Allocation Rules: To Create an Allocation Rule That Uses a Fixed Ratio (Weight)

In this activity, you will learn how to create an allocation rule in which a user-defined coefficient is used to distribute amounts among accounts and subaccounts.

Story

Suppose that the HEADOFFICE branch pays all advertising bills that the SweetLife Fruits & Jams company receives. At the end of each month, the accountant of the HEADOFFICE branch needs to distribute the advertising expenses between the HEADOFFICE, RETAIL, and SWEETEQUIP branches by using the fixed ratio 5:1:1.

Acting as an administrator, you need to define an allocation rule that will distribute the bill amount.

Configuration Overview

In the U100 dataset, the following tasks have been performed for the purposes of this activity:

  • On the Companies (CS101500) form, the SWEETLIFE company has been defined.
  • On the Branches (CS102000) form, the HEADOFFICE, RETAIL, and SWEETEQUIP branches of the SWEETLIFE company have been created.
  • On the Chart of Accounts (GL202500) form, the 61000 - Advertising Expense account has been created.
  • On the Ledgers (GL201500) form, the ACTUAL ledger has been defined.
  • On the Segmented Keys (CS202000) form, the SUBACCOUNT segmented key has been created.

Process Overview

In this activity, on the Allocations (GL204500) form (Allocation tab), you will specify the general settings for an allocation rule. Then on the Source Accounts and Destination Accounts tabs of this form, you will specify the accounts and subaccounts for the rule.

System Preparation

Before you start configuring the allocation rule, do the following:

  1. Launch the MYOB Acumatica website with the U100 dataset preloaded, and sign in as a system administrator Kimberly Gibbs by using the gibbs username and the 123 password.
  2. On the Company and Branch Selection menu on the top pane of the MYOB Acumatica screen, make sure that the SweetLife Head Office and Wholesale Center branch is selected. If it is not selected, click the Company and Branch Selection menu to view the list of branches that you have access to, and then click SweetLife Head Office and Wholesale Center.
  3. Make sure that you have completed the following prerequisite activity to perform the needed configuration of subaccounts: Subaccounts: Implementation Activity.

Step 1: Specifying General Settings for an Allocation Rule That Distributes by Weight

To begin creating an allocation rule that distributes amounts by weight, do the following:

  1. Open the Allocations (GL204500) form.
  2. On the form toolbar, click Add New Record.
  3. In the Description box of the Summary area, type Advertising expenses.
  4. In the Branch box, ensure that HEADOFFICE is selected.
  5. On the Allocation tab, in the Start Period box, select 01-2024.
  6. Leave the End Period box empty.
  7. Make sure that the Recurring check box is cleared.
  8. In the Allocation Method box, make sure that the By Account PTD option is selected.

    The period-to-date amount will be distributed during the allocation process.

  9. In the Distribution Method box, select By Weight.

    With this option selected, you have to specify the ratio that is distributed to each account–subaccount pair.

  10. In the Allocation Ledger and Source Ledger boxes, ensure ACTUAL is selected.
  11. In the Last Revision Date box, leave the current date, which the system has inserted.

You have specified the general settings for the allocation rule. You will now proceed to specifying source and destination accounts and subaccounts for the rule.

Step 2: Specifying Accounts and Subaccounts for the Allocation Rule

To specify the accounts and subaccounts for the rule, while remaining on the Allocations (GL204500) form, do the following:

  1. To specify the source account from which the allocated amount will be deducted (which in this case is the 61000 - Advertising Expense account of the head office), on the Source Accounts tab, click Add Row, and specify the following settings in the row:
    • Branch: HEADOFFICE
    • Account: 61000
    • Subaccount: 000-000
    • Percentage Limit: 100.00

      This indicates that the full amount will be distributed during the allocation process.

  2. To specify the first destination account–subaccount pair to which the amount will be allocated (for the head office branch), on the Destination Accounts tab, click Add Row, and specify the following settings in the added row:
    • Branch: HEADOFFICE
    • Account: 61000
    • Subaccount: 000-000
    • Weight/Percent: 5
  3. To specify the second destination account–subaccount pair to which the amount will be allocated (for the retail store branch), click Add Row, and specify the following settings in the added row:
    • Branch: RETAIL
    • Account: 61000
    • Subaccount: 000-000
    • Weight/Percent: 1
  4. To specify the third destination account–subaccount pair to which the amount will be allocated (for the equipment sales center branch), click Add Row, and specify the following settings in the added row:
    • Branch: SWEETEQUIP
    • Account: 61000
    • Subaccount: 000-000
    • Weight/Percent: 1
  5. Click Save on the form toolbar.

You have defined a rule that will distribute the amount posted to the 61000 - Advertising Expense account of the head office branch among all three branches in the system.