For project wise reporting in Tally.ERP9, organizations can use either “Cost Centres” or “Ledgers”. But, it is always suggested to using cost centres. We need to understand the step by step process of project wise reporting using cost centres through a scenario based case study.
The case study states that Mr. Rajendra Singh, who is the owner of a business, is having a project called “ABC” originating in the state of Jharkhand. The business owner sends one of his trustable employees Mr. Rahul Kumar, to Jharkhand so that he can manage the work being onsite. During his stay in Jharkhand, Mr. Kumar incurs both personal expenses as well as costs related to the project. Mr. Singh allocated some amount to Mr. Kumar to be used for the running of the project. We will now see how the client (Mr. Singh) bills the customer and derive the actual profit by assessing the exact cost of the project.
Here, Mr. Singh makes a payment of Rs. 10,000 to Mr. Kumar for “setting up of a centre in Jharkhand for the project”. At the same time, Mr. Singh also keeps track of the expenses incurred so that he can later send a bill to the client and can claim reimbursements for the expenses incurred for the project.
The above transaction is recorded as a “Journal” entry. “ABC” Project is created as a cost centre under the Project Category.
Mr. Kumar purchases raw material worth Rs. 2,500 for the project. Here a Purchases account is opened where the transaction needs to be recorded either as purchases in a journal voucher or purchase in the voucher mode.
Henceforth, Mr. Kumar spends Rs. 1,000 on travelling expenses in Jharkhand for the “ABC” project. A note needs to be taken with regards to the personal expenses of Mr. Kumar incurred during his stay in Jharkhand can be calculated in a convenient way while keeping a track of all other expenses related to the “ABC” project.
NOTE: While passing a Journal entry, the transaction opens a “Cost Allocation Window”, where the user need to select the required category and cost centre. Finally, tagging is required between the concerned category and cost centre.
For the detailed report analysis, follow the below given steps.
Step 1: Go to Gateway of Tally (GOT)
Step 2: Click on Display
Step 3: Click on Statement of Accounts
Step 4: Click on Cost Centres
Step 5: Click on Cost Centre break up
Note: Other than Cost Centre break up, there are even other points under the “Display Cost Centre” option. They are as follows;
- Category Summary
- Ledger Break-up
- Group Break-up
Step 6: Select the ABC project from the list of cost centres
Step 7: Press Enter and finally click on Detailed View
In the course of time, revenue was generated from sales and the company made huge profits.
The report analyzed the break up expenses and the closing balance. Similarly, the grand total also gives us the actual profit after deducting the expenses incurred by Mr. Rahul Kumar.
If you are using Tally.ERP 9, along with Business Intelligence (BI) tools like Easy Reports, you can easily fetch information and prepare reports without any hassle.
EasyReports offers comprehensive cost centre reporting such as:
- Monthly Analysis of Cost Centre
- Multi level cost centre reports
- Exception Reports – missing Cost centres
- Cost Centre wise ledger breakup with all cost centres and ledgers in one report
- Ledger wise cost centre breakup with all cost centres and ledgers in one report
- Cost Centre Profit and Loss
To know more visit us at www.easyreports.in