Allocations:

  • This is when one company pays/receives payment, but wants to allocate the revenue/expense over multiple companies/subsidiaries.

 

Recommendations for Allocations:

  • When creating transactions that must be allocated to multiple companies, each company should be setup as a GL Variable.  
  • For Billing transactions, enter in the Billing as usual with the customer selected. For the Billing Line, select a clearing balance sheet GL account in the Revenue GL account field and select the company that will be receiving the actual payment as the GL Variable.
  • For Vendor transactions, enter in the Payable as usual with the vendor selected. For the Payable Line, select a clearing balance sheet GL account in the Expense GL account field and select the company that will be paying the actual payment as the GL Variable.
  • The actual allocation would happen through a Journal Entry:
    • For Billings, the entry would Debit the same balance sheet clearing GL account with the original GL Variable and Credit revenue for the allocated amount with that company’s GL Variable. There will be a Credit line for each allocated amount.
    • For Payables, the entry would Credit the same balance sheet clearing GL account with the original GL Variable and Debit expense for the allocated amount with that company’s GL Variable. There will be a Debit line for each allocated amount.
  • A lookup relationship should be added on both the Billing and Payables objects to the Journal Entry. This will provide a user with visibility on each Billing and Payable allocation.
  • This process can be customized with auto allocation with the help of a partner. Please contact our support desk for a list of approved partners at support.accountingseed.com.
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