TallyERP9 Tutorial Part-2: Account 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. Using this you can generate reports, which are meaningful as well as compliant with laws.

1. Default Groups in TallyERP9

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

Tally.ERP9 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.

The lowest level would be the Ledger Account.  All Voucher entries are passed using ledgers. 

Tally.ERP 9 has Pre-Defined Ledgers for Cash (under Cash-in-hand group) and for the Profit & Loss A/c (under primary group).

15 Primary Groups 13 Sub Groups
Branch / DivisionsBank Accounts
Capital AccountBank OD A/c
Current AssetsCash-in-hand
Current LiabilitiesDeposits (Asset)
Direct ExpensesDuties & Taxes
Direct IncomesLoans & Advances (Asset)
Fixed AssetsProvisions
Indirect ExpensesReserves & Surplus
Indirect IncomesSecured Loans
InvestmentsStock-in-hand
Loans (Liability)Sundry Creditors
Misc. Expenses (ASSET)Sundry Debtors
Purchase AccountsUnsecured Loans
Sales Accounts 
Suspense A/c 

Out of the 15 Primary Groups, 9 Primary Groups appear in the Balance Sheets that are Capital in nature and 6 Primary Groups appear under Profit & Loss account which are Revenue in nature13 Sub-Groups are classified under the 15 Primary Groups and they appear in the Balance Sheet.

Tally.ERP9 Book (Advanced Usage) @ Rs.550
Tally.ERP9 Book (Advanced Usage) @ Rs.550

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. We do not recommend you to open Advances to Suppliers’ account under this Group. For further details, please refer to the section on Common Errors.
  • 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:
  • 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 GST, TDS, TCS, .
  • 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.

Note: An account under Bank OCC A/c group is printed as a separate Cash Book in the traditional Cash Book format and does not form part of the Ledger.

  • 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.

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.

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

Purchase Account

This is similar to sales accounts, except for the type of transactions.

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.

2. Create Account Groups (under Single Group) one-by-one in TallyERP9

1.  Go to Gateway of Tally Accounts Info. Groups Create ( under Single Group )

2.  After giving Name to the Group, In the field Under , from the List of Groups displayed, select the parent group under which the group has to be classified.

For example, Indirect Expenses .

Account Groups in TallyERP9
Account Groups in TallyERP9

A new group created under primary will not be reflected in reports until you pass masters/transactions for that group.

You can also View any Groups… 

[Note: In the display mode, group details can’t be modified.]

Go to Gateway of Tally Accounts Info. Groups Display ( under Single Group ).

You can also Alter / Modify any Groups …

Go to Gateway of Tally Accounts Info. Groups Alter ( under Single Group 

3. Create Multiple Groups in one-go (Multiple Groups) in TallyERP9

You can create, edit or delete multiple groups in Tally.ERP 9.

1.  Go to Gateway of Tally Accounts Info. Groups Create (Multiple Groups).

2.  Select the group category in the field Under .

3.  Enter the Name of the group. The screen appears as shown below:

Account Groups in TallyERP9
Account Groups in TallyERP9

4.  Select All Items in the field Under to create multiple groups of different categories.

A new group created under primary will not be reflected in reports until you pass masters / transactions for that group.

4. Delete a Created Group (No Default Group) in TallyERP9

Groups can be deleted from the alteration screen. You cannot delete groups from the Multiple group Alteration mode.

1.  Go to Gateway of Tally Accounts Info. Groups Alter ( under Single Group ).

2.  Select the group from the List of Groups .

3.  Click : Delete .

4.  Click Yes to confirm deletion.

Note:
A group cannot be deleted if:
> The group has sub-groups.  
> The group has ledgers classified under it.  
> The group is a predefined master.

5. Advanced Configurations for Account Groups in TallyERP9

1.  Go to Gateway of Tally Accounts Info Groups Create (Single Group) .

2.  Select F12: Configure (Group Configuration) and enable Allow advanced entries in masters.

Account Groups in TallyERP9
Account Groups in TallyERP9

The group creation screen with advanced options is displayed as shown below:

Account Groups in TallyERP9
Account Groups in TallyERP9

In the Group Creation screen

1.  Enter a name for the group.

2.  Enter a group category. If a group is created under Primary you must select from asset, expenses, income or liability.

3.  Select the Nature of Group .

4.  Select Yes for the option Group behaves like sub-ledger? to allow groups to act as a ledger.

  • When the option Group behaves like sub-ledger? is set to No , all the ledgers that are grouped is displayed in detailed mode, as shown below:
Account Groups in TallyERP9
Account Groups in TallyERP9
  • When the option Group behaves like sub-ledger? is set to Yes , the ledgers grouped under the same is not displayed in detailed mode, as shown below:
Account Groups in TallyERP9
Account Groups in TallyERP9

5.  Set Nett Debit/Credit Balances for Reporting? to Yes to display net debit or credit balance in the report (whichever is higher).

6.  Set Used for Calculation (e.g. taxes, discounts)? to Yes if ledgers under this group have percentages for discounts or taxes to be used in invoice entry. This is displayed while passing voucher in invoice mode and for automatic calculations.

7.  Select Method to Allocate when used in Purchase Invoice from the Allocation Methods list to allocate the expense of the item in the ratio of the quantity or value.

Practical Assignment :

Create the Following Groups under various Pre-defined Groups (already given) :

Sundry Debtor (pre-defined) :                
> Corporate Customer                
> Local Customers                
> Outside Customers (IGST)
> Wholesale Customer
Sundry Creditor (pre-defined) :
> Local Creditor                
> Outside Creditor (IGST)
> Other Creditor
Indirect Expenses (pre-defined):               
> Salaries & Staff Expenses                
> Administrative Expenses                
> Selling & Distribution Expenses  
Indirect Income (pre-defined):             
> Other Income                
> Interest Earning

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