Payment and Receipt Entry in Tally

A payment entry in Tally records money going out and uses the Payment voucher (F5). A receipt entry records money coming in and uses the Receipt voucher (F6). The rule is simple: for a payment you debit the expense or the party you paid and credit Cash or Bank; for a receipt you debit Cash or Bank and credit the party or the income. Once this clicks, daily entries take seconds.

The logic behind it

Every entry has a debit and a credit that balance. For money moving through cash or bank, the trick is to ask: did cash go out or come in? If cash went out, credit Cash. If cash came in, debit Cash. The other side is whatever the money was for.

Step by step: payment entry (money out)

Example: paying ₹5,000 office rent by cash.

1. Gateway of Tally ▸ Vouchers, then press F5 (Payment).
2. Set the date with F2 if needed.
3. In Account, choose Cash (or Bank if paid by bank).
4. Under Particulars, select the Rent ledger and type 5,000.
5. Tally shows Cash credited and Rent debited automatically.
6. Save with Ctrl + A.

Result: Rent (expense) debited ₹5,000, Cash credited ₹5,000.

Step by step: receipt entry (money in)

Example: receiving ₹8,000 from a customer, Gupta Stores.

1. Vouchers ▸ press F6 (Receipt).
2. In Account, choose Cash (or Bank).
3. Under Particulars, select Gupta Stores and type 8,000.
4. Tally debits Cash and credits Gupta Stores.
5. Save with Ctrl + A.

Result: Cash debited ₹8,000, Gupta Stores (the customer) credited ₹8,000, which reduces what they owe you.

Quick reference

Worked example (a day's entries)

• Paid ₹1,200 electricity by cash → Payment: Dr Electricity 1,200, Cr Cash 1,200
• Paid ₹10,000 to supplier Metro Supplies by bank → Payment: Dr Metro Supplies 10,000, Cr Bank 10,000
• Received ₹15,000 from customer by bank → Receipt: Dr Bank 15,000, Cr Customer 15,000

Pro tips

• Choose Bank as the account when the money moved through bank, so your bank balance in Tally matches your passbook.
• Use F2 to back-date an entry to the day it actually happened.
• After saving, press Alt + P to print a payment or receipt voucher if you need a hard copy.

Common mistakes

• Wrong side. In a payment, cash is credited (going out). Beginners sometimes debit it. Ask: did cash leave? If yes, credit it.
• Paying an expense to the wrong ledger. Debit the specific expense (Rent, Electricity), not a generic one.
• Using Receipt for a sale on credit. If no money came in yet, don't pass a receipt. Record the sale, and pass the receipt only when you're actually paid.

Key takeaways

• Payment (F5) = money out: debit expense/party, credit Cash/Bank.
• Receipt (F6) = money in: debit Cash/Bank, credit party/income.
• Match the account (Cash or Bank) to how the money moved.
• Use F2 to set the correct date.

Practice task

In your practice company, record: (1) paid ₹3,000 salary by cash, (2) paid ₹6,000 to a supplier by bank, and (3) received ₹9,000 from a customer by cash. Then open the Cash ledger and check the running balance makes sense.

Practice hundreds of real entries with a trainer in the ADFA program at HCI.