Diagram
A process flow showing how resource tags and usage data flow into Azure Cost Management, where tag inheritance and filtering enable grouped cost analysis and reporting.
Define Tags and Their Structure
Tags in Azure are metadata elements that you attach to resources. Each tag is a simple key-value pair of text, such as Environment: Production or Department: Finance. Tags help you organize resources, track costs, and enforce governance. You can create and manage tags through the Azure portal, Azure CLI, or PowerShell.
When a tagged resource reports usage, the tag is attached to the usage data and flows into Azure Cost Management. There you can filter and group costs by tag, so you see spending broken down by department, environment, or project. Tags only appear in cost reports after the resource has active usage, and changes like adding, editing, or deleting a tag take effect only on new usage data. To get reliable cost reports, keep tags consistent across resources, apply them to every resource you want to track, and record any tag changes for historical accuracy.
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