As the new financial year is round the corner, there are questions and doubts in minds of accountants as well as Tally users. As the new financial year approaches near activities start to increase in the business world. While Many think of moving ahead in new financial year, others think to shift from manual accounting to computerized accounting.
As a user of Tally software few thing which comes up in the mind and their possible solution would be discussed here.
First thing which comes in mind of a Tally users during this period is, “Should I create a new company in new financial year to continue accounting?“
This thought comes due to many reasons. One of them is that we think new financial year should start in new company as it would be easy to work in fresh new company. Old troubles with company data would be left behind and as the company created is new the entries would be faster in new company.
But this is totally a wrong approach unless and until you want a completely fresh start. This start would be in form of creation of new company or new entity etc. If you are just starting your accounts on computer, then this move is justified. Otherwise we should never create a new company in new financial year.
The solution is just change the financial year to the next one in Gateway of Tally screen by pressing Alt + F2.
The complete problem and the solution is discussed by me few years back in this link.
The second reason which comes in the mind of accountant to start separate accounting on new financial year is that they want to split the company in new year. The reasons may be that they think they should not carry the burden of last year problems to the new year.
This is also a wrong approach. You need not to split the company on First of April of every year. You can do it later when you have finished finalizing the balance sheet.
Till then what you need is just change the financial year from Gateway of Tally Screen by pressing Alt +F2
The process of splitting a company is here.
Third issue a Tally user faces is of Invoice numbering. As he moves to new financial year he may face duplicate invoice numbering issue. In every new year invoice numbering starts with 1 and in previous year too it was one. It would give error in Tally if you are using bill wise bill referencing. Since ref no is picked as invoice no. so every time when Invoice no 1 is created an auto ref no 1 is also created. Whenever same ref no is created Tally throw’s an error message as same ref no cannot be used. To avoid this problem you should use bill number prefixed by or suffixed.
