Accounts Receivable and Payable management
In Tally, managing outstanding payments and receipts is crucial for any business. Tally provides several options to manage outstanding payments and receipts, such as New Ref, Against Ref, Advance Ref, and On Account. Here is a brief explanation of each of these options:
- New Ref:
New Ref is used when a new payment or receipt is received from a customer or supplier. For example, if a customer pays an outstanding invoice, the payment can be recorded as a new reference. When using New Ref, the outstanding amount is reduced by the amount of the new payment.
- Against Ref:
Against Ref is used when a payment or receipt is received against an existing invoice or bill. For example, if a customer pays an outstanding invoice partially, the payment can be recorded as Against Ref. When using Against Ref, the outstanding amount is reduced by the amount of the payment, and the balance amount remains outstanding.
- Advance Ref:
Advance Ref is used when a payment or receipt is received in advance for future invoices or bills. For example, if a customer pays in advance for future services, the payment can be recorded as Advance Ref. When using Advance Ref, the amount received is recorded as an advance and can be used to offset future invoices or bills.
- On Account:
On Account is used when a payment or receipt is received for which no specific invoice or bill exists. For example, if a customer makes a partial payment for services, and no specific invoice is raised, the payment can be recorded as On Account. When using On Account, the outstanding amount is reduced by the amount of the payment, and the balance amount remains outstanding until a specific invoice is raised.
Conclusion:
Tally provides several options to manage outstanding payments and receipts. By using the New Ref, Against Ref, Advance Ref, and On Account options, businesses can keep track of their outstanding payments and receipts, and ensure that their financial statements are accurate and up-to-date. By managing outstanding payments and receipts efficiently, businesses can improve their cash flow and maintain a healthy financial position.