Setup Ledger allocation rule

This article describes how to setup and use ledger allocation rules in Dynamics AX 2012. This functionality can be used to allocate a global amount in several combinations of account/financial dimensions. The key of the repartition can be fixed or linked to another account. In an allocation rule, there are several components:

  • the source: select the account/dimension you want to allocate. The total of the amount from all the journals will be the base of the allocation.
  • the destination: select all the combinations of account/dimensions that will receive an amount.
  • the rule: select the way of calculation of the allocation. It can be fixed (enter directly a percentage) or variable (with a linked to another account for example).

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The allocation rule, can be setup with several methods:

  • Option A: Basis allocation method
  • Option B: Fixed percentage method
  • Option C: Fixed weight
  • Option D: Distribute the source document amount equally.

To illustrate this Dynamics AX functionality, I will use an example: the accountant want to allocate the amount of the insurance of the budget “004” into 3 different budgets. The amount of the insurance to allocate is in the account 616000-004.

  • Option A: the allocation rule is based on the amount of the property rental (account 613200) for each budget.
  • Option B: the allocation rule is based on a fixe percentage: 10%for budget 001, 35% for budget 002 and 55% for budget 003.

Prerequisites

Before using allocation rule, you need to create a new Journal name with the journal type “Allocation”

Access: GL > Setup > Journals > Journals names

  • Create a new journal
  • Select the journal type “Allocation”
  • Select a voucher series.

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Option A: Basis allocation method

You need to use a basis when you want to allocate an amount in several combination of main accounts and dimensions based on another main account/dimension amount. In the case of a basis method, you need to setup a “Ledger allocation basis”.

With the example, I have an amount of insurance charge from a budget (account 61600 with budget 004) that I want to allocate in 3 others budgets. The allocation is based on the amount of the property rental (account 613200) for each budget:

  • Insurance charge to allocate : account 616000 – 004 = $12000
  • Destination of my allocation : 616000 – 001 / 616000 – 002 / 616000 – 003
  • Base of the repartition : Amount of the account 613200 for each budget (001, 002 and 003).
  • Amount in the accounting :
    • 613200 – 001 = 10000
    • 613200 – 002 = 15000
    • 613200 – 003 = 25000

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Step 1 : Create ledger allocation basis

Access: GL > Setup > Posting > Ledger allocation basis

  • Create one basis rule for each combination of account/dimension. In the example we need to create 3 rules.
  • Enter a description
  • Click on Basis

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  • Create a first line and select “Main account” in “Field setting”,
  • In “Source criteria”, select the main account. In the example, the value 613200,
  • Create a second line and select “Financial Dimension” in “Field setting”,
  • In financial dimension filed, select the dimension you need. In the example, it is “budget”,
  • In “Source criteria”, select the main account. For the first rule, it is “001”.

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  • Create two other rules with the 2 other budget values.
  • Click on active of each ledger allocation basis.

Step 2: Create ledger allocation rules

Access: GL > Setup > Posting > Ledger allocation rules

  • Create a new ledger allocation rule
  • Enter a description

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  • Go to the “General” tab,
  • Select the allocation method “Basis”,
  • Select a journal name .

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  • Go to the Offset tab,
  • Select the offset account. In the example, I want to credit the same account used in the source (61600-004) to have a zero balance after the allocation.

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  • Click on “Source”
  • Select the main account. In the example, the value is the main account 616000.
  • You can create an other line to add a financial dimension. In the example, I add a second line with the dimension Budget.

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  • Click on “Destination”
  • Create a first line with the first Basis rule. Select the Basis rule, the ledger account  and financial dimension of the destination (616000-001)
  • Create a second line with the second basis rule and the ledger account and financial dimension of the destination (616000-002).
  • Create a third line with the third basis rule and the ledger account and financial dimension of the destination (616000-003).

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  • Go back to the first form and active the rule.

Step 3: Execute allocation rule

In the example, we want to have this results:

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Access: GL > Periodic > Process allocation request

  • Select the allocation rule,
  • Select the start date to retreive amount for the allocation,
  • In proposal option, select “Proposal only” to be able to check the journal or “Post anly” to directly post the journal.

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Access: GL > Journals > Allocation

  • Open the new allocation journal created by Dynamics AX.
  • Post the journal if all is OK.
  • In the example, I have the amount of the account 616000-004 is allocate into the 3 other budgets according to the amount of the account 613200 for each budget.

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Option B: Fixed percentage method

With the example, I have an amount of insurance charge from a budget (account 61600 with budget 004) that I want to allocate in 3 others budgets. The allocation is based on fixed percentage:

  • Insurance charge to allocate : account 616000 – 004 = $12000
  • Destination of my allocation : 616000 – 001 / 616000 – 002 / 616000 – 003
  • Base of the repartition : 10% for budget 001, 35% for budget 002 and 55% for budget 003

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Step 1: Create ledger allocation rule

Access: GL > Setup > Posting > Ledger allocation rules

  • Create a new ledger allocation rule
  • Enter a description
  • When the rule is created, don’t forget to click on “Active” to be able to use it.

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  • Go to the tab “General”
  • Select the allocation method “Fixed percentage”
  • Select a journal name.

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  • Go to the tab “Offset”
  • In this example, I want to reversing the initial account/dimension, so I select Source. But you can specifed an other account.

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  • Click on “Source”
  • Create a new line and select the main account. in the example the value is 616000.
  • Create a second line and select the financial dimension “Budget” with the value 004 for this example.

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  • Click on “Destination”
  • Create a first line for the first destination : account 616000-001 with the fixed percentage 10%
  • Create a second line for the second dimension 002: account 616000-002 with  fixed percentage 35%
  • Create a third line for the the third dimension 003: account 616000-003 with  fixed percentage 55%
  • Check that the total percentage is equal to 100.

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Step 2: Execute allocation rule

Access: GL > Periodic > Process allocation request

  • Select the allocation rule,
  • Select the start date to retreive amount for the basis of the allocation,
  • In proposal option, select “Proposal only” to be able to check the journal or “Post anly” to directly post the journal.

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Access: GL > Journals > Allocation

  • Open the new allocation journal.
  • Post the journal if all is OK.
  • In the example, I have the amount of the account 616000-004 is allocate into the 3 other budgets according to the percentage of the rule.

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4 thoughts on “Setup Ledger allocation rule

  1. Pingback: General journals with template | My Financial Dynamics AX

  2. Hi,
    I need to put in the source more than one account for example:
    account A
    account B
    cost center 99

    I create a fixed percentage rule

    I would create one destination for all account included in the source with the same % distribution
    but I need to put the destination account in the same source account

    account A – cost center A 20%
    account A – cost center B 80%
    account B – cost center A 20%
    account B – cost center B 80%
    in all single rule.

    There is the possibility to book as destination account the source account??

    Any parameter, maybe?

    thanks

    Reply
  3. How to process ledger allocation from Vendor Invoice Journal / Payment Journal from AP > Journals > Invoices > Invoice journal and AP > Journals > Payments > Payment journal.
    — Ram | +91-9003151150 | skype: svrcrown

    Reply

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