Computerised

Accounting System
 Syllabus
Unit –I : Introduction to Computerized Accounting : Computerized Accounting – Need & Significance,
Evolution from Manual to Computerized Accounting System, Benefits of Computerized Accounting (e.g.Tally
ERP9), Evolution of Accounting Software, Different Versions of tally, Silent Features, Technological
Advantages of Computerized Accounting.
Unit – II : Fundamentals of Computerized Accounting (e.g. Tally ERP 9.0) : Start-up & Quit, Screen
Components, Setting up a new company, Select, Alter & Delete a company, Maintaining Accounting Masters-
Groups, Ledgers, Maintaining Inventory Masters- Stock Group, Stock Item, Units of Measure, Stock
Categories, Godown, F11 Features, F12 Configurations
Unit –III : Vouchers : Accounting Vouchers – Contra, Payment, Receipt, Journal, Purchase, Sales, Debit Note
and Credit Note, Inventory Vouchers – Purchase Orders, Sales Orders, Receipt Note & Delivery Note, Stock
Journals, Rejection In, Rejection Out.
Unit – IV :Reports : Accounting Reports : Trial Balance, Profit & Loss A/c, Balance Sheet, Day book,
Cash/Bank Book, Ledger Report, Group Summary, Voucher Report, Inventory Reports – Stock Summary,
Stock Item Summary, Stock Group Summary, Stock Category Report, Godown Report, Inventory Vourcher
Report, understanding report-wise F12 configurations.
Unit – V : GST Functionality : Activating GST in Tally, Setting Up GST-Company Level, Ledger Level or
Inventory Level, Creating GST Mastes- C-GST, S-GST, I-GST Recording GST Transaction – Purchase,
Sales, Printing GST Tax Invoice, GST Returns, Payment of GST
 Practical’s
1. Company Creation, Alternation and Deletion in Computerized Accounting (e.g.Tally.ERP 9.0)
2. Backup & Restore of Company
3. Create, Display, Alter and Delete Accounting Groups
4. Create, Display, Alter and Delete Ledger
5. Recording Bank Transactions using Contra voucher
6. Recording Payment vouchers
7. Recording Receipt vouchers
8. Recording Cash Purchase transaction (Accounts only)
9. Recording Credit Purchase transaction (Accounts only)
10.Recording Cash Sales transaction (Accounts only)
Practical’s contd.
11. Recording Credit Sales transaction (Accounts only)
12.Recording Journal voucher for Asset Purchase
13.Recording Journal voucher for Consumable Purchase
14.Recording Purchase Order and Receipt Note
15.Recording Sales Order and Delivery Note
16.Creating GST Ledgers (S-GST, C-GST and I-GST)
17.Recording GST Purchase & Sales Invoice (with single rate only)
18.Display Accounting Reports (Trial Balance, P&L A/c, Balance Sheet, Cash/Bank Book etc.)
19.Display Inventory Reports in Tally (Stock Register, Order reports etc.)
20.GST Reports
Content
• Meaning of Manual /Computerised Accounting
• Traditional/Manual System of Accounting
• Process of Computerised Accounting
• Featueres of Computerised Accounting
• Difference Between Manual Accounting System And Computerised
Accounting
• Advantages and Disadvantages of Computerised Accounting
Process/Steps In Computerised Financial Accounting
• Advantages of The Computerised Financial Accounting System
• Various Components of A Computerised Financial Accounting System
 Definition of Manual Accounting
• Manual Accounting, as the name signifies, is the paper-based
accounting system, in which journal and ledger registers, vouchers,
account books are used to store, classify and analyse financial
transactions of an organization. It is often used by small businessmen,
such as sole proprietors, shopkeepers, etc. to maintain the record of the
business transactions, due to lower cost.

• One of the advantages of the manual accounting system is its easy

accessibility. It is also characterised by confidentiality, which makes
the sensitive information hacking free. Nevertheless, manual accounts
can only be prepared correctly if the accountant possesses good
knowledge of bookkeeping and accounting.
• Moreover, human error, such as incorrect recording of the transaction,
the omission of the transaction, figure transposition and so forth, is
likely to occur while the preparation of manual accounts which cannot
be ignored.
 Meaning of Computerised Accounting
• As its name suggests, "computerized accounting" is accounting done
with the aid of a computer

• It tends to involve dedicated accounting software and digital

spreadsheets to keep track of a business or client's financial
transactions.

• A computerized accounting system is a software program that is stored

on a company's computer, network server, or remotely accessed via the
Internet and it can be a great benefit for a business. It can help
streamline accounting steps and help minimize errors
• Computerized accounting is a beneficial use of current technological
advances

• Not only has it revolutionized the traditional paper methods of

accounting, but it has also created new types of accounting
applications for business

• Companies now create entire accounting information systems that

integrate all business operations, including external suppliers and
vendors in the value chain
• Computerized accounting systems (or software) have replaced
manual-based accounting in virtually all businesses and organizations,
providing accountants, managers, employees and stakeholders access
to vital accounting information at the touch of a button

• Computerized accounting systems automate the accounting process--

improving efficiency and cutting down costs

• Computerized accounting has many advantages over traditional

manual accounting

• Computerized accounting tends to be more accurate, is faster to use,

and is less subject to error than its manual counterpart
 OBJECTIVE OF COMPUTERIZED
ACCOUNTING
• Labor Saving: Labor saving is the main aim of introduction of
computers in accounting. It refers to annual savings in labor cost or
increase in the volume of work handled by the existing staff.

• Time Saving: Savings in time is another object of computerization.

Computers should be used whenever it is important to save time. It is
important that jobs should be completed in a specified time such as the
preparation of pay rolls and statement of accounts.Time so saved by
using computers may be used for other jobs.
• Minimization of Frauds: Computer is mainly installed to minimize
the chances of frauds committed by the employees, especially in
maintaining the books of accounts and handling cash. Effect on
Personnel: Computer relieves the manual drudgery, reduces the
hardness of work and fatigue, and to that extent improves the morale
of the employees.
• Accuracy: Accuracy in accounting statements and books of accounts
is the most important in business.This can be done without any errors
or mistakes with the help of computers. It also helps to locate the
errors and frauds very easily.
 ROLE OF COMPUTERIZED
ACCOUNTING
• The manual system of recording accounting transactions requires
maintaining books of accounts such as journal, cash book, special
purpose books, and ledger and so on. From these books summary of
transactions and financial statements are prepared manually.

• The advanced technology involves various machines, which can

perform different accounting functions, for example a billing machine.
This machine is capable of computing discount, adding net total and
posting the requisite data to the relevant accounts.
 Features of a Computerised Accounting
Program
• Inputting invoices, credit notes, receipts and payments

• By entering one transaction all of the double entry is completed for

you. (Because a computerised accounting system is fully integrated)

• There may be a separate payroll program

• Generating Management reports

1. Fast, Powerful, Simple and Integrated
2. Complete Visibility Enhanced User Experience
3. Accuracy
4. Speed
5. Scalability
6. Power
7. Improved Business Performance
8. Quick Decision Making
9. Complete Reliability
 COMPUTERIZED ACCOUNTING
SYSTEM
Advantages Dis-advantages
•All banking activities are done by •Cost of computerized system is very
using computer system high

•Transaction can be done anywhere •High cost for maintenance

and anytime
•The system can be infected by
•It takes shorten time for any viruses
banking process
•Member of workers have to be
reduce as they are no longer needed
 Advantages Dis-advantages
Codification is possible Needs heavy investment

Easy control Problem of security

Universal application Loss of data

Easy to process voluminous data An artificial device

Possibility of manipulations

Not suitable for small firms

Requries training on part of

accountants
TRADITIONAL / MANUAL SYSTEM OF
ACCOUNTING
PROCESS OF COMPUTERISED
ACCOUNTING
 Manual Accounting Vs Computerized
Accounting
BASIS FOR MANUAL COMPUTERIZED
COMPARISON ACCOUNTING ACCOUNTING
Meaning Manual Accounting is a system of Computerized Accounting is an accounting
accounting that uses physical registers system that uses an accounting software, for
and account books, for keeping recording financial transactions
financial records. electronically.
Recording Recording is possible through book of Data content is recorded in customized
original entry. database.
Calculation All the calculation is performed Only data input is required, the calculations
manually. are performed by computer system.
Speed Slow Comparatively faster.
Adjusting entries It is made for rectification It cannot be made for
of errors. rectification of errors.
Backup Not possible Entries of transactions can be
saved and backed up
Trial Balance Prepared when necessary. Instant trial balance is
provided on daily basis.
Financial Statement It is prepared at the end of It is provided at the click of
the period, or quarter. button.
In manual accounting, we check the Computerized accounting system will
journal and then we transfer figures to automatically process the system and
related accounts' debit or credit side will make all the accounts ledgers
through manual posting. because we have pass the voucher
entries under its respected ledger
account.
Both adjustment journal entries and its Only adjustment entries will pass in
posting in the ledger accounts will be the computerized accounting system,
done manually one by one. posting in the ledger accounts will be
done automatically.
We have to make the financial We need not prepare financial
statements manually by careful statement manually, financial
transferring trial balance's figures in statements will become automatically.
income statement and balance sheet.
• Recording of data
• Data entering
• Classification and processing of data
• Data Storage
• Reporting
• Accuracy
• Lesser paper work
• Codification of data
• Data sharing
• Adjusting entries
Computerised Accounting Systems

• Computerised accounting systems basically mean software tools that

we can employ for accounting purposes. In other words, they help in
maintaining accounting records digitally. They even generate financial
statements automatically using the data users feed into them.
• Tally is a great example of a computerised accounting system. It is a
popular software that accepts accounting information, generates
financial statements, maintains records, etc. Similarly, billing
machines like the ones found in malls are also good examples of
digital accounting systems. They help in calculating billing amounts,
reducing discounts, adding information of customers, etc.
Application of computerised accounting
system – Tally with GST package
• Tally is one of the most widely used financial accounting softwares. It
is used by various types of trade and industries. It is a comprehensive
business accounting and inventory management software that provides
various facilities like multi-lingual operations, online functions,
legally supported reports, etc.
• In 2009, Tally Solutions introduced the software Tally.ERP 9. The
software offers comprehensive business management solution. It
maintains all books of accounts. Different types of vouchers such as
vouchers for receipt, payment, sales, purchases, etc., can be used for
recording transactions. It follows the principle of double entry system
of book keeping. In 2017, it was updated to comply with the Indian
Goods and Services Tax (GST) requirements.
SIGNIFICANCE OF COMPUTERISED
ACCOUNTING SYSTEM
• The speed with which accounts can be maintained is several fold
higher.
• Automatic correct balancing of ledger accounts
• Automatic tallied trial balance unless some mistake is made while
recording the opening balance.
• Automatic income statement
• Automatic balance sheet
 Salient Features of Computerised
Accounting System
• The processing of information will be by one or more computers.
• The computer or computers may be operated by the entity or by a third
party.
• The processing of financial information by the computer is done with the
help of one or more computer softwares.
• A computer software includes any program or routine that performs a
desired function or set of functions and the documentation required to
describe and maintain that program or routine.
• The computer software used for the accounting system may be an acquired
software or may be developed specifically for the business.
• Acquired software may consist of a spread sheet package or may be
prepackaged accounting software.
 Threat to Computerised Accounting
System
• The only concerns that has increased today are concerns for controls,
security and integrity of the computer system as more and more
information is stored not in the hard print but as soft copies inside the
computer.
• Issue like unauthorised access to the data either through the local area
network or through the internet by hacking into the company server
are becoming potential threat to the computer usage.
Classification and Codification of Accounts
• The main unit of classification in accounts should be the major head
which should be divided into minor heads, each of which should have
a number of subordinate heads, generally shown as sub-heads.
• The sub-heads are further divided into detailed heads. Sometimes
major heads may be divided into ‘sub-major heads’ before their further
division into minor heads.
• The major heads, minor heads, sub-heads and detailed heads together
may constitute a four tier arrangement of the classification structure of
accounts.
 TALLY ERP 9
Tally is designed to integrate all business operations, like sales,
finance, purchasing, inventory, and manufacturing and so on
Tally facilitates accurate and up-to-date business information at
our fingertips anywhere.
 Versions of Tally
• Tally 4.5 DOS based accounting with inventory
• Tally 5.4 Windows based Accounting with Inventory
• Tally 6.3 With online finalization, Auditing
• Tally 7.0 Import and Export Features
• Tally 7.2 With VAT, TDS and Service Tax
• Tally 8.1 With FBT and Excise Duty
• Tally 9.0 With Payroll System, Multi language features
• Tally ERP 9 With Remote Access facility, multi budgets and
scenarios etc.
 Accounting in Tally
• Accounts Fundamentals, Including basic accounting principles & other topics
pertaining to Bank reconciliation, Depreciation, Ledger posting, Financial
statement etc.
• Meaning and Process of Accounting (Better for no commerce students).
• Accounting Concepts, Conventions, Equation & other fundamental terms
• Book keeping - Preparation of Journal, Subsidiary books, Cash Book, Ledger &
Trial balance.
• Financial Statements - Trading Accounts, Profit & Loss Accounts and Balance
sheet
• Financial statements with important adjustments.
How to open tally?
• Click on Start Menu
• In the search bar, type Tally
• Click on the icon that says “Tally”
• After clicking, you will see the Tally Opening Screen
Opening screen of tally
• After the opening screen you will see the Main Screen of Tally
Parts of the Main screen of tally
COMPANY CREATION IN TALLY
• To create a new company, press ‘C’ on the keyboard or click on the option
“Create Company” in the Company Info Menu
• After the “Company Creation” screen opens, Enter name of the
business for which accounting is being done
• Then enter mailing details such as Name and Address. Then select
Country and State. Then enter PinCode
• After Mailing Details, you will be required to enter Contact Details
such as Phone no., Mobile no., Fax no., email and website of the
business.
• Next, you are required to input the details of the financial year.
Date on which the books begin and the date on which financial
year begins.
• Next, you can enter password for tally to make your data secure
and safe.
• Next you are required to set details of currency for accounting
purposes. You can select currency, its symbol, name, decimal places
to be used, etc.
• After entering all the required information press Enter to Finish the
company creation.
• When the question “Accept?” appears press Y or Enter to complete
company creation.
• After Company is created you will be returned to the Gateway of
Tally screen
•SELECT
To Select a company, Press F1 button or click on the “Select
A COMPANY
Company” option in the button ToolBar. The Select Company
screen will show all available companies. Click on the company you
want to select and press Enter.
• After select a company, you will be returned to “Gateway of Tally”
screen.
ALTER A COMPANY
• If you wish to change any details which were entered by you in a
company, you can change the same by using the Alter option.
• From the Company Info screen select the Alter option by pressing A or by
clicking on “Alter”
• After pressing Alter, you will view a list of companies available
in Tally from which you can select the company you wish to
Alter
• Make the changes, you wish to make and press Enter to accept
the changes.
• After Altering and accepting changes, you will be returned to
the Main screen of Tally with Company Info.
DELETE A COMPANY
• To delete a company, from the Company Info menu, select Shut
Company by pressing H or clicking on “Shut Company”.
• From the given list of companies, select the company you wish
to delete and press Enter. After pressing Enter the company will
be deleted and you be returned to the Main Screen
GROUPS IN TALLY
• From the “Gateway of Tally” screen, select “Accounts Info”
under the head Masters by pressing A or clicking on the option
in the menu.
• Under the head, Accounts Info, you will find a sub head titled
“Groups”
• Press G or click on Groups to open the Groups menu
• Tally allows you to Create, Display or Alter Groups with the
added feature of utilizing single groups or multiple groups at
the same time.
SINGLE GROUPS
• To create a single group, Press C or select Create under the
head Single Group
• You will then be asked to enter group name, the head under
which it falls (tally has many predefined groups based on
accounting principles) and fill other details required. After that
press enter to save group.
• Display Group allows you to Display details of the group.
• Press D under the Single Group to display list of available
groups.
• From there you can select the group you want to be displayed.
• Alter a group allows you change details of a group.
• Press A in the group menu to select to alter a single group.
• From the list of available groups, select the group you wish to
alter
• Make necessary changes and press enter to accept.
• After altering, you will be shown list of groups again in case you
want to alter another group.
• If you wish to alter another group select the same and make
alterations.
• If not, press Esc to go back to the Group Menu
Multiple Groups
• To Create Multiple Groups
• If you wish to create multiple groups under the same head at the same time, you can use this
option
• Press R or select create under the head multiple groups
• Select the head under which the groups are to be created then enter names of groups and press
Enter to accept
• To Display Multiple Groups, Select Display or Press I
• From the list of groups, select the ones you wish to display
• To Alter multiple groups, Press T or select Alter from the Group
menu
• Select the groups which you wish to alter from the list of
groups
• Make necessary changes and press Enter to accept
To go back from the Group Menu to the Accounts Info menu, Press Q or select Quit