Create and Maintain Allocations

You can define and maintain allocation distributions from a source account for multiple destination accounts. Source accounts for allocations can be financial or nonfinancial. If you enter a nonfinancial source account, all destination accounts for that allocation must be nonfinancial.

Allocations can only be entered and deleted in Allocation Entry; however, the source amount can be modified using General Journal Entry or Allocation Selection.

You can determine whether the allocation is to be manually generated using General Journal Entry, or automatically selected for generation during period-end processing using Allocation Selection in the Period End menu.

Before You Begin

Allocations cannot be entered or maintained in Allocation Entry if allocations have been selected for posting, but not updated in Allocation Selection.

To create and maintain allocations

Select General Ledger Main menu > Allocation Entry.
Enter the allocation number. For more information, see Allocation Entry - Fields.
To copy an existing allocation entry and then make any necessary modifications, click Copy. For more information, see Copy an Allocation.
Enter the description for the allocation entry, and enter the Source Account field for the allocation.
In the Allocation Method field, select the calculation method to use for the allocation.
If you are creating a basis allocation, in the Allocation Basis field, select the type of basis to use. If you selected a budget basis, select the budget code for the basis.
In the Allocation Cycle field, select whether the allocation cycle is to be automatically selected for posting at the end of each period, quarter, or fiscal year, or manually posted.
In the Amount to Allocate field, select the type of amount to allocate.
If you select a manual allocation amount, in the Manual Amount field enter the amount.

Note Entering a manual amount that is greater than the balance of the source account will create an over-allocation.

Enter the journal comment, if necessary.
Click the Lines tab, and at the Account No. field, enter a destination account number for the distribution. You can use asterisks (*) and at signs (@) as necessary to create account masks.
If Quantity is selected as the allocation method, enter the quantity to be distributed to this account. If Percent is selected as the allocation method, enter the percentage to be distributed to this account. If Basis is selected as the allocation method and you want to link the basis amount to another account, select the Link check box and enter an account number to use for the basis calculation. You can use at signs (@) as necessary to create account masks.
Enter the comment for the distribution, and enter other destination accounts as necessary.
To view the information entered for accuracy, click the Print button and print the Allocation Listing. For more information, see Allocation Listing. Click Accept.

An allocation entry is created or modified. You can post manual allocations using General Journal Entry, and post cycle allocations using Allocation Selection.

Example - Planning Allocations

Allocations are calculated in order of their allocation number. It is important to consider this when defining cascading allocations, where a destination account for one allocation later becomes a source account for a subsequent allocation. For example:

Allocation 0000100 distributes the current activity as follows:

Source Account

50600-00-000-000-000 Advertising:Corporate

Destination Accounts

50600-01-000-000-000 Advertising:West

50600-02-000-000-000 Advertising:East

Account number 50600-01-000-000-000 is also a source account in allocation 000999, which distributes the current activity as follows:

Source Account

50600-01-000-000-000 Advertising:West

Destination Accounts

50600-01-550-000-000 Advertising:West–California

50600-01-770-000-000 Advertising:West–Oregon

The amount allocated to the destination accounts in allocation 000999 will include the current activity from 50600-01-000-000-000 plus the amount allocated to 50600-01-000-000-000 in allocation number 000100.

Example - Creating Quantity Allocations

The following Allocation Journal shows how the allocation amount is distributed using the Quantity method.

Allocation Source Amount: $550.00

	Account No.	Description	Quantity	%	Distribution Amt
	50500-01-010-000-000	Copier Expense:Irvine–Admin	90	30%	$165.00
	50500-01-020-000-000	Copier Expense:Irvine–Sales	75	25%	$137.50
	50500-01-030-000-000	Copier Expense:Irvine–Prod.	135	45%	$247.50
Total			300	100%	$550.00

The percentage rates in the above example were calculated by dividing each quantity by the total quantity amount (for example, 90/300=30%).

Example - Creating Percent Allocations

The following Allocation Journal shows how the allocation amount is distributed using the Percent method.

Allocation Source Amount: $550.00

	Account No.	Description	%	Distribution Amt
	50500-01-010-000-000	Copier Expense:Irvine–Admin	30%	$165.00
	50500-01-020-000-000	Copier Expense:Irvine–Sales	25%	$137.50
	50500-01-030-000-000	Copier Expense:Irvine–Prod.	45%	$247.50
Total			100%	$550.00

The following Allocation Journal shows how a partial percentage allocation is distributed using the Percent method.

Account Balance: $1,000.00

Allocation Source Amount: $700.00

	Account No.	Description	%	Distribution Amt
	50500-01-010-000-000	Copier Expense:Irvine–Admin	15%	$150.00
	50500-01-020-000-000	Copier Expense:Irvine–Sales	35%	$350.00
	50500-01-030-000-000	Copier Expense:Irvine–Prod.	20%	$200.00
Total			70%	$700.00

After the allocation is distributed, the remaining balance of the source account is $300.

Example - Entering Basis Allocations

The following example shows how an allocation amount is distributed using the Basis method.

A company is billed for advertising expenses in the period that the advertising is run. The company wants to allocate advertising in the current period based on the department sales of the prior period. A basis allocation with linked distributions is set up as follows:

Source Account: Advertising Expense

Allocation Method: Basis

Allocation Basis: Prior Activity

Allocation Cycle: Period

Allocation Amount: Activity

Destination Accounts: The Advertising Expense account for each department, each linked to the Sales account for each department.

When the allocation is generated, the total sales for the prior period for the specified destination accounts are calculated, and the current advertising expense is distributed to the individual department advertising expense accounts based on the ratio of the department’s sales to overall sales.

Example - Using Account Masks to Specify Destination Accounts

Multiple accounts can be selected through the use of masking and template characters. The following examples show how the asterisk (*) can be used as a wildcard and the at sign (@) as a template position.

Chart of Accounts

50600-10-010-000-000 Advertising Expense:Irvine–Location 01

50600-10-020-000-000 Advertising Expense:Irvine–Location 02

50600-99-010-000-000 Advertising Expense:New York–Location 01

50700-10-010-000-000 Operations Expense:Irvine–Location 01

50700-10-020-000-000 Operations Expense:Irvine–Location 02

50700-99-020-000-000 Operations Expense:New York–Location 02

Example A - Using Masking Characters

Source Account: 50600-00-010-000-000 Advertising Expense:Corporate–Location 01

Destination Account: 50600-**-010-000-000

The following accounts receive the allocation:

50600-10-010-000-000

50600-99-010-000-000

Example B - Using Template Characters

Source Account: 50600-10-000-000-000 Advertising Expense:Irvine

Destination Account 1: 50600-@@-010-000-000

Destination Account 2: 50600-@@-020-000-000

The following accounts receive the allocation:

50600-10-010-000-000

50600-10-020-000-000

Example C - Using Both Masking and Template Characters

Source Account: 50600-00-000-000-000 Advertising Expense:Corporate

Destination Account: @@*@@-**-010-000-000

The following accounts receive the allocation:

50600-10-010-000-000

50600-99-010-000-000

50700-10-010-000-000