Year ending process, moving to new financial year in tally erp 9
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As you know Indian Accounting system is following April to march Financial year system.In this chapter we will discussing the steps to be taken in tally erp 9 while moving to a new financial year. Make sure that all expense shall be booked,and put all banking entries,and prepare a reconciliation statements. Ensure that GST payable is accurate.
Things to be done before closing a financial year .
- Make sure that all expense as on date is booked.
- Put all banking entries,like cheque issued, bank charges, cheque deposit up to 31 st march and prepare a bank reconciliation.
- Make sure that all purchase entries have been booked and availed all Input tax credits.
- Make sure that the the GST payable is accurate.
- You should make sure that all the transactions related to the financial year is booked.
Different options or procedure of Year ending in tally erp 9
There are three options available in tally erp 9 for Year ending and starting a fresh Financial Year.
- Change the current Period
- Split company data.
- Export closing balance of current financial year & import the opening balance in to new company of current financial year.
Let’s explain Each and every options.
1.Changing Current Period in Gateway of Tally
In this option should create only one company for the whole accounting year. Here is how it works
In the Financial year 2018-19 1st April ABC Ltd started business ,Bought a tally erp 9 and start entering transactions ,On 31-03-2019 The financial year ends ,Here you need not create a new company for data entry of Financial year 2019-20 Just change the Financial Year How ?
Look at the picture, You have entered the last entry of the financial year 2018-19, Now you want to move into new financial year 2019-20 ,and want to enter a voucher of 1st april 2019
At this stage ,suppose you tries to enter a sale voucher on 01-04-2019 tally will say Date cannot be above the current period 31-03-2019.
So What is the solution?
Tally erp 9 know 01-04-2019 is not in the Financial year 2018-19, So you need to change the Financial Year to 2019-20, How ?To do this you need to come back to gateway of tally.
Just use shortcut key to change the Financial Year. ALT+ F2 or click on the Current Period on the left top of the gateway of tally
Change Financial Year to 2019-2020 as shown in the below image.
Press ENTER key, this will change your company’s Financial year.
- The balance of the previous year ,will be carried forwarded, Here you don’t need to pass any closing entries.
- The Closing stock of the previous Financial year will become the opening stock of the new financial year.
- The net profit/loss will be transferred to the new FY after calculating net income -net expenses. There for the balances of the expense/income account will not be transferred.
- The asset liabilities ledger’s balance will be transferred to the new FY.
This is how we do year ending process using the same company data.
Advantage of Using same company data for all Financial year.
You can view the consolidated reports of all Financial year of the company,You will get the total working result of the company from the beginning to current date.
2.Splitting of company data.
This is another year ending process for large companies who’s data volume is big or those companies want to keep each financial year data into separate folder so that you can keep the previous year’s data safe and continue to work with current financial year.
For Large volume data company’s continue in a single data for years will creates issue like, low speed in the tally operation like slow loading, slow viewing of reports and may cause crashes of tally data. Keeping separate data for every financial year may cause.
How to split company?
We have provided a detailed tutorial on how to split tally erp 9 data here . How ever here is the steps for your quick reference.
- Take a back up of tally erp 9 data
- Go to Gateway of Tally
- Select Company Info ( ALT + F3) > Split Company Data >Select Company
- Tally will recommend the split from date, This date will be the beginning of the new financial year as shown in the image.
Hit enter key, Split ? Yes
Tally will create two new company with their financial year starting in their names as shown in the image above.
The first company is the Current company with all existing data.
The second company is the new company for the new financial year .You can start working in it.
3. Export closing balances & import as opening balances
The third and final method is exporting of closing balances of ledgers, stock items from existing company and import the balances into newly created company for the fresh financial year.
Example : Good wood imports wants to import the opening balances to the newly created company of Fy 01-04-2019 to 31-03-2019 from Old company of Financial year 01-04-2018-31-03-19.
- To do this Go to Display >List of accounts.
- Click on Export or use shortcut key Alt + E.
- The export screen will display as shown below.
In the screen, you will find the following options.
Language: Default ( All Languages)
Format: XML (Data Interchange)
Export Location: Choose the location of file to be exported.
Output File Name: a name with an extension XML, for example Master.xml
Open Exported Folder: Yes
Type of Masters: You can select the masters you want ,you can select the only required masters from the list, here I am selecting All Masters as the entire masters need to be exported and imported.
Include Dependent Masters : No
Export Closing balance as opening ? : Yes ,This is the important point you should not and follow.
To Date: This is the date up which closing balance are considered for exporting.
Hit Enter Key to export the masters.
After the process is completed ,a folder will open in front of you with the exported xml file.
Now the exported masters shall be imported to the newly created company for the Financial Year 2019-2020
Open the company Goodwood Import 2019-2020
Gateway of Tally > Import Of Data >Masters
In the import master enter the location ,treatment of duplicates
Name of file to be exported : Enter the location and file name of master xml file.
Treatment of entries already existing: If the same master of new company is there in the importing xml file, what shall be done by tally. There are three options.
- Combine Opening Balance: This will combine existing balance in the new company. Tally will add or subtract the balance based on the nature of balance ( Debit or credit).
- Ignore Duplicate: The duplicate will not be considered and existing master and balance will remains in the company.
- Modify with New data: This will overwrite the existing duplicate master.
Now the Hit enter Key,Tally will start importing the masters and opening balance in the new company. Now you can view the balances of ledgers and stock items.