Allocation Processing Steps

This week’s episode shows the general steps of an allocation processes, from transactions to balances and back down to transactions.

This graphic gives a sense of how the data flows for an allocation process.

CwK E136 Allocation Steps 1 Steps Graphic
Steps of an allocation process
  1. The costs must be accumulated to a total costs.
  2. The activities or drivers must also be accumulated to get to a total number of activities.
  3. The total costs are divided by the total activities to get to a per unit cost,
  4. Which is then multiplied by each of the driver specifics to determine what the cost of that driver is.

This is Episodes 183 of Conversations with Kip, the best financial system vlog there is. Literally learn more–about ledgers and financial systems–at FinancialSystemsEducation.com.

Prior Episode in Allocation Series:  Allocation and Activities

Next Episode in Allocation Series: Data Implications of Allocation Processes

Watch all episodes in order on the Conversations with Kip Playlist.

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