How to Manage Monthly Rentals in Tally A Step by Step Guide

Managing monthly rental transactions manually can be time-consuming and error-prone. If you use Tally for your accounting needs, you’ll be glad to know that it’s a powerful tool for handling recurring rental payments, generating invoices, tracking due dates, and managing tenants or rental customers.

In this step-by-step guide, we’ll show you how to effectively manage monthly rentals in Tally, making your rental business smoother and more organized.

Why Use Tally for Monthly Rentals?

Tally, especially TallyPrime, is more than just an accounting software — it can be tailored for rental income, tenant tracking, recurring invoices, and even inventory for rental assets. It’s ideal for:

• Real estate managers
• Equipment rental businesses
• Co-working spaces
• Property owners with multiple tenants

Step 1: Create Rental Income Ledger

1. Go to Accounts Info > Ledgers > Create.
2. Name the ledger something like Monthly Rent Income.
3. Under Group, select Indirect Incomes.
4. Save the ledger.

This helps classify rental income separately in your Profit & Loss account.

Step 2: Create a Ledger for Each Tenant

1. Go to Accounts Info > Ledgers > Create.
2. Enter the tenant’s name (e.g., ABC Enterprises).
3. Under Group, select Sundry Debtors.
4. Enter the credit period (if applicable) and GST details (if needed).
5. Save the ledger.

Each tenant gets a unique ledger to track payments and outstanding balances.

Step 3: Create a Rental Invoice

1. Go to Accounting Vouchers > F8: Sales (even though it’s rent, treat it as a service sale).
2. Select the tenant’s name under Party A/c name.
3. Enter the rental month in the Narration or Reference No. field.
4. Under Particulars, select the Monthly Rent Income ledger.
5. Enter the amount and any applicable taxes (CGST/SGST).
6. Save the voucher.

You’ve now recorded your monthly rental transaction as income and created an invoice.

Step 4: Enable Recurring Entries (Optional)

If you want to automate monthly rent entries:

1. Use Memorandum Vouchers to create a template.
2. Go to Accounting Vouchers > F10: Memorandum.
3. Create the rental entry as usual and save it.
4. Use Auto Repeat features or reminders in TallyPrime for regular entries.

Step 5: Track Outstanding Balances

To check who hasn’t paid:

1. Go to Display > Statements of Accounts > Outstanding > Receivables.
2. View all pending payments by tenant.

This helps you follow up and avoid missed collections.

Step 6: Generate Reports

Use Tally’s built-in reports to view:

• Monthly income from rentals
• Tenant-wise ledger balances
• Taxable service summaries (for GST)
• Profit & Loss including rental income

Bonus Tip: Use Cost Centers for Multiple Properties

If you manage rentals at different locations or units, enable Cost Centers in:

• F11 > Accounting Features > Enable Cost Centers
• Assign rent income to different cost centers for better tracking and analytics.