Set up allocation accounts
With allocation accounts, you can specify the percentages that you want to use to split document or general journal lines into multiple general ledger entries. For example, a company wants to allocate building expenses to different department dimensions. To do so, they can create an allocation key, as shown in the following image.
To create an allocation account, follow these steps:
Select the Search for Page icon in the upper-right corner of the page, enter Allocation Accounts, and then select the related link.
Select New.
You can create allocation accounts of the following types:
Fixed - When you want to split expenses in a way that repeats over a longer period, you can use a fixed allocation. With a fixed allocation, you can define the allocation split. This split only changes when you change the setup on the Allocation Account page.
Variable - To distribute revenue or expenses based on values that change over time, you can use the variable allocation method. With variable allocations, you can specify the sources to use to calculate the allocation percentages. For example, this method is useful for splitting employee costs according to the varying headcounts in department or divisions. Another example is distributing the cost of rent based on production floor footage that might vary for each production line over time. Variable allocations use a combination of dimensions and statistical accounts to determine how amounts distribute for a period.
For each allocation account, you can specify one or more destination accounts. These accounts are the ones that the allocation posts to. You could set up an allocation account to allocate an amount to several G/L accounts but also to the same G/L account except with different dimensions.
You can use the following destination account types:
G/L Account - The amount to allocate posts to the G/L account that you specify in the Destination Account Number field.
Bank Account - The amount to allocate posts to the bank account that you specify in the Destination Account Number field.
Inherit from parent - You don't specify the destination account numbers on the allocation account card. Instead, they're inherited from the account number on the document or general journal line. With Inherit from parent, you can allocate amounts as you go. This feature can be useful when you want to use the same allocation key for multiple accounts, such as using the same allocation key for all expense accounts. In that case, instead of setting up separate allocation accounts for each expense account, you can set up one allocation account with Inherit from parent and then assign it whenever you use an expense account on a document or general journal line.
After selecting the destination account type and number, you can enter the share that you want to allocate to that account. Business Central uses the value in the Share field to automatically calculate the percentage.
When you want to allocate an amount to one or multiple dimensions and dimension values, select Manage > Dimensions.
Set up a fixed allocation for G/L accounts
The following video demonstrates how to set up a fixed allocation to allocate building expenses to different departments.
Set up an allocation account with Inherit from parent
The following video demonstrates how to set up a fixed allocation by using the Inherit from parent destination account type.
Set up a variable allocation with statistical accounts
The following video demonstrates how to set up a variable allocation for employee expenses by using statistical accounts.