TallyPrime Job Costing: Setup, Entries, and Reports Explained

Published on: 28-07-2025

TallyPrime Job Costing: Setup, Entries, and Reports Explained

In today's competitive business landscape, keeping track of where your money goes is crucial. Whether you're a construction firm, manufacturer, or service provider—job costing helps you determine the profitability of individual projects. Thankfully, TallyPrime, one of India’s most trusted business management software, offers robust job costing features.

This article will walk you through what job costing is, its benefits, and how to implement job costing in TallyPrime with real-world examples.

 What is Job Costing?

Job costing is a method of accounting that tracks the cost of each specific job or project separately. This includes materials, labor, and overheads. It helps businesses:

• Estimate costs more accurately.
• Identify cost overruns quickly.
• Increase profitability by cutting wasteful expenses.

✅ Why Use TallyPrime for Job Costing?

TallyPrime provides built-in support for job costing and job work modules. It allows you to:

• Track expenses project-wise.
• Allocate costs to each job.
• Generate job-specific profitability reports.
• Monitor inventory and labor costs associated with each job.

 Prerequisites to Enable Job Costing in TallyPrime

Before you begin, follow these setup steps:

Step 1: Enable Cost Centres and Cost Categories

1. Go to F11: Features > Accounting Features.
2. Set "Maintain cost centres" to Yes.
3. Enable "More than one cost category" if required.

Step 2: Create Cost Categories (Optional)

Navigate to:

Gateway of Tally > Accounts Info > Cost Categories > Create

Example:

• Category Name: Projects

This is optional, but useful if you want to separate departments or divisions handling different jobs.

Step 3: Create Cost Centres (Jobs)

Go to:

Gateway of Tally > Accounts Info > Cost Centres > Create

Example:

• Job A – Residential Building
• Job B – Office Interiors

Each job is treated as a Cost Centre.

 Setting Up Ledgers for Job Costing

Create the necessary expense ledgers and link them to the respective cost centres.

1. Navigate to Accounts Info > Ledger > Create
2. Name: Material Purchase
3. Under: Direct Expenses
4. Set Cost Centre applicable: Yes

Repeat for other ledgers like:

• Labor Charges
• Site Expenses
• Equipment Rental

 Recording Job Costing Transactions

Here’s how you can track costs job-wise:

1. Purchase Vouchers (Materials Bought for a Job)

Gateway of Tally > Accounting Vouchers > Press F9 (Purchase)

• Ledger: Material Supplier
• Item: Cement
• Cost Centre: Job A – Residential Building

This ensures the material cost is linked to Job A.

2. Payment Vouchers (Labor or Contractor Payments)

F5 (Payment Voucher)

• Ledger: Labor Charges
• Amount: ₹50,000
• Cost Centre: Job B – Office Interiors

This tracks labor cost for Job B.

3. Journal Vouchers (Internal Transfers or Adjustments)

F7 (Journal)

• Used when allocating indirect expenses like admin costs to projects.
• Debit: Project A (cost centre)
• Credit: Admin Expenses

 Job Costing Reports in TallyPrime

TallyPrime automatically aggregates cost data per job. To view:

1. Cost Centre Report

Gateway of Tally > Display More Reports > Cost Centres

Select your desired job to see:

• Total income vs expenses
• Material, labor, overhead break-up
• Profitability status

2. Ledger-wise Report

Shows how much each ledger (e.g., labor charges) contributed to a specific job.

Real-Life Example: Construction Company

Let’s say your company is handling Job A: Residential Building.

Total Cost = ₹1,65,000

Now, suppose the client pays you ₹2,50,000, and you record it under:

• Ledger: Project Income
• Cost Centre: Job A

Profit = ₹2,50,000 - ₹1,65,000 = ₹85,000

TallyPrime will generate this report automatically when job costing is properly configured.

Tips to Maximize Job Costing Accuracy

1. Keep Ledgers Granular: Create specific ledgers for different types of expenses.
2. Use Inventory Modules: For better material tracking, link inventory items to cost centres.
3. Reconcile Often: Regularly check reports for cost overruns.
4. Budget for Jobs: Use Budgeting features in TallyPrime to compare actual vs expected costs.

 Advanced Job Costing (Optional)

If you're running a manufacturing or service job that includes bill of materials (BoM), stock transfers, or subcontracting, you can:

• Use Job Work In/Out features (via Inventory Features)
• Maintain Godown/Location-wise inventory linked to projects
• Track Consumption vs Output

This provides you with a full project cost trail, from procurement to delivery.

Job Work vs Job Costing: What's the Difference?

If you're a manufacturer outsourcing parts of the process, consider using TallyPrime’s Job Work module instead.

 Final Thoughts

Job costing in TallyPrime is a powerful feature that helps you evaluate the performance of each project. Whether you're a small construction firm, interior design company, or engineering consultant, it ensures your finances are project-aligned and profitable.

Benefits of Job Costing in TallyPrime:

• Live project-wise cost tracking
• Improved budgeting and estimation
• Enhanced decision-making for future bids
• Seamless financial + inventory integration

Start Using Job Costing Today

To get the best out of job costing in TallyPrime:

• Update your software to the latest version.
• Train your team on cost centre tagging.
• Periodically review job-wise profitability.

With the right setup, TallyPrime turns into a project profitability powerhouse.