Creating an Allocation Batch
If you have enabled the Expense Allocation and Accounting Periods features (Setup > Company > Enable Features > Accounting under Advanced Features and Basic Features, respectively), you can manually run multiple fixed allocation schedules in a specific sequence. An allocation batch, commonly referred to as the step-down allocation method in cost accounting, enables you to define a sequence where the result of the first allocation is the source pool of the second allocation and so on. You can include up to ten allocation schedules in a batch.
Allocation batches generate non-approved, non-posted journal entries. You can reuse these journals within the same allocation batch, however, to use them from external sources the journals must be approved and posted. External sources include other journals, other batch journals, and journals which are generated by other allocation schedules.
If you have enabled both the Statistical Accounts and Dynamic Allocation features (Setup > Company > Enable Features > Accounting under Advanced Features), you can assign any statistical account to any allocation schedule. The weight for the allocation, based on the balance of that statistical account through statistical journals or as an absolute value, is dynamically calculated when the allocation journal is generated. This is useful in advanced costing such as Activity Based Costing and Usage Based Costing, and when you are running cost centers and profit centers.
If you do not enable the Statistical Accounts and Dynamic Allocation features, your allocation batch can include only allocation schedules based on percentages.
For example, you want to create an allocation batch that includes three allocation schedules. The first schedule allocates the IT department costs by headcount to the Manufacturing, Sales, and Marketing departments. From the results of the first allocation schedule, the second schedule then allocates facility costs by office space to the Manufacturing, Sales, and Marketing departments. Finally, from the results of the second allocation schedule, the third schedule then allocates marketing costs based on number of units sold to the Manufacturing department.
Allocation schedules included in an allocation batch cannot be run outside of the batch.
To create an allocation batch:
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Go to Transactions > Financial > Create Allocation Batches.
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Enter a name for this allocation batch.
The system date displays in the Date Created field.
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Enter the date on which the journal entries should post.
You cannot save the allocation batch without specifying a posting date.
The read-only Created By field displays the user's name that created the batch.
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Select or clear the Inactive box to enable or deactivate this allocation batch.
This option does not delete the allocation batch.
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In the Notes field, enter any notes about this allocation batch.
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In the Allocation Schedule column, select an allocation schedule to include in this batch.
Important:Only those allocation schedules where the Frequency is set to Run by Batch can be included in a batch. After you include an allocation schedule in a batch, you cannot inactivate or delete that allocation schedule. In addition, you cannot change the frequency of the schedule unless you first remove the allocation schedule from all of the batches in which it is included.
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Click Add.
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Repeat these steps for each allocation schedule that you want to include in this batch.
You can use the mover buttons to reorganize the batch sequence. You can also drag and drop schedules to reorganize the sequence.
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Click Save.