eliminate Earnings/
Deductions pay heads with Zero values.
Show Payslip Names for Ledgers – Set this option to Yes to display
the Name defined in the Appear in Payslip field in the pay head master.
Include Employee Groups & Categories – Set this option to Yes to
display Category-wise/ Group-wise pay sheet. If this option is set to No,
the Pay Sheet will appear Employee-wise.
Show Category/Group Total – Set this option to Yes to display Cate-
gory and Group-wise columnar pay head totals.
Show Grand Total – Set this option to Yes to display the sum of all pay
head columns appearing in the report.
Show Attendance Details - Set this Option to Yes to display the Attend-
ance for the Employees
Display Production types in Tail Units - Set this Option to Yes to show
the Overtime details in minutes.
Format – Select Detailed mode to view Pay Sheet information of
employees with their respective category and group. Select Condensed
mode when only sum totals are required for each category and group.
Show Employee Number – Set this option to Yes to display employee
numbers.
Show Employee Designation - Set this Option to Yes to show the des-
ignation for employees.
Expand all levels in Detailed Format – Set this option to Yes to
expand all levels and display Employee details.
Appearance of Names – Select the appropriate name style to appear in
the paysheet (viz., Alias (Name), Alias only, Name (Alias), Name only).
Sorting Method – Sort the Pay Sheet either by Alphabetical increasing /
decreasing, Employee number or by the Default method.
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The Pay Sheet with the above configurations will appear as shown:
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Payroll Accounting and Compliance
To view the Pay Sheet till date with Category and Group Totals
In F12: Configuration, set Category / Group Total to Yes (by default it is set to Yes)
Press Alt+F2 and change period as 01-04-2009 to 30-06-2009
The Pay Sheet with Category and Group Totals displays as shown:
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Payroll Accounting and Compliance
Button options:
Detailed/Condensed Button – This button (Alt+F1) is used to toggle
between the detailed and condensed modes of reporting.
Period button – This option (F2) is used to define the periodicity of the
report, i.e. for a day, week, fortnight, month, quarter, half-year, year or
any given period.
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The Pay Sheet for the selected Employee Group displays as shown:
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Payroll Accounting and Compliance
You can also drill down from the above report to the voucher level, by highlighting the pay heads
column of the required employee and pressing Enter.
Button Options:
Employee Filter Button – By using the Employee Filter button
(Ctrl+F7), view the individual employee/ Employee group pay sheet
report.
New Column – This option (Alt+C) is used to add a new column for
any other Pay Head, which is not part of the pay structure.
Alter Column – This option (Alt+A) is used to replace an existing col-
umn in the report with another Pay Head column.
Delete Column -– This option (Alt+D) is used to delete an existing col-
umn in the report.
You can also print the Pay Sheet, by pressing Alt+P and specifying the required options in the
Pay Sheet Print configuration screen.
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While printing the Pay Sheet, you can choose to Increase the Line Height (for each employee
line) if you want to create space for the employee’s signature or to affix a stamp. Such a Pay
Sheet can also be used as a salary disbursement register.
Press Alt+P to print Pay Sheet and set the Increase Line Height for Signature/ Stamp?
field to Yes
The printed Pay Sheet with space for signature/ stamp is as shown.
Figure 22.155 Printed Pay Sheet with space for Signature/ Stamp (1A)
Figure 22.156 Printed Pay Sheet with space for Signature/ Stamp (1B)
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Payroll Accounting and Compliance
You can also Email or Export Pay Sheet Report in the manner as
discussed in Payslip Section. The navigation steps for Emailing, Exporting
Pay Sheet is similar to as explained in Payslip Report.
Payroll Statement
A Payroll Statement is a columnar report which displays Group/Department-wise employees’
break-up of selected earnings or deductions, for a specified month or period.
Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll > Payroll
Statement
Select the required pay head and press Enter
The Payroll Statement for Basic Pay Earnings Head for the month of April 2009 is as shown:
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Payroll Accounting and Compliance
You can further configure the Payroll Statement to display the Employee groups and categories,
category/group subtotals, grand totals, user-defined Payslip names, employee names, employee
bank details, sort it by Employee number, by pressing F12: Configure
Enter the details in F12: Configuration screen as shown
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Payroll Accounting and Compliance
Show Grand Total – Set this option to Yes, to display the sum of all
the pay head columns in the report.
Format – Select the Detailed mode to view payroll information of
employees with their respective categories and groups. Select the
Condensed mode when only sum totals are required for each category
and group.
Show Employee PF Account Number – Set this option to Yes, to dis-
play the Provident Fund Account number of an employee.
Show Employee I.T. PAN – Set this option to Yes, to display the
Income Tax Permanent Account Number (PAN) of an employee.
Show Employee Bank Details – Set this option to Yes, to display the
Bank Account Number of an employee
Show Employee Number – Set this option to Yes, to display the
Employee Number of an employee.
Show Employee ESI Number – Set this option to Yes, to display the
State Insurance Number of an employee.
Show Employee Passport Details – Set this option to Yes, to display
an employee’s passport details.
Show Employee Visa Expiry Date – Set this option to Yes, to display
an employee’s visa expiry date.
Expand all levels in Detailed format – Set this option to Yes, to
expand all levels and display Employee details.
Appearance of Names – Select the appropriate name style to appear
in the Payroll Statement (Alias (Name), Alias only, Name (Alias), Name
only).
Sorting Method – Sort the Payroll Statement using Alphabetical
(Decreasing), Alphabetical (Increasing), Bank details, Employee IT
Pan Number, Employee Number, ESI Number, PF Account Number,
Passport details or by the default method.
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Payroll Accounting and Compliance
The Payroll Statement with the above Configurations will appear as shown:
To view Payroll Statement for other Pay Heads, you may either select other Pay Head(s) in the
manner as discussed or you may also include other Pay Heads in the above report for compara-
tive analysis or to obtain a cumulative value, by pressing Alt+C and selecting the required Pay
Head(s).
The Payroll statement with additional Pay Heads will appear as shown:
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Payroll Accounting and Compliance
Payment Advice
A Payment Advice is an intimation letter containing the details of employees with their bank
account numbers issued to the banker to transfer a specified sum (salaries earned) to the
employees’ bank accounts.
As discussed earlier, the contents of the Payment Advice can be altered in F12: Payroll Configu-
ration as per the employer’s requirements.
Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll > Payment
Advice
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The Payment Advice will be available only when the Salaries are
processed through Bank Transfer and a Payment voucher is passed
for the salaries payable for a given month/period.
You can also Email or Export Payment Advice in the manner as
discussed in Payslip Section.
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Payroll Accounting and Compliance
Payroll Register
A Payroll Register is a month-wise transaction summary report which displays the number of
payroll vouchers passed during a particular month. Additional information can be appended into
the Payroll Register, by inserting a new column with the required voucher type i.e., Attendance,
Journal, Purchases, Sales and so on.
Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll >Payroll
Register
Press F12: Configure and set the Appearance of Names and the Periodicity to use as
shown.
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Payroll Accounting and Compliance
The Payroll Register with the above configurations will appear as shown:
Tally.ERP 9 allows you to drill down to the voucher level from the above display for any kind of
verification, by pressing Enter on the required month/period.
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Payroll Accounting and Compliance
You can further drill down to transaction level, by selecting the required transaction and pressing
Enter.
Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll >Employee Pay
Head Breakup
Select the required Pay Head from the List of Pay Heads and press Enter
The Employee Breakup of Pay Head for Basic pay screen displays as shown:
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
You can also Email or Export Employee Breakup of Pay Head Report in
the manner as discussed in Payslip Section.
To drill down to the Employee Monthly Summary report from the Employee Summary report,
Highlight the required employee and press Enter
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To further drill down to Employee Voucher level screen from the Employee Monthly Summary
report, press Enter on the required month
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Payroll Accounting and Compliance
You can further drill down to transaction level, by selecting the required transaction and pressing
Enter.
The Employee Breakup of Pay Head report can be viewed with additional Pay Heads, by
pressing Alt+C and adding the required Pay Head and for multiple periods, by pressing Alt+N.
Go to Gateway of Tally > Display > Payroll Reports > Statements of Payroll >Pay Head
Employee Breakup
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
To further drill down to view the Breakup of Employee report for each ledger from the above
displayed report, select the required ledger and press Enter
The Breakup of Employee screen for a selected ledger (Basic Pay) displays as shown:
You can drill down further to view the Monthly Summary of the selected ledger and the Employee
Voucher report.
The Pay Head Employee Breakup report can be viewed with additional employees, by pressing
Alt+C and adding the required Employee and for multiple periods, by pressing Alt+N.
Attendance Sheet
An Attendance Sheet is a columnar report which displays the details of Attendance/ Production
types with the number of attendance/ production units achieved during a particular month or
period.
Go to Gateway of Tally > Display > Payroll Reports > Attendance Sheet
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Payroll Accounting and Compliance
You may configure the above report with additional details, by pressing F12:Configure and
enabling the following options, as required.
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
Attendance Register
An Attendance Register is a month-wise transactions summary report which displays the number
of attendance vouchers passed during the month. You can append additional information by
inserting a new column with the required voucher type, i.e. Payroll, Journal, Purchases, Sales and
so on.
Go to Gateway of Tally > Display > Payroll Reports > Attendance Register
Press F12: Configure and set the Appearance of Names and the Periodicity to use as
shown
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Payroll Accounting and Compliance
Tally.ERP 9 allows you to drill down to the voucher register, from the Attendance Register screen
for any kind of verification.
You may further drill down to voucher level, by pressing Enter on the required transaction.
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Go to Gateway of Tally > Display > Payroll Reports > Expat Reports > Passport Expiry
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Payroll Accounting and Compliance
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You can view Payroll Statutory reports either from Statutory Reports menu or Payroll Reports
menu i.e., Gateway of Tally > Display > Statutory Reports > Payroll Reports or Gateway of
Tally > Display > Payroll Reports > Statutory Reports
In this section, we will generate each of the above forms / report and understand the purpose and
information to be furnished.
i. Computation Report
The PF Computation Report provides the summary of Amount Payable and amount paid in
respect of PF for a given period comprising of Employer Contributions, Employee Deductions and
Employer’s Other charges, if any. To view PF Computation Report, follow the steps given below:
Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Computation
Press F2 and specify the period as 01-04-2009 to 30-06-2009 and press Enter
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Payroll Accounting and Compliance
The report, by default displays summary of Employee’s Provident Fund, Employee’s State
Insurance and Professional Tax, you may however configure to display only details of Provident
Fund
Press F12 : Configure and enable/disable the following options as required
Press Enter
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Payroll Accounting and Compliance
To view detailed ledger wise information under each contributions / deductions head, press
Alt+F1.
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Payroll Accounting and Compliance
You can further drill down to Employee Breakup of Pay Head report and from their to Employee
Vouchers and so on, by pressing Enter on the required ledger from the above screen.
ii. Form 5
As per the Employees' Provident Funds Scheme,1952 [para 36 (2)(a)], a return is required to be
submitted in Form 5 within 15 days of the following month detailing the list of Employees qualify-
ing for membership to the Employees’ Provident Fund for the First time during every month.
Form 5 is a monthly Returns to be submitted with the details of any new employee covered under
EPF. In Tally.ERP 9, you can generate Form 5 in the prescribed format containing the details of
the new joinees in the organisation for the selected month. To generate the PF Form 5 for the
month of June 2009, follow the steps given below:
Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Provident Fund >
Form 5
In the Payroll Statutory Print Configuration screen,
Specify 01-04-2009 and 30-04-2009 in the From and To fields respectively
Select the required Payroll Category, Employee/Group and Sorting Method
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Payroll Accounting and Compliance
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In our case study, there are two new employees joined during the month of June 2009 and thus
Form 5 contains the details of the above employees.
iii. Form 10
As per the Employees' Provident Funds Scheme,1952 [para 36 (2)(a) & (b), a Return is required
to be submitted in Form 10 within 15 days of the following month detailing the list of members
leaving service during the month.
Form 10 is a monthly Return to be submitted with the details of employees leaving the organisa-
tion. In Tally.ERP 9, on resignation or retirement or expulsion of any employee, the date of leaving
is required to be specified in the Employee master of such employee. The Date of Leaving option
in the Employee Master appears, in alteration mode. The Form 10 will contain the details of
Employees for whom the date of leaving is specified in the Employee Master.
You can generate Form 10 in the prescribed format containing the details of the employees
resigned for the selected month. To generate the PF Form 10 for the month of August 2009, follow
the steps given below.
Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Provident Fund >
Form 10
In the Payroll Statutory Print Configuration screen
Specify 01-09-2009 and 30-09-2009 in the From and To fields respectively
Select the required Payroll Category, Employee/Group and Sorting Method
Specify 10-10-2009 in the Date field
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Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Provident Fund >
Form 12A
In the Payroll Statutory Print Configuration screen
Specify 01-04-2009 and 30-04-2009 in the From and To fields respectively
Select the required Payroll Category, Employee/Group and Sorting Method
Specify the Name & Address of the Bank
Set Include VPF Account to No
Specify 0 in the Number of Contract Employees field
Press Enter to accept 0 in Number of Rest (Temporary Employees) field
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
v. PF Monthly Statement
The PF Monthly Statement provides a summary of Employee wise monthly PF Employee Deduc-
tions and Employer Contribution amount. To print PF Monthly Statement, follow the steps given
below:
Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Provident Fund >
Monthly Statement
In the Payroll Statutory Print Configuration screen,
Specify 01-04-2009 and 30-04-2009 in the From and To fields respectively
Select the required Payroll Category, Employee/Group and Sorting Method
The printed PF Monthly Statement for April 2009 will appear as shown:
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Payroll Accounting and Compliance
vi. Form 3A
As per the Employees' Provident Funds Scheme,1952 [para 35 & 42] and the Employees'
Pension Scheme 1995 (Para 19), a Form (Member’s Annual Contribution Card) showing month
wise recoveries towards EPF and Pension Fund in respect of a member for one financial year is
required to be furnished by the employer before 30th April of the following year.
Form 3A is a annual contribution card to be furnished for each employee in separate sheet to
EPFO. To print Form 3A, follow the steps given below:
Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Provident Fund >
Form 3A
In the Payroll Statutory Print Configuration screen
Select Primary Cost Category in the Cost Category field
Select All Items in the Employee/Group field
Specify 01-03-2009 and 28-02-2010 in the From and To fields respectively
Set Include VPF Account to No
Select the Employee Name in the Sorting Method field
Specify 28-02-2010 in the Date of Printing field
The completed Payroll Statutory Print Configuration screen will appear as shown:
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Payroll Accounting and Compliance
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The next page will contain the Contribution Card in Form 3A for the next employee.
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Payroll Accounting and Compliance
vii. Form 6A
As per the Employees' Provident Funds Scheme,1952 [para 43] and the Employees' Pension
Scheme 1975 [para 20], a Form (Consolidated Annual Contribution Statement) providing annual
contributions of each member of the establishment is required to be submitted by 30th April.
Form 6A is vital form for compiling the annual Provident Fund statement of a subscriber. In
Tally.ERP 9, you can generate Form 6A in the prescribed format. To print Form 6A follow the steps
given below:
Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Provident Fund >
Form 6A
In the Payroll Statutory Print Configuration screen
Specify 01-03-2009 and 28-02-2010 in the From and To fields respectively
Select the required Payroll Category, Employee/Group and Sorting Method
The completed Payroll Statutory Print Configuration screen will appear as shown:
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
viii. E-Return
In Tally.ERP 9 , you can also generate PF Form 3A in .xls format for e-filing purposes.
Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Provident Fund >
E-Return
The exported file (E-Return) will be placed in the default Tally.ERP 9 directory.
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Payroll Accounting and Compliance
i. Computation Report
The ESI Computation Report provides the summary of Amount Payable and amount paid in
respect of ESI for given period comprising of Employer Contributions and Employee Deductions.
To view ESI Computation Report, follow the steps given below:
Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Computation
Press F2 and specify the period as 01-06-2009 to 30-06-2009 and press Enter
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Payroll Accounting and Compliance
The report, by default displays summary of Employee’s Provident Fund, Employee’s State
Insurance and Professional Tax, you may however configure to display only details of Employee
State Insurance.
Press F12 : Configure and enable/disable the following options as required
Press Enter
To view detailed ledger wise information under each contributions / deductions head, press
Alt+F1.
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Payroll Accounting and Compliance
The detailed Employee State Insurance Computation Report will appear as shown:
You can further drill down to Employee Breakup of Pay Head report and from their to Employee
Vouchers and so on, by pressing Enter on the required ledger from the above screen.
ii. Form 3
As per Regulation 14, a declaration form in Form 3 is required to be filed for every Half Yearly
stating the list of Employees whose remuneration is not exceeding Rs. 10,000/- per month.To
generate ESI Form 3, follow the steps given below:
Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Employee State
Insurance > Form 3
In the Payroll Statutory Print Configuration screen,
Specify 1-04-2009 and 30-09-2009 in the From and To fields respectively
Select the required Payroll Category, Employee/Group and Sorting Method
Select the required Gender from the List of Gender field
Type Bangalore in the Place field
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Payroll Accounting and Compliance
The completed Payroll Statutory Print Configuration screen will appear as shown:
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Employee State
Insurance > Monthly Statement
In the Payroll Statutory Print Configuration screen,
Specify 01-06-2009 and 30-06-2009 in the From and To fields respectively
Select the required Payroll Category, Employee/Group and Sorting Method
The printed ESI Monthly Statement for June 2009 will appear as shown:
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Payroll Accounting and Compliance
iv. Form 5
As per Regulation 26, a Return of Contribution in Form 5 is required to be submitted to the appro-
priate Branch Office within 42 days of the expiry of the contribution period (i.e, 12th May or
November 11th of each year). Such return of contribution should be prepared in quadruplicate
and submitted separately for the main Code Number and each sub-code number.
The employer may make compliance from the parent unit and submit only one return in respect of
all the branches or may make compliance through their Branch Offices/ Sales Offices separately
in the Regions where such offices are located.
Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Employee State
Insurance > Form 5
In the Payroll Statutory Print Configuration screen
Specify 01-04-2009 and 30-09-2009 in the From and To fields respectively
Select the required Payroll Category, Employee/Group and Sorting Method
Select the required Display Employee Name Style in Appearance of Employee Names
field
Specify Bangalore in the Place Field
Specify 30-09-2009 in the Date of Printing field
Type the name of the Signatory in the Authorised Signatory Name field
Type the Designation details of the signing authority
In the Residential Address field provide the Home Address of Authorised Signatory
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Payroll Accounting and Compliance
The completed Payroll Statutory Print Configuration screen for ESI Monthly Statement is as
shown:
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
v. Form 6
As per Regulation 32, a register of Employees covered under Employees State Insurance
Scheme, containing information regarding the Insurance No., dispensary, other occupational
details, Employer’s Share and month wise (under that particular Half Year) ESI details (i.e., Gross
wages, Number of working days and ESI Contribution for each employee) should be furnished. To
generate Form 6, follow the steps given below:
Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Employee State
Insurance > Form 6
The completed Payroll Statutory Print Configuration screen will appear as shown:
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Professional Tax >
Computation Report
From the List of Ledgers drop down, select Professional Tax and press Enter, the Pay-
roll Statutory Print Configuration screen appears
In the Payroll Statutory Print Configuration screen,
Specify 01-06-2009 and 30-06-2009 in the From and To fields respectively
Select the required Payroll Category, Employee/Group and Sorting Method
Type Bangalore in the Place field
Specify 30-06-2009 in the Date of Printing field
The completed Payroll Statutory Print Configuration screen will appear as shown:
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Payroll Accounting and Compliance
The printed Professional Tax Computation Report for the month of June 2009 will appear as
shown:
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Payroll Accounting and Compliance
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Payroll Accounting and Compliance
Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Professional Tax >
Statement
From the List of Ledgers drop down, select Professional Tax and press Enter, the Pay-
roll Statutory Print Configuration screen appears
In the Payroll Statutory Print Configuration screen, specify 01-06-2009 and 30-06-2009
in the From and To fields respectively
Select the required Payroll Category, Employee/Group and Sorting Method
The completed Payroll Statutory Print Configuration screen will appear as shown:
The printed Professional Tax Statement for June 2009 will appear as shown:
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Payroll Accounting and Compliance
You can view PT Computation Report from Gateway of Tally > Display >
Payroll Reports > Statutory Reports > Computation menu, detailing Pro-
fessional Tax collected and paid during a given period in the manner as
discussed in Provident Fund Computation Report section.
Gratuity Report
The Gratuity Report displays the provisional liability of an employer towards his employee in
respect of gratuity payable at the time of cessation of employment either by resignation, death,
retirement or termination.
The Gratuity Summary Report displays the gratuity amount payable in accordance with the pay
components and formulae defined in the ledger master, as discussed earlier. In Tally.ERP 9, the
Gratuity amount is calculated proportionately for eligible days in a year to the extent of completed
months of service.
You can view Gratuity Report either from Statutory Reports menu or Payroll Reports menu i.e.,
Gateway of Tally > Display > Payroll Reports > Statutory Reports or Gateway of Tally >
Display > Statutory Reports > Payroll Reports.
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Payroll Accounting and Compliance
Go to Gateway of Tally > Display > Payroll Reports > Statutory Reports > Gratuity Report
The Gratuity Report for the Employees eligible for Gratuity will appear as shown:
In order to ascertain the Gratuity payable amount, set Use for Gratuity to
Yes in the Pay Head master (i.e. Basic Pay, Dearness Allowance etc.)
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Payroll Accounting and Compliance
The above report displays the details of all employees' along with the Date of Birth, Date of
Joining and the Gratuity Eligible Salary, besides commenting on the total Gratuity liability as on
date. Press F12: Configure to configure for additional options
Tally.ERP 9 allows you to drill down to the Gratuity Details report from the above display.
Select the required employee and press Enter
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Payroll Accounting and Compliance
Once the employee is deactivated (i.e., when the date of leaving is filled in
the Employee master), Tally.ERP 9 stops computing Gratuity for the deacti-
vated employee. If the tenure of service of such an employee falls below the
eligible slab for gratuity calculation, he/she will not be entitled for any
gratuity amount. However, in cases where the tenure of service is spread
over more than one eligible slab(s), he/she will be entitled to the sum total of
all the slabs.
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Payroll Accounting and Compliance
Points to Remember
Payroll is the process of maintaining records of all employees’ salaries.
The Payroll function in Tally.ERP 9 facilitates accurate and timely
employee payments.
The Attendance/Production Type is used to record attendance and pro-
duction data.
Salary components constituting Pay Structures are called Pay Heads.
Gratuity is a monetary benefit paid by an employer to an employee, at
the end of the employment, for the services rendered over the period of
employment.
Attendance voucher is a voucher type used to record attendance, over-
time, leave or production details.
Payroll voucher is used to record employees’ payroll related transac-
tions.
Payslip is a document, issued to an employee, that itemises each com-
ponent of his/her earnings and deductions.
Pay Sheet is a matrix report with details of pay heads pertaining to
employees.
Payroll Statement helps to generate reports for specific pay heads.
Attendance Sheet displays information relating to employees’ attend-
ance or production data.
Gratuity Summary Report calculates the liability of a company in terms
of gratuity.
Expat Report provides comprehensive information about employees
who are abroad, on short/ long-term assignments.
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