Tally.ERP 9 – Costing
CONTROL & OPTIMISE YOUR COSTS USING TALLY.ERP 9…!
Costing is concerned with recording, classifying, and summarising costs for the determination of costs of products or services, planning, controlling, and reducing such costs, and furnishing information to management for effective decision making. Businesses can benefit from various Costing facilities in Tally.ERP 9. Essential costing functions are listed below:
Optimize Costs Using Cost Centre & Categories: A business, for achieving optimum cost-effectiveness, assigns its controllable costs to cost centers. Any unit of the organization to which costs can be allocated is a Cost Centre. For Example Branches, Departments, Projects, Products, Persons, and so on.Tally.ERP 9 enables a business to allocate transactions to Cost Centres. For example, besides the ledger-wise accounting allocation, a transaction may be allocated amongst different Branches. Tally.ERP 9 allows to compare one Cost Centre with another, hence provides information regarding the performance of each Cost / Profit Centre.
Cost Category is a cluster of related cost centers. Cost Categories allow parallel allocation of the same transaction in multiple dimensions. In many cases, a single transaction may have to be allocated to more than one type of Cost Centre. Cost Categories enable allocating costs to parallel sets of Cost Centres i.e. the same amount can be allocated to more than one cost center.
COST CENTRE REPORTS
CATEGORY SUMMARY:
This report displays the summary of all the cost centers under a cost category.
COST CENTRE BREAK-UP:
This report displays Ledger and Group summary information for the selected cost center.
LEDGER BREAK-UP:
This report displays the summary information of all Cost Centres for the selected Ledger.
GROUP BREAK-UP:
This report displays the summary information of all Cost Centres for the selected Group.
AUTOMATIC COST ALLOCATION & CONTROL
Cost Centre Classes are used to automate Cost Centre allocations in transactions. You can use cost center classes if you do not wish to manually allocate amounts to cost centres in each entry.
COST ESTIMATION & CONTROL
Cost estimation is the process of pre-determining the cost of a certain product job or order. Such pre-determination may be required for several purposes. Some of the purposes are as follows:
- Budgets & Variance
- Preparation of financial statements (valuation of stocks)
- Job Costing
BUDGETS & VARIANCE:
A budget is a detailed plan of income and expenses expected over a certain period of time. A budget can provide guidelines for managing future investments and expenses. Every Business has its objectives and goals and must have an efficient mechanism to set its targets and appraisal of achievements in respect of the target.
To achieve the important managerial controls, Tally.ERP 9 provides a flexible system of Budgets for groups, Ledger or Cost Centres. Tally.ERP 9 allows creating multiple Budgets for different purposes. For Example Sales budget, Expenses budget, etc. You can compare the actual performance with budge created and also get a variance report to ensure corrective measures if required.
STOCK VALUATION:
Tally.ERP 9 allows you to view the effects of different stock valuation methods on the closing stock value. You can view a columnar display of different stock valuations.
Each stock item can be set up to have a different stock valuation method (E.g. Average Cost, Average price, Last Purchase cost, Last Sales price, FIFO). In some instances, a particular method of valuation may be required, for example, to assess the replacement value or saleable value of the stock. Tally.ERP 9 displays stocks in any or all the valuation methods dynamically and simultaneously, without any complicated procedure.
JOB COSTING:
Job Costing is a form of specific order costing, which applies to a job undertaken according to customer requirements and specifications. It applies to industries that produce definite products against individual orders from customers. Some industries where job costing plays an important role are construction, manufacturing, printing, automobile, etc. Tally.ERP 9 offers comprehensive Job Costing that helps businesses in project/job order mode to estimate costs and track them. To read more about Job Costing click here