20 May 2017

How to allocate ledger amount in pre defined cost centre (with video demostration)

In my previous post I have discussed on cost center. Now this post is about how to use those cost centers in such a manner that they will be assigned automatically as per a designed proportion.
Well, to do the same, you need some cost center classes, created in a pre defined formula. So, I will guide the process definitely but at first, for the sake of simplicity, take an example.

Example: Suppose you have a building with two floor, and you want to track the floor wise electricity expenses for the entire building. In this situation you can simply use two cost center namely 1. "Ground floor" & 2. "First floor", and manually allocate the amount of electricity expenses into these two cost centers. Now, in addition to this situation, consider that in each month you spend a flat 30% of the total electricity expenses for "Ground floor" and 70% for the "First floor". Now that's the situation when you can use pre defined cost allocation to automatically allocate the aggregate amount of electricity expenses into "Ground floor" (70%) and "First floor" (30%).
To use this feature follow the steps mentioned below:

  1. Create the required cost centers. (How to create cost centers?)
  2. Press F11 and then F1. Set Yes for "Pre defined cost center allocation during entry?"  Press enter.
  3. On pressing enter you will see a new screen for the cost centre classes. Enter the name of class here. Press enter.
  4. Now, again a new screen for allocation of cost centre will be appear, select the appropriate Cost category(if needed), Cost centers and put the percentage of allocation for each cost centre. Save the screen.
  5. Now again type name of another Cost centre class and repeat the same process if you want to create more cost centre classes. (Always remember to save all windows and don't press "Esc" button during this process)
Your cost centre classes is now ready for allocating automatically in the defined percentage.

01 May 2017

How to pass voucher entry in Tally ERP

To pass a voucher entry in Tally:
  • At first, you have to select proper voucher type after entering "Accounting voucher" (Which are available from "Gate way of Tally").
  • Then you have to enter the date of the voucher by pressing F2 button.
  • and you have to enter the voucher number, if you are not using automatic voucher numbering.
Although there are so many voucher types in Tally, but In this article I will focus on six basic types of accounting vouchers only
these are:-
  1. Payment  (Shortcut Key: F5)
  2. Receipt    (Shortcut Key: F6)
  3. Contra     (Shortcut Key: F4)
  4. Purchase  (Shortcut Key: F9)
  5. Sales       (Shortcut Key: F8)
  6. Journal     (Shortcut Key: F7)
 We know that according to Dual aspect concept, any accounting voucher should contain two equal and opposite effect namely Debit (Dr) and Credit (Cr). The above six works in the same rules, they are only classified by their nature of occurring. Let's understand one by one:-

1. Payment (Shortcut Key: F5)

Double entry payment voucher

Whenever you paid money for any expenses or to anyone, you need to pass a payment voucher. Payment is outflow of money, therefor in double entry mode at least one or more cash or bank account(s) should be entered in credit side of a payment entry. In debit side any accounts other than cash/bank should be entered. (with their amounts in both side)
Single entry payment voucher

In single entry mode you can choose only one cash/bank account in the "Account" field , and one or more other accounts in particular fields. To switch between single entry and double entry mode- press the Configuration button (F12) then set "Yes" or "No" respectively to the option "Use Single Entry mode for Pymt/Rcpt/Contra". (Amount should be entered in the single side only).
Switching between single entry & double entry mode



Receipt voucher

2. Receipt (Shortcut Key: F6)

A receipt entry reflect incomes. Hence, always one or more cash/bank account(s) are to be entered in the Debit side. (In receipt mode, debit side is situated after credit side unlike payment mode.). Like payment voucher, a receipt voucher also can be passed in either single or double entry mode.

3. Contra (Shortcut Key: F4)

Contra voucher
In a contra entry only cash /Bank accounts are permissible in both debit and credit sides. Contra entry reflects changes in the position of Cash / Bank accounts, it does not effect the overall financial position of a organization. It also can be entered in single or double entry system.

4. Purchase (Shortcut Key: F9)

Purchase voucher should be passed when inventories or services were purchased for Trading purpose(resale/manufacture). A purchase voucher has two modes, these are Voucher mode & Invoice mode (Press "Ctrl + V" to swap, and the Invoice mode can be farther segregated into to parts, these are Accounting invoice and Inventory invoice (Press "Alt + I" to swap)
Purchase Invoice (Inventory Invoice mode)
In Voucher Mode: the entry should be passed like normal double entry system, where the debit side will must contain a Purchase account. In credit side you can choose party/cash/bank accounts.
In Accounting Invoice Mode: the entry should be passed as a single entry mode, where a "Party account" field and a "particulars" field will appear instead of debit and credit.
In Inventory Invoice Mode: the entry is appropriate to pass a purchase entry containing inventory details , such as Item name, Quantity, Rate & Amount.
Sales Invoice (Inventory Invoice)

5. Sales (Shortcut Key: F8)

Sales voucher should be passed when trading inventories or services were sold. In a sales voucher, a sales account always need to be credited. Like a purchase voucher a sales voucher also can be passed in Voucher mode, Accounting invoice mode and Inventory invoice mode.

6. Journal (Shortcut Key: F7)

Basically Journal voucher is for non-cash/bank entries for non-trading items and all other adjustment entries. An accounting entry (not inventory) which does not fall in the above five category, is a journal entry.
Journal entry