Profit by branch, project or department: cost centres and budgets in TallyPrime

A cost centre, also called a profit centre, is any unit you want to see income and expenses for: a branch, a project, a vehicle route, a department, even a person. In TallyPrime you allocate amounts to cost centres as you record vouchers, and the reports add them up.

Cost centres can be arranged in a hierarchy, for example departments with teams under them, so you can read the numbers at whichever level you need.

A cost category groups related cost centres for reporting. TallyPrime starts with a primary cost category, and you can add others, such as one for branches and another for projects.

With parallel allocation, the same expense can be split across cost centres in more than one category at once. A fuel bill can be allocated to the vehicles that used the fuel and, at the same time, to the projects they were working on, without entering it twice.

The Cost Centre Breakup report shows the income and expenses allocated to a cost centre, grouped by ledger, and can compare several cost centres side by side. The Cost Centre Summary totals income and expenses across cost centres, with a monthly view, and the Cost Category Summary does the same for a category.

Powerpack adds a cost centre profit and loss report for teams that want a P&L for each unit.

Budgets can be set for ledgers, groups and cost centres. A ledger budget can be on net transactions or on closing balance, and a group budget applies to every ledger under that group, which suits an expense head or your debtors.

Open the trial balance with a budget selected, and TallyPrime shows budget, actuals and variance side by side. A negative variance means actual spending has gone past the budget, so it’s easy to spot which line or cost centre needs attention.

Construction companies use a cost centre for each project or site to track project costs, subcontractor expenses and profit per project. Logistics companies track operational expenses route-wise and cost centre-wise to see which routes and services pay.

NGOs track each project’s expenses against its budget for audit-ready reporting, and schools set a budget for each department and compare it with actual spending. Setting cost centres up to match how the business is run is part of how Powercomputers implements TallyPrime.