A customer pays you ₹50,000 against three open invoices at once. Which bill did they clear? Bill-wise references let you split one receipt across the specific invoices it settles, so outstanding is tracked per bill — not just as one lump against the client. It's Tally's New Ref / Against Ref, built into the payment form.
Allocate one receipt across bills
On Add payment, pick the client and the amount, then the bill-allocation panel lists their open invoices with each one's balance. Type how much of the receipt goes to each — the panel keeps a running allocated and on account total as you go. What you don't allocate stays on account as an advance, ready to apply to a future bill.
Against Ref vs New Ref
Against Ref settles an invoice that already exists — the everyday case. New Ref earmarks part of the receipt against a specific invoice as a first-time reference (an advance tied to that bill). Both are bounded by the invoice's outstanding balance; the unallocated remainder is the on-account portion, not a separate line.
Per-bill outstanding, no double-count
An allocation is the detail of the same paid amount, never an extra payment. Each rupee is attributed to at most one invoice (or to on-account), so the per-reference balances reconcile exactly with the receivables ageing on Outstanding — the same allocated amounts feed each invoice's paid figure. An invoice flips to paid the moment its allocations cover its total.
Over-allocation is impossible
The rules are enforced in the database itself, not just the screen: every allocation must be more than zero, no more than that invoice's outstanding, and the sum can never exceed the receipt. A try to over-allocate is refused at the write — so you can never pay a bill twice or allocate money you didn't receive, whether you do it in the app or over the API. All the arithmetic runs in whole paise, so nothing drifts by a rounding rupee.
Access & control
Owners and assistants record and allocate payments; an invited accountant sees the allocations read-only. Re-allocating a payment is just remove-and-add — one allocation row per invoice per payment.
Related: Payments received and TDS, Day Book, Cashbook and Outstanding.