Overview
Corporate Allocations is a powerful tool that allows you to manipulate existing ledger transactions to generate new transactions. You can use it to split or reassign expenses and other transactions using predefined criteria. You can allocate amounts across periods, accounts, analysis codes and business units. The charges can be split, increased or decreased. Corporate Allocations generates and posts ledger transactions, so you could achieve the same result by entering a manual journal using Ledger Entry. However, by using Corporate Allocations you can automate the apportionment process and repeat it each period, or as often as you require. |
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Corporate Allocations uses allocation setups to generate a series of journal transactions.
An allocation setup can contain the following components: - an allocation source which identifies the costs or charges to be apportioned.
- an allocation target which identifies the target account to which the costs or charges are to allocated.
- an allocation ratio which identifies the proportion of the source that is to be allocated to the target, if required.
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Tip: An allocation generates balancing journal transactions to keep the ledger in balance. The balancing transaction is posted to an offset account which is identified on either the allocation source, or allocation target, depending on the type of allocation being run.
These three allocation components are identified for each of the following example allocation requirements.
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Before you can run a corporate allocation, you must specify the allocation components and then combine these into an allocation processing rule.
Allocation Setup (CALS) links the allocation source, the allocation target and the allocation ratio to create the allocation sequence. You may combine a number of allocation sequences in an allocation setup.
There are three steps required to define and initiate a corporate allocation:
1. Define the two or three allocation components required:
- Use Allocation Sources (CALSS) to create an allocation source which identifies the transactions to be used as the basis for the allocation.
- Use Allocation Targets (CALT) to create an allocation target which identifies the target account, and optional target offset account, to be used by the generated postings.
- Optionally, use Allocation Ratios (CALR) to define an allocation ratio which identifies the calculation rules required.
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2. Use Allocation Setup (CALS) to combine the allocation components into an allocation sequence, within an allocation setup.
3. Finally, when the allocation is fully defined, use Corporate Allocation Run (AR) to perform the allocation. Tip: The first time you run an allocation you should set the Post Transactions option in the Corporate Allocation Run to No to report on the ledger transactions and check they have been produced correctly. Steps 1 and 2 are only required to maintain the allocation setup. Once you have defined the allocation you can run it as often as you need to.  Write Comment (0 Comments)
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An allocation source identifies the account, or range of accounts, to be used as the basis for an allocation. Selected transactions posted to these accounts provide the source amount to be manipulated and allocated. An allocation source is created and maintained using Corporate Allocation Source (ALS). Each allocation source is identified by a unique allocation source code. This code is then referenced on an allocation sequence, in Allocation Setup (CALS).Allocation sources are described in more detail in What are Allocation Sources? |
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An allocation target identifies the target account to be updated by an allocation. The allocation transaction generated by an allocation run posts to this target account. You can also identify the business unit and ledger for the target account. For example, you may wish to allocate costs across business units, or generate budget transactions. For a charge type allocation, the allocation target also identifies the target offset account. This is the account to which the balancing reversal transactions are posted. If the target account is in a different business unit to the source account, the target offset account transactions are required to keep the target business unit in balance. You can choose to consolidate the target and target offset posting transactions, to reduce the number of postings generated. Allocation targets are described in more detail in What are Allocation Targets? |
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