Introduction
Managing fixed expenses is a critical aspect of financial operations, and NetSuite, a leading Enterprise Resource Planning (ERP) system, offers a valuable feature called “Expense Allocation” to simplify this process. This feature allows organizations to account for fixed expenses without the need to split them among individual departments, classes, or locations in advance of incurring the expenses. With Expense Allocation, businesses can use allocation schedules to create journal entries that allocate funds from an expense account into one or more other accounts on an ongoing basis. In this article, we will delve into the capabilities of NetSuite’s Expense Allocation feature and how it can be used to efficiently manage fixed expenses.
Client Request:
“We need a more efficient system for managing fixed expenses without the need to split them among individual departments or locations in advance. It’s crucial that we can streamline the accounting process and ensure that funds are allocated appropriately. Can you provide a solution for these requirements?”
Solution:
NetSuite’s Expense Allocation feature effectively addresses these needs. By enabling this feature, you can account for fixed expenses without the complexity of splitting them among individual departments, classes, or locations in advance of incurring the expenses. This simplifies the accounting process and allows for centralized management of fixed expenses. Additionally, you can use allocation schedules to create journal entries that facilitate the transfer of funds from an expense account into one or more other accounts, ensuring that fixed expenses are appropriately distributed. With this solution, you can streamline the management of fixed expenses, enhance financial efficiency, and simplify the allocation of funds to the necessary accounts.
Navigation:
To enable this feature, please follow these steps:
- Navigate to ‘Setup’ in your financial system.
- Click on ‘Company.’
- Select ‘Enable Features.’
- Within the ‘Accounting’ tab, you’ll find the ‘Expense Allocation’ option.
- Check the box next to ‘Expense Allocation’ to enable this feature.
