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Create Account Head
Usually, grouping of accounts is done only when reports are needed. This may result in delay in preparing the reports. 
You can group the ledger accounts while creating them. This will enable your reports and statements to reflect the desired classification at any point.  Also you can also re-group the ledgers (with some minimal restrictions) if re-classification is necessary. Re-grouping becomes necessary whenever there is a change in the nature of information. However, re-grouping can be done only by users who have authorised rights.

At the highest level of grouping, accounts are classified into capital or revenue — specifically into assets, liabilities, income and expenditure. Based on mercantile accounting principles, we have provides a set of reserved groups and allows you to modify their names or create sub-groups.

The Group Creation screen displays:-

Name of Group
Enter the name of the Group to be created. For example, Administrative Expenses.
Alias
Enter an alias name to allow access to the group using the Alias in addition to its name or leave it blank. For example, for Administrative expenses, you can enter Office Expense or even an alphanumeric code, say E001, as an alias

Sub-Groups
A Sub-Group behaves exactly like a group and is created under a group.
Groups have a hierarchical structure. The main group of accounts that determine the entire accounting and their presentation are the asset, liability, income or the expenditure. These main groups ascertain whether a ledger affects Profit & Loss Account as a revenue item or if it affects the Balance Sheet.



This helps in the purpose of keeping the accounts of a particular group together during displays and analysis.   Use the classification depending on the most natural group for the party.

During voucher entry, only the ledger accounts are used and the group structure remains transparent, irrespective of the use of sub-classification.
The same principle can be applied to Sundry Debtors, Sales Accounts, Purchase Accounts and so on.
You can classify Debtors and Creditors according to geographical areas as shown below.
You can classify creditors according to their tax status as shown below.
You can create unlimited levels of sub-groups (like branches) or ledgers only if they are two or more in number. You can simply create ledgers directly under Marketing Expenses as shown below.

Main Ledger Creations

A Ledger is the actual account head to which you identify a transaction. All Ledgers have to be classified into Groups. Hence a thorough understanding of account classification is important for working with Ledgers. The creation and usage of Groups, has been explained above. Now you will learn how it works with Ledgers.

Creating a Ledger Account with minimal information:


Name
Enter the Name of the account. You can provide the full name of the account. 

Account Group
All accounts must be classified under their appropriate Groups. Select the Group under which the Ledger is created from the List of Groups. 

 Is This Buyer or Vendor
Tick if the ledger is created for Buyer or Vendor

Is  Bank
Tick if the ledger is created for any Bank

Rest is optional

Sub Ledger Creations

Mailing Details is applicable only for party accounts like Sundry Debtors, Creditors and Branch Divisions. This is also available for loan accounts. Enter the party's particulars here. These are used in mailing outputs like statement of accounts.

Tax Information
The Tax Information consists of the default fields PAN/IT No. and the TIN/SALES Tax No. 
 
Default Credit Period
Credit Periods are in days only and are calculated from the Invoice date.


Warehouse

A Cost Centre / Warehouse is any unit of an organisation to which transactions (generally, revenue) can be allocated. When only costs or expenses are allocated to these units, they are referred to as Cost Centres. When profits are also allocated to these units, they become Profit Centres. You can now obtain a Profit and Loss account of each such Profit Centre.

Cost Centre in Tally allows an additional dimension to a transaction where a Ledger account indicates the nature of the transaction. It does not readily disclose, except in the narration field, which part of the organisation was involved in the transaction.
By providing Cost Centres, a transaction can be allocated to it, which would then enable extraction of all transactions for a Cost Centre. Tally gives you the Cost Centre break-up of each transaction as well as details of transactions for each Cost Centre.
Some examples of Cost Centres are

   
Cash/Bank Entry
By Default, the Payment Entry screen appears in Single Entry Mode 


Advantages of Double Entry Mode

Receipt
Bank Receipt Voucher Print
Journal Voucher



Contra Entry : According to accounting rules, Contra Entry is a transaction indicating transfer of funds from:

Petty Cash

Sales Return
 

Select the Sales Account from the Account combo. Select the Report Dates and the Report Layout from the Layout combo. Click OK to view the Report.

This report is similar to the Sales Register with the only difference being that instead of Sales Invoices, it gives the user details of Sales Returns entered during the period for which he is taking the report. The information included is the Return Date, the Customer Name, the Product, Quantity, Rate and Gross. The Report is customizable, if any other information is required.
Click Close in the Report to close the Sales Returns Book Report window and return to   the Main Menu.

Purchase Returns

 
The Purchases Returns Book window is displayed when selected under the Purchases Reports option of the Financial Accounting Menu.

Select the Purchases Account from the Account combo. Select the Report Dates and the Report Layout from the Layout combo. Click OK to view the Report.
This report is similar to the Purchases Register with the only difference being that instead of Purchase Vouchers, it gives the user details of Purchases Returns entered during the period for which the user are taking the report. T

Reconciliation of Bank accounts
Reconciling the company's bank accounts with the banker's statement is a regular task of accounting.

The display goes to the Reconciliation mode, which can be edited. The primary component of the current screen is the column for Bankers Date.

The Balance as per Company Books reflects the balance as on the last date

Report for  Bank Reco.

Trial Balance

Ledger & Sub Ledger

Report Trial Balance
Day Book Report
Outstanding Report
Audit Report
Cash Bank Report
Journal Voucher Report
Sale Report
Purchase Report
DR/CR Report
Ledger & Sub Ledger Report
Vat Report
Bank Reconsilation Report
Minutes Of Meeting Report
TDS Challan Report
Balance-sheet (group)
Voucher Head Wise Report
Employee Wise Report
Day Book (Cash/Bank)
Profit & loss A/C
Balance Sheet Report