Configure the allocation
Allocations give you more insight into your costs and revenues by allocating these to products, departments, regions/areas, etc. You allocate your costs and revenues by posting them to a cost centre. You can also allocate quantities.
You have 5 allocation axes that you can use independently of one another and which do not have any interrelations. This way, you can make up to five different cross-sections of the environment.
You can handle allocations in several ways:
- When posting journal entries and other entries, you can directly enter the correct allocation code.
- During the entry, you distribute the entry amounts across different allocation codes on the first entry line.
- You have the amounts automatically distributed by percentage across multiple allocation codes when printing the allocation overviews.
- Record a distribution key which periodically automatically redistributes amounts that have been entered across several allocation codes in the same axis.
Allocation of financial entries offers the following advantages: reduced number of ledger accounts, increased insight and easy expansion.
You use 30 ledger accounts to journalise salaries and your company has two departments.
- Without allocation, you would add two ledger accounts for each salary journal entry (4000 Management salary, 4001 Personnel salary, etc). So, you would need 60 ledger accounts for two departments, 90 for three departments, and 120 ledger accounts for just four departments (for example Management, Sales, Administration and Warehouse). Or you use ledger accounts 4400 Fuel, 4401 Car insurance, 4402 Road tax, 4403 Car maintenance and 4404 Car depreciation. In this case, purchasing a second car would add another 5 ledger accounts. Sorting by department or by vehicle is almost impossible with this kind of processing.
- With allocation, you use 30 default ledger accounts for the salary journal entries. You add 2 allocation codes for these. In this case, expansion to 5 departments would mean an expansion by 3 allocation codes. In the old situation, this would have been 3 x 30 ledger accounts. Expansion from 2 cars to 20 would result in 18 x 5 = 90 new ledger accounts, as opposed to 18 allocation codes.
If you are using allocations, you always have insight into all costs of a single allocation (department), all costs of a type (salaries) and you have overviews where costs and department are sorted alongside one another (for example via a pivot table in Excel).
- Activate the Allocation functionality
- Specify settings
- Configure allocation axes
- Add allocation codes
- Link allocation codes to ledger accounts
- Collectively delete allocation assignments
- Set preferred allocations
- Renumber allocation codes
- Allocation dependencies
- Configure the allocation breakdown
- Budget allocations
- Order management, Projects, Subscriptions allocation link
- Configure the allocation, cost centres and cost units in HR/Payroll