interest calculation in tally

This is one of the most powerful features available in Tally. Tally automatically calculates interest based on the information furnished by the user at the time of creation of ledgers. The user can now view the impact of interest accumulated against each ledger and in turn against each transaction. Although Tally provides exhaustive information on interest implications, the interest amounts are not brought into books. The user now has the option to book the interest calculated as per his requirements. Interest is calculated on simple and compound basis and can be entered into books by passing debit notes for interest receivables and credit notes for interest payable.

Procedure :

-> Firstly activate interest calculation (including advanced parameters) for the company by pressing F11 (features). Then, activate the interest calculations option for each specific ledger for which interest has to be calculated. Also specify the % of interest along with the interest style. The user can specify different %'s for different periods.

-> Select Ledger from ‘Accounts Info' menu -> Alter -> select any ledger for which interest calculation has to be activated -> set interest calculation to yes -> now provide information regarding ‘rate of interest (%)' and style as per requirements. -> accept the same.

Tally automatically calculates interest for ledgers for which interest calculations is activated. To view report,

-> select Display -> Statement of Accounts -> Interest Calculations -> select Receivables / Payables or ledger wise.

In case the user opts to specify or change the Rate of interest at the time of entering the transaction, then he do so by activating the option ‘Override interest parameters' in Ledger creation mode.

**DM