Enhancing Overhead Allocations with Allocation Structure

Objectives

After completing this lesson, you will be able to:
  • Explain what allocation structures are used for
  • Manage and use allocation structures

Allocation Structures

To make the allocation even more precise, it could be beneficial to separate costs on distinct G/L accounts according to the type of costs initially posted on the sending object. This provides a more detailed level of analysis for the responsible managers. Using allocation structures helps you do just that.

Definition

An allocation structure is a structure where you have mapped primary and secondary cost elements to a secondary cost elements. It allows you to post to multiple overhead allocation accounts in a single segment.

Note

An allocation structure can be used for cost centers as well as WBS elements (and where available, internal orders).
The figure outlines an allocation structure for cost assessments, detailing three assignments: Rent, Other costs. This structure ensures accurate cost assessment within the specified accounts.

Configure an Allocation Structure

To configure an Allocation Structure that can be used in Allocation Cycles (Overhead Allocation or Intercompany Allocation), you perform the following steps:

This screenshot describes the order of configuration steps to be executed when using the Maintain Allocation Structures configuration process.

Steps

  1. To create an allocation structure, use the Implementation Activities tile and then expand Accounting → Overhead Costs → Overhead Cost Processes → Period-End Closing → Maintain Allocation Structures.

  2. Choose Display → Change.

  3. To create a new allocation structure, choose New Entries .

  4. Fill in the Alloc. Str. field and the Text field with our preferred ID and description to identify your new allocation structure.

  5. Choose Save.

  6. Select your allocation structure, then double-click Assignments in the Dialog Structure.

  7. Choose New Entries to create your new assignment categories.

  8. Fill in the Assignment and Text field with our preferred IDs and descriptions to identify at least two assignments.

  9. Choose Save and ignore any information message.

  10. For each assignment category, designate which cost elements will be included as a Source. This can be done by entering one or multiple cost element groups, individual cost elements, or a range of cost elements. To do so, select an assignment category of your choice and then double-click Source in the Dialog Structure and enter your cost element, cost element interval or cost element group.

  11. Follow the instructions in 8. also for any further assignment category of your allocation structure.

  12. Then, double-click Assessment Cost Element in the Dialog Structure.

  13. Choose New Entries.

  14. Enter the appropriate Assessment Cost Element that will be used to credit the sender and debit the receiver.

  15. After completing all entries of your new allocation structure, choose Save to store the defined allocation structure. If the Prompt for customizing request dialog comes up, choose the Continue (Enter) icon.

    Result

    Note

    You can also copy an allocation structure using the Copy as... button.
    Changes to your allocation structure will not affect past allocation results. However, it will influence your future cost allocation of actual and plan data.

  16. Choose Navigate to last opened page (SAP icon).

Perform an Overhead Allocation using an Allocation Structure

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