Dealing with Hire Purchase in Tally is simple. Firstly raise the initial invoice for the total. If you pay for the item by Direct Debit or on a fixed day each month you know when each payment will be made you can add all of these payments to the payments section of the invoice. Each payment will appear in your bank in Tally as the day comes and the total due on the invoice will drop automatically. If you are required to pay all of the VAT upfront and you are cash accounting for VAT you will need to create a separate invoice for the VAT element of the invoice. Thus one invoice will have no VAT and you will have a 100% VAT invoice.