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Crestwood Associates

Lessons in Allocations in Microsoft Dynamics GP


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    “Allocations” seems to be the buzz word lately.  Do you need to allocate in the general ledger or another module?  Do you need to allocate in summary at month end?  What about budgets?  We have some suggestions direct from the customers that use these tools every day.  

    In Microsoft Dynamics GP, you can use the fixed and variable allocation accounts in the financial module to allocate revenue and expense to different departments at the time of entry.  So if you set up a template with the amount allocated in a fixed percentage or a variable ratio (based on balances in other accounts), you can allocate the expense at the time the invoice is entered in Dynamics GP.

    If you prefer to wait until month end to do allocations, you can use a SmartList report to gather the data and export to Microsoft Excel to manipulate the percentages.  You can then import a journal entry back into the Dynamics GP General Ledger using Integration Manager.  Another alternative would be to build a report in FRx or Management Reporter that would create the allocation journal entry for you.  You can export it to Excel and import it into the GL using Integration Manager.

    But what about allocations in Budgets?  We have found an efficient way of using Forecaster budgeting to allocate to lines of business within the same Dynamics GP company.   No one at Presbyterian Homes, a Continuing Care Retirement Community, expected the department managers at their various locations to know what the allocation at each line of business (assisted living, independent living and health care) should be at the time of budgeting.  It was too complex a calculation to allocate a medical supply expense, for example, this way.  To simplify the budgeting process, the finance team allowed the department managers to input summary totals for all expense lines and let Forecaster do the allocations in the background.  They used the same templates they had built using the MC2 Advanced Intercompany tool in Payables Management to allocate the expenses for budgets in the same percentages they were using for actual expenses.  They could then review the budget allocations on the Forecaster input screen immediately, to review for reasonableness

    Debra O’Neill, Special Projects & Budgeting Manager at Presbyterian Homes, says, “The department managers were happy to have all the necessary information presented in one place, happy that they did not have to continually request reports from accounting to support their budget process.”

    The Forecaster utility, Budget Transfer Tool, allows the finance team to transfer the budgets to Dynamics GP and then report on the budget in FRx.  We also loaded 2 years of historical data into Forecaster, so they could review the trends in certain line items.  

    “Even with this being an implementation year, Presbyterian Homes was able to keep to their typical budget process calendar.  Typically a software implementation would cause a slide of the milestone dates in the calendar.  With Forecaster, future years’ budget process will include more efficiency,” says Debra O’Neill.

    The Forecaster tool has been released with Dynamics GP 2010 and will be supported through its normal lifecycle.  Contact us at [email protected] for more information on this tool and how it works with Dynamics GP.

    By John Cooper, Project Manager, at your Illinois Microsoft Dynamics GP Gold Certified Partner.

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