Masters in Tally.erp9

Masters in Tally.ERP9

 Masters in tally are pre-defined structure and content of our accounting information system. Basically there are two basic types of Masters in tally. Accounting Masters, Inventory Masters, in later stages we will also study Payroll Masters as well. Under Masters in tally there are two options

1.   Accounts Info

·         Groups

·         Vouchers

·         Voucher Types

2.   Inventory Info

·         Stock Groups

·         Stock Items

·         Units of Measure

·         Voucher Types

·         Copy Bills Allocation Details

·         Tax Rate Setup

Groups

Groups are collection of ledgers of the same nature. Account groups are maintained to determine the hierarchy of Ledger Accounts, which is helpful in determining and presenting meaningful and compliant reports.

At the highest level, accounts are classified into Capital or Revenue – and more specifically into Assets , Liabilities , Income and  Expenditure .

Tally.ERP 9 provides you with 28 pre-defined Groups . Of these 15 are Primary Groups and 13 are Sub-Groups . You can also create your own groups, either as Sub-groups or Primary groups . Groups can be sub-classified to an unlimited level to give a virtual accounting tree. The lowest level would be the Ledger Account.  All Voucher entries are passed using ledgers. Groups at the time of creating the chart of accounts or you can alter them at any time.

Tally.ERP 9 has pre-defined ledgers for Cash (under Cash-in-hand group) and for the Profit & Loss A/c (under primary group).

Default /Predefined Groups

In Tally.ERP 9, there are a number of default Groups that can be used for various accounts.

Capital Account

This records the Capital and Reserves of the company. The ledgers that belong to Capital Accounts are Share Capital, Partners' Capital A/c, Proprietor's Capital Account and so on.

Reserves and Surplus [Retained Earnings]

This contains ledgers like Capital Reserve, General Reserve, Reserve for Depreciation and so on.

Current Assets

Current Assets record the assets that do not belong either to Bank Accounts or to Cash-in-Hand sub-groups.

● Bank Accounts : Current account, savings account, short term deposit accounts and so on.

● Cash-in hand : Tally.ERP 9 automatically creates Cash A/c in this group. You can open more than one cash account, if necessary.

● Deposits (Asset) : Deposits contain Fixed Deposits, Security Deposits or any deposit made by the company (not received by the company, which is a liability).

● Loans & Advances (Asset) : This records all loans given by the company and advances of a non-trading nature (example: advance against salaries) or even for purchase of Fixed Assets.

● Stock-in-hand : This group contains accounts like Raw Materials, Work-in-Progress and Finished Goods. The balance control depends on whether you have selected Integrated Account-cum-Inventory option while creating the company. (refer to Company creation section for more details) Let us consider these options:

● Integrated Accounts-cum-Inventory : This option has a significant effect on the Balance Sheet and Profit & Loss Account. If set to Yes, it brings the stock/inventory balance figures from the inventory records and provides a drill down to the Stock registers from the Balance Sheet. You are not allowed to directly change the closing balance of an account under this group. You are allowed to pass transactions in Inventory records and the account balances are automatically reflected in the Balance Sheet as Closing Stock.

● Non-integrated Accounts-cum-Inventory : If Integrated Account-cum-Inventory option is set to No, it ignores the inventory books figures and picks up manually entered closing stock balances from the ledger account created. This provides the facility to maintain accounts separately and inventory separately.

You are not allowed to pass transactions if your accounts that come under this Group. It allows you to hold opening and closing balances only. Since no vouchers can be passed for these accounts, they are the only accounts for which the closing balances can be directly altered (by an authorised user only).

● Sundry Debtors : For customer accounts refer to common and possible errors in grouping of accounts section.

Current Liabilities

Accounts like Outstanding Liabilities, Statutory Liabilities and other minor liabilities can be created directly under this group. Sub-groups under Current Liabilities are Duties and Taxes, Provisions and Sundry Creditors

● Duties and Taxes : Duties and Taxes contain all tax accounts like VAT, CENVAT, Excise, Sales and other trade taxes and the total liability (or asset in case of advances paid) and the break-up of individual items.

● Provisions : Accounts like Provision for Taxation, Provision for Depreciation and so on are recorded under Provisions.

● Sundry Creditors : For trade creditors, refer to common and possible errors in grouping of accounts section.

Investments

Group your investment accounts like Investment in Shares, Bonds, Govt. securities, long term Bank deposit accounts and so on. This allows you to view the total investments made by the company.

Loans (Liability)

Loans that a company has borrowed, typically long-terms loans.

● Bank OD Accounts [Bank OCC Accounts] :  Tally.ERP 9 provides you with distinct types of Bank Accounts,

● Bank OCC A/c : To record the company's overdraft accounts with banks. For example, Bill Discounted A/c’s and Hypothecation A/c’s etc.

● Secured Loans : Term loans or other long/medium term loans, which are obtained against security of some asset.   does not verify the existence of the security. Typical accounts are Debentures, Term Loans, and so on.

● Unsecured Loans : Loans obtained without any security. Example: Loans from Directors/partners or outside parties.

Suspense Account

In modern accounting, many large corporations use a Suspense Ledger to track the money paid or recovered, the nature of which is not yet known. The most common example is money paid for Traveling Advance whose details will be known only upon submission of the Travelling Allowance bill. Some companies may prefer to open such accounts under Suspense Account.

● Loans and Advances (Asset) group : The Suspense Account is a Balance Sheet item. Any expense account even if it has 'suspense' in its name, it should be opened under Revenue group like Indirect Expenses and not under Suspense Account group.

Miscellaneous Expenses (Asset)

This group is typically used for legal disclosure requirements such as Schedule VI of the Indian Companies Act. It should hold incorporation and pre-operative expenses. Companies would write off a permissible portion of the account every year. A balance remains to an extent that cannot be written off in Profit & Loss Account. Tally.ERP 9 does not show loss, carried forward in the Profit & Loss Account, under this group. The Profit & Loss Account balance is displayed separately in the Balance Sheet.

Branch/Divisions

This maintains ledger accounts of all your company's branches, divisions, affiliates, sister concerns, subsidiaries and so on. Tally.ERP 9 permits Sales and Purchase transactions to take place with accounts opened here. Remember, these are their accounts in your books and not their books of accounts. Just treat them as any other party account. If you wish to maintain the books of a branch/division on your computer, you must open a separate company. (Tally.ERP 9 allows maintenance of multiple company accounts).

Sales Account

You can classify your sales accounts based on Tax slabs or type of sales. This also becomes a simple mechanism for preparation of Tax returns.

For example,

● Domestic Sales

● Export Sales

You can even open an account as Sales Returns under the group Domestic Sales to view your net sales after returns (or the returns may be directly passed through Journal against the specific Sales account).

Purchase Account

Purchase of all goods falls under this group.

Direct Income [Income Direct]

These are Non-trade income accounts that affect Gross Profit. All trade income accounts fall under Sales Accounts. You may also use this group for accounts like Servicing, Contract Charges that follow sales of equipment.

For a professional services company, you may not use Sales Account group at all. Instead, open accounts like Professional Fees under this group.

Indirect Income [Income Indirect]

These are miscellaneous non-sale income accounts. Example: Rent Received and Interest Received.

Direct Expenses [Expenses Direct]

These are Manufacturing or direct trading expenses. These accounts determine the Gross Profit of the company.

Indirect Expenses [Expenses Indirect]

All administrative, selling or non-direct expenses.

Profit & Loss Account is a reserved primary account in Tally.ERP 9. You can use this account to pass adjustment entries through journal vouchers. For example, transfer of profit or loss account to Capital or Reserve account.