How to Implement/Apply Interest Calculation Option in Tally Prime

How to Implement/Apply Interest Calculation Option in Tally Prime Process 1: Create/Alter Customer Ledger with Activation of Interest Calculation Option

Step: GOT > Create > Ledger

Ø In Ledger Screen Activate Following Option

Name – Type Supplier or Customer Ledger name, Like Ritesh Mishra

Under – Select Sundry Creditor/Debtor

Maintain Balances bill-by-bill – Yes

Default Credit Period – Type Any Days for Default days as Credit Period like, 30 days

Check for credit days during voucher entry – If you set this option ‘Yes’, Tally will warns you

if the party exceeds the credit period and about pending outstanding.

Activate Interest Calculation – ‘Yes’ & Press ‘Enter’

Ø Press F12 for Advance Parameter option in Interest Calculation screen & Enable

· Use Advance Interest Parameters – Yes & Press ‘Enter’

After Pressing ‘Enter’ Screen will appear like this following Screenshot

Ø In this Above Screenshot Enable Following Option like,

· Calculate Interest Transaction-by-Transaction – This option Provide us to calculate interest

on each transaction for this Party. Set to ‘Yes’

· Override parameters for each transaction – activating this option will help you to change the parameters, that is the rate and interest style will be asked during sales/Purchase voucher entry.

· Include Transaction date for Interest Calculation

For amounts added – ‘Yes’ this Option is useful when you add transaction date for Calculation of Interest otherwise set to ‘No’.

· Rate – Type rate of Interest like,10%

·
Per – There are Four types of interest style given

§ 30 Day Month – this style Calculate Interest on the basis of 30 Day in one Month.

§ 365 Day Month – this style Calculate Interest on the basis of 365 Day in one Year.

§ Calendar Month – this style Calculate Interest on the basis of Month-wise (28, 29, 30 or 31 Days)

§ Calendar Year – This style Calculate Interest on the basis of Year-wise (365 or 366)

Ø Select Anyone Style According to you Necessity , I Select ‘calendar Month’

·
On – There are three type of Interest Balance given

§ All Balance – This Type of balance use for both Pay & Receive Interest from any Party.

§ Credit Balance – This Type of balance use for Pay Interest only to any creditor.

§ Debit Balance – This Type of balance use for Receive Interest only from any Debtor.

Ø Select Anyone Balance According to you Necessity , I Select ‘Debit Balance’

·
Applicability – Here two options are available

§ Always – this Option calculate interest from next day of transaction

§ Post due Date – This option calculate interest from due date given by you, like 10 days after. When you select this option tally ask for due days by how many days after you apply interest calculation for selected party.

Ø Select Anyone Balance According to you Necessity , I Select ‘Always’

· Calculation From – It is also show three types of options

§ Date of Applicability – this Option calculate interest from next day of transaction.

§ Due Date of Invoice/Ref – this option apply interest calculation on party from due date of Invoice/Reference given by you during voucher entry.

§ Eff. Date of Transaction – this option calculates interest from effective date of Transactions given by during voucher.

Ø Select Anyone Balance According to you Necessity , I Select ‘Date of Applicability’

·
Rounding – there are three types of rounding method given

§ Downward – In this type of rounding, the value in Paisa is always rounded downward to the nearest Rupee. Like ₹3.60 to convert in ₹3

§ Normal – In this type of rounding, if the value in Paisa is 50 Paisa or more, it is rounded upward to the nearest Rupee, and, if the value in Paisa is less than 50 Paisa, it is rounded downward to the nearest Rupee.

§ Upward – In this type of rounding, the value in Paisa is always rounded upward to the nearest Rupee. Like ₹3.60 to convert in ₹4

Ø Select Anyone Balance According to you Necessity , I Select ‘Normal’

· Limit – Type ‘1’

Ø After Filling All Option Screen of Interest Parameters will show like this following screenshot:

Ø Press ‘Ctrl+A’ for save this screen

Ø
After Save Interest Parameter screen, Ledger screen look like this following screenshot.

Ø Press ‘Ctrl+A’ for save this screen

Note: If Maintain Bill by Bill Option not show in ledger screen then press F12 & Enable

‘Maintain Balance Bill-by-Bill’ set to ‘Yes’

Note: Create/Alter all Suppliers/customers ledger as explained above

Ø Practice Exercise for Enable Interest Calculation in Party Ledger in Tally Prime, for You

Name

Under

Maintain Balance Bill by Bill

Default Credit Period

Check for Credit days during

voucher entry

Activate Interest Calculation

Ritesh traders

Sundry creditor

Yes

25

Yes

Yes & Fill

Geeta LTD.

Sundry Debtor

Yes

29

Yes

Yes & Fill

Suresh Varma

Sundry creditor

Yes

24

Yes

Yes & Fill

Process 2: Pass Sales Voucher Entry in Invoice mode for Calculate Interest on Customer

Step: GOT > Accounting Voucher (F8 )

Ø Pass entry as normal way like this following screenshot:

Ø After Inserting Stock Item in Sales/Purchase Voucher Press 4 times ‘Enter’ then there are Four types of Method of Adjustment in ‘Type of Ref’ column for Bill shown like this Following screenshot:

Ø Select ‘New Ref’ from Method of Adjustment & type any Bill No: in Name Column

Ø Press ‘Ctrl+A’ for Save this screen

Note: Pass New Purchase Voucher Bill Entry by Following Same Step in Above Example for new Sale Voucher Entry.

Ø Practice Exercise for Make a new Purchase(F9) Voucher Entry Like this following Example

· Date – 02/04/2020

· Party A/c Name – Ritesh traders

· Sales Ledger – Purchase Account

· Name of Item –Sony TV

· Quantity – 5

· Rate – 4000

Ø Press Four times Enter after inserting ‘rate’ of Item & fill details like

· Type of Ref – Select “New Ref”

· Name – Type Bill Number as Your Choice like, “DKP2”

· Due Date or Credit days – Auto fill

· Amount- Auto fill

Ø For Showing Interest Calculation Reports

· Step : GOT > Display more Reports > Statement of Accounts > Interest Calculation > Ledger

> Select your ‘Supplier or Customer’ Ledger For Showing Outstanding >Press ‘F2’ for Change

Period > Enter > Alt+F1

Ø
After reaching above step Interest calculation screen shown like this following screenshot:

Ø In the report you can see the number of days; the bill is overdue, % of interest & interest amount.

Process 3: Debit Note voucher Type Alteration for Received Interest Amount from Customer

Step: GOT > Alter > Voucher Type > Debit Note > Enter

Ø Screen shown like this following screenshot

Ø In Debit Note Alteration Screen Define ‘Name of Class’

Ø In Name of Class Type Name Like I type,’ S.I’ & Press Enter

Ø And Enable the Option “Use Class for Interest Accounting” set to ‘Yes’ & Press ‘CtrlA’ for

Save this screen

Ø After Enable all Option Screen will show like this Following Screenshot

Ø Press Ctrl+A for Save Debit Note changes

Note : Make Changes Also in Credit Note Voucher as Same way in Above Step of Debit Note Voucher type for Paid Interest Amount to Supplier

Process 4: Debit Note voucher Entry for Received Interest Amount from Customer

Ø The calculated interest does not affect the books of account. This has to be accounted if needed. Normally when we debit a party account we issue a document called debit note. You have to create a debit note in tally and send a printout to the party.

Step: GOT > Voucher > Alt+F5 > Select Class ‘S.I’ > Ctrl+H > Select ‘As Voucher’ > Enter

Ø For Passing Entry in Debit Note Voucher fill details like ,

· Date – Type Date when you received interest from customer like, 01/05/2020

· Dr – Ritesh Mishra

Ø
After selection of Customer, List of Interest Bills Shown like this screenshot:

Ø Select one from list & Press ‘Ctrl+A’

Ø
After Pressing Ctrl+A method of Adj. shown select ‘Agst Ref’ and After Select Pending Bills like this following screenshot:

Ø Press Ctrl+A for Save this Screen

· Cr – Select ‘Interest Received’ ledger (Under ‘Indirect Income’ group)

Ø
After Filling All Above Details Screen will shown like this screenshot:

Ø Press Ctrl+A for Save this Screen

Note : Pass Credit Note Voucher Entry as Same way in Above Step of Debit Note Voucher entry for Paid Interest Amount to Supplier by Filling following Details

Date -02/05/2020 Cr – Ritesh Traders

Dr – Interest Paid (Indirect Expense)

Process 5: Receipt (F6) voucher Entry for Received all dues Amount with Interest Amount from Customer

Step: GOT > Voucher > F6 > Ctrl+H > Single Entry > Enter

Ø For Passing Entry in Receipt Voucher fill details like ,

· Date – Type Date when you received all Outstanding from customer like, 01/05/2020

· Account – Cash/Bank

· Particulars – Ritesh Mishra

Ø After selection of Customer, Method of Adj. select ‘Agst Ref’ and After Select Pending

Bills Shown like this screenshot:

Ø Press Ctrl+A for Save this Screen

Note : Pass Payment Voucher Entry as Same way in Above Step of Receipt Voucher entry for Paid Outstanding with Interest Amount to Supplier by Filling following Details

Date -02/05/2020 Account – Cash/Bank

Particulars– Ritesh Traders

Budget Management in Tally Prime Class-6

· Budget Management: – Budget management is an effective tool for organizations to better manage their expenses and costs. It is traditionally the domain of financial managers and controllers, but certainly as important for procurement management.

Business organizations determine how much financial scope is available for expenditure based on budgets making it an indirect factor for quality. And thereby making an accurate estimate of costs to be allocated by budget holders organizations are able to control expenditures and not be faced with any surprises.

EX: Marriage Budget, Company Expense Budget, Festival Budget

ü Process 1 : Create Budget