Generally, cost allocations include identifying the sources of indirect costs such as administration expenses and spreading these costs among cost objects, such as finished goods and services, and unfinished goods (work in progress), services, sold items, or other objects. Also, cost allocations are used for allocating the incomes or expenses for financial reporting purposes.
The functionality of cost allocations is available only if the Posting on General Ledger option is selected on the Administration > Settings > Service Settings form.
Manual and Automatic Allocations
Generally, allocations are performed automatically by the Month-End Closing service tool. However if needed, you can manually allocate specific costs by creating a corresponding document on the Accounting > Service Tools > Manual Cost Allocations form.
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- Accounting > Master Data > Cost Allocation Methods
- Accounting > See also > Cost Allocation Settings
Allocation Methods
In FirstBIT ERP, there are multiple predefined allocation methods. You can use the Accounting > Master Data > Cost Allocation Methods form to view all the available methods and to add new methods.
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For more details, see The Bases for Allocations. If the Production module is enabled in your application, you can easily create allocation methods of the Cost of Goods/Services type based on the available predefined data sources.
Allocation Settings
Using the Accounting > See also > Cost Allocation Settings form, you can specify particular GL accounts (more precisely, records structured as GL Account / Department / Entity) to be used as source of amounts for allocation and which allocation methods should be used for these sources. You can use the predefined allocation settings, edit them, or define new settings. If there are more than one settings for the same GL account or account section, the latest settings will be used.
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For more details on allocation settings, refer to Allocation Settings.
Execution of Allocations
Generally, automatic allocations are executed by the Month-End Closing service tool in two stages:
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