Weekly Dynamic: Unit Allocations in Project Accounting

Feature Pack 1 for Microsoft Dynamics GP 10 added Cost Allocations to the Project Accounting module. I covered the basics in Part 1 so go there for the overview. I was a little stumped by the way unit based allocations worked so this post should provide at least the basics to get started with allocating project costs based on units.

For starters, when you setup a unit based allocation, you don't set an amount. You can only base it off of the units on another cost category. This means that it works like a variable allocation account in that the WHOLE amount will be moved off the base project and on to the allocated projects. If you are using % or Amounts to allocate, you could leave some amount on the base project by moving say 50% to another project.

With Unit based allocations, you set a cost category on the allocate "TO" side to base the allocations off of. If you allocating to other cost categories within the project, unit allocations will move the whole thing since there is only one instance of a cost category per project. But when allocating across projects, the system looks at each projects % of the units charged and allocates accordingly.

For example, you want to allocate travel costs based on time worked to two projects. The TO cost category for basing time would be a labor based cost category. If travel costs were $1,000, Labor for Project A had 20 hrs and Project B had 80 hrs, Project A would get 20 units and $200 in costs and Project B would get 80 units and $800 in costs. No costs would be left in the base project.

Contrast this with a % or $ based allocation where you could say that you want $200 on Project A and $700 on Project B leaving $100 sitting in the base project. This scenario isn't possible with Unit based allocations. But, with Unit based allocations you don't need to know the split, you can just let the system figure it out.

It's also pretty easy to setup a control project to hold depreciation or travel costs and use Unit based allocation to ensure that no costs stay in those projects.

Where it gets a little strange is that you can mix and match the cost categories that you want to use to allocate. So one line in an allocaton setup could allocate based on time and a second line based on copier usage, completely different things. Unit allocations treats a unit as a unit for the allocation calculation. It doesn't distinguish between types of units. Obviously something like "number of copies" could have significantly higher usage and lower cost than "brain surgery consulting hours". Consequently, you'll want to be careful when setting up your unit allocations or you could make a mess.

This is a new feature in GP and the documentation is a little thin so it possible that I've missed something. If I did, feel free to leave a comment and I'll make corrections.