To illustrate how cost allocation works, consider an organisation with the following cost objects configured:
- two cost centres: CC001 and CC002
- three project codes: P1, P2 and P3
An expense report totalling 200€ and containing two expense items, a taxi of 50€ and a dinner of 150€, could be allocated as follows:
- 100€ (50%) to cost centre CC001
- 50€ (25%) to project code P1
- 50€ (25%) to project code P2
- cost centre CC002 and project code P3 are not allocated anything
This can be illustrated as follows:
Here's how this might look when creating the expense report (the custom fields for the cost objects are highlighted):
The default behaviour will thus be to allocate 50% of the amount of each expense item to Marketing, and allocate the remainder of each item equally between Project Codes 1 and 2.
In this case, the expense report and cost allocations are created as follows (your site configuration might be different):
- Select the Create an Expense Report tab.
- Select New Expense Report.
- Fill in the mandatory fields (Expense Report name and Purpose in this case).
- Click Choose a cost allocation and select Project Code.
- Click the + button twice to add fields for two project codes.
- In our example, the Marketing department is cost centre CC001, so select Marketing from the list in the Cost centre field and set its allocation to 50%.
- From the list in the first Project code field, select Project 1 and set its allocation to 25%.
- Do the same for Project 2 in the next Project code field.
You can also customize the cost allocation for an individual expense item when you add the item to the expense report - see Adding Expense Items with Cost Allocation.
- Customizing the allocation of an expense does not change the default behaviour.
- Changing the default allocation behaviour does not affect the existing expenses - it is only applied to the additional or new ones.