Pool Base

Use the following steps to set up to set up the base of the pool:

1. Set up all information on the Pool Details tab.

2. Enter the Credit Allocation information in the Default Accounts tab.

3. Identify the account/organization combinations that will form the allocation base of the pool.  

4. Select the checkbox to the left of the Account number column to identify the account/organizations that you want to include in the cost pool base.

5. Use the Select pushbutton to include the records that have been selected.

The amount of allocation that is transferred to each debit allocation account when pools are posted is calculated as follows:

Cost Account/Org  (Amount)

Rate = -----------------------------------------------------

Base Accounts/Orgs (Amount, Hours, or Units)

Rate * Individual Base Account/Org (Amount) = Debit Allocation Amount

The amount calculated for the debit allocation amount is posted to the debit allocation account/organization listed on the line with the base accounts/organizations individually. Debit allocation/organizations should be used by only one pool.  The debit allocation account/organization can, however, be used as a cost pool account or base account in other pools.

The Available Account/Orgs table window automatically displays account/organization combinations that are active, detail, and linked to an active organization.  Once you select an account/organization combination, it will be transferred to the Pool Base table and will no longer be available for selection in the Available Account/Orgs table.

Select an account/organization combination as a base item for your cost pool if you want an allocation that is based on that account.  As noted previously, the system will take the entire cost pool and divide it by the total base amount to obtain a ratio, and the ratio is then multiplied times the amount in the base account/organization resulting in the allocation amount to be posted.

Warning: Changing the account/organization combinations that form the base of a pool after processing has begun can cause significant problems in the PROJ_SUM and PROJ_BURD_SUM tables.   You should review the steps outlined below and contact General Support before attempting to delete any account/organizations from the pool of an active pool.

In general, if you have not begun any processing for a fiscal year, you should be able to delete the account/organization without encountering problems.  If you have begun processing, you will need to take additional steps to ensure that the tables are correct after the change is complete.

Deleting an account from the base of a cost pool is problematic because of the way the data is stored in the PROJ_SUM and PROJ_BURD_SUM tables.  If a pool allocation is made to a specific account/organization, the amount of the allocation will exist in the burden columns for the account/organization combination.  If you delete the account/organization, the year-to-date allocation will remain in the table.  This results in an improper allocation of costs.  

Perform the following steps to remove an account/organization combination from the base of an existing cost pool:

Perform steps 1-8 before changing the base accounts in the Pool Base subtask.

Step 1

Set up two clearing accounts that will be used to zero out all pool costs temporarily.  These accounts should be mapped to the same financial statement line.  Once you have completed this process, the accounts will have a zero balance so you can check the financial statement line when you have completed the process to ensure that there is no balance in the accounts.

The following example shows how these accounts can be set up:

EXAMPLE:

 Acct # Acct. Name Acct Type F/S Line

1999-001 Pool Cost Clearing Asset Other Assets

1999-002 Pool Cost Offset Asset Other Assets

Step 2

Use the Pool Cost subtask to include the Pool Cost Clearing account in the pool where the change to the base is needed.  

Step 3

Use a journal entry to reverse the total year-to-date pool cost from the pool.  Make sure that the total pool costs are included in this entry.  You can find the total year-to-date pool costs on the most recent Statement of Indirect Expenses.  You must make sure that all costs for the period have been posted before you run the Statement of Indirect Expenses.

The following example outlines the journal entry that is needed:

EXAMPLE:

Pool # 10, Statement of Indirect Expense shows year-to-date costs of $ 200,000.

Journal Entry:

Dr: 1999-002 Pool Cost Offset $ 200,000

Cr: 1999-001 Pool Cost Clearing $ (200,000)

Step 4

Run the following screens in the order noted below.

• Build Rate Application Table (Projects\Process\Allocations)

• Compute & Print Pools Rates (Projects\Process\Allocations)

• Allocation Journal Edit Report (Projects\Review\Allocations)

• Post Pool Journal (Projects\Process\Post)

After you have completed all these processes, the year-to-date actual rate should be zero. The inclusion of the clearing account with a credit equal to the amount of the year-to-date pool should bring the entire pool to zero, causing the rate to be calculated at zero percent. You must make sure that the rate is zero by reviewing the Statement of Indirect Expenses.

Step 5

Using the Pool Rates subtask, change the year-to-date target rate to zero percent.

Step 6

After you have changed the target rate in Step 5, run the following screens in the order noted:

• Compute Burden Cost (Projects\Process\Project)

• Compute Revenue (Projects\Process\Revenue)

• Post Revenue (Projects\Process\Post) (at actual rates to clear variances, if any)

• Update Project Status Report Table (Projects\Process\Project)

• Update Other Project Report Tables (Projects\Process\Project)

Accounts previously burdened with this pool's rate will now have zero burden costs applied.

Step 7

Now record and post a second journal entry reversing the journal entry created in Step 2.

Journal Entry:

Dr: 1999-001 Pool Cost Clearing $  200,000

Cr: 1999-002 Pool Cost Offset $ (200,000)

This step will reestablish the cost pool at its original amount.

Step 8

Reset the target rate to the correct rate in the Pool Rates subtask.

In the Pool Base subtask, deselect the accounts which should not be in the pool base and add any additional accounts needed.

Step 9

Run the following processes in the order noted:

• Build Rate Application Table (Projects\Process\Allocations)

• Compute & Print Pools Rates (Projects\Process\Allocations)

• Allocation Journal Edit Report (Projects\Review\Allocations)

• Post Pool Journal (Projects\Process\Post)

• Compute Burden Cost (Projects\Process\Project)

• Compute Revenue (Projects\Process\Revenue)

• Post Revenue (Projects\Process\Post) (at whatever rate you normally use, actual or target)

• Update Project Status Report Table (Projects\Process\Project)

• Update Other Project Report Tables (Projects\Process\Project)   

If you follow these steps precisely, your PROJ_SUM and PROJ_BURD_SUM tables should accurately reflect the burden amounts on a year-to-date basis.

The debit allocation account specifies where to post the allocation for the debit account/organization that is placed in the base of the pool.  These debit allocation accounts are necessary so that pool allocations can be included in other cost pools or in the base of other cost pools.  If the debit allocation accounts are properly assigned to financial statement lines, the pools can be reconciled to the Statement of Indirect Expense that is printed from the Compute & Print Pools Rates screen (Projects\Process\Allocations).

Use cost and receivables variance accounts to post the variance between revenue at target and revenue at actual.  

You can elect to post revenue with variances in the Post Revenue screen.  You can post variances only if you are posting revenue using target rates.  When you post variances, costs are effectively adjusted to target costs.  You can read more about this topic in the documentation for the Compute Revenue screen (Projects\Process\Revenue).  Revenue is posted at target with variances so that there will not be large variations in revenue when the indirect rates are expected to stabilize throughout the year.

If you need to change the debit allocation account/organization, you must follow some of the same steps as in changing the base account/organization.  If the debit allocation account/organization has been used during the fiscal year and it is changed, the original posting will not be removed from the General Ledger. Call General Support for the required steps to change the debit allocation account in a pool.

You can include the same base account/organization in the base of multiple pools.  If you need to include the allocation from one pool in the base of another pool, you must use the debit allocation account organization in the base of the pool receiving the allocation.  You cannot use a debit allocation account as an allocation account in more than one pool.

This non-editable field displays the accounts that are available for selection.  These accounts, in combination with the selected organizations, must be active for the fiscal year displayed.

This non-editable field displays organizations that are available for selection. These organizations, in combination with the selected accounts, must be active for the fiscal year displayed.

This non-editable field displays the name of the account displayed in the Account field.

This non-editable field displays the name of the organization displayed in the Organization field.

Use the Select pushbutton to select an account/organization for the base of a pool.  You must first select the checkbox next to the desired Account/Organization in the Available Accounts/Orgs table.

The account/organization will display in the Pool Base table located in the right half of the screen. The debit allocation, variance account/organizations, and reference numbers that were entered in the Default Accounts tab will automatically display in the Pool Base table.  You can change these defaults after initial selection.  If you need to change these accounts after processing has occurred, contact General Support.

Use the Select pushbutton to add accounts to this field. These accounts, with the selected base organizations, form the base portion of the pool, and must be active for the fiscal year displayed.

This field displays organizations linked to accounts selected in the Base Account field. These organizations, with the selected base accounts, form the base portion of the pool, and must be active for the fiscal year displayed.

This field displays the name for the Base Account.

This field displays the name for the Base Organization.

Enter, or use Lookup to select, the allocation account. These accounts form the account part of the recipient account/organization combination that receives the allocated amounts for each of their respective base account/organizations. All accounts selected must be active for the fiscal year displayed. Allocation accounts cannot include accounts that have the Project Required checkbox selected in the Maintain Accounts screen (Accounting\Maintain\Accounts). The default allocation debit account from the Default Accounts tab will initially display in this subtask, where you can edit it.

Enter, or use Lookup to select, the allocation organization. These organizations form the organization part of the recipient account/organization combination that receives the allocated amounts for each of the respective base account/organizations.

All organizations selected must be active for the fiscal year displayed. The default allocation debit organization from the Default Accounts tab will initially display in this screen, where you can edit it.

Enter, or use Lookup to select, the allocation reference 1. These reference numbers will receive the allocation portion for each of the respective base account/organizations.

You should initialize the Allocation Ref 1 field in this subtask only if reference numbers are used in data entry.  The default allocation reference 1 account from the Default Accounts tab will initially display in this subtask, where you can edit it.

Enter, or use Lookup to select, the allocation reference 2. These reference numbers will receive the allocation portion for each of the respective base account/organizations.

You should initialize the Allocation Ref 2 field in this subtask only if reference numbers are used in data entry.  The default allocation reference 2 from the Default Accounts tab will initially display in this subtask, where you can edit it.

Enter, or use Lookup to select, the cost variance account. These accounts form the account part of the account/organization combination that is used to post the difference between actual and target rates to the income statement for each of the respective base account/ organizations.

All accounts selected must be active for the fiscal year displayed. Cost variance accounts cannot include accounts that have the Project Required checkbox selected in the Maintain Accounts screen (Accounting\Maintain\Accounts). The default cost variance account from the Default Accounts tab will initially display in this subtask, where you can edit it.

Enter, or use Lookup to select, the cost variance organization. These organizations form the organization part of the account/organization combination that is used to post the difference between actual and target rates to the income statement for each of the respective base account/organizations.

All organizations selected must be active for the fiscal year displayed.  The default cost variance organization from the Default Accounts tab will initially display in this subtask, where you can edit it.

Enter, or use Lookup to select, the cost variance reference 1. These reference numbers receive the cost variance portion for each of the respective base account/organizations.

You should initialize the Cost Variance Ref 1 field only if reference numbers are used in data entry. The default cost variance reference 1 from the Default Accounts tab will initially display in this subtask, where you can edit it.

Enter, or use Lookup to select, the cost variance reference 2. These reference numbers receive the cost variance portion for each of the respective base account/organizations.

You should initialize Cost Variance Ref 2 field only if reference numbers are used in data entry.  The default cost variance reference 2 from the Default Accounts tab will initially display in this subtask, where you can edit it.

Enter, or use Lookup to select, the receivable variance account. These accounts form the account part of the account/organization combination that is used to post the difference between actual and target rates to the balance sheet (Unbilled Receivables) for each of the respective base account/organizations.

All accounts selected must be active for the fiscal year displayed. Receivable variance accounts cannot include accounts that have the Project Required checkbox selected in the Accounts screen (Accounting\Maintain\Accounts).  The default receivables variance account from the Default Accounts tab will initially display in this subtask, where you can edit it.

Enter, or use Lookup to select, the receivable variance organization. These organizations will form the organization part of the account/organization combination that is used to post the difference between actual and target rates to the balance sheet (Unbilled Receivables) for each of the respective base account/organizations.

All organizations selected must be active for the fiscal year displayed. The default receivable variance organization from the Default Accounts tab will initially display in this subtask, where you can edit it.

Enter, or use Lookup to select, the receivable variance reference 1. These reference numbers will receive the receivable variance portion for each of the respective base account/organizations.

The Receivables Variance Ref 1 field should be initialized only if reference numbers are used in data entry. The default receivable variance reference 1 from the Default Accounts tab will initially display in this subtask, where you can edit it.

Enter, or use Lookup to select, the receivable variance reference 2. These reference numbers will receive the receivable variance portion for each of the respective base account/organizations.

The Receivables Variance Ref 2 field should be initialized only if reference numbers are used in data entry.  The default receivable variance reference 2 from the Default Accounts tab will initially display in this subtask, where you can edit it.