Tally Accounting
Posted by Asok K Nadhani on

Cost Category in Tally

Cost Category in Tally

Cost Category is hierarchical organisation of  similar nature Cost Centres, to get summarised Cost Reports, in the same way as Accounts Groups are  hierarchical organisation of Ledger Accounts of similar nature.

For example, you may allocate ledger accounts of a voucher to Cost Centres under Cost Categories as follows:

  • Products Type (Mobile, Tablet, Note Book, Laptop)
  • Service Type (Board, Memory Card, AMC)

Anay transaction element in Voucher may be allocated to multiple Cost categories simultaneously, distinct and independent of each other.

Ledger Account Transactions in Voucher are allocated to Cost Centres only (NOT to Cost Categories). The Cost Category organizes the allocation to respective Cost Category  

Cost Categories Activation in Tally

Having activated Cost Centre (set Yes at Maintain Cost Centre ), also set Yes at More than one Payroll / Cost Category at Company Operations screen, to enable entry of Cost Categories. Consequently, the option Cost Categories also appear at Accounts Info Menu to create & maintain Cost Categories.

Even when Cost Category is not activated (when you set No at More than one Payroll / Cost Category, as explained above), a Primary Cost Category  is internally created and all Cost Centres created are placed under this internally created Primary Cost Category (but you cannot create any new Cost Category).

When Cost Category is activated. Cost Centre must be placed under a specific Cost Category

Cost Category Creation in Tally

 At Accounts Info Menu, select Cost Category  to get Cost Category Menu. 

Cost Category menu in Tally

At Cost Category Menu, select Cost Category  to get Cost Category creation screen . Now enter as follows:

  • Cost Category Name: At Name, enter Cost Category Name.
  • Cost Allocation Type: You may specify the Ledger Account Types for Allocation to Cost Centres, as follows:
  • Allocation of Revenue Accounts Items : At Allocate Revenue Items,  set Yes to allocate amount of Nominal Ledger Accounts only (i. e. Ledger Accounts of  Income / Expenses), else set No ( Non Revenue Ledger Account cannot be  allocated to the Cost Category).
  • Allocation of Non Revenue Accounts Items : At Allocate Non-Revenue Items field,  set Yes to allocate Non Revenue Ledger Account (i. e, Ledger Accounts of Assets / Liabilities) to the Cost Category, else set No  (Non Revenue Ledger Accounts can not be  allocated to the Cost Category

Cost Category creation in Tally

You may set Yes at either of the option (to allocate for selected type of Ledger Accounts, or both (to allocate all ledger accounts). Do not set No to both the option (No Ledger account would be allocated)

Cost Centre creation under Cost Category in Tally

Cost Centre creation has been explained earlier. However, After you have created Cost Category, you have to create a Cost Centre under a Cost Category only. During Cost Centre creation / alteration , enter as follows :

  • Parent Cost Category : At Category, select  the Parent Cost Category (if the cursor has skipped to next field, press Shift+Tab (or Up Arrow) to get to Category field and select the parent Category from the list.
  • Cost Centre Name : At Name, enter the Cost Centre Name.
  • Parent Cost Centre : At Under, select  the Parent Cost Centre (or select Primary) from the list (or press Alt+C to create the parent Cost Centre and select it at Under field)

Cost Centre creation in Tally

Cost Category selection in Tally

Cost Category creation in Multi Mode in Tally

You may create Multiple Cost Centres through Multi Mode.  The Multi Mode is more convenient  to create / alter / display a number of Cost Centres at a time, in one screen.

The process of Entry of Multi Mode Cost Category entry is similar to entry of Multi Mode Accounts Ledger , Account Group & Cost Centres, described earlier.

Select Create under Multiple Cost Categories at Cost Categories Menu, to get Must Cost Categories creation screen, to enter as follows :

  • Cost Category Name: At Name of Cost Category column, enter Cost Category Name.
  • Cost Category Account Type: You may specify the Ledger Type for Allocation as explained earlier.
  • Allocation of Revenue Accounts Items : At Revenue Items column,  set Yes to allocate amount of Nominal Ledger Accounts only (i. e. Ledger Accounts of  Income / Expenses), else set No ( Non Revenue Ledger Account cannot be  allocated to the Cost Category).
  • Allocation of Non Revenue Accounts Items : At  Non-Revenue Items column,  set Yes to allocate Non Revenue Ledger Account (i. e, Ledger Accounts of Assets / Liabilities) to the Cost Category, else set No  (Non Revenue Ledger Accounts can not be  allocated to the Cost Category

You may set Yes at either of the option (to allocate for selected type of Ledger Accounts, or both (to allocate all ledger accounts). Do not set No to both the option (No Ledger account would be allocated).

Multi Mode Cost Category creation

Multi Mode Cost Category Creation Button Bar

Cost Category Master Alteration : To Alter a Cost Centre Master, at Cost Centre Menu, select Alter (under  Multiple Cost Centre) to get Cost Centre Alteration screen, displaying the Cost Category, similar to Cost Category creation screen. Place the cursor to the desired field and make necessary alteration in the same way as Creation of Cost Centre, explained above.

Cost Centre Master Display in Tally

Display a Cost Centre Master, at Cost Centre Menu, select Display (under  Multiple Cost Centre), to get the Cost Category Display screen, displaying the Cost Category, similar to Cost Category creation screen. You may view the details but you cannot change any data from Display screen.

Cost Category / Cost Centre Master Display in Tally

Multi Mode Cost Centre Creation under Cost Category

We have explained Multi Mode Cost Centre Creation earlier. However, on Cost Category creation, you have to create Cost Centres under Cost Category. You may create Cost Category under Multi Mode. As described, at Cost Centre Menu , select Create under Multiple Cost Centre to get Multi Mode Cost Center creation under Cost Category entry screen.

Multi Mode Cost Center creation under Multiple Cost Category in Tally

Now enter as follows:

Parent Cost Centre:At Under Cost Centre, select the parent Cost Centre (or select Primary) under which you like to place the Cost Centre (for the first Cost Centre created, you can select Primary only).

  • To create a Cost Centre under any Cost Centre, select All Items at Under Cost Centre .
  • To Create a Cost Centre under a specified Parent Cost Group, select the Parent Cost Centre at Under Cost Centre.

Now enter the Cost Centres as follows :

  • Cost Category Name:At Category column, select the Cost Category from the list.
  • Cost Centre : Enter the Name of the new Cost Centre to be created
  • Parent Cost Centre : At Under column, select as follows:
  •  If All Items is specified at Under Cost Centre, then select the Parent Cost Centre from the list of Cost Centres
  • If a specified Cost Centre was selected at Under Cost Centre, then the selected Cost Centre is auto carried at Under column and you do not have to select the Parent Cost Centre at Under column

Multi Mode Cost Center creation under ONE Cost Category in Tally

Multi Mode Cost Centre creation buttons in Tally

Multi Mode Cost Centre creation button bar in Tally

Multiple Cost Category allocation in Voucher in Tally

We have seen Cost Centre Allocation of Ledger Account in Voucher. On creation of Cost Categories, you may allocate the Cost Allocable Ledger Amount to Multiple set of Cost Categories.

During voucher entry, on entry of Cost Allocable Ledger & Amount , you get Cost Allocation screen to allocate the Ledger Amount to Cost Category / Cost Centre.

  • Cost Category : Select the Cost Category
  • Cost Centres : Now allocate to the Cost Centres under the selected Cost Category, one by one, till the entire ledger amount is fully allocated. Select the Cost Centre. Enter the amount (you may enter amount in negative, in case of deduction or reverse adjustment). The net of total amount allocated must match with the Ledger Amount.

After allocation of Ledger Amount to the selected Cost Category (and underlying Cost Centres), you may again select another Cost Category and allocate the edger Amount to another set of Cost Category/ Cost Centres, in the same way.

Press <enter>at Cost Category field to terminate allocation to Cost Category for the Ledger Amount.

Multi Cost Category Voucher entry in Tally

Multiple Cost Centre Voucher Allocation in Tally

Multi Cost Category allocation in Voucher in Tally

You get back to the main voucher entry screen showing the allocation details to the Cost Categories & Cost Centres (Amount with Dr/Cr sign) as entered in Cost Centre allocation screen.

The sign of positive allocation is same (Dr/Cr)  as the sign of allocated Ledger Amount, while the sign the sign of negative allocation (Dr/Cr) is opposite.

Cost Category Summary in Tally

Select Display > Statement of Accounts > Cost Centres > Category Summary to get Cost Category. It shows summary of all Cost Categories, displaying figures for underlying Cost Centres..

Cost Category Summary in Tally

Cost Category Summary Configuration in Tally

At Cost Category Summary, Click F12:Configure to get Cost Category Summary Configuration screen, to set up following options :

– Opening Balances : At Show Opening Balances :

  • Set Yes to show Opening Balance of the Cost Centre
  • Set No. The Opening Balance of the Cost Centre is not shown

– Transactions Break Up: At Net Transaction only:

  • Net of Debit / Credit : Set Yes to show only he Net of Debit / Credit either in Debit or Credit Column (whichever is greater)
  • Debit / Credit Break Up : Set No to show both Debit & Credit amount separately, in respective Debit or Credit Column (whichever is greater)

– Closing Balances : At Show Closing Balances :

  • Set Yes to show Closing Balance of the Cost Centre
  • Set No. The Closing Balance of the Cost Centre is not shown

– Percentage : At Show  Percentages:

  • Set Yes to show the % of amount of each Cost Centre in respect of Total  for that column
  • Set No. % column is shown

– All Details : Having set F1:Detailed button, at Expand all Levels in Details Format,

  • Set Yes to show complete details of all lower level Cost Cetres
  • Set No. Lower Level details are not shown

Cost Category Summary Configuration in Tally

Cost Category Summary Buttons in Tally

At Cost Centre Summary , you get Buttons , as follows:

  • F1:Detailed / Condensed : Click F1:Detailed button to get next level details. F1:Condensed to get top level Cost Centre only
  • Columnar Buttons : To define Columnar Reports of various Periods & Companies

Cost Category Summary Buttons Bar in Tally

Drill Down: On drill down from various elements at Cost Category Summary, you get reports as follows:

  • Cost Center Summary : From the top level Cost Category (or higher level Cost Centre having subordinate Cost Centre), you get Cost Centre Summary report giving the summary figures of each Cost Centre under the selected Cost Centre / Category, for the specified period
  • Cost Centre Monthly break up : From the lowest level Cost Centre (Cost Centre having no subordinate Cost Centre), you get Cost Centre Monthly breakup report giving the monthly  figures of the selected Cost Centre, for the specified period. You may set the Period & Periodicity of the Report.

Cost Centre Opening Balance Reports in Tally

To show Opening Balance of Revenue Items, at  Cost Centre creation screen, set Yes at Show Opening Balance in Revenue Accounts in Reports

Cost Centre Opening Balance option set Up in Tally

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