Creation of Company, Ledgers and Groups in Tally

Before any transaction can be recorded in Tally, three things must be set up in order.

1. Creation of a Company. The very first step is to create a Company in Tally, from the 'Gateway of Tally' screen, entering basic details such as the company's name, address, and the date on which its financial year begins. All subsequent work — ledgers, vouchers, and reports — is carried out within this Company.

2. Groups. Tally provides a set of predefined Groups — standard classification heads under which every ledger account is placed, such as Capital Account, Loans (Liability), Sundry Creditors, Sundry Debtors, Purchase Accounts, Sales Accounts, Direct Expenses, and Indirect Expenses, among others. These predefined groups mirror the very same classification of accounts (Capital, Assets, Liabilities, Revenue, Expenses) taught throughout this subject — Tally is simply organising the same accounting classifications inside the software. A user may also create additional groups of their own if the predefined list does not suit a particular business's needs, but every ledger must always belong to some group, predefined or user-created. …