Cost
Center in Tally.ERP 9
1.
Introduction
The cost center
in Tally.ERP 9 refers to an organizational unit to which costs or expenses can
be allocated during transactions while the cost category is used to accumulate
costs or profits for parallel sets of cost centers.
Example: HP Computer pvt. ltd.
ds Sales, Marketing, Distribution
and Workshop departments esa gksus okys
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Simple Accounting
|
||
SN
|
Expanse
|
Amount
|
1
|
Office Rent
|
53,000
|
2
|
Electricity
|
12,100
|
3
|
Breakfast
|
65,000
|
4
|
Mobile Bill
|
4,600
|
5
|
Water Bill
|
7,900
|
6
|
Internet Bill
|
3,850
|
Total
|
1,46,450
|
|
Cost Center Accounting
|
||||||
SN
|
Expanse
|
Departments
|
||||
Sales
|
Marketing
|
Distribution
|
Workshop
|
Total
|
||
1
|
Office Rent
|
15,000
|
10,000
|
12,000
|
16,000
|
53,000
|
2
|
Electricity
|
3,000
|
3,500
|
1,600
|
4,000
|
12,100
|
3
|
Breakfast
|
18,000
|
26,000
|
15,000
|
6,000
|
65,000
|
4
|
Mobile Bill
|
1,200
|
2,500
|
400
|
500
|
4,600
|
5
|
Water Bill
|
2,000
|
2,500
|
1,400
|
2,000
|
7,900
|
6
|
Internet Bill
|
700
|
750
|
500
|
1,900
|
3,850
|
Total
|
39,900
|
45,250
|
30,900
|
30,400
|
1,46,450
|
|
2.
Enabling Cost Centre and Cost Category
·
Go
to Gateway of Tally > F11: Features > F1: Accounting Features
·
Set
‘Maintain Cost Centres’ to ‘Yes’
·
Set
‘More than ONE Payroll/ Cost Category’ to ‘Yes’
3.
Creating Cost Centers
·
Go
to Gateway of Tally> Accounts Info.> Cost Centers> Select ‘Create’
under Single Cost Centers
4.
Allocating Expenses to Cost Centers during
Transaction
To allocate
expenses to each cost centers while making.
To pass the
payment transaction:
·
Go
to Gateway of Tally > Accounting Vouchers > F5: Payment
·
Debit
the ‘Expanse’ ledger with the required amount
·
Press
Enter to open ‘Cost Allocation’ screen
·
Select
the ‘Primary’ in ‘Cost Category’
·
Allocate
each cost center with the amount.
·
Complete
the Payment Voucher
5.
Pre-Allocation of Costs
For faster entry
you can pre-allocate cost centers by defining percentage in the Cost Centre
Class.
·
Go
to Gateway of Tally > F11: Accounting Features
·
Set
'Use Pre-defined Cost Centre Allocations during Entry' to 'Yes' > Press
‘Enter’
On the
‘Auto-Cost Allocation’ screen,
·
Enter
the ‘Class Name’ and press ‘Enter’
·
Select
the appropriate ‘Cost Category’ and enter the required percentage
Now, let’s use
the ‘Cost Centre Class’ in a transaction for paying expanse. To do this, let’s
first create a ledger ‘Expanse’ and allocate all the cost centers. To pass the
transaction:
·
Go
to Gateway of Tally > Accounting Vouchers > F5: Payment
·
Select
‘class’ in ‘Cost Centre/Classes’
·
Complete
the Payment Voucher.
Cost Center Accounting
|
||||||
SN
|
Expanse
|
Departments
|
||||
Sales
|
Marketing
|
Distribution
|
Workshop
|
Total
|
||
1
|
Office Rent
|
25%
|
15%
|
40%
|
20%
|
100%
|
2
|
Electricity
|
25%
|
15%
|
40%
|
20%
|
100%
|
3
|
Breakfast
|
50%
|
25%
|
10%
|
15%
|
100%
|
4
|
Mobile Bill
|
20%
|
40%
|
20%
|
20%
|
100%
|
5
|
Water Bill
|
25%
|
25%
|
25%
|
25%
|
100%
|
6
|
Internet Bill
|
15%
|
15%
|
15%
|
55%
|
100%
|
Total
|
160%
|
135%
|
150%
|
155%
|
||
6.
Cost Centre Reports
For faster
identification and detailed analysis of how costs are allocated to your
business units, Tally.ERP 9 provides reports to show complete details of all
the cost centers and their related transactions in different ways. These
reports are:
1. Category Summary
2. Cost Centre Break-up
3. Ledger Break-up
4. Group
Break-up
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