How to Create an Invoice in Tally

November 09, 2015
Amanda Highbridge
bookkeeping, accountant, invoicing, freelancer, entrepreneur, laptop, invoice generator

Tally is a popular accounting software used by businesses of all sizes to manage their financial transactions. One of the essential features of Tally is its invoicing capability, which allows users to generate professional invoices for their clients. In this article, we will guide you through the process of creating an invoice in Tally, from understanding the basics to customizing your invoice and sending it to your clients.

Understanding the Basics of Tally

Before we begin creating an invoice in Tally, it is important to have a basic understanding of what Tally is and why it is widely used in the business world.

Tally is an accounting software that provides a comprehensive solution for managing financial transactions, inventory, and payroll. It is known for its simplicity and ease of use, making it an ideal choice for both small businesses and large enterprises.

With Tally, businesses can efficiently track and record their financial transactions, ensuring accurate and up-to-date financial statements. The software’s user-friendly interface allows even those without extensive accounting knowledge to navigate and utilize its features effectively.

In addition to its accounting capabilities, Tally also offers robust inventory management features. Businesses can easily track their inventory levels, monitor stock movement, and generate reports to make informed decisions about purchasing and sales.

Furthermore, Tally simplifies the payroll process by automating calculations and generating payslips. It ensures compliance with tax regulations and provides accurate salary calculations, saving businesses time and reducing the risk of errors.

What is Tally?

Tally is an accounting software that has gained widespread popularity due to its versatility and efficiency. It is designed to cater to the needs of various industries, including retail, manufacturing, services, and more.

One of the key features of Tally is its ability to handle multiple financial and inventory books simultaneously. This allows businesses with multiple branches or divisions to maintain separate books while still having consolidated financial statements.

Tally also offers powerful reporting capabilities, enabling businesses to generate various financial reports such as balance sheets, profit and loss statements, cash flow statements, and more. These reports provide valuable insights into the financial health of the business and aid in decision-making.

Another notable feature of Tally is its integration with other business applications. It seamlessly integrates with banking systems, tax filing portals, and other software, reducing manual data entry and improving overall efficiency.

Importance of Invoicing in Tally

Invoicing is a crucial aspect of any business as it serves as a formal request for payment from a customer. Tally’s invoicing feature enables businesses to generate accurate and professional invoices, helping them streamline their billing process and maintain healthy cash flow.

With Tally’s invoicing feature, businesses can easily create customized invoices with their company logo, contact information, and payment terms. The software automatically calculates taxes, discounts, and other charges, ensuring accurate and error-free invoices.

Moreover, Tally allows businesses to track the status of their invoices, whether they are pending, paid, or overdue. This helps in monitoring outstanding payments and following up with customers to ensure timely collection.

Additionally, Tally’s invoicing feature provides businesses with insights into their sales performance. It generates reports that show sales trends, customer-wise sales, and product-wise sales, enabling businesses to identify their best-selling products and focus on areas that need improvement.

By utilizing Tally’s invoicing feature, businesses can enhance their professionalism, improve their cash flow management, and maintain strong customer relationships.

Preparing to Create an Invoice in Tally

Before you can start creating an invoice in Tally, there are a few necessary details you need to gather and some initial setup you need to do.

Creating an invoice in Tally is a crucial step in managing your business finances. It allows you to document and track the goods or services you provide to your clients, ensuring smooth transactions and accurate record-keeping.

Now, let’s dive deeper into the necessary details and setup required to create an invoice in Tally.

Necessary Details for an Invoice

To create an invoice in Tally, you will need to have the following information at hand:

  1. Client’s name and contact information
  2. Description and quantity of goods or services provided
  3. Pricing details, including unit price and total amount
  4. Tax rates, if applicable
  5. Payment terms and conditions

Gathering these details beforehand will help you create an accurate and comprehensive invoice. It ensures that you have all the necessary information to provide a clear breakdown of the transaction to your client.

Additionally, having the client’s contact information readily available allows you to easily communicate any queries or clarifications regarding the invoice.

Setting Up Your Tally Account

If you haven’t already, you will need to set up your Tally account before you can start creating invoices. Setting up your account involves a few essential steps that ensure your Tally software is tailored to your business needs.

Here’s a step-by-step guide to setting up your Tally account:

  1. Download and install the latest version of Tally from the official website. This ensures that you have access to all the latest features and bug fixes.
  2. Launch Tally and enter your company details, such as name, address, and contact information. Providing accurate company information helps in maintaining transparency and professionalism in your invoices.
  3. Configure your accounting preferences, such as currency, taxation, and invoice format. Tally allows you to customize these settings according to your business requirements, ensuring that your invoices comply with the relevant regulations and standards.
  4. Create ledger accounts for your customers and suppliers. Ledger accounts help you keep track of the financial transactions with your clients and suppliers, making it easier to generate invoices and maintain accurate records.
  5. Set up tax rates and other financial parameters according to your business requirements. Tally provides a flexible system that allows you to define tax rates and other financial parameters specific to your industry and location. This ensures that your invoices accurately reflect the applicable taxes and comply with the relevant tax laws.

Once you have set up your Tally account, you are ready to start creating your first invoice. Tally’s user-friendly interface and comprehensive features make the invoice creation process efficient and hassle-free.

Remember, accurate and well-structured invoices not only facilitate smooth financial transactions but also contribute to maintaining a professional image for your business.

Step-by-Step Guide to Creating an Invoice

Now that you have a solid foundation in Tally and have set up your account, let’s dive into the step-by-step process of creating an invoice.

Creating an invoice is an essential task in any business. It allows you to bill your customers for the products or services you have provided, ensuring that you receive payment for your hard work. Tally, a popular accounting software, makes this process seamless and efficient.

Starting a New Invoice

To begin creating a new invoice in Tally, follow these steps:

  1. Open Tally and select the company for which you want to create an invoice.
  2. Go to the “Accounting Vouchers” menu and select the “Sales” or “Sales Invoice” option.
  3. Fill in the necessary details, such as the invoice number, invoice date, and customer details.

Starting a new invoice sets the foundation for the billing process. It ensures that all the essential information is captured accurately, enabling smooth transactions and record-keeping.

Once you have entered the initial details, you can proceed to add items to your invoice.

Adding Items to Your Invoice

When adding items to your invoice, make sure to include the following information:

  • Item description: Clearly describe the product or service being billed.
  • Quantity: Specify the quantity of each item being billed.
  • Rate: Indicate the rate or price per unit of the item.
  • Discount, if applicable: If you are offering any discounts to your customers, mention the discount amount or percentage.
  • Tax, if applicable: If your sales are subject to taxes, specify the tax amount or percentage.

By providing detailed information for each item, you can ensure accurate billing and avoid misunderstandings with your customers. Clear item descriptions, along with the quantity and rate, help your customers understand what they are being charged for. Additionally, discounts and taxes need to be clearly stated to avoid any confusion or disputes.

Applying Taxes and Discounts

If your sales are subject to taxes or if you want to offer discounts to your customers, Tally allows you to easily apply them to your invoice. To apply taxes or discounts, follow these steps:

  1. In the invoice screen, navigate to the tax or discount column for the respective item.
  2. Select the appropriate tax or discount ledger account.
  3. Enter the tax rate or discount percentage.

Tally will automatically calculate the tax amount or discount based on the provided information. This automation saves you time and reduces the chances of manual errors. It ensures that your invoices are accurate and comply with the applicable tax regulations.

Creating an invoice in Tally is a straightforward process that streamlines your billing operations. By following the step-by-step guide and providing detailed information for each item, you can create professional invoices that facilitate smooth transactions and maintain a healthy relationship with your customers.

Customizing Your Invoice in Tally

Now that you have learned how to create a basic invoice in Tally, let’s explore ways to customize your invoice to match your brand identity.

Adding Your Company Logo

Adding your company logo to your invoice can help create a professional and personalized impression on your clients. To add your company logo, follow these steps:

  1. Save your company logo as an image file (e.g., PNG, JPEG).
  2. In Tally, go to “Company Info” and select “Alter” option.
  3. Navigate to the “Logo” section and browse for the file containing your company logo.
  4. Save the changes, and your company logo will now appear on all printed and digital invoices.

Choosing an Invoice Template

Tally offers a range of pre-designed invoice templates that you can choose from to give your invoice a unique look. To select an invoice template, follow these steps:

  1. In Tally, go to “Accounts Info” and select “Voucher Types.”
  2. Select the invoice type you want to modify/apply the template to.
  3. Edit the voucher type and navigate to the “Printing” section.
  4. Choose the desired template from the available options or create a custom template using Tally’s built-in editor.
  5. Save the changes, and your selected template will be applied to all new invoices.

Customizing your invoice template can help you showcase your brand identity and provide a professional touch to your invoices.

Finalizing and Sending Your Invoice

Once you have created and customized your invoice in Tally, it’s time to review, save, and send it to your client.

Reviewing Your Invoice

Before finalizing your invoice, it is crucial to review it for any errors or omissions. Double-check the invoice details, such as item quantities, pricing, and total amounts, to ensure accuracy.

Saving and Printing Your Invoice

After reviewing your invoice, save it in Tally by selecting the “Save” option. Tally will automatically assign a reference number to your invoice for easy tracking and referencing.

If you need a physical copy of the invoice, you can print it directly from Tally using a printer connected to your computer. Go to the “Display” menu and select the “Vouchers” option to view the saved invoices. Select the desired invoice and click on the “Print” button to generate a printed copy.

Emailing the Invoice to the Client

In addition to printing, you can also email the invoice directly to your client from within Tally. To email an invoice, follow these steps:

  1. In the “Display” menu, select the “Vouchers” option to view the saved invoices.
  2. Select the invoice you want to email and click on the “Email” button.
  3. Enter the recipient’s email address and any additional message you want to include.
  4. Click on the “Send” button, and Tally will send the invoice as an email attachment.

Emailing your invoices not only saves time but also provides a convenient and paperless solution for your clients.


Invoicing is an essential task for any business, and Tally makes it easy and efficient with its invoicing feature. By understanding the basics of Tally, preparing the necessary details, and following the step-by-step guide provided in this article, you can create professional invoices, customize them to match your brand identity, and effortlessly send them to your clients. Embrace Tally’s invoicing capabilities and streamline your billing process today.

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