Tally Accounting
Posted by Asok K Nadhani on

Job Cost Accounts in Tally

Job Cost Accounting in Tally

Job Costing refers to allocation of all expenses relating to a Job. A Job may mean a Project, a Product, a Contract  or any identifiable entity for which the revenue & costs can be allocated or apportioned.

Job Costing involves tracking of each element of cost and revenue to ascertain the actual costs incurred for each job. Each Job is a distinct entity, identified by a distinct Job Number or Job name.

A Job may be done in house in its own workshop, may be sub contracted to external Jobber, or a combination of both. Some parts of the Job are given to external agencies whiles some processes are done internally within the organization.

Job Cost Features Activation in Tally

To activate Job Costing feature, at Gateway of Tally, Click F11: Features to get Company Features Menu. At Company Features  Menu :

  • Accounting Features set up : Select Accounting Features to get Accounting Featuresscreen. At Accounting Features screen, set :
    • Yes at Maintain Cost Centres
    • Yes at Use Cost Centre for Job Costing

Job Cost Accounting features set up in Tally

  • Inventory Features Set up : Select Inventory Features to get Inventory Features screen. At Inventory Features screen, set :
    • Yes at Maintain Multiple Godown / Excise Units, to activate Projects as Godowns

Multiple Job Cost set up in Tally

Job Cost Masters creation in Tally

For Job Costing System, create the following types of Masters

  • Ledger Accounts for :
    • Jobber
    • Sales / Purchase
    • Income / Expenses
  • Cost Centres for Job Costs
  • Godowns for Jobber
  • Job Cost Voucher Class

Job Ledger Accounts creation in Tally

Create following Ledger Accounts for Job Costing :

  • Jobber Ledger: Create Jobber Ledger in usual way, like Supplier Ledger Account.

Jobber Ledger creation in Tally

Job Sales & Purchases Ledger creation in Tally

Create Job Sales Ledger under Sales Account and Job Purchase Ledger under Purchase Account group, as usual.

Job Sales Ledger Account creation in Tally

Job Purchase Ledger Account creation in Tally

Job Income and Expenses Ledger creation in Tally

Apart from Sales & Purchase, for all Income & Expenses directly attributable or indirectly allocable to Job Costs, create Income & Expenses Ledger under Direct Income & Expenses Group.

Jobbing Charges Ledger Account creation

To get Job Cost analysis, you may set Yes at Cost Centres Applicable for all such Ledgers.  

Job Cost Centre Master creation in Tally

Cost Centre creation has been explained earlier. Create Cost Centre for each Job to which the Income & Expenses will be allocated. At Gateway of Tally,select Accounts Info > Cost Centres > Create to create Job Cost Centre. Normally, a work order number, or an Item/work order number combination may be used as Cost Centre, to get Cost/Profit Analysis in respect of a work order or each Item of work order.

Cost Centre master ser up for Job Cost in Tally

Jobber Godown Master creation in Tally

Raw materials are issued to workshop / process department. So, create a Godown for each of these departments where the materials for the job are transferred to & transferred from Job process.

Sometimes, materials are issued to third party Jobber, In such case, create a Godown for each Jobber, as the transferred materials are property of the organisation. So Jobber’s place is treated as Godown.

Godown Creation has been explained earlier. At Gateway of Tally,  select Inventory Info > Godowns > Create to get Godown Creation screen. Create the (Jobber) Godown.

Godown Master set up for Jobber in Tally

At Godown (Jobber) creation screen, at Set Job / Project Name, select the associated default Job Cost Centre (from the list of Cost Centres for which you have set Yes at Use for Job Costing associated with the Godown).

Job Cost Voucher Class  Creation in Tally

All Issue & Receipt of materials relating to Job are to be entered through Job Cost Vouchers.

To get Jobwise Analysis and cost of materials issued to and received from respective Jobs, you should create Job Cost Stock Journal Voucher classes. You must have created at least two Job Cost Godowns to activate Job Cost Stock Journal class.

Voucher Class creation has been explained earlier. At Gateway of Tally, select Accounts Info>Voucher Type>Create and create Stock Journal Voucher Type as usual.

At the Name of the Class, write the class name .

Job Cost Stock Journal Voucher Class creation

Now set the options to create a voucher class for Jobber as follows:

Job Class Voucher creation for Inter-Godown Transfer in Tally

At Use Class Voucher for Inter-Godown Transfer :

  • Set Yes to get only one column for details of Items transferred. This option is useful when the Items, Quantity and their value of source and destination are same, so that you do not have to type the Items both for Source & Destination. This is useful for internal department or Godown transfer.

Job Cost Class set up for Inter Godown Transfer

  • Set No to get different columns for Source & Destination. This is useful when the Items, Quantity or value may be different (due to conversion, shortage, excess etc), additional expenses.

Job Cost Class set up for Consumption

Job Class Voucher creation for Consumption in Tally

Set Yes at Use Class Voucher for Job Costing Consumption.This option is available only of you set No at Use Class Voucher for Inter-Godown Transfer .

Manufacturing Journal Voucher Type in Tally

Stock Journal Voucher Class has been explained earlier. At Gateway of Tally, select Accounts Info>Voucher Type>Create to create  Stock Journal Voucher Type.

Manufacturing Journal Voucher Type creation

Set Yes at Use as a Manufacturing Journal

Job Cost Voucher entry in Tally

Having created the Masters, you may now enter the vouchers for :

  • Job Purchase : Enter Purchase Voucher for Materials Purchased for use in the Job
  • Job Charges : Enter expense Voucher (or Purchase Voucher) for expenses / Jobber Charges for a Job.
  • Job Issue: Enter Stock Journal Voucher for materials purchased for use in the Job
  • Job Manufacturing Voucher :  Enter Manufacturing Journal Voucher for Raw Materials consumed and Finished Products Manufactured, alongwith manufacturing costs incurred
  • Job Expenses Payment Voucher : Enter Payment Voucher for Payment for Job Expenses
  • Job Sales Voucher : Enter Sales Voucher for the Jobbing Charges

The steps for each type of voucher entry are now discussed.

Job Purchase Voucher Entry in Tally

Purchase Voucher entry has been explained earlier.  Enter Purchase Voucher as usual with Godown details

At Item allocation screen , select the Godown in which the received materials are stored and enter the Quantity & Rate / Amount.

Job Purchase Voucher entry in Tally

Jobber Charges Voucher Entry in Tally

Journal Voucher entry has been explained earlier. Create Journal Voucher (you may create a Purchase Voucher also) for the Jobber Charges, debiting the Job Expenses Account and crediting the Jobber Ledger Account, recording the details of expenses incurred

On entering the Job Expense Ledger in the voucher, enter the Cost Centre allocation for the Ledger Account

Jobber Charges Journal Voucher entry in Tally

Job Issue Voucher Entry in Tally

As Jobbers are treated a Godown, Materials issued to jobber should be recorded through a Stock Transfer Voucher .

Jobber Materials Issue Voucher entry in Tally

At Gateway, select Inventory Voucher to get Inventory Voucher creation screen. Click F7:St Jrnl button and select

the respective Stock Journal Voucher Type Voucher Class (e.g Job Issue) to get the Stock Journal Voucher entry screen.

  • At Source side, select the Items issued and select the Godown from where the materials are issued (e.g Main Location).
  • At Destination side, select the Items issued and select the Jobber at Godown field whom the materials are issued.

Job Work Journal Voucher Entry in Tally

After the materials are issued to Jobber, Jobber does the manufacturing Job. In this process, the Jobber consumes raw materials given to him and produces finished products. He then delivers the finished products to the principals and submits the consumption statement in respect of materials consumed to produce the materials delivered to the principals

At Gateway, select Inventory Voucher to get Inventory Voucher creation screen. Click F7:St Jrnl button and select Manufacturing Journal Voucher Type created from the list of Stock Journal Voucher Types to get Manufacturing Journal Voucher entry screen .

Job Work Manufacturing Journal voucher entry in Tally

Enter the Manufacturing Journal voucher in respect of Finished Item produced, materials consumed to produce the Finished Item and Manufacturing expenses incurred, as follows:

  • Top Part : Produced Item Details :
  •  Produced Item Name : At Name of Product, Enter the finished Product produced by the Jobber
  • Godown : At Godown, select the Godown at which the Produced Item is stored
  • Quantity : Enter the Quantity of Item Produced

You may further enter Batch details as follows, if the respective options are activated

  • Batch Number : At Batch Name, enter the Batch Reference of the Item Produced
  • Mfg Date : At Mfg Dt., enter the Date of Manufacturing
  • Expiry Date : At Expiry, enter the Date of Expiry
  • Left Part : Raw materials consumed : Now enter the details of each Item consumed to manufcature the Item produced, as follows
  • Item Name : At Item Name column, select he Name of the Item consumed,
  • Godown  : At Godown column, enter the Godown where the produced Item is stored..
  • Quantity : At  Quantity column, enter the Quantity of Item produced
  • Rate : At Rate column, the Rate (Cost) of the Item (with Rate UoM) is displayed
  • Item Cost : At Amount, the cost of the Item consumed (Quantity x Rate) is displayed

Total Cost of Components : The Total Cost of materials consumed and unit cost of production (Total Cost of Components per unit of Item produced) is shown at the right part at Cost Of Components, as explained next

  • Right Part : Cost Details :  Here enter the details of Cost of Product is shown
  • Cost of Components : Total Cost of materials consumed entered at the left part is displayed  at Cost of Components.
  • Manufacturing Cost : Now enter the additional Manufacturing Cost details as follows:
  •  Expenses Account : At Type of Cost, select the Expenses Ledger Account
  •  Expenses % : Enter the Percentage of the Expenses
  • Expenses Amount : The computed amount as per % entered on Total Component Cost is displayed, which you may change. In this way, you may enter the exact amount of Cost incurred for each type of Expenses.

Jobber Payment Voucher in Tally

Payment Voucher has been explained earlier. After entry of Job Expenses Journal Voucher, create Payment Voucher in respect of payment of Jobber charges

Jobber Payment  Voucher entry in Tally

Job Expenses Voucher Entry in Tally

Apart from Jobber Charges, payment for other expenses for the Job are made through Payment Voucher, debiting the Job Expenses Account

Job Expenses Voucher entry  in Tally

Job Sales Voucher Entry in Tally

 Sales Voucher has been explained earlier. Enter Sales Voucher for the Jobbing Charges.

Job Sales Voucher entry in Tally

At Item allocation screen, select the Godown from which the Item is sold .

Item  allocation details entry in Job Sales Voucher  in Tally

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Asok K Nadhani (AKN Profile in dvidya site), is author of more than 30 Books on Business Accounting Software. His Business Software consultancy firm INFOSOFT, provides consultancy services on implementation of Business Accounting System to Business Enterprises.

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