So you want to know what is tally?
Tally is popularly known as an accounting software for small and medium businesses. It does all the functions of accounting that a particularly mid sized business has. This is the view of most of the persons who know about Tally.
But Tally does much more than that.
Tally is not just an accounting software. After the release of ERP version of Tally, the capability and functioning of Tally is much more widened and extended to a great extent.
For example (I give this example often to various people) did you know that you maintain Employees information in Tally?
Right from his/her name to everything about duties, work, profile, groups and so on. This is could be a great feature if a business has a number of employees working in the business.
This was just one example and there are hundreds (if not thousands) of examples I can give you about Tally like the one above.
So exactly What is Tally?
Now along with the introduction of GST (Goods and Services Tax) in India, Tally will be used by more people than before.
The reason for this is for most of the general public, Tally is a go to software for accounting and that is because of the simplicity of the Tally in itself.
I am using Tally since 2012 when I first learned from my principal during my CA articleship (internship). Since then, I have not found any other simpler software than Tally for the purpose of accounting.
I know why you have the question, “What is Tally”. You want to know whether it is an accounting software and whether you can successfully do your work in Tally.
For your ease, I have broken down the whole explanation into different parts.[responsive_video type=’youtube’ hide_related=’0′ hide_logo=’0′ hide_controls=’0′ hide_title=’0′ hide_fullscreen=’0′ autoplay=’0′]https://www.youtube.com/watch?v=KADudi8R-EY[/responsive_video]
What is Tally
Well, Tally is a complete Enterprise Resource Planning system with an excellent grip in accounting features.
Although Tally has many more core features that a business requires but its hold in accounting is truly commendable. Therefore Tally is known more for accounting rather than any other of its features.
If I have to mention a single software for a business need even if the business is just starting out, Tally is the one which I would recommend.
The reason for this recommendation is because Tally does all the things that a business at a time of starting up requires.
And, not just business, but you can use Tally for your personal accounting also.
For example, let’s say, you are a salaried person and have investments in shares, mutual funds and some other real estate investments.
- You can easily pass entries for your monthly salaries. – Receipt Entry
- Easily pass the entries for Stock Market and Mutual Fund Investments (along with capital gains) – Stock Market Entries
- You can also pass entries for investments in Real Estate. – Normal Payment Entry
And the best thing is that you do not have to prepare Balance Sheet or Profit and Loss Account or any of the reports because they are automatically prepared while you are passing the entries.
Now let’s say for an example, if you are starting up a business of a general store, what would you require?
- Sales and profit analysis
- Taxation (GST, VAT, TDS, TCS)
I have brainstormed the needs of a newly opened general store which are all covered by Tally.
There are even more functions than this like Audit, Payroll, Manufacturing and so on which if needed can be used.
This was just an example of a general store and almost any business which requires a software for its functioning, Tally can be a best fit.
This was my answer to your question “What is Tally” and trust me, it can do much more.
I will now take you to a mesmerizing journey through the core features of Tally and will also explain some of the core features of Tally.
You can learn about the features and uses or you can simply go and start learning Tally for free since now, you know the basic meaning of Tally.[thrive_link color=’orange’ link=’https://www.tallyschool.com/free-tally-course-online/’ target=’_blank’ size=’medium’ align=’aligncenter’]Learn How to Use Tally with Free Course[/thrive_link]
Core Features of Tally
I’ve discussed some of the very core features or you can say some of the important functionality of Tally here. The features are listed without giving any specific rank to them.
I am sure you will like the detailed listing of some of the amazing features of Tally.
This is like an introductory guide for a first time reader if you have not heard about Tally before or just heard a little bit about Tally.
Accounting in Tally
Of course, accounting is the main function of Tally and that is what it is known for.
The first word that comes in the mind of a person when hearing about Tally is accounting.
Accounting is a basic function of Tally and most people do not ever use any other functions other than accounting in Tally. At the most they will use Inventory management and some of the Taxation features.
Because many people do not exactly know how to use those features and in many cases they do not even require them.
If we particularly talk about accounting, Tally has segmented it further in 6 different functions. They are:
- Contra (Only for cash and bank related entries)
- Payment (For payment entries)
- Receipt (For receipt entries)
- Journal (For entries which doesn’t include cash or bank and for closing entries)
- Sales (For sales billing)
- Purchases (For purchase billing)
There are many more functions related to accounting like Credit Note, Debit Note, Reverse Journal, Memos and so on which helps in performing accounting entries in an easy way.
Let’s go to billing!
Image Credit: Alexander Baxevanis
Billing in Tally
Billing is an inevitable part of any business and it’s care is duly taken by Tally.
Actually billing is included in Accounting feature discussed above but it has somewhat a separate function rather than accounting.
The best thing in Tally is that when you create a billing entry you do not have to create again an accounting entry for that bill.
This reduces redundancy in entering a big amount of data.
So if you are having a shop and you do billing from Tally, you or your accountant do not have to again perform accounting for the same bills as it already done by you.
In Tally, Sales and Purchase vouchers are actually for billing but they can also be used as a simple voucher. Everything in a bill you can imagine is there in Tally for the purpose of billing.
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Payroll in Tally
This feature is of use when you are having a good number of employees.
For a 1 or 2 employees it makes no sense to purchase a software like Tally.
But if your or your client’s business has a good amount of transactions then you may require Tally.
For maintaining Payroll in Tally, there are functions like Employee Categories, Employee Groups, Attendance, Pay Heads and of course Employees.
For a manufacturing entity there are functions such as Units (Work) and Production Types by which information regarding production done by employees in specific units can also be measured.
Complex payroll calculations are automatically done in Tally when we use the Payroll function. These calculations often require many hours for the calculation but in Tally it is done in automatically.
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Inventory in Tally
As billing is an inevitable part of a business and so is the inventory.
Effective inventory management can save huge amount of costs especially if you are functioning in a manufacturing environment.
In Tally you can classify inventories on the basis of groups, units, tariff (applicable for goods on which GST is levied), different stock items and godowns in which they are located.
Apart from the above, we can also create Price Lists and Reorder Levels for convenience. Inventory management is done via inventory vouchers for which you can have a look at this post.
If you or your clients have a business in which inventory management is required and if you have Tally then there is no need to worry about inventory management.
Image Credit: Emilio Labrador
Banking in Tally
In this era of digitization, without banking no business can survive.
Banking functionality is very well covered by Tally. Though it was not present in earlier versions of Tally but is there in Tally.ERP 9 and all of its versions.
You can directly print cheques, maintain cheque register, create deposit slips and payment advice in Tally.ERP 9.
Most important function in Banking is Bank Reconciliation (BRS).
BRS will eliminate the tedious task of reconciling the bank statements with the books of accounts and this will save a lot of your valuable time.
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Taxation or GST in Tally
A business cannot operate in isolation. It needs a society to operate which is governed by a government which levies different types of taxes on a business as it is a commercial activity.
Well, Taxation is also covered by Tally.
Previously Income Tax, VAT, Excise, Customs and Service Tax were taken care of by Tally.
Now GST is also included in Tally’s latest version. You can upgrade Tally to have the GST functionality right now.
Now you can also create GST entries in Tally as well as GST Returns in Tally without using any other software.
The process is simple and easy and almost same as previous taxation entries.
If you are covered under Audit as per Income Tax Act, 1961 then there are different functions for that also such as Form 3CD, Form 3CA, 44AB Audit, Form 3CB and so on.
If you have taxation functions enabled then billing is done including taxes on the sales or purchases.
At the end of the year or a particular accounting period tax credit or tax payable automatically gets calculated by Tally.
Image Credit: Tally Solutions
Reporting in Tally
Different types of reports are required at different times for making effective business decisions. In Tally there are reports such as Statutory Reports, Payroll Reports, Job Work In and Out Reports and the most significant Exception Reports.
I like Exception Reports because it displays the information what should not have happened and that is what is necessary to take a look at while running a business or simply writing accounts of a client.
Reports are not limited to just reports in Tally.
In fact at every screen in Tally, you can print it or export it and that can also be called a report in a certain sense.
For example, if you are in Sales Register then you can print that which can also be called an essential piece of information in the form of report.
Image Credit: Phil Jern
Ratio Analysis in Tally
This option is not used by many people and the simple reason is that not many people are interested in analysis or they do their own analysis.
But Tally has included that in it.
In the Gateway of Tally there is an option called Ratio Analysis which displays many important ratios on the basis of information which is entered by you at the time of creating vouchers.
Some of the common ones which are included in Tally are Current Ratio, Quick Ratio, Debt/Equity Ratio and Inventory Turnover.
You can also alter the timing for which you want to have a look at ratios. For example you want to know the Current Ratio for the first six months of the year which can also be done in Tally.
Moreover Ratio Analysis in Tally helps us to make quick decisions about our business or our client’s business whatever the case may be.
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Wrapping it up
This is what Tally is. I have not seen a software like Tally which is so simple and still have so much in it that I cannot even remember all the things.
This is why Tally is used in more than 100 different countries apart from India.
From a personal accounting to shop to manufacturing enterprise, Tally can do all of it.
At last all I want to say is now onward if anybody asks you what is Tally, you can easily put this article before his eyes and he will understand what is Tally.
Do you think any of the features of Tally are not covered above? Answer it in comments!