How to Pass Salary Outstanding and Payment Entries in Tally Easily?

Student Asks Question:

Ma’am, salary is paid on 5th of next month, but our office enters it as if it was paid on 31st. What’s the correct way to do it in Tally?

Answer

They don’t pay salary exactly on the last date of the month (like 31st August), but they still want the salary to show under August expenses. Why? So that the accounts for that month are accurate.

Do this in Tally in two simple steps:

Step 1: On 31st August – Just Say Salary Is Due

You’re not paying it, you’re just saying:

“Salary for August is pending. I will pay next month.”

This is called a Journal Entry.
In Tally, press F7 – Journal
Date = 31st August

Entry:

Salaries A/c Dr ₹50,000
To Outstanding Salaries A/c ₹50,000

This means:
“Salaries are recorded as expense, but not paid yet.”

Step 2: On 5th September – Actually Pay the Salary

Now the real cash or bank payment happens.
Use F5 – Payment in Tally
Date = 5th September

Entry:

Outstanding Salaries A/c Dr ₹50,000
To Bank A/c ₹50,000


That’s it. Salary is cleared.

Why this is the correct way?

Because:

• You didn’t pay on 31st, so don’t show payment on 31st.
• But you want salary to show in August’s accounts, so you make it outstanding on 31st.
• Then when you actually pay, it clears from outstanding.

Groups in Tally: