The DPN system allows you to allocate accounts payable and journal entries as well as facilitating the allocation of a complete department’s net monthly results. The allocation tables store the percentages to be allocated to each office. Multiple tables can be setup to accommodate allocations by head count, square footage, percent of budgeted revenue or other formulas. Lookups, including table descriptions are provided during the allocation process to assist the user with the correct selection.

Allocation tables for both Accounts Payable/Journal Entries and Overhead allocations are setup through General Ledger, File Maintenance and Allocation Tables (GL-1-8).

When allocating through Accounts Payable or Journal Entries, the General Ledger Account Number must be defined as an L (allocation) type in order for the prompt to display, asking if the user wants to allocate. It is often easier to setup a single department and define every account for that department with the L (allocation) type – and use that department designation when you want to allocate. This procedure also makes it easier to set the L (allocation flag) as it can be done by department. The allocation department will not be used for actual posting to your general ledger – the posting is governed by the departments in the allocation tables.

When posting an invoice for a vendor you will have the ability to allocate the entire amount or specify an amount to be allocated.

For example: If you have a location that is occupied by a several departments, (sales, relocation, administrative, marketing and IT) you may want to allocate the certain expenses such as rent, utilities, and janitorial to each department based on the square footage occupied. So let’s say that the monthly janitorial billing total is normally $1,000, but this month you are billed $1,250 because the carpet was shampooed in the sales office portion only. The user can say Y (yes) to allocate, ask that $1,000 be allocated using the square footage table and direct expense the $250 to the sale office department.

Overhead allocations (OA) require an OA account number which is typically shown on income statements below the net profitability from operating as a separate line item(s). Multiple OA accounts are allowable – for example if you want to break out the administrative OA, marketing OA and IT OA to separate accounts. An allocation financial format is required for the OA calculation but it can be as simple as a single line rolling all income and expense accounts together – remember to include the appropriate OA account. OA’s can be processed multiple times within an accounting period – for example if you processed the OA and realized that the depreciation expense journal entries had not yet been posted for the month – post those entries and simply run the OA’s again. The new allocation entry will pick up only the additional expenses.

Allocations are an excellent way of providing more accurate operating costs for your offices and managers – and using the allocation tables not only saves the time of calculating the amounts but also ensures consistent and accurate calculations. For more information or assistance in setting up your allocations, please contact DPN Customer Support at 1-800-955-3282.