Bill-wise outstandings and bank reconciliation in Tally Prime

Two tasks fill the first month of most accounts jobs: knowing who owes what, and proving that the bank ledger matches the bank statement.

Bill-wise details: one invoice, one reference

When a party ledger has bill-by-bill balances switched on, every sales or purchase voucher asks for a reference. Choose New Ref and give the invoice number. When the payment comes in, choose Agst Ref and pick that same invoice. The invoice is then settled and drops out of the outstanding list.

Example 1: you raise sales invoice INV-104 for 25,000 to a customer on 3 May as New Ref. On 20 May a receipt of 25,000 arrives. In the Receipt voucher, select the customer, choose Agst Ref and pick INV-104. The customer's outstanding is now zero.

Example 2: the same customer pays 15,000 against the 25,000 invoice. Select Agst Ref INV-104 and enter 15,000. The report now shows 10,000 pending with the original date, so the age of the balance is correct. Had you used On Account, the 15,000 would float with no link to any invoice and the ageing would be wrong.

Reading the outstanding reports

Receivables, under Outstandings in the statements of accounts, lists every open invoice with its date, pending amount and overdue days; Payables does the same for suppliers. The Ageing option groups balances into buckets such as 0 to 30 days and 31 to 60 days.

Bank reconciliation

Go to Banking, choose Bank Reconciliation and select the bank ledger. Each voucher shows a Bank Date column. Type the date on which the transaction appears in the statement. Entries with a bank date are treated as cleared. The screen shows the balance as per company books, the amounts not reflected in the bank, and the balance as per bank. When the last figure equals the statement's closing balance, you are reconciled.

Example 3: the books show 1,80,000 and the statement shows 1,95,000. The reconciliation screen lists one payment of 15,000 with no bank date: the cheque has not been presented yet. That explains the gap, and nothing needs correcting. Bank charges that appear only in the statement, by contrast, need a voucher in the books before the two will match.

Common mistakes and a practice habit

• Using On Account for every receipt, which makes the ageing report useless.
• Typing the voucher date as the bank date. The bank date is when the bank processed it.
• Reconciling without the actual statement open. The figures must come from the bank, not from memory.

In a practice company, create three customers, raise six invoices, and record payments in different patterns: full, part, advance and on account. Open Receivables and Ageing after each one. Then enter ten bank vouchers and reconcile against a statement you write yourself, including one bank charge not yet in the books.