VI SEMESTER B COM

COMPUTER APPLICATIONS

COMPUTERISED ACCOUNTING
WITH TALLY

MODULE II

SNEHA LUCY JOY

ASSISTANT PROFESSOR
DEPARTMENT OF COMMERCE AND MANAGEMENT
 COMPUTERISED ACCOUNTING WITH TALLY

MODULE II

INVENTORY MANAGEMENT WITH TALLY

SNEHA LUCY JOY

DEPARTMENT OF COMMERCE AND MANAGEMENT

ST JOSEPH’S COLLEGE (AUTONOMOUS)

DEVAGIRI
 CHAPTER IV

INVENTORY MANAGEMENT

• Inventory management can be defined as a whole lot of activities

done to maintain an optimum number of inventories to ensure
uninterrupted production, sales, high customer satisfaction,
reduced inventory handling cost and so on.
• In simple words, inventory management is all about striking the
balance between overstocking and understocking.
• Overstocking will lead to cash flow blockage and additional cost
for managing excess stock.
• On the flip side, understocking leads to loss of sale due to non-
availability of stock at the right time.
• Thus, it’s all about maintaining the right level inventories at the
right time and keeping the inventory handling cost at low.

Stock Items

• Stock Item refers to goods that you manufacture or trade.

• It is the primary inventory entity and is the lowest level of
information on your inventory.

Create stock items (Single mode)

Stock items are goods that you manufacture or trade (sell and
purchase). It is the primary inventory entity. Stock Items in the
Inventory transactions are similar to ledgers being used in
accounting transactions.

1. Gateway of Tally → Inventory Info →Stock

Item →(Single) Create

2. Enter the Name of the Stock Item.

3. Enter the Alias name of Stock Item (if required).

4. The field Under will show the List of Groups . Here you can
select the Stock Group to which the Stock Item belongs. By
default, Primary Stock Group appears in this field.

The Stock Item Creation screen appears as shown:

 Create multiple stock items

1. Go to Gateway of Tally →Inventory Info →Stock

Item →(Multiple) Create

2. Select a Stock Group or All Items from List of Groups to

create the Stock Item.

3. Enter the Name of the Stock Items.

5. Enter the opening quantity, rate per unit.

The Multi Stock Item Creation screen appears as shown below:

Display Stock Items

You can display the existing Single Stock Item and Multiple Stock
Item .

Single stock item:

Go to Gateway of Tally > Inventory Info > Stock Items > Display
(under Single Stock Item).

Select the Stock Item you want to display from the List of Items .

Multiple stock items:

Go to Gateway of Tally > Inventory Info > Stock Items > Display
(under Multiple Stock Item).

Alter Stock Items

This option allows you to view and change the details for the
existing Single Stock Item and Multiple Stock Item.

Alter a single stock item

1. Go to Gateway of Tally > Inventory Info. > Stock

Items > Alter (Single Stock Item).

2. Select the required Stock Item from the List of Items .

The Stock Item Alteration screen appears.

Alter multiple stock items

1. Go to Gateway of Tally > Inventory Info > Stock

Items > Alter (Multiple Stock Items).

2. Select a stock group from the List of Groups to alter the stock
item under the selected group or under All Items.

The Multi Stock Item Alteration screen appears.

Stock Group

• Stock Groups in Inventory are similar to Groups in

Accounting Masters.

• They are helpful in the classification of Stock Items.

• You can group Stock Items under different Stock Groups to

reflect their classification based on some common features
such as brand name, product type, quality, and so on.

• Grouping enables you to locate Stock Items easily and report

their details in statements.

Create Single Stock Groups

Stock Items are classified into stock groups to reflect their

classification based on some community.

1. Go to Gateway of Tally > Inventory Info> Stock

Groups > (Single) Create

2. Enter the Name of the Stock Group.

3. Enter additional name apart from primary name [if required] in

the field Alias .

4. Specify whether it is a primary group or a sub-group of another

group in the field Under , by selecting from the list.
 Press Enter to save.

Create Multiple Stock Groups

[Link] 9 allows you to create Stock Groups using single or

multiple options.

1. Go to Gateway of Tally > Inventory Info. > Stock

Groups > (Multiple)Create

2. Select the parent group under which you want the new groups
to be created from the List of Groups .

3. Enter the Name of the Stock Group.

Display Single Stock Group

You can display the existing Stock Group in Single mode and
multiple mode.

1. Gateway of Tally > Inventory Info. > Stock

Groups > (Single) Display

2. Select the Stock Group whose particulars you want to display

from the List of Groups.

The Stock Group Display screen appears.

Display Multiple Stock Groups

1. Go to Gateway of Tally > Inventory Info. > Stock

Groups >(Multiple) Display

2. Select the Stock Group from the List of Groups .

If you select All Items from the List of Groups, all the Groups
and sub Groups are displayed.
 If you select Grade One from List of Groups , all the sub
Groups related to Grade One will be displayed.

Stock Categories

• Stock Category offers a parallel classification of stock items.

• Like stock Groups, classification is done based on similarity

in behaviour.

• The advantage of Categorizing items is that you can classify

the stock items (based on functionality) together – across
different stock groups which enables you to obtain reports on
alternatives or substitutes for a stock item.

For enabling Stock Category option in the Inventory Info menu,

press F11 > Inventory Features > Set Yes for Maintain stock
categories.
Create a single Stock Categories

• This option allows parallel classification of stock items.

• Like Stock Groups, Stock Categories are also classified based

on some similar behaviour.

1. Go to Gateway of Tally > Inventory Info. > Stock

Categories > Create (under Single Stock Category).

2. The Stock Category Creation screen is displayed.

3. Enter the Name of the Stock Category.

4. Specify whether it is a primary category or a sub-category of

another category in the field Under.

Press Enter to save.

Create Multiple Stock Categories

Tally. ERP 9 allows you to create Stock Categories using single or

multiple options.

1. Go to Gateway of Tally > Inventory Info. > Stock

Categories > Create (underMultipleStockCategory).
 2. The Multiple Stock Category Creation screen is displayed as
shown below:

3. Specify the names of the Stock Category.

Display a single Stock Category

You can display the existing Stock Category in Single mode and
multiple mode.

1. Go to Gateway of Tally > Inventory Info. > Stock

Categories > Display (under Single Stock Category).

2. Select the Category for which you want to view the display
details from the List of Categories.

Display Multiple Stock Categories

1. Go to Gateway of Tally > Inventory Info. > Stock

Categories > Display (under Multiple Stock Categories ).

2. Select the Stock Category from the List of Categories .

 If you select All Items from the List of Groups , all the
categories and sub categories are displayed.

Alter a Single Stock Category

This option allows you to view the existing Stock Category in edit
mode, here you are allowed to change the various information.

1. Go to Gateway of Tally > Inventory Info. > Stock

Categories > Alter (under Single Stock Category).

2. Select the Stock Category from the List of Categories .

The Stock Category Alteration screen is displayed as shown.

Make the necessary changes and click Yes to accept.

 Deletion is possible only in the alteration mode. For deleting the
Stock Category, Press Alt+D.

Alter Multiple Stock Categories

1. Go to Gateway of Tally > Inventory Info. > Stock

Categories > Alter (under Multiple Stock Categories).

2. Select the Stock Category from the List of Stock Categories.

The Multi Stock Group Alteration screen is displayed as shown.

Make the necessary changes and click Yes to accept.

Note: You cannot delete a Stock Category in multiple mode.

Units of Measure

• Stock Items are mainly purchased and sold on the basis of

quantity.

• The quantity in turn is measured by units.

• In such cases, it is necessary to create the Unit of Measure.

• The Units of Measure can either be simple or compound.

• Examples of simple units are: nos., metres, kilograms, pieces

etc.
Simple Units of Measure

1. Go to Gateway of Tally > Inventory Info > Units of

Measure > Create.

The Unit Creation screen is displayed as shown below:

This field will show the Type of Units.

● Simple

● Compound.

Simple units are nos, pcs , and so on.

Compound unit is a combination of two simple units.

By default [Link] 9 will show the Simple unit for creating

the unit of measure.

2. Define the Symbol of the unit, for example, Nos.

3. Specify the Formal Name of the symbol, for example,

Numbers.
Compound Unit of Measure

• A Compound Unit is a relation between two Simple Units.

• Hence, before you create a Compound Unit, ensure that you

have already created two Simple Units.

For example, To Create Compound unit – Doz (Dozen) of 12 Nos

(Numbers), you have to create two simple units, Doz (Dozen) and
Nos (Numbers) and set the conversion factor as 12.

1. Go to Gateway of Tally > Inventory Info > Units of

Measure > Create.

The Unit Creation screen is displayed as shown.

2. Select Compound from the Types of Units and press Enter.

The Conversion field will be displayed for creating Compound
unit.
 3. Select the First unit from the Units List. In the above example,
Dozen will be the First Unit.

4. Specify the Conversion Factor. In the above example,

Conversion factor will be 12.

5. Specify the Second Unit from the Units List. In the above
example, Number will be the Second Unit.

6. Accept the Screen for Saving of Compound Unit Creation.

Alter Units of Measure

You can alter the units of measurement created in [Link] 9.

1. Go to Gateway of Tally > Inventory Info. > Units of

Measure > Alter.

2. Select the Name of Unit you want to alter from the Units list.
The Unit Alteration screen appears as shown below:

3. Make the necessary changes.

4. Accept the screen.

You can delete a unit of measure by pressing Alt+D. However, a

unit of measure that is part of a compound measure cannot be
deleted without deleting the compound measure first.
 Display Units of Measure

You can display the existing Units of Measure.

1. Go to Gateway of Tally > Inventory Info. > Units of

Measure > Display.

2. Select the Unit of Measure you would like to view from the
Units list. You can select a compound unit or a simple unit from
the list. The Unit Display screen is displayed as shown below:

Godowns/Locations

• In your business, you may be managing the inventory in

multiple physical locations, such as shops, warehouses, bins,
racks, cabinets, and so on.

• In this case, you can use the Godowns/Locations capability of

[Link] 9.

• Using godowns will help you keep a record of inventory

moving from one project or manufacturing stage to another.

• Similarly, you can also track the stock moving in and out of
your business premises for consignment sales or job work.
 • You can view stock reports for each godown and account for
the movement of stock between godowns.

• You can create individual godowns or multiple godowns in a

hierarchy.

For example, y ou can simply create Warehouse A, Warehouse B,

and Warehouse C, or you can create Southern Region, with
Warehouse A and Warehouse B under it, and Eastern Region, with
Warehouse C and Warehouse D under it. Then, you can get the total
inventory in Southern Region, and the inventory in Warehouse B.

Create Godowns/Locations

To start allocating your stock items in godowns, you need to create

a Godown first.

1. Press F11 (Features) > Inventory Features > and set Maintain
multiple Godowns as Ye .

2. Gateway of Tally > Inventory Info. > Godown >( Single)

Create .

3. Name & alias : you can specify multiple aliases for the godown
name.

4. Under : Select Primary or Main Location.

 5. Accept the screen.

Create multiple Godowns/Locations

• If you have stored your inventory in more than one location,

in [Link] 9 you can choose to create godowns one by one,
or create multiple godowns from a single screen.

1. Gateway of Tally > Inventory Info. > Godowns > (Multiple)

Create .

2. Under Godown :

● If you select Under Godown > All Items , you will be

prompted to select the parent godown for each godown name
that you specify under the Name column.

● If you select any other godown, say Under Godown > Main
Location , this godown is treated the parent godown for all
the godowns you create

A sample Multi Godown Creation screen is shown below.

 Alter, Display, and Delete Godowns/Locations

Like other masters, you can Alter , Display , or Delete godowns.

Alter Godowns

• You can alter details of godowns and the changes will reflect
in all dependent Masters, Transactions, and Reports.
• Use Gateway of Tally > Inventory Info. > Godowns >
Alter.

Display Godowns

• To view the details of the godown you have created.

• Use Gateway of Tally > Inventory Info. > Godowns >
Display.

Delete Godowns

You can delete a godown if it is not used in any other master or

transaction. Open the godown you wish to delete in the alteration
mode, and press Alt + D.
 COMPUTERISED ACCOUNTING WITH TALLY

MODULE II

INVENTORY MANAGEMENT WITH TALLY

SNEHA LUCY JOY

DEPARTMENT OF COMMERCE AND MANAGEMENT

ST JOSEPH’S COLLEGE (AUTONOMOUS)

DEVAGIRI
 CHAPTER IV

INVENTORY MANAGEMENT

Inventory Vouchers

• Inventory Vouchers perform the function in the inventory

system that accounting vouchers do in the accounting system.
• Inventory Vouchers are also means of entering transactions.
Accounting vouchers will update only Accounts, but Inventory
vouchers will update both Accounts and Inventory.
• Inventory vouchers record the receipt and issue of goods/stock
(Movement of goods), the transfer of stock between locations
and physical stock adjustments.
• If you have not integrated accounts with inventory, inventory
vouchers will not have any impact on the Balance Sheet stock
figures.
• Set the option

Integrate accounts and inventory to Yes in F11: Features

The following inventory vouchers are available in Tally ERP 9

1. Purchase Order (Alt+F4)

2 .Sales Order (Alt+F5)

3. Rejections Out (Alt+F6)

4. Rejections In (Ctrl+ F6)

5. Stock Journal (Alt+F7)

6. Delivery Note (Alt+F8)

7. Receipt Note (Alt+F9)

8. Physical Stock (Alt+F10)

1. Purchase Order-(Alt+F4)

• A Purchase order entry has to be made in the books of the

company to assist them in checking whether the goods have been
received or not.
• The Purchase Order number can be used as a reference.
• For example, the company wishes to place an order with the
supplier for some goods.
❖ To create a Purchase Order
❖ Go to Gateway of Tally Press F11: Features→ F2 inventory
features→set “Allow purchase order processing” YES Then,
❖ Gateway of Tally > Inventory Vouchers > press Alt+F4 or
click on Purchase Order

2. Sales Order-(Alt+F5)

• A Sales Order entry has to be made to record sales order.

• The Sales Order number can be used as a reference.
• For example, a customer places an order with the company
for purchasing some goods.
 ❖ To create a Sales Order
❖ Gateway of Tally > Inventory Vouchers > press Alt + F5 or
click on Sales Order

[Link] Out (Purchase Return) (Alt+F6)

• A Rejections Out entry is passed to record the rejected goods.

• This is used to record the goods that are rejected and
returned to a supplier-Purchase Returns.
• For example, the company returns items that had previously been
taken into stock to the supplier.
• This is a pure inventory voucher.
• For example: We have purchased some goods and have rejected
a part of it.
❖ To view Rejections Out Voucher.
❖ From F11 Inventory Features, Enable the option Use
Rejection Inward/ outward Notes
❖ Go to Gateway of Tally > Inventory Vouchers>Press Alt+F6
or Select the button Rejections Out voucher

[Link] In (Sales Return) (Ctrl+ F6)

• A Rejections in entry is passed to record the rejected goods.

• This voucher is used to record goods received back that were
rejected by our customers-Sales Return.
• For example a customer has rejected goods that was sold earlier.
 • In F11 Inventory features set use Rejection Inward/ Outward
notes to 'Yes'
• Go to Gateway of Tally > Inventory Vouchers>Press Ctrl+F6
or Select the button Rejections in voucher

5. Stock Journal-Alt + F7

• For example the company transfers items of stock from the

warehouse to the shop.
• We have to specify quantities that are transferring along with their
rates and amounts.
❖ Gateway of Tally-> Inventory Voucher->press "Alt + F7".
❖ The left hand side shows the Source location or Consumption and
the right hand side is the Destination location or the Production
Part.

Source (Consumption)

❖ Here we give the name of the item and the location from where it
moves or where it is consumed along with the rate and amount.

Destination (Production)

❖ Here we want to give the name of the item and the location to
where the named item moves.

For example, the company keeps the stock in a godown of Kochi which
is in main location Company transferred 10 Nos of Table fan to
Godown a Rs. 2800 each.
6. Delivery Note-Alt +F8

❖ This voucher is used to record goods delivered to a customer.

❖ For example, the company delivers goods from stock to a
customer.
❖ If a Sales Order exists for that customer, selecting the appropriate
Sales Order will bring up the relevant particulars.
❖ Gateway of Tally-> Inventory Voucher--> press "Alt +
F8"/Delivery Note button.
❖ Reference, ledger account, customer's name and address, name of
item, qty, rate, and amount are recorded in this voucher

7. Receipt Note Voucher-Alt+F9

• This voucher is used to record the receipt of goods.

• For example, the company receives new stock from a supplier.
• If a Purchase Order exists for that Supplier, selecting it will bring
up the order particulars.
• In this voucher we have to enter details such as order details,
supplier's details, godowns, quantity, rate, purchase ledger etc.
❖ To view the Receipt Note Voucher-
❖ Gateway of Tally-> Inventory Voucher-> press "Alt + F9/
Receipt Note Voucher ".

8. Physical Stock Voucher-Alt +F10

• This voucher records actual stock which is found on physical

verification or counting.
 • There may be some discrepancy between the actual stock and the
computer stock figure.
❖ To view the Physical Stock Voucher-
❖ Gateway of Tally-> Inventory Voucher-> press "Alt + F10/
Physical Stock button from Button Bar

PURE INVENTORY VOUCHERS

❖ Pure inventory voucher perform the same function in the

inventory system as accounting vouchers in the accounting
system.
❖ Accounting vouchers will update only Accounts, but Inventory
vouchers will update both Accounts and Inventory.
❖ In this case, the vouchers record the receipt and issue of
goods/stock, the transfer of stock between locations, and physical
stock adjustments.
❖ Pure inventory vouchers are those that do not affect financial
records.
❖ They affect only the stocks.
❖ There will be a rise or fall in the stock when such vouchers are
entered.
❖ If accounts are not integrated with inventory, inventory vouchers
will not have any impact on the Balance Sheet stock figures, They
will separately maintain the stock balances.
 ❖ There are six types of pure inventory vouchers-
Rejections Out (Alt+F6)
Rejections In (Ctrl+ F6)
Stock Journal (Alt+F7)
Delivery Note (Alt+F8)
Receipt Note (Alt+F9)
Physical Stock (Alt+F10)

--------------------------------------------------------------------------------
 COMPUTERISED ACCOUNTING WITH TALLY

MODULE II

SNEHA LUCY JOY

DEPARTMENT OF COMMERCE AND MANAGEMENT

ST JOSEPH’S COLLEGE (AUTONOMOUS)

DEVAGIRI
 CHAPTER VI

INTEGRATION OF ACCOUNTING WITH TALLY

Cost Centres

• A cost centre is any unit of an organisation to which cost

(generally, revenue) can be allocated.
• When only costs or expenses are allocated to these units, they
are referred to as Cost Centres.
• When profits are also allocated to these units, they become
Profit Centres.
• You can now obtain a Profit and Loss account of each such
Profit Centre.
• Transactions are allocated to cost centres.
• This enables accounting all transactions for that particular cost
centre.
• You can view the cost centre break up of each transaction as
well as the details of transactions for each Cost Centre.

Some examples of Cost Centres are:

● Departments of an organisation - Finance, Manufacturing,

Marketing, and so on.

● Products of a company.

● Individuals such as Salesman A, Salesman B.

Enable Cost Centres

A cost centre is any unit of an organisation to which transactions

(generally, revenue) can be allocated. When only costs or expenses
are allocated to these units, they are referred to as Cost Centres.
When profits are also allocated to these units, they become Profit
Centres.

1. From Gateway of Tally > Click F11: Features > Accounting

Features .

2. Enable the option Maintain Cost Centres?

3. Enable the option Maintain more than one payroll or cost

category? to maintain cost categories.

4. Press Ctrl+A to save the Company Operations

Alteration screen.

Create Cost Centre

• In order to create a Cost Centre, enable Maintain cost

centres in F11: Accounting Features.

• For parallel allocation of Cost, you can enable Maintain more

than one payroll or cost category.

Create a single cost centre

1. Go to Gateway of Tally > Accounts Info > Cost

Centres > (Single) Create.

3. Enter the Name.

 4. Select the parent cost centre Under which the cost centre has to
be grouped.

5. Press Enter to save the Cost Centre.

Create multiple cost centres

1. Go to Gateway of Tally > Accounts Info. > Cost

Centres > (Multiple) Create.

2. Select the Cost Category.

3. Enter the Name of the Cost Centre.

Alter a Cost Centre

You can alter an existing cost centre in the single mode.

1. Go to Gateway of Tally > Accounts Info. > Cost

Centres >(Single)Alter

2. The Cost Centre Alteration appears as shown below:

3. Make changes as required.

4. Press accept to save the screen

Delete a Cost Centre

Cost centres can also be deleted in the alteration mode.

 1. Go to Gateway of Tally > Accounts Info. > Cost
Centres > Alter (under Single Cost Centre ).

2. Select the Cost Centre from the List of Cost Centres .

The Cost Centre Alteration screen appears.

3. Click Alt +D.

Cost Categories

• Cost categories are useful for organisations that require

allocation of revenue and non-revenue items to parallel sets
of cost centres.

• For example, region-wise or geography-wise, Grade-wise,

Department-wise, cost categories.

• You can use cost categories you can allocate, in parallel, a

transaction to more than one set of cost centres.

• For example, Cost Centres such as Marketing, Finance and

Manufacturing can now belong to a category -
Departments.

• The Salesmen A, B, and C can be Cost Centres under a

Category - Executives.

• Similarly, you can create a new Cost Category Projects under

which Cost Centres such as airport construction, road
construction and buildings may be created.
 • The classification appears as following:

Cost Departments Executives Projects

Categories

Cost Marketing Salesman A Airport

Centres Construction

Manufacturing Salesman B Road

Construction

Finance Salesman C Buildings

Enable Cost Category

Cost categories are useful for organisations that require allocation of

revenue and non-revenue items to parallel sets of cost centres. Enable
cost categories in F11 features to create and use cost categories.

1. From Gateway of Tally > Click F11: Features .

2. Enable the option Maintain Cost Centres

3. Enable the option Maintain more than one payroll or cost

category

Create a Cost Category

• On enabling cost categories, the option Cost Category is

available in the Accounts Info. menu.
 • By default all cost centres are grouped under Primary Cost
Category.

• You can create cost categories and group cost centres under
cost centres, as required.

• Multiple cost categories can be created in one go in multiple

mode.

Single Cost Category

1. Go to Gateway of Tally > Accounts Info. > Cost

Categories >(Single) Create.

2. Enter the Name.

The Cost Category Creation screen appears as shown below:

Create multiple cost categories

1. Go to Gateway of Tally > Accounts Info. > Cost

Categories >(Multiple)Create

2. Enter the Name of Category.

The Multi Cost Category Creation screen appears as shown

below:
 3. Press Enter to save the Cost Categories.

Alter a Cost Category

You can alter an existing cost category in the single mode.

Alter a single cost category

1. Go to Gateway of Tally > Accounts Info. > Cost

Categories > (Single)Alter

2. Select the Cost Category from the List of Categories. The Cost
Category Alteration screen appears.

3. Make the changes in the required fields.

4. Press accept to save the screen.

Alter multiple cost categories

You can alter multiple Cost Categories at a time in this mode.

● Go to Gateway of Tally > Accounts Info. > Cost

Categories >( Multiple)Alter

The Multi Cost Category Alteration screen displays.

Make the necessary changes and accept to save.

 Delete a Cost category

1. Go to Gateway of Tally > Accounts Info. > Cost

Categories > Alter (Single).

2. Select the Cost Category from the List of Categories.

The Cost Category Alteration screen appears.

3. Click Alt+D.

4. Click Enter to confirm deletion of the cost category.

Note: You will not be able to delete a Cost Category in multiple mode.

…………………………………………………………………………………………
 COMPUTERISED ACCOUNTING WITH TALLY

MODULE II

SNEHA LUCY JOY

DEPARTMENT OF COMMERCE AND MANAGEMENT

ST JOSEPH’S COLLEGE (AUTONOMOUS)

DEVAGIRI
 CHAPTER VI

INTEGRATION OF ACCOUNTING WITH TALLY

How can we enable bill wise details in Tally?

BILL-WISE DETAILS

• Maintain Bill Wise Details is useful to save all Sales and

Purchases Vouchers in Tally as per the actual bills.
• It is also helpful to track the details of a voucher entry i.e credit
sales or credit purchases so that the important information about
that particular voucher or bill can be known.
For example, Vikas Enterprises sold a 10 table fans to Mr.
Mathew for Rs 30,000 on 1st July 2018 and he with that he will
pay the amount within next 30 days.
Let us have another example of purchase of Table Fan. Vikas
Enterprises purchased 10 Table Fan from Delux Associates for
Rs. 25,000 on 1st June, 2018 and have agreed with them to pay
pay the amount in the next 60 days

How can we track this in Tally? In the above cases, we can easily
track the number of days and the amount remaining to pay as well
as amount received on bills. This is the meaning of Bill Wise Details
in Tally ERP 9.

• Bill-wise details are available only for party accounts, viz, ledger
accounts classified under Sundry Debtors, Sundry Creditors .
 • To get Bill-wise details we have to enable the option Maintain
Bill Wise Details in Tally.
• To activate or enable it

Gateway of Tally> Press F11 (Company Features)-> F1

(Accounting Feature) → set “Maintain Bill Wise Details” - YES

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.

…………………………………………………………………………

Which are the different types of bill references in Tally?

TYPES OF BILL REFERENCES

• Advance
• New Ref
• Against Ref
• On account

These references are explained below.

1. Advance Reference

This option is used when amount is paid or received as an

advance from or to party in other words.
It is used in case of advance receipt or payment entry.
We can adjust this advance when making the sale or purchase
entry.
2. New Reference

It is used when we make any purchases or sales entry.

We select this for new transactions.
For example, it is used for a new bill issued on our customer or
issued on us by our supplier.
We are not allowed to give the same name for two new references
in other words, new references must be unique.

3. Against Reference

This option is used when we want to adjust against a previous

reference i.e. adjust against a bill marked new reference.
It is used when you have to pay or receive amount against credit
bill.
Typically, we would mark a bill new reference and adjust its
payment by marking the payment against reference

4. On account

On Account is selected when we are unable to mark a payment or

a receipt against specific pending references.
It is used when we don't have any idea of any bill wise detail.
Typically, we would do this in cases of lump sum payments
where a number of bills are pending but we are not instructed
against which bill the money should be adjusted.

………………………………………………………………………
 1. What do you mean by invoicing? List out the 2 types of invoice
mode.
2. What is the difference between account invoice and item
invoice?
INVOICING

• When a sales transaction is made, a document giving the

details of the transaction such as item name, quantity, rate,
tax, etc. has to be given to the buyer or debtor as proof of his
purchase.
• This document is called Invoice or Cash Memo.
• Before proceeding with the invoicing, activate Invoice Entry
capability in F11 Company Features.
• In F11: Features “Allow Invoicing “is set to Yes.
• Invoices mode is of two types :They are
❖ Account Invoice
❖ Item Invoice

ACCOUNT INVOICE

• Sales Account Invoice is generally used by professionals such

as doctors and consultants who require to issue an invoice for
certain services provided such as consultancy charges
professional fees.
• Trading and manufacturing organizations also use the Account
Invoice for invoicing service charges
 ITEM INVOICE

• Invoicing is generally used for sale of stock where the details of

the items sold are listed.
• Selecting the Item Invoice allows to select the stock items that
need to be invoiced.
• Trading and manufacturing organizations commonly use this
format.

…………………………………………………………………………
What do you mean by Budgets in Tally? (2)
How to alter and delete a budget in Tally? (2)
Define Budgets. Explain the steps to create, alter and delete budgets
and controls in Tally. (10)
BUDGETS

❖ A budget is a plan prepared for the flow of funds in an

organisation.
❖ It contains financial guidelines for the future plan of action
for a selected period of time.
❖ A budget helps to refine goals and use funds efficiently.
❖ It provides accurate information for evaluation of financial
activities, aids in decision making and provides a reference for
future planning.
❖ Budgets for Banks, Head offices, Departmental budgets like
Marketing Budgets, Finance Budgets, can be created.
 ❖ The Budgeted figures in Tally. ERP 9 can be compared with
Actual figures and variance report can be generated.

Creation of budget

• In [Link] 9, you can create a budget for groups, ledger

accounts, and cost centres.
• Go to Gateway of Tally > Accounts Info. > Budgets > Create.
• Enter a Name for your budget in the Budget Creation screen.
• Enter the period of the budget in the From and To fields. The
period entered can be a month, a year or any other period.
• In Set/Alter Budgets of, select
❖ Groups - To create a budget for a Group of ledger accounts.
❖ Ledgers - To create a budget for Ledgers.
❖ Cost Centres - To create a budget for Cost Centres.

Create Budgets for Cost Centres

• Set the option Cost Centres to Yes to view the Cost Centre
Budget screen.

• Enter a budget figure in Expenses for the cost centre.

 • Enter a budget figure in Income for the cost centre.

• Enter Closing Balance.

The Cost Centre Budget screen appears as shown below:

• Press Enter to save the budgets created.

Create Budgets for Groups

• In Set/Alter Budgets of, enter Yes in the Groups field.

• In the Group Budget screen that appears,Select the required

group.

• Enter the budget amount in the Amount field.

• Press Enter to save.

 Create Budgets for Ledgers

• In Set/Alter Budgets of, enter Yes in the Ledgers field to view

the Ledger Budget screen.

• Select the required ledger.

9. Enter the budget amount in the Amount field.

10. Press Enter to save.

Alter a Budget

1. Go to Gateway of Tally > Accounts Info > Budgets > Alter.

2. Modify the fields as required, i n the Budget Alteration screen.

Delete a Budget

1. Go to Gateway of Tally > Accounts Info > Budgets > Alter .

2. Press Alt+D to delete.

View Budget Variance

1. Go to Gateway of Tally > Display > Trial Balance.

2. Click Alt+B to view budget variance, as shown below .

 3. Select the required budget to view the details.

---------------------------------------------------------------------------------------------------------
 COMPUTERISED ACCOUNTING WITH TALLY

MODULE II

SNEHA LUCY JOY

DEPARTMENT OF COMMERCE AND MANAGEMENT

ST JOSEPH’S COLLEGE (AUTONOMOUS)

DEVAGIRI
 CHAPTER VI

INTEGRATION OFACCOUNTING WITH TALLY

PART A

1. What do you mean by Bank reconciliation statement?

2. What do you mean by purchase order and sales order processing
in Tally?
3. List out the stock valuation methods used in tally?
4. What do you mean by reorder levels?
5. How can we specify reorder levels in Tally?
6. What do you mean by Bill of materials?
7. How to do inventory ageing analysis in Tally?

PART B

8. How can we do manual bank reconciliation in Tally?

9. How can we do interest calculations in Tally?
10. Explain the steps to create the Bill of materials in Tally.

PART C

11. Define bank reconciliation statement. Explain the steps to

create a bank reconciliation statement in Tally.
Bank Reconciliation Statement

• Bank Reconciliation Statement is an explanation of the

difference between bank balance as per cash book and
bank balance as per Passbook (Bank statement).
• Sometimes, the bank balance as per cash book and passbook
do not tally with each other, then we can know the
difference between them by preparing the bank
reconciliation statement.
• Bank Reconciliation in Tally can be done in 2 ways-
Manual
Automatic

Manual Reconciliation

• Go to Gateway of Tally > Banking > Bank Reconciliation.

• Select the required Bank account from the List of Bank and
press Enter.

• The Bank Reconciliation screen of the selected Bank appears.

 • By default, the details in the Bank Reconciliation screen
are sorted based on Bank Date. Or else, such sorting will be
based on the Instrument Date.

❖ The Bank Reconciliation screen can also be accessed from-

Gateway of Tally > Display > Accounts Books > Cash/Bank Books
> Select Bank Ledger > Select a month > F5: Reconcile.

Automatic Reconciliation

❖ For Auto Bank Reconciliation in [Link] 9, ensure that the

following configuration have been made in the Bank’s Ledger
(Creation/Alteration mode)
❖ Set YES to “Set/Alter Banking Configuration”
❖ Select the relevant bank for the bank Ledger from the
available List of Banks

❖ Activate Auto Reconciliation-Set the option “Activate Auto

Reconciliation?” to Yes
Auto Reconciliation of the Bank Statement with the Company Books

Go to Gateway of Tally > Banking > Bank Reconciliation

❖ Select the required bank from the List of Banks that is displayed

The Bank Reconciliation screen for the selected Bank appears:

❖ Click on B: Bank Statement or press Alt+B.
❖ The Select File screen appears.
❖ Select the relevant File Type for the bank statement being
imported

❖ Select the required file (Bank Statement) for reconciliation

❖ Press Enter.
❖ A message appears, indicating the Total Entries in Bank
Statement, number of Reconciled transactions, and Additional
Bank Entries
 ❖ Press any key to view the Bank Reconciliation with reconciled
and additional transactions.
❖ The reconciled transactions will appear with the Bank Date filled
automatically upon import of the bank statement.
❖ The additional entries present in the bank statement will be
reflected under Amounts not Reflected in Company Books

…………………………………………………………………………
INTEREST CALCULATION

❖ Interest is a legitimate return on money invested and chargeable

in the business world on loans and also on delayed payments.
❖ Interest can be calculated on the basis of Simple or Compound
Interest.
❖ Interest is calculated on outstanding receivables or payables.

STEP I: Enable interest calculation

• Click F11:Features.
• Set the option “Activate interest calculation” to Yes .

STEP II: Create party ledger

• Go to Gateway of Tally > Accounts Info. > Ledgers >(Single)

Alter .
• Set Activate interest calculation? to Yes.
• The Interest Parameters screen appears.
• Set the options in the screen as yes and also enter the rate.
• Select the Interest Style , as required. The rate of interest will be
calculated on the basis of the interest style applied.

Note: If the interest style selected is 365-day Year , then the interest
will be calculated for 365 days irrespective of the number of days in
the calendar year. If Calendar Year is selected as the interest style, then
the rate of interest will be calculated on 365 days or 366 days,
depending on the number of days as per the calendar.

• Accept the screen.

STEP III: Sales voucher entry

• While entering the transactions in sales voucher an interest

parameters screen will appear with already given details.
• If we want, we can change the parameters and save the screen.

We can view the interest calculation report:

Gateway of Tally > Display > Statement of Account >Interest

calculations >Interest receivable
 COMPUTERISED ACCOUNTING WITH TALLY

MODULE II

SNEHA LUCY JOY

DEPARTMENT OF COMMERCE AND MANAGEMENT

ST JOSEPH’S COLLEGE (AUTONOMOUS)

DEVAGIRI
 CHAPTER VI

INTEGRATION OFACCOUNTING WITH TALLY

PART A

1. What do you mean by purchase order and sales order processing

in Tally?
2. List out the stock valuation methods used in tally?
3. What do you mean by reorder levels?
4. How can we specify reorder levels in Tally?
5. What do you mean by Bill of materials?
6. How to do inventory ageing analysis in Tally?

PART B

7. Explain the steps to create the Bill of materials in Tally.

PURCHASE ORDER PROCESSING

• When the order is placed with the suppliers for the supply of
goods, the items, quantities, date of receipt, and so on, details are
given with the Purchase Order Number.
• Later, when these goods are received, the Purchase Order is
tracked for the Order Details either in the receipt note or in the
purchase Invoice.
 To enable purchase order processing

1. Go to Gateway of Tally > F11: Features > Inventory

Features.

2. Set Enable purchase order processing? to Yes.

3. Save the screen.

To create a purchase order

1. Go to Gateway of Tally > Inventory Vouchers > F4 :

Purchase Order .
2. Purchase Order Voucher Creation screen will appear.
3. There we have to enter the following details like-
• Party's A/c Name.
• Order No.
• Name of Stock Items
• Quantity of the item, as required.
• Rate

The Order Voucher Creation screen appears as shown below:

Now, you can send the purchase order for an item to your supplier.
SALES ORDER PROCESSING

When you receive an order from a customer, you may need to

provide the details of items, quantities, date of delivery, and so on,
with a Sales Order Number. When these goods are delivered, this
sales order number will be used to track the order details either in the
delivery note or in the sales invoice.

Enable sales order processing.

a. Press F11 (Features) > F2 (Inventory Features).

b. Set the option Enable sales order processing to Yes .

To create a sales order

a. Gateway of Tally > Inventory Vouchers > Alt + F5 (Sales

Order).

b. Sales Order Voucher Creation screen will appear.

c. There we have to enter the following details like-

• Party's A/c Name.

• Order No.
• Name of Stock Items
• Quantity of the item, as required.
• Rate.
• Provide Narration, if needed, and accept the screen.

The Order Voucher Creation screen appears as shown below:

BILL OF MATERIALS-BOM

• BOM stands for Bill of Materials.

• A Bill of Materials contains a list of material and components
needed for a particular work order. In other words, it is a list
of component items required to undertake production.
• A Bill of Material should be available while manufacturing an
item.

Enabling BOM in Tally

• Gateway of Tally > F12: Configure > Accts/Inventory Info

• Set “Allow component list details (Bill of Materials)” Yes

Creating Bill of Materials

• Create a stock item: eg: -Laptop

• Gateway of Tally >Inventory Info>Stock item>create
• Stock item creation screen will appear. Enter the following
details-
❖ Name of the stock item
 ❖ Under which stock category
❖ Set components (BOM)-Yes
❖ Quantity, rate, value
• Another screen will appear, there provide the following
components: -
❖ Processor
❖ Hard disk
❖ Mother board
❖ RAM
• The Bill of material component screen of computer will appear
which contains the following details-
❖ Bill of material name
❖ Components of
❖ Units
❖ Stock item
❖ Godown
❖ Quantity

INVENTORY AGEING ANALYSIS

❖ Money locked up in stocks can adversely affect the liquidity of a

company and every company should try its best to reduce stock
levels to the optimum.
❖ Every business should take steps to dispose of older stocks as they
might deteriorate with passage of time, out of fashion, or simply
get forgotten.
 ❖ Tally's aged stock analysis enables us to know the age of stocks
in hand according to when they were received and the purchase
value.

To view the age analysis, do the following.

• Go to Gateway of Tally > Display > Inventory

Books > Ageing Analysis
• Select the group of stock items for which Ageing Analysis is
required.
• Tally will display the inventory ageing analysis.

STOCK VALUATION METHODS USED IN TALLY

❖ Tally. ERP 9 allows users to value stock in different methods.

❖ Each stock item can be set up to have a different stock valuation method.
❖ There are two valuation methods for Inventory Items:
 ● Valuation based on Cost of product.

● Valuation based on Market Price of product.

Valuation based on Cost of product.

● At Zero Cost

● Average Cost

● FIFO

● FIFO Perpetual

● Last Purchase Cost

● LIFO Annual

● LIFO Perpetual

● Standard Cost

● Monthly Avg. Cost

Market Valuation methods

● At Zero Price

● Avg. Price

● Last Sales Price

● Std. Price

Enabling stock valuation methods in Tally

❖ Gateway of Tally>F12: Configure >Accounts/Inventory Info

❖ Set “Allow advanced entries in masters” to YES
 ❖ Go to Gateway of Tally > Inventory Info > Stock Items > Create

❖ In stock item creation screen select the costing method and market
valuation method.
❖ Save the screen.
❖ Gateway of Tally>Stock summary
❖ Select the stock item.
❖ Click on the button Auto Column.
❖ Another screen will appear. Select stock valuation methods

Tally will display the stock summary which shows the different stock valuation
methods.
REORDER LEVELS

❖ It is important that a business maintains sufficient stocks to meet customer

needs, at any point of time.
❖ This also means that it is important not to accumulate stocks that don't sell.
❖ Reorder level is the quantity of stock beyond which the stocks have to be
replenished.
❖ Reorder level is that quantity in hand for a stock item, reaching which,
we should order for new supplies.

Enable reorder level

• Go to Gateway of Tally > F11: Features.

• Set the option “ Enable purchase order processing” to Yes.
• Now the option Reorder Levels will appear in the Inventory Info. menu.

Specifying Reorder Levels

• Go to Gateway of Tally > Inventory Info > Reorder Levels.

 • Select Stock Groups, categories or items for which we want to specify the
reorder levels.
• Enter the required Reorder Quantity and the Minimum Order Quantity of
each stock item in the Specify Reorder Levels screen, as shown below:

-----------------------------------------------------------------------------------------------