Introduction to Tally

 Tally is one of the most widely used accounting software programs in

India and across the globe. Developed by Tally Solutions Pvt. Ltd., it is a
powerful business management tool that enables businesses to manage
their financial accounts, inventory, taxation, payroll, and other operations
with accuracy and efficiency.
 Tally is especially popular among small and medium enterprises (SMEs)
due to its user-friendly interface, robust functionality, and compliance
with Indian taxation laws such as GST. With features like real-time data
processing, multi-location support, and customizable reports, Tally
simplifies complex financial processes and ensures transparency and
control over business operations. The latest version, Tally Prime,
enhances usability with a more intuitive design and improved navigation,
making accounting tasks easier for both beginners and professionals.

What is Tally?
Tally is one of the most popular accounting and business management software
used by individuals, accountants, and businesses across India and several other
countries. It is developed by Tally Solutions Pvt. Ltd., an Indian multinational
company. The software is designed to handle a wide range of tasks such as
financial accounting, inventory management, taxation (including GST),
payroll, and more — all in one platform.
Tally stands for "Transactions Allowed in a Linear Line Yard." It uses a
simple and user-friendly interface, making it suitable even for people with basic
accounting knowledge. The software follows the principles of double-entry
accounting, ensuring accuracy and compliance with legal and tax regulations.
The latest version, Tally Prime, is more advanced and flexible, offering
improved features like multi-tasking, data security, easy navigation, and
quick reporting. It supports multi-user operations and works well in various
business environments like retail, manufacturing, service sectors, and even
NGOs.
Tally is also used in many educational institutions and vocational training
programs to help students gain practical skills in accounting and business
management.
Key Functions of Tally
 Maintaining Company Accounts – Create and manage ledgers,
vouchers, journals, and trial balances.
  GST Accounting – Auto-calculates and maintains GST returns
(B2B/B2C, GSTR-1, GSTR-3B).
 Inventory Management – Keep track of stock, warehouses, reorder
levels, and item groups.
 Payroll – Manage employee records, salaries, and statutory deductions
(EPF, ESI).
 Banking Features – Bank reconciliation, cheque printing, e-payments.
 Generating Reports – Balance sheet, profit and loss, cash flow, and
other financial reports.
Why Tally is Important
 Saves time by automating calculations and processes
 Reduces errors in business transactions
 Helps comply with tax laws and maintain transparency
 Generates real-time financial data and reports for decision-making
 Easy to install, learn, and use
Who Uses Tally?
 Small and medium-sized businesses
 Accountants and auditors
 Retail and wholesale traders
 Educational institutions
 Government departments
 Students pursuing commerce, business, or vocational IT courses
How to Open Tally Software on a Computer
1. Switch on the Computer
o Turn on your desktop or laptop and wait for it to fully boot.
2. Login to Windows
o Enter your user password (if any) and go to the desktop screen.
3. Locate the Tally Icon
o Find the Tally icon on your desktop or in the Start menu.
 o The icon will usually be labelled Tally ERP 9 or Tally Prime,
depending on your version.
4. Double-Click the Icon
o Double-click the Tally icon to launch the software.
o You can also right-click and select Open.
5. Wait for the Software to Load
o The Tally loading screen will appear.
o Wait a few seconds for the main menu/dashboard to open.
6. Select/Create a Company
o If a company already exists, click on Select Company.
o If you’re using it for the first time, choose Create Company to
enter your business details.
7. Enter Your Work Area
o After selecting a company, the Gateway of Tally screen will
appear.
o You can now start recording transactions, creating ledgers, viewing
reports, etc.
How to create a Company in Tally
1. Open Tally Software
 Double-click the Tally Prime (or Tally. ERP 9) icon on your desktop or
from Start Menu.
2. Gateway of Tally
 After Tally opens, you will see the Gateway of Tally screen.
 Select “Create Company” from the menu.
o In Tally Prime, go to:
Alt + K (Company) → Create
3. Enter Company Details
Fill in the following fields:
Field What to Enter Example

Company Name Your project/company name (e.g., ABC Traders)

Mailing Name Same as above or your firm’s full name

Address Enter full postal address

Country India (or your country)

State Choose the correct state

Pin Code Your area’s pin code

Phone Number Optional

Email Optional

4. Financial Year Begins From

 Set the start date of your financial year (e.g., 01-04-2025).
5. Books Beginning From
 Usually same as the Financial Year (e.g., 01-04-2025).
6. Enable Features (Optional)
 You can enable GST, Inventory, Payroll, etc. later by pressing F11.
7. Save the Company
 Press Ctrl + A to save the company details.
After Creation:
You will return to the Gateway of Tally under the new company. Now you can:
 Create ledgers
 Enter vouchers
 Enable GST
 Record transactions
Tally Main Screen and Navigation

 1. Main Screen of Tally

 When you open Tally (Tally Prime or Tally. ERP 9), the first screen you see
is called the Gateway of Tally.

Key Sections on the Main Screen:

Section Name Description

Shows the software name (Tally Prime or Tally. ERP 9) and
Title Bar
current company name.
Contains important function keys like F1 (Help), F11
Top Menu
(Features), F12 (Configuration).
Company Info Displays name and financial year of the selected company.
Gateway of The main control panel of Tally. You access all features from
Tally here.
Left side shows Masters (Ledgers, Stock), Transactions
Menu Options
(Vouchers), Reports.
Calculator
At the bottom, a built-in calculator for quick calculations.
Panel
Right side has shortcut keys for quick navigation (like Alt+F3
Button Bar
for Company Info).

2. Navigation in Tally – How to Use It

Tally is keyboard-friendly and menu-driven.

Basic Navigation Keys:

Key / Shortcut Action

Arrow Keys Move up/down or select menu items
Open the selected menu or confirm an
Enter
option
Esc Go back or cancel
Ctrl + A Accept/save screen
Company Info (Create, Select, Shut
Alt + F3
Company)
Features (Enable/Disable GST, Inventory,
F11
etc.)
F12 Configuration settings
Company menu in Tally Prime (Create,
Alt + K
Alter, etc.)
 Key / Shortcut Action
Ctrl + Q Quit to main screen or close Tally

 Common Navigation Path Examples:

Task Navigation Path

Create Company Gateway → Alt+K → Create
Create Ledger Gateway → Masters → Create → Ledger
Record a Sale Voucher Gateway → Vouchers → F8: Sales
Enable GST Gateway → F11 → Enable GST → Yes
View Balance Sheet Gateway → Reports → Balance Sheet

Uses of Tally Software

Tally is one of the most widely used accounting and business management
software in India and many other countries. It is used by businesses,
accountants, students, and companies for various financial and inventory tasks.
1. Accounting Management
 Record and maintain all financial transactions.
 Automatically prepare Balance Sheets, Profit & Loss Accounts, and
Trial Balance.
 Supports both manual voucher entry and automated journal creation.
2. GST Compliance
 Tally helps in managing GST (Goods and Services Tax) with automatic
tax calculations.
 Easily generate GST invoices, e-way bills, and returns (GSTR-1,
GSTR-3B).

3. Inventory Management
 Track stock levels, location-wise inventory, item movement, and reorder
levels.
 Supports batch-wise, lot-wise, and godown-wise inventory tracking.
4. Payroll Management
  Helps in managing employee records, salaries, PF, ESI, and TDS.
 Generates salary slips, pay registers, and compliance reports.
5. Banking Features
 Reconciliation of bank statements.
 Handles post-dated cheques, cheque printing, and electronic fund
transfers.
6. Multi-User and Multi-Company Support
 Allows multiple companies to be managed from one platform.
 Supports multiple users with role-based access control.
7. MIS Reports (Management Information System)
 Generate reports for better business decisions like:
o Sales Summary
o Stock Summary
o Outstanding Reports
o Cash Flow / Fund Flow
8. Remote Access and Data Security
 With [Link], data can be accessed remotely.
 Tally ensures data security, backup, and restore features.
Assets and Liabilities in Tally
1. Introduction
Tally is powerful accounting software used to maintain company financial data.
Two of the most important components in any financial system are Assets and
Liabilities. These are key parts of a company's Balance Sheet and are handled
very efficiently in Tally.
2. What are Assets?
Assets are resources owned by a company that provide future economic value.
Examples:
 Cash in Hand
 Bank Accounts
  Buildings
 Machinery
 Vehicles
 Inventory/Stock
 Accounts Receivable (Debtors)
Asset Groups in Tally:
Tally includes the following default groups for assets:
 Fixed Assets
 Current Assets
 Investments
 Cash-in-Hand
 Bank Accounts
 Sundry Debtors
 Stock-in-Hand
Tally Entry Example for Asset:
 Ledger Name: SBI Bank
 Under Group: Bank Accounts
3. What are Liabilities?
Liabilities are obligations or debts a company owes to outsiders or lenders.
Examples:
 Loans Payable
 Creditors
 Outstanding Expenses
 Taxes Payable
Liability Groups in Tally:
Tally includes the following default groups for liabilities:
 Capital Account
 Loans (Liability)
 Sundry Creditors
  Current Liabilities
 Provisions
Tally Entry Example for Liability:
 Ledger Name: Axis Loan Account
 Under Group: Loans (Liability)
4. How Assets & Liabilities Work in Tally

Task How it Works in Tally

Creating an Asset or Gateway of Tally → Create Ledger → Choose

Liability Group

Viewing Balance Sheet Gateway → Reports → Balance Sheet

Debit Side (Left) Assets

Credit Side (Right) Liabilities

Tally automatically places ledgers under the correct side based on the group
selected.
5. Display in Balance Sheet
In Tally, the Balance Sheet is automatically generated:

Section Contains

Cash, Bank, Debtors, Stock,

Assets
etc.

Loans, Creditors, Capital,

Liabilities
etc.

Access it by:
Gateway of Tally → Reports → Balance Sheet
Assets and liabilities are crucial for understanding a company’s financial
position. Tally makes it easy to enter, track, and report these elements through
its organized ledger and group system. This helps accountants and business
owners make better financial decisions.
What is a Trading and Profit & Loss Account?
  A Trading Account shows the gross profit or loss from buying and
selling goods.
 A Profit & Loss Account shows the net profit or loss after accounting
for all indirect expenses and incomes.
Steps to Create a Trading and Profit & Loss Account in Tally
Step 1: Create a Company
 Open Tally → Alt + K → Create Company
 Fill in details (name, address, financial year start) → Ctrl + A to save.
Step 2: Enable Accounting Features
 Press F11: Features → Enable "Maintain Accounts" → Enable GST if
needed → Ctrl + A to save.
Step 3: Create Ledgers
Create the following ledgers under proper groups:

Ledger Name Group

Sales Sales Accounts

Purchase Purchase Accounts

Inventory → Stock-
Opening Stock
in-Hand

Inventory → Stock-
Closing Stock
in-Hand

Wages Direct Expenses

Freight Inward Direct Expenses

Rent Indirect Expenses

Commission
Indirect Incomes
Received

Capital Capital Account

Cash Cash-in-hand
Step 4: Record Transactions
Go to Gateway of Tally → Accounting Vouchers
Use the correct voucher types:

Voucher
Transaction Type Shortcut Key
Type

Purchase Entry Purchase F9

Sales Entry Sales F8

Expense Entry Payment F5

Income Entry Receipt F6

Adjust Closing Stock Journal F7

Step 5: View the Trading and Profit & Loss A/c

1. Go to Gateway of Tally → Profit & Loss A/c
2. It will automatically show:
o Trading Account (Top Section) – Gross Profit/Loss
o Profit & Loss (Bottom Section) – Net Profit/Loss
If your entries are correct, Tally will show:
 Total Sales
 Cost of Goods Sold (COGS)
 Gross Profit/Loss
 Total Indirect Expenses and Incomes
 Net Profit or Net Loss

Career in Tally

 1. Tally Operator : A person who enters daily business data into Tally
software.
 2. Accounts Executive : Handles company’s accounting work like
ledger, voucher, report, creation.
 3. GST Assistant : Helps in preparing and filing GST returns using
Tally.
 4. Data Entry Operator : Inputs purchase, sales, and expense details
into Tally.
 5. Accountant : Maintains all financial records and prepares profit/loss
and balance sheets.