Job Costing in TallyPrime: Setup in 5 Easy Steps + Example

Setting up TallyPrime for Job Costing allows businesses to track costs and revenues associated with specific jobs, projects, or contracts.

This feature helps in evaluating profitability and managing expenses effectively.

1. Step-by-Step Setup for Job Costing in TallyPrime:

1. Enable Job Costing in TallyPrime:

• Go to Gateway of Tally > F11: Features > Accounting Features.
• Set Enable Job Costing to Yes.

2. Create Cost Categories and Cost Centers:

• Navigate to Gateway of Tally > Accounts Info > Cost Categories > Create.
• Create categories like “Projects” or “Departments”.
• Then go to Cost Centers under the same menu and create specific cost centers (e.g., “Project A”, “Project B”).

3. Create Ledgers:

• Create ledgers for various expenses, incomes, and inventory items related to the job.
• While creating or altering the ledger, assign it to the relevant Cost Center.

4. Record Job Costing Transactions:

When recording vouchers (e.g., purchase, sales, journal), allocate expenses or revenues to the specific cost centers you created.

5. Generate Job Costing Reports:

• Go to Gateway of Tally > Display More Reports > Job Work Analysis > Job Work Summary.
• View detailed reports like Cost Center-wise Job Work Analysis and Job Work Breakup.

2. Example: Job Costing of 2 Projects in TallyPrime

Let’s say a construction company is working on two projects: “Building A” and “Building B”. The company would:

1. Create a Cost Category named “Projects”.
2. Create Cost Centers named “Building A” and “Building B” under this category.
3. Assign all related expenses and incomes (e.g., material costs, labor charges) to these cost centers.
4. Use TallyPrime to track how much is spent and earned for each project separately.

3. Benefits of Job Costing in TallyPrime:

1. Accurate Profitability Tracking:

Know exactly how much each job or project is costing versus how much revenue it’s generating.

2. Better Financial Control:

Helps in budgeting, forecasting, and managing expenses for specific jobs.

3. Informed Decision-Making:

Provides detailed insights to help decide whether to continue, expand, or discontinue specific jobs.

4. Conclusion:

Setting up Job Costing in TallyPrime offers a structured approach to managing projects or jobs, enabling businesses to track costs accurately, manage resources effectively, and ensure project profitability.

Whether it’s a small business or a large organization, TallyPrime’s job costing feature is a valuable tool for financial management.