Tally.ERP 9 for cash basis accouting

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Tally.ERP 9 for Cash Basis Accounting

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Agenda

• Overview of Cash Basis Accounting

• Structure of Cash Basis Accounting Module

• Tally.ERP 9 for Cash Basis Accounting

• Business Process Flow

• Primary Requirement

• Tally.ERP 9 – Fitment


Overview of Cash Basis Accounting

Cash basis of accounting, recognizes revenues and expenses when money is actually

received or paid out.

For example, the professional service fees for auditors are recognized as revenue on

receipt of money and not when the client agrees to pay or when the services are

provided.


Structure of Cash Basis Accounting

Cash Basis Accounting

Voucher Creation

Financial Reports

Service Tax Calculation


Process Flow – Cash Basis Accounting (An example : CA Business)

CASH BASIS ACCOUNTING

Client approaches CA for the audit related services

Client agrees for the fees. Services are provided to the

client

Sale invoice is prepared in the name of client against different audit services

provided

Acknowledgement for receipt of payment is given against

the sale invoice, on receipt of the cash to account

Receivable revenue is not recorded in financial

statements

CA views the financial statements, outstanding

report, service tax reports. All the reports are shown

with the information of cash received

Client pays for the service received through cash

Outstanding report shows the pending receivable details

Service tax is not calculated on the receivables


Primary Requirement – Cash Basis Accounting

Category / Module Major Requirement Explanation

Cash basis Accounting

Invoice Creation Typically, invoice is created at the time of providing service or when the liability is created for the client, but as per cash basis accounting the books of accounts shouldn’t get affected.

The cash receipt is acknowledged against the sales invoice. The books of accounts would reflect the changes.

Outstanding Reports Outstanding reports should show the party names and the amount as receivable, for user to follow up. This helps user to track the receivables better.

Assessment Year For each invoice the assessment year could be mentioned along with the date of invoice. This will help in filing returns in a different year than accounting year.

Service Tax Calculation Service tax should get calculated on payment of cash. The service tax reports like computation, payable, ST3 and others should get updated only on receipt of cash and not on creation of invoice.

Financial Reports Financial reports in cash basis accounting should recognize revenue only on receiving cash from the clients while accrued receivables are not reflected in the reports.


Tally.ERP 9 Fitment – Cash Basis Accounting

Contd..

SL No. Requirement Part of Tally.ERP 9 Part of Solution

1 Assessment year in invoice Yes

2 Auto creation of masters Yes

3 Logo printing in invoice Yes

4 Terms and conditions in invoice Yes

5 Voucher numbering Yes

6 Maintain bill-wise details Yes

7 Multiple mailing details for company & ledgers Yes

8 Voucher type creation Yes

9 Define terms and conditions for invoice Yes

10 Creation, alteration, deletion of assessment year Yes

11 Professional fee head creation Yes

12 Configuration of service tax Yes


Tally.ERP 9 Fitment – Cash Basis Accounting

SL No. Requirement Part of Tally.ERP 9 Part of Solution

13 Professional fee details during invoice level Yes

14 Additional details for professional fees during invoice creation

Yes

15 Visibility of receivables on invoice creation Yes

16 Financial statement behavior on creation of sales invoice Yes

17 Financial statement visibility on receipt Yes

18 Service tax visibility on invoice creation Yes

19 Service tax visibility on receipt of cash Yes

20 Printing of detailed service invoice with tax details Yes

21 Service tax reports ( input credit, ST3, payable etc.) Yes

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Tally.ERP 9 for cash basis accouting

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