What is Tally – Including GST + Learn Easily how to Use Tally

What is Tally - Including GST + A Detailed Understanding

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

What is Tally
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.

  1. You can easily pass entries for your monthly salaries. – Receipt Entry
  2. Easily pass the entries for Stock Market and Mutual Fund Investments (along with capital gains) – Stock Market Entries
  3. 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?

  1. Accounting
  2. Billing
  3. Sales and profit analysis
  4. Banking
  5. Inventory
  6. 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.

Accounts book

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:

  1. Contra (Only for cash and bank related entries)
  2. Payment (For payment entries)
  3. Receipt (For receipt entries)
  4. Journal (For entries which doesn’t include cash or bank and for closing entries)
  5. Sales (For sales billing)
  6. 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.

I’ve discussed the above technique in detail in another article.

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.

Image Credit: miguelb

Payroll in Tally

This feature is of use when you are having a good number of employees.

For a 1 or 2 4814632541_088fb83af7_zemployees 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.

Image Credit: U.S. Army Corps of Engineers Europe District

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.

What is Tally - Banking
What is Tally – Banking

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.

You can view two tutorials on Bank Reconciliation made by me. They are Bank Reconciliation – Part 1 and Bank Reconciliation Part – 2.

Image Credit: epSos .de

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.

What is Tally - GST
What is Tally – GST

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.

Image Credit: korafotomorgana

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!

Join TallySchool & Start learning Tally with GST for Free!





114 thoughts on “What is Tally – Including GST + Learn Easily how to Use Tally

    • Rishit Shah says:

      Hi, Ramu Kotte!
      It is simple to assign VAT to invoice in Tally package. I’m writing the steps below for Tally.ERP 9.

      From Gateway of Tally, go to Quick Setup.

      Then select Value Added Tax.

      After that select Tax Ledger under the heading Master Setup.

      You are now in the Tax Ledger Setup screen where you can set the percentage. In your case it is 1%, 5% and 14.5% in three different ledgers.

      At last press enter and you’re done.

      I hope you got it! 🙂

  1. yogesh pandey says:

    Hi,
    I;m Yogesh Pandey I’m completing graduation(BBA) this year. Really Tally is an awesome software in accounting dept. If you want to become a good accountant in future u should know very well about Tally.

    • Rishit Shah says:

      Yep, Yogesh! You’re absolutely right and I also feel that as an accountant you should know Tally in detail.

    • Rishit Shah says:

      The core difference is that Tally works on a principle of accounting entries while Quickbooks doesn’t.

  2. sunny says:

    Hai, i am home maker, i completed my b-tech(IT) in 2004. Now i want to start my carrer. Is there a chance to learn Tally . is it suitable for me..

  3. Nikitha says:

    Hello.. I’m dng 1st year bba…people are advising me to do tally along..
    Will it play a important role in my career.. Is it useful?

    • Rishit Shah says:

      Hi, Nikitha!

      If you are looking forward more towards accounting in your career, then you must learn Tally.
      Otherwise, it is okay even if you do not know it. 🙂

  4. s.moorthy says:

    Hai sir I’m 39years old from Salem tamilnadu . shall I study tally for my future carrier .I doesn’t know about tally .how many months it take to study .fee details .after study how much starting salary .I’m now not in any job .pl help .

    • Rishit Shah says:

      Hi, Sir!
      You are a great inspiration to those who think that it is too late. But from your spirit, all I can say is it’s never too late.

      Before you can learn Tally, I want you to learn basic accounting, because Tally is all about accounting in digital format.

      If you know Tally well, you can get a job but I don’t know about the salary structure. Sorry for that. 🙂

  5. Adesh Jain says:

    Hi.. Just read your entire blog. What i say Thank you very much for clear my confusion about tally. nd yaa i want to learn tally.

  6. Bijaya says:

    i am very happy that this comments are help me but i want to practice in offline mode in tally erp9. And i want to know that how is differ from our account book recording and how it is done ? Thanking You. Sir.

  7. prameela chintada says:

    hai sir iam prameela from andrapradesh iam verry poor so iam discontinue degree
    ihave job pregent days tally verry popular so shall i study tally for my future carrier idoesn’t know about tally please sir i want to start tally please help me

  8. Shubham tiwari says:

    I am graduated in b.com before 2 yr
    And want to learn tally..but my account sec is very weak. M planning to take classes of tally from some institute! Is this will be easy to me ?? Or I should know account perfectly first??plz suggest

  9. Shubham tiwari says:

    And sir 11th 12 th i was the student of science section..nd now m workless so everybody arround me forcing me to take tally classes. Though i had gone through over your above article..it was like easy to understand or like motivation article for those who want learn tally..suggest me what should i do

    • Rishit Shah says:

      Hi, Shubham!
      You should do what you love.
      People will come and go.

      If you like Tally, learn it.
      If you don’t like it leave it.

      You are a science student.
      If you like science and you can do something in it but it is taking time, go for it.

      DO NOT listen to what other people say.

      If I would have listened to other people, you would have never found TallySchool.
      That’s it.

      I repeat, DO NOT listen to what people say. Do what you love.

  10. Basava says:

    Hi Sir,

    I am commerce graduate and I have three years of bpo accounting experience in oracle in Bangalore. Now I got job in UAE as accountant and this is new business.

    Here management advised to take tally for accounting, but I not have experience in that.

    So can it be easy without experience and without trainer ?

    Please advise, thank you for a assistance!

    Regard,
    Basava

    • Rishit Shah says:

      Hi, Basava!

      If you know basic accounting, you will be able to learn Tally in a matter of days.
      In fact, you can start from Free Tally Course of TallySchool here –

      If you want to know advanced features like taxation, cost center etc. you can buy the DVD too.

  11. samwel macharia says:

    I got interested in Tally one month ago after a friend disclosed to me that it’s faster and easy than quick books. .am now going through it. I have done CPA to sec 6 in kenya and right now finishing my Bcom in finance.
    is there manual book on how to use tally?

  12. A Bernard says:

    hi sir,
    my name is Bernard i am31 years old from Hyderabad have discontinued my 12th standard in 2008 due to marriage after that i could not do my studies right know i am working as a store manager at a baby store i would like to learn tally please help me i am going through a tough situation financially

  13. chetan says:

    Hii..sir. My name is chetan. I am from akola state: maharastra..u r blog is so beneficial. i am doing b.com 2nd yr..along with my graduation i am also doing tally course..i would like to learn diffrent kinds of course in accounts can you plz suggeste me which is the further course is important for me.?

    • Rishit Shah says:

      Hi, Chetan!

      There is no specific course in accounts.
      B.Com is sufficient for accounts.

      Further you can go for M.Com.
      That will make you very much good at accounts.

  14. Pakshal shah says:

    I am pakshal shah .. I m confused… Which course starts .. I have thinks about 2 sub selected.. Tally n others .. So plz help me Rishit shah .. Your suggestion.. In my course..

  15. Sugu says:

    am planning to learn tally… which one should I choose? which one makes me better in life… I mean, which one is the heart… so that I can join that course.

  16. Mohan lal Choudhary says:

    Hey!
    I am using Tally.ERP 9 & I am working as public accountant. Now I am managing account of 6 Firms but there is a problem that I am not perfect in account. I have only knowledge of Tally. I am a student of science. So plz suggest me how can I gain my knowledge to become a perfect accountant & which works have done by an accountant. Plz tell me. For details information whatsapp me on +918386849360

  17. Rajiv Mehta says:

    Dear All

    We have published a book on Tally known as Essential Tally ERP 9 it is a 228 pages book and priced at only Rs. 270 which will be delivered any where in India via Speedpost. If interested one can buy it online search on PayTM or Amazon for the same using keywords “Essential Tally ERP 9”

  18. tamilmani says:

    hi sir,am tamil.i need to learn tally,because now we start new construction company, so tell me how many days to learn tally

  19. chinna marudhu says:

    Hi sir I am Marudhu from Tamil nadu, I dont know about tally but I need more information especially which software using to tally? This line got any future bcoz I m more interested in tally. Plz help me any suggestions?

    • Rishit Shah says:

      Hi, Marudhu!

      Tally is an awesome software with features of an ERP, but is mainly used for accounting.

      I can say that till next 2-3 years, Tally won’t go anywhere.

      If you learn Tally, you can get an accounting job.

    • Rishit Shah says:

      Hi, Mable!
      I say this to everyone who asks this question.

      Tally is nothing but accounting in digital format.

      If you know accounting you will learn Tally in few days.

      But if you do not know accounting, you have to learn accounting first to learn Tally in a proper way.

  20. Lance says:

    Hi Rishi,

    I am working on a travel expense management software, and want to do integration with Tally, could you please let me know more about this.

    • Rishit Shah says:

      Hi, Lance!

      I am sorry, but I am not a programmer/coder.
      You have look out for one to integrate Tally with your travel management software, especially who knows TDL.

      TDL means Tally Definition Language which is used for programming in Tally.

  21. Saurabh says:

    Hi Rishit,

    I have a query.
    I want to use tally for my wholesale business.Is it possible..? and to whom i can approach to get the customized product and also proper training. I am from Patna in Bihar.

    Could you help with my query.

    Thanks
    Saurabh

    • Rishit Shah says:

      Hi, Saurabh!

      You can learn Tally from TallySchool.
      Further advanced Tally from the DVD course of TallySchool.

      For customized product, I suggest you contact Tally Solutions and they will provide you with authorized persons who are Tally developers.

  22. ahmednor abdi sulub says:

    HI.. i am AHMEDNOR from somalia , i use tally erp9, people and companies in somlia don`t use all features in tally, because the think that features are not for them,,

      • ahmednor abdi sulub says:

        Thank you RISHIT SHAH
        we use tally online via remote desktop coonection,
        and can`t print automatically ALT+P,
        so what is your suggestion for that?

  23. bishowjit karmokar says:

    hi
    I am bishowjit . bba hon’s accounting final year I want to learn tally . so i install it . but not active it . how source i active it say me details plz .

  24. Rahul Pillai V says:

    Bro i am a b.com student from Kerala planning to leave to Dubai. Many of my relatives are saying to take a tally course. So i want to know tht does all tally course have international values or is there institutions like MBA in IIM. Also tell me the best tally course suiting for me

  25. Srinivasan Krishnamurthy says:

    Dear Rishi, I’m retired banker, keen to learn tally software package, although presently engaged myself in various Audit assignments through a CA firm. Before that I want to know what is the front end software used for user interface and also what software used for data storage of the tally user?

  26. S. Ansar basha says:

    Hii sir,
    I am ansar from andhra pradesh, I am studying b. Tech mechanical engineering in a well known University. Now I am in summer vacation nearly 50days, so I have Decided to do tally course which is useful to increase strength in my C. V…
    Will it be useful for me in future sir,, please suggest me.

    • Rishit Shah says:

      Hi, S Ansar Basha!

      How can Tally help you in Mechanical Engineering?
      Sorry, but it will add to an extra skill but it will not help you if want a career in mechanical engineering.

  27. Linfy says:

    Hi sir,
    I am a Maths graduate, and like to study tally course, which was the best course you can suggest for me, pls. reply…

  28. HAMED says:

    Hello bro,
    Thanks for the information.
    Could please tell me about the data back up, activation license, and after sales services.. does it have cost on annual supporting..
    Thanks.

  29. Haradhan Rakshit says:

    I am a retired Branch Manager of E S I Corporation and an M COM. Have some knowledge of computer but not any knowledge of tally system. Due to my social welfare character I have not saved money during my more than 40 years of service. I am still very active in nature. Now really I need earnings. I have chosen Tally work for this purpose. Your advice and help will definitely fulfill my purpose. Sir, your comments please……

    • Rishit Shah says:

      Hello Sir!

      It is very good of you to have done social welfare for the people.
      But I am sorry to say that not saving money is a very bad idea.

      Although, if you want to start earning now, you can. Learn Tally online here on TallySchool and go ahead.

  30. Harshad says:

    sir

    how to enter import purchase in tally erp9 ? we are importing material from other countries and our agent clear custom clearence if exporter send us invoice of 100 usd & clearence agent at the time pay custom duty of 1000 how to enter it in tally erp 9

    • Rishit Shah says:

      Hi, Harshad!

      For that you have to change the country of the Sundry Creditors while creating the ledger from whom you are purchasing.
      Also, you have to enable foreign currency operations in Tally.

  31. ponnuraj k says:

    Have a good day.
    I have tally course in csc tamil nadu.I want study GST include tally training,and want online job tally.I am Reiterd central government staff

  32. Mritunjay pandey says:

    Sir isme likha hai tally is mostly used by small and medium enterprise then which software is used by large enterprise for the accounting purpose

    • Rishit Shah says:

      Hi, Mrityunjay!

      Good question. 🙂

      Some of the large enterprises use Tally but not many of them. Large businesses use software like SAP because they are highly customizable.

  33. RANA DEY says:

    I am a B.Sc doing sales & Mkt job.Want to join desk job.Whether it will be easier for me to join the course?

    • Rishit Shah says:

      Hi, Rana!

      Start the course and see how it is. It is free course so there is nothing to lose here for you.
      Try and see how it works for you. I have tried to make it as simple and as basic as possible.

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