SAP ERP and Tally ERP – A Comparative Analysis

Some of the software due to its user friendly quality gets easily, quickly and widely accepted
by users or say common people at ground level. It becomes a common platform among a large
number of people and they start communicating in the same fashion in which such commonly
accepted software talks.

As time passes, slowly and gradually such software creates a typical mind set of its users.
Users becomes so friendly with the available functions and quality of the software and enjoy
using it. Therefore when question of migration to advance level comes, such commonly
accepted software or version becomes a bench mark. People or users start comparing the new
version or new software with such bench marked software and even version.

Of this, “Windows” is one of the best example in case of operating system and “Google” in
case of search engine or E-mail service.

Like wise when it comes to the area of ERP, especially in India, Tally is one of the best
example of such commonly accepted software.

Tally is a basic ERP software where as SAP is advanced ERP software. Both of them started
their journey as an Accounting software in the year 1986 and 1972 respectively. Both of them
has their own strength and weakness.

In India, every individual or organization who has started their journey from ground level, are
directly or indirectly connected and / or involved with Tally. That is the reason comparing Tally
with SAP becomes a very very common exercise with every individual, user, professional one
who moves from basic level to advance.

So as I have done and tried to put it into black and white for all my friends and other
professionals who are on the same career path and thinks on the same track.

Though I am a certified SAP-FI consultant having reasonable knowledge of even Tally ERP,
being an individual functional consultant and qualified only in FI module, this comparison can
not be exclusive as I can not do minute comparison in fields other than FI nor compare the
software technically.

To make it exclusive I invite suggestions, comments and criticism on the same from all the
experts, mentors, seniors, professionals, colleagues and friends.

Regards
Chirag Shah
Particulars SAP Tally

History SAP was founded by Five Tally as an Financial Accounting

former IBM employees in the Software was Introduced by the
year 1972 and completed its Peutronics Pvt. Ltd. company was
first Financial Accounting founded by Late Shri S. S. Goenka in
 System in 1973. the year 1986.
SAP is a Walldorf, Germany Tally is Bangalore, India based
based company company

About ERP SAP is module base fully Tally is beautifully integrated among
integrated, sophisticated, various areas,  like Accounting,
well tried and tested and Finance, Inventory, Sales, Purchase,
globally accepted ERP Manufacturing, Payroll, Costing, Job
software. Costing, Legal Compliance etc.
Any logical combination of which are part of the standard
modules can be implemented software and automatically
and integrated as per integrated by default subject to quick
requirement. setup. There is no module concept in
Implementing and integrating Tally.
SAP is considered as a But still as on today there are some
project as it involves long cases where two areas of the
term planning, High software are not talking to each
Investment and gestation other. Like Payroll is fully integrated
period. with accounts and legal compliance
Some of these modules are but not with sales and purchase.
listed below. So one can say that Tally is also a
sophisticated, well tried and tested
globally accepted but yet on the way
to fully integrated ERP software.

FI – stands for Financial

Accounting.

CO – stands for Controlling.

AA – stands for Assets

Accounting

CRM  – stands for Customer

Relationship Management.

FSCM – stands for Financial

Supply Chain Management.

HR  – stands for Human

Resources.

IM – stands for Investment

Management.

MM – stands for Materials

Management .

PLM  – stands for Product

Life Cycle Management.

PM – stands for Plant

Maintenance.

PP – stands for Production

Planning.

PS  – stands for Project

 Systems.

QM  – stands for Quality

Management.

SD – stands for Sales and

Distribution.

SM – stands for Service

Management.

ABAP – stands for Advanced

Business Application
Programming.

Basis – is typically the

administration of SAP.

BI – stands for Business

Intelligence.

Net weaver – provides

technical foundation for SAP
applications.

Solution Manager facilitates –

technical support for
distributed systems.

Enhancements Through BADI or ABAP Through TDL (Tally Definition

to the standard Program Language)
version of the
code or
Customization

Cost of Very High Comparatively very low and

ownership, affordable by small business man or
Implementation
and an individual 
Maintenance

Time involved in SAP implementation and It can be Implemented very very

ownership, integration involves long quickly.
Implementation process, time, planning, cost It is as easy as thinking of a product,
and etc. It can not be buying it either online or from
Maintenance. implemented in short period supermarket, read instructions and
of time.
start using it. 

User friendly Software is not much user Software is absolutely user

friendly.
friendly. 

Training & One can not learn it Very easy to learn as educational
Learning independently. It requires version of the software is available
professional guidance and along with supporting help files,
training. online.
There are some prerequisite Learning Tally doesn’t require
 for enrollment in SAP exams,
profile of the candidate is any professional training 
passed through lots of filters
by SAP even for eligibility.
Learning SAP is very difficult
and costly affair.

Availability of Qualified consultants or There is a very good market of Tally

Staff / Qualified trained staff are not easily Consultants / Data Operator,
Personnel available and are very costly especially in India.
affair. Jobs & Recruitment of Tally
personnel is internally supported by
Tally.
Easy to find qualified and trained

personnel. 

Third party Not very good as Tally is developed

software Very High and reliable.  with a core proprietary engine.
support

Technology Three tier (R3) architecture Two tier (R2) architecture

technology. technology. It is code-less ERP
Completely based on System  developed with a core
proprietary engine and a Software
coding.  Development Kit namely Tally
Definition Language (TDL)

2 tier technology has certain

limitations as compared to three tier
technology, that is
– Data can not be processed in
background
– Data can not be validated or
substituted
– System response will become slow
upon increasing users.

Speed SAP processing speed is not Tally is lightning fast but it is true
very fast but it can handle only up to certain level of data
huge volume of data.
volume. 

Data Handling Large / Huge data sustains, Software is not good in handling
Capacity there is no hurdle or huge data, system stop responding
limitation in processing large in case of processing large
database. database.
Data can also be processed Data can not be processed in
background.
in background 

Legacy System Supported internally and Not supported internally. It required

Data Migration functional consultant can do technical knowledge, namely TDL
(Tally Definition Language)
 so. 

Suitable for Good and advisable only for Good and advisable only for small
large scale business heaving and medium scale business where
multinational, cross border, data volume is not very high and
multi location operation with entire operation and management is
multi point control. very closely controlled.

Management Good for Vertical Hierarchy Good for Horizontal Management

System Management System. System.

Data Entry Posting document requires It is done through single data entry
passing through various screen named as Voucher Entry
screens and control which screen which is very fast and user
makes data entry a bit friendly. Simply works directly with
lengthy and complicated.
Where normal Debit and Debit = Dr and Credit = Cr. 
Credit is controlled by
posting key.

Deletion, Not allowed, can only be

Modification of reversed Allowed and it can be locked. 
Transaction
entered

Data Validation Data Can be validated at There is no data validation.

entry level itself. 

Data Wrong data can automatically There is no such concept of data

Substitution be substituted as per various substitution in Tally.
combination

configured. 

Atomization Documents can automatically It can done by enhancing standard

be generated Internally based software with business add-ins
on Recurring document which are readily available and in
configuration, accrual engine market and also internally managed
configuration etc. and by tally via Tally-Shop.
There is also concept of voucher
posted.  duplication in case of manual entry.

User Level R3 technology brings very User level control is good only for
Control High level of user level small scale business. User wise
tolerance limit can not be defined in
security control  tally. Therefore administrator’s
involvement requires very
frequently.

Multi level Document can be passed Document can be passed through

document through various level before only two levels before it gets posted.
approval These posted vouchers can be
system. it gets posted.  passed through multiple Internal and
external audit.
Parallel Fully Supported and one of There is only work around solution
Accounting the most powerful function of to it.
SAP as compared to other

ERP Software. 

Chart of SAP Supports common chart Tally do not support common chart
Account and of account and controlling of account and controlling area be
Controlling area area be used across the used across the company codes. It
can be copied from one company
company codes.  code to another but the same will not
automatically be updated
simultaneously, it requires manual
updation.
This causes lots of problem in
consolidated reports.

Controlling It can be controlled by field Supported only through TDL

Various field at status variant which is program. Functional consultant can
the time of supported in SAP internally not control.
creating Master and functional consultant can
& Transaction configure it as per
entry. requirement.

Mass data input Mass data can internally be Mass data entry is is not supported
entered by by creating batch internally. It can only be Imported
through XML file.
through LSMW or BDC. 

Access to data SAP Database can be Tally database is available only for
base accessed, viewed and view purpose. It can not be modified
directly.
modified Internally.   (It
may involve high risk of
dumping data)

Data Splitting It involves very lengthy Data can be split and rejoined. It can
process. It is called as data
archiving. be done very quickly. 

Document / Document gets automatically Voucher can not be split

Voucher be split on various basis as automatically.
Splitting
per configuration. 

Automatic Payment list gets generated Payment list can be generated and
Payment on the basis of criteria reviewed but payment instruction or
Program or defined and the same can be documents needs to be generated
Automatic reviewed, altered and finally manually one by one.
Dunning large number of payment Payment can not be blocked for
instructions / documents can processing.
be processed at once.
Payment can be blocked for
processing.
Task Monthly and Yearly closing There is no Task management
Management procedure can be defined by functionality in Tally.
and Closing arranging all the involved
Procedure tasks in a flow. Different
tasks can be assigned to
various users. Status of the
same can be viewed and
controlled online with a
dashboard. These procedure
gets stored and can be used
for multiple time in future.

Depreciation Various types of depreciation Neither automatic calculation nor

calculation and gets calculated and posted posting is supported.
posting automatically. One Assets One assets can only be depreciated
can also be depreciated in in one way.
multiple way and the same
can be documented with the
help of various areas of
depreciation. E.g. Rate and
method of depreciation  is
different in case of Income
Tax and MCA.

Sale of Assets. At the time of sale of assets No atomization.

all the relevant entries like
posting mid term
depreciation, calculating and
posting profit / loss etc. are
automatically done. The
profit / loss can be calculated
differently for various areas 
that uses different type of
depreciation.

Number Range There is no atomization in As Tally is code less system it

case of Alpha numeric required number range only in case
voucher number range, by of voucher entry.
default. Tally supports alpha numberic
number range and the same gets
updated automatically.

Type of Ledger There are mainly three As many ledger types as required be
different types of ledger created. It works on parent child
namely General Ledger, relationship concept and not on
Customer Ledger and Vendor control account concept.
Ledger.
Petty Cash Separate business Petty cash journal gets created
transactions is required to be based on voucher type used for
setup for petty cash recording transaction therefore no
implementation. such separate business transaction
setup is required.

Group of Parent and child relationship Parent and child relationship

Account between various group of between various group of accounts
accounts can be defined at gets defined at the time of creating
the time of designing masters itself.
financial reports. As a result only standard version of
As a result as many financial statements are available.
combination of financial
reports can be designed as
required.

Custom Report Supported Internally through Supported externally only through

Designing Report Writer or through TDL Programming
designing various financial
statement versions or
externally through ABAP

Programming 

Legal Rate of Tax is defined Supported taxation rates, forms etc.

Compliance through various user defined gets automatically updated by
key. Which needs to be updating statutory version.
updated time to time
manually

Comparative By default there are only 2 Comparitive analysis, by default is

Analysis years of financial data can be available for any number of years or
compared. period or even company codes in a
single report. Even performance can
be compared between multiple
ledger accounts or multiple material 
item or multiple controlling

areas 

Some of the Similarities

Server – Client Yes Yes

System

Remote access Yes Yes

& Real Time
Data entry.
Multi Language Yes Yes
Support

Ratio Analysis Yes Yes

Scenario Yes Yes

Analysis

Budgeting & Yes Yes

Variance

Customer Credit Yes Yes

Limits

Automatic Bank Yes Yes

reconciliation

Funds Flow & Yes Yes

Cash Flow
reports

Cost Center Yes Yes

Accounting

Profit Center Yes Yes

Accounting

Job Costing / Yes Yes

Product Costing

Incorporate Yes Yes

additional costs
of purchase.

Multi-currency Yes Yes

transactions
and foreign
exchange gain /
loss
calculations.

TDS & TCS Yes Yes

Service Tax & Yes Yes

Excise

VAT & CST Yes Yes

MCA Reports Yes Yes

ESIC, PF, PT Yes Yes

Etc.

Preparing Pay Yes Yes

sheet, Pay Slip
etc.

Multiple Yes Yes

inventory
valuation

Multiple price Yes Yes

lists

Dual units of Yes Yes

measure

Bar code Yes Yes

support

Point of Sale Yes Yes

Billing

Stock aging Yes Yes

reports

Physical stock Yes Yes

take records

Maintain batch Yes Yes

& expiry details

Re-order levels Yes Yes

Record samples Yes Yes

& free items

Handle Yes Yes

Rejection and
Scrap

Multiple Yes Yes

Godown

Multiple Product Yes Yes

Class

Respond to Yes Yes

queries

Drill down Yes Yes

facility

Support Post Yes Yes

Dated / Future
Transaction

Multiple type of Yes Yes

vouchers

Posting Period Yes Yes

control

Support Cheque Yes Yes

Printing,
Payment Advice
Printing,
Voucher
Printing

Interest Yes Yes

Calculation

Cheque Yes Yes

Management &
Cheque
Register

Supply Chain Yes Yes

Management