Departmental Allocation Report

What is a Departmental Allocation Report?

Allocation reports are considered financial tools and are often used by accountants to estimate profitability for revenue-generating departments after the distribution of overhead expenses to their financials. Key functionality in this type of allocation tool automatically calculates overhead amounts to be allocated from administrative to revenue generating departments. Any number of allocation methods can be used. In the example below, the allocations were performed based on headcount and square feet. You will find an example of this type of allocation tool below.

Purpose of Departmental Allocation Reports

Companies and organizations use Departmental Allocation Reports to get full visibility into the true profitability of their revenue-generating departments. When used as part of good business practices in a Finance and Accounting department, a company can improve its profit center analysis, as well as, reduce the chances that managers overstate profitability of departments that consume a lot of overhead services from other business units.

Departmental Allocation Report Example

Here is an example of a fully automated Allocation Report that calculates and stores allocated expenses by department.

Departmental Allocation Report Example

Departmental Allocation Report Example

You can find hundreds of additional examples here.

Who Uses This Type of Allocation Tool?

The typical users of this type of allocation tool are: CFOs and Department Managers.

Other Allocation Tools Often Used in Conjunction with Departmental Allocation Reports

Progressive Finance and Accounting Departments sometimes use several different Departmental Allocation Reports, along with profit & loss reports, dashboards and other management and control tools.

Where Does the Data for Analysis Originate From?

The Actual (historical transactions) data typically comes from enterprise resource planning (ERP) systems like: Microsoft Dynamics 365 (D365) Finance, Microsoft Dynamics 365 Business Central (D365 BC), Microsoft Dynamics AX, Microsoft Dynamics NAV, Microsoft Dynamics GP, Microsoft Dynamics SL, Sage Intacct, Sage 100, Sage 300, Sage 500, Sage X3, SAP Business One, SAP ByDesign, Acumatica, Netsuite and others.

In analyses where budgets or forecasts are used, the planning data most often originates from in-house Excel spreadsheet models or from professional corporate performance management (CPM/EPM) solutions.

What Tools are Typically used for Reporting, Planning and Dashboards?

Examples of business software used with the data and ERPs mentioned above are:

  • Native ERP report writers and query tools
  • Spreadsheets (for example Microsoft Excel)
  • Corporate Performance Management (CPM) tools (for example Solver)
  • Dashboards (for example Microsoft Power BI and Tableau)

Corporate Performance Management (CPM) Cloud Solutions and More Examples

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