Automating Allocation of Expenses to Projects in Dynamics GP

Many companies (including government contractors) must prepare budgets as well as report actual revenues & expenses down to the level of individual projects, but do not wish to incorporate projects into their chart of accounts structure (the preference being to maintain that information in a sub-ledger). One of the associated challenges is that allocated expenses frequently need to be charged to projects, but some of the best allocation tools in Dynamics GP are limited to working only at the level of GL accounts.

For those clients using Dynamics GP’s Project Accounting module, GP offers a “Project Allocation” option, which allows users to re-assign certain expenses from one project to multiple other projects. This functionality allows expenses from one project (derived from timesheet entry, purchases, etc.) to be allocated out to other projects, based on either a fixed percentage or based on units or amounts from a specified basis (cost category) on the projects to which the expenses are to be allocated.

Many clients prefer to track project data using Dynamics GP’s Analytical Accounting module, in part because of ease of use and compatibility with financial reporting tools. For those companies, Tridea Partners has developed an add-on application that works in a manner similar to the “Variable Allocations” functionality in Dynamics GP. The difference is that this new application allows users to base their allocations on the balances (or period net change) in combinations of GL accounts and AA codes. Furthermore, the resulting allocated amounts can be posted to combinations of GL accounts and AA codes. It provides a means of performing a month-end allocation of expenses to projects based on actual expenses that have been incurred and assigned to projects during the course of the month. The user simply defines the combination of accounts/AA codes that will be used as drivers for the allocation, and then associates them with the destination posting accounts/AA codes. The program will calculate the amount to be allocated, and automatically post an entry with both the allocation-out and the corresponding allocations to the various projects.