TallyPrime Masters: Accounting, Inventory, and Cost Allocation

Posted on Feb 25, 2026 in Business Administration and Innovation Management

What are Masters in TallyPrime?

Masters in TallyPrime are the fundamental containers or main entities of accounting and inventory data that are created once and used repeatedly across various transactions and reports. They form the backbone of the entire data structure of a company in TallyPrime.

Think of Masters as the templates or definitions for all the elements that you will use in your day-to-day transaction recording (Vouchers). For example, you define a Ledger for “Salaries Expense” once, and then you use that Ledger every time you record a salary payment. Similarly, you define a Stock Item once, and use it in every sales and purchase invoice.

Data stored in Masters is generally independent and helps in compiling, summarizing, and balancing transaction data to reflect in various financial statements.

Various Types of Masters in TallyPrime

TallyPrime classifies Masters into various categories based on the type of information they hold and the function they perform:

1. Accounting Masters

These are the principal entities related to financial accounts and are necessary for creating financial statements (Profit & Loss Account and Balance Sheet).

  • Groups: These are collections of Ledgers of a similar nature, used to organize the Chart of Accounts and determine the hierarchy for reporting. TallyPrime automatically creates 28 reserved Account Groups.
  • Ledgers: These are the actual accounting heads (e.g., Cash Account, Sales Account, Rent Expense, Customer A/C) used to record transactions and generate all accounting reports.
  • Voucher Types: Used to categorize different natures of transactions (e.g., Sales Voucher, Payment Voucher, Journal Voucher) and configure their behavior.
  • Cost Category and Cost Centre: Used for departmental accounting and tracking expenses and incomes by specific location, project, or employee.
  • Budget: Used to create and manage financial targets for planning and control.
  • Currency & Rates of Exchange: Used for maintaining accounts in multiple currencies.

2. Inventory Masters

These are necessary for businesses that deal with goods and require stock and inventory management.

  • Stock Group: Used to group stock items of a similar nature (e.g., Electronics, Raw Materials, Finished Goods).
  • Stock Item: The actual goods or products that are bought or sold (e.g., Laptop HP 15, Steel Rods).
  • Units of Measurement (UoM): Defines the unit in which stock items are measured (e.g., Pcs, Kgs, Meters).
  • Stock Category: Used for the parallel classification of Stock Items, independent of Stock Groups.
  • Godown (Location/Warehouse): Used to maintain stock details location-wise.
  • Bills of Material (BoM): Used in the manufacturing process to define the components required to produce a finished item.

3. Payroll Masters

These are used by companies to manage employee salary, attendance, and payroll processing.

  • Employee: Contains the personal and salary details of each employee.
  • Employee Group: Used to group employees for easier management.
  • Pay Heads: Defines the components of salary (e.g., Basic Pay, HRA, Conveyance Allowance, PF Deduction).
  • Attendance/Production Type: Used to record attendance (e.g., Absent, Present, Medical Leave) or production output.

4. Statutory Masters

These masters are used for tax and regulatory compliance purposes.

  • GST Classification: Used for Goods and Services Tax compliance.
  • TDS (Tax Deducted at Source) Nature of Payments.

Cost Category and Cost Centres Explained

In accounting, particularly within TallyPrime, Cost Category and Cost Centre are masters used to allocate and track expenses (and sometimes income) to specific organizational units, projects, or individuals. This helps in analyzing performance, controlling costs, and determining profitability at a granular level.

A. Cost Category

A Cost Category is a classification used to group similar Cost Centres. It defines the basis or the nature of the tracking.

  • Purpose: It acts as an umbrella under which multiple cost centres can be created.
  • Examples:
    • Department: Used to track expenses for all departments (Production, Sales, HR).
    • Project: Used to track expenses for different projects (Project A, Project B).
    • Employee: Used to track expenses incurred by different employees.

B. Cost Centre

A Cost Centre is the actual unit of the organization, a location, a project, or a person to which a transaction’s value (expense or income) can be assigned. It is the most specific unit for cost allocation.

  • Purpose: To monitor cost control and performance measurement.
  • Examples (Under the ‘Department’ Category):
    • Production Department
    • Sales Team – North
    • HR Manager

Steps to Create Cost Category and Cost Centres in TallyPrime

The process involves two main steps: Enabling the Feature and then Creating the Masters.

Step 1: Enable Cost Centre Feature

Before creating Cost Categories and Cost Centres, you must enable the feature for the company:

  1. From the Gateway of Tally, press F11 (Features).
  2. In the Company Features screen, ensure that “Accounting” is selected.
  3. Under the Accounting section, set the option “Enable Cost Centres” to Yes.
  4. Press Ctrl+A to save the changes.

Step 2: Steps to Create Cost Category and Cost Centre

Once enabled, you create the masters from the Gateway of Tally (GoT):

Creating a Cost Category
  1. Go to GoT > Create.
  2. Select Show More and then select Cost Category.
  3. Enter a Name for the Category (e.g., Department or Project).
  4. Set the options “Allocate Revenue Items” and “Allocate Non-Revenue Items” to Yes, based on your requirement.
  5. Press Ctrl+A to save.
Creating a Cost Centre
  1. Go to GoT > Create.
  2. Select Cost Centre.
  3. Select the appropriate Cost Category (e.g., Department).
  4. Enter a Name for the Cost Centre (e.g., Production or Sales).
  5. In the Under field, you can select Primary or another existing Cost Centre if you want to create a hierarchy.
  6. Press Ctrl+A to save.

After creating these masters, you can use them in transaction vouchers (like Payment or Journal Vouchers) to allocate any expense or income to the specific Cost Centre under its defined Cost Category.