How to Check Profit and Loss and Balance Sheet Reports in Tally ERP
The profit and loss report in Tally ERP shows you exactly how much your business earned and spent in any period — in just two or three clicks. Whether you run a kirana store in Nagpur or a salon in Kochi, Tally prepares this report automatically from the entries you have already made. No CA visit needed just to check your monthly numbers. Here is how to read and use these two most important financial reports.
Why These Two Reports Matter for Your Shop
Imagine Rajan owns a dhaba in Pune. At month end he wants to know — did I actually make money or just stay busy? The Profit and Loss statement answers exactly that. It shows total sales, total expenses, and the net profit or loss. The Balance Sheet is the bigger picture — what your business owns (assets) and what it owes (liabilities). Together these two reports are what any bank, tax consultant, or GST officer will ask for first. Tally builds both reports automatically from your daily voucher entries. You do not type them manually. The more accurate your daily entries, the more trustworthy these reports.
Understanding the Profit and Loss Report in Tally ERP
The P&L report in Tally has two sides. The left side shows expenses — purchase cost, salaries, rent, electricity, and other overheads. The right side shows income — your sales and any other revenue. If income is more than expenses, you see Net Profit on the left side. If expenses are higher, you see Net Loss on the right side. For example, if your Kochi salon had sales of ₹1,80,000 and total expenses of ₹1,25,000 in March, Tally will show Net Profit of ₹55,000 clearly. You can also filter this report for any custom date range — one week, one month, or the full financial year.
Understanding the Balance Sheet in Tally ERP
The Balance Sheet shows your business position on a specific date. Left side has Liabilities — capital you invested, loans you took, amounts you owe to suppliers. Right side has Assets — cash in hand, bank balance, stock value, amounts customers owe you. In Tally both sides always match and balance, which is why it is called a Balance Sheet. For a kirana shop owner in Srinagar, seeing that customers owe ₹40,000 but supplier payments are due ₹15,000 helps plan cash flow much better. This report does not show profit — it shows financial strength.
Common Mistakes That Spoil These Reports
Many shop owners find their P&L showing wrong numbers. The most common reason is missing entries — a purchase made but not entered in Tally, or a cash sale recorded under the wrong ledger. Another mistake is putting personal expenses like a family grocery bill under shop expenses. That inflates your costs and reduces profit on paper. Also, if you have not entered opening stock correctly at the start of the year, the gross profit calculation will be wrong throughout. Always double check that your cash balance in Tally matches the actual cash in your drawer before trusting these reports fully.
How to Share or Print These Reports
Once you open the P&L or Balance Sheet in Tally, press Alt+P to print it directly. You can also export it as a PDF or Excel file. Many small business owners in Nagpur now export the PDF and share it on WhatsApp with their CA for quarterly review. If you use Tally Prime, there is also an option to email the report directly. Keep at least a monthly PDF copy saved on your phone or laptop. This becomes very useful during GST filing season or if you ever apply for a business loan or a Mudra scheme from your bank.
Step-by-Step Guide
- 1Go to Gateway of Tally Open Tally ERP and make sure you are inside the correct company. You will see the Gateway of Tally screen. All reports start from here. If you have multiple companies, confirm the company name shown at the top.
- 2Select Display from the main menu On the Gateway screen, click on Display or press D on your keyboard. This opens the Display menu which contains all financial statements and registers. You will find both P&L and Balance Sheet listed here.
- 3Open Profit and Loss Account Inside Display, select Financial Statements, then click Profit and Loss Account. Tally instantly shows the full P&L for the current financial year. You will see sales, purchases, gross profit, expenses, and net profit clearly.
- 4Change the date range if needed Press F2 to change the period. You can set any From and To date — like 1st March to 31st March — to see only that month's profit and loss. This is very useful for monthly business review without any manual calculation.
- 5Go back and open Balance Sheet Press Escape to go back to Financial Statements. Now select Balance Sheet. Tally shows assets and liabilities as of today's date. Press F2 to change the date if you want to see the position on a past date.
- 6Export or Print the Report Press Alt+E to export as PDF or Excel. Press Alt+P to print directly. Save the PDF on your phone or share on WhatsApp with your accountant. Do this every month so you always have a record ready.
• Press F1 in the P&L report to switch between Detailed and Condensed view. Detailed view shows every ledger separately — very helpful when a number looks wrong and you want to find the cause.
• If your Net Profit looks unusually high or low, first check your closing stock entry. Wrong stock value is the number one reason for a misleading P&L in small shops.
• Bookmark the shortcut: Gateway > Display > Financial Statements. You will visit this path at least once a week once you get comfortable with reading these numbers.
• Always match your Tally cash balance with physical cash before trusting the Balance Sheet. Even one missing cash entry will throw off the whole picture.
• Set a monthly reminder on your phone — maybe the 3rd or 4th of every month — to check the previous month P&L. This small habit helps you spot problem areas before they become big losses.
Frequently Asked Questions
Open Tally right now, go to Gateway > Display > Financial Statements > Profit and Loss Account, and check your current month numbers. Then open the Balance Sheet and note your cash and bank balance. Take a screenshot and save it — that is your first real financial review done!
One share helps dozens of shop owners.