Cost Categories facilitate to allocate amount to multiple cost Centres in parallel. For example, a company may allocate an amount independently to Salesman, Products & Agents as follows:
Cost Category Salesmen Products Agents
Cost Cenres Mr A Printers M/S. ABC
Mr B Consumables M/S. XYZ
Now an amount of Rs. 3000 may be allocated to:
Mr. A – 1300 Mr. B – 1700
Printers-1600 Consumables – 1400
M/S. ABC – 1800 M/S. XYZ – 1200
Having done like this, now you will get reports of allocated amount accordingly.
To activate Cost Categories, you must set Yes to both the options Maintain Cost Centres & More than one Cost Category in Accounting Features F11: Features.
Name: Type the name of Cost Category. You can not create duplicates with same name.
Allocate Revenue Items: Give Yes to allocate Revenue Transactions (e.g., Sales, Purchase, expenses and income) to cost centres that you will create under the cost categories, specify No if you wish to allocate capital/non-revenue item only to the cost centres under this cost category.
Allocate Non-Revenue items: For revenue cost centres, set it to No. If you wish to allocate Non-Revenue or Balance Sheet items, set it to Yes.