Cash Management in Tally.ERP 9

Type of cash management

Explanation

Cash management – Receivables

When a business issues an invoice it is reported as a receivable, which is cash earned, but not yet to be received. Owing to the terms and conditions of the invoice, the business may have to wait 30, 60 or 90 days for the cash to be received.

Problems involved: - It is common for a business to report increasing sales, yet still run into a cash crunch because of slow or poorly managed receivables.

Solution: - There are a number of things a business can do to accelerate its receivables and reduce payment float, including clarifying billing terms with customers, using an automated billing service to bill customers immediately, using electronic payment processing through a bank to collect payments, and staying on top of collections with a receivables ageing report. And all this can be done with the help of ERP solution Tally.ERP 9 as it packs every solution listed above in it’s software module to effectively manage cash receivables.

Cash management – Payables

When a business controls its payables, it can have a better control over its cash flow. By enhancing the overall efficiency of the payables process, a business can reduce costs and keep more cash working in the business.

Payables management solutions, such as electronic payment processing, direct payroll deposit and controlled disbursement, can streamline and automate the payable functions.

How ERP solutions plays an important role here:

·       Most or all of the receivables and payables management functions can be automated using business banking solutions such as Tally.ERP 9.

·       Technology has opened up opportunities for smaller businesses to access the same large-scale cash management technologies used by bigger companies.

·       Management will be able to reallocate precious resources to growing the business.

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Explanation

Bills receivable is a bill of exchange on which payment is expected to be received at a later date. Receivables report in Tally.ERP 9 displays all the outstanding receivables during a specified period.

How to view receivables summary in Tally?

Go to Gateway of Tally > Display > Statements of Accounts > Outstandings > Receivables.

What does it reflect in it’s report?

This report displays all outstanding receivables invoice-by-invoice, till date.

[Note: This report takes into consideration only those party ledgers for which the option Maintain balances Bill-by-Bill option is enabled. ]

Components of this report -

· Date: This is the Effective date of the invoice and not the actual date.

·       Reference Number: This is the bill reference number entered in the Bill-wise Details screen.

·       Party's Name: The party ledger name appears in this field.

·       Pending Amount: This is the outstanding balance on a particular invoice.

·       Due On: This is the due date of the bill (with reference to the Effective date) specified during voucher entry.

·       Over due days: This will he reflected in report only if during the time of creation of party ledger you have defined the default credit period. And Tally will calculate the default days from the end of credit period date till the date on which the bill stands outstanding due.

Explanation

Bills payable is a bill of exchange due for payment at a future date. Bills payable report in Tally ERP 9 displays all the outstanding payables during a specified period.

How to view payables summary in Tally?

Go to Gateway of Tally > Display > Statements of Accounts > Outstandings > Payables .

What does it reflect in it’s report?

This report displays all outstanding payables invoice-by-invoice, till date.

Components of this report -

All the components of this report bare same as receivables summary report.

Explanation

This report displays the outstanding receivables or payables for a particular party ledger during a specified period.

How to view ledger outstanding report?

·       Go to Gateway of Tally > Display > Statements of Accounts > Outstandings > Ledger

·       And select a ledger from the list which you want to view

·       Now press ALT + B to view the bills outstanding as on the date

To settle required bills against bills outstanding

Step 1: Select the bills to be settled by pressing Spacebar.

Step 2: Click B: Bill Settlement button or press Alt + B key.

Step 3: In the Bill Settlement screen :

·       In the field Voucher Type, by default Receipt or Payment, based on the final outstanding amount of the selected bills, will be pre-filled.

·       In the field Voucher Date, enter the date of Receipt/Payment voucher

·       In the field Account, select the required Bank or Cash ledger from the List of Ledgers

·       Specify the required remarks in the Narrations field

Step 4: Press Enter to save the Voucher.