Allocation Types on the General Ledger menu lets you set up allocation types using different methods, applying rules for General Ledger and/or Job Status apportionment of sales or costs. This is a global table across all companies.

Depending which method you chose, one or both of the following tabs are available:

The GF method is based on fixed GL allocations.

Use this method if overhead GL accounts are allocated to departments based on a fixed percentage such as number of employees or square footage.

You want to allocate 90% of the total rent of $15000 to the Rent expense account 7090, based on the square footage for each department, as follows: dept 1 = 3420 sq ft, dept 2 = 5670 sq ft, dept 3 = 5210 sq ft.

GL Allocation

Allocation Basis

The system takes the balance in the account range Allocation line, and multiplies it by the percentage to determine the amount to allocate. Then it takes the fixed value in each allocation basis line to determine a percentage for each line, and creates a GL transaction to the debit account on each line, with the balancing transaction hitting the credit account on the first screen.

So if 00.00.7010 has a balance of $10000 and 00.00.7020 has a balance of $5000, the amount to be allocated is $15000x90%= $13500. This is allocated based on square footage as follows: dept. 1 = 3420 sq. ft., dept. 2 = 5670 sq. ft., dept. 3 = 5210 sq. ft. and the following GL entries are created.

​GL Allocation - Method GV

The GV method is based on GL account balances.

Use this method if overhead GL accounts are allocated to departments based on sales.

You want to allocate 90% of sales salaries/benefits to each department’s sales expense account 7080 based on sales. Sales salaries/benefits hit overhead accounts 00.00.7010 and 00.00.7020, while sales in each department hit 4010 and 4020.

GL Allocation

Allocation Basis

The system takes the balance in the account range Allocation line, and multiplies it by the percentage to determine the amount to allocate. Then it takes the account balance in each allocation basis line to determine a percentage for each line, and creates a GL transaction to the debit account on each line, with the balancing transaction hitting the credit account on the first screen.

So if 00.00.7010 had a balance of $40000 and 00.00.7020 had a balance of $10000, the amount to be allocated would be $50000x90%= $45000. If Div 1 had sales of 7000, 2 = 9000, 3 = 3000, 4 = 4000 and 5 = 12000, the GL entries below would get created.

If Override Credit Analysis on the first screen is populated as above (00.00.7120), the following postings would happen.

If Override Credit Analysis is blank, the following GL accounts from the GL Allocations screen above would be used in the postings.

The JC method is based on the amounts in certain cost codes for specific contracts.

You want to charge certain contracts (in contract group CONST, allocation group WARR) a warranty burden of 1% on all labour costs with cost head FIELD, and you want the burden to hit the same cost code, but the AL category, and the GL code __.__.6300. You want the credit to hit a warranty liability account 10.10.6400.

Contract Details

Cost Code Allocation

Allocation Overrides

So if a cost code with a section of 10, activity of 400, cost head of FIELD and a cost category of LA has $60,000 of costs this period, a contract cost transaction for 600 based on the % to Allocate and would hit the same cost code but the AL cost category based on the overrides. This figure will be posted to GL account 10.10.6300, while the credit hits a warranty Liability Acct in 10.10.6400 if the credit was also masked on the first screen.

If the allocation should hit a different cost head, it will use the same section and activity as the original cost unless they are overridden.

You want to allocate small tools or consumables at 0.5% of material cost to a cost head of CONSU, category AL.

Main screen

GL Allocation

Allocation Overrides

So if a cost code with a section of 10, activity of 400 and a cost category of MA has $120,000 of costs this period, a contract cost transaction for 600 based on the % to Allocate and would hit the cost head of CONSU and AL Cost category based on the overrides. This figure is posted to GL account 10.10.6300, while the credit hits a warranty Liability Account in 10.10.7120.

If the allocation should hit a different cost head, it will use the same section and activity as the original cost unless they are overridden.

If there are multiple overrides defined, then the Debit Amount will be pro-rated across the overrides proportionally.

The JR method is based on the revenue on specific contracts.

The JR allocation works the same way as the JC method, except it allocates based on revenue not costs.

Warranty Expense is 2% of contract revenue, a contract with $100000 would have a contract cost allocation of 2000 that would hit either the same cost code as the revenue or the cost codes entered as overrides.

GL Allocation

So if a revenue cost code has $100,000 of Revenue this period, a contract revenue transaction for 2000 based on the % to Allocate and would hit the cost head of REV and blank cost category (Revenue). This figure is posted to GL account 10.10.6300, while the credit hits a warranty Liability Account in 10.10.7120 if the credit was also masked on the first screen.

If the allocation should hit a different cost head, it will use the same section and activity as the original cost unless they are overridden.

The JV method lets you allocate costs from the General Ledger or an overhead contract to many contracts based on costs from other contracts.

You want to allocate amount in the Executive Burden GL Account to all contracts based on labour costs. So if there is $10,000 in the GL account 01.01.8300, and contracts that have labour for the month are:

The allocation is costed to cost code 10001burd.AL based on labour costs.

Allocate GL or Contract Costs

Allocation Basis

Allocation Overrides

There is $1,000 office expense in the overhead contract ZZ.0001off.OC, and contracts that have materials for the month are:

The allocation is 10% of other costs costed to cost code 10001off.oc based on material costs.

Allocate GL or Contract Costs

Allocation Basis

Allocation Overrides

GL Allocations Processing on the General Ledger Administration menu lets you extract allocations for reporting, with an option to process the data as a General Ledger Journal.

Field Definitions

Allocation Type

The allocation type (or types) to include in this process.

Allocation Group

The allocation group (or groups) to include in this process.

Financial Period for Transactions

The financial period of the transactions to include in this process.

Process Allocations

Whether to produce an allocation journal as part of this process. If this is not ticked, a report only is produced.

When you select the Process Allocations field, four additional fields appear below it:

Financial Period to Allocate, Transaction Date, Transaction Type, and Post Batch.

Financial Period to Allocate

Post Batch

Use these fields to further define how you wish to process the allocations, such as selecting the financial period to post the journal to, the transaction date and type to use for the journal, and whether to post the batch automatically during the process.