Company Setup Configuration

Company Creation and Setup

Before you can record a single transaction, you need to create a digital version of your business inside Tally. This is more than just entering a name; it’s about setting up the entire framework for your accounting, inventory, and compliance.

To begin, use the shortcut $Alt+F3$ to open the Company Info menu, then select 'Create Company'. This opens a screen where you'll input the foundational details of your business.

Field	Explanation
Directory	The folder path on your computer where Tally will save this company's data. It’s crucial to keep track of this for backups.
Name	The official name of your company as it should appear on reports.
Mailing Name & Address	The legal name and registered address used for formal communication and printed invoices.
Statutory Compliance for	Select the country to apply the correct tax laws and compliance features.
Financial Year from	The first day of the accounting year (e.g., 1-Apr-2023 in India). This defines the 12-month period for all financial reports.
Books beginning from	The date you actually start recording transactions in Tally. It can be the same as the financial year start date, or a later date if you are migrating to Tally mid-year.

A common point of confusion is the difference between the 'Financial Year from' and 'Books beginning from' dates. The financial year is fixed, like 1st April to 31st March. However, if your business starts operations or you switch to Tally on 1st October, your 'Books beginning from' date would be 1-Oct, while the 'Financial Year from' remains 1-Apr. Tally will use these dates to correctly prepare reports for the entire financial year, even if transactions only exist from October onwards.

Once these details are filled in, you have the option to set up security. This is a critical step for protecting your financial data.

Tally Vault

noun

An enhanced security feature in Tally that encrypts your company data. A Tally Vault password, once set, cannot be recovered if lost. The company name is also hidden and replaced by asterisks in the company selection menu, providing an extra layer of confidentiality.

You can also enable 'Use Security Control'. This lets you create different user profiles (like Administrator and Data Entry Operator) with specific permissions, controlling who can view, create, or alter different types of information. This is standard practice in any professional environment to maintain data integrity.

Activating Business Features

With the company created, the next step is to tell Tally how your business operates. This is done in the F11: Features menu. Think of this as a control panel where you switch on the specific modules your business needs. Pressing F11 brings up options for Accounting, Inventory, and Statutory features.

Here are some of the most essential features you will likely enable:

Accounting Features (F1)

Enable bill-wise entry details: This is fundamental for managing accounts receivable and payable. It allows you to track every invoice, so you can apply payments to specific bills and easily generate reports on outstanding amounts for any party.

Inventory Features (F2)

Maintain multiple godowns: A 'godown' is any location where you store stock—a warehouse, a specific shelf, or even a vehicle. Enabling this lets you track inventory levels across different locations accurately.
Maintain stock categories: This adds another layer of classification for your inventory items. For example, if you sell televisions (Stock Group), you can create categories like 'Smart TV', '4K TV', and 'OLED' to get more detailed sales and stock reports.

Statutory & Taxation (F3)

This is where you enable features for taxes like Goods and Services Tax (GST), Tax Deducted at Source (TDS), and others, depending on your country's regulations.

Configuring Your Workspace

While F11: Features controls what your company can do, F12: Configure controls how Tally looks and behaves for you, the user. This menu is context-sensitive, meaning its options change depending on which screen you are on. For example, the F12 configuration options on a voucher entry screen are different from those on a reporting screen.

It allows you to fine-tune your workflow, such as changing how dates are entered, whether to skip certain fields during data entry, or providing additional details in reports. You can explore these options on any screen by pressing F12 to see how you can customise the interface to suit your needs.

Ensuring Business Continuity

Your Tally data is one of your most valuable business assets. Regular backups are not just a good practice; they are essential for disaster recovery and audit compliance. A hardware failure, data corruption, or accidental deletion could be catastrophic without a recent backup.

The backup process in Tally creates a compressed file with a .tbk extension in the destination folder you specify. The restore function reads this file and reconstructs the company data.

To perform a backup:

Go to the Gateway of Tally and press $Alt+F3$ to open the Company Info menu.
Select the 'Backup' option.
Specify the 'Source' (the folder where your data is stored) and the 'Destination' (where you want to save the backup file). It is highly recommended to use an external drive or cloud storage for backups.
Select the company you wish to back up from the list and accept the screen.

To restore data:

From the Company Info menu, select the 'Restore' option.
Specify the 'Destination' (where you want the restored company to be saved) and the 'Source' (the location of your backup file).
Select the backup you want to restore.

Always ensure that a company with the same name doesn't already exist in the destination folder, as Tally will not restore it to avoid overwriting existing data.

With your company created, features enabled, and a backup plan in place, you are ready to begin the core accounting task of recording business transactions.

Mastering Tally ERP 9 for Business Accounting