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.
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.
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.
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.
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.
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.
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
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 |
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
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.
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.
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.
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.