Opening Balances — Starting a New Company in Tally
Entering all opening balances for Sunrise Retail including stock, party, and financial ledgers
Module 22 of 31 — Tally Prime. Enter Sunrise Retail's complete opening Balance Sheet as on 01-Apr-2025 and verify the Trial Balance difference is zero. Duration: 50 min.
Learning Objectives
- Enter financial ledger opening balances (Dr/Cr) in the ledger master
- Enter opening stock for each stock item
- Enter bill-wise opening balances for debtors and creditors
- Verify the Trial Balance difference is exactly ₹0
Prerequisites: Ledger Creation — tally-05
When Are Opening Balances Needed?
Opening balances are required in two situations:
- New company starting fresh — capital, bank, and any pre-existing loans/liabilities
- Migrating from another system — all ledger balances from the old software brought in
Sunrise Retail Pvt Ltd starts operations on 1 April 2025. The directors and accountant have agreed the following opening Balance Sheet.
Sunrise Retail — Opening Balance Sheet (01-Apr-2025)
| Ledger | Tally Group | Dr/Cr | Amount |
|---|---|---|---|
| Cash-in-Hand | Cash-in-Hand | Dr | ₹50,000 |
| SBI Current Account | Bank Accounts | Dr | ₹8,00,000 |
| Closing Stock (Opening) | Stock-in-Hand | Dr | ₹6,00,000 |
| Furniture & Fixtures | Fixed Assets | Dr | ₹1,50,000 |
| Computer & Equipment | Fixed Assets | Dr | ₹80,000 |
| Security Deposit – Office | Loans & Advances (Assets) | Dr | ₹2,00,000 |
| TechWorld Distributors Pvt Ltd | Sundry Creditors | Cr | ₹1,80,000 |
| Kiran Sharma's Capital | Capital Account | Cr | ₹17,00,000 |
Verification:
Opening stock note: The ₹6,00,000 stock comprises 50 mobile phones @ ₹12,000 each sourced from the previous financial year. This is entered as an opening balance in the "Closing Stock" ledger under the Stock-in-Hand group.
Entering Opening Balances — Method 1: In Ledger Master
Repeat for every ledger in the table above.
Example — Cash-in-Hand:
Example — Kiran Sharma's Capital:
Entering Opening Stock
The opening stock (50 mobile phones) is linked to the "Closing Stock" ledger for Balance Sheet, but the physical stock is entered in the Stock Item master:
Alternatively, use Physical Stock Voucher:
Entering Bill-Wise Opening Balance for Creditor
TechWorld Distributors has an outstanding of ₹1,80,000 from FY 2024-25. For the outstanding reports to show the original invoice reference:
This way, Reports → Outstandings → Payables shows "TW-2024-1089 — ₹1,80,000 — due by Apr 14, 2025" rather than a faceless opening balance.
Checking the Difference in Opening Balances
After all balances are entered, verify:
If this line appears, debits ≠ credits somewhere. Common causes:
| Cause | Fix |
|---|---|
| Wrong Dr/Cr side entered | Alter ledger → flip the Dr/Cr |
| A ledger balance missed | Find which side is short and enter the missing ledger |
| Decimal error | Check amounts digit by digit |
| Stock value mismatch | Verify Stock Item opening balance ties to "Closing Stock" ledger |
The Balance Sheet must show Difference: ₹0 before entering any transactions.
Practice Exercise
Exercise: A firm migrating from ERP 9 to Tally Prime has these balances — verify if they balance: Debtors ₹8,50,000 | Creditors ₹3,20,000 | Cash ₹1,50,000 | Bank ₹12,00,000 | Capital ₹14,00,000 | Fixed Assets ₹5,00,000 | Outstanding Expenses ₹80,000
Show Solution
| Ledger | Dr | Cr |
|---|---|---|
| Sundry Debtors | ₹8,50,000 | |
| Cash | ₹1,50,000 | |
| Bank | ₹12,00,000 | |
| Fixed Assets | ₹5,00,000 | |
| Capital | ₹14,00,000 | |
| Sundry Creditors | ₹3,20,000 | |
| Outstanding Expenses | ₹80,000 | |
| Totals | ₹27,00,000 | ₹18,00,000 |
Difference: ₹9,00,000 — does not balance!
Investigation: the ₹9,00,000 shortfall on the credit side suggests a missing liability or additional capital. Check whether a bank loan or another capital contribution was omitted.
Key Terms
| Term | Meaning |
|---|---|
| Opening Balance | Balance a ledger carries at company start or migrated from previous system |
| Difference in Opening Balances | Tally indicator that Dr ≠ Cr — must be resolved before transactions begin |
| Physical Stock Voucher (Alt+F10) | Voucher to enter physical stock count as opening inventory |
| Migration | Moving data from old software to Tally — all opening balances must be re-entered |
| Bill-Wise Opening | Entering individual invoice references for debtors/creditors within the opening balance |
Module Summary
- Opening balances entered in ledger master: Alter → Opening Balance → Dr or Cr
- Sunrise Retail 01-Apr-2025 opening BS: Total Assets = Total Liabilities = ₹18,80,000
- Assets: Cash ₹50k, SBI Bank ₹8L, Stock ₹6L, Furniture ₹1.5L, Computer ₹80k, Deposit ₹2L
- Liabilities: TechWorld Creditor ₹1.8L (with bill ref TW-2024-1089), Capital ₹17L
- Verify:
Gateway → Reports → Balance Sheet— "Difference in Opening Balances" must not appear
Quick Quiz
1. After entering all opening balances for Sunrise Retail, the Balance Sheet shows "Difference: ₹0." This means:
- a) The company has no assets
- b) All debits equal all credits — balances are correctly entered
- c) The company has no profit yet
- d) Tally has automatically reconciled an error
Answer
b) All debits equal all credits — the fundamental accounting equation (Assets = Liabilities + Capital) is satisfied. The company can begin entering transactions.
2. TechWorld Distributors' outstanding of ₹1,80,000 is entered as:
- a) Debit — it is money we will pay
- b) Credit — it is a liability (creditor balance)
- c) Debit — it reduces our bank balance
- d) It does not need a Dr/Cr assignment
Answer
b) Credit — a creditor balance is a liability. The company owes money to TechWorld, so TechWorld's ledger has a credit (Cr) balance. When we pay, we debit TechWorld and credit the bank.