Bill references

Bill references are an important aspect of accounting, especially when dealing with accounts payable and receivable. They help track individual transactions and improve the accuracy of financial records.


Accounting is the process of recording, summarizing, analyzing, and reporting financial transactions of a business or organization. It involves the systematic recording of financial transactions and the preparation of financial statements such as the balance sheet, income statement, and cash flow statement.

Bill references used in accounting

A bill reference is a unique identifier assigned to a bill or invoice. It can be a number, code, or any other combination of characters that helps an organisation easily identify the specific transaction.

Why to Use Bill References?

  • Improved Accuracy: Bill references help an organisation to track individual transactions and ensure that payments are applied to the correct invoices. This reduces the risk of errors and makes it easier to reconcile accounts.
  • Better Record Keeping: By linking transactions to specific bills, an organisation can easily access detailed information about each purchase or sale. This can be helpful for audits, tax purposes, or simply understanding spending habits.
  • Efficient Cash Flow Management: Bill references allow an organisation to track outstanding invoices and overdue payments. This information is crucial for managing cash flow effectively.

How to Use Bill References in Tally?

  • Enable Bill-wise Accounting: Tally allows the organisation to enable bill-wise accounting. This feature will prompt to enter a bill reference when recording transactions related to accounts payable and receivable.
  • Assign Bill References: When creating a purchase order or receiving an invoice, assign a unique bill reference. This reference can be own internal code or the reference number provided by the vendor.
  • Record Transactions with Bill Reference: When recording a payment to a supplier or receiving a payment from a customer, include the corresponding bill

Bill wise accounting:

If we make an entry to a ledger that needs bill wise details, we have to give the details of the bill at the voucher entry itself. Where we can see the details of bills, specific credit periods and get the correct outstanding result [balance] of each ledger.

But when there are a lot of entries it becomes difficult to match a payment to an invoice. It is so that the details of creditors and debtors are maintained at the invoice level and called as Bill-Wise Accounting system.

Bill wise accounting is maintained to know party (Sundry Debtors/Creditors) outstanding with details of each and every bills.

In summary, bill-wise accounting in Tally Prime enhances accuracy, simplifies tracking, and streamlines financial management. It’s a valuable tool for businesses to manage their receivables and payables effectively


Types of Bill wise details in Tally Prime:


There are four types of bill wise detail.


New Reference:

This is used at the time of passing sales and purchase entries which will later serve for Against reference entries to be passed under Sundry debtors and creditors ledger.


Against Reference:

This reference is used when we pass receipt entries or payment entries against the references created at the time of passing of original entries such as sales and purchase.



This reference is used when any amount is received in advance for any services rendered or for any outward supplies of goods is made or when any amount is paid in advance for purchases to be made at the future date.


In other words, this type of bill wise detail is maintained where the nature of service or nature of product or terms of business demands advance receipts/ advance payments to be made and to track these when the business gets materialized at the time of raising of bill or invoice, these entries would serve as reference.


On Account:

An interest receipt entry, interest payment entries uses these types of references. But apart from these, this type of reference is also used when we are unsure of as of against which bill the sum has been settled by the debtor.


So, all those types of entries are kept under this reference till the time it gets cleared as to which Invoice the sum relates to.


  • New Reference: Used for creating any dues when you receive new bills (sales/purchases).
  • Against Reference: Used for adjustment against existing dues (cash received or paid).
  • Advance: Tracks advance payments received or made.
  • On Account: Used for non-transactional adjustments (e.g., interest charged, cheque dishonored).