Top 30 Tally Interview Questions and Answers (2026)
Mia Young
Preparing for a Tally interview? It is time to understand what makes candidates stand out. Knowing the right Tally interview questions helps reveal analytical skills, accounting accuracy, and software proficiency.
Tally offers diverse opportunities across finance, accounting, and business management domains. Professionals with strong technical experience, domain expertise, and root-level experience in Tally gain an edge. Whether you are a fresher or experienced, analyzing skills, practical knowledge, and understanding top questions and answers can help crack interviews and impress seniors or managers.
Based on feedback from over 75 accounting professionals, team leaders, and hiring managers, these curated insights reflect real-world practices and highlight the most relevant areas evaluated across technical and professional interviews.
Top Tally Interview Questions and Answers
1) What is Tally and why is it widely used in accounting?
Tally is a comprehensive accounting and enterprise resource planning (ERP) software developed by Tally Solutions Pvt. Ltd. It automates financial accounting, inventory management, payroll processing, taxation, and reporting functions. Businesses prefer Tally because it integrates multiple financial operations into a single interface, reducing manual effort and data redundancy.
One of Tally’s main benefits is its support for GST compliance, multi-currency transactions, and real-time financial reporting. Additionally, its scalability makes it suitable for both small enterprises and large corporations. For instance, a retail business can use Tally for daily invoicing and stock tracking, while a manufacturing unit can use it for cost center analysis.
👉 Free PDF Download: Tally Interview Questions & Answers
2) Explain the different versions of Tally and their key features.
Tally has evolved through multiple versions to meet modern business needs. The major versions and their highlights are as follows:
| Version | Key Features | Example Use |
|---|---|---|
| Tally 7.2 | Basic accounting and VAT features | Small retailers |
| Tally 9 | Payroll and multilingual support | SMEs |
| Tally ERP 9 | GST integration, remote access, and multi-user support | Large organizations |
| Tally Prime | Simplified navigation, search-enabled interface, and real-time reports | Accountants and auditors |
Example: A logistics firm may upgrade from Tally ERP 9 to Tally Prime for better dashboard insights and faster GST reconciliation.
3) What is the difference between Tally ERP 9 and Tally Prime?
Tally Prime is an enhanced version of Tally ERP 9 designed with improved usability and accessibility.
Below is a structured comparison:
| Feature | Tally ERP 9 | Tally Prime |
|---|---|---|
| Interface | Menu-driven | Search-driven (“Go To” feature) |
| Navigation | Complex | Simplified |
| Data Access | Limited remote capability | Secure browser access |
| Reporting | Manual filters | Dynamic and customizable filters |
| Multi-tasking | Restricted | Allows switching between tasks easily |
Example: In Tally ERP 9, users had to exit one report to open another. In Tally Prime, accountants can toggle between ledgers and balance sheets seamlessly, improving workflow efficiency.
4) How does Tally handle GST compliance?
Tally provides an integrated GST module that simplifies the process of managing returns and invoices. It allows users to configure GST details, generate tax invoices automatically, and reconcile GSTR-1 and GSTR-3B reports. The software auto-calculates CGST, SGST, and IGST based on transaction type and location.
For example, if a company in Maharashtra sells goods to a customer in Delhi, Tally automatically applies IGST instead of SGST and CGST. The GST return dashboard offers insights into pending and filed returns, helping businesses remain compliant without manual reconciliation.
5) What are the main components of Tally?
Tally comprises several interconnected modules that cover all aspects of accounting and management. The core components are:
- Accounting Module: Manages ledgers, vouchers, and journal entries.
- Inventory Module: Tracks stock levels, godowns, and stock valuation.
- Payroll Module: Automates salary computation, PF, and ESI.
- Taxation Module: Handles GST, TDS, TCS, and VAT compliance.
- Cost Centre Management: Allocates expenses to specific projects or departments.
Example: A manufacturing firm can use the cost centre module to track raw material consumption per department while maintaining separate ledgers for salary disbursement.
6) What are the advantages and disadvantages of using Tally?
| Advantages | Disadvantages |
|---|---|
| User-friendly interface | Limited customization for complex needs |
| Real-time reporting and GST readiness | Requires periodic updates |
| Multi-user and multi-currency support | Needs trained personnel |
| Affordable for SMEs | Integration with third-party tools is restricted |
Example: While Tally simplifies daily accounting, companies needing advanced BI (Business Intelligence) integration might require additional software.
7) How is data secured in Tally?
Tally ensures data security through encryption, password protection, and user-level access controls. Administrators can restrict access to sensitive ledgers or reports based on employee roles. The TallyVault feature uses 128-bit encryption to protect company data files from unauthorized access.
Additionally, Tally supports data backup and restore functionalities. For instance, an accountant can schedule daily auto-backups to prevent data loss during power failures. These features collectively enhance confidentiality, integrity, and availability, the core pillars of data security.
8) What is a ledger in Tally and how is it created?
A ledger in Tally represents an account head where all related transactions are recorded. Every financial entry requires at least two ledgers—one debit and one credit—following the double-entry principle.
Steps to create a ledger:
- Go to Gateway of Tally → Accounts Info → Ledgers → Create.
- Enter the ledger name (e.g., Sales, Purchases, Rent).
- Select the appropriate Group (e.g., Sales under Income).
- Save the ledger.
Example: When recording a rent payment, the “Rent Expense” ledger is debited, and “Cash” is credited.
9) Explain the concept of vouchers and their types in Tally.
Vouchers in Tally are documents that record business transactions. They form the backbone of Tally’s accounting system. The main voucher types include:
| Voucher Type | Purpose | Example |
|---|---|---|
| Contra Voucher | Records fund transfers between cash and bank | Cash deposit in bank |
| Payment Voucher | Records outgoing payments | Salary paid |
| Receipt Voucher | Records incoming funds | Customer payment |
| Journal Voucher | Adjusts entries like depreciation | Depreciation on machinery |
| Sales & Purchase Vouchers | Record sales and purchases | Product sale to customer |
Each voucher type ensures accurate entry classification, enabling precise financial reporting.
10) What are cost centres and cost categories in Tally?
Cost centres and cost categories help in detailed cost analysis and performance tracking.
- Cost Centre: Represents a specific department, project, or employee where costs are incurred.
- Cost Category: Groups multiple cost centres for higher-level analysis.
Example: A construction company can define cost centres such as “Site A” and “Site B” under the cost category “Projects.”
Tally enables allocation of each expense or income to a particular cost centre, assisting management in comparing profitability across different projects or teams.
11) What is the process of reconciling bank statements in Tally?
Bank reconciliation in Tally ensures that the company’s cash book matches the bank statement. It helps identify differences due to unpresented cheques, bank charges, or interest entries.
Steps to reconcile:
- Go to Banking → Reconciliation.
- Select the bank ledger.
- Enter the statement date and match each transaction with the bank statement.
- Mark the reconciled entries with the correct transaction date.
Example: If a cheque issued on 25th March is cleared on 30th March, the difference will appear in Tally until reconciliation is done.
The benefit is that reconciled statements help detect errors or unauthorized withdrawals early.
12) Explain the difference between accounting vouchers and inventory vouchers.
Accounting vouchers record financial transactions, while inventory vouchers track the movement of goods and materials. Both play crucial roles in accurate business reporting.
| Criteria | Accounting Voucher | Inventory Voucher |
|---|---|---|
| Purpose | Records monetary transactions | Tracks stock movement |
| Examples | Payment, Receipt, Journal | Delivery Note, Stock Journal |
| Affects Books | Yes, impacts ledgers | No, affects stock only |
| Example Use Case | Recording rent payment | Recording stock transfer |
Example: When goods are sold, a Sales Voucher records the transaction monetarily, and a Delivery Note updates inventory. Using both ensures that accounting and stock systems remain synchronized.
13) How does Tally handle TDS (Tax Deducted at Source)?
Tally simplifies TDS management through automated calculation and reporting features. The user can activate TDS by enabling the feature under Statutory Features. Once set up, Tally automatically deducts TDS when applicable and records it under the appropriate ledgers.
It supports generation of Form 26Q, Form 16A, and Form 27Q reports directly. For instance, if a company pays ₹50,000 as professional fees with 10% TDS, Tally automatically deducts ₹5,000 and credits ₹45,000 to the vendor.
This automation ensures timely TDS deposit and return filing, reducing the risk of non-compliance penalties.
14) What is the difference between Single Entry and Double Entry accounting in Tally?
Tally primarily follows the double-entry system, though it allows a simplified single-entry view for non-technical users.
| Feature | Single Entry | Double Entry |
|---|---|---|
| Basis | Cash transactions only | Debit and credit concept |
| Accuracy | Less accurate | Highly reliable |
| Reports | Limited | Comprehensive (Balance Sheet, P&L) |
| Use Case | Small businesses | All organizations |
Example: In double-entry, purchasing goods worth ₹10,000 on credit debits “Purchases” and credits “Creditors.”
Single-entry does not record both sides, making it unsuitable for complex accounts. Therefore, Tally’s double-entry system ensures transparency and accuracy.
15) How do you generate financial statements in Tally?
Tally automatically generates key financial reports such as the Balance Sheet, Profit & Loss Account, and Trial Balance.
Steps:
- Go to Gateway of Tally → Display → Financial Statements.
- Select the required report.
- Apply filters for a specific date range or cost centre.
For example, selecting Profit & Loss Account displays total income, direct expenses, and net profit instantly.
These reports can be exported in PDF or Excel for audit or presentation purposes. Tally’s automatic summarization ensures real-time accuracy and helps management make timely financial decisions.
16) What is a cost tracking feature and how is it used in Tally?
The cost tracking feature links specific expenses or incomes to particular jobs or activities. This helps measure project profitability and budget utilization.
Example:
If a company executes two marketing campaigns — “Online Ads” and “Print Media” — cost tracking enables comparison of both. Expenses like graphic design and ad spend can be assigned separately.
Benefits:
- Identifies unprofitable projects
- Improves budget allocation
- Enhances management decision-making
Thus, Tally’s cost tracking ensures transparency in resource utilization and assists in cost-based performance evaluation.
17) How can you manage payroll in Tally?
Tally’s Payroll module automates employee salary computation, statutory deductions, and payslip generation.
Steps:
- Enable Payroll under Features (F11).
- Define employee groups, attendance types, and pay heads (Basic, HRA, etc.).
- Process monthly payroll and generate payslips.
Tally also handles PF, ESI, and Professional Tax calculations.
Example: When processing payroll for 10 employees, Tally auto-calculates salary components based on attendance and tax rules.
This integration eliminates manual errors and ensures statutory compliance in employee compensation.
18) How do you create and use a stock item in Tally?
Stock items represent individual goods in inventory. Each item is created with its name, unit, and valuation method.
Steps:
- Go to Inventory Info → Stock Items → Create.
- Define item name, stock group, and unit of measure.
- Enter opening balance (if any).
Example: A wholesaler can create stock items like “Laptop Dell XPS” and “HP Pavilion” under the “Computers” group.
During sales, these stock items update automatically, allowing real-time stock tracking and valuation accuracy.
19) What are the types of groups in Tally and why are they important?
Groups in Tally classify ledgers under predefined accounting heads to ensure systematic reporting.
Types of Groups:
- Primary Groups: Predefined by Tally (Assets, Liabilities, Income, Expenses).
- Sub-Groups: Created under primary groups for detailed classification.
Example:
Under “Sundry Debtors,” individual customer ledgers can be created.
This hierarchy ensures clarity in financial statements and allows customized reporting by department or expense type, making Tally’s reporting framework highly organized.
20) How can errors in Tally be identified and rectified?
Tally includes multiple built-in validation and diagnostic tools to detect errors such as mismatch entries, incorrect ledgers, or unbalanced transactions.
Common error correction steps:
- Use Verify Company Data to check for corrupt entries.
- Run Repair utility if files are damaged.
- Open Day Book to filter incomplete vouchers.
Example: If debit and credit totals do not match, Tally displays an “unbalanced entry” error, prompting the user to fix it.
Thus, Tally’s built-in validation ensures accounting accuracy and data reliability.
21) How does Tally manage multi-currency transactions?
Tally simplifies global business operations through its multi-currency accounting feature. Users can define multiple currencies and assign conversion rates, enabling transactions in foreign denominations.
Example: A company in India receiving USD payments can maintain ledgers in INR while issuing invoices in USD.
Tally automatically applies exchange rates for conversion and records the gain or loss due to currency fluctuations in a separate ledger.
Steps:
- Enable multi-currency under Features (F11).
- Define currencies with symbols and conversion rates.
- Use foreign currency during voucher entry.
This ensures accurate financial reporting for international trade.
22) What is the role of Audit and Compliance features in Tally?
Tally’s Audit and Compliance module provides real-time tools for accountants and auditors to review data integrity.
Key functions include:
- Audit Trail: Tracks every modification in vouchers or ledgers.
- Statutory Audit Reports: Summarize deviations or pending entries.
- User Activity Logs: Record who made what changes and when.
Example: An auditor can filter all modified vouchers within a date range to verify unauthorized alterations.
This feature enhances accountability, compliance, and transparency—essential for GST audits and financial due diligence.
23) What is data synchronization in Tally and how is it performed?
Data synchronization allows multiple Tally installations (head office, branches, or remote users) to exchange accounting data. It ensures that all entities maintain consistent financial records.
Types of synchronization:
- Online (via Tally.NET) – Real-time data sync.
- Offline (via file transfer) – Manual sync using backup files.
Steps:
- Enable synchronization under Gateway of Tally → F3 → Data Synchronization.
- Define server and client roles.
- Perform sync to exchange transactions.
Example: A retail chain can synchronize daily sales data from multiple branches to the head office automatically.
24) How can remote access be used in Tally Prime?
Tally Prime provides secure remote access through Tally.NET services, enabling users to access company data from any location.
Steps:
- Create a Tally.NET user ID.
- Enable remote access for the company.
- Login using credentials from another Tally installation.
Example: An auditor working remotely can verify client books without being physically present.
The data remains encrypted and accessible only through authenticated user credentials, ensuring both convenience and confidentiality.
25) How does Tally integrate with the GST portal for compliance?
Tally simplifies GST return filing by allowing seamless export and reconciliation of GST data. It automatically generates GSTR-1, GSTR-3B, and GSTR-9 reports, which can be directly uploaded to the GST portal.
Process:
- Verify transaction details.
- Export JSON files using Tally’s GST module.
- Upload on the GST portal for filing.
Example: After entering all sales invoices, Tally auto-generates a GSTR-1 summary, which can be matched with the GSTN data.
This ensures error-free and timely GST filing.
26) What is the use of TallyVault and how is it different from a regular password?
TallyVault offers an additional layer of security by encrypting company data using a 128-bit encryption algorithm. Unlike a normal password, which restricts access, TallyVault encrypts the data file itself, making it unreadable without the correct vault password.
| Security Type | Function | Visibility |
|---|---|---|
| User Password | Restricts login access | File visible |
| TallyVault Password | Encrypts company data | File hidden/encrypted |
Example: Even if someone copies the Tally data folder, it remains inaccessible without the TallyVault key. This makes TallyVault an essential tool for financial data confidentiality.
27) How are job costing and job work management handled in Tally?
Tally’s Job Costing module helps track project-related expenses and revenues. It links resources, materials, and time spent on specific jobs.
Steps:
- Enable job costing in Features (F11).
- Create cost centres for each job.
- Record expenses and allocate them accordingly.
Example: A manufacturing unit can track raw materials, labour, and overheads for each batch produced.
This helps determine project profitability and enables efficient cost control and estimation for future projects.
28) What is ODBC in Tally and how is it useful?
ODBC (Open Database Connectivity) in Tally allows external applications like Excel or SQL to access Tally data dynamically.
Benefits:
- Real-time data import/export.
- Custom reporting and analytics.
- Integration with BI tools.
Example: A finance manager can fetch live Tally data into Excel using =SQL.REQUEST() for customized MIS reporting.
This feature provides flexibility for organizations that require advanced analysis beyond Tally’s built-in reports.
29) How does Tally handle stock valuation and what are its different methods?
Stock valuation in Tally determines the monetary value of inventory for accurate profit reporting. Tally supports multiple valuation methods as per accounting standards.
| Method | Description | Use Case |
|---|---|---|
| FIFO (First In First Out) | Oldest stock issued first | Perishable goods |
| LIFO (Last In First Out) | Latest stock issued first | Commodity trading |
| Weighted Average | Average cost method | Manufacturing units |
| Standard Cost | Fixed rate valuation | Budgeting purposes |
Example: A manufacturer using weighted average ensures smoother cost fluctuations during volatile market prices.
30) What are the common reasons for data corruption in Tally and how can it be prevented?
Data corruption in Tally usually occurs due to abrupt system shutdowns, virus attacks, or hardware failures.
Preventive measures:
- Regular Backups: Schedule automatic daily backups.
- Use Reliable Hardware: SSDs and UPS systems reduce risk.
- TallyVault Encryption: Prevents unauthorized data modification.
- Avoid Concurrent Edits: Limit simultaneous access on the same data file.
Example: A company maintaining cloud backups can quickly restore data in case of corruption, ensuring business continuity.
Tally’s built-in Repair Utility can also recover minor data inconsistencies.
🔍 Top Tally Interview Questions with Real-World Scenarios & Strategic Responses
1) What are the key features of Tally ERP 9 that make it popular among accountants and businesses?
Expected from candidate: The interviewer wants to assess your understanding of Tally’s core functionalities and business relevance.
Example answer: “Tally ERP 9 offers comprehensive accounting, inventory management, payroll, and GST compliance features. Its automation capabilities, ease of data entry, and real-time financial reporting make it a preferred choice for businesses. Additionally, Tally’s remote access and data synchronization features enhance collaboration and efficiency across multiple branches.”
2) How do you create and manage ledgers in Tally?
Expected from candidate: The interviewer wants to evaluate your practical knowledge of basic Tally operations.
Example answer: “In Tally, ledgers are created under the ‘Accounts Info’ section by selecting ‘Ledgers’ and then ‘Create.’ I ensure each ledger is correctly grouped under its respective head such as Assets, Liabilities, Income, or Expenses. Proper classification ensures accurate financial statements and smooth reporting.”
3) Can you explain how GST is handled in Tally ERP 9?
Expected from candidate: The interviewer wants to know your familiarity with taxation processes in Tally.
Example answer: “Tally ERP 9 allows users to configure GST by enabling the ‘Statutory & Taxation’ feature. Once activated, GST details like registration number, tax rates, and HSN codes are set up. The system automatically calculates GST during transactions and generates accurate tax reports and returns such as GSTR-1 and GSTR-3B.”
4) Describe a situation where you had to troubleshoot an error or data corruption issue in Tally.
Expected from candidate: The interviewer wants to evaluate your problem-solving and troubleshooting abilities.
Example answer: “At my previous job, the Tally data file became corrupted due to a power failure. I restored the data from a backup and then used the Tally repair utility to rebuild the company data. To prevent future issues, I implemented a regular automated backup schedule and trained the team to follow safe data-handling practices.”
5) How do you manage inventory in Tally ERP 9?
Expected from candidate: The interviewer wants to test your understanding of stock and inventory management.
Example answer: “Tally ERP 9 allows inventory management through stock groups, stock items, and units of measurement. I create stock categories to classify items, define opening balances, and regularly update stock vouchers. This ensures real-time tracking of stock levels, valuation, and movement across locations.”
6) How would you handle discrepancies between Tally reports and physical records?
Expected from candidate: The interviewer is testing your analytical thinking and reconciliation skills.
Example answer: “In my last role, when discrepancies occurred between physical stock and Tally reports, I performed a detailed reconciliation by comparing stock registers, purchase records, and sales vouchers. After identifying mismatched entries, I made necessary journal or adjustment vouchers and verified reports to ensure alignment with actual records.”
7) How do you secure financial data in Tally?
Expected from candidate: The interviewer wants to gauge your awareness of data protection and security measures.
Example answer: “I use Tally’s built-in security controls such as user-level access permissions and password protection. Data encryption and regular backups are also key practices I follow. I ensure that only authorized users have access to sensitive financial information to maintain data integrity and confidentiality.”
8) Can you explain how to generate and interpret financial statements in Tally?
Expected from candidate: The interviewer wants to assess your reporting and analytical abilities.
Example answer: “Tally automatically generates financial reports like the Balance Sheet, Profit and Loss Account, and Cash Flow Statement. I use these reports to analyze business performance, identify expense trends, and assist management in decision-making. I also customize reports based on time periods or cost centers when needed.”
9) Tell me about a time you trained others to use Tally effectively.
Expected from candidate: The interviewer wants to evaluate your communication and leadership skills.
Example answer: “In my previous role, I was responsible for training a new team of junior accountants on Tally operations. I developed hands-on training sessions covering ledger creation, voucher entry, and GST compliance. As a result, the team became proficient in Tally within two weeks, reducing entry errors and improving workflow efficiency.”
10) How do you stay updated with new features and updates in Tally?
Expected from candidate: The interviewer wants to see your commitment to continuous learning and professional development.
Example answer: “I stay updated by following Tally’s official blog and newsletters. I also participate in online Tally forums, webinars, and training programs that discuss software updates and practical tips. These resources help me adapt quickly to new functionalities and improve operational accuracy.”
