Introduction to Cost Allocation Functions
In this issue, we would like to introduce the cost allocation feature available in NetSuite.
The Cost Allocation function allows you to allocate expenses to each department based on predefined criteria. This function is useful from the standpoint of improving operational efficiency because the calculation is performed on the system, rather than allocating expenses manually.
An image of the process is as follows
(Expenses) 100 (Cash, etc.) 100
Department A (Expense) 40 (Expense) 100
Division B (Expense) 60
The allocation criteria set in the cost allocation function can be selected between dynamic and static settings.
Dynamic (dynamic) allocation is a method in which allocation criteria are determined based on predefined rules each time an allocation process is performed.
This makes it possible, for example, to prorate expenses based on the amount of sales per department using saved searches.
This is an introduction to the Cost Allocation function.
Thank you for taking a look!