Glossary
What is a cost centre?
What a cost centre is, how Tally uses it to split costs across departments, and how to get a similar view in SimpleERP, which does not have them.
Updated
In short
A cost centre is a department, location or activity whose costs are tracked separately, such as a factory or showroom. SimpleERP does not have cost centres; use branches or separate expense sub-accounts instead.
A cost centre is a part of a business, such as a department, location, machine or project, whose costs are tracked separately so the owner can see what each part spends. It does not change the accounts an entry posts to; it adds a tag that splits the same expense across centres. In Tally, cost centres are tagged on voucher lines and reported on their own.
Cost centre (Tally term): a worked example
Lakshmi Steel Furnitures wants rent and power split between its Coimbatore factory and its Ukkadam store. Without cost centres, it adds sub-accounts under the seeded expense accounts.
| Account | October 2026 |
|---|---|
| 5200 Rent | ₹12,000 |
| 5201 Rent: factory | ₹8,000 |
| 5202 Rent: Ukkadam store | ₹4,000 |
| 5210 Utilities | ₹18,400 |
| 5211 Power: factory | ₹15,900 |
| 5212 Power: Ukkadam store | ₹2,500 |
FAQ
Questions, answered
Is a cost centre the same as a profit centre?
No. A cost centre tracks spending only, such as an accounts or maintenance department. A profit centre tracks both income and costs, such as a branch or product line, so you can see whether it makes money on its own.
Does SimpleERP have cost centres like Tally?
No. There are no cost centres, cost categories or budgets. The closest options are branches, which tag every document and journal and filter account ledgers, and separate expense sub-accounts for each location or activity.
How do I move Tally cost centre data into SimpleERP?
Cost centre tags do not carry over. Decide whether branches or sub-accounts fit your split, set them up first, then enter opening balances. Keep your Tally cost centre reports for the years already closed.
When are branches better than sub-accounts?
When the split is a real location with its own stock, staff or GSTIN, such as a second shop. Branches tag whole documents. Sub-accounts suit a split inside one location, such as power for the press shop versus the paint line.
Related
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How a small business keeps one set of books across branches: branch tagging, GSTINs by state, stock transfers, branch profit and shared costs.
Read moreChart of accounts
The organised list of every account a business records transactions in.
Read moreMoving from Tally or Excel
Import masters, balances and open bills from Tally or Excel, checked first and undoable, then run both systems for a month.
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