Creating a company in Tally ERP9 is the first task you encounter when you start the accounting process. Just in case you have multiple businesses, the Tally ERP9 software also allows you to create a company in Tally or have several company accounts at a one-time cost in it. Tally.ERP 9 has evolved and gone far beyond the concepts of standard accounting software meant to ensure management of statutory compliances or the mere statutory files updating for GST purposes available in it or the Tally website solution.
Significance of using Tally for company creation
Due to technological advancements, the upgraded features mean that Tally can now operate remotely on Tally.net while tracking all its process payroll files and other features. All you need to do is update your Tally version of solutions regularly. The most recent improvements are the Tally compatibility features available in release of the Tally.ERP 9 solution.
TallyPrime is the new Tally ERP 9 version that has replaced the older Tally versions while bringing to the table its best features of speed, simplicity, simplicity, reliability and flexibility that are impressive in how to create a company in Tally. Plus, it provides an entirely new experience of multitasking without navigating or losing progress in operations. TallyPrime operations are not complex as expected but are easier to invoice in and discover the products in. We shall now move on to the vital steps of setting up the company in Tally ERP9’s replacement version TallyPrime.
How to start Tally.ERP 9?
Before you create a company in Tally.ERP 9, you should learn how to how to start Tally ERP9 process. Here is how you do it:
- Firstly, buy the licensed version of Tally and download it.
- Once downloading is complete, your screen will prompt you on whether you wish to allow Tally to make changes to your computer software files.
- Click on ‘Run’ the software and install it.
- This allows the icon and shortcut to Tally ERP9 software to get installed on your computer’s desktop.
- To open the Tally ERP9 or TallyPrime Software, double click on the desktop’s Tally icon and go ahead and create Tally account user ID and password.
Also Read: Creating Ledger in Tally.ERP 9
How to create a company in Tally ERP9?
Once you have opened the Tally program, you need to use these easy steps to create a company in Tally and go to the Tally ERP9 Create Company Screen section.
- From the drop-down list, click on the 'Create' company and then the 'Company Info' section using the arrow up and down arrow keys and then pressing the Enter Key.
Under the ‘Details’ in Company Creation Screen, you will need to enter your company’s details under the various sections as asked for. The first section has the company name and contact details.
The details that need to be filled in the section for company creation in Tally are as follows:
Directory: This is where the company information and details will be stored. The directory is the area of or location of storage of the data used to create a company in Tally. In Tally ERP9, the Tally directory stores the data in several directories found in the installation folder.
Name: This field is meant to fill in the name of your company. Here, type in your Company’s name, for example - XYZ Enterprises / ABC LLP.
Primary mailing details: This field contains the mailing address of your company. It contains details like
Mailing name where you need to enter the name of your company. For example, type in XYZ Enterprises / ABC LLP.
Company Address: Here, you must enter the address data field with the company address details. For example, type in 543. Gandhi Chowk, Lane 12, Bahadur Market, Haryana.
Country: Tally ERP9 is a global company. Hence in this data field, you will have to enter the country name. You can select your country ‘India’ from the drop-down list if the business you operate is located in India.
State: In this data field, you need to select the state from the drop-down list. This is a mandatory selection and complies with the SGST or State GST.
Pincode: This field is for the post office’s pin code of your company’s location.
Contact details: Under this section are the company’s contact details like phone/contact mobile number, the Facsimile or Fax number, website details and email details.
Phone no: In this field, type in the contact number of the company. This telephone number will be displayed on your Invoices, for example, 091 20248567.
Mobile no: Normally, a company will have a person who manages the company or is in charge of product delivery, invoicing, product complaints etc. In this data field, you should enter the phone number for this person—for example, type in 0911 34659877.
Fax No: Some companies have a dedicated number to which their fax machine is connected to receive such facsimile messages 24/7 automatically. In this data field, you must enter your phone number fitted with fax facilities—for example, type in 0911 34659877. If you do not have a Fax number, you can leave it blank.
E-mail: This field is the main email address of your company. Please enter the company's email address for communications and product inquiries. This information will also be displayed on your invoices.
Website: You are required to enter the company’s web address here. If you do not have a web address, you can leave it blank.
How to create a company in Tally: For accounting books
Financial year and Books details:
This section has the following fields to be entered:
Starting date of the Financial year or FY begins from date: In this data field, you must enter the starting date of the financial year to which your creation of the company corresponds. For example, you may have started your company on November 01 2017. Then your financial year corresponds to the starting date you enter as 01/04/2017 or April 1st 2017, even though you commenced operations only from November 1st 2017.
Starting date for account books or Book beginning from date: Using the same example mentioned above, in this data field, you will need to type in the date corresponding to the financial year of the company's commencement. Hence, you need to enter 01/04/2017 as the commencement date of accounting books, even though the actual commencement of account keeping starts from November 1st 2017.
Creation of a company in Tally: Security
Security controls settings, setting the tally password and using security control features are critical aspects of a company creation in Tally ERP 9.
You need to set the Tally Vault administrator password to access company creation in Tally ERP9 that contains the data fields related to security purposes. When enabled, encryption facilities in Tally convert the password data from an easily recognised format to an unreadable and unrecognised format.
In these fields, you will need to enter an alphanumeric password to enter the Tally Vault. Thus, you can prevent other unauthorised users from accessing your company data. In TallyPrime or the latest version of Tally ERP 9, on entering a password, there is an indicator that assesses the password strength.
If the indicator shows red, your password is weak and can be easily guessed. The yellow colour means the strength of your password is fair, while green indicates that your password is strong. Always set a strong password. Never use your date of birth and name as passwords, as this is very easy to guess. Use special characters like #, @, $ etc., with alphabets and numbers to make a strong password.
Benefits of enabling security control:
Enabling the security control data field and administrator password allows you to control the Tally Vault and the data used in creating a new company in Tally ERP9. It is accessible only for specific purposes and to particular people on the password entry for user authentication.
For example, you can allow access to Tally ERP 9 to:
- The voucher entry screens for data entry operators tasked with this job.
- You can ensure only the billing clerks can access the invoice voucher for Sales.
- Financial managers can be assigned to use and access financial reports and data through controlled access designated through administrator control.
The following section relates to the settings for the base currency information. This is important to set and understand as your financial records carry the set formats in Tally company creation.
Base currency symbol: This data field sets the required currency symbol. This is auto-selected and is set to the country of origin that you had entered. There is no necessity to change this field when you use the same currency for accounting. For example, if India is the country of origin of your goods entered in the company details information, this tab automatically selects Indian Rupees as the currency denoted by Rs.
Formal currency name: This field corresponds to the currency’s formal name for its selection based on the country of origin and its auto-selected currency from the previous areas. In this case, it will show Indian Rupees.
Suffix the amount with the symbol?: This data field provides you with the option to suffix the amount entered with the appropriate symbol. For example, using this option and entering 4,500/- will show as Rs 4,500/-. If you have entered the US dollar symbol, then it will show as $ 4,500/-.
Do you want to add space between the symbol and the amount entered?: This field allows the data field entered as in the above example to be entered as Rs 4,500/- and provides a space between the symbol and currency amount. Some people may prefer no space option, in which case it will show as Rs4,500/- with no space between the currency amount and its symbol.
Do you want to show the amount in millions?: Setting this data field to Yes makes Tally display the data entered in your balance sheet and other reports in millions. Indian currency denominations may follow the format of using lakhs while the US format is in millions. Hence an amount entered in India as 150 lakhs is shown as150,00,000. This will be shown as 15 million or 15,000,000 by using this option. [The conversion factor is 1 million equals 10 lakh or 10,00,000].
The number of decimal places: Typically, accounting books use two decimal places after a number. For example, in the Indian currency system, paisa is denoted in the two decimal places after the rupee. Similarly, the US currency system also uses the last two decimal places to denote the cents. In these systems, 1 Rs=100 paisa or I USD =100 cents. Mathematical calculations, on the other hand, may use more decimal places. It also has the 'Whether to include word representation for decimal after amount' and 'How many numbers of decimal places for the amount in words?' options.
How to save the details entered in the company creation screen:
Once you have entered all details about your company, it is always best to verify the details once for errors. These details will appear as screens during verification to scrutinise the details entered, change the mistakes, etc. Pressing enter accepts the screen details, and pressing enter again will save the details as verified details. Note that if your Tally Vault Security is enabled, then details can only be entered, verified and saved through authentication using your Tally user ID and password. Only then you will be directed to the Tally Gateway. When all details are verified and saved, you have successfully entered your company details in the Tally ERP9 company creation. You can instantly generate your transactions, invoices etc., from the master sheets you have already created.
Also Read: How to Enter Sales Return Entry in Tally ERP 9?
For using Tally with ease, you need to know how to create new company in Tally and be compliant when filing your returns etc. It is not very hard to learn how to make Tally work for you and can be used to track automatically, control, monitor your accounting systems, GST compliance filing and more. You can use the Biz Analyst application for this purpose. It helps you manage your accounting functions and stay connected with your business 24/7. You can also manage and analyse your sales data and increase your sales team productivity to increase your business growth.
1. What is meant by FY or Financial Year?
The financial year FY for bookkeeping always starts on April 1st and ends on March 31st of the subsequent year.
2. What is the ‘Whether to include word representation for decimal after amount’ option?
Using this data field, one can print the word representation after the decimal. For example, in Indian currency, the decimal portion is called Paisa, and for the USD, it is cents. By setting this field, you can represent your amount as Rs 1540. 50p or $ 1540. 50c.
3. Explain the ‘How many decimal places for the amount in words?’ option.
With this option, if you set this field as one decimal place, 75 paise in Indian currency is printed as 70paisa. If you use two decimal places, then it will print as 75paisa when using Indian currency.
4. What happens if I lose the Tally Password?
You can use the following options: Press ALT F3 Company Info>> Security Control>> User and Password >> Change the password of the mentioned user.
However, if you are not an admin user, you need to ask the Admin user to do this process.
5. What scenarios arise when a company is started in the middle of an FY?
The two scenarios that can arise are:
- If you start a company in the middle of any financial year, the date of commencement or beginning date will be April 1st of the year of commencement irrespective of the date of commencement of operations.
- If you are migrating your manual accounting systems to Tally ERP 9 in the middle of the financial year, the date of commencement or beginning date will be April 1st of the year of commencement.