TallyERP9 Tutorial Part-3: [Ledgers]

A ledger is the actual account head to identify your transactions and are used in all accounting vouchers.

For example, purchase, payments, sales, receipts, and others accounts heads are ledger accounts. Without a ledger, you cannot record any transaction.

All Ledgers have to be classified into Groups. These groups and ledgers are classified into Profit and Loss or Balance Sheet.

The creation and usage of Groups in Tally.ERP 9 has been explained earlier. Now you will learn how Tally.ERP 9 works with Ledgers.

Gateway of Tally.ERP 9  →  Master  → Accounts Info  →  Ledger

Ledger in TallyERP9
Ledger in TallyERP9

1. Pre-defined Ledgers in Tally.ERP 9

There are two pre-defined ledgers available in Tally.ERP 9, they are:

(i) Cash

This Ledger is created under the Group Cash-in-hand. You can enter the opening balance as on the date of books beginning from. You can also alter the name and even delete the Ledger.

(ii) Profit and Loss Account

This Ledger is created under the Group Primary. Previous year’s Profit or Loss is entered as the opening balance for this ledger. The balance entered here is treated as the opening profit/loss and shown in the Balance Sheet as opening balance of Profit and Loss account in the Liabilities side.

You cannot delete this ledger, but you can modify the same.

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

2. Creating a Single Ledger in Tally.Erp9

1. Name Box : enter the name of ledger, alias is used for short name.

2. Select the group under which the ledger will be created.

3. Enter the Opening Balance.

Ledger in TallyERP9
Ledger in TallyERP9

Configuring F12 (functional key): You can also configure your ledger creation as per your requirement by using ‘F12’

Name

Enter the Name of the account. Tally.ERP 9 does not allow the entry of duplicate names. The uniqueness check is made here itself.

Note that the punctuation and other non-relevant information are ignored by Tally.ERP 9 in its recognition of a name. Thus, CST, C.S.T. and C. S. T. are all considered as same.

Tally.ERP 9 converts the first letter of all relevant words to upper case, which helps you; speed up data entry.

Alias

Enter an alias name if required. You can access the Ledgers using the original name or the alias name.           

Under

All accounts must be classified under their appropriate Groups. Select the Group under which the Ledger is created from the List of Groups. (To create a new Group from this field press [ALT+ C].    A wrong classification would affect the treatment of the Ledger account in final statements and during voucher entry.

You can, alter a Ledger account to change its group classification at any time.

Opening Balance

If yours is an existing company whose books you are entering into Tally.ERP 9, Opening Balance would be applicable in circumstances where the Ledger is an asset or a liability and if it has a balance in the account as on the date of beginning of books in Tally.ERP 9.

Tally.ERP 9 recognizes normal accounting principles of debit balances for Assets and credit balances for Liabilities. Revenue accounts normally do not have balances. Tally.ERP 9, however, permits you to give balances even for such accounts –

F12 : Configure ( Ledger)

Ledger in TallyERP9
Ledger in TallyERP9

Use of these features

1. Provide Advanced information in master: This will allow you to enter the data much faster.

2. Additional information can be provided against any respective ledger, for example:

    Phone number of the party.

3. Address: This feature is useful at the time of party ledger creation.

4. Contact details: You can enter the name of the contact person.

3. Displaying, Altering and Deleting Ledger Accounts in Tally.ERP9

You can alter any information of the ledger master with the except for the closing balance under the group stock-in-hand.

To display/alter a Single ledger :

Information under Display and Alter is the same. Display option does not permit any modification. Alter option permits you to alter the information.

You are allowed to alter any information of the ledger master with the exception of the Closing Balance of a ledger account, if any, other than closing balance of accounts under the group Stock-in-hand.

  • Go to Gateway of Tally > Accounts Info. > Ledgers > Display or Alter.

Modification of account ledgers is possible for single ledgers as well as multiple ledgers. However for multiple ledgers, all the fields are not available for alteration.

To delete a Single ledger

You can delete the ledger if no vouchers have been created under this ledger.

Go to Gateway of Tally > Accounts Info > Ledgers > Alter > Press Alt+D.

Delete in TallyERP9

Click Yes.

 Press Enter / Yes to delete the Ledger.

Note:
Deletion of a Ledger is irreversible. The Ledger will be permanently deleted from the system.

If you want to delete a Ledger for which Vouchers have been created, then you have to first delete all the Vouchers from that Ledger and then delete the Ledger Account.

4. Creating a Current Liabilities / Assets Ledger in Tally.ERP9

Accounts like Outstanding Liabilities, Statutory Liabilities and other minor liabilities can be created directly under Current Liabilities and Assets can be classified as Current assets and Fixed assets.

1.    Go  to Gateway of Tally > Accounts Info > Ledgers > Create.The Ledger Creation screen appears as shown below:

Ledger in TallyERP9
Ledger in TallyERP9

5. Creating Bank Account Ledgers in Tally.ERP9

Bank ledgers contain relevant information about a bank that you use to make or receive payments. You can provide information such as Bank name, Account no., IFS code, and address while creating bank ledgers.

To create a bank ledger

1.  Go to Gateway of Tally > Accounts Info. > Ledgers > Create.

2.  Enter the Name of the bank for the bank ledger.

3.  Select Bank Account from the List of Groups, in the Under field.

Note: The Books Beginning date is pre-filled in Effective Date for Reconciliation field.

4.  Provide the following details in Bank Accounts details:

  • A/C holder’s name – It prefills the company name; however, you can alter this name by pressing Backspace.
  • A/c no. – Provide the account number of your bank.
  • IFS code – Provide the IFS code for your bank.

Note: If the IFS code in incorrect, the system prompts the warning message “Invalid IFS Code. The IFS Code must contain 4 alphabets, followed by 0 and 6 numbers/alphabets. For example, UTIB0000221.”

  •  Bank name – Select the bank name from the List of Banks.

The Ledger Creation screen appears as shown below:

Creating Bank Account in TallyERP9
Creating Bank Account in TallyERP9

Note: The List of Banks is displayed only when TSS and internet connectivity is available. Additionally, the Bank Configuration displays options that are applicable for the bank you select.

5.  Under Bank Configuration: o     Enable Set cheque books.  Enter the details of the cheque range in the Cheque Book Management screen as shown below:

Creating Bank Account in TallyERP9
Creating Bank Account in TallyERP9
  • Enter the correct cheque numbers and press Enter to navigate to the Ledger Creation screen.
  • Enable  Set cheque printing configuration? to Yes. [ If your want to Print Cheque]

[Practical Assignment]

Create the following Bank Ledger with Opening Balances given:

 Bank Account :Opening Balance
HDFC Bank                
Axis Bank                
ICICI Bank                
State Bank of India  
10,000
65,000
80,000
30,000

6. Creating Party Ledgers (Sundry Debtor / Sundry Creditor) in Tally.ERP9

A business deals with customers, wholesalers, retailers, Suppliers and many such business parties on a day-to-day basis. You need to create party ledgers to record transactions that you make, which may involve Sales , Purchase, Receipts or Payments, or Sales or Purchase from these parties.

To create a Party Ledger:

1.   Go to Gateway of Tally > Accounts Info. > Ledgers > Create.

2.   Enter the Name of the Party ledger

3.   Select Sundry Creditors / Sundry Creditors from the List of Groups in the Under field.

4.   Set the option Inventory values are affected? to No,.

5.  In Mailing details, the State is your default local State. You can change name of State from the State List  if your Suppliers belongs to Outside State.

Creating Party Ledgers
Creating Party Ledgers

6.   Enable the option Set/Alter GST Details? to open the GST Details screen.

  • Select the relevant Registration Type from the List of registration Types.
  • Enter the 15-digit GSTIN or UIN issued by the tax authority.
  • If the supplier is an e-commerce operator, then enable the option Behave as e-Commerce Operator?

The GST Details screen appears as shown below:

Creating Party Ledgers
Creating Party Ledgers
  • Press Ctrl+A to accept.

The Ledger Creation screen displays as shown below:

Creating Party Ledgers
Creating Party Ledgers

Important Points:

  • GST involves within State (Local) and Outside State (Outside).
  • GST within State transactions are classified into CGST & SGST & Outside State transaction is IGST.
  • Tally.ERP9 will select CGST , SGST (with state transaction) or IGST (outside State transaction) on the basis of Party Ledger Address i.e. State & Party Registration type i.e. Composition or Consumer or Regular or Unregistered. If Party is Registered either under Composition or Regular, then GSTIN / UIN No. has to be mentioned. Tally.ERP9 will validate the GSTIN / UIN No. on the basis of State selection under Mailing details.
  • So the most important part at the time creation of Party Ledger is its selection of State in Mailing Address and type of Registration under Tax Registration Details as per screen below:
  • Tally.ERP9 will calculate GST automatically on the basis of GST Rate given in Items & Goods in case of Accounts with Inventory and in case of Accounts only GST Rate given in Sales or Purchase Ledger:

Maintain Balances Bill-by-Bill & Default Credit Period (if you require) :

This functionality is available only, if you have Set Maintain Bill-wise details to Yes in F11: Features > F1: Accounting Features.

Creating Party Ledgers
Creating Party Ledgers
Creating Party Ledgers

This option is applicable when you want the balances to be maintained Bill by Bill or Bill wise. Normally, this option is useful for Ledgers falling under Sundry Debtors & Sundry Creditors. If you set this option to Yes, while entering the opening balance in the Opening Balance field at the end of Ledger Creation screen and press Enter, the Bill-wise Breakup screen of the Ledger created is displayed as shown.

Creating Party Ledgers
Creating Party Ledgers

If the total amount of all your bills covers the Opening Balance, the On Account becomes NIL. You could have Bills totalling beyond the Opening Balance. In the screen shown above, there are two bills 50,000, 25,000. Now, if the balance brought forward is 1,00,000/- , the On Account amount will reflect 25,000/-. If you obtain the bill particulars at a later date, you can alter the ledger to enter these details, which will nullify On Account.

Define the Default Credit Period :

The credit period may be given for Sundry Debtors and Sundry Creditors. The number of credit days or period can be defined in various ways:

 SuffixExample
DaysNone5 is considered as 5 days.
WeeksW5 W is considered as 5 weeks.
MonthsM5 M is considered as 5 months.
YearY5 Y is considered as 5 years.

Set the option Check For Credit Days During Voucher Entry to Yes to get a warning message when the party ledger selected in a transaction has exceeded the credit period, and outstanding bills have not been cleared. The warning message appears as shown below:

Creating Party Ledgers
Creating Party Ledgers

This will ensure that there is better control over credit period and outstanding amounts to be received and paid.

Cost Centre Options :

To get the option Cost Centers are applicable? in the Ledger Creation screen, you have set Maintain cost centres to Yes in F11: Features > F1:Accounting Features.

1.  Enable the Cost Centers are applicable? option, if any of the transactions need to be allocated to any particular cost center (which involves this ledger).

2.  Enable the Activate Interest calculation option to enable interest calculation automatically based on the interest rate and style of calculation specified.

3.  Enable the Use advanced parameters  option to enable the advanced parameters for interest rates that change from time to time.

7. Creating GST Ledger (CGST / SGST / IGST) under Duty and Taxes Group in Tally.ERP9

Tax Ledgers should be created under Duties and Taxes group which contains all tax accounts like GST, and other trade taxes and total liability.

To account for the different taxes to be paid under GST (central tax, state tax, union territory tax, integrated tax, and cess), you have to create a tax ledger for each tax type.

The following GST Ledgers will be created :

i.  SGST     [ State Tax for both Purchase and Sale within State ]

ii. CGST    [ Central Tax for both Purchase and Sale within State ]

iii. IGST    [ Integrated Tax for both Purchase and Sale Outside State]

I. To create ‘SGST’ ledger

1.  Go to Gateway of Tally > Accounts Info. > Ledgers > Create.

Creating SGST Ledgers
Creating SGST Ledgers

2.   In Under, select Duties & Taxes.

3.   Select GST as the Type of duty/tax.

Creating SGST Ledgers
Creating SGST Ledgers

4.   Select State Tax as the Tax type.

Creating SGST Ledgers
Creating SGST Ledgers

Note : Percentage of Calculation should be 0% ( Don’t Change ) due to multiple Tax Rate

Similarly, you can create ledgers CGST & IGST by selecting the relevant Tax type under GST.

II. To Create CGST Ledger :

Creating CGST Ledgers
Creating CGST Ledgers

III. To Create IGST Ledger :

Creating IGST Ledgers
Creating IGST Ledgers

[Practical Assignment]

Create the following GST Ledgers :

Duties & Taxes:                
CGST                
SGST                
IGST  

8. Creating Sales and Purchase Ledgers for GST Compliance in TallyERP9

If many items you sell have the same tax rate, specify the tax rate and other GST details in your sales ledger. Similarly, if the items you purchase have the same tax rates, update your purchase ledger.

If you sell items with multiple tax rates, you can still maintain a single Sales Ledger for both within and outside State Sales, and record all GST details at the stock item or stock group level. You can create a single Purchase Ledger both for within as well as outside State Purchase, similarly.

I. Creating a Sales Ledger: Sales-GST/IGST (both for Local & Outside State)

To Create a Sales Ledger i.e. GST-Sales

1.  Go to Gateway of Tally > Accounts Info. > Ledgers > Create.

Creating Sales and Purchase Ledgers in TallyERP9
Creating Sales and Purchase Ledgers in TallyERP9

2.   Enter the Name of the Sales ledger i.e. GST-Sales

3.   Select  Sales Account  from the List of Groups in the Under field.

4.   Set the option Inventory values are affected? to Yes ,.

5.   Is GST Applicable – Applicable.

Creating Sales and Purchase Ledgers in TallyERP9
Creating Sales and Purchase Ledgers in TallyERP9

6.   Set/alter GST Details – No,

Don’t specify the details in the GST Details because GST Rate specified in all Items will automatically Calculate the CGST and SGST as well as IGST,.

7.   Select the Type of supply. By default the type of supply is set to Goods.

Creating Sales and Purchase Ledgers in TallyERP9
Creating Sales and Purchase Ledgers in TallyERP9

8.   Press Ctrl + A to save.

[ Note : Only one Ledger i.e. GST-Sale will be created for all type of GST Sales ]

II. Creating a Purchase Ledger: Purchase-GST/IGST (both for Local & Outside State)

To Create a Purchase Ledger i.e. GST – Purchase (Local)

  • Follow the steps used for Creating the Sales Ledger i.e. GST-Sales as above.
Creating Sales and Purchase Ledgers in TallyERP9
Creating Sales and Purchase Ledgers in TallyERP9

1.   Go to Gateway of Tally > Accounts Info. > Ledgers > Create.

2.   Enter the Name of the Sales ledger i.e. GST-Purchase (Local)

3.   Select Purchase Account  from the List of Groups in the Under field.

4.   Set the option Inventory values are affected? to Yes ,.

5.   Is GST Applicable – Applicable.

Creating Sales and Purchase Ledgers in TallyERP9
Creating Sales and Purchase Ledgers in TallyERP9

6.   Set/alter GST Details – No,

Don’t specify the details in the GST Details because GST Rate specified in all Items will automatically Calculate the CGST and SGST as well as IGST.

7.   Select the Type of supply. By default the type of supply is set to Goods.

Creating Sales and Purchase Ledgers in TallyERP9
Creating Sales and Purchase Ledgers in TallyERP9

8.   Press Ctrl + A to save.

[ Note : Only one Ledger i.e. GST-Purchase (Local) will be created for all type of GST Purchase within State ]

[Practical Assignment]

Create the following Purchase & Sales Ledgers:

Sales Account:                
Sale – GST/IGST
Purchase Account:                       
Purchase – GST/IGST

9. Creating Expenses and Income Ledgers without GST Compliance in Tally.ERP9

You can select the income or expenses account group to create ledgers.

To create an Expense Ledger:

1.  Go to Gateway of Tally > Accounts Info. > Ledgers > Create.

2.  Enter the name of the ledger in the Name field.

3.  Select Indirect Expenses from the List of Groups in the Under field.

Note: Select Indirect Income from the List of Groups if you want to create an income ledger.

4.  Set the option Inventory values are affected? to No . (Default is No)

The expense Ledger Creation screen appears as shown below:

Creating Expenses and Income Ledgers in TallyERP9
Creating Expenses and Income Ledgers in TallyERP9

5. Regarding Statutory Information, GST should be Not Applicable , as well as the Option ‘Include in assessable value calculation for’ should be Not Applicable as white marked above.

6.   Press Ctrl+A to accept.

You can also enable cost centre options in expenses or income ledger.

To enable Cost Centres in the Ledger Creation screen

1.   Go to Gateway of Tally > F11: Features > Accounting Features.

2.   Set the option Cost/Profit Centres Management to Yes.

3.   Set the option Cost centres are applicable? to Yes in the Ledger Creation screen, if any of the transactions have to be allocated to a particular cost centre.

10. Creating Service Ledger with GST Compliance in Tally.ERP9

In case of Service oriented Business like…Chartered Accountant, Lawyer, Advertising Agency, Consultant, Architectures etc.. they provide Service to the customer and provide Bill / Invoice with GST Compliance. So in this case, Tally.ERP9 provides Accounting Invoice with auto GST Calculations, provided all Service Ledgers has to be created with GST Rate ( as applicable).

For Example:

Create a Ledger – Audit Free with GST 28%

Setup: Create a Ledger, ‘Audit Fee’ under Direct Income with GST Applicable and Set/Alter  GST Details – YES , with Type of Supply – Service as per screen below:

Creating Service Ledgers in TallyERP9
Creating Service Ledgers in TallyERP9

1.  Set/alter GST Details – Yes , specify the details in the GST Details screen below, and save.

Creating Service Ledgers in TallyERP9
Creating Service Ledgers in TallyERP9

Nature of transaction : Select Sales Taxable from the Natures of Transactions List as above.

[Select Sales Exempt , if the type of supply is exempted from tax under GST, or select Sales Nil Rated , if the tax rate applicable to the type of supply is 0% under GST.]

To specify further GST-related details , click F12: Configure .

Creating Service Ledgers in TallyERP9
Creating Service Ledgers in TallyERP9

2.  Type of supply – Services .

3.  Press Ctrl + A to save.

[Practical Assignment]

Create the following Service Ledger under Direct Income with GST Compliance :

Direct IncomeGST Rate
Service Charges (12%)12%
Installation Charges (5%)5%
AMC Charges (15%)18%

10. Creation of Rounded off (+/-) Ledger for rounding the Invoice Value in Tally.ERP9

 You can create a Ledger ‘Rounded off (+/-)’ to round-off the invoice value automatically. 

1.  Go to Gateway of Tally Accounts Info. Ledgers Create / Alter .

Note : If you already created the given Ledger Rounded Off (+/-), you can alter as below
Creating Rounded off Ledgers in TallyERP9
Creating Rounded off Ledgers in TallyERP9

2.  Set Type of Ledger? as Invoice Rounding .

3.  Select the Rounding method as Normal Rounding and enter the Rounding limit to 1 .

4.  Under Statutory Information, all options should be set to Not Applicable .

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