Tally ERP9 – Cost centers / Profit centers with multiple Cost Categories

In Tally.ERP 9 you can allocate transactions (especially those which are revenue in nature) to par- ticular Cost Centres, which will help you in extracting reports for that Cost Centre (Profit Centre). Cost Centers could generally be a Unit / Division / Department / Function / Activity etc in the organization or even Sales Executives, to which transactions (generally transactions which are revenue in nature) are allocated.

You can also compare one cost centre with the other. Hence cost centers will provide the man- agement with information regarding their performance. With cost categories enabled, parallel allo- cation of the same expense is possible between different cost centres.

To view Cost Centre Break-Up,

Go to Gateway of Tally > Display > Statements of Accounts > Cost Centres > Cost Centre break-Up

2.6.1 Cost Category

In many cases, you would like to allocate a transaction to more than one cost centres. Especially, if you want to track revenue either based on location and person or brand and type of product, Tally.ERP 9 provides you a facility called Cost Categories. This facility enables you to allocate costs to parallel sets of cost centres i.e., the same amount can be allocated to more than one cost centre.

For example., Create two categories, one by the name of Administration and another by the name Accounts under Primary Cost Category. Create Employees or persons under the respective cost categories and enter a payment transaction for a ledger account for which cost centres are applicable.