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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There are many uses for Corporate Allocations, some of which are outlined in this section.
Apportioning Expenses
If costs are posted to an expense account as a total, it may be necessary to apportion the total expense to each relevant cost centre to reflect each cost centre's operating costs accurately. This can be done in a variety of ways:

Apportioning Inter-Company Costs
Fully supports inter-company processing. Allocations and charges can be made across business units. The allocation postings can be placed on transfer files for distribution to remote sites where hey are posted using Ledger Import.
Postings to inter-company offset accounts can be generated automatically to keep each business unit in balance.
Calculating Commissions
Corporate Allocations can be used to generate and post commissions or any other derived values. A threshold can be applied in an allocation source, which can determine, for example, the level of commission to apply.
Calculating Interest Charges
You can use Corporate Allocations to automate the generation of interest on loans. For example, you can charge interest on loans to staff, or on outstanding inter-company balances. The allocation source is the average balance of the loan, while the ratio gives the appropriate interest calculation.
Uplifting Budgets
You can use Corporate Allocations to uplift budgets. You can take actuals for the source time scale, and uplift the figures to inflate the budget by a percentage. This could be used for example, where the first quarter actuals were out of line with budgets, to adjust budgets for subsequent periods.
Measuring Performance
Although performance measurement varies considerably from one organization to another, it primarily uses non-financial measures. Such information can be recorded on memo accounts in SunSystems. Corporate Allocations can base calculations on non-financial information contained in these memo accounts.
Activity Based Costing - ABC
The principle of activity based costing is the allocation and apportionment of overheads to the cost of producing a product or providing a service. In many manufacturing environments, overheads are allocated across departments on a simple volume basis. ABC aims to diversify the methods used to distribute costs and to pay more attention to cost types and cost behaviour. ABC recognizes that the roles fixed and variable costs have in business decision-making and requires the use of different llocation and apportionment methods.
Combining the information held on your ledgers with non-financial information held on memo ccounts can generate activity based costing reports.
You can use any number of allocation setups to allocate expenses. Once you have set up your allocations, you can easily analyse the costs in a form that meets your business needs.
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