Pool Details

An unallowable pool has costs in the pool, or numerator, that cannot be included in the calculation of revenue or on a bill.  These costs are legitimately applied to projects, as they are part of the cost of the project, but should not be included in revenue or billing.  Unallowable costs generally include costs such as alcohol, advertising, and goodwill.  

Select the Apply Rates to Projects and the Unallowable checkboxes in the Pool Details tab to set up an unallowable pool. The Apply Rates to Projects checkbox is necessary because the costs should be applied as costs of the project. The Unallowable checkbox prevents inclusion of the pool's indirect costs in revenue or billing calculations.

If you change the status of the Unallowable checkbox after initializing and processing the cost pools, you must run the Build Rate Application Table screen (Projects\Process\Allocations) before the changes will occur.

Allocation group numbers are needed because only allocation group number one is allocated to projects.  Use higher allocation group numbers to perform "what-if" scenarios that can be used to analyze the affect of changes to your rate structure. The system requires that you enter an allocation group number in all screens that contain pool information.  

Sequence numbers determine the order in which the pools are processed.  The Compute & Print Pools Rates screen (Projects\Process\Allocations) uses sequence numbers to allocate costs between pools by calculating the lower-numbered pools first.

If costs from one pool are allocated to another, the pool receiving the allocation must have a higher sequence number than the pool allocating the costs.  This is so that the costs that are allocated are included in the total cost or base of the higher sequenced pool.  If this is not properly set up, the pool calculation will be incorrect.    

The Create Cost Transfer Journal Entry screen (Projects\Process\Project) uses the Financial Statement Reclass Accounts to post the indirect amounts that require reclassification by pool.

When revenue is posted by owning organization and costs are posted by performing organization, you should run the Create Cost Transfer Journal Entry process.  If you post all your revenue to performing organizations, then you do not need to populate these fields or run the Create Cost Transfer Journal Entry process.

This process redistributes direct and indirect costs to the performing organization of the project. The process uses the account/organizations in this screen to redistribute the indirect costs by pool.  You need to populate only the fields in the Financial Statement Reclass Accounts group box if you will be using the Create Cost Transfer Journal Entry process.   

Credit reclass pools do not post to projects and are primarily designed to reclassify the costs by organization.  

Credit reclass pools are needed because each pool has only one credit account/org. When you post the pools, the entire cost pool amount is credited to the account/organization listed as the credit allocation account/organization in the Default Accounts tab for that pool.  If there are several organizations in the cost pool, the costs shown on some of the income statements by organization will be cleared out but not on the others.   Credit reclass pools can resolve this problem.  

Examples

Enter, or use Lookup to select, the cost pool type.  

The names for the pool types were established in the Allocation Groups screen (Projects\Configure\Allocations). The pool type name is an optional entry used to group similar pools on reports and is used only for pools that apply rates to projects. System-defined pool types include "FRINGE," "OVERHEAD," "MATERIAL HANDLG," "SUB CONTR," "G&A," and "HM OFF G&A." These descriptions may have been changed for your company. Select the type that best represents each pool.

Select this checkbox to identify the cost pool as a service center. Service centers represent a collection of costs that are incurred in the provision of a service. You can allocate these costs to projects or other cost pools in accordance with either a system-derived number of hours or amount, or a user-supplied quantity.

The initial default for this checkbox is unchecked. If it remains unchecked, the ServiceCenter subtask link is disabled and Units is not available as a Basis Type for the pool.

If you select this checkbox, the PoolRates subtask link is disabled because service centers do not calculate rates that are stored in the Pool Rates table. In this circumstance, you must complete the Service Center subtask.

Select this checkbox to specify whether the pool will allocate to projects.

This checkbox is for cost pools that are not service centers. The initial default is selected for all cost pools except service centers. For service center pools, it is not available.

For any cost pools that are not in allocation group 1, this checkbox will not be applicable.

Select this checkbox to designate this pool as unallowable.

An unallowable pool is one that is not included in any revenue or billing calculations. It has the same effect as placing a burden cost ceiling of zero on every project and account that was burdened by a specific pool (for example, if your company wants to capture entertainment costs in an unallowable pool). This pool would then allocate to the projects in the base to reflect the true cost of the project; although no revenue would be generated from this burden. The Unallowable checkbox will not be available unless you selected the Apply Rates to Projects checkbox. If you select the Unallowable checkbox and the Apply Rates to Projects checkbox is not selected, the system will select both.

Select this checkbox to exclude G&A cost pools from the calculation of inventory burdening for asset inventory. If you select this checkbox, the Compute Inventory Burden Rates application (Projects\Process\Allocations) excludes from its calculations any accounts that are classified as "asset" (ACCT.s_acct_type_cd = "A") in the Accounts screen (Accounting\Maintain\Accounts).

Enter up to 30 alphanumeric characters for a short description for the pool basis.

Select this radio button to derive the allocation base for a given cost pool by adding the amount found in the General Ledger table for all account/organization combinations set up as the base of the cost pool. This radio button is the default allocation base type for all cost pools.

Select this radio button to derive the allocation base for a given service center pool by adding the hours charged to the General Ledger for all account/organization combinations that have been set up as the base of the cost pool. Once you select this radio button and save the cost pool, you cannot change this setting.

Select this radio button to derive the allocation base for a given cost pool by adding the units found in the General Ledger table for all account/organization combinations set up as the base of the cost pool.

This radio button becomes available when you select the Service Center checkbox. You must be sure to enter the units in the Maintain Allocation Journal screen (Projects\Transactions\Allocations) if you select this radio button.  The units entered can represent head count, number of pages, clock time, square footage, percents, etc. You should enter a description of the base in the Basis Description field.

Enter, or use Lookup to select, a valid account number to be used as the debit side of the Cost Transfer Journal Entry for this pool.

When the cost of a project is charged to the performing organization(s) and the revenue is collected by the owning organization, the Create Cost Transfer Journal Entry screen (Projects\Process\Project) will automatically create a journal entry to reallocate the cost from the performing organization(s) to the owning organization. After you post this journal entry, you will be able to print Income Statements by Organization, if you desire.

The Financial Statement Reclass Debit Accounts must already be established in the Accounts screen in the Maintain menu in the Accounting domain. They should be Detail accounts with Project Required unchecked. Note that the reclass accounts for the direct costs are entered in the  Financial Statement Mappings screen (Accounting\Maintain\Financial Statements). Debit and credit accounts should be unique for each pool to provide visibility to the reclass process. Remember to link the reclass account numbers to the proper organizations and to their respective Financial Statement lines when assigning accounts.

Enter, or use Lookup to select, a valid account number to be used as the credit side of the Cost Transfer Journal Entry for this pool.

When the cost of a project is charged to the performing organization(s) and the revenue is collected by the owning organization, the Create Cost Transfer Journal Entry screen (Projects\Process\Project) will automatically create a journal entry to reallocate the cost from the performing organization(s) to the owning organization. After you post this journal entry, you will be able to print Income Statements by Organization, if you desire.

The Financial Statement Reclass Credit Accounts must already be established in the Maintain menu in the Accounts screen in the Accounting domain. They should be Detail accounts with the Project Required checkbox unchecked. Note that the reclass accounts for the direct costs are entered in the Financial Statement Mappings screen (Accounting\Maintain\Financial Statements) Debit and credit accounts should be unique for each pool to provide visibility to the reclass process. Remember to link the reclass account numbers to the proper organizations and to their respective Financial Statement lines when assigning accounts.