Removing Records of Cost Using Distribution Keys

Reallocate Posts of Cost Using Distribution Keys

	For general information in relation to distribution keys see Distribution Keys and Reallocate Posts Using Distribution Keys.
	For related topics see: Reallocate Posts of Cost Not Assigned to Any Department Reallocate Posts of Cost Not Assigned to Any Cost Center
	Specify both the department and cost center in distribution key. They are used at the same time in line of the newly-created journal entry. Below you can observe how costs get distributed only by departments; at the same time you could distribute them by cost centers.

 Distributing posts using distribution keys in templates for automatic posting represents the simplest and most transparent method of further distribution. By doing this you reverse the existing posts and create new ones. They are distributed by departments using the distribution key. Any such additional posts are displayed in a separate document type for posting. The advantages for using this method lie in:

• the fact that you can always expect the balance of such journal entry to be  0 (the reversed old post and together with the new post), otherwise and error occurred.
• the fact that you can simply delete the partial entry if you made a mistake when using distribution key, or if it changes in accordance with any later agreements. Later you can change the template for automatic posting and repeat the procedure. Here it is not required to change and correct original posts in the general ledger nor the original received document.

1. New Document Type of Journal Entry

Firstly, open a new document type of journal entry so as to:

• separate any further partial posts. This can also prove useful in for example creating a trial balance report. Using this as well as other reports on subject accounts/general ledger you can exclude individual document types when creating reports and so get status of data before they were distributed by departments
• identify it as the type of document where you always get balance of debit and credit transactions which is equivalent 0

Document 471 is used in this case.

2. Designing Distribution Keys

Create as many distribution keys in Distribution Keys register as is required in order to distribute transactions on individual accounts or account groups.

Here we selected one singe distribution key that you can also observe in the topic on distribution keys.

3. Select Accounts or Account Groups and Distribution Keys

Set which accounts or account groups are to be used in distribution. Of course, set also the distribution key.

In our case let us create a template for rent costs to be kept on control account 413.

Naturally, you could also proceed differently and for each subsidiary account from the Chart of Accounts select a different distribution menthod, that is, a different distribution key.

Moreover, you could use in distribution all accounts of the same group (41) and distribute them by using the same distribution key. By all means whenever and should this prove wise.

4. Set Period for Transfer of Post

It is correct that you decide, when creating distribution keys, how often (e.g. on a monthly basis, half-yearly basis, annual basis) you want to perform distribution and which criteria to use in collecting data  (e.g. date of posting period). So transfers of posts will not overlap each other. 

It is wise to select the period on a monthly basis and posting period as date criteria.  

5. Transfer of Post or Creating a Report

Perhaps it suffices just checking the amount of cost by individual departments. So you can only display the report and do not trigger posting. 

6. Template for Automatic Posting

7. Examples

1. Supplier Invoice

Let us say that you received an invoice in May 2015 for the following:

• rent for business premises in amount of € 1,000 (account 4130); when you received the invoice it was posted to the department of Department 1,
• rent for garages and parking lots in amount of € 200 (account 4131); when you received the invoice it was posted to the department of Department 1.

2. Distribution Report

Because of the need for creating a monthly financial report, in June you distribute costs by departments and on the grounds of the previously selected distribution key.

 As the start date select 1.5. 2015 in Posted From field and as the end date select 31.05. 2015 in To field. The business event is reposted on the last day of the selected period, that is on May 31st, 2015.

Before you actually proceed with posting it is wise to view posting data in report, e.g. Report by Lines - Detailed.

3. Journal Entry Used in Posting Distribution

By clicking the Posting button records data in journal entry.

As envisaged the amounts of posts from the selected period are reversed in the amount and department as specified in the original post.

New amounts and references to department, as specified in distribution key, are posted.

4. Account Card

5. Trial Balance by Departments - All Journal Entries

6. Trial Balance by Departments - No Journal Entry Used in Distribution

The examples given can also be of help in distributing revenues. The only difference being that you have to adjust liability and asset balance on account or groups of accounts accordingly!