Katcha Accounting in Tally – Complete Guide

Call CA Tally HelpDesk +91 9205471661, 8368262875

Katcha Accounting is a common term in Indian accounting, especially for small businesses and traders. It refers to informal or temporary accounting entries made when exact details of transactions are not yet available, often due to:

• Lack of invoices

• Pending receipts or payments

• Unsettled supplier or customer accounts

• Small cash transactions

It helps track money flows before final settlement in the books.

Does Tally Support Katcha Accounting?

Yes, Tally can handle Katcha Accounting, but it does not explicitly label it as “Katcha Accounting.” Instead, it uses features like:

1. Voucher Types for Unsettled Transactions

Tally allows you to record transactions using various voucher types:

• Payment Voucher / Receipt Voucher – for cash in/out

• Journal Voucher – to record temporary or adjusting entries

• Sales / Purchase Voucher – even without full details

Example:
If a supplier delivers goods but the invoice is pending, you can record a temporary entry in Purchase Journal Voucher with approximate amounts. Later, when the invoice arrives, you can adjust the entry.

2. Use of Ledger Accounts for Temporary Recording

In Tally, you can create temporary ledgers like:

• Katcha Receivable

• Katcha Payable

• Temporary Expenses

This allows you to record transactions before final reconciliation.

Example:
If you paid Rs. 10,000 to a supplier without a bill:

• Debit: Katcha Expense Rs. 10,000

• Credit: Cash / Bank Rs. 10,000

Later, when the bill is received, you adjust the ledger to the correct expense account.

3. Tracking Pending Settlements

Tally’s Outstanding Reports help track unpaid bills or temporary entries:

• Receivables / Payables – check pending Katcha amounts

• Day Book – shows all temporary entries for reconciliation

• Audit / Edit Log – tracks modifications for future legal proof

4. Adjustments and Finalization

Once full details are available:

1. Open the temporary ledger (Katcha)

2. Adjust entries to the correct accounts

3. Delete or modify temporary entries

4. Update VAT / GST if applicable

This ensures clean and legally compliant accounts.

Benefits of Katcha Accounting in Tally

1. Improved Cash Flow Tracking

   • Even temporary payments/receipts are recorded

2. Avoids Missing Entries

   • No transaction is left unrecorded

3. Simplifies Reconciliation

   • Outstanding balances can be reconciled easily

4. Supports Small Business Operations

   • Perfect for businesses that handle informal transactions

5. Audit and Compliance Ready

   • Temporary entries can be traced and adjusted later

Example Scenario

This ensures your books are always updated, even with pending details.

Key Points to Remember

• Katcha accounting is temporary and informal

• Tally allows full tracking and adjustments

• Use temporary ledgers for unsettled transactions

• Always reconcile Katcha entries to final accounts

• Helps with GST, audit, and legal compliance

Conclusion

Tally does provide the flexibility to manage Katcha Accounting through:

• Voucher types

• Temporary ledgers

• Outstanding & edit logs

• Easy adjustments

While it is not a separate “Katcha Accounting module,” Tally’s standard features fully support recording, tracking, and finalizing temporary transactions, making it suitable for small traders, garment businesses, and cash-based operations.

Powered by Binarysoft Technologies
Authorized Tally Partner
Location : 1626/33, 1st Floor, Naiwalan, Karol Bagh, New Delhi – 110005, INDIA
Contact us : +91 7428779101, 9205471661, 8368262875
Email us :  tally@binarysoft.com (10:00 AM – 6:00 PM, Mon–Fri)

Frequently Asked Questions