Cost Centre and Cost Category in Tally Prime

 

Cost Centre and Cost Category

Cost Centres

A cost centre is any unit of an organization to which

transactions (generally, revenue) can be allocated. When

only costs or expenses are allocated to these units, they are 

referred to as Cost Centres. When profits are also allocated

to these units, they become Profit Centres. You can now

obtain a Profit and Loss account of each such Profit Centre.

Transactions are allocated to cost centres. This

enables accounting all transactions for that

particular cost centre.  You can view the cost centre

break up of each transaction as well as the details of

transactions for each Cost Centre.

Some examples of Cost Centres are:

● Departments of an organisation - Finance,

 Manufacturing, Marketing, and so on.

● Products of a company.

● Individuals such as Salesman A, Salesman B.

Create Company

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F11   Feature

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Enable Cost Centres  -  yes

 

Create Cost Category

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Cost Categories

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Create New

Name  : Sales Project 1

Allocate Revenue Items : Yes

Allocate Non-Revenue Items : No

 

Create Cost Centre

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Create

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Cost center

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Create

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Category   :    Sales Project 1

Name        :    Salesman 1

Under        :    Primary

 

Similarly, we started making the cost center as given below-

Salesman 2

Salesman 3

Salesman 4

 

Ledger

Conveyance -   Indirect Expenses

Voucher

F5 – Payment Voucher

Cash

____________                                                            15000

Dr Conveyance

Cost Allocation for: Conveyance

Up to: Rs 15000

Cost Category

                     Name of Cost Centre                      Amount

Sales Project 1

                            Salesman 1                                             3500

                            Salesman 2                                             3000

                            Salesman 3                                             4000

                            Salesman 4                                             4500

 

Cost Centre Class

For Faster Entry You Can Pre- Allocate Cost Centers By Defining Percentage In The Cost Center Class.

 

For example if a salary of Rs. 50000 .Is to be paid and distributed as 30% to sales man 1 , 25% to salesman 2, 25% salesman 3 and 20% to salesman 4.

 

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Cost center Classes

Cost Centre Classes Name – Company Name

Class Name             National Traders

Sales Project 1 Sales man 1     -        30% Salesman2      -         25% Salesman 3     -         25% Salesman  4     -        20%

 

 

Ledger

Salary    -    Indirect Expenses

Voucher

F5  -    Payment Voucher

Cash

Salary                                                                 50000

 

Salesman   1                        15000Dr.

Salesman    2                       12500Dr.

Salesman    3                       12500Dr.

Salesman    4                       10000Dr.

 

Display Cost Center Report

 

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Statements Of Accounts

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Cost Centres

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Category Summary

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