Allocations enable you to split costs and revenue from selected general ledger accounts and dimensions and allocate them to other general ledger accounts and dimensions. You can do this within a single company or across multiple companies.
Allocate To
Single Company Allocations
If you select this your allocations are applied to one company.
Cross-Company Allocations
If you select this your allocations are applied across multiple companies.
Allocation Methods
Fixed Allocations
For fixed allocations, you can specify the allocation split either as a percentage or as a specific amount.
For example, you can use allocations to allocate marketing costs equally between multiple cost centers. If the marketing costs are $5,000 in a particular month, the allocation is split as follows:
| Cost Center | Percentage |
Allocation ($) |
|---|---|---|
| A | 25 | 1,250 |
| B | 25 | 1,250 |
| C | 25 | 1,250 |
| D | 25 | 1,250 |
See Using Fixed Allocations to Allocate Costs and Revenues for more information on fixed allocations.
Proportional Allocations
For proportional allocations, you can use general ledger and dimension balances as the basis to calculate the allocation split.
For example, you can split head office marketing costs across multiple offices proportionally, based on the value of sales each office has generated in proportion to the company's total sales. If the marketing costs are $250,000, the allocation is split as follows:
| GLA | Dim 1 |
Dim 2 |
Costs to Allocate ($) |
|---|---|---|---|
| Marketing | USA | Head Office | 250,000 |
| GLA | Dim 1 |
Dim 2 |
Sales Generated ($) |
Contribution to Total Sales (%) |
Proportional Allocation of Marketing Costs ($) |
|---|---|---|---|---|---|
| Sales | USA | Chicago | 1,500,000 | 30 | 75,000 |
| Sales | USA | New York | 750,000 | 15 | 37,500 |
| Sales | USA | San Francisco | 1,250,000 | 25 | 62,500 |
| Sales | USA | Boston | 1,000,000 | 20 | 50,000 |
| Sales | USA | Dallas | 500,000 | 10 | 25,000 |
| Total | 5,000,000 | 100 | 250,000 |
In the example above, as Chicago generates 30 percent of the total sales of $5,000,000 (which amounts to $1,500,000), they will receive 30 percent of the total marketing costs of $250,000 (which amounts to $75,000).
See Using Proportional Allocations to Allocate Costs and Revenues for more information on allocations that are based on proportional values.
Statistical Allocations
For statistical allocations, you can use variable sets of statistical values as the basis for your allocation, such as headcount or square footage of office space.
For example, you can split head office IT costs across multiple departments using the headcount in each department. If the IT costs are $20,000 in a particular month, the allocation is split as follows, based on the headcount:
| Department | Headcount |
Allocation ($) |
|---|---|---|
| Marketing | 5 | 3571.43 |
| Sales | 7 | 5000.00 |
| HR | 12 | 8571.43 |
| Finance | 4 | 2857.14 |
See Using Statistical Allocations to Allocate Costs and Revenues for more information on allocations that are based on a set of statistical values.
Intercompany Transactions
You can also use Allocations to eliminate intercompany transactions, like this:
- Filter Group 1 retrieves from company Merlin Spain, GLA Intercompany Receivables, Period 10
- Filter Group 2 retrieves from company Merlin US, GLA Intercompany Payables, Period 10
In this example, the elimination is posted to company Merlin Eliminations, GLA Elimination Adjustments, Period 10.
Allocation Templates
Allocation templates allow you to reuse the details you have entered during the allocation process, such as the filter structure of the source data, allocation rules used, and allocation details. This means that there is no need to enter the details each month and the Allocation Scheduler can run them automatically for you. Dates, periods, and specific amounts are not stored in the template.
You can save the details you have entered as a template at the start or at the end of the allocation process. Although this makes it possible to save an incomplete allocation template, these templates are excluded from processing by the Allocation Scheduler. For a template to be available for use, all the mandatory fields must be completed on each of the pages.
See Creating an Allocation Schedule and Managing Allocation Templates for more information.
Reversing an Allocation Transaction
It is not possible to delete an allocation transaction. If you have created an allocation transaction in error, you must reverse it. See Reversing an Allocation Transaction for information on how to do this.
This will create a transaction of equal value, but with the opposite sign. The reversing transaction line items have the process status of "Not Processed" and a matching status of "Not Matchable". This is the same as the original allocation transaction line items.
You should note the following restrictions:
- You cannot partially reverse an allocation; you must reverse it in full.
- You can only reverse an allocation transaction once.
Processing Allocations in Batch
Depending on the volume of data being processed, when you run an allocation it might run immediately (synchronously) or it might run as a batch job (asynchronously).
- If the allocation process is generating journals, the point at which it switches to running in batch is determined by Manual Journal Line Limit in the Document Line Volume Settings custom setting.
- If the allocation process is generating transactions, the point at which it switches to running in batch is determined by Allocation Transaction Batch Lines Limit in the Document Line Volume Settings custom setting.
The Document Line Volume Settings custom setting is a protected setting, so you must contact FinancialForce Customer Support to adjust these values.
When the allocation process runs in batch, you (the person who starts the process) are notified by email when the process completes. Any errors that occur are recorded in logs which you can access from the Allocation Detail page.
SECTIONS