by Bookkeeping is the process of systematically recording financial transactions of a business. It involves maintaining accurate and detailed records of every financial transaction that occurs within an organization. Here’s how Tally Prime helps with bookkeeping:
- Recording Transactions: Tally Prime allows you to record various types of financial transactions, including sales, purchases, expenses, income, and more. You enter these transactions into the software, specifying the accounts involved, dates, amounts, and other relevant details.
- Ledger Maintenance: Tally Prime maintains individual accounts called “ledgers” for each type of transaction. For example, you have separate ledgers for cash, bank accounts, sales, purchases, and expenses. The software automatically updates these ledgers when you enter transactions.
- Bank Reconciliation: Tally Prime can assist in reconciling bank statements with your recorded transactions to ensure that your books match the actual bank balances.
- Generating Reports: It provides various reports that summarize your financial data, including balance sheets, profit and loss statements, trial balances, and cash flow statements. These reports help you understand your financial position at any given time.
Accounting: Accounting goes beyond bookkeeping. It involves interpreting, analyzing, and summarizing financial data to provide insights into a company’s financial health and performance. Tally Prime supports accounting in the following ways:
- Double-Entry Accounting: Tally Prime follows a double-entry accounting system, which ensures that for every debit (money in) in one account, there is a corresponding credit (money out) in another account. This system helps maintain the fundamental accounting equation: Assets = Liabilities + Equity.
- Financial Analysis: With Tally Prime, you can analyze your financial data to make informed decisions. It allows you to compare current and past financial periods, assess profitability, and identify areas where costs can be reduced or revenue increased.
- Taxation: Tally Prime assists in calculating and managing various taxes, such as GST, VAT, and income tax. It generates tax reports and helps with tax compliance and filing.
- Inventory Management: For businesses that deal with inventory, Tally Prime provides features to manage stock levels, track stock movements, and calculate inventory valuations.
