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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.


Chirag Shah





SAP was founded by Five former IBM employees in the year 1972 and completed its first Financial Accounting System in 1973.

SAP is a Walldorf, Germany based company

Tally as an Financial Accounting Software was Introduced by the Peutronics Pvt. Ltd. company was founded by Late Shri S. S. Goenka in the year 1986.

Tally is Bangalore, India based company

About ERP

SAP is module base fully integrated, sophisticated, well tried and tested and globally accepted ERP software.

Any logical combination of modules can be implemented and integrated as per requirement.

Implementing and integrating SAP is considered as a project as it involves long term planning, High Investment and gestation period.

Some of these modules are listed below.

Tally is beautifully integrated among various areas,  like Accounting, Finance, Inventory, Sales, Purchase, Manufacturing, Payroll, Costing, Job Costing, Legal Compliance etc. which are part of the standard software and automatically integrated by default subject to quick setup. There is no module concept in Tally.

But still as on today there are some cases where two areas of the software are not talking to each other. Like Payroll is fully integrated with accounts and legal compliance but not with sales and purchase.

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 to the standard version of the code or Customization

Through BADI or ABAP Program

Through TDL (Tally Definition Language)

Cost of ownership, Implementation and Maintenance

Very High

Comparatively very low and affordable by small business man or an individual ➕

Time involved in ownership, Implementation and Maintenance.

SAP implementation and integration involves long process, time, planning, cost etc. It can not be implemented in short period of time.

It can be Implemented very very quickly.

It is as easy as thinking of a product, buying it either online or from supermarket, read instructions and start using it. ➕

User friendly

Software is not much user friendly.

Software is absolutely user friendly. ➕

Training & Learning

One can not learn it independently. It requires professional guidance and training.

There are some prerequisite for enrollment in SAP exams, profile of the candidate is passed through lots of filters by SAP even for eligibility.

Learning SAP is very difficult and costly affair.

Very easy to learn as educational version of the software is available along with supporting help files, online.

Learning Tally doesn’t require any professional training ➕

Availability of Staff / Qualified Personnel

Qualified consultants or trained staff are not easily available and are very costly affair.

There is a very good market of Tally Consultants / Data Operator, especially in India.

Jobs & Recruitment of Tally personnel is internally supported by Tally.

Easy to find qualified and trained personnel. ➕

Third party software support

Very High and reliable. ➕

Not very good as Tally is developed with a core proprietary engine.


Three tier (R3) architecture technology.

Completely based on coding. ➕

Two tier (R2) architecture technology. It is code-less ERP System  developed with a core proprietary engine and a Software 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.


SAP processing speed is not very fast but it can handle huge volume of data.

Tally is lightning fast but it is true only up to certain level of data volume. ➕

Data Handling Capacity

Large / Huge data sustains, there is no hurdle or limitation in processing large database.

Data can also be processed in background ➕

Software is not good in handling huge data, system stop responding in case of processing large database.

Data can not be processed in background.

Legacy System Data Migration

Supported internally and functional consultant can do so. ➕

Not supported internally. It required technical knowledge, namely TDL (Tally Definition Language)

Suitable for

Good and advisable only for large scale business heaving multinational, cross border, multi location operation with multi point control.

Good and advisable only for small and medium scale business where data volume is not very high and entire operation and management is very closely controlled.

Management System

Good for Vertical Hierarchy Management System.

Good for Horizontal Management System.

Data Entry

Posting document requires passing through various screens and control which makes data entry a bit lengthy and complicated. Where normal Debit and Credit is controlled by posting key.

It is done through single data entry screen named as Voucher Entry screen which is very fast and user friendly. Simply works directly with Debit = Dr and Credit = Cr. ➕

Deletion, Modification of Transaction entered

Not allowed, can only be reversed

Allowed and it can be locked. ➕

Data Validation

Data Can be validated at entry level itself. ➕

There is no data validation.

Data Substitution

Wrong data can automatically be substituted as per various combination configured. ➕

There is no such concept of data substitution in Tally.


Documents can automatically be generated Internally based on Recurring document configuration, accrual engine configuration etc. and posted. ➕

It can done by enhancing standard software with business add-ins which are readily available and in market and also internally managed by tally via Tally-Shop.

There is also concept of voucher duplication in case of manual entry.

User Level Control

R3 technology brings very High level of user level security control ➕

User level control is good only for small scale business. User wise tolerance limit can not be defined in tally. Therefore administrator’s involvement requires very frequently.

Multi level document approval system.

Document can be passed through various level before it gets posted. ➕

Document can be passed through only two levels before it gets posted.

These posted vouchers can be passed through multiple Internal and external audit.

Parallel Accounting

Fully Supported and one of the most powerful function of SAP as compared to other ERP Software. ➕

There is only work around solution to it.

Chart of Account and Controlling area

SAP Supports common chart of account and controlling area be used across the company codes. ➕

Tally do not support common chart of account and controlling area be used across the company codes. It can be copied from one company 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 Various field at the time of creating Master & Transaction entry.

It can be controlled by field status variant which is supported in SAP internally and functional consultant can configure it as per requirement.

Supported only through TDL program. Functional consultant can not control.

Mass data input

Mass data can internally be entered by by creating batch through LSMW or BDC. ➕

Mass data entry is is not supported internally. It can only be Imported through XML file.

Access to data base

SAP Database can be accessed, viewed and modified Internally. ➕ (It may involve high risk of dumping data)

Tally database is available only for view purpose. It can not be modified directly.

Data Splitting

It involves very lengthy process. It is called as data archiving.

Data can be split and rejoined. It can be done very quickly. ➕

Document / Voucher Splitting

Document gets automatically be split on various basis as per configuration. ➕

Voucher can not be split automatically.

Automatic Payment Program or Automatic Dunning

Payment list gets generated on the basis of criteria defined and the same can be reviewed, altered and finally large number of payment instructions / documents can be processed at once.

Payment can be blocked for processing.

Payment list can be generated and reviewed but payment instruction or documents needs to be generated manually one by one.

Payment can not be blocked for processing.

Task Management and Closing Procedure

Monthly and Yearly closing procedure can be defined by arranging all the involved 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.

There is no Task management functionality in Tally.

Depreciation calculation and posting

Various types of depreciation gets calculated and posted automatically. One Assets can also be depreciated in 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.

Neither automatic calculation nor posting is supported.

One assets can only be depreciated in one way.

Sale of Assets.

At the time of sale of assets 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.

No atomization.

Number Range

There is no atomization in case of Alpha numeric voucher number range, by default.

As Tally is code less system it required number range only in case of voucher entry.

Tally supports alpha numberic number range and the same gets updated automatically.

Type of Ledger

There are mainly three different types of ledger namely General Ledger, Customer Ledger and Vendor Ledger.

As many ledger types as required be created. It works on parent child relationship concept and not on control account concept.

Petty Cash

Separate business transactions is required to be setup for petty cash implementation.

Petty cash journal gets created based on voucher type used for recording transaction therefore no such separate business transaction setup is required.

Group of Account

Parent and child relationship between various group of accounts can be defined at the time of designing financial reports.

As a result as many combination of financial reports can be designed as required.

Parent and child relationship between various group of accounts gets defined at the time of creating masters itself.

As a result only standard version of financial statements are available.

Custom Report Designing

Supported Internally through Report Writer or through designing various financial statement versions or externally through ABAP Programming ➕

Supported externally only through TDL Programming

Legal Compliance

Rate of Tax is defined through various user defined key. Which needs to be updated time to time manually

Supported taxation rates, forms etc. gets automatically updated by updating statutory version.

Comparative Analysis

By default there are only 2 years of financial data can be compared.

Comparitive analysis, by default is available for any number of years or 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 System



Remote access & Real Time Data entry.



Multi Language Support



Ratio Analysis



Scenario Analysis



Budgeting & Variance



Customer Credit Limits



Automatic Bank reconciliation



Funds Flow & Cash Flow reports



Cost Center Accounting



Profit Center Accounting



Job Costing / Product Costing



Incorporate additional costs of purchase.



Multi-currency transactions and foreign exchange gain / loss calculations.






Service Tax & Excise






MCA Reports






Preparing Pay sheet, Pay Slip etc.



Multiple inventory valuation



Multiple price lists



Dual units of measure



Bar code support



Point of Sale Billing



Stock aging reports



Physical stock take records



Maintain batch & expiry details



Re-order levels



Record samples & free items



Handle Rejection and Scrap



Multiple Godown



Multiple Product Class



Respond to queries



Drill down facility



Support Post Dated / Future Transaction



Multiple type of vouchers



Posting Period control



Support Cheque Printing, Payment Advice Printing, Voucher Printing



Interest Calculation



Cheque Management & Cheque Register



Supply Chain Management



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  • Good Comparison!!! (Good for Small-Midsize companies)

    After comparison, I see "The Indian ERP" s/w needs much more improvement in terms of new technologies.

    BTW, what is the popularity of this(tally) s/w outside India?

    Also SAP has an ERP s/w for small and medium enterprises..

    How it is different from Tally? any Idea. Which is the best?

    • Dear Rajkumar,

      Thanks for appreciating and for your comments on the blog.

      This comparison is purely between two ERP software and more over for Indian Market only.

      So far as Indian ERP market is concern as a whole, I can not pass any comments with my limited knowledge.

      ERP is more over rated on the basis of its capabilities to fulfill client needs, and needs are highly volatile which differs Industry to Industry, person to person and time to time and also governed by many external factors like govt. policies etc. therefore I am of the opinion that there can not be any software that can be certified 100% perfect or say best, in absolute term.

      Therefore Yes, I will agree to your point that even Indian ERP needs much more improvement.

      Coming back to your question, popularity of Tally ERP outside India.

      As per data available on net, "Tally is transforming businesses across industry in over 94 countries. Today, more than 2 million business users successfully uses tally and enjoying its product philosophy... the 'Power of Simplicity."

      Yes even SAP has come out with SAP-B1 for small and medium enterprises. It differs as compare to tally as follows:

      Positive side of SAP can appear only on its successful installation which requires long term planning, gestation period, competent personnel and much more which also involves huge investment. Out of these if any factor fails entire installation fails, client sees only negative side of SAP and ultimately SAP fails.

      My experience with SAP says that software is very very efficient but the only thing is due to lack of expert consultants, all the available functionalities are not used to its fullest as a result entire Implementation goes for toss and client don't get good return on their Investment on SAP. 

      Where as in tally one can implement it overnight, there is very good market of Tally  consultants and staff, recruitment process is internally supported by Tally over and above  Internal Tally support center and telephonic support directly by Tally. One can say that client start enjoying all the positive sides of Tally within no time, before its negative sides get exposed.

      So far as combination of India & SME is concern tally occupies more than 75% of market.

      Therefore in my opinion, so far as Indian market is concern SAP needs much more improvement. How so ever efficient software is but it can not prove its efficiency if it is not backed by efficient implementation and support.

      I myself have personally seen SAP B1 installation in India, but still client satisfaction level and success ratio is very very less.

      I have also seen cases where both the ERPs are used simultaneously namely SAP R3 and Tally in order to enjoy benefits of both.

      Therefore answering your question "Which is the best?" is very very difficult.



    • Dear Ghanem,

      Thank you for appreciation.

      Any further suggestions, input or even criticism in order to improve existing points, are most welcome.



  • Dear Chirag,

    Very nice blog. A good comparison indeed. Somehow, I have missed this one out. Now a days most of the consultant are just SAP trained and becoming SAP consultant, in turn they are failing to understand the business processes. Tally is definitely a popular product in the market and your blog gives a bird view of what both are doing, though SAP is advanced in its own way.

    Keep it up.

    Best Regards,


    • Thank you sir, for your comments.

      SAP is advanced ERP, indeed, but like for short distance travelling one can not use airways, for SMEs SAP may not prove to be a correct choice.

      I would say that those who wish to learn SAP should learn any of a small ERP software first, which will help in understanding all basic concepts.

      Thanks once again



  • Chirag,

    Indeed a good article. When I was given the chance to explain what is SAP I took the example of Tally on my introduction. Tally is a very good product. But I strongly reckon you can't actually compare that with one of best product "SAP".

    SAP always a great product. I too believe Tally is good Indian Product.

    Your articles are really exploring new ideas. 🙂



    • Dear Mr. Ram,

      Thanks for your appreciation.

      I do agree with you that SAP is a great product provided it is implemented properly.

      It is like an Aircraft, if handled properly it will take you across the ocean else one can imagine a situation if aircraft is not handled properly. 😆 😥



  • Thanks for sharing in-depth knowledge in between SAP ERP and Tally ERP. 🙂

    SAP FI module practicing and also comparing with tally like costing, checking chart of accounts and controlling area, posting documents, checking automatic payment run etc.

    This blog is helps to minimize my R&D in comparison. 🙂



  • Exceptional Effort Chirag, a serious help could be derived by the people who are thinking of comparing the two. Kudos for your efforts.