New Functionality In Microsoft Dynamics 365 Business Central 2023 Wave 2: Use General Ledger Allocations to Distribute Costs and Revenue More Efficiently

This post is part of the New Functionality In Microsoft Dynamics 365 Business Central 2023 Wave 2 series in which I am taking a look at the new functionality introduced in Microsoft Dynamics 365 Business Central 2023 Wave 2.

The fourteenth of the new functionality in the Application section is use General Ledger Allocations to distribute costs and revenue more efficiently.

To make data entry efficient and reduce errors for recurring types of posting, you can use allocations to predefine how to distribute revenue for transactions or cost amounts across G/L accounts and dimensions. You can use allocation keys on document and document lines, and in most journals.

Enabled for: Users, automatically
Public Preview: Sep 2023
General Availability: Oct 2023

Feature Details

You can use customized allocation keys to automate the distribution of revenue or cost transactions in journals, sales documents, or purchase documents. Allocation keys can trigger automatic G/L entry postings and allocations across different accounts and dimensions.

For example, allocation keys can automate postings related to payroll overhead. When posting total salary expenses at the end of the month, you can use automatic account codes to assign a percentage of the total salary to automatically post as overhead expenses. Or, you can use headcount per department to distribute the cost to the department-related dimension.

You can define your allocation keys based on:

• Fixed amounts.
• Variable amounts (balance, net change).
• Statistical accounts (non-financial quantities you track through the Statistical Accounts feature).

My Opinion

I’ve worked with another system in the past that had allocation accounts and the fixed ones were very useful. There variable one was used very little, but in combination with statistical accounts could be useful for splitting costs. For example, splitting based on headcount or number of virtual servers.