Account Allocation

Account Allocations (ACA) is used primarily to match transactions on an account.

For example, a debtor/receivables payment transaction can be allocated or matched to the original invoice.

You can fully match a group of transactions, and you can split a transaction if you need to match against only part of the transaction value.

Account Allocations can determine whether settlement discount has been taken and post the discount and any tax on the discount automatically. It can also generate and post any currency exchange differences caused by fluctuating exchange rates.

Account Allocations also allows you to:

  • change the allocation marker on a transaction, for example to reconcile the transaction, indicate the processing status of the transaction, mark it for immediate payment, or withhold it from payment.
  • alter the transaction analysis codes, description, entry date, payment terms code, due date and other payment related details.
Note:  If budget checking at analysis code level is used, any amendment to analysis codes via Account Allocations is not reflected in the budget check values and therefore any future postings may not be compared against the correct value.

When you use Account Allocations you perform some of the following steps, each of which is described briefly below:

  • Extract Account Transactions for Allocation
  • Display the Transaction Details
  • Amend Transaction Details
  • Match the Transactions
  • View the Allocation Balancing
  • Post the Allocations, Discount and Exchange Differences.

Extract Account Transactions for Allocation

The first step in the process is to select the transactions you want to allocate, or amend, on an account. The Account Allocations Extract facility provides powerful selection criteria for you to choose the transactions you require.

You can specify ranges of accounting period, transaction date, journal type, journal source, transaction reference, entry date, allocation marker, and transaction analysis codes to identify the transactions you wish to select. You can also select transactions based on the currency codes, amounts and debit/credit indicator.

The transaction selection criteria are entered using the Selection Criteria for Account Allocation form.

Display the Transaction Details

All of the transactions extracted for allocation or amendment are displayed on the Search Results - Account Allocation form.

You can change the sequence in which the transactions are displayed using the Sort option.

Note:  The FULL version of Account Allocations displays all of the details available on a transaction, not all of which can be amended. Other versions of the Account Allocations form display only some of the transaction details. For example, the PAYMENTS version of Account Allocations only allows you to update the payment details on a transaction and so only displays those details.

Amend Transaction Details

The transaction details you can amend are displayed in highlighted columns on the Search Results - Account Allocation form. You can alter the allocation marker, description, payment due date and other payment details. You can also amend the transaction analysis codes which allows you to correct any analysis mistakes or reanalyze existing transactions.

You can use the Action All option to change the allocation marker on a group of transactions. This is useful if you have used the Extract facility to select transactions that all require the same allocation marker. For example if you need to withhold a set of transactions from payment.

Match the Transactions

When you match, or allocate, transactions you are linking together related transactions to 'close' them and allow them to be removed from the system by Ledger Cleardown (LCL). The matched transactions must balance which means the total of the allocated debit transactions must equal the total of the allocated credit transactions.

You can fully match a transaction by allocating the entire transaction value. To fully match a transaction you set the allocation marker to To Be Allocated.

Alternatively, you can partially match a transaction by splitting a single transaction into two transactions, one of which is allocated and the other left unallocated. To partially match a transaction, you set the allocation marker on the original transaction to Split and enter the amount to be allocated.

As you mark transactions for allocation, the transaction values are added into allocation totals maintained by the system. The transactions marked for allocation must balance before you can post amendments.

View the Allocation Balancing

The transactions you match must balance before the allocations can be posted. To be in balance, the total of the debit and credit transactions marked for allocation must net to zero. In addition, the transactions marked with some allocation markers must balance separately.

To help you balance the allocations, Account Allocations maintains and displays useful totals. It displays the overall debit and credit allocation totals, and any difference, in any of the currency values in use.

In addition, it displays the debit and credit allocation totals for the allocation markers that must balance separately.

Note:  In a multi-currency environment, the currency balancing rules also apply as defined in Business Unit Setup.

Post the Allocations, Discount and Exchange Differences

When you have marked the required transactions for allocation, you use the Post option to update the transactions. If the allocations balance, the transactions are allocated. The allocation reference, allocation date and allocation period are all recorded on the transactions.

Sometimes the transactions you have matched together do not balance. This may simply be because you have selected the wrong group of transactions for matching. Or it may be because:

  • settlement discount has been taken on some of the transactions which has caused an imbalance.
  • different exchange rates apply to the matched transactions which has caused an imbalance in one or more of the currency values.

The system calculates any discount due on transactions and determines whether or not this is allowed. It takes any authorized discounts automatically, and also allows you to apply an imbalance as discount.

Account Allocations automatically caters for both of these situations. When you choose to Post an allocation that is out of balance it checks whether the out-of-balance amount could be settlement discount or an exchange difference.

If the differences are within the tolerances allowed for discount, it generates and posts the discount. If the allocation remains out of balance, and discount was allowed, you can choose to post the imbalance as additional discount.

If the difference is caused by a currency fluctuation or rounding difference, it applies the currency balancing rules and may generate and post a realized exchange difference or rounding adjustment transaction automatically. Otherwise, you are forced to balance the allocations manually.

Alternatively, you can choose to manually enter and post an additional journal to balance the allocations.

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