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In tally erp 9, To account the transactions of a business, we create a company and start entering vouchers in it.As you know a financial year ends in 12 months.In Indian system we follows April to march system. Some tally users continues the accounting process in same company.In such cases you need to select the financial year every time. otherwise tally shows in accurate balance sheet and profit and loss account mix up with all Financial year.
Why not follow a separate company for each Financial Year
You can Create a separate company for each Financial year. As we did in manual accounting, maintaining separate books of accounts for every financial year is beneficial more than maintaining a single company. But the difficulty is creating all masters like, ledgers, groups, stock items and transferring of balances to the ledgers is time consuming. So what is the shortcut. In tally erp 9, to overcome this situation, there is an option called splitting of company.
Benefits of splitting company
- You need not create all masters again and again, splitting will transfer all masters to the new company.
- The final balance from the balance sheet will also transferred and displayed as opening balance.
- Splitting will provides
Prerequisites for splitting company data
● Splitting may cause damage of your accounting data, so that A backup of the data of the latest must be kept.
● There should not be any unadjusted forex gains/losses ,if pending shall be accounted.
● No purchase/sales bills are due. Check the Profit & Loss A/c and inventory statements (purchase/sales bills pending). You have to account them in the respective party accounts or in the bills pending account.
Verify company data before splitting ?
Tally erp 9 has developed a utility to identify the possible errors while splitting the data, this tool will tell you the following errors may occurs and possible solutions.
Incorrect units for items,cost center does not belongs to category,no accounting allocation for voucher entries,voucher total do not match etc,cost break up total does not match. etc, Lets, how to verify data
Go to Gateway of Tally>F3 :Cmp info >Split Company Data>Verify company data.
Select the company for verification , Hit Enter key. and accept the selecting by pressing Yes.
Tally will check for all possible errors and display message of errors found
If there is no error found
If there are errors, list all the errors as shown below.
You have to rectify all the errors by hitting enter key on the displayed errors.
How to split company?
After verification of data, you are ready for company splitting. to get a company split,you have to follow the below steps.
- Go to Gateway of Tally > F3 : Cmp Info . > Split Company Data > Select Company .
- Select the required company from the List of Companies .
- Enter the required date in the Split from field.
The Split Company Data screen appears as shown below:
The screen will automatically recommend a split from date based on the data entry done in the company.
Let’s understand the fields in the split company data screen,
Split From: Split from date is the date from which the new company will start. If you want to change the split from date, you can change it, It is the beginning of new financial year.
First Company: Split company will create a copy of existing company,So the first company is the copy of existing company.
Second Company: Second company means the newly company created with all existing ledgers and masters with required opening balance .there will not be any voucher entry in this company.
4. Press Enter to split the company data.
Click on Yes to proceed and split company data, tally will begin splitting instantly
After completion of process, You will find three companies in the same name as original.
In the picture i have marked 1,2,3,4 let’s check what are those.
- The new company is loaded automatically
- This is the original company we used for splitting.
- This is the copy of original company added the financial year in the name.
- This is the new company for which we want to start use for the new period, here also tally have marked the financial year along with name.