Concept: Allocation Rules

Allocations divide costs between different departments or activities within a company. In Adaptive Planning, allocation rules automatically distribute the values between levels, using system accounts. The rules have definitions and scopes. The scope indicates where and when to apply the rule. The definition describes where the values come from and where they should go.

Allocation accounts provide an accounting of the movement and keep the accounts balanced. The rules maintain the allocation accounts automatically.

The

Manage Allocation Rules

page displays the

Allocation Rules

list. The rules display in the order they're applied to the model. From the list, you can review:

You can:

Edit a rule with the pencil icon.
Delete a rule with the red X icon.
Adjust the position of a rule with the up and down arrows. Be sure that the rules are in the correct order to produce the necessary results.

Levels and accounts define the source of an allocation. You indicate which accounts have values to move with the allocation rule. You can use either:

Formula that references 1 or more accounts.
Account attributes.

The rule takes the values of these accounts at specific levels. These levels are called

Source Levels

.

The rule distributes the value of the allocation at the

Source Levels

into the Allocation-Out system account. The Allocation-Out system account holds those values as debits at the

Source Levels

.

The allocation rule moves the value into specific levels. These levels are called

Target Levels

.

The rule distributes the value of the allocation at the

Target Levels

into the Allocations-In system account. The Allocation-In system account holds the values as a credit at the

Target Levels

.

When you don't want the total value distributed evenly across the target levels, you can apply weights. Example: You can use the Headcount account to distribute the allocations based on the Headcount.

Your company budget has $5,000 planned for computer parts. You can use a rule to distribute that budget across departments 5 departments evenly. Each department then knows they can spend $1,000 on computer parts.

Your company leases a new building to house your IT and Engineering departments. You can allocate the $4,000 maintenance expenses between the 2 departments. There are 100 engineers and 25 IT professionals. You can add a Headcount weight. The Engineering department gets $3,000 and the IT department gets $1,000.

The complexity of the allocation rule and the number of affected system accounts both affect the overall performance of the model. We recommend that you limit your:

Allocation rules to 10 rules.
Corresponding system accounts to 20 (1 in and 1 out system account per allocation rule).

For more efficient maintenance, we recommend that you use account attributes instead of formulas. When you use account attributes, any accounts created in the future and marked with the attribute value automatically follows the allocation rule. You can remove accounts from the rule by removing the attribute from the account. When you use a formula, you must edit the rule to add and remove accounts.