About Cost Allocation

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:

MCO intro

Here’s how this might look when creating the expense report (the custom fields for the cost objects are highlighted):

MCO example1

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.

Note:

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.

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