Organization Overhead Allocation

If you use the Organization Reporting application, you can allocate overhead by organization instead of on a firmwide 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 consist of the total 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 program to distribute these expenses (pools) among your organizations.

Allocating overhead by organization allows you to distribute overhead in multiple passes. Here is an example of how a firm might set up 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.