Exception Report in Tally Prime – Complete Guide to Finding and Fixing Accounting Mistakes (2025 Edition)

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Exception Reports in Tally Prime are powerful tools that help businesses identify mistakes, missing information, inconsistencies, and unusual accounting behaviours in their books. Whether you are an accountant, auditor, or business owner, understanding Exception Reports is essential for clean financial data, smooth GST filing, and error-free audit.

This complete, non-copyrighted 6-minute guide explains:

What an Exception Report is
Why it is important
Types of exception reports in Tally Prime
How to view and use them
Common errors identified
Step-by-step solutions
Best practices for maintaining clean data

This guide is written simply so even beginners can understand easily.

What Is an Exception Report in Tally Prime?

An Exception Report highlights unusual or incorrect entries recorded in the books. These are not errors thrown by Tally, but exceptions that indicate:

Missing information
Potential mistakes
Unusual behaviour in transactions
Deviations from normal accounting patterns

In simple words, Exception Reports help you find entries that need correction before finalising accounts, GST filing, or audit.

Why Exception Reports Are Important

Exception Reports help you:

Detect wrong entries
Identify missing values
Fix GST mismatches
Remove duplicate entries
Ensure accuracy of ledgers
Prepare error-free financial statements
Make audit faster and easier

Every business should review the Exception Reports regularly to maintain clean books.

How to Open Exception Reports in Tally Prime

You can access exception reports through:

Gateway of Tally → Display More Reports → Exception Reports

You will find multiple types of exception reports depending on your data and modules enabled.

Major Types of Exception Reports in Tally Prime

1. Negative Cash

Shows dates where your cash balance went below zero.
This means cash payments are higher than available cash, which is not allowed legally.

2. Negative Stock

Shows items with negative quantity, indicating incorrect purchase or sales entries.
This happens when goods are sold without stock availability.

3. Pending Tax

Shows incomplete GST details such as missing HSN, tax rate, or incorrect ledger mapping.

4. Overdue Receivables and Payables

Displays customers or suppliers whose payments are overdue beyond credit limits or credit period.

5. Optional Vouchers

Lists vouchers saved as optional, which are not reflected in accounts unless converted.

6. Unadjusted Forex Gains/Losses

Used when dealing with foreign currency transactions.
Displays entries needing revaluation.

7. Reorder Status Exceptions

Shows stock items that need replenishment based on defined reorder levels.

8. Bank Reconciliation Exceptions

Highlights mismatches between Tally entries and actual bank statement data.

9. Purchase and Sales Mismatch

Shows incomplete invoices, wrong ledger selection, missing values, or mismatched stock entries.

10. Cost Centre Exceptions

Shows entries where cost centres are missing despite activation of the feature.

How Exception Reports Help in GST Compliance

Tally Prime’s Exception Reports assist in GST accuracy by identifying:

Missing HSN or SAC
Wrong GST classification
Incorrect tax rates
Invoices without party GSTIN
Unadjusted credit/debit notes
ITC mismatch

Fixing these errors ensures accurate GSTR-1 and GSTR-3B filing.

How to Fix Errors Shown in Exception Reports

Here is how you should correct errors shown in exception reports:

Negative Cash

Check vouchers on the date of negative cash
Correct the posting
Re-enter or adjust cash receipts

Negative Stock

Re-enter purchase or sales date
Fix opening balance
Correct item quantities

Pending GST Information

Update GST rates
Enter HSN/SAC
Correct party GSTIN
Map the correct tax ledgers

Overdue Bills

Review outstanding reports
Record receipts or payments
Adjust advance entries

Bank Reconciliation Issues

Enter correct cheque details
Match Tally date with bank statement
Remove duplicate entries

Optional Vouchers

Convert optional vouchers to regular ones when they become confirmed entries.

Best Practices for Using Exception Reports

Check exception reports weekly
Match all GST reports before filing
Keep ledgers properly grouped
Avoid back-dated entries unless required
Always update contact & GST details of parties
Review stock summary after every month
Use security control to prevent data tampering

These habits keep your books error-free and compliant.

How Exception Reports Improve Audit Quality

Auditors rely on exception reports to quickly find discrepancies.
Exception reports:

Save audit time
Improve transparency
Highlight suspicious entries
Support error-free finalisation
Make compliance stronger

This is why Tally Prime is preferred by auditors and CA firms.

Final Summary

Exception Reports in Tally Prime act like your accounting warning system. They highlight wrong, missing, or unusual entries so you can fix them before they become major problems. By reviewing exception reports regularly, you ensure:

Clean and accurate books
Smooth GST filing
Error-free audit
Better decision-making

Tally Prime keeps your financial data accurate, organised, and compliant through its powerful Exception Reporting system.

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