Processing allocations is an integral part of accounting processes. An organization incurs various expenses that later need to be allocated (distributed) among various units using certain parameters. These expenses typically include, but are not limited to, rent expenses, utility expenses, salaries for support functions such as human resources and IT support, general expenses such as advertising, and so on.
Let's consider a simple example to understand this concept. Assume that an organization has 400 employees working in its two departments—hardware sales and software services. This organization also has an administration support department. For the sake of simplicity, we'll assume that it uses only two chartfields: Account and Department. Let's say the chartfield values are as follows:
|
Account |
Department | ||
|---|---|---|---|
|
Value |
Description |
Value |
Description |
|
900000 |
Salary expenses |
A300 |
Hardware sales |
|
A400 |
Software services | ||
|
A500 |
Administration | ||
The salary for the...
