Allocations overview
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Sage Intacct offers 2 methods for allocating funds: transaction allocations and dynamic account allocations.
Transaction allocations
Transaction allocations provide a way to distribute transaction amounts across multiple dimensions—such as departments, locations, projects, or classes—automatically. Automatically allocating amounts based on a preset definition saves time and increase accuracy for routine transactions, such as rent allocated across locations or utilities allocated across departments.
For example, an organization distributes an expense for janitorial services across 3 locations. The transaction allocation is set up to reflect the occupancy percentage for each location. When you select this allocation on an AP purchase invoice line item, Intacct automatically divides the amount across the locations according to the percentages saved in the transaction allocation definition.
For more detailed examples, see About transaction allocations.
Dynamic allocations
Dynamic (account) allocations are designed to pull source balances automatically and distribute them across dimensions, according to the calculation method set as the basis. This style of allocation includes the setup of an allocation template so you can routinely generate allocations without having to redefine the calculations every time. This capability helps organizations that need more than the basic transaction allocations, and those businesses that have time consuming periodic or complex allocations.
For example, suppose you have a dimension called Program, and within that dimension you have 4 programs: A, B, C, and D. If you use a basis (calculation method) that allocates 10% to program A, 20% to program B, 30% to program C, and 40% to program D, a source balance of 100,000 is allocated as follows:
- 10,000 to program A
- 20,000 to program B
- 30,000 to program C
- 40,000 to program D
The result is that allocated costs reflect true performance.
For more details, see Dynamic allocations workflow.
What's the difference?
Transaction allocations are intended for use during transaction entry with parameters being known up front.
Dynamic allocations are applied as after-the-fact account amount distributions on a periodic basis. The dynamically generated allocations also automatically create journal entries with verifiable calculations attached so you can see how the debits and credits were derived from the source and basis amounts.
