How to create new financial year in TallyPrime 7.0

 

Six Steps to Create New Financial Year in Tally Prime 7.0

How to create new financial year in TallyPrime 7.0 is a crucial process for every business and accountant. A proper setup ensures accurate bookkeeping, smooth GST compliance, and error-free reporting throughout the year. Below are the six essential steps you should follow carefully while creating a new financial year.

 

Step 1: Take Data Backup

Before performing any major operation like splitting data or creating a new financial year, taking a backup is mandatory.

Data backup acts as a safety shield. In case anything goes wrong during the process, you can restore your data without any loss.

How to take backup:

• Open TallyPrime
• Go to Gateway of Tally
• Press Alt + Y (Data)
• Select Backup
• Choose the company
• Provide destination path (external drive or safe folder)
• Press Enter to proceed

Why it is important:

• Prevents data loss
• Helps in restoring previous records
• Essential before data split

Tip: Always store backup in an external drive or cloud for extra safety.

 

Step 2: Data Split

Data splitting is the most important step when entering a new financial year. It separates your old financial year data from the new one.

What happens in data split?

• Previous year data remains unchanged
• New financial year data is created automatically
• Opening balances are carried forward

How to split data:

• Go to Gateway of Tally
• Press Alt + Y (Data)
• Select Split
• Choose the company
• Enter split date (usually 1st April)
• Confirm the process

Important points:

• Ensure all entries are completed before splitting
• Avoid splitting if audit is pending

Tip: After splitting, Tally creates two companies—one for the old year and one for the new year.

 

Step 3: Select New Company

Once data is split, you need to work in the newly created financial year company.

How to select:

• Go to Gateway of Tally
• Press F1 (Select Company)
• Choose the company with the new financial year (e.g., 2026–27)

Why this step matters:

• Ensures you are working in the correct financial year
• Avoids posting entries in the wrong year
• Keeps records properly organized

Tip: Always verify the financial year displayed on the screen before passing any entry.

 

Step 4: Check Opening Balance

After creating the new financial year, verifying opening balances is very important.

What to check:

• Ledger balances
• Cash and bank balances
• Stock values
• Sundry debtors and creditors

How to check:

• Go to Display → Trial Balance
• Compare with previous year closing balances
• Verify group-wise and ledger-wise balances

Why it is important:

• Ensures accurate carry forward
• Helps detect errors during data split
• Maintains financial accuracy

Tip: If differences are found, re-check data split or correct entries before proceeding.

 

Step 5: Check GST Setting

GST settings must be reviewed at the beginning of every financial year to ensure compliance.

What to check:

• GSTIN number
• State and registration type
• Tax rates
• HSN/SAC codes
• GST applicability in ledgers

How to update GST settings:

• Go to F11 (Features)
• Select Statutory & Taxation
• Enable GST (if not already enabled)
• Update required details

Why it is important:

• Ensures correct GST return filing
• Avoids errors in GSTR-1 and GSTR-3B
• Maintains compliance with government rules

Tip: Also verify GST rates in stock items and ledgers to avoid wrong tax calculations.

 

Step 6: Set Voucher Numbering

Voucher numbering should be reset at the beginning of a new financial year for proper record keeping.

Types of voucher numbering:

• Automatic
• Manual
• Automatic (Manual Override)

How to set voucher numbering:

• Go to Gateway of Tally
• Select Voucher Type
• Choose voucher (e.g., Sales, Purchase)
• Press Alter
• Set numbering method
• Reset starting number (usually from 1)

Why it is important:

• Maintains proper sequence of transactions
• Helps in audit and tracking
• Avoids duplication errors

Tip: Use automatic numbering for better control and consistency.

Creating a new financial year in TallyPrime 7.0 is not just a technical process—it is the foundation of your entire year’s accounting system. By following these six steps—backup, data split, company selection, balance verification, GST setup, and voucher numbering—you can ensure a smooth and error-free transition.

For accountants, business owners, and professionals, a well-prepared financial year means:

• Accurate reports
• Hassle-free GST compliance
• Better financial control

If done correctly, it saves time, reduces errors, and keeps your business stress-free throughout the year.

Check YouTube Link: https://www.youtube.com/watch?v=pWk_ct4VKq4