Accounts Allocation Template for General Ledger and Budget
Accounts allocation templates are used to create new accounting transactions from an existing balance. See Accounts Allocation for General Ledger and Budget
Allocation templates can be used for both allocation and accounts distribution.
- Allocation – used to allocate a balance to one or several accounts/account combinations.
- Accounts distribution – used to create new transactions from a percentage calculation of an existing balance (for example, calculation of Social Security markups on pay costs).
Allocation templates are used for allocation of costs and revenues in accounting and budgeting. Allocations when budgeting can only occur within one budget.
Various programs are used to create allocation templates and its included elements depending on whether the allocation is intended for accounting or budgeting. The process is, essentially, the same for both. Allocation templates are defined in ’A/C Allocation Template. Open’ (GLS070) for accounting and ’Budget Allocation Template. Open’ (BUS005) for budgeting.
A start period is entered for every allocation template. The start period is used to make it possible to process more than one version of an allocation template to be worked on. When running allocations, the allocation template valid for the period is used.
An allocation template consists of one or more allocation elements. For every element, an allocation base table and an allocation target table are connected. This is described below. In order to carry out an allocation in a budget, the templates must be connected to a budget in ’Budget. Open’ (BUS100). Only one template can be specified per budget.
The model below illustrates the construction of the allocation template:
Use of allocation levels
The allocation/markup occurs in various steps or levels, which are specified in the allocation elements. Up to 99 levels can be defined.
An account is used as the base for the allocation or accounts distribution. The account values are retrieved from the general ledger (outcome or budget) or from a budget depending on whether the allocation refers to an update of accounting or budget allocation. As a receiving account, is one or more of many accounts on a higher level. The new transactions are stored in a particular file and marked with a level number.
These transactions do not immediately affect the general ledger or the budget. They are used as the base for further allocation (with or without new values from the general ledger/budget) to a receiving account on a superior level. The number of underlying levels to be included by every allocation is specified at each allocation level.
When the allocations are completed, an allocation proposal is printed. If the outcome of the allocation is incorrect, the allocation template must be adjusted. The proposal is approved when you specify that it should update the general ledger or the current budget.
Accounts allocation element
The accounts allocation elements control whether the allocation is to use outcome or budget values, the level(s) to be included in the calculation, and if dynamic allocation is to be used. An allocation base table and an allocation target table are connected to every element.
The elements are defined in ’A/C Allocation Template. Connect Element’ (GLS071) and –’Budget Allocation Template. Connect Element’ (BUS006). These programs are reached via (GLS070) and (BUS005).
Each element contains these parameters:
- Allocation level: Allocation level specifies the level for the transactions created by the element. The levels are user-defined and can be between 00 and 98.
- Calculated from allocation level: This parameter specifies the allocation level from which the allocation is to be calculated. The level must be lower than the current level. The base can be the main file (outcome or budget) or transactions that were created during a calculation on a lower level.
- Calculated to allocation level: This parameter specifies the allocation level to which the allocation is to be calculated. The level must be lower than the current level. The base can be the main file (outcome or budget) or transactions that were created during a calculation on a lower level.
- Calculate account allocation base from: This parameter specifies whether the allocation base is to be retrieved from outcome or budget. If budget is selected, the budget number and version are specified.
- Calculate selection from: This parameter is used for so called dynamic allocation and allocation selection. It also specifies whether this is to occur from outcome or budget.
- Allocation base table: An allocation base table is connected to every element (see below).
- Allocation target table: An allocation target table is connected to every element (see below).
Allocation base table
The allocation base table specifies the accounting identity that constitutes the base for the calculation, for example, accounts for pay and cost centers.
Base tables are defined in 'A/C Allocation Base Table. Open' (GLS060). The table contains one or more user-defined rows which specify from which and to which accounting string the allocation is done.
Allocation target table
The allocation target table specifies the new transactions to be created from the allocation base table and the amount of the balance to be allocated to each respective accounting string.
Allocation target tables are defined in 'A/C Allocation Target Table. Open' (GLS062) and contain these parameters:
Allocation method
The allocation method defines how account entries are automatically created for allocations:
| Method | Use |
|---|---|
|
The total percentage or share is zero. |
This method is used for allocation/accounts distribution. At least two new account entries are created from an existing transaction in the main file. These are equivalent to one percent of the original transaction. The original transaction controls whether the account entries are debit or credit. In order for the voucher to balance, the sum of the percentages for the receiving account and balancing offset account must be zero. |
|
Total percentage is 100. |
This method is used for period accounting and cost of capital calculation. The giving account, the base, is entered in its respective allocation base table. The amount to be allocated can also be split between various transactions. The reciprocal relationship between these is specified in percent or shares. The total of these transactions must reach 100% of the account entries from the giving account. No balancing offset accounting occurs. Note: This method is only valid for budget allocations.
|
|
Total percentage is optional. |
Only valid for budget allocations. |
Allocation type
The allocation type specifies how allocations are to be calculated. Allocations can be calculated as percentage allocation over one or more divisions, as share allocation over one or more divisions or based on resource driver values (percentage allocation) or by an allocation table with amount or quantity as the base (only within the same division).
Extra overhead – percentage
This parameter is used to specify a markup percentage on the transactions that are part of the base.
Allocation selection table
An alternative to specifying a percentage share per row is to specify that the new transactions are to have the same percentage as the outcome on one or more accounting intervals. The allocation can also start from cost variables.
The so-called dynamic allocation is specified in an allocation selection table, a table for the dynamic creation of allocations. The table is used later in the allocation target table.
Selection tables are defined in ‘A/C Allocation Selection Table. Open’ (GLS064).
Examples
Example 1: Allocation in accounting
An example of how an account allocation template may be used is when calculating costs for social security contributions. Salary costs are used as the basis for this calculation:
- Salary costs are recorded under cost center in dimension 2
- Social security costs are recorded under cost center in dimension 2
- Accrued social security costs are recorded separately.
The base table (from table)
The base table is defined as:
| Name | Account range |
|---|---|
| Salary costs | Account X – account Y |
Target table (to table)
The target table has two lines:
| Account | Cost center | % |
|---|---|---|
| Social security costs | 38 | |
| Accrued social security costs | -38 |
Account entries used as basis
The general ledger contains these balances for the period:
| Account | Cost center | Amount | |
|---|---|---|---|
| Salary costs | 100 | 100,000 | debit |
| Salary costs | 200 | 50,000 | debit |
Result
These account entries are created when the allocations are made:
| Account | Cost center | Amount | |
|---|---|---|---|
| Social security costs | 100 | 38,000 | Debit |
| Social security costs | 200 | 19,000 | debit |
| Accrued social security costs | 57,000 | credit |
Example 2: Budget allocation
To allocate freight costs per product group in relation to budgeted revenues per product, these tables are needed:
Freight costs are budgeted in account 7010 without other dimensions. Revenues are recorded in account range 3000 to 3499.
Base table (from table)
| Dim 1 | Dim 2 | Dim 3 | Dim 4 | Dim 5 | Dim 6 | Dim 7 |
|---|---|---|---|---|---|---|
| 7010 | ||||||
| 7010 |
Target table (to table)
| Dim 1 | Dim 2 | Dim 3 | Dim 4 | Dim 5 | Dim 6 | Dim 7 | Sel/Pct |
|---|---|---|---|---|---|---|---|
| 7010 | + | 00001 | |||||
| 7010 | -100% |
Here, the first line in the target table does not contain a percentage but instead refers to a table for dynamic allocation.
Dynamic allocation with allocation selection table
| Dim 1 | Dim 2 | Dim 3 | Dim 4 | Dim 5 | Dim 6 | Dim 7 |
|---|---|---|---|---|---|---|
| 3000 | ||||||
| 3499 | ||||||
| + |
The allocation selection table is used to specify the range of accounting IDs used for calculation and which dimension(s) the ID calculates.
Assume that 1,000,000 has been budgeted for account 7010 Freight costs. The balance of the revenue account per product group (Dim 3) is:
| Dim 3 | Amount | Percent |
|---|---|---|
| 100 | 100,000 | 7.14 |
| 200 | 300,000 | 21.43% |
| 300 | 400,000 | 28.57% |
| 500 | 600,000 | 42.86% |
| TOT | 1,400.00 | 100.00% |
This means these account entries are recorded in account 7010 after the allocation:
| Dim 1 | Dim 2 | Dim 3 | Amount |
|---|---|---|---|
| 7010 | 100 | 71,400 | |
| 7010 | 200 | 214,300 | |
| 7010 | 300 | 285,700 | |
| 7010 | 500 | 428,600 | |
| 7010 | -1,000,000 |