Tally Prime is one of the most trusted accounting and GST compliance software used by millions of businesses. Whether you are a beginner in accounting or a professional managing multiple clients, knowing how to create a Company and Ledgers in Tally Prime is essential. Without proper company setup and ledger creation, no business transactions can be recorded accurately.

In this detailed guide, you will learn what a company in Tally means, how to create one, how to configure its features, how to create essential ledgers, and how to organize your chart of accounts effectively. This article is written in a simple and practical manner with tables, tips, and examples for better understanding.

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What Is a Company in Tally Prime?

A Company in Tally Prime represents the business entity whose books of accounts you want to maintain. It contains essential information such as:

• Company Name
• Financial Year
• Books Beginning Date
• Address and Contact Details
• GST Information
• Currency Details
• Security Controls
• Financial and Accounting Preferences

Tally Prime allows unlimited companies to be created and maintained in a single system. They can be opened, shut, altered, backed up, and restored anytime.

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How to Create a Company in Tally Prime

You can create a company in Tally Prime through the Create Company menu.

Step-by-Step Process

Step 1: Open Tally Prime

Start Tally Prime from your desktop.
Once it opens, you will see the Gateway of Tally screen.

Step 2: Go to Create Company

You will see the following options:

• Create Company
• Select Company
• Shut Company

Choose Create Company.

Step 3: Enter Company Details

Fill in the details as required.

Field	Description
Directory	Where your company data will be stored
Name	Official name of your business
Mailing Name	Name to print on invoices
Address	Company address
Country	Location of business
State	State for GST applicability
Pincode	Postal code
Phone/Email	Contact information
Financial Year Begin	Start of financial year, e.g., 01-04-2024
Books Begin From	Start date of accounts
Currency	Auto-filled based on country

Step 4: Enable GST and Other Features

After entering basic details, enable additional features as needed:

• Enable GST
• Maintain Accounts with Inventory
• Enable Security Control
• Enable TDS/TCS
• Enable Payroll

Each business requires different modules depending on operations.

Step 5: Save the Company

Press Ctrl + A to save the company.
Now your Tally company is successfully created.

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Additional Company Configurations

Once created, you can configure additional settings through:
Gateway of Tally > F11 (Features)

Some commonly used configurations are:

Feature	Purpose
Accounting Features	Enable credit limits, bill-wise details, cost centers
Inventory Features	Enable batches, expiry dates, godowns
Statutory Features	Enable GST, TDS, TCS, PF, ESI
Invoice Features	Enable item-wise tax, discount, e-way bill options

These settings help customize Tally Prime based on your business needs.

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What Is a Ledger in Tally Prime?

A Ledger is an accounting head under which financial transactions are recorded.
Tally uses a group and ledger system based on the accounting hierarchy.

Examples of commonly used ledgers:

• Cash
• Bank Accounts
• Sundry Debtors
• Sundry Creditors
• Purchase
• Sales
• Duties & Taxes
• Capital Account
• Fixed Assets
• Expenses (Direct & Indirect)

A company must have at least two ledgers to start:

• Cash
• Profit & Loss A/c (Created automatically)

All other ledgers must be created manually.

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How to Create a Ledger in Tally Prime

Step-by-Step Process for Creating a Ledger

Step 1: Go to Ledger Creation Screen

Gateway of Tally > Create > Ledger
OR
Press Alt + C while entering a voucher.

Step 2: Enter Ledger Details

Fill in the required details.

Field	Description
Name	Ledger name (e.g., ABC Traders)
Group	Correct group classification such as Sundry Debtors
Opening Balance	Opening value if any
GST Details	For GST registered ledgers
Mailing Details	For customers and suppliers

Step 3: Group Selection

Selecting the right group is very important because it affects:

• Financial statements
• Trial balance
• Profit and loss
• Balance sheet classification

Example:
Sale ledger should be under Sales Accounts,
Supplier ledger under Sundry Creditors,
Customer ledger under Sundry Debtors,
Expenses under Indirect Expenses.

Step 4: Save Ledger

Press Ctrl + A to save.

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Types of Ledgers You Should Create in Every New Company

Below is a practical list of common ledgers used in most businesses:

1. Capital and Owner-Related Ledgers

• Capital Account
• Drawings

2. Banking Ledgers

• Bank Account Name
• Bank OD/CC Accounts

3. Sales and Purchase Ledgers

• Sales GST 5 percent
• Sales GST 12 percent
• Sales GST 18 percent
• Purchase GST 5 percent
• Purchase GST 12 percent
• Purchase GST 18 percent

4. Tax Ledgers

• CGST
• SGST
• IGST
• TDS Payable
• TCS Payable

5. Customer and Supplier Ledgers

Each customer and supplier has its individual ledger.

6. Expense Ledgers

• Rent
• Salary
• Office Expenses
• Electricity Expenses
• Telephone Charges
• Stationery

7. Asset and Liability Ledgers

• Furniture
• Computers
• Building
• Loan Accounts
• Outstanding Expenses

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Example Table: Ledger and Its Group

Ledger Name	Group
ABC Traders	Sundry Debtors
Rent Expense	Indirect Expenses
CGST Payable	Duties & Taxes
SBI Bank A/c	Bank Accounts

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Important Tips for Creating Accurate Ledgers in Tally Prime

Here are must-follow guidelines to avoid errors:

1. Use Proper Naming Conventions

Examples:

• Don’t use abbreviations without clarity.
• Use customer/supplier names exactly as per invoices.

2. Select Correct Group Always

Grouping mistakes can cause wrong balance sheet or P&L results.

3. Maintain Opening Balances Carefully

Incorrect opening balances can reflect wrong totals throughout the year.

4. Enable Bill-Wise Details

Useful for tracking customer invoices, outstanding payments, and supplier credits.

5. Add GST Details for Taxable Ledgers

For customers and suppliers:

• GSTIN
• Registration type
• State
• Tax applicability

For product-based ledgers:

• GST rate
• HSN/SAC code

6. Use Mailing Details for Parties

This helps generate invoices, statements, and reports accurately.

7. Regularly Review the Chart of Accounts

Tally Prime allows viewing all ledgers through:
Gateway of Tally > Chart of Accounts

This helps identify:

• Duplicate ledgers
• Wrong groups
• Incomplete details

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Example: Creating a Customer Ledger

To create a ledger for a customer named Sharma Traders:

• Name: Sharma Traders
• Group: Sundry Debtors
• Maintain balances: Yes
• Enable bill-wise details: Yes
• Opening balance: Enter outstanding receivable
• GSTIN: If available
• State: Required for intra-state or inter-state supply

This ensures proper tracking of sales, receipts, and outstanding balances.

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Example: Creating a Sales Ledger with GST

For GST-based sales at 18 percent:

• Name: Sales 18 Percent
• Group: Sales Accounts
• Type of supply: Goods or Services
• GST Rate: 18 percent
• HSN/SAC: Enter if known

This ledger will automatically calculate GST in invoices.

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Conclusion

Creating a Company and Ledger in Tally Prime is the foundation of maintaining accurate and compliant accounts. With proper setup, correct grouping, and well-structured ledgers, your accounting process becomes smooth and error-free. This guide explained company creation, ledger creation, essential fields, GST setups, grouping, and best practices in a simple and comprehensive format. Whether you are running a small business or managing large-scale operations, mastering these basics will significantly improve your accounting efficiency.

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Disclaimer

This article is intended for educational purposes. Tally Prime features may vary depending on updates and configurations. Users should apply settings based on their business requirements.

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