Organization Overhead Allocation
If you use the Organization Reporting feature, you can allocate overhead by organization instead of on an enterprise-wide basis.
When you allocate overhead by organization, you treat each organization as if it is a separate entity. Your total overhead is divided into individual pools to be distributed among your organizations.
Your pools of overhead are made up of all indirect expenses posted to overhead or promotional projects for each individual organization. Each operating organization has its own pool of indirect expenses that must be allocated. In addition, you may have non-operating organizations that absorb expenses shared by many organizations. You can use the Overhead Allocation process to distribute these expense pools among your organizations.
When you allocate overhead by organization, you can distribute overhead in multiple passes. Here is an example of how you might set up overhead allocation:
| Multiple Passes of Overhead Allocation | |||
|---|---|---|---|
| Corporate Level | |||
| Pass 1 | |||
| Boston General | Chicago General | ||
| Pass 2 | |||
| Boston Technical | Boston Design | Chicago Technical | Chicago Design |
| Pass 3 | |||
| Projects | Projects | Projects | Projects |
- Pass 1: Total overhead from the corporate level is distributed among your non-operating organizations.
- Pass 2: Each non-operating organization distributes its share of corporate overhead, plus its own overhead, to the operating organizations.
- Pass 3: Each operating organization distributes all overhead received, plus its own overhead, to the regular projects owned by the organization.