financial analysis tools in tally.erp 9 · tally.erp 9 provides us the capability to generate...
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Financial Analysis Tools in Tally.ERP 9
INFORMATION TECHNOLOGY TRAINING 309
5.1 INTRODUCTION
Tally.ERP 9 provides us the capability to generate numerous advanced and critical ManagementInformation System Reports and analytical tools, thereby facilitating better management, effectivecontrol and well-informed decisions.Following are the some of analytical reports in Tally.ERP 9:� Cash Flow Statement� Fund Flow Statement� Ratio Analysis� Budgeting & Controls� Bank Reconciliation Statement5.2 CASH FLOW STATEMENT
Tally.ERP 9 facilitates generation of Cash flow statement, which displays the movement of cashflow viz., cash inflows and cash outflows (both, cash and bank) for a given period. The reportalso displays the net flow for any period.To view Cash Flow Summary:� Go to Gateway of Tally > Display > Cash/Funds Flow > Cash Flow.� Select a month and press Enter.
Fig. 5.2.1: Cash Flow Statement screen
FINANCIAL ANALYSIS
TOOLS IN TALLY.ERP 95CHAPTER
© The Institute of Chartered Accountants of India
Accounting Package
INFORMATION TECHNOLOGY TRAINING310
To generate Daily Cash Flow Statement, press F4. To view information on the average cashinflow /out flow for any period, activate Show Average Details in F12: Configure.5.3 FUND FLOW STATEMENT
Tally.ERP 9 facilitates generation of Fund Flow Statement, which displays the sources of theFunds and their applications. This report clearly indicates the movement in sources andapplication of funds impacting the business’s working capital and cash position. It includesoperational funds, increase and decrease in inventories, creditors/ debtors.To view Fund Flow Statement:� Go to Gateway of Tally > Display > Cash / Funds Flow > Funds Flow.� Select any month and press Enter.
Fig. 5.3.1: Fund Flow Statement screen
5.4 RATIO ANALYSIS
Ratio Analysis is an indicator of the operating performance of a business. In Tally.ERP 9, wecan generate Ratio Analysis report providing information on critical ratios (viz., operating costpercentage, return on working capital and so on) in a single report.To view Ratio Analysis Report:� Go to Gateway of Tally > Ratio Analysis.
© The Institute of Chartered Accountants of India
Financial Analysis Tools in Tally.ERP 9
INFORMATION TECHNOLOGY TRAINING 311
Fig. 5.4.1: Ratio Analysis Report screen
5.5 BUDGETING & CONTROLS
Tally.ERP 9 helps us to create Budgets for different periods and compare the actual financialperformance vs budgeted figures and generate variance reports. We can define budget values foreach Group as well as for Ledgers.To enable Budgets:� Go to Gateway of Tally > F11: Features > F1: Accounting Features.� Set Maintain Budgets and Controls to Yes.To create Budgets:� Go to Gateway of Tally > Accounts Info. > Budgets > Create.� Specify Name for the Budget.� Specify Date range for the budget.� Set Yes to Groups‘/ Ledgers and assign budget to selected groups/ledgers.To view Budget Reports:� Select any report (i.e., Balance Sheet or Profit and Loss A/c or Trial Balance).� Press Alt + C (New Column).� Specify details for period, Currency and Method of Stock Valuation.� Select the created budget name for Types of Value to show.� Set Show Variance to No.
© The Institute of Chartered Accountants of India
Accounting Package
INFORMATION TECHNOLOGY TRAINING312
Fig. 5.5.1: Budgeted Vs Actual Figures screen
VARIANCE ANALYSIS
In Tally.ERP 9, we can view Variance Analysis Report which provides infor-mation on thedifference between the actual vs the budgeted figures.To view Variance Analysis report, set Show Variance to Yes from the above Insert Column(Alt+C) screen or follow the steps given below:� Go to Gateway of Tally > Display > Trial Balance/Account Books (Group Summary).� Select Budget Variance (Alt + B).� Select the Type of budget and press Enter.
Fig. 5.5.2: Budget Variance Report screen
© The Institute of Chartered Accountants of India
Financial Analysis Tools in Tally.ERP 9
INFORMATION TECHNOLOGY TRAINING 313
5.6 BANK RECONCILIATION STATEMENT
Tally.ERP 9 provides us the facility to reconcile the transactions of the company’s Bank Bookwith the Bank Statement and instantly displays the Balance at Bank and as per the company’sBank Book.To view Bank Reconciliation Statement:� Go to Gateway of Tally > Display > Account Books > Cash/Bank Book.� Select the required Bank Account and press Enter on the required month.� Press F5: Reconcile.� Enter the date of clearing (Bank Date), date on which the transaction is being debited/
credited, from the Bank Statement.
Fig. 5.6.1: Bank Reconciliation Report screen
We can predefine the date of reconciliation for transactions starting from where we want toreconcile, by specifying the Effective Date of Reconciliation in the Bank Ledger Master.
© The Institute of Chartered Accountants of India