Principally, there are two different kinds of tally sticks: the single tally and the split tally. A common form of the same kind of primitive counting device is seen in various kinds of prayer beads.
A number of anthropological artefacts have been conjectured to be tally sticks:
The single tally stick was an elongated piece of bone, ivory, wood, or stone which is marked with a system of notches (see: Tally marks). The single tally stick serves predominantly mnemonic purposes. Related to the single tally concept are messenger sticks (e.g., Inuit tribes), the knotted cords, khipus or quipus, as used by the Inca. Herodotus (c. 485–425 BC) reported the use of a knotted cord by Darius I of Persia (c. 521–486 BC).
The split tally was a technique which became common in medieval Europe, which was constantly short of money (coins) and predominantly illiterate, in order to record bilateral exchange and debts. A stick (squared hazelwood sticks were most common) was marked with a system of notches and then split lengthwise. This way the two halves both record the same notches and each party to the transaction received one half of the marked stick as proof. Later this technique was refined in various ways and became virtually tamper proof. One of the refinements was to make the two halves of the stick of different lengths. The longer part was called stock and was given to the party which had advanced money (or other items) to the receiver. The shorter portion of the stick was called foil and was given to the party which had received the funds or goods. Using this technique each of the parties had an identifiable record of the transaction. The natural irregularities in the surfaces of the tallies where they were split would mean that only the original two halves would fit back together perfectly, and so would verify that they were matching halves of the same transaction. If one party tried to unilaterally change the value of his half of the tally stick by adding more notches, the absence of those notches would be apparent on the other party's tally stick. The split tally was accepted as legal proof in medieval courts and the Napoleonic Code (1804) still makes reference to the tally stick in Article 1333. Along the Danube and in Switzerland the tally was still used in the 20th century in rural economies.
The most prominent and best recorded use of the split tally stick or "nick-stick" being used as a form of currency was when Henry I introduced the tally stick system in medieval England in around 1100. He would accept the tally stick only for taxes, and it was a tool of the Exchequer for the collection of taxes by local sheriffs (tax farmers "farming the shire") for seven centuries. The split tally of the Exchequer was in continuous use until 1826. In 1834 tally sticks representing six centuries worth of financial records were ordered to be burned in a stove in the Houses of Parliament. The resulting fire set the chimney ablaze and then spread until most of the building was destroyed. This event was described by Charles Dickens in an 1855 article on administrative reform.