Add Allocations
Allocations help you move amounts from one set of accounts, projects, classes, or grants to another. From Allocations, you can add allocations based on units or fixed percentages that you update over time, as well as balances or specific percentages of balances.
Tip: After you add allocations, create groups to run up to five at a time (including pre-allocation reports).
From Allocations, under Allocations, select Add.
Tip: The steps below also apply to editing. To update, select Edit from an allocation's menu, then save your changes. A message informs you when your save completes. At any time, you can view the message under your top-level navigation bell.
Under Basics, enter a unique name and helpful description, and determine whether other users can run or edit.
Select Next. Under General, select a type:
Direct - Moves account balances from a set of source accounts to a set of destination accounts, or reallocates amounts to projects, classes, and transaction codes within accounts.
Indirect expense - Applies a fee schedule to an account balance in order to calculate an amount. After calculation, the allocation debits an expense account and credits an asset account for that amount. Use primarily to allocate investment fees to projects, classes, and transaction codes.
Indirect revenue - Uses an income amount to debit an asset account and credit a revenue account. This is helpful when allocating interest income to projects, classes, and transaction codes.
Indirect miscellaneous (misc) - Uses an amount to calculate by relative balance or fee schedule. After calculation, the allocation can debit and credit a combination of accounts. This is useful for allocating amounts from project to project, class to class, and transaction code to transaction code without the account type restrictions that are applied to other indirect allocation types.
These are similar to indirect income and expense, except you're not restricted to certain source and destination accounts. You can create allocations based on the amount calculated in an allocation pool, fees calculated using fee schedules, or income such as interest, dividends, royalties, as well as realized and unrealized gains.
Indirect cost - Calculates reimbursable indirect costs to help you meet grant guidelines. When your organization receives grant funding — even partial funding — indirect costs (also called admin costs), are the normal operational expenses you incur while carrying out the grant's mission, but can't tie directly to the grant's specific purpose.
Calculating reimbursable indirect costs while meeting strict government guidelines can be a difficult task. However, indirect cost allocations streamline the process and help you successfully recoup reimbursable costs.
With government grants, there's usually an agreed upon rate at which your organization can bill the funding agency (or charge the grant) for indirect costs. You can then enter that rate, in conjunction with projects and allocation pools, to calculate reimbursable costs that are billed to the funding agency or charged to the associated grant.
To use indirect cost allocations, you need to add allocation rates and assign them to projects. You'll also need to create allocation pools and use business rules to associate projects with the allocation.
Specify a status, pool, and fee schedule.
Pools and schedules are important allocations settings that help you effectively configure and run allocations for your organization.
For indirect revenue and misc allocations, specify the amounts to allocate.
Determine how you want to handle exclusions. Use relative or specific dates and exclude specific transactions from the calculation as needed.
Choose source and destination methods, then specify post, report, and journal preferences.
Configure references so you can trace each allocation back to the journal entries it creates.
During reconciliation, these references help you identify where each entry came from, confirm it was created correctly, and fix issues when needed. You can review references at any time from the journal entry batch generated by the allocation run.
Select Next. Under Source and destination, choose an interfund set, then update source and destination account and distribution info as necessary.
Note: Source and Destination display as separate tabs only when destination method is based on units or percentage.
Tip: Interfund sets balance accounts when debit and credit accounts aren’t in the same fund.
Select Next. Under Calculation, base calculations on actual or budgeted amounts, method, and balance percentage.
Methods are used with your date parameters to calculate balances. For example, average daily balance calculates each day in the range, adds those balances together, and divides them by the number of days in the date range.
Tip: For indirect cost allocations, the calculation method is automatically set to "Net change".
Finally, choose default dates for the calculation, such as a specific date or fiscal period. Then determine how to handle accounts with positive or negative balances.
For Indirect cost allocations, select Next. Under Pool, designate the amount or percent to allocate for each account associated with each project in the selected pool. You can also choose to exclude specific accounts.
Select Next. Under Destination accounts, enter specific debit and credit accounts to allocate the calculated indirect costs to each project. You can also designate an interfund set to use.
Choose how to proceed:
Return to previous tabs or save now.
If you're editing an existing allocation, choose Save as to update or repurpose your setup.
To save and go directly to the report, select Save and generate pre-allocation report.
To immediately process, select Save and allocate. With this option, the following occurs:
Journal entries are created and added to a batch (which manually or automatically post, depending on the allocation's configuration).
An allocation report is attached to the batch.
View the batch from General ledger, Journal entries.