Creating a Company

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

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

Above is displayed an International Company Creation Screen. 

Note that the State and PIN Code fields are not available.

The screen for India/SAARC would be:

A detailed explanation on each field is given:

Directory

The data path where you want the company to be created is specified in theDirectory field.

This field is skipped by default when you create the company in the data path given in the Tally.INI file. If you want to change it, use the backspace key and modify it to the path required.

This is referred to as the TallyAnywhere concept – which is the ability to create/load companies in separate directories. The Directory field is displayed while selecting Select, Create, Backup, Restore and Rewrite options for a company. By default, the cursor will skip the field, presuming that you wish to use the default data directory for your work. You may press Backspace to give a new path and work from there.

For example, the default Tally data directory could be C:\TALLY\DATA. You may now wish to create a new company on C:\TALLY\PERSONAL, and some other companies on C:\TALLY\BRANCHES. The next time, the default directory displays C:\TALLY\DATA, and if you wish to work on the data of your branches, press Backspace and enter C:\TALLY\BRANCHES for the directory name. This displays the companies whose data is stored in that location in the List of Companies. You can even give the path of a network server or any other storage device.

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

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

Note:
1.  In the space provided for the Address details, observe the vertical compression as compared to the Mailing Name field where there is horizontal compression. 
2. 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. 
3.  Tally 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 andTelephone 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.

E-mail Address

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

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 Rs. appears by default for India/SAARC Companies and the field is left blank for International Companies.

Maintain

Tally displays a drop down for the Type of Company with two optionsAccounts 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 automatically considers 12 months from the date you give here as the Financial Year.

For example, if you enter April 1, 2005 as the date, the Financial Year will be from April to March ending with March 31, 2006. If you enter October 1, 2005 as the Financial Year From then the financial year will be from October 2005 to September 2006 ending with 30th of September every year.

Tally 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 presumes that you wish to maintain books from the beginning of the financial year. Hence, Tally 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 provides the required flexibility in such a case by allowing you to give the date when the books of accounts actually began. Tally 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, 2005, the opening balances for all the accounts can be given as on August 19, 2005 even though the Financial Year given is April 1, 2005 (April to March financial year). The company's books will begin on August 19, 2005 and close on March 31, 2006, which ensures smooth transition to the next year.

This concept can be applied even when you are migrating to Tally 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 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.

Use Security Control?

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

If you opt for security control, Tally offers a comprehensive password based access control to different features of Tally based on authority lists created by the Administrator. (The section on Security Control under Administer Tally contains details on authority lists)

Name of Administrator, Password, Repeat

Assuming the Tally Vault Password and Use Security Control is set to Yesenter 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. It will be discussed in greater detail under the Security Control section in Administer Tally.

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

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

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

This completes the Company Creation process in Tally.

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 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 uses this currency symbol in reports, wherever necessary.

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.

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: Features.

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)

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.

Symbol for Decimal Portion

Enter the symbol for decimal portion.

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