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TALLY TUTORIAL

By far the most versatile tool for management information, Tally's cost centres allow dimensional analysis of financial information. You will now learn to allocate transactions like expenses and incomes to cost centres with a view to assess their performance.

Create Cost Centres

You will now create projects undertaken by a company as cost centres.

First of all, activate the Feature Cost Centres in the F11:Company Features. Do NOT activate 'more than one Cost Category'

Now return to the main Gateway of Tally.

Select Accounts info, Cost Centres, Create under Single Cost Centre

  1. Type Projects in the Name field and press Enter.
  2. Press Enter at Primary and Enter or Y to Accept.
  3. Create the next cost centre Buildings.
  4. Select Projects in the Under field and Accept.
  5. Similarly create two more cost centres Airports and Roads under the cost centre Projects.

You have now created four cost centres, three of which are sub-cost centres under a cost centre. Buildings, Airports and Roads are grouped under the cost centre Projects. Tally allows creations of cost centres within cost centres to any depth.

Displaying Cost Centres

Once created, cost centres can be displayed by selecting Display for single or multiple cost centres. You can not alter any information.

Altering Cost Centres

Existing cost centres can be altered by selecting Alter. The procedure is the same as creating a cost centre. Simply type in the changes. You may alter the parent by selecting another cost centre from the list.

Deleting Cost Centers

You can delete a cost centre via the Cost Centre Alteration screen by pressing [Alt]+[D]. However, you cannot delete a cost centre that containing another cost centre or has vouchers allocated to it. The lowest level must be deleted first.

Applying Cost Centres to Ledger Accounts

  1. Now create a few ledger accounts with cost centre active for these accounts. You can decide whether a ledger account should be allocated to cost centres when creating it.
  2. Create ledger accounts Conveyance and Postage under Indirect Expenses. Create Consulting Fees under Direct Incomes, Select Yes to Cost Centres are applicable?

Cost centre allocation in Voucher Entry

The entire objective of creating cost centres is to allocate expenses and revenues to cost centres. Allocation is dynamic and done at one stage only, i.e., Voucher Entry. Hence,

  1. Select Voucher Entry
  2. Select Payment
  3. Date: 14-12-98
  4. Dr Conveyance 20.00
  5. Now in the Cost Centre Allocation sub-screen that comes up after you keyed in the amount, type B with the intention to allocate the expense to Buildings. Confirm the selection of Buildings and press Enter for the entire amount of 20.00 for Buildings.
  6. Since you have completed the allocation of the full amount, the cursor moves back to the main voucher screen.
  7. Cr Petty Cash 20.00
  8. Type in the Narration 'Paid to Amar for travel to Brigade Road for the Buildings Project'.
  9. Press Enter and accept the voucher.                                                                                                                       Now Select Receipt Voucher.
  10. Cr Consulting Fees 1000.00
  11. Since you had activated Cost Centre Allocation for Consulting Fees, the sub-screen appears.
  12. Select Buildings and allocate the full amount to it.
  13. In the Narration, type 'Received for work done by Amar on the Buildings project'.

Display Cost Centre Information

In the vouchers, you allocated different transactions to cost centres. It is now time to view the kind of information that they provide.

  1. Wherever you are, come back to the Gateway of Tally.
  2. Select Display, Statements of Accounts then Cost Centres.
  3. Select Category Summary to display the net summarised position of the cost centres under Projects.
  4. Select Buildings and press Enter.

You are now drilling down into the Cost Centre 'Ledger' of Buildings. As from everywhere in Tally, you can drill right down to the vouchers. Experiment with the different button options. Now get back to the Display Cost Centres menu.

  1. Select Cost Centre Break-up.
  2. Select Buildings.
  3. What do you see? This is the net position of your activity on Buildings. All your purchases and expenses against your sales and incomes giving you the net transactional profits on Buildings.
  4. Click on Details button to explode the groups. Alternatively, try [Shift]+[Enter] on a line e.g. Indirect Expenses.
  5. Now use the keys [alt]+[C] or click on New Column Button to bring up data for Roads alongside Buildings.
  6. With your cursor on Indirect Expenses in the Particulars column, drill down to view further details. Are the columns retained?
  7. Now escape back to the first double column screen. Bring the cursor to the Indirect Expenses amount for Roads.
  8. Press Enter to see more details. What happens? Do you retain the two columns?

You have just gone through an amazing feature of Tally. You are now ready to learn about Cost Categories.

Cost Categories

In the above exercises, by allocating transactions to Buildings and Roads, we have obtained full analysis of these project cost centres. While entering the vouchers, we held 'Amar' responsible for some of the expenses and incomes and 'Barry' for some. The purpose of mentioning their names in the Narration was to be able to record their performance for later analysis and possible bonus payments. Now to extract the information and to know what projects Amar was involved with and the same for Barry. one can use Tally's excellent filtering utility [Alt]+F12:Range button and filter in information giving suitable conditions.

Try it out now. Use the category summary and filter information by using vouchers having Narrations containing 'Amar'.

  1. Display Statements of Accounts -> Cost Centres -> Category Summary
  2. Select Buildings. Drill down to the Cost Centre Vouchers for December.
  3. Now click on F12: Range. Give the filter condition.

It is possible to filter out all information and obtain the report but what if you have not given the information consistently in the vouchers?

Use Tally's Cost Category feature to allocate the transaction to Projects as well as to other 'Categories' like 'Salesman' or Branches or Departments and so on.

  1. Get back to the Gateway of Tally from wherever you are.
  2. Activate the 'more than ONE Cost Category' option in F11:Features.
  3. Accept the screen. Try [Ctrl]+[A] keys to accept without having to press Enter at each option.
  4. Get back to the Gateway of Tally and into Accounts info, Cost Categories, Single Create.
  5. Create a Category 'Salesmen' under Primary Cost Category.
  6. Allocate Revenue Items only and not Non-revenue items.
  7. Now return to the Accounts info menu and select Cost Centres
  8. Now the first information that you need to give is which Cost Category do you want the new cost centre to belong.
  9. Select Salesman for the Category
  10. Type in Amar for the cost centre.
  11. Accept Primary for 'Under' (Parent). You can have another cost centre under the same category is its parent.
  12. Likewise create Barry as a cost centre.

The cost centres Amar and Barry have been created under the Cost Category  Salesmen.  The Cost Centre Projects and its sub cost centres Buildings, Roads and Airports were not given any category and hence automatically fall under Primary Cost Category.  Primary Cost Category is Tally's default category, which you have come across already during Display.

You will now create a new Cost Category by the name Projects and Assignments and move the cost centre Projects under this new Category.

  • create a new Cost Category by the name Projects and Assignments and move the cost centre Projects under this new Category.

Hint: Use Alter Cost Centres to move.  Do you have to alter the individual cost centres under Projects to move the Category? if so do it now.

Now you will create a voucher to learn how to allocate amounts to cost centres belonging to different cost categories.

  1. Select Voucher Entry

  2. Select Payment

  3. Date 17-12-98

  4. Dr Conveyance 50.00

  5. Now the Cost Centre Allocation sub-screen that comes up as before after you keyed in the amount, but first You must select the Category.  Type P with the intention to select Projects & Assignments.  Allocate the expense to Buildings. Confirm the selection of Buildings and put in amount of 30.00 for Buildings.

  6. You can allocate the amount partly to Buildings and partly to other Cost Centres  in the same cost category.  At this moment, what Cost centres are permitted? Only those that belong to the same category.  Note that you must allocate the whole amount of 50.00 before moving on to another cost category or to return to the main screen.  Allocate 20.00 to Roads.

  7. Your cursor moves to the Cost Category line.  Here if you press Enter when it is blank (or select end of list) you go back to the main voucher entry screen.  This means that though you are forced to allocate to cost centres, you need not select more than one cost category or cost centre.

  8. But do not go back just yet.  Select Salesmen (Cost Category).

  9. Select Amar and put in 50.00, Accept.

  10. Since you have completion the allocation of the full amount, and to all possible cost categories, the cursor moves back automatically to the main voucher screen.

  11. Cr Cash 50.00

  12. Press Enter and accept the voucher.

  13. Press Pg Up to view the voucher.

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