Whether you’re a seasoned user of Business Central or new to its expansive suite of tools, understanding how to effectively utilize Fixed Allocations can significantly streamline your financial management processes. In this post, we will guide you step-by-step through the nuances of working with Fixed Allocations, ensuring you can harness this powerful feature to optimize your business operations.
In this scenario, we would like to allocate the amount from the Prepaid Insurance account to the Health & Dental Insurance Expense account using Fixed breakdown amounts for each Department Dimension.
To setup a new allocation, search for Allocation Account:
We will set this one up as a Fixed account type.
Select the 61000 account for each line and enter the Share amount that should be broken out across each department. Business Central will calculate the percent based on the share.
Now select the first line and go to manage-dimensions:
We would like the 10% to go to Administration, so select the ADM department
Now select the second line and go to manage-dimensions and select the PROD department:
And then complete the same step for the third line for the SALES department:
We are now ready to post the fixed allocation entry
Search for General Journals:
There is now a new Account Type option available in this window called Allocation Account
Select this and then select the allocation we just setup called HEALTHINS
On the next line select the GL Account Prepaid Insurance account as the offset.
Go to Post/Print-Preview Posting to view the entries that will be posted
The 10600 Prepaid Insurance account will be credited to clear the amount out of that account.
The 61000 Health & Dental Insurance account will be debited with the fixed allocations to the different Departments as we defined in the Allocation Account setup:
As we wrap up this insightful journey through the world of Fixed Allocations in Business Central, we hope you now feel confident in leveraging this robust feature to enhance your financial management. Remember, Fixed Allocations are not just a tool, but a strategic asset that can streamline your accounting processes, improve accuracy, and save time. We encourage you to experiment with the functionalities we’ve discussed and tailor them to the unique needs of your business. If you encounter any challenges or have further questions, don’t hesitate to contact us. Keep exploring, learning, and optimizing your financial operations with Business Central. Until our next post, where we’ll cover using different genearal ledger accounts for payables and recievables. Happy allocating!