Simply adhering to the reserved groups may be sufficient for many organisations. For greater diversity, Tally allows you to create your own groups, either as sub-groups or primary groups. Groups can be sub-classified to practically an unlimited level, to give a virtual accounting tree. At the lowest level, of course, would be the ledger account. An example of sub-groups would help illustrate the power of this facility:
The group Indirect Expenses can be sub-classified as under (ledgers given in italics):
Remember, that during voucher entry, only the ledger accounts are used, - and the grouping structure remains transparent, irrespective of the use of sub-classification.
This idea can be easily extended to other areas like Sundry Debtors, Sales Accounts, Purchase Accounts, etc. For example, Debtors and Creditors are very useful when sub-grouped according to geographical areas:
You may prefer to classify creditors according to their tax status, e.g.,
You can see that, unlimited levels of sub-grouping, is a convenience to be used thoughtfully. Use it to give a never before depth to your presentation of accounting information but take care to not carry it too far. Too many levels of sub-groups may make their use redundant and their management unwieldy. A simple guideline could be to create branches of sub-groups or ledgers only if they are two or more than in number. A situation where you have created groups as follows should be avoided:
Obviously, you could have done with simply creating ledgers directly under Marketing Expenses.
| 1. | While it is necessary to assign every ledger to a group/sub group, it is not essential to have your own sub classification of accounts; you may simply use the reserved groups for grouping your ledger account |