Setting up Account Allocations

You can routinely distribute an expense among more than one account, according to rules that you define. First, you set up an Allocation Account. Any charges you enter to that account trickle down to the other accounts that you specify on the Chart of Account Allocations form. Each of these other accounts is charged with an amount or percentage of the total. This process occurs during posting to the General Ledger.

  1. In the Chart of Accounts form, set up an account with a description that explains how the allocation account is used, for example, Supplies Expense Distribution. Specify this information:
    Account Type
    Specify Allocation.
    Unit Code 1-4
    Set the appropriate unit code fields to Accessible.
  2. In the Chart of Account Allocations form, only accounts of type Allocation are displayed. Select the allocation account and specify this information:
    Sequence
    This field determines the order in which the allocation is made. For example, you might have 4 allocation sequences in a rule, and the first sequence allocates a fixed amount of $75 to a distribution account. If the current expense is $75 or less, the other allocation sequences are ignored.
    Allocation Basis Type
    Specify the basis used to create the distribution journal entries for this sequence. Different sequence numbers in the same allocation rule can use different basis types.
    • If the sequence distributes a percentage of the total amount, specify Percentage.
    • If the sequence distributes an exact amount to this account, specify Amount.
    • If the sequence distributes whatever is remaining after the other sequences are completed, specify Remainder. This option can only be used for the last sequence number in the rule.
    Note:  If you add at least one sequence with an Allocation Basis Type of Percentage, the last sequence must have an Allocation Basis Type of Remainder, to avoid rounding errors.
    Allocation Basis Rate

    Specify the decimal percentage or the  amount used to create the distribution journal entries for this sequence For example, specify 25.000 for 25%.  If Allocation Basis Type is Remainder, this value is zero and the field is disabled.

    Distribution Account, Description and Account Type
    Select the account to which you want to distribute the expense. The account description and type are displayed..
    Unit Codes
    The unit code fields are enabled for any accessible unit codes. Select the appropriate codes. For example, if Unit Code 1 is accessible, select a department to which the expense will be allocated.
    Allocate by Statistical Account
    If this sequence allocates expenses using variable percentages that are based on the information in a statistical account, select this field.

    For more information, see Example: Allocating Expenses with Variable Percentages based on YTD Amounts from Statistical Accounts.

    Statistical Account

    If you selected Allocate by Statistical Account, specify the statistical account number.

  3. Repeat step 2 to add sequences until the rule is complete and the expense amount is completely allocated.
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