Home›Blog›Tally Prime Basics: Groups, Ledgers and Vouchers

Tally Prime Fundamentals⏱️ 9 Min Read📅 Updated September 2026

By CSH Technical Team • Official Tally Partner Dubai

Tally Prime Basics: Setting Up Groups, Ledgers and Vouchers the Right Way

📌 Key Takeaways: Getting Your Foundation Right

Hierarchy Drives Reports: Tally follows a strict Group → Sub-group → Ledger → Voucher chain. Choosing the wrong parent group distorts your Balance Sheet or P&L even if the voucher amount is accurate.
Control Master Creation: Using Alt + C mid-voucher is convenient, but uncontrolled use is the #1 cause of duplicate and misclassified ledgers.
Cost Centres Prevent Clutter: Use separate ledgers for different expense natures (Rent vs. Salary), and Cost Centres (F11) for branch, project, or department splits.
Accounting First, Shortcuts Second: Master debit-credit rules before memorising F4–F9 voucher keys.

📑Table of Contents13 Sections

Quick Navigation • Complete Foundation Guide

01How Tally Organises Accounts→02Ledger Creation in Tally Prime→03Primary vs Secondary Ledgers→04Cost Centres: Detail Without Clutter→05Debit & Credit Rules That Matter→06How to Create Voucher in Tally→07Quick Voucher Reference Table→08Starter Chart of Accounts Setup→09Opening Balances Verification→106 Common Mistakes to Avoid→1130-Second Check Before Ctrl+A→12The Best Order to Learn Tally→13Frequently Asked Questions→

Mastering Tally Prime basics begins with understanding a simple truth: most Tally problems don’t begin with a wrong voucher. They begin weeks earlier, on the day someone created a ledger in a hurry and put it under the wrong group. Then the Balance Sheet looks odd, the debtors report doesn’t match the bank, and nobody can explain why.

So before you learn how to create voucher in Tally, it is worth getting the foundation right: accounting groups in Tally, ledgers, cost centres, and the debit-credit logic that holds everything together. This guide covers each of these in the exact order you will actually need them.

1. How Tally Organises Your Accounts

Think of your Chart of Accounts as a filing cabinet. Groups are the drawers, sub-groups are the folders inside them, and ledgers are the individual files. Every voucher you enter ends up in one of those files.

In TallyPrime, the chain looks like this:

Group → Sub-group → Ledger → Voucher

Take your business bank account as an example. Business Current A/c is the ledger. It sits under Bank Accounts, which in turn falls under Current Assets. You never post an entry to a group directly. You post it to the ledger, and Tally rolls the figure up into the group totals.

This is exactly why the parent group matters. It decides where an amount appears in your Balance Sheet or Profit & Loss account. Choose the wrong group and the report will be wrong, even if every single entry is correct.

Here are the accounting groups in Tally you will use most often:

Accounting Group	What Belongs Here
Capital Account	Proprietor’s or partners’ capital investments
Loans (Liability)	Bank term loans, corporate credit facilities, unsecured loans
Fixed Assets	Laptops, office furniture, machinery, delivery vehicles
Bank Accounts	Business current and corporate savings accounts
Cash-in-Hand	Main office cash, petty cash float
Sundry Debtors	Customers who owe you money
Sundry Creditors	Suppliers and vendors you owe money to
Sales Accounts	Product sales, service income, consultancy revenue
Purchase Accounts	Goods bought for resale or raw materials for production
Direct Expenses	Carriage inward, freight, factory wages, customs clearing
Indirect Expenses	Office rent, salaries, internet, DEWA/electricity, admin costs
Indirect Incomes	Interest earned, commission received, miscellaneous income
Duties & Taxes	UAE VAT (Input VAT 5%, Output VAT 5%), Corporate Tax, or GST/TDS

2. Ledger Creation in Tally Prime

A ledger is the actual account where transactions get recorded. Customer names, supplier names, bank accounts, expense heads, and income heads are all ledgers.

STEP-BY-STEP

How to Create a Ledger in Tally Prime

Press Alt + G (Go To) and choose Create Master > Ledger (or from Gateway of Tally > Create > Ledger).
Type the ledger name — for example, Internet Charges.
In the Under field, select Indirect Expenses.
Configure applicable tax/statutory details if required, then press Ctrl + A to save.

A few more practical examples of getting the parent group right during ledger creation in Tally Prime:

Ledger Name	Correct Parent Group
Sharma Traders / Al Noor LLC (Customer)	Sundry Debtors
Patel Packaging / Gulf Supplies (Supplier)	Sundry Creditors
Business Current A/c	Bank Accounts
Internet Charges	Indirect Expenses
Office Printer	Fixed Assets
Consultancy Income	Sales Accounts

⚠️ A Word on Alt + C (Quick Master Creation): While entering a voucher, you can press Alt + C to create a missing ledger on the spot. It is handy, but it is also how most duplicate and misplaced ledgers are born. When you are in the middle of a busy day’s entries, it is easy to pick the first group that looks close enough. Many well-run finance offices solve this by letting only one or two senior accountants create masters, while everyone else picks from the approved list.

3. “Primary” and “Secondary” Ledgers: Clearing Up the Confusion

You will often hear people talk about primary and secondary ledgers. These aren’t formal account categories in TallyPrime. They are informal terms people use to separate a broad heading from a specific account. For instance, Sundry Debtors might be called the “primary” level, and Sharma Traders the detailed ledger under it.

You may also notice a screen titled Ledger Creation (Secondary). That only appears when you create a ledger from inside a voucher using Alt + C. It is simply the quick-create popup window, not a different type of ledger account.

What actually matters is simple: the right group, the right ledger, and the right voucher.

4. Cost Centres: Detail Without the Clutter

Suppose your business operates three branches (for example, across Dubai, Abu Dhabi, and Sharjah — or Pune, Nashik, and Nagpur), and you want to know how much each branch spends on conveyance. The tempting approach is to create three separate ledgers:

Conveyance – Branch A
Conveyance – Branch B
Conveyance – Branch C

Do this for every operating expense and your ledger list will soon run into the hundreds, making your Trial Balance painfully long to read.

The cleaner option is to keep a single Conveyance ledger and create three Cost Centres — one for each branch. Every time you record a conveyance expense, you allocate it to the relevant branch. Your Chart of Accounts stays short and clean, and you still get a branch-wise profitability and expense report whenever you need it.

⚙️ How to Switch On Cost Centres: Press F11 (Features) and set Enable Cost Centres to Yes.

Rule of Thumb: If two expenses are different in nature (Rent vs. Salary), give them separate ledgers. If they are the same expense but you want to see it split by branch, department, project, or salesperson, use Cost Centres.

5. Debit and Credit: The Rules That Actually Matter

No shortcut key will save you if you are unsure which side of an entry an account goes on. Here is the core accounting logic:

Account Type	Increases With	Decreases With
Asset (Bank, Cash, Debtors, Equipment)	Debit (Dr)	Credit (Cr)
Expense (Rent, Salaries, Purchases, Utilities)	Debit (Dr)	Credit (Cr)
Liability (Creditors, Bank Loans, Output Tax)	Credit (Cr)	Debit (Dr)
Capital (Owner’s Equity, Partner Capital)	Credit (Cr)	Debit (Dr)
Income (Sales, Service Revenue, Interest Earned)	Credit (Cr)	Debit (Dr)

An easy way to remember it: Assets and Expenses grow on the Debit side; Liabilities, Capital, and Income grow on the Credit side. And in every single entry, total debits must equal total credits.

Let’s see it in action with four everyday business transactions:

1. Monthly office rent of 18,000 paid from the bank:
Rent A/c — Dr 18,000
To Bank A/c — Cr 18,000

2. Payment of 42,500 received from customer (Sharma Traders):
Bank A/c — Dr 42,500
To Sharma Traders A/c — Cr 42,500

3. Goods sold on credit for 75,000:
Sharma Traders A/c — Dr 75,000
To Sales A/c — Cr 75,000

4. Packing material bought on credit for 38,000:
Purchase A/c — Dr 38,000
To Patel Packaging A/c — Cr 38,000

6. How to Create Voucher in Tally

A voucher is simply the form you use to record a transaction in TallyPrime. To open the voucher screen:

Press Alt + G > Create Voucher, or
Go to Gateway of Tally > Vouchers.

Choose the voucher type, fill in the date, ledgers, amounts, and narration, and save with Ctrl + A.

Voucher Type	Shortcut Key	When to Use It
Contra	`F4`	Moving money between Cash and Bank accounts
Payment	`F5`	Paying money out (cash or bank outflow)
Receipt	`F6`	Receiving money in (customer collections, income)
Journal	`F7`	Adjustments, depreciation, and non-cash entries
Sales	`F8`	Recording customer sales (goods or services)
Purchase	`F9`	Recording supplier bills and purchases
Credit Note	`Alt + F6`	Sales returns and customer credit adjustments
Debit Note	`Alt + F5`	Purchase returns and supplier debit adjustments

Tip: If a shortcut doesn’t respond as expected on your keyboard or laptop configuration, all voucher types are always clickable on the right-hand button bar of the voucher screen.

What Each Voucher Looks Like in Practice

Payment Voucher (`F5`)

Electricity bill of 9,400 paid through the bank:

Electricity Expenses Dr 9,400 To Bank A/c 9,400

Receipt Voucher (`F6`)

Commission of 12,000 credited to the bank:

Bank A/c Dr 12,000 To Commission Received 12,000

Contra Voucher (`F4`)

20,000 withdrawn from bank for petty cash:

Cash A/c Dr 20,000 To Bank A/c 20,000

Journal Voucher (`F7`)

Depreciation of 8,500 on the office printer:

Depreciation Dr 8,500 To Office Printer 8,500

Sales Voucher (`F8`)

For a credit sale, the Customer is debited and Sales (plus Output VAT if applicable) is credited.

Purchase Voucher (`F9`)

For a credit purchase, Purchase (plus Input VAT if applicable) is debited and the Supplier is credited.

7. Quick Reference: Which Voucher for Which Transaction?

Business Transaction	Account to Debit	Account to Credit	Voucher Type
Rent paid by bank	Rent Expense	Bank Account	Payment (`F5`)
Money received from a customer	Bank Account	Customer (Debtor)	Receipt (`F6`)
Cash withdrawn from bank for office use	Cash-in-Hand	Bank Account	Contra (`F4`)
Sale of goods/services on credit	Customer (Debtor)	Sales Account	Sales (`F8`)
Purchase of stock on credit	Purchase Account	Supplier (Creditor)	Purchase (`F9`)
Year-end asset depreciation	Depreciation Expense	Fixed Asset	Journal (`F7`)
Interest credited by bank	Bank Account	Interest Received	Receipt (`F6`)

Golden Rule: Always work out the accounting first. The voucher is only the tool you use to record it.

8. A Simple Starter Structure for Small Businesses

If you are doing a fresh chart of accounts setup in Tally, this clean blueprint is a sensible place to begin:

Capital Account: Proprietor’s Capital / Partner Capital A/c
Loans (Liability): Bank Term Loan, Loan from Director
Bank Accounts: One dedicated ledger per bank account
Cash-in-Hand: Main Cash, Petty Cash
Sundry Debtors: One ledger per customer entity
Sundry Creditors: One ledger per supplier entity
Fixed Assets: Computers & IT, Office Furniture, Delivery Vehicles
Sales Accounts: Domestic Sales, Export Sales, Service Income
Purchase Accounts: Trading Purchases, Direct Subcontracting
Direct Expenses: Carriage Inward, Customs & Clearing
Indirect Expenses: Office Rent, Salaries & Wages, Electricity/DEWA, Internet & Telecom
Indirect Incomes: Interest Received, Miscellaneous Income
Duties & Taxes: Separate Input VAT / Output VAT (or GST) tax ledgers

Resist the urge to over-divide: You do not need an “Electricity – April” and an “Electricity – May” ledger. One Electricity ledger combined with Tally’s date-range filter (Alt + F2) will give you monthly breakdowns effortlessly.

9. Opening Balances: Check Before Day One

Opening balances are the closing figures you carry forward into TallyPrime on day one of your books. These typically include bank and cash balances, outstanding customer receivables, unpaid supplier bills, active loans, fixed assets, and owner capital.

Verify every single opening balance against your previous accounting software or last signed audited financial statements before you post a single daily voucher. An error in opening balances quietly flows into every Balance Sheet you generate afterwards, no matter how carefully later entries are recorded.

10. Six Mistakes That Come Up Again and Again

1. Putting a Ledger Under the Wrong Group

A supplier accidentally placed under Sundry Debtors will distort both your accounts receivable and accounts payable schedules simultaneously.

2. Creating Duplicate Ledgers

Sharma Traders, Sharma Trader, and Sharma Trd. might look harmless, but they split one customer’s statement across three separate accounts. Always search your existing list before creating a new master.

3. Creating Too Many Expense Ledgers

If you are creating branch-wise or department-wise copies of the same expense head, switch to Cost Centres instead.

4. Using Journal Vouchers (F7) for Everything

Payment (F5), Receipt (F6), Contra (F4), Sales (F8), and Purchase (F9) vouchers exist for a reason. They keep your Day Book readable, populate statutory registers properly, and keep cash/bank books accurate.

5. Writing Vague Narrations

Writing “Paid” or “Payment done” tells nobody anything six months later. A clear narration like “Office rent for September 2026 paid from business current account, landlord invoice no. 248” takes five seconds and saves hours during audit.

6. Uncontrolled On-the-Fly Master Creation (`Alt + C`)

Unchecked use of Alt + C by multiple data-entry operators is the primary way duplicate and misclassified ledgers creep into company books.

11. A 30-Second Check Before You Press Ctrl+A

Run through these five questions before saving any voucher in TallyPrime:

What actually happened? Was it money in, money out, a credit sale, a credit purchase, or an internal adjustment?
Is this the right voucher type? (F4 Contra, F5 Payment, F6 Receipt, F7 Journal, F8 Sales, F9 Purchase)
Are these the right ledgers? Have you selected the exact party, expense, or bank ledger?
Is the Debit and Credit correct? Do the sides follow core accounting rules?
Are the details complete? Check the voucher date, amount, bill-wise reference number, tax ledger, cost centre, and narration.

It is a small habit, but it catches 95% of bookkeeping errors before they ever reach your financial statements.

12. The Best Order to Learn Tally & Final Thoughts

If you are building your Tally basic knowledge from scratch or training a junior accountant, follow this exact sequence:

Accounting Rules → Groups → Ledgers → Debit & Credit → Voucher Types → Voucher Entry → Reports → Reconciliation

Shortcuts will come naturally with daily practice. Knowing that F5 opens a Payment voucher is useful; knowing why the expense is debited and the bank is credited is what makes you reliable at the job.

Learning how to create voucher in Tally is much easier once your Chart of Accounts is in good shape. Set up your accounting groups in Tally sensibly, complete ledger creation in Tally Prime under the correct parent group, use cost centres where you need branch or project detail, and double-check your opening balances before daily entries begin. TallyPrime records what you tell it to record — real accuracy comes from understanding the accounting behind each entry.

13. Frequently Asked Questions (FAQ)

How does Tally Prime organise your Chart of Accounts?

Tally Prime organises accounts using a four-level hierarchy: Group → Sub-group → Ledger → Voucher. Transactions are always posted to individual ledgers, and Tally automatically rolls the figures up into parent group totals on your Balance Sheet and Profit & Loss statement.

How do I create a ledger in Tally Prime?

Press Alt+G (Go To) and select Create Master > Ledger (or go to Gateway of Tally > Create > Ledger). Type the ledger name, select the appropriate parent group in the ‘Under’ field (such as Sundry Debtors, Indirect Expenses, or Bank Accounts), and press Ctrl+A to save.

What is the difference between a Ledger and a Cost Centre in Tally Prime?

If two expenses are different in nature (such as Rent vs. Salaries), create separate ledgers. If it is the same expense that you want to track across multiple branches, departments, projects, or employees, keep a single expense ledger and allocate amounts using Cost Centres (enabled via F11 Features).

What does ‘Ledger Creation (Secondary)’ mean in Tally Prime?

‘Ledger Creation (Secondary)’ is not a separate category of account. It is simply the title of the quick-create popup window that appears when you press Alt+C to create a missing ledger on the spot while entering a voucher.

What are the main voucher shortcut keys in Tally Prime?

The primary voucher shortcuts in Tally Prime are: F4 for Contra (cash-bank transfers), F5 for Payment, F6 for Receipt, F7 for Journal adjustments, F8 for Sales, F9 for Purchase, Alt+F6 for Credit Note, and Alt+F5 for Debit Note.

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Tally Prime Basics: Setting Up Groups, Ledgers and Vouchers the Right Way

📌 Key Takeaways: Getting Your Foundation Right

1. How Tally Organises Your Accounts