Maintaining Cash and Bank Books in Tally ERP.9

Most college accounting exercises start with a blank ledger page and a pile of vouchers you have to sort by hand. Real businesses don’t work that way anymore. The moment a cash sale or a bank transfer is entered as a voucher in Tally ERP.9, the software quietly builds the cash book and bank book behind the scenes, balances them, and keeps them ready for you to view at any time. Understanding how this automation works is just as important as knowing the manual format, because it’s what you’ll actually use once you step into a finance role. This post walks through how Tally ERP.9 maintains cash and bank books, how to read the reports it generates, and why the underlying accounting logic still matters even when a machine is doing the posting.

What a cash book and bank book actually record 🔗

A cash book is the record of every transaction that increases or decreases the cash balance of a business, while a bank book records every transaction that moves money into or out of a bank account. In manual accounting, both function as a book of original entry and a ledger account at the same time, which is why accountants often call the cash book a hybrid record rather than a plain subsidiary book, as explained in this overview of cash book formats. Cash receipts and bank deposits go on the debit side, while cash payments and bank withdrawals go on the credit side, and the running balance after each entry tells you exactly how much cash or bank balance the business is holding at that point.

Why manual cash books still matter conceptually 🔗

Even though Tally automates the posting, the accounting logic hasn’t changed. A cash book still has to follow the debit-credit rule, contra entries still need to be identified, and the closing balance still has to tie out with the actual cash in hand or the bank statement. If you don’t understand the manual version, the software output will look like a black box. It’s also worth knowing that maintaining a cash book isn’t just an academic exercise. Under the Income Tax Rules, professionals and businesses that cross specified income thresholds are legally required to maintain a cash book that records daily receipts and payments, which is one of the few subsidiary books explicitly named in India’s tax compliance framework. So the report you’re about to learn to read in Tally isn’t just for exam purposes; it’s a statutory record.

How Tally ERP.9 builds these books for you 🔗

In Tally ERP.9, every ledger account is grouped under a parent group, and cash and bank ledgers sit under the Cash-in-hand and Bank Accounts groups respectively. The moment you enter a voucher, such as a receipt, payment, sales, or purchase voucher, that affects one of these ledgers, Tally automatically posts the entry to both the relevant ledger and the corresponding cash or bank book. You don’t create a separate cash book file; the software brings together all transactions from that category into one report whenever you ask for it, as described in Tally’s own documentation on account books. All transactions that involve a bank, including deposits, withdrawals, and cheque clearances, similarly flow into the Bank Book reports.

Contra entries and how they’re handled 🔗

Contra entries, where money moves from cash to bank or vice versa, are a natural fit for this system because a single voucher entry updates both ledgers at once. This is precisely the situation where automation saves time compared to manual bookkeeping, since you’d otherwise have to post the same transaction on both sides of two separate books by hand.

Viewing the cash and bank book in Tally ERP.9 🔗

To see these reports, the path is straightforward: go to Gateway of Tally, then Display, then Account Books, and select Cash/Bank Book(s). This opens a summary screen that lists cash and bank ledgers with their monthly figures, and you can move the highlight bar over any month to press Enter and drill into the detailed voucher list for that period, a workflow confirmed in Tally’s official guide to displaying the cash book. If you need to compare figures across a different range of months, pressing Alt+F2 lets you change the reporting period without leaving the screen.

Reading the monthly ledger summary 🔗

The Cash/Bank Summary screen shown after following this path typically looks like a simple monthly table, with each row representing a month and columns for debit, credit, and closing balance. A simplified version looks like this:

This is the kind of monthly view referred to in your textbook outline when it mentions viewing monthly ledger summaries. It gives you a quick health check on cash flow without having to open every single voucher.

Drilling down to voucher-level detail 🔗

Selecting a specific month and pressing Enter opens the Ledger Vouchers screen, which lists every voucher posted in that period along with the debit and credit amount for each. This is where the report earns its name as a detailed cash or bank book, since it shows every individual receipt and payment rather than just the monthly total. One useful detail worth remembering for exams: if the cash balance on a particular date turns negative, which shouldn’t happen in a properly maintained cash book, Tally highlights that credit balance in red so it’s immediately visible, a feature documented in the same cash book display reference.

Daily breakup and other useful configurations 🔗

Beyond the monthly and voucher-level views, Tally ERP.9 lets you see a daily breakup of transactions using the F6 key, which shows total receipts, payments, and closing balances for each day of the selected period instead of a monthly rollup. Pressing F12 opens the configuration menu, where you can also choose to view the highest and lowest cash balance recorded on any date, which is genuinely useful when you’re analysing cash flow patterns rather than just checking a single closing figure, as outlined in Tally’s guide to the Cash/Bank Summary report.

Comparing multiple cash and bank ledgers together 🔗

Businesses rarely operate with just one bank account. Tally ERP.9 has a multi-columnar reporting facility that lets you place the cash book and one or more bank books side by side on the same screen, or compare two different banks against each other, instead of switching back and forth between separate reports. You add a new column using Alt+C, choose the ledger you want to bring in, and Tally arranges the comparison automatically, a capability explained in the multi-column bank book documentation. This is particularly handy for businesses that route different types of payments, such as vendor payments versus salary disbursements, through separate bank accounts and want a consolidated view for a specific month or a custom date range.

Why this matters beyond the software screen 🔗

It’s tempting to treat this topic as a set of menu paths to memorise for an exam. But the underlying purpose is the same as it’s always been in financial accounting: giving a business, an auditor, or a tax officer an accurate, chronological trail of every rupee that moved through cash and bank. The automation in Tally ERP.9 doesn’t remove the need to understand debits, credits, and contra entries; it just removes the manual labour of posting them twice. When you later study bank reconciliation statements, you’ll be comparing the bank book balance generated exactly the way described here against the bank’s own passbook or statement, so the accuracy of what gets posted at this stage carries forward. A cash book maintained carelessly in Tally, with wrong ledger selections or missed vouchers, creates reconciliation headaches down the line, the same way a sloppy manual cash book would have decades ago.

A practical habit worth building 🔗

If you’re using Tally for a college project or an internship, get into the habit of checking the Cash/Bank Summary screen at the end of each week rather than waiting until month-end. Catching a wrongly entered voucher early, before dozens of transactions pile on top of it, saves a lot of correction work later. It’s a small discipline that mirrors what working accountants do in practice.

What do you think? If a business runs three separate bank accounts for different purposes, would you rely more on the individual bank book for each account or the multi-column comparison view for day-to-day monitoring? And how would you explain to a classmate, in one sentence, why a cash book still counts as both a journal and a ledger even when software is doing the posting?

References

1. https://www.geeksforgeeks.org/cash-book-meaning-types-and-example/
2. https://cleartax.in/s/books-of-accounts-and-audit-requirements-for-freelancers
3. https://help.tallysolutions.com/article/Tally.ERP9/Reports/Display_Financial_Statements/Intro_Cash_Book.htm
4. https://help.tallysolutions.com/docs/te9rel65/Reports/Display_Registers_Ledgers/Display_Cash_Book.htm
5. https://help.tallysolutions.com/article/Tally.ERP9/Reports/Display_Registers_Ledgers/Display_Cash_Book.htm
6. https://help.tallysolutions.com/article/Tally.ERP9/Reports/Display_Registers_Ledgers/Display_Cash_Bank_Summary.htm
7. https://help.tallysolutions.com/article/Tally.ERP9/Reports/Display_Registers_Ledgers/Display_MultiColumn_Bank_Book.htm