Allocation Rules: To Create an Allocation Rule That Uses a Dynamic Ratio of the Period-to-Date Account Balances

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

Story

Suppose that accountants of the HEADOFFICE branch post rent expenses to the 000-000 subaccount to speed up data entry. At the end of each month, they split the rent expenses by departments based on the head count.

Acting as an administrator, you need to define an allocation rule that will distribute the posted amount between the departments based on the head count.

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 branch of the SWEETLIFE company has been created.
  • On the Chart of Accounts (GL202500) form, the following accounts have been created:
    • 62900 - Rent or Lease Expense
    • 69500 - Salaries and Wages
  • 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

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 creating 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 Uses a Dynamic Ratio

To begin creating an allocation rule that distributes amounts by using a dynamic ratio, 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 Rent 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.
  9. In the Distribution Method box, select By Dest. Account PTD.

    The source amount will be distributed proportionally to the period-to-date balances. When you select this option, the Base Ledger box becomes available.

  10. In the Allocation Ledger and Source Ledger boxes, ensure that ACTUAL is selected.
  11. In the Base Ledger box, select HEADCOUNT.

    The base ledger is the ledger from which the allocation proportions are calculated. You can take the proportions from an actual, budget, or statistical ledger. To calculate the proportions, the system uses the amounts from the base accounts specified on the Destination Accounts tab. If the Base Ledger box is empty, the system calculates the proportions from the amounts in the allocation ledger.

  12. Make sure that the Allocate Source Accounts Separately check box is cleared.
  13. 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, and 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 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 62900 - Rent or Lease Expense account of the head office), on the Source Accounts tab, click Add Row, and specify the following settings in the added row:
    • Branch: HEADOFFICE
    • Account: 62900
    • Subaccount: 000-000
    • Percentage Limit: 100.00
  2. To specify the first destination account–subaccount pair to which the amount will be allocated (for the Finance department), on the Destination Accounts tab, click Add Row, and specify the following settings in the added row:
    • Branch: HEADOFFICE
    • Account: 62900
    • Subaccount: 000-FIN
    • Base Branch: HEADOFFICE
    • Base Account: 69500
    • Base Subaccount: 000-FIN
  3. To specify the second destination account–subaccount pair to which the amount will be allocated (for the Marketing department), click Add Row, and specify the following settings in the added row:
    • Branch: HEADOFFICE
    • Account: 62900
    • Subaccount: 000-MKT
    • Base Branch: HEADOFFICE
    • Base Account: 69500
    • Base Subaccount: 000-MKT
  4. To specify the third destination account–subaccount pair to which the amount will be allocated (for the Operations department), click Add Row, and specify the following settings in the added row:
    • Branch: HEADOFFICE
    • Account: 62900
    • Subaccount: 000-OPS
    • Base Branch: HEADOFFICE
    • Base Account: 69500
    • Base Subaccount: 000-OPS
  5. To specify the fourth destination account–subaccount pair to which the amount will be allocated (for the Sales department), click Add Row, and specify the following settings in the added row:
    • Branch: HEADOFFICE
    • Account: 62900
    • Subaccount: 000-SLS
    • Base Branch: HEADOFFICE
    • Base Account: 69500
    • Base Subaccount: 000-SLS
  6. Click Save on the form toolbar.

You have defined a rule that will distribute the amount posted to the 62900 - Rent or Lease Expense account of the head office branch among the departments based on the head count.