What are Allocation Setups?
An allocation contains the instructions for an allocation run. An allocation setup pulls together an allocation source, its related allocation target and, where necessary, the allocation ratio required for the allocation. The allocation setup also determines whether a charge or split type of allocation is required, and controls how the ledger transactions are generated and posted.
Allocation setups are defined using Corporate Allocation Setup (CAD). You can use the Report action to produce a listing of selected allocations.
Allocation Sequencing
An allocation setup can contain a number of allocation sequences. Each allocation sequence identifies a single allocation source, allocation target and allocation ratio, if it is required. So, each allocation sequence performs an individual cost apportionment. The allocation sequence number determines the order in which the sequences are run.
For example, you may want to allocate marketing costs across different departments in the following way: 30% to production, 10% to head office and the remainder to sales. A single marketing cost allocation run would be required and it would contain three sequences, one for each department's allocation. The sales department's allocation must be the final sequence in the run to ensure it receives the 'remainder' of the total marketing cost.
Allocations are chained together like this for business reasons and for efficiency. From a business point of view, you can group together all of your logically related allocations, for example, all of your head office cost allocations.
From an efficiency point of view, by combining all the allocations in a single allocation setup you can execute them with a single instruction.
In addition, by combining the allocations into a single run you can generate just one journal which is posted at the end of all of the sequences, rather than generating one journal per allocation sequence. This speeds up the processing time and allows you to reduce the number of transactions generated by consolidating them.
Sometimes the results of one allocation sequence affect the source amount of a following sequence. If this is the case you can still combine the allocation sequences into a single allocation setup, but you must set the After Each Sequence posting option to post the allocation transactions at the end of each sequence.
Target Periods
When you define the allocation setup, you specify the periods to which the generated target transactions are to be posted. The following table shows the possible combinations and their results:
| Period From | Period To | Result |
| blank | blank | Target transactions are posted to the Period To specified in Corporate Allocation Run (CAL). |
| nnn | blank | Target transactions are posted to a period nnn relative to the Period To specified in Corporate Allocation Run. |
| Cnnn | blank | Target transactions are posted to a period nnn relative to the current period of the source business unit. |
| nnn | nnn | Target transactions are distributed evenly over the range of periods, relative to the Period To specified in Corporate Allocation Run. |
| Cnnn | Cnnn | Target transactions are distributed evenly over the range of periods, relative to the current period of the source business unit. |
| = | blank | Target transactions are posted to the accounting period of the originating source transactions. |