IMPORTANCE OF TALLY FOR BCOM STUDENTS | UPDATED 2019
What is tally? Tally is popularly known as accounting software for small and medium businesses. It does all the functions of accounting that a particular medium-sized business has. Tally is not just an accounting software. After the release of the ERP version of Tally, the capability and functioning of Tally have widened and extended to a great extent. For example, 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. 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. Tally software is a complete Accounting, Inventory, Taxation and Payroll software. Tally 9 ERP software is considered as one of the best Accounting software. Tally is capable of handling any kind of business transactions. Tally 9 ERP software is being used by individuals and business corporations to maintain their books of Accounts. It is important to maintain a record of all monetary transactions. To record such transactions it is necessary for an individual to learn tally from an institute offering Tally courses. Tally software is used so widely that it has become imperative for the students seeking jobs in the Accounts department of any company to learn Tally to the advanced level. SMS, VARANASI held a six-day Tally workshop was organized for its B. Com IIIrd year students from 21 Nov to 28 Nov 2016 (except 26-27 Nov). The resource person for the workshop was Mr.AshishVerma from the Institute of Financial Accounting for Professional, Varanasi. During the workshop, he focused on the importance of workshop for commerce graduates and the importance of learning Tally in the final year of B. Com. You check their website at http://smsvaranasi.com/ 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. The reason why tally is recommended is that it does all the things that a business at a time of starting 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. In short,the tally makes manual work simple and easy to access, it is hassle-free and you can avoid making mistakes. Now let’s say for an example if you are starting up a business of a general store, what would you require? Accounting Billing Sales and profit analysis Banking Inventory We can 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. CORE FEATURES OF TALLY Accounting in tally Accounting is the main function of the tally, the first thing that comes to the mind of a person after hearing tally is accounting it is the core function of the tally. 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, 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 into 6 different functions. Contra (Only for cash and bank related entries) Payment (For payment entries) Receipt (For receipt entries) Journal (For entries which don’t include cash or bank and for closing entries) Sales (For sales billing) Purchases (For purchase billing) Billing in tally Billing is mostly included in the Accounting feature, 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 an accounting entry again for that bill. This reduces redundancy by entering a big amount of data. So if you have a shop and you do billing from Tally, you or your accountant do not have to perform accounting for the same bills again as it already done for 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. Payroll in tally This feature is of use when you have a good number of employees working for you, 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 automatically. Inventory in tally Inventory is as inventible part of a business as billing. Effective inventory management can save a huge amount of costs especially if you are workingin 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. 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. Banking in tally Banking has always played a major role in a business and with the digitalization it has become important and easy to maintain records and data. 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. Taxation or GST in the tally A business cannot operate in isolation. It needs a society to operate which is governed by the government which levies different types of taxes on a business as it is a commercial activity. 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. 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. Exception Reports are good because they display the information that 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 the Sales Register then you can print that which can also be called an essential piece of information in the form of a report. Ratio analysis in the 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. It is a 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 the way 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.