Deltek Vantagepoint Help

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Contents of the Overhead Allocation Form of Accounting Settings

Use the Overhead Allocation settings form to control how overhead expenses are allocated to your regular projects. Deltek recommends that you allocate overhead to analyze project performance.

Contents

Field Description
Scope Use this drop-down list to control how overhead allocation is distributed. Select one of the following settings:
  • Companywide: Overhead allocation distributes one pool of overhead to regular projects, phases, and tasks to which direct labor or revenue has been charged during the accounting year. When you select this option, additional variance overhead fields for projects, phases, and tasks are enabled.
  • Organization: Overhead allocation distributes separate pools of overhead from non-operating organizations to operating organizations. Vantagepoint then distributes overhead to projects and tasks to which direct labor or revenue has been charged during the accounting period. If you select this method, no other information is required for overhead allocation at the system level on the screen. However, the Basis field can be used by Key Financial Metrics to calculate actual overhead rate and Overhead Rate can be used for burden calculations. If you select this method, you should complete the overhead setup for each individual organization in Settings > Organization > Individual, in the desktop application.
  • None: Vantagepoint does not allocate overhead. If you select this option, no other information is required. You can, however, use Overhead Rate for burden calculations. Typically, you would not allocate overhead if your enterprise job costs using billing rates. It is rare for an enterprise to select this method.
Method If you set the Scope option to Company-wide, use this option to specify how expenses are allocated for the active company. Overhead is the sum of an enterprise’s indirect expenses, such as vacation pay, sick time, rent, utilities, and so on. Select one of the following settings:
  • Assign: Vantagepoint allocates overhead on a year-to-date basis to regular projects based on a specified percentage of each project’s direct labor or revenue, not on the enterprise’s actual overhead costs. Because you select the specified percentage, this method generates a consistent overhead rate month-to-month on projects reports. However, the method will likely result in a difference in total year-to-date overhead allocated to all projects and total overhead expense on your income statement. The difference will be stored in the variance project.
  • Prorata (proration): Vantagepoint allocates on a year-to-date basis to regular projects based on a percentage of the enterprise’s actual year-to-date indirect expenses to each regular project. This method generates a true overhead number but will fluctuate month-to-month as the year-to-date overhead expenses fluctuate on the income statement over the year.
Overhead Rate Enter the default overhead rate (percentage) to use when assigning overhead. When Vantagepoint allocates overhead, it uses this rate for all projects/tasks that do not have a rate defined in the Projects hub. You are able to override this rate at the project level in the Projects hub.

This rate is only used if you are assigning overhead. This overhead rate is also used to calculate burdened rates on all job-to-date labor on project reports that use burdened rates.

You do not need to enter decimal points or percent signs. For example, enter 165 for 165%. The overhead rate helps to determine the amount of overhead a project will receive by calculating the amount for every dollar of direct labor and revenue ($1.00 * 165% = 1.65 of overhead).

You cannot enter a negative number.

Basis Select one of the following settings:
  • Direct Labor: This indicates that you want to base your overhead allocation on your direct labor, including regular hours and overtime hours. For every dollar of direct labor, a certain percentage of overhead should be assigned. Therefore, more labor-intensive projects receive more overhead.
  • Revenue: This indicates that you want to base your overhead allocation on your revenue. For every dollar of revenue, a certain percentage of overhead should be assigned. Therefore, projects generating more revenue receive more overhead.

Variance Fields

If you selected Companywide for the scope, Vantagepoint displays the following three fields:

Field Description
Variance Project You must enter an overhead variance project when using the Assign method (not for Proration). Click to display the Project/Phase/Task Lookup and select the regular project to which Vantagepoint will assign all unallocated overhead.

To maintain reconciliation between project costs and general ledger costs, you must define this Overhead Variance project. This project stores the difference between the total year-to-date overhead assigned to projects (via the assignment method) and the actual total indirect expenses incurred as displayed on the Income Statement. Use the Overhead Allocation report to gauge the variance and whether the rate should be adjusted.

Variance Phase If the variance project has phases, specify the phase to which Vantagepoint assigns all unallocated overhead. Click to display the Phase/Task lookup and select a phase and task from the list.
Variance Task If the variance project has tasks, specify the task to which Vantagepoint assigns all unallocated overhead. Click to display the Task lookup and select a task from the list.

Additional accounts to include in Overhead Allocation Base Calculations

Use this grid to filter, add, and remove additional accounts used in the overhead allocation base calculation.

Field Description
+ Add Account Click this option to add an account record. A blank account row is added at the bottom of the grid
Account Click in the first field to display the Account lookup. Select an expense account from the list for which you want to include in the allocation base. You can add direct and/or reimbursable expenses within the base. The account's numeric ID appears in this field.

To sort through long lists of accounts and restrict the list to either a single account or a range of accounts, enter one or more alphanumeric values in the search field.

Suggested accounts to add to the base include any expense that is often an alternative to the base, for example, computer expense for Direct Labor allocation. This field applies to the following:

Base Apply
Direct Labor Yes
Revenue No
Total Labor Yes (only if allocating by organization with the Distribute to Operating Organizations option selected)
Total Cost Yes
Description This field autopopulates when you select an account from the Account lookup.