Self Help Groups (SHGs) play an important role in savings, internal lending, and women empowerment. Proper accounting helps SHGs maintain transparency, track loans, manage member savings, and prepare financial reports easily.
Using TallyPrime for SHG accounting makes ledger maintenance simple and accurate. In this guide, you will learn how to create ledgers for a Self Help Group step by step.
What is a Ledger in SHG Accounting?
A ledger is an account used to record financial transactions separately. In a Self Help Group, ledgers help maintain records for:
Member savings
Loans received
Loans given to members
Interest collection
Expenses
Bank transactions
Cash balance
Proper ledger creation helps the SHG maintain accurate books of accounts.
Why Ledger Creation is Important for SHGs
Creating proper ledgers gives many benefits:
Easy tracking of member savings
Accurate loan balance monitoring
Proper interest calculation
Clear income and expense reports
Better transparency among members
Easy preparation of balance sheets
Smooth auditing process
Basic Ledger Groups Required for SHG
Before creating ledgers, understand the important accounting groups used in SHG accounting.
| Ledger Type | Group Name |
|---|---|
| Member Savings | Capital Account |
| Bank Account | Bank Accounts |
| Cash Account | Cash-in-Hand |
| Loans Taken | Secured Loans |
| Loans Given to Members | Loans & Advances |
| Interest Received | Indirect Income |
| Expenses | Indirect Expenses |
Step-by-Step Ledger Creation in Tally
Step 1 – Open Ledger Creation Screen
In TallyPrime:
Go to Gateway of Tally
Select Create
Click Ledger
Now you can create individual SHG ledgers.
Create Member Savings Ledger
This ledger records monthly savings collected from members.
Details
| Field | Value |
|---|---|
| Name | Members Savings |
| Under | Capital Account |
This account shows total savings collected by the group.
Create Bank Account Ledger
SHGs usually maintain a bank account for transactions.
Example
| Field | Value |
|---|---|
| Name | SBI SHG Account |
| Under | Bank Accounts |
Enter bank details while creating the ledger.
Create Cash Ledger
Details
| Field | Value |
|---|---|
| Name | Cash |
| Under | Cash-in-Hand |
This ledger tracks cash available with the SHG.
Create Loan Ledger for Members
This ledger tracks loans given to SHG members.
Example
| Field | Value |
|---|---|
| Name | Loan to Members |
| Under | Loans & Advances |
You can also create separate ledgers for each member.
Example:
Loan to Priya
Loan to Lakshmi
Loan to Selvi
Create Loan Taken Ledger
If the SHG receives loans from banks or federations, create loan ledgers.
Example
| Field | Value |
|---|---|
| Name | SHG Bank Loan |
| Under | Secured Loans |
Create Interest Received Ledger
Interest collected from members should be recorded separately.
Details
| Field | Value |
|---|---|
| Name | Interest Received |
| Under | Indirect Income |
This helps calculate SHG income properly.
Create Expense Ledgers
SHGs may incur meeting, travel, audit, or stationery expenses.
Common Expense Ledgers
Meeting Expenses
Stationery Expenses
Audit Fees
Bank Charges
Travel Expenses
All these should be created under Indirect Expenses.
Important Voucher Entries for SHG
Monthly Savings Collection
Cash/Bank A/c Dr
To Members Savings A/c
Loan Given to Member
Loan to Member A/c Dr
To Cash/Bank A/c
Loan Repayment with Interest
Cash/Bank A/c Dr
To Loan to Member A/c
To Interest Received A/c
Bank Loan Received
Bank A/c Dr
To SHG Bank Loan A/c
Loan EMI Payment
SHG Bank Loan A/c Dr
Interest Paid A/c Dr
To Bank A/c
Tips for Maintaining SHG Accounts Properly
Record transactions daily
Maintain separate ledgers for each member loan
Verify bank balance regularly
Keep supporting bills safely
Check loan outstanding amounts monthly
Conduct regular account verification meetings
Final Words
Proper ledger creation is the foundation of successful Self Help Group accounting. Using TallyPrime helps SHGs maintain accurate financial records, improve transparency, and manage savings and loans efficiently.
By creating correct ledgers for savings, loans, bank accounts, interest, and expenses, SHGs can easily prepare financial statements and manage their funds professionally.
