Monthly Archives: October 2009

Job Costing in Tally.ERP 9

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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 which produce definite products against individual orders from customers.

Some industries where job costing plays an important role are:  construction, manufacturing, printing, automobile, etc.

Flexibility and simplicity being the underlying philosophy of Tally, the same is incorporated in the Job Costing feature, using which you can:

  • Ascertain profitability i.e., Net Profit / Loss for a particular Job / Project
  • Track the transfer of materials from one godown to another
  • Easily track the consumption of materials at different locations
  • Drill down till voucher level for any kind of alteration or reference
  • Track material-wise receipts, consumption, transfers and closing stock at multiple locations dedicated for a job.
  • Create job ‘cost centres’ and report on them
  • Capture revenue and expenses as and when they are updated
  • Compare and analyse various jobs
  • Ascertain profitability i.e., Net Profit / Loss for a particular Job / Project
  • Inventory movement: Opening, Inwards, Outwards , Transfer, Consumption etc
  • Allows comparison of each element of cost, selling price and profit with other jobs
  • Can ascertain the costs under each element when the job is in progress
  • Do a Job Work Analysis where a service or a product is the output
  • On the completion of a job, each element of cost, selling price and profit can be  compared against estimates and other jobs

The following scenario will showcase the flexibility and simplicity of this feature.

You are executing a contract for grill work to be done in a two storey building on a fixed rate basis for each floor separately. According to the terms of the contract, you will be paid the actual cost + 25% on a weekly basis. So you purchase the necessary raw material and unload the same at the ground floor of the building and then move the material to the first floor as the need arises. Now, at some point of time, you would like to know the profitability and cost of this project. You would also like to know the raw material stock at any given point of time.

The question arises – how do you go about getting all this information as and when you need it?

Using the Job Costing feature, all you need to do is define and enable certain parameters, create certain entities like godowns, vouchers, ledgers, etc. Once all this is done, your Job analysis report will give you a clear picture on various financial aspects of this particular project – all with a few clicks of the keyboard.

Other related reports that can be generated on the fly are:

Job Work Analysis Report – It also allows you to drill down from the Job Work Analysis report to voucher entry, to view a break up of Job/Project

Materials Consumption Summary Report – displays Opening Value, Inward Value, Consumption, Other Transfers and Closing Value

Comparative Job Work Analysis Report – displays the details of Multiple Jobs in a single report in different columns

Connectivity using Tally.ERP9 using HTML,ODBC , XML and Synchronization

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The Technology Advantage of Tally.ERP 9

Behind the Scene

High Performance Data Engine:

Tally.ERP 9 uses a recursive object oriented, flexi-field, flexi-length embedded database engine giving a compact and fast performance. The in-built database engine also ensures that you do not need to install or understand any third party database like most other applications. Tally.ERP 9 is completely maintenance free without any administration required from your side. The perform- ance is reflected with most of the reports coming up instantly. Overall you get a smooth experience with a lower cost of ownership.

Data Reliability and automatic recovery

Tally.ERP 9 provides a high level of reliability of data with several technologies built into it. Your data does not get corrupted even if there is a sudden machine shutdown or network breakdown or power cut. This is ensured using the concept of transaction atomicity?? which is supported by the object oriented storage. Tally.ERP 9 uses data integrity checks intensively to detect any change to your data by external means. Any corruption happening in this way will be instantly detected as the program operates the data with a timely warning to you. Besides providing a warning, Tally.ERP 9 provides you a unique capability to recover from most corruptions by allowing you to simply rewrite the data. The corrupted data is then discarded and you can continue with normal operations, at the most re-entering the corrupted transactions or masters only.

Internet & Data exchange

HTTP-XML based data interchange

Tally.ERP 9 uses a recursive object oriented data structure which can naturally and easily be expressed as XML. Tally.ERP 9 can export your data in XML format and can also import data coming in XML format. This is a fundamental capability of the program and can be easily used to extract data for third party applications or to pump in data from third party applications as long as

it is compliant with the schema of a voucher or master.

The process can be automated since Tally.ERP 9 can run as an HTTP (Hyper text transfer protocol) server and can process requests for import or export in HTTP-XML to this server from other applications. Even third party web applications written in ASP, PHP, Java etc. can talk to

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The Technology Advantage of Tally.ERP 9

your Tally.ERP 9 running as an HTTP server and provide real-time information or remote data

input. The third party application can send a request to Tally.ERP 9 to get any report in XML or even in HTML formats. Even new reports can be added by defining them in TDL (Tally Definition Language). In the same way, a master or a voucher can be created in XML and sent to Tally.ERP

9 server as an HTTP-XML request and will be processed and stored by Tally.ERP 9.

This capability has been used to provide the synchronisation capability (explained in this document later) which allows data to be replicated, exchange between multiple Tally.ERP 9 instances running at same or different locations just by configuring the same.

All Tally.ERP 9 reports can be readily exported in XML format.


Figure 6.1 XML Request -Schema for Export of Trial Balance Report

ODBC – Open Database Connectivity

ODBC data access

Tally.ERP 9 provides an ODBC (Open database connectivity) driver natively which allows other applications like MS-Excel (which can use an ODBC data source) to directly pick up data from Tally.ERP 9 running as an ODBC server. This data is again real-time data and can be refreshed

by such applications any time as long as Tally.ERP 9 is running. You can pick and choose the available information and design your own reports in tools like Excel. The type of data available

on ODBC from Tally.ERP 9 can be extended using TDL (Tally definition Language).

ODBC compliance allows other programs to use data from Tally.ERP 9 directly.

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Procedure:

‡ Load Company > Press Alt+F2 (Change Period)

The Technology Advantage of Tally.ERP 9

‡

Minimize Tally.ERP 9
‡

Open a new Excel worksheet > Data > Import External Data

> Data Import

‡ Select Tally ODBC_9000 as Data Source

‡ Click Open


Figure 6.2 Data Source from Tally.ERP 9 in MS Excel Screen

Tally.ERP 9 connects to data source and displays Tally.ERP 9 Wizard query screen -> select the columns you would want to include in the query.


Figure 6.3 Table Selection in MS Excel Screen

Select the required columns (data). MS Excel displays the data selected.

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The Technology Advantage of Tally.ERP 9


Figure 6.4 Import of Tally.ERP 9 Ledger Data in MS Excel Screen

In a similar manner you can select other data for import into Excel and format your reports as per requirements.

Automatic data replication/exchange with synchronisation

Ability to synchronise data across multiple offices

Synchronisation process in Tally.ERP 9 helps you to transfer data between two or more locations. For instance, Synchronisation can be done both ways for the Head office of a company and its Branch office situated in two different locations.


Figure 6.5 Synchronisation Process between HO & Branch Offices

TDS in Tally.ERP 9 features at a glance

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Tax Deducted at Source (TDS) in Tally.ERP 9 can handle statutory and business requirements in a

simplified manner. Various features of Tally.ERP 9 with relevant use cases which can benefit you are given below:

1. TDS on expenses (Journal /Purchase Voucher)

By this entry, you can account expenses and deduct tax at source to arrive at the net balance payable to a party.

2. Expenses partly subject to TDS (Journal /Purchase Voucher)

In the event, where a part of the expenditure is not subject to TDS and the balance amount is subject to TDS, it is crucial to record the accurate value of expenses for computation of TDS. Tally.ERP 9 provides the flexibility to enter information for the same expense ledger in the same voucher.

3. Accounting expenses and deducting TDS later (Journal /Purchase Voucher)

In some cases, you (the deductor) may follow the procedure of accounting only expenses on the receipt of bills and later deduct applicable TDS on all such accounted expenses in one voucher. Tally.ERP 9 provides the flexibility to account expenses and later deduct tax on such expenses.

4. Accounting multiple expenses and deducting TDS later (Journal /Purchase Voucher)

With this entry, you can account multiple expenses (in the same voucher) and deduct TDS later by recording a TDS deduction journal voucher.

5. TDS on advance payments

You can record a payment voucher to account advances and TDS on advances. The advance paid after deducting TDS can be adjusted against the bill received.

6. TDS on expenses at lower rate

Your assessing officer can issue a certificate for deduction of tax at lower rate than the relevant rate. In Tally.ERP 9, the user can record and compute TDS on transactions, on which lower rate of deduction is applicable.

7. TDS on expenses at zero rate

You can record and compute TDS on transactions, on which zero rate of deduction is applicable

8. Surcharge calculation on prior period expenses

In TDS, when the payment exceeds the surcharge exemption limit, surcharge is applicable on the entire amount right from the first transaction. However, if surcharge is not charged on transactions recorded until the deductee reaches the surcharge exemption limit, then surcharge is to be calculated on the entire amount. Tally.ERP 9 automatically calculates the surcharge on the prior transactions.

9. Reversal of expenses with TDS

In case you want to reverse transaction(s), the expenses and TDS deducted needs to be reversed. Tally.ERP 9 provides the flexibility to account expenses and later reverse the expenses and TDS, on cancelled transaction(s), if the cancellation is made before the payment of TDS to the Government.

10. Accounting changes in TDS percentage

Any changes in the TDS percentages or applicability of cess or surcharge for the Financial Year are updated in the deductee type statutory masters.

Example: For the Financial Year 2009-10 surcharge or cess is not applicable for TDS. For tax deduction only the specified TDS rates are considered. These changes are updated in the deductee type statutory masters

11. Accounting TDS on payments made to non–residents

TDS on payments made to non residents in Indian rupee can be accounted.

As per the requirement under Double Taxation Avoidance Agreement (DTAA), a flat deduction

of TDS without surcharge and education cess in case of payments to NRIs towards the services provided under section 195 is supported.

12. Accounting TDS on Expenses – with Inventory

TDS on expenses can be accounted with inventory details, if any, in purchase voucher (in invoice mode) and journal voucher.

Example: Expenses on purchase of cartons with company logo and other information as required, on which (including the VAT amount) TDS is applicable

13. TDS for Purchases in Item Invoice mode

In case you use item invoices for the purchases of services, TDS calculation is supported for such requirements.

14. TDS on Fixed Assets

In case of payments/advances for services that will be capitalised, the necessary TDS support is also supported.

15. Payment of TDS

TDS payment entry can be recorded using a TDS helper in payment voucher.