Balance Sheet in Tally Prime

In this article, we will walk through the process of generating a balance sheet in Tally Prime, a widely used accounting software. The balance sheet provides a snapshot of a company's financial health, showing its assets, liabilities, and owner's equity at a particular point in time. Below, we will cover the steps to generate a balance sheet using Tally Prime, with a real-world example.

Step 1: Opening Tally Prime

Start by opening the Tally Prime application. After launching the software, you will be greeted with the main screen of Tally Prime, where you can manage your company’s financial data.

Step 2: Select Company

If you have already created a company in Tally Prime, select the company from the list of available companies. If you haven’t created a company yet, you will need to create one by entering details such as the company name, address, financial year, and other necessary information.

Step 3: Create Ledgers

Before generating the balance sheet, ensure that all necessary ledgers are created in the software. Ledgers represent various financial transactions and accounts such as assets, liabilities, income, and expenses. Some key ledger groups to set up are:

• Assets (Fixed and Current)
• Liabilities (Long-term and Short-term)
• Capital (Owner’s Equity)
• Revenue and Expense Accounts

For instance, let’s create a ledger for “Cash in Hand” under the “Current Assets” group and a ledger for “Loan Payable” under the “Current Liabilities” group.

Step 4: Enter Transactions

Next, you need to enter financial transactions into Tally Prime. These transactions may include sales, purchases, payments, receipts, etc. Each transaction should be recorded in the appropriate ledger. For example, let’s assume the following transactions:

• Received cash payment of ₹50,000 from a customer
• Paid ₹20,000 for office rent
• Purchased inventory worth ₹30,000 on credit
• Loan payable of ₹10,000

These transactions should be recorded in the relevant ledgers (e.g., Cash in Hand, Rent Expense, Creditors, Loan Payable) in Tally Prime.

Step 5: Generate Balance Sheet

Once all transactions have been entered, you can generate the balance sheet in Tally Prime by following these steps:

1. Press Alt + F1 to go to the “Company Info” screen.
2. Select “Display” from the menu, then choose “Balance Sheet” under the "Financial Statements" section.
3. Choose the desired date for the balance sheet (for example, 31st December 2024).
4. Click on “Show” to generate the balance sheet.

Step 6: Review the Balance Sheet

The balance sheet will be displayed on the screen, showing the following main sections:

• Liabilities: This section will list liabilities, including short-term and long-term obligations such as loans and creditors.
• Assets: This section will list assets, such as cash in hand, accounts receivable, and fixed assets.
• Capital: This shows the owner's equity or capital invested in the business.

In our example, the balance sheet might look something like this:

Step 7: Closing the Balance Sheet

After reviewing the balance sheet, you can print it or export it in various formats (such as PDF or Excel). You can also choose to save it for future reference or use it for reporting purposes.

Conclusion

Generating a balance sheet in Tally Prime is a straightforward process. By following the steps above, you can quickly set up the required ledgers, record financial transactions, and generate a detailed balance sheet for your company. This balance sheet will help in assessing the financial health of your business, making it a crucial tool for decision-making.