Tally Tutorial

How to Process Payroll | Payroll Process in Easy Steps

Posted on by Tally Academy

The payroll process is an essential activity in an organization with employees. Depending on the structure of the salaries and the prevailing laws and regulations, the calculation of payroll can be either simple or more complex. It is vital to process payroll in a timely and accurate manner. Any discrepancies in the calculations have a direct impact on employee morale and productivity.

The payroll process also involves compliance with the regional laws and regulations. If there are mistakes that are not in compliance with the rules, it could put the organization into legal and financial trouble. An accurate and effective payroll process is essential in any organization whether big or small. Using business management software with capabilities to manage payroll makes the entire process simpler and error-free.

The payroll is the amount of money that the employer pays out to employees for their services. Every organization has a list of add ons and deductions from the basic pay of the employee. These involve allowances, bonuses, taxes etc.What is payroll process?

To have a payroll process, every organization must:

  • Define a pay policy with basic pay, benefits, leave policies, encashment of leave and other related items
  • Define the components that appear on the payslip as per the company’s policy and in compliance with regulations
  • Obtain and record the employee details accurately. This includes the bank account details, tax details etc.
  • Validate the employee inputs
  • Calculate the statutory as well as non-statutory deductions and deduct them to arrive at the gross pay amount
  • Pay the salary amount to the employees through the mode that the company employs. Most often this is done by intimating the bank of the salary amount to be disbursed to each employee account
  • Record the payroll transactions in the accounting system
  • Pay the dues to the appropriate authorities and file returns accurately and before the due dates
  • Physically or digitally (PDF) distribute payslips and other relevant tax documents to the employees.

How to process payroll in easy steps?

The payroll process steps are categorized into the following

  • Pre-payroll process,
  • Payroll calculation process
  • Post-payroll process

Let’s discuss each of these in detail.

Pre-Payroll Process

Defining the payroll policy

Different organizations have their own unique payroll policies. These should be very clearly and unambiguously defined. The first step is to define the basic pay for the different designations in the organization. Leaves and benefits are monetized differently in each organization. There may be deductions for leave taken beyond the given quota. Unused leave may be convertible to money. Some organizations pay for overtime while others do not. Certain companies have the practice of an annual bonus payout. If the bonus is performance-based, the policy should be well defined. The accurate computation of this amount is essential. The payroll policy should be approved by the management of the organization.

Data gathering

The details of an employee are usually collected and recorded at the time of onboarding a new employee. This may include their PAN number, other ID numbers and details.

Attendance and performance data

Payroll also requires the attendance data of the employee. If any bonuses or benefits are due, the relevant department would have to provide the data to payroll. If the employee has earned a performance bonus or a raise, it should be recorded by payroll. In a smaller organization, this data would be easy to gather and compute. In a larger organization, this flow of data to payroll is more challenging. Business management software with an integrated payroll system makes the data flow easier and more accurate.

 Validation

All the data received would have to be validated for accuracy and compliance with the organization’s policies as well as the law. Payroll would have to ensure that no employee who has left employment continues to feature as an active employee for payroll calculation. All the current employees should be included for salary calculation without missing anyone.

Payroll calculation process

This is the payroll process that takes place based on the data input.Payroll is calculated manually or through the use of software to calculate the net pay after factoring in gross income and gross deductions.

Gross income/salary = regular income + allowances if any + one time payment or bonus if any

Gross deduction = regular deductions + statutory deductions + one-time deductions if any

Net pay = Gross income – gross deduction

If the payroll is calculated manually, these values are checked for accuracy and errors if any are corrected.

Post-payroll process

Payroll accounting

The amount of salary disbursed as well as the different components of additions and deductions have to be accounted for. The relevant transactions have to be recorded and entered as per the accounting practices of the organization. If the company uses a standalone payroll software or HR software the data would have to be reentered into the accounting software.

Salary payout

The actual payment of salary to the employees is most often through bank accounts. The organization’s bank account should be sufficiently funded before initiating the salary disbursal payroll process. A salary bank advice statement is generated based on the net pay for each employee along with their account number.

Autogenerated Payroll Voucher in TallyPrime

Reporting

Payslips and tax details are generated and given to the employees physically or digitally. Payroll reports that are required by the management have to be generated and submitted.

Compliance

The statutory deductions that are made from the employees’ salaries have to be paid to the relevant government agencies. The amounts have to be paid and the returns filed well within the due dates.

Process payroll accurately and on time every time

When there are gaps in the payroll data flow, the chance of computational or data entry errors is higher. It is essential that payroll should be error-free and in compliance with the laws and regulations. TallyPrime makes the payroll process quick and easy.

auto-generated-payroll-processing

The benefits of payroll accounting with TallyPrime are:

  • Integration with financial accounting. Tally seamlessly integrates the payroll amounts to the accounting process. There is no necessity for reentering all the payroll data into the accounting software
  • Generates payslips for employees
  • Enables payroll processing with compliance
  • Also tracks the loan details of employees
  • Allows flexibility in user-defined classifications, departments, groups, subgroups and other criteria. It also allows the user to define all the components of payroll such as attendance/time/production units, earning and deduction pay heads.

Accrual Basis of Accounting and Accrued Expenses

Posted on by Tally Academy

One of the fundamental accounting assumptions associated with the preparation and presentation of financial statements is the accrual basis of accounting. The following are three accounting foundations that are used by the business.

  • Accrual Basis of Accounting
  • Cash Basis of Accounting
  • Hybrid Accounting

What is Accrual Basis of Accounting

The word “Accrual” can be explained as revenue and cost are accrued i.e., they are recognized as earned or incurred (irrespective of whether money is received or paid) and entered in the books of accounts for the period to which they relate.

The procedure of recording transactions by which revenue, cost, assets and liabilities are reflected in the accounts for the period to which they accrue. This includes considerations relating to deferrals, allocations, depreciation and amortization. This basis of accounting is also referred to as ‘Mercantile Basis of Accounting’.

How Does Accrual Basis of Accounting Works?

Accrual basis of accounting tries to record the financial effects of the transactions, events, and circumstances of an enterprise in the period in which they occur rather than recording them in the time period in which cash is received or paid by the enterprise.

The accrual basis of accounting recognizes that buying, producing, selling and other economic events that affect the enterprise’s performance often do not coincide with the cash receipts and payments for the given period. The motive behind following the accrual basis of accounting is to relate the accomplishments (measured in the form of revenue ) and the efforts (measured in terms of cost ) so that reported income ( net of expenses ) measures an enterprise’s performance during a period instead of merely listing its cash receipts and payments.

It also recognizes the assets, liabilities, revenue and accrued expenses for the amounts received or paid in cash in the past, and amounts expected to be paid or received in cash in the future.

Features of Accrual Basis of Accounting

The essential features of the accrual basis of accounting are:

  • Revenue is recognized as it is earned.
  • Expenses or costs are matched either against revenues so recognized or against the relevant time period to determine periodic income.
  • Expenses that are not loaded to the income statement or profit and loss statement are carried forward and are kept under continuous review. So any cost thereafter which appears to have lost its utility or its power to generate future revenue is written-off as a loss.

What is Accrued Expenses

Accrued expenses refer to an expense related to the business operation which is recognized in the books of the accounts before it is paid, and these expenses are recorded in the books for the period they are actually incurred.

Accrued Expenses Recognition Rules

Under accounting by the accrual basis, the costs are matched either against revenues or against the relevant time period in order to determine the net income. All those costs which are not charged against the income of the period are carried forward. If any accrued expense has lost its utility or its power to generate revenue in the future, it is written off as an expense or a loss.

Under the accrual basis of accounting, the expenses are recognized by following the approaches explained below:

Identification with Revenue Transactions

Costs which are directly linked with the revenue recognized during the relevant period (in respect of which the money has been paid or not) are considered as expenses and are charged to income for the period.

Identification with a Time Period

Unlike some costs which have a direct connection with the revenue for the period, in most cases, the relationship is so indirect that it is impractical to attempt to establish its revenue relationship. These costs are regarded as ‘period costs’ and are considered as an expense in the relevant accounting period. salaries, telephone, travelling charges, depreciation on office building etc. are some of the examples which are identified using this approach.

Following are the treatment of accrued expenses by applying the above approach.

  • The benefit of costs which do not clearly extend beyond the accounting period is charged as expenses.
  • The benefit of expenses which could be traced to a future period is accounted as prepaid expenses even though they are paid in the current accounting period.
  • Expenses of the current year, for which payment has not yet been made (outstanding expenses) are recognized and charged to the profit and loss account for the current accounting period.
  • Contingent losses should be provided by a charge in the profit and loss statement only if it is confirmed that an asset has been declared not of use, impaired etc. and a rationale estimate of the resulting loss can be made.

Examples of Accrual Basis of Accounting and Accrued Expenses

Example -1

Examples Explanation
Mr Rehman, an accounting professional from Bangladesh provided accounting services of 10,000 Tk. to Marsh Hardware on 10th December with a credit period of 15 Days. Marsh Hardware paid 10,000 Tk in January. Using the accrual basis of accounting, Mr Rehman will report the 10,000 Tk as revenue in the income statement and this will also be reported as accounts receivable in the balance sheet as on 31 December.
The rule used for the above example is related to revenue recognition: Here, revenue is recognized as when it is earned provided:

·       Revenue is measurable or the consideration receivable from the sale of goods, the rendering of services or use of resources of the enterprise is reasonably determinable.

·       Revenue in respect of which there is no uncertainty of collection is immediately recognized.

Example -2

Max Enterprises located in Indonesia paid office rent of Rp 1,500 on 31st December. They also incurred Rp 300 for electricity, gas, and sewer/water during December.

Max Enterprises was billed for utilities used on 10th January with a due date to pay the bill by 1st February.

 Using the accrual basis of accounting, Max Enterprises will report the rent expense in December. This is because the rent benefit was consumed, incurred and paid in December,

Max Enterprises will also report estimated utility expenses of Rp 300 so that the income statement provides a better measure of December’s profitability.

In Balance sheet as on 31st December, a liability of Rp 300 towards utilities payable will be reported. This will show the accurate obligation of the company as on 31st December,

Example -3

Max Ltd has prepaid wages of Rs. 100,000. As per the accrual basis of accounting, this will be recorded as an expense in the income statement. In the balance sheet, this will be shown as pre-paid expenses under the current assets.

Rules used for example 2 and 3 are of matching costs with revenue and relevancy of time period. Here, costs are matched either against revenues so recognized or against the relevant time period to determine periodic income. This is explained in detail in the accrued expenses recognition rules section.

Differences Between Accrual Basis of Accounting and Cash Accounting

The difference between accrual accounting and cash-based accounting is in the timing of recognition of revenues, expenses, gains and losses.

Receipts of cash in a period may largely reflect the effects of enterprise activity in the earlier periods, while many of the cash outlays may relate to activities and efforts expected in future periods. Thus, an account showing cash receipts and cash outlay of an enterprise cannot indicate cash received vs the investment and also to what extent an enterprise is successful. On the other hand, the accrual basis of accounting gives you the complete and accurate view of expenses, income, liabilities etc. and help you measure the business in terms of profitability and financial position.

Accounting and Payroll Software

Posted on by Tally Academy

Introduction

Businesses today have plenty of obstacles to overcome and plenty of tools to help them do so. Technology in particular has greatly changed the way companies operate, and currently over ninety percent of all companies use technology of some form to help with basic functions. Payroll is the most commonly used feature in software.

Companies that don’t like the thought of outsourcing will have to find another solution, and TallyPrime’s payroll is an attractive option. There are many benefits of using TallyPrime payroll solutions or HR payroll software, including some which one may not even be aware of. If the business wants to keep the HR department responsible for payroll, considering TallyPrime payroll is a great way to help them handle the tasks.

Benefits from a payroll software for accountants

  • Simplicity in usage
  • Accounting and payroll software do not involve installation of any expensive infrastructure equipment for its functioning
  • Implementation of accounting and payroll software is as simple as logging into a secure web portal
  • No disruption of work at the office while systems are set up and no downtime with accounting and payroll software
  • It is simple in a way that its features can be accessed and learned by any professional with the most basic computer software and business skills
  • Ensures security and reliability of data
  • Accessibility – Data can be accessed from any machine (computer) at any time

What does a business need from an HR payroll software?

If a business is considering using an automated program and keeping most of the payroll functions within the office, then it should likely ensure that payroll customer service can help it deal with any issues related to the software, especially technical support.

Most HR payroll software will provide with regular reports, but good payroll customer service means being able to request any payroll related information and receive it quickly. Say, if a business needs the stats for employee salaries or attendance over the last six months, it should be able to get it through payroll customer service.

Payroll software for small business

Technically speaking, payroll software is defined as a computer program that manages a company’s payroll necessities. For small and medium businesses, we know it’s a formidable task to sit at the end of every month and pour in many hours to summing up the salary details for each employee. Often, in such companies, the owner has to perform multiple duties and it’s difficult to spare time for calculating overtimes and employees’ taxes.

And one such HR payroll software which tops the Payroll software list among other service providers for small business entities is TallyPrime. TallyPrime Accounting and payroll software is simple yet effective software that takes care of all the necessary calculations and takes care that the salaries are paid on time.

TallyPrime delivers comprehensive payroll management software with necessary payroll compliances built in it. It provides the facility from simple payslip generation up to complex allied processes which include Salary revision, loans and advances and ad-hoc payments. It also manages the salary of the employees according to statutory norms and processes.

Notable features of TallyPrime payroll software

  • Full integration with accounts for simplified payroll processing and accounting
  • User-defined classifications and sub-classifications for comprehensive reporting on aspects such as employees, employee groups, pay components, or departments
  • Support for user-defined Earnings and Deductions Pay Heads
  • Flexible and user-defined criteria for simple or complex calculations
  • Unlimited grouping of Payroll Masters
  • Support for user-defined production units such as attendance, production, or time-based remuneration units
  • Flexible processing period for payroll
  • Comprehensive reports for cost centre as well as employee-wise costing
  • Predefined processes for accurate and timely salary processing, employee statutory deductions & employer statutory contributions
  • Processing payments using the e-payments capability in TallyPrime
  • Auto-fill facility to expedite the attendance, payroll, and employer’s contribution processes
  • Accurate computation and deduction of statutory payments such as Income Tax, ESI, EPF, NPS, Professional Tax, and Gratuity
  • Generate statutory forms and challans for Income Tax and EPF & ESI, as prescribed
  • Facility to drill-down to the voucher level for any alteration
  • Compute arrears of previous period(s)
  • Track loan details of employees.

Frequently asked questions

What is payroll management?

Payroll is simply an aggregation of total amount of wages paid by the company to its employees. Companies usually hire payroll services from third parties by way of outsourcing which make the process of accounting for payroll and easy and effortless task. Management of employee payroll in a smart way is now as easy as it can get, with TallyPrime. A collection of predefined processes in TallyPrime enables error-free automation of payroll process. Further, you can view and handle exceptions effortlessly.

 

How to choose the best payroll management software?

To choose the best payroll management software, you must ensure that it has the following capabilities:

  • Payroll Accounting & Salary Processing
  • Multiple Employee Grouping
  • Flexible Attendance/Production Types
  • Statutory Compliance in payroll
  • Easy to define and process fixed and flexible pay-outs to the employees
  • Multiple Calendar type such as fixed days, as per calendar etc. to suit your requirements
  • Generate Monthly Returns, Annual Forms and Statements for PF, ESI, Professional Tax and Income Tax.

 

How does payroll management software work?

TallyPrime offers various features that allows you to implement and process payroll. You can use the Payroll Info. menu to create different payroll masters required for computing earnings and deductions for employees.

 

What is payroll in TallyPrime?

The payroll feature in TallyPrime is fully integrated with accounting to streamline payroll processing. Organisations can set up and process payroll using simple and complex criteria. A collection of predefined processes in TallyPrime enable error-free automation of payroll process.

 

How do I enter salary in Tally payroll software?

You can add, delete or change a pay head component or its value for individual employees. To quickly enter the pay structure of each employee, define the Pay Structure for the Employee Group for an employee group using pay heads which are applicable to most employees. You can then copy and apply the same structure to each employee.

PAYMENT ADVICE – DEFINITION, COMPONENTS & FORMAT

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For any business, irrespective of its size of operations, small or medium or large scaled enterprises, it is always important to keep track of money that flows into the business. Once an invoice is issued by you, you as a prudent businessman want to ensure that every one of them is paid so that you have a healthy cash flow.

As a businessman, you also want to keep your customer relationship healthy and show a professional and courteous approach to money management. Here, in this scenario, maintenance of documents such as payment receipts and payment advice notes comes in very handy for any business.

What is payment advice or payment advice note?

Payment advice note is a document or letter of communication sent by a customer or buyer to businesses which states that an invoice has been paid to vide cheque, NEFT, RTGS or by any means of electronic transfers etc.,

It is a letter of communication that acknowledges the seller as to which outstanding invoices have been cleared by the buyer and by what means. Therefore, a payment advice note can be very useful when it comes to matching payments to an invoice.

Difference between payment receipt and payment advice note

Payment receipt Payment advice notes
A payment receipt is a document showing the proof of payment issued by the supplier

 

It is usually issued by the supplier to the customer to acknowledge receipt of payment.

 Payment advice is sent by customers to the seller

 

This is issued by the customer to the supplier that an invoice has been paid and it provides the invoice reference and date as well.

Components of payment advice

Payment advice should contain the following information :

  • The date on which payment advice was drafted.
  • A reference to invoice number or invoice number against which the payment has been made.
  • The amount of payment against such invoice
  • The method of payment such as Cheque, NEFT, RTGS etc.,

Sample payment advice format

sample payment advice format

How do businesses generate payment advice?

Today, most businesses are using accounting software to manage the books which comes with the inbuilt capability to generate various statements including payment advice. Also, managing the outstanding bills portfolio has become very simple with the help of ERP software. It allows you to know the bills which has been paid and which has been outstanding due.

Payment advice processed using accounting software helps to ensure the professional standards have been followed as receipts can be easily tracked against the invoices in real-time.

Using Tally.ERP 9, makes it easier to generate payment advice and send it to suppliers/other parties along with the cheques/other instruments. It is fully flexible to add or remove the additional details from payment advice to meet your business needs.

Consolidated Balance Sheet: Definition, Example and Steps to Prepare it?

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What is a consolidated balance sheet?

A consolidated balance sheet is a financial statement that shows the financial position of a parent company and its subsidiary companies. In simple words, a consolidated balance sheet is mere consolidation of financial details of all a subsidiary including parent company and presenting as one balance sheet for the entire group.

A consolidated balance sheet is usually prepared by the business operating as a group of companies that have more than one subsidiary and it portrays the combined details of assets and liabilities.

What is Consolidated Balance Sheet

Format and example of consolidated balance sheet.

P Ltd acquired Q Ltd on 1.1.2018. Their balance sheet as at 31.3.2017 is given below. Using this, let us prepare a consolidated balance sheet.

P Ltd Balance Sheets as at

31st March 2017

Liabilities P Ltd

( INR )

 Assets P Ltd

( INR )
Share Capital :

10,000 Equity shares of Rs 10/- each fully paid

5,000  Equity shares of Rs 10/- each fully paid

  

1,00,000

 

–

 Fixed Assets

Investments :

4,000 Shares in Q Ltd

  80,000

 

40,000
General reserve 40,000 Stock  20,000
Profit and Loss Account 20,000 Debtors  25,000
Creditors 10,000 Cash and Bank   5,000
  1,70,000   1,70,000

Q Ltd Balance Sheets as at

31st March 2017

Liabilities Q Ltd

( INR )

 Assets Q Ltd

( INR )
Share Capital :

10,000 Equity shares of Rs. 10/- each fully paid

5,000  Equity shares of Rs. 10/- each fully paid

  

–

 

50,000

 Fixed Assets

Investments : –

4,000 Shares in Q Ltd

  45,000

 

–
General reserve 10,000 Stock  10,000
Profit and Loss Account 10,000 Debtors  10,000
Creditors   5,000 Cash and Bank  10,000
   75,000    75,000

Consolidated  Balance Sheet P Ltd and it is Subsidiary Q Ltd

As at 31.12.2017

consolidated balance sheet example

How do businesses prepare consolidated balance Sheet?

A consolidated balance sheet is a key financial statement in case of group companies. The financial statements of different companies belonging to the same group are consolidated to present the financial position as a whole.

Manually preparing a consolidated balance sheet involves several steps right from arriving the share capital, profits etc. and it is a tedious task. As a result, businesses have automated the task of consolidating financial information using accounting software. Thereby, consolidated balance sheet is readily available as an when required. Not just consolidated balance sheet but also several other key financial and accounting reports can be consolidated a click of a button.

Using Tally.ERP 9, you can consolidate the entire books of accounts, view consolidated reports and seamlessly compare the parent and subsidiary companies report.

In Tally.ERP 9, you can do this by creating a group company. It allows you to conveniently view all your companies in one place.

Group company creation in Tally.ERP 9

Group company function as a single economic entity, where financial reports such as balance sheet, profit and loss a/c and trial balance are consolidated without any impact on the transactions and real-time basis.

Using the group company, you can compare the performance of your subsidiary companies and keep a tab on the overall business.

Inventory Planning: Basic Concept and Benefits

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Inventory is one of the most crucial aspects of any business model. A close tab on the movement of inventory can make or break your business and that’s why entrepreneurs always emphasise on effective inventory management. While a few business owners do understand the significance and cruciality of tracking inventory on a regular basis, some fail to realise its importance making their business fall through the unseen cracks. While production and manufacturing organizations hold raw material inventories, finished goods and spare parts inventories, trading companies might hold only finished goods inventories depending upon the business model.

When in case of raw material inventory management function is essentially dealing with two major functions. First function deals with inventory planning and the second being inventory tracking. As inventory planners, their main job consists in analysing demand and deciding when to order and how much to order new inventories.

What is inventory planning?

Inventory planning refers to the process that any organization adopts to determine the optimal quantity as well as timing, with the sole aim of aligning such plans with the organization’s capacity to produce and make sales. Inventory planning usually affects the company in numerous ways. For example, it directly determines the cash flow of any organization and its profits margins with reference to those that have an over reliance on fast turnovers of materials and goods. Evidently, inventory planning is an important aspect of any business’s success.

Good inventory planning supports several vital business objectives including:

  • Customer service and satisfaction
  • Supply chain efficiency
  • Control of costs
  • Accurate sales and demand forecasting

Benefits of inventory control and planning

  • Cash Flow

Inventory control and planning allows small businesses to manage their cash flow opportunities. SMEs aren’t always able to purchase large amounts of inventory, due to limited capital. By having better control of their inventory, they can know exactly how much inventory they will need and when they need it. This can free up other capital to re-invest in other areas of the business.

  • Business intelligence

An inventory control and planning solution allows small businesses to gain insights into the fast-selling products. This allows them to adjust their product line and to make quick and smart business decisions.

  • Maximize profits

By being able to make better business decisions the inevitable outcome for a small business will be an increase in profits. This is because the stock in their inventory will only be stock that’s actually selling. Other stock that doesn’t grab customer’s attention can be deemed obsolete and can be abandoned. This makes the general business practice more efficient.

  • Limits employee mishandling

Inventory planning and control limits the ability of employees to steal from the inventory. Often employees use items from a business’ inventory for personal use. Without inventory control, the business owner would be none-the-wiser. This practice ultimately reduces the profitability of the business. By limiting the ability of the employee to steal, the employer is reducing potential ‘hidden’ costs.

  • Reduce labour costs

Improved inventory planning and control techniques allow small businesses to reduce labour costs associated with inventory. These include the time spent counting stock and the transportation of stock. Employing an intelligent inventory planning and control solution can significantly reduce all these labour-intensive activities.

Conclusion

Earlier, the conventional way to track inventory was to use pen and paper. Over a period of time, businesses switched to spreadsheets, and most small businesses still manage their inventory in the same manner. However, as the business grows, it becomes next to impossible to continue using manual methods or spreadsheets, since a business owner will end up spending more time managing inventory rather than focus on the overall business. Also, inherently entering data by hand, is time consuming and error prone, and tends to be a repetitive task, which can easily be automated. Most importantly, an efficient inventory management in today’s day and age demands a centralized database that is accessible to multiple resources in your business, across multiple locations and updates on a real-time basis.

It needs to be noted here that inventory management software isn’t the only technology that can help a business manage its inventory and stock efficiently. It also includes mobile scanners, POS machines, barcode machines and a host of other equipment which can automate your inventory processes.

Data Synchronisation: Definition and Importance Benefits

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What is Data Synchronisation?

Data synchronisation is the effort to ensure that, once data leaves a system or storage entity, it does not fall out of harmony with its source, thereby creating inconsistency in the data record. Often, we might modify and update the data after it has been entered into the system. It is important that when we make such changes, all the alterations reflect in all the systems in the same way and there are no discrepancies, in order to avoid any errors. Data synchronisation provides a means of creating harmony and consistency among all the systems that have access to data.

Data conflicts can result in errors and low data quality, which consequently leads to a lack of trusted data down the line. With data synchronisation properly implemented throughout a system, a business will see performance improvement in many areas, including:

  • Logistics and transportation
  • Sales team productivity
  • Order management
  • Invoice accuracy
  • Business systems
  • Cost efficiency
  • Reputation management

Data accessibility and error resolution afford time savings, allowing emphasis to be put on important business development processes like marketing, new product development, and strategic decision-making. Virtually everyone benefits from clean, synced data.

  • Customers receive product information and service that meets their specific needs
  • Business users can interact with all department members using up-to-date information, in real-time, even globally
  • Executives receive the latest data when making important strategy decisions
  • Stockholders can easily stay on top of their business interests
  • Manufacturers access the most recent updates or changes for accurate design and production
  • Distributors have access to the most recent product and marketing information

Benefits of Data Synchronisation

·       Data availability

One of the key benefits of a data synchronization system is that data is made available locally, rather than through potentially expensive, less reliable, and slow connections to a single central database. Data is accessible locally even in the absence of any connection to a central database, so you are not cut off from data in the event of a failure of a network connection.

·       Response time

Synchronization improves response times for data requests for two reasons. Retrieval rates are faster because requests are processed on a local server, without accessing a wide area network. Also, local processing offloads work from a central database server so that competition for processor time is decreased.

Tally.ERP 9 has a robust mechanism to synchronise Master data, removing the need for convoluted approaches, giving both higher reliability, as well as allowing new forms of control architectures (example, allowing for a central system to ‘create and modify masters’, while the local systems are only allowed to enter transactions). You can share data between two or more instances of Tally.ERP 9 using a client–server environment using data synchronisation. Data synchronisation can be initiated from the client to the server or vice versa, depending on your user-defined configurations.

The concept of ‘On Demand Synchronisation’ – where systems actually align to a Tally.NET Synchronization Service, allowing each system to independently complete their work without needing to be ‘connected to each other live’.  It has immediate benefits of removing the ‘manual’ coordination between two end-points before data is exchanged – which is a current typical behaviour. It immediately increases the scale of ‘simultaneous uploads’ from ‘multiple points’ – as each system is now independently operating without clashing with another.

Fund Flow Statement: Definition, Format with Example

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Definition of fund flow statement

A fund flow statement is a statement prepared to analyse the reasons for changes in the financial position of a company between two balance sheets. It portrays the inflow and outflow of funds i.e. sources of funds and applications of funds for a particular period.

It is also righteous to say that a fund flow statement is prepared to explain the changes in the working capital position of a company.

Objectives of fund flow statement

A question arises as to why prepare fund flow Statement when we already prepare profit and loss and balance sheet. The need here arises because the profit and loss and balance sheet will not explain the reasons for a change in the financial position.

Profit and loss a/c and balance sheet will give two years figures i.e., current years and previous years. But it will not explain as to why the movement has happened, let’s say, the extent of use of long-term funds for a long-term needs and the use of short-term funds for a long term and short term. Here is why fund flow statement is prepared.

Broadly, a fund flow statement will give us the following two information:

  • Sources of funds – From where the funds have come in
  • Application of funds – Where these funds have been used

Components of a fund flow statement

A fund flow statement comprises of :

  • Sources of funds: It talks about the extent of funds availed from
    • Owners
    • Outsiders
  • Application of funds: It talks about how the funds have been utilized
    • Funds deployed in Fixed assets
    • Funds deployed in Current assets

Fund flow statement explained with examples

National Enterprises raised its funds from the following equation listed below:

  • Long term funds for its noncurrent assets.

Explanation: Noncurrent assets are a company’s long-term investments for which the full value will not be realized within the accounting year. Examples of noncurrent assets include investments in other companies, intellectual property (e.g. patents), and property, plant and equipment.

So, going by the accounting parlance, long term funds are generally raised by a company to meet its long-term requirements. So National Enterprises using its long-term funds for its non-current assets are the right utilization of funds and these details are explained by fund flow statement.

  • What if National Enterprises uses its short-term funds to finance its long-term assets?

Here the fund flow statement when prepared conveys the users of financial information that the usage of the fund has not been made properly by the company as it is living dangerously by utilizing its short-term funds for financing long term assets.

It means that when the company is in need for funds for repaying it to the short-term obligation, it will be in cash crunch situation since once an investment is made into long term assets by the company it, it will not be in a position to convert it into liquid cash at a later stage due to the nature of the investment.

This is how the fund flow statement explains the source of funds and its utilization or application, allowing the users of financial information interpret and know the impact on the business.

Benefits of preparing a fund flow Statement

  • It helps to explain the managers of funds as to why the company is sitting in liquidity strain despite making profits as reflected in profit and loss statement.
  • On the contrary, it helps the managers to understand as to how a company is financially strong despite losses made by it in its operation front.
  • A fund flow statement helps us to analyze whether any short-term funds are being used for long term purposes. The grey area which can only be highlighted by preparation of fund flow Statement.

Users of funds flow Statement

The most interested users of fund flow statements are the lenders of capital. They pay more attention to the fund Flow Statements than the Profit and Loss and Balance sheet.

For Example, Bankers who lend money to the company as Overdraft or Cash Credit in return for interest. The bankers use the information provided by the company in its profit and loss statement and balance sheet in preparing fund flow statements, which then enables them to take decisions as whether to provide its overdraft or cash credit facilities to its clients or not.

Fund flow statement format

Sources of Funds   Application of Funds  
 Capital

Debts

Funds generated from operations

Sale of assets (if any)

 

 

 

 

 

·       (Bal.fig) Excess usage of funds over sources.

[Decrease in working capital]

 xxx

xxx

xxx

 

 Funds utilised in creation of Fixed assets

Funds utilised in creation of other Non- current assets.

Funds utilised in repaying existing loans.

Funds utilised for paying dividends, taxes

 

*(Bal.fig) Excess of Funds over application of funds –

 

 

[ Increase in working capital]

 

 xxx

 

xxx

 

xxx

 

xxx

 

 

xxx
Total xxx   xxx
  • Increase in working capital

Possibilities may arise when long term sources are in abundance of uses or application resulting in a gap. Which we call in fund flow statement as ‘Increase in working capital’. As it is a free flexible source which can now be used by the company for funding its working capital requirements. Say short term loans outstanding (if any) can be paid from the long-term sources slot or dividends be paid etc.,

  • Decrease in working capital

Possibilities that the company has more uses of funds, but it has very limited long-term source available. At that time, the company will go for funds which are available in the nature of working capital.

As a result, the company will reduce the funds available for working capital and divert it for long term uses. So, by decreasing the working capital, we get the funds which are available for long term uses which form part of the source of funds.

The increase or decrease in working capital can be known by preparing a statement of changes in working capital. This statement compares the values of two years of the difference between Current asset and Current Liabilities and tells as to whether there is an increase or decrease in working capital.

How do modern businesses prepare a fund flow statement?

Given the importance of fund flow statements brings to the table, most of the businesses prepare and analyze this statement more frequently. Today, most businesses use ERP software or accounting software which automatically prepares the fund flow statement along with various other financial statements. This allows business owners and other users of financial information to analyze and make on-time smart business decisions.

View Tally.ERP 9 Reports in Browser

Posted on by Tally Academy

Experience the freedom of viewing your Tally.ERP 9 reports from anywhere, on any device, in a browser, securely. All you need is Tally.ERP 9 Release 6.6, and a device with a web browser and internet connection.

Anywhere, Any device : You can access Tally.ERP 9 reports from anywhere using any device such as, laptop, smartphone, tablet, and so on, with a web browser, and an active internet connection.

Security and Control : You have complete control on who views the reports, and which reports are available to a user. Further, your data will always be in your machine. Whenever a user views a report in a browser, only the data required for that report is fetched from your Tally.ERP 9.

Reports in a web browser : Select the company, then select the report from the list shown once you log in to the Tally portal. The report with the latest data is fetched and displayed. You can drill down to the next levels of the report to get further details. You can change the period of the report as well. Refresh the page to get the updated information.

Download Reports and Invoices : You can open a report and download it as a PDF document. You can drill down up to the voucher level. You can also download invoices and vouchers.

Easy Setup : Update to Tally.ERP 9 Release 6.6, connect your company, and allow users to view reports from anywhere. Note that only users with valid Tally.NET IDs are allowed to view reports in browser. Your account ID (e-mail ID used to activate your license) is a valid Tally.NET ID. You can also create Tally.NET IDs for users who need to view reports in browser.

Connect Company to view reports in browser

You can decide when to connect your company for users to view reports and disconnect the same when it is not needed. You need to have internet connection on the computer where Tally.ERP 9 is installed.

1. Go to Gateway of Tally , click F4: Connect .

a. If you have enabled security control for your company, move to step 2.

In case you have not enabled security control for your company, Tally.ERP 9 will prompt you for the same.

o In the Security Control screen, the option Use security control is set to Yes .

o Provide the administrator details. This login credential is for the company data.

2. Provide report access to Tally.NET users.

a. Click Yes to add Tally.NET users and allow browser access.

b. Select the Security Level as Tally.NET Owner .

c. In Username/Tally.NET ID , enter a valid Tally.NET ID for which you want to give access.

Note: You can check for valid Tally.NET IDs on the Tally portal , by logging in with account administrator’s e-mail ID. You can also create more Tally.NET IDs, if needed.

Now that the company is connected, a sign (c) appears against the company name in the List of Selected Companies in the Gateway of Tally.

When an authorised user logs in to the Tally portal, the connected company appears in the List of Companies with the status as Connected .

View Tally.ERP 9 reports from anywhere using browser

1. Open www.tallysolutions.com and log in using your Tally.NET ID and password. All the companies that you can access are listed with the status as Connected or Offline .

2. Select a connected company. The List of Reports is displayed.

3. Select the report that you want to view. A request is sent to Tally.ERP 9, and the selected report is fetched to display in the browser. You can download the report as a PDF document by clicking  , and change the report period by clicking  on the top-right corner of the screen.

4. To get further details of any value, you can drill down up to the voucher level in many reports. You can also download the voucher as a PDF document.

 

Use the Back button of the browser to go back to the previous screen. In case you are accessing from a phone, the phone back button does the same.

5. To change the report, you can use  on the top left of the screen, and click Change Report .

6. To change company, you can use  on the top left of the screen, to view the List of Companies, and click SELECTED COMPANY .

Manage Access Rights of Users

You can add many Tally.NET users, and allow them to view reports in browser. You can also decide who can access which report.

In this section

● Create Tally.NET IDs

● Allow users to view reports in browser

● Create Security Levels to provide limited access to reports

Create Tally.NET IDs

You can create Tally.NET IDs directly on the Tally portal. Alternatively, you can create using Control Centre in Tally.ERP 9.

1. Go to Tally portal , log in using your account administrator’s e-mail ID.

2. On the left pane, click Control Centre > User Management > Manage Users .

3. In the Manage Users screen, click CREATE USER .

4. In the Create New User section, select the required Security Level as Standard User or Owner .

5. In the Tally.NET ID field, enter a valid e-mail ID. The password for the Tally.NET ID is sent to the email ID provided.

6. Select the option Enable Tally.NET Services to give access to Tally.NET features and browser reports.

7. In case you have multiple branches, select the branch for which the user is allowed to access reports in browser.

8. Click CREATE .

Tally.NET IDs are created. You need to allow browser access to these users, in Tally.ERP 9, so that they can view reports in browsers.

Allow users to view reports in browser

You can allow many users to view reports in browser.

1. Go to Gateway of Tally > F3 : Cmp Info > Security Control > Users and Passwords .

2. Select the Security Level as Tally.NET Owner , Tally.NET User , or Tally.NET Auditor . You can also create Security Levels, if needed.

3. In Username/Tally.NET ID , enter the required Tally.NET ID.

4. Set the option Allow Browser Access to Yes , and accept.

Note: By default, the security level Tally.NET Owner and Tally.NET Auditor provide access to view all the reports available for viewing in browsers. But the security level Tally.NET User has access to only a few reports. The reports that are not available to the security level Tally.NET User are given here .

● In case you need to disallow viewing reports for this company in browsers for a user, set Allow Browser Access to No .

These users can view reports in browsers, whenever the companies are connected.

Create Security Levels to provide limited access to reports

You can create multiple Security Levels to manage user access to different reports in Tally.ERP 9. If Tally.NET IDs are added under such Security Levels, you can control who can view which report in browser.

1. Go to Gateway of Tally > F3 : Cmp Info > Security Control .

2. Select Types of Security and press Enter .

3. In the Security Levels screen, move to the end of the entries in List of Security Levels to get a blank row.

4. Enter the name for the new security level and press Enter to drill down.

5. In the Use Basic Facilities of field, select Tally.NET User .

6. Ensure that the option Use Tally.NET Authentication is set to Yes . This will enable you to change the configuration of Allow Browser Access option while adding a user.

7. In the Disallow the following Facilities column, select Full Access from the Type of Access list and press Enter .

8. Select the name of the report you want to disallow. For example, if you want to disallow access to Bank Books , select it and press Enter . Full access to Bank Books is disallowed for this security level and for all users added under this security level.

9. In the Allow the following Facilities column, select Full Access from the Type of Access list and press Enter .

10. Select the name of the reports you want to allow access. For example, if you want to allow access to Ledger Outstanding , then select it and press Enter .

11. Similarly, allow access to other reports, Group Outstandings and save.

You have created a new security level with access to all reports available for a Tally.NET User except Bank Books and additionally allowed access to Ledger Outstandings and Group Outstandings .

12. Add Tally.NET IDs under this Security Level to allow these users to view the limited set of reports in browser.

Manage Company for Browser Access

You have complete control and flexibility on the company setting for report access, including when the access is needed.

● Enable/Disable browser access for your Company

● Disconnect Company

● Connect/Disconnect multiple companies

● Connectivity Status report in Tally.ERP 9

● Remove names of Offline Companies not used from the list in browser

Enable/Disable browser access for your Company

When you update your Tally.ERP 9 to Release 6.6, browser access is enabled for the company. However, you can disable it when no users are expected to view the reports.

● Go to F11: Features > F4: TSS Features to check your settings. You will see that Connect for browser access is set to Yes .

● If you need to disable browser access, set the option to No .

Disconnect Company

When there is no need for users to access reports in browser you can disconnect the company.

● Click F4: Disconnect .

When you disconnect a company in Tally.ERP 9, the status of the company changes to offline on the Tally portal.

Connect/Disconnect multiple companies

When you have more than one company open in Tally.ERP 9, you can connect any or all of these companies at once. Ensure that the companies have security enabled and Tally.NET IDs are added to give access to reports in browser before using multiple company connect functionality. You need to have internet connection on the computer where Tally.ERP 9 is installed.

1. Open all the required companies.

2. Click F4: Connect .

3. In the Connect Companies screen, select the companies one by one.

4. Press Enter to connect. You can see the connection success message for each company in the calculator panel.

When multiple companies are connected, you can disconnect many connected companies at once.

● Press Alt+F4 to disconnect the companies.

● In the Disconnect Companies screen, select the companies to disconnect and accept.

Connectivity Status report in Tally.ERP 9

This report gives you details of all the companies connected for Browser Access and Tally.NET Services. This report is active when at least one company is connected.

1. Go to Gateway of Tally > F3 : Cmp Info .

2. Select Connectivity Status .

The Connectivity Status report displays the company name, the company’s connect name, and the status of connection for Browser Access and Tally.NET Services.

Remove names of Offline Companies not used from the list in Browser

When a company is connected for browser access the name of company continues to be shown in the browser list for ever. In case you are not connecting that company anymore the name will continue to appear but with connection status as offline. You would want to remove all such names from the list of companies in the browser which are no more connected and only appear as offline. You can do so using the Remove from the list option.

1. Open www.tallysolutions.com and log in using your Tally.NET ID and password. All the companies that you can access are listed with the status as Connected or Offline .

2. Click the three dots provided next to the offline company.

3. Click the option REMOVE FROM THE LIST .

4. A message Are you sure you want to remove the company from the list? to confirm . click Remove .

5. A confirmation message is displayed once the company is removed successfully. click Ok .