Allocation of Expenses using Mass-Allocation Functionality of ...

In today's post, I will show you how to allocate overhead expenses ... Expenses using Mass-Allocation Functionality of Oracle General Ledger. Hi,Colleagues! Intoday’s post, IwillshowyouhowtoallocateoverheadexpensestocostcentersbasedontheSq.ft.,whichwasinitiallybookedasaninvoiceinAPmodule. BusinessCase: Accountingdepartmentrequiredtoallocatetherentexpensetothecostcentersbasedonsomecriteriainthesystemanditshouldbeauto-allocatedeverytimewhentheexpenseinvoicebooked,accountedandpostinGL. Forinstance,ifacompanyincurredrentexpenseUSD175,217.40intheMay-17periodandaspercompanyprocedures,thisshouldbeallocatedtodifferentdepartmentsonSq.Ftbasisandchargedagainsttheirbudget. Sothecalculationwouldbe: RentExpense:USD175,217.40 CompanyTotalarea:50,000Sq.Ft. Department"FacilitiesResources"area:5,000Sq.Ft. Department"WestRegionResources"area:6,000Sq.Ft. Department"EastRegionResources"area:15,000Sq.Ft. Department"MachineResources"area:4,000Sq.Ft. Department"ComputerResources"area:12,000Sq.Ft. Department"CommunicationsResources"area:8,000Sq.Ft. SoFacilitiesResourcesdepartmentrentexpensewillbe:USD17,521.74((AED175,217.40÷50,000)X5,000)),forWestRegionResourcesdepartmentwillbeUSD21,026.088andsameformulawillbeappliedtootherremainingdepartments. Prerequisites: Beforedoingthesetup,youneedtoidentifytheGLaccountcodeoftheRentExpense. Inmyexample,itis01.000.7420.0000.000,the3rdsegmentrepresentingnaturalaccountwhichisRentexpenseaccount;and2ndsegmentrepresentscostcenter. Also,needtomakesuretheParentandchildhierarchyisdefinedforthecostcenters. AccountbalanceofMay-17oftheaboveaccountandthisshouldbeallocatedasperaforementionedformula. Setup: Firstoff,wewillposttheSq.FtdetailsintheGL: Select"STAT"asacurrencyandcostcentersGLcodes,thenpostit-Thiswillbeaone-offactivity. NownavigatetoGeneralLedgerResponsibility->Journals->Define->Allocation DefineBatchname,BalanceTypeshouldbeActual,thenclickon"Formulas"button Herewedefinetheformula: a.NametheFormula b.SelectJournalCategory c.Selectfunctionalcurrency d.Selectcurrencyallocation"ConvertedAmount"asthiswilltakethecompletebalanceoftheGLaccountinsteadof"CalculatedAmount"whichconsiderforeigncurrenciesexchangeratesontheeffectivedate. e."A"representstotalexpense,inourcase,itisUSD175,217.40,soweneedtoselect01.000.7420.0000.000andtypeshouldbe"C"constant,currencytype"Entered"andcurrency"USD". f."B"representstheusagefactorofthedepartments.Hereweneedtomakesurethatweshouldselectonlyparentvalueofthecostcenter,andtypeshouldbe"L"looping,subsequently,thesystemwillautomaticallypickthechildvalues. e."C"representsthetotalareaofthecompany,whichis50,000Sq.ft.Hereweneedtomakesurethatweshouldselectonlyparentvalueofthecostcenter,andtypeshouldbe"S"summing,subsequently,thesystemwillautomaticallyadduptheamountofeachcostcenter. d."T"representsthetargetaccount,whichisaDebitaccount,anditwillbethesameaccountaswehavegivenin"B". e."O"representstheoffsetaccount,whichisaCreditaccountanditwillbethesameaccountaswehavegivenin"A". Transactions: Nowgobacktothemainallocationwindow,validateandaftersuccessfulvalidation,press"Generate"andalsoyouneedtoscheduleitsothatnexttimeitwillallocateautomatically. ViewtheprogramRunMassAllocationsoutputtocheckifsystemreallyallocatedsuccessfullyornot Nowyoureviewthejournaltoseehowthesystemcalculatedtheamount: Systemsuccessfullyandaccuratelyallocatedtherentexpensetothecostcenters,youmaynowpostitandrunthefinancialreports. Thanks SyedEhsan +971564460290 [email protected] 18 3Comments Like Comment Share SayeedAhamed Thanksforsharingthisarticle Like Signintolikethiscomment Reply Signintoreplytothiscomment 2y Reportthiscomment HamzaESSEBAA Thankyou, verywellexplained Like Signintolikethiscomment Reply Signintoreplytothiscomment 1Like 3y Reportthiscomment SyedEhsanUllahJawaid You’rewelcome Like Signintolikethiscomment Reply Signintoreplytothiscomment 3y Reportthiscomment Seemorecomments Tovieworaddacomment,signin Tovieworaddacomment,signin EnablingofSLA(Sub-LedgerAccounting)forPayrollCostinginOracleEBSR12 Jul9,2017 OracleSub-LedgerAccounting(SLA):Concept&Customization-Payables Jun17,2017 FixedAssetInductionProcessfromanAccountingPerspectiveinOracleR12 Jun17,2017 Othersalsoviewed ATaleofThreeTowers VektorTeh 2y حساباتالاصولالثابتهبالتفصيل- HeshamASSAL 6mo WhatisCEMLI? RaviChhabra 6y AccountingEntriesinOracleFusionCloudApplication AmitThakur☁ 3y