How to Make Cost Centers / Profit Centers with multiple Cost Categories in Tally ERP

In Tally.ERP 9 you can allocate transactions (especially those which are revenue in nature) to particular

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 management

with information regarding their performance. With cost categories enabled, parallel allocation

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

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.

􀂇 Select the relevant Cost Category and Cost Centre during Voucher Entry

To view Cost Category summary,

Go to Gateway of Tally > Display > Statements of Accounts > Cost Centres > Category

Summary