Tally will rebuild its 40-year-old accounting software for the AI era

Picture this: the software that keeps the accounts of your neighbourhood kirana shop is about to get its old engine pulled out and a brand new one fitted. On 16 October 2026, Mint reported that Tally Solutions is preparing to scrap and rebuild the core of its 40-year-old accounting software for the age of AI. Its Managing Director, Tejas Goenka, put it bluntly: "But if we don't do it now, it is death."

Wait, what is Tally?

If you have ever seen a shopkeeper or a CA uncle type numbers into an accounting screen at the billing counter, there is a good chance it was Tally. It is accounting software. Accounting simply means keeping a careful record of every rupee that comes in and goes out, like a diary for money.

Tally was started in 1986 by Bharat Goenka, with guidance from his father. Today, Tally's own site says it is trusted by 2.5 million+ businesses in more than 100 countries. That is over 25 lakh businesses. A YourStory report puts its customer network at close to three million. Tally says it was started to help MSMEs, which means micro, small and medium businesses, like shops, traders and small factories. They use it for daily accounts and for GST, the tax added to most things we buy.

Here is the part that surprises people: Tally is a homegrown Indian product. It was built in India long before UPI, GST or the startup boom.

What exactly is Tally going to do?

According to Mint's report, the overhaul will go deep. It will touch the software's own database (where the data is stored), its maths functions and its memory management system (how the software uses the computer's working memory). In the interview, which Goenka gave to The Economic Times Digital and which Mint reported, he called the work painful and said, "There's no other answer."

Think of it like a family that has run a chai stall on the same corner for 40 years. Business is fine. But the road outside is being rebuilt, and the customers of tomorrow will walk in from a new direction. So the family decides to knock down the old stall and build a fresh one, even though the old one still works.

Tally has done this five times before

This is not new for Tally. Mint says the company has carried out five major technology rebuilds: the move from DOS (old black screens where you typed commands) to Windows, then the arrival of the internet, then cloud computing. Each time, Goenka said, the team took the old code and threw it away. In his words: "We just take our old code, junk it, and then we redesign."

Tally's Executive Director Nupur Goenka told YourStory that the company built almost everything itself, including its own database, its own memory manager and its own programming language. She said the full stack has been rewritten five times without carrying over a single line of code.

Two cards: the old way, typing every bill by hand, and the new way with Docs by Ira, where AI drafts the entry and a person checks it — Docs by Ira tries to replace typing bills by hand with snap, check and save.

The AI tool Tally already launched

Tally started testing AI around 18 months ago. In May, it launched its first AI product, called TallyIra. Its main feature, "Docs by Ira", reads a supplier's invoice (the bill a seller gives you) or a bank statement and turns it into an accounting entry. Tally calls such an entry a voucher.

So instead of a shop's accountant typing every line of 50 bills by hand, the shop can scan or upload them. Tally's page for its latest version, TallyPrime 7.1, says Docs by Ira can save up to 80% of processing time and that you review the entries before anything is saved.

Mint reports that TallyIra uses Google's Gemini and China's open-source model Qwen to pull details out of documents. Nabendu Das, Tally's chief of engineering and products, said around 20,000 to 25,000 customers have used it so far, and it has handled roughly 6 to 7 million pages of invoices and bank statements.

A counter rising to 6 million plus, showing pages of invoices and bank statements read by TallyIra since May — About 6 to 7 million pages read since the launch in May.

One catch: TallyIra is not free with TallyPrime. Mint says it is bought separately, and users need a licensed copy of TallyPrime Release 7.1 or later plus an active Tally Software Service plan.

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Can AI be trusted with money records?

This is the big worry. A wrong number in a shop's accounts can mean a wrong tax filing. Das was honest about it: "AI is a probabilistic system." That means it makes its best guess, so it will not be right 100% of the time.

So Tally keeps a person in charge. The software does not make the entry on its own. It reads the bill, shows what it found, and flags anything that looks off. As Das put it, "It will make sure there's a human in the loop."

It is a bit like a helper at a samosa stall who counts the cash at the end of the day. The owner still checks the total before closing the box.

What about the people who do accounts?

Entering invoices and matching bank statements is daily work for many bookkeepers. Mint notes that more automation is expected to reshape that daily work. Goenka said there is no denying the disruption, but how it plays out depends on each person.

He also said that people who take responsibility for AI-made work get different results from people who hand everything over to the tool, even with the same tool. And for now, Tally itself is still growing. It has about 1,150 employees, and Goenka said, "We are one of those rare companies that is continuing to hire."

Tally also works through a big partner network. Its About page lists 28,000+ partners who handle sales, support and services for customers.

Bar chart comparing about 1,150 Tally employees with more than 28,000 Tally partners — A small company team, backed by a very large partner network.

Why this matters

Even Goenka admits nobody has the full answer yet. He told the interviewer that big old companies, startups and new players are all thinking about AI in the same way, and "Someone is going to figure this out." He hopes it will be Tally.

There is also the question of trust and privacy. In a YourStory fireside chat, the Goenkas said the basics will not change with AI: cost, reliability and privacy. Tejas Goenka gave the example of a textile maker with around Rs 1,500 crore in revenue where only four people know the customer names.

For a young person, the lesson is simple. Even a 40-year-old champion has to be ready to start again from zero when the game changes. Tally has done it five times. Number six is about AI.

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Sources

You may republish this story under CC BY 4.0: credit Manpreet Kaur and link to this page.