M.A AUDITS & ACADEMI: Creating a New Company in Tally.ERP 9

Wednesday, April 3, 2013

Creating a New Company in Tally.ERP 9

Creating a Company

Creating a Company involves providing basic information about the company whose books of accounts are to be maintained in Tally.ERP 9.

Go to Gateway of Tally > (Alt+F3) Company Info. > Create Company

The Company Creation screen appears as shown:

A detailed explanation on each field is given:

Connectivity

Tally.Server 9 needs to be connected to the Internet for smooth operations which include user authentication and license management.

If Tally.Server 9 has not been connected to the Internet for 30 days or more, in the List of Tally.Servers in Tally.ERP 9, information on the number of days till surrender will be displayed (Will be Surrendered after x day(s)!):

Users need to ensure that Tally.Server 9 is continuously connected to the Internet to avoid License Surrender.

Incompatible version of Tally.Server 9 used with Tally.ERP 9

Tally.ERP 9 Series A Release 4.51 will crash with the following error message if Tally.Server 9 Release 4.5 is used for data sharing:

Users need to upgrade to Tally.Server 9 Release 4.51 to continue working on Tally.Server 9 data.

Incompatible version of License Server

The following message will be displayed in Tally.ERP 9 Series A Release 4.5/4.51 if Tally.Server 9 Release 4.51 is used alongside License Server 7.8:

Users need to upgrade to License Server 7.9 for smooth operations.

Incompatible version of Tally.Server 9 used with License Server 7.9

The following error message will be displayed in Tally.ERP 9 if Tally.Server 9 Release 4.5 is used alongside License Server 7.9:

Users need to upgrade to Tally.Server 9 Release 4.51 for smooth operations.

Name

Enter the name of the company whose books are being opened. If you are a professional accountant and are maintaining the books of your clients, give the Client Company's name.

Mailing Name and Address

In addition to the Company Name, Tally.ERP 9 provides the facility to enter the Mailing Name field. It displays the Company Name by default. You may change it as required, if the mailing name is different from the Company Name. The mailing name and address details are picked up for inclusion in any report that needs the company name and address as heading. For example: Balance Sheets, Statement of Accounts, and so on.

Tally.ERP's reports print the mailing name and address as given:

Tally.ERP 9 does NOT restrict the number of lines for the address details. Tally.ERP 9 accommodates all the entered information and vertically compresses the same.

Note: In the space provided for the Address details, observe the vertical compression as compared to the Mailing Name field where there is horizontal compression.

You can specify any length for the mailing name and you are permitted to give any number of lines for the address. The information is completely visible.

Tally.ERP 9 handles compressed information correctly while printing. It adjusts the reports accordingly.

Statutory compliance for

Select the Country from the List of Countries. The Statutory Features and Base Currency Symbol are enabled in accordance with the country selected. For example, if the accounts belong to a company in India, the base currency would be Indian Rupees. The Base Currency will appear with respect to the Country selected.

Selecting India from the List of Countries brings up a State, Pin Code and Telephone No. field.

State

You can select the appropriate state from the predefined list.

PIN Code

Specify the PIN Code (Postal Index Number) of the specified address.

Telephone

Enter the Telephone number.

Mobile No

Enter the mobile number of the company.

E-mail Address

Enter the E-mail address that will be used to e-mail documents, reports and data from Tally.ERP 9.

Enable Auto Backup

This feature allows the user to safeguard his company data. The Automated Backup or Auto Backup is a capability that automatically takes data backup in the background without any disturbance or affecting your work.

Auto Backup can be carried out by executing the following steps:

Go to Company Creation/Alteration screen of the required company.

Set Yes to Enable Auto Backup as shown:

Save the Company Creation/Alteration screen.

The data backup is stored in the data folder of the respective company.

E.g.: A company titled ABC Company has a folder 10009 located in C:\Tally.ERP9\Data. On enabling Auto Backup feature the backup file ABK.900 is created in C:\Tally.EPR9\Data\10009

Restoring Auto Backup Data

To restore the auto backup taken execute the following steps:

From the Gateway of Tally

Press Ctrl + Alt + K.
Restore Company on Disk screen appears.
The Source field displays the data path of the company under Select Auto Backup to Restore screen. Press Enter.
The List of Auto Backup(s) will list all the companies enabled for Auto Backup.
Select the required company and press Enter.

The List of Auto Backup Versions screen appears listing the backup versions.

Note: List of Auto Backup Versions will contain backup version on daily basis.

The maximum days of backup versions listed will be of 60 days.

Select the required version from the list and press Enter.
The selected version of data backup is restored to the respective company folder.
The auto backup utility prompts the user to overwrite the existing company.
Press Y or click Yes to proceed with restoring the data.
Press Alt + F1 to Shut the existing company.
Select the restored company.

Currency

Currency symbol is the symbol of the base currency, that is, the currency that will be used to maintain the books of account.

The symbol ` appears by default in case India for India/SAARC Companies and the field is left blank for International Companies.

Note: The currency symbol changes based on the country selected from the list for Statutory compliance for field.

To read about Indian Rupee Symbol Conversion.

Tally.ERP 9 now allows you to use the new Indian Rupee Symbol introduced by the Government of India. You may use the new rupee symbol as base currency symbol or as foreign currency symbol (under multi currency scenario), for your existing as well as for new companies.

We thank M/s Foradian Technologies for having developed and provided the New Indian Rupee Symbol which is used in Tally.ERP 9.

Conversion of Rupee Symbol for an Existing Company

In case Rupee Symbol (Rs.) is used as Base Currency Symbol

When you load your existing company in Tally.ERP 9 Series A Release 3 for the first time, the select company screen after loading will prompt you with a message to convert the Base Currency Symbol (E.g. Rs.) to the New Currency Symbol (

), as shown:

Note: The font used for Rupee Symbol (

) in Tally.ERP 9 Reference Manual is Rupee he used in Tally.ERP 9 Reference Manual

Click Yes or press Y to convert.
The currency conversion successful message appears as shown:

Press Enter to continue.

The Company Alteration screen is updated with the new Base Currency Symbol as shown:

Note: Tally.ERP 9 checks for the country selected in the Statutory compliance for field under Mailing & Contact Details in the Company Creation/Alteration screen. In case Indiais selected, Tally.ERP 9 prompts you to convert base currency symbol to new currency symbol (

), irrespective of any currency symbol being used in base currency and name in the formal name of currency.

In case you do not want to convert your Base Currency to New Currency symbol while loading the existing company in Tally.ERP 9 Release 3.0 for the first time, click No or press N to the conversion prompt message.

The currency conversion decline message will appear as shown:

Press Enter to continue.

Note: To convert to New Indian Currency symbol later, go to Company Alteration or Currency Alteration screen (Gateway of Tally > Accounts Info > Currencies > Alter) and pressCtrl + 4 to type the new currency symbol at the Base Currency Symbol field and save the settings.

In case Rupee Symbol (Rs.) is used as Foreign Currency (under Multi Currency)

When you load your existing company using Tally.ERP 9 Series A Release 3.0 for the first time, having one of the foreign currency symbols as Rs., or/and formal name containing Indian Rupees/INR/IND Rupees, etc., the select company screen while loading will prompt you with a message to convert the Foreign Currency (E.g. Rs.) to the New currency (

)symbol, as shown:

Click Yes or press Y to convert.
The currency conversion successful message appears as shown:

In case you do not want to convert your Foreign Currency (created for India) to New Currency Symbol (

) while loading the existing company in Tally.ERP 9 Release 3.0 for the first time, click No or press Nto the conversion prompt message.

The currency conversion decline message appears as shown:

Note: To convert to New Indian Currency symbol later, go to Currency Alteration (Gateway of Tally > Accounts Info > Currencies > Alter) screen and press Ctrl + 4 to type the new currency symbol at the Symbol field and save the settings.

New Rupee Symbol for Newly Created Companies

When a new company is created in Tally.ERP 9 Release 3.0, the Base Currency Symbol will automatically display the New Indian Currency Symbol (

), as India is by default set in Statutory compliance forfield under Mailing & Contact Details in the Company Creation screen.

Note: In case you do not want to use the New Indian Currency Symbol while creating the company, you may type the required symbol under Base Currency Symbol field.

To convert to New Indian Currency symbol later, go to Company Alteration or Currency Alteration screen (Gateway of Tally > Accounts Info > Currencies > Alter) and pressCtrl+4 to type the new currency symbol at the Base Currency Symbol field and save the settings.

What do I do if New Rupee Symbol () does not appear in Tally.ERP 9?

Tally.ERP 9 Release 3.0 in 98/ME Operating Systems: Tally.ERP 9 Release 3.0 will display a box symbol (□) if your computer has Windows 98 or ME Edition as operating system. You will not be able to use the New Indian Rupee symbol as the above mentioned operating systems do not support UNICODE.

Maintain

Tally.ERP 9 displays a drop down for the Type of Company with two options Accounts only and Accounts with Inventory

Select Accounts only if you do not have any inventory transactions (suitable for professionals and corporate offices).

However, at a later date (if required) you can choose to alter the information as Accounts-with-Inventory. Select Accounts-with-Inventory, to maintain both financial accounts and inventory.

Financial Year From

In most countries, the books of accounts of a company are maintained for a stipulated period like, 12 months, 15 months, and so on. This stipulated period is referred to as the Financial Year.

The stipulated period of the financial year is 12 months in most countries. Tally.ERP 9 automatically considers 12 months from the date you give here as the Financial Year.

For example, if you enter April 1, 2008 as the date, the Financial Year will be from April to March ending with March 31, 2009. If you enter October 1, 2008 as the Financial Year From then the financial year will be from October 2008 to September 2008 ending with 30th of September every year.

Tally.ERP 9 allows you to maintain data for multiple years by changing the period (Alt+F2) at the Gateway of Tally. In addition, you can also specify the date of actual establishment of the company (date of incorporation)

Books Beginning From

Tally.ERP 9 presumes that you wish to maintain books from the beginning of the financial year. Hence, Tally.ERP 9 displays the date given in Financial Year From field automatically.

The date for Books beginning from can be changed, in case of companies, which are incorporated in the middle of the year. If your company is new, you can opt to start the books of accounts from the date of actual establishment of the company (date of incorporation) but close books according to the Financial Year as specified by you. Tally.ERP 9 provides the required flexibility in such a case by allowing you to give the date when the books of accounts actually began. Tally.ERP 9 will open books from this date and close as on the last day of the Financial Year.

For example, if your company is established on August 19, 2008, the opening balances for all the accounts can be given as on August 19, 2008 even though the Financial Year given is April 1, 2008 (April to March financial year). The company's books will begin on August 19, 2008 and close on March 31, 2009, which ensures smooth transition to the next year.

This concept can be applied even when you are migrating to Tally.ERP 9 from any other system or from a manual accounting system on any day during the Financial Year. Close books in that other system on the previous day and start books on Tally.ERP 9 from this day. You are allowed to give opening balances of all Ledger accounts including Revenue accounts.

TallyVault Password

TallyVault is an enhanced security system, which allows for encryption of the company data. Encryption involves converting normally accessible Tally information into unrecognisable information, which can only be reconverted by authorised persons.

Give a password here and repeat the same in the Repeat field. This basically results in the creation of an encrypted company whose information is not accessible to users other than the password holder.

Password Strength

Password Strength indicator is available in Tally.ERP 9 from Release 4.5 onwards. Now, strength is displayed while creating / altering passwords under Security Control, Tally Vault, and Control Centre. Also when Password Policy is enabled, Password Strength is indicated in the Change Password screen that appears for first time login.

Let us understand the logic used by Tally.ERP 9 to ascertain a password’s strength. This logic consists of two sets of conditions to be applied.

A. Password Score

Password strength is decided on the basis of a 5 score scale -

Score	Strength
1	Weak
2	Fair
3	Good
4	Strong
5	Very Strong

As soon as a character is entered, the score becomes 1 (i.e. weak)
The score then keeps incrementing by 1 unit if any of the following conditions match:

If password has both lower and uppercase characters
If password has at least one number
If password has at least one special character
If password length is greater than 10

Once the score has been obtained, the next set of conditions is applied,

If password length is less than 8 characters, irrespective of the strength determined in the first step, the score changes to 1
If password length is less than 12 but greater than 8, and score is greater than 3, the score is rounded off to 3
If password is same as the login name of the person, the score changes to 1

Note: In case of TallyVault Password, if the password is same as Company Name, the score changes to 1.

Based on the final score, the strength is displayed to the user accordingly.

For example, in Company Creation screen under Security Control, if the Login Name of Administrator is Ajay and password provided is Tally.123, then applyingPassword Score-

1 point is awarded for each of the conditions met:

Entering a character
Using a combination of Lowercase and Uppercase character – “Tally”
Using more than one number – “123”
Using a special character – “.”

Hence the total score = 1+1+1+1, that is 4.

Now the second set of conditions, that is Password Length and User Name match is to be applied.

B. Password Length and Username match

It can be observed that only the second condition is applicable to our example. Since length is 9, that is, greater than 8 but lesser than 12, the score is rounded off from 4to 3.

Therefore, as per this example, the net score is 3 and hence the strength attributed to the password is Good.

Use Security Control?

Set this to Yes, if you want to initiate a password-protected system to control access to Tally.ERP 9 data. Else, set this to No.

If you opt for security control, Tally.ERP 9 offers a comprehensive password based access control to different features of Tally.ERP 9 based on authority lists created by the Administrator. For more information refer Data Management in Tally.ERP 9.

Name of Administrator, Password, Repeat

Assuming the Tally Vault Password and Use Security Control is set to Yes enter the Name of Administrator, Password and Repeat in the respective fields.

Use TallyAudit Features

Tally Audit allows the administrator or an auditor profile user to track changes in accounting information. If you wish to use this facility, select Yes. Tally Audit will be available only to the administrator/auditor, through Display of Statements of Accounts.For more information refer Data Management in Tally.ERP 9.

Disallow opening in Educational mode ?

Set this option to Yes, if you don't want the company to be opened in Educational mode of Tally.ERP 9. Else, set this to No.

On accepting the company creation screen, if you have specified Tally Vault password, Tally.ERP 9 prompts you to enter the TallyVault password as appears:

Then Tally.ERP 9 prompts you to enter the Name of User and Password (if any).

After verification Tally.ERP 9 imports the latest statutory masters. Wait till the screen shows that 100% of import is complete.

This completes the Company Creation process in Tally.ERP 9.

An explanation on the fields on the bottom of the Company creation screen follows:

Base Currency Information

The Base Currency Information is found in the bottom frame of the Company creation Screen. Base Currency is the currency in which your accounts would be maintained. Financial statements are prepared in the base currency by default and these are normally required to be submitted to local statutory authorities. The Base Currency information in Tally.ERP 9 varies with the country selected for Statutory Compliance.

You can record transactions and raise invoices in foreign currency; and also maintain bank accounts or ledgers in foreign exchange, when required.

Base Currency Symbol

The currency symbol given earlier in the Company Creation screen is displayed here automatically.

Tally.ERP 9 uses this currency symbol in reports, wherever necessary.

Click here to read about Indian Rupee Symbol Conversion.

Formal Name

Formal Name is the full name of the currency specified.

The Formal Name for the base currency is set to Indian Rupees for Indian Companies.

Number of decimal places

The number of decimal places for the base currency is set to 2, by default. However, you have the option of specifying up to 4 decimal places. Indian currency has 2 decimal places whereas certain other countries require 3 decimal places and so on.

Is Symbol Suffixed to Amounts

For countries, which specify the symbol after the amount (value) – this facility is provided. For example, Yen is specified after the amount (5000 Yen) unlike in India where the symbol is specified before the amount (Rs.5000)

Symbol for Decimal Portion

Enter the symbol for decimal portion.

Show Amounts in Millions

This is useful for companies, which require reporting the financial statements in millions. This is possible only if Allow Multi-Currency is enabled in F11: Accounting Features.

Put a space between Amounts and Symbol

This facility is provided to users who require a space between the amount and the symbol. However, putting a space between the amount and symbol could give an opportunity for misuse incase of cheque printing. Hence, the flexibility to turn this option on and off as required is provided.

Decimal Places for Printing Amounts in Words

You can specify the number of decimal places for printing the amount in words. This number should be equal to or lesser than the number specified in Number of Decimal places field in company creation or currency master screen which will appear in Invoice and Cheque printing screen.

For example, if the currency is expressed upto 3 decimal places, the numeric to be printed in words can be restricted to 2 decimal places.

Note: The Name of the Company, cannot be translated or transliterated but will appear in the Language created.

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