CHAPTER - I ( BASICS OF TALLY )
BASICS OF TALLY
A. What is tally?
Tally Solutions Pvt. Ltd., is an Indian
multinational company that provides enterprise resource planning software. It is headquartered
in Bangalore, Karnataka India. The company reports that its software
is used by more than 1 Million customers. Tally Versions :- 4.0, 4.5,
5.4, 6.3, 7.2, 8.1, 9.0, Tally ERP 9, Tally.ERP 9.
History
Tally Solutions, then known as
Peutronics, was co-founded in 1986 by Shyam
Sunder Goenka and his son Bharat Shyam Sunder Goenka
was running a company that supplied raw materials and machine parts to plants
and textile mills in southern and eastern India. Unable to find software that
could manage his books of accounts, he asked his son, Bharat Goenka, 23, a
Maths graduate to create a software application that would handle
financial accounts for his business. The first version of the accounting
software was launched as an MS-DOS application. It had only basic accounting
functions, and was named Peutronics Financial Accountant. It was known as the
first code less package, a feature that made it easy for most people to use.
In 1988, the product was renamed as TALLY.
In 1997, the first Windows based version 5.4
was released.
In 1999, the company formally changed its
name to Tally Solutions.
In 2005, Tally 7.2 was launched with features
designed to meet Indian value-added taxation (VAT) requirements.
In 2006, Tally launched Tally 8.1, a
concurrent multi-lingual version.
In 2009, the company released Tally.ERP 9,
offering complete business management solution
In 2015, the company launched a program
called Vriddhi to certify and classify its business partners. Also in
2015, Tally Solutions announced the launch of Tally.ERP 9 Release 5.0 with
taxation and compliance features.
As of 2016, the company had 1 million
customers.
In 2016, Tally Solutions was shortlisted as a
GST Suvidha Provider to provide interface between the new Goods and Services Tax (GST) server and
taxpayers, and in 2017, the company launched its updated GST compliance
software.
In 2017, Tally Launches New Release
(Tally.ERP 9 Series A release 6) for GST Based on the taxation changes in
India.Currently Tally ERP 9 Series A released 6.3 which provide to the extent
data recognition as per Indian GST requirement.
Products
Tally main product is its Enterprise Resource Planning
Software called Tally.ERP 9 with single user and multi-user licenses. For large
organizations with many branches, Tally. Server 9 is offered. The software
handles accounting, inventory management, tax management, payroll etc.
B. Basic accounting concepts
What is accounting?
Accounting or accountancy
is the measurement, processing, and communication of financial information
about economic entities such as businesses and corporations. The modern field was established by the Italian mathematician Luca Pacioli in 1494. Accounting, which has been called the
"language of business", measures the results of an organization's
economic activities and conveys this information to a variety of users,
including investors, creditors, management, and regulators. Practitioners of accounting are known as accountants. The terms "accounting" and
"financial reporting" are often used as synonyms.
Accounting can be divided into several fields
including financial accounting, management accounting, external auditing, tax accounting and cost accounting. Accounting information systems
are designed to support accounting functions and related activities. Financial
accounting focuses on the reporting of an organization's financial information,
including the preparation of financial statements, to
external users of the information, such as investors, regulators and suppliers; and management accounting focuses on the
measurement, analysis and reporting of information for internal use by
management. The recording of financial transactions, so that summaries of the
financials may be presented in financial reports, is known as bookkeeping, of which double-entry bookkeeping
is the most common system.
Accounting is facilitated by accounting organizations
such as standard-setters, accounting firms
and professional bodies.
Financial statements are
usually audited by accounting firms,
and are prepared in accordance with generally
accepted accounting principles (GAAP). GAAP is set by various
standard-setting organizations such as the Financial
Accounting Standards Board (FASB) in the United States and the
Financial Reporting Council in the United Kingdom. As of 2012, "all major economies"
have plans to converge towards or adopt
the International
Financial Reporting Standards (IFRS).
N.B: Source taken from wikipedia.org
Types of Accounts
Basically
there are three types of accounts. Such as;
- Real Account:- Real accounts are related to asset account which can be touched felt, eg building account, machinery account ,stock,furniture etc
- Personal Account:- Personal accounts are related to persons , institutions companies. examples are bank account, creditors a/c etc
- Nominal Account:- Nominal accounts are related to income and expenses or losses and gains , examples are rent, commission, salary etc
Rule for Real Accounting is
Debit
What Comes In
Credit
What Goes Out
Lets learn this
with a Transaction, Furniture purchased for 2500.00 First
of all try to understand which types of accounts are involved in this
transaction. Furniture & cash are dealing in this transaction. Both
furniture and cash are asset. so both aspects ( debit, credit) are related to
real account. Now check what is the Rule for Real account.“Debit what
comes in” , Here furniture is coming in the business, So the debit
aspect is furniture.Then Real account rules for credit ” Credit what goes
out” Cash is going out so credit “cash”.
Particulars
|
Debit(Dr)
|
Credit(Cr)
|
Furniture
|
2500.00
|
0.00
|
Cash
|
0.00
|
2500.00
|
Rule for Personal account is
Debit The
Receiver
Credit The Giver
Now We can
move on to the Personal account.Let’s find out the debit & credit
for the transaction “Furniture purchased from Mozart Furnitures on
credit For 3000.00”.what are the two aspects in this transaction? 1.Furnitures
2. Mozart Furnitures .Then find out the type of accounts
involved in this transaction. As furniture is an asset real account is involved
& Mozart Furniture is a company or sole trader or partnership firm, it
is a personal account.What are the rules for these two account type
“Debit What comes in” Furniture is coming in to the business so debit
is given to the furniture
now take the rules for personal account “Credit the giver” who is
giving the furniture ? SO credit is given to “Mozart furnitures”.
Particulars
|
Debit(Dr)
|
Credit(Cr)
|
Furniture
|
3000.00
|
0.00
|
Mozart Furnitures
|
0.00
|
3000.00
|
Rule
for Nominal Account is
Debit All Expenses or Losses
Credit All Incomes or gains
Finally Nominal
Account. On every month end we are getting salary let’s think it from a
companies view point. Salary paid to employees 100000.00 .The two
accounting aspects are salary & cash, then account type ,
salary is expense to the company, so salary comes under nominal account .as per
nominal account “Debit all expenses or losses” So Debit Salary
& Cash is going out of the Business,Hence Credit Cash which is real
account.
Particulars
|
Debit(Dr)
|
Credit(Cr)
|
Salary
|
100000.00
|
0.00
|
cash
|
0.00
|
100000.00
|
N.B: Sources taken from tallygame.com
C. Tally and Accounts
In the above discussion we have defined some of the key features of accounts.
Frankly speaking accounts itself is a very vast term. Tally is just a part of
accountancy. Normally to find out the profit & loss accounts of any company
or to find out the balance sheet of any company we keep books of records (like
purchase, sales, receipt and payment) throughout the year. At any point of time
if we want to find out the PL A/c of any company , what we do?, Bring all these
above four books, take a calculator, do the necessary calculation, and reached at
a point whether our company is making profit or it is incurring loss. Means
everything we do manually. Which is quite boring, time consuming? In tally we are
going to do exactly the same thing but in a more systematically and automated process.
Which is less time consuming and less erroneous.
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