Cost allocations

Push pooled overhead out across departments, locations or projects by percentage, account balance, or a driver like headcount.

Accounting → Allocations.

Shared costs — rent, insurance, IT — arrive in one lump but belong to several parts of the business. An allocation spreads them.

Three bases:

• Fixed percentage — you decide the split. Percentages must total 100.
• Account balance — split in proportion to spend on chosen accounts, so a department that spends more absorbs more.
• Statistical driver — split by headcount, square footage or any statistical account. This is the most defensible basis and the one auditors prefer.

Running one: preview first — you see the pool, each target's share, and the amount. Post when it looks right.

What it does to the books: the pooled cost is credited out and debited back with a dimension attached. The company-wide total is unchanged; only its shape moves. Your P&L total is identical, but P&L by Class now tells you something true.

Safeguards: an allocation cannot run twice for the same period.