It's hard to carry around significant amounts of coinage. In large quantities, such as a king rewarding/bribing a duke for assembling an army to fight for him, it might require wagonloads of coins. Worse, before the early 1300s in England, gold coinage was forbidden and everything had to be counted out in silver pennies.
Tally sticks made of willow provided a solution. It relied on one of those systems of splitting something into two pieces that matched only each other, so a promissory note in any amount could be created - one half to the debtor, one to the creditor. No need to lug coins to the exchequer. People quickly figured out that the tally sticks themselves could be exchanged.
If you had a tally stock showing that Bishop Basset owed you £5, then unless you worried that he wasn't good for the money, the tally stock itself was worth close to £5 in its own right. If you wanted to buy something, you might well find that the seller would be pleased to accept the tally stock as a safe and convenient form of payment.
It ended rather badly, and with great irony in 1834. Parliament got rid of the system of tally sticks in the 1820s in order to make everyone record their transactions by ledger. Which was fine, except that they decided to burn the old tally sticks to celebrate the change to modernity, and burned them underneath the Houses of Parliament. You may have heard of the Great Fire of 1834 which destroyed those buildings.
To celebrate, it was decided to burn the sticks - six centuries of irreplaceable monetary records - in a coal-fired stove in the House of Lords, rather than letting parliamentary staff take them home for firewood. Burning a cartload or two of tally sticks in a coal-fired stove is a wonderful way to start a raging chimney fire. So it was that the House of Lords, then the House of Commons, and almost the entire Palace of Westminster - a building as old as the tally stick system itself - was burned to the ground.
The online history of the Houses of Parliament records this in less embarrassing fashion.