Advice question for the community. We're having a discussion on the best way to enter Company expenses vs Division specific or Location specific expenses. We have two main divisions of products, and it's easy to enter an expense against Division A for a marketing campaign for products within Division A as it's specific to that division. My question is when it comes to expenses that are for the company, like business cards, that are not specific to a division but instead to support the company as a whole. I see two possible options: 1. Leave division field blank since the expense is not related to a specific division (my preference), and train users on reporting this 2. Create another division at the top level for "Company" and instead fill in division of this psuedo-division representing the company. This would also require creating a psuedo-location for the same reason. I'm against this since it seems to me to be miss-categorizing transactions to a specific division/locaiton when they aren't. Would appreciate any insight / advice on different ways to accomplish this in case I haven't thought of something

take all your “general” expenses (say, all blank expenses without segmentations) and allocate then proportionally in some manner, like you would internet or electricity costs. I would avoid “pseudo” locations, they usually lead to “misbehavior”

I agree about the psuedo locations. The idea of splitting expenses actually came up in our discussions, but was deemed too much manual work. (ie, utility bills are a single line item from Vendor, and taking that single line item and splitting it would add manual overhead as well as break the 1:1 of line item accounting). Unless we're missing a large benefit, it doesn't seem to outweigh the cost.

are you not using allocations?

I've done allocations. Its not very hard and has a set of rules you can run

I wasn't familiar with that term (I'm system admin, so only surface understanding of accounting), so just did some googling which led me to https://docs.oracle.com/en/cloud/saas/netsuite/ns-online-help/section_N1483457.html

yes, that’s the one. surprise you have not heard of it frankly as it offers great options specifically for dynamic allocations and configs are needed indeed. use it, this is exactly what you are asking about

(coming from a pure data background, accounting is somewhat smoke and mirrors for me still). So for an expense like business cards. We'd enter the Vendor Bill under Div: 1, Loc: 1, and then within the Allocation Schedule for say end of month, you'd tell it to divy up that single expense Across Divs 1 & 2, and Locs 1, 2, & 3?

yes, exactly, and you can do it either by hard aka static allocation (33.3%, 33.3%, 33.4%) or dynamic based on your headcount or any other dynamic data that works for you. Not only vendor bills, you can do it to account balances as well. works great for C-Suite allocation, for example. and then you can do allocations in batches (i.e. first you allocation a vendor bill, then you allocation account balance, etc)

iiiiinteresting. I think Allocation is definitely what we should be looking into. Thanks for the heads up. The only thing that bothers me is that the initial expense would be set to a single division/location, so accurate reporting based on division/location wouldn't be able to be pulled until after the allocation journal entries are in, is that fair to say?

yes, that is correct. therefore you can set your allocation to be performed daily if necessary…

in your experience, retroactively editing transactions (simply due to human error) seems like this would break the Allocation since it's based off the original transaction, so in my head it would make sense to have allocations be part of a closing period checklist, that way the allocation JE wouldn't also have to be updated?

it is entirely up to you. To sweep wrong postings you can do ’any” instead of “none” in set up so that it works. And if you look at your financials during the period you want to have your expenses allocated properly at the time of “looking”. Or do it once a month during close. Depends fully on how you guys handle things

Thank you for your insight. It sounds like Allocations are where we need to start looking to accomplish this. which makes my options 1 & 2 not relevant. I wll pass this onto our accounting team.