My client has two types of departments
Cost centers- those which only incur costs but do not generate revenue directly like HR, IT, Internal Audit, Admin, etc
Revenue centers- those which generate revenue and incur costs as well like service, sales etc.
I have managed both these departments as dimensions in NAV. I want to allocate all cost from Cost centres to revenue centers periodically to see the actual profits of each revenue centres and at the same time want to see how much each cost centers expensed. But When I move cost say from HR to Sales department I cannot see the cost of HR department. This has become an issue.
I would be really thankful to know if you any have solution for this kind of problem
Thanking in Advance.
When you say that you cannot see the cost of the HR dept when you move from HR to sales, where is it that you cannot see it?
If you are using the analysis views, then you should be able to use a standard filter to show two dimensions, e.g.
Thanks for the reply Kryton.
Yes of course i can see the details but the balance becomes nil when there is positive and negative transactions for the same dimension. when i book cost to HR it is positive and when i reallocate from HR to Sales this will make HR negative and the balance will be zero. In fact I need something from a system that tells me I had this much of cost incurred for HR, the total figure or the total of the debits. But i cannot use debit only here because sometimes there are adjustments too.
in accounting corrections are done by method called STORNO - ask your accountants, they easily will explain what it is all about. Navision even has a almost forgotten field Correction (not only in Journals, this is present in document tables, too). Many users have asked here what it is all about, I’ve seen answers here when people who are consultants for years already say it is kind of historical heritage, that means they do not know either why & when to use this functionality.
in short - book corrections as negative Db, not Cr amount (or negative Cr instead of Db, depending on what needs to be corrected).
Two possible solutions I see here:
- You post a G/L Journal, where the debit and credit accounts are the same account, but the dimensions (= cost centers) differ, thereby “moving” costs from one department to the another, without changing the total account balance. You can view the outcome in the G/L - Balance by Dimension form. That’s quick and dirty.
- You invest in a “Cost Accounting” solution (out-of-the-box in the European version since NAV 5.0 for example), which can automate such allocations, supports allocation rules and does a lot of other nice managerial accounting things. This module separates the financial accounting (G/L) from the managerial accounting, which means the company-internal portion of finance can accommodate transactions your auditor/CPA won’t like, but support your bosses in decision-making. It would help to improve consistency and transparency in allocation rules etc.
Thank you Modris for your invaluable suggestion. In fact i saw it somewhere in your posts earlier where you explained STORNO and how it works in Navision. I found it a nice idea to separate corrections and reversal entries.But i am sorry to say that the auditors in our part of world do not easily accept it simply because they are not used to doing it. By the way if you can think of any solutions for my above problem I would really appreciate it. I will comeback with further explanation if it is not understandable to you.
Thank you once again.
Thank you goelu for your response. I am afraid you didnt understand my problem clearly. let me exlplain it further. When I first book my expenditure I charge it to a Dimension Value “A”. This is booking of expenditure. Later I move the cost from “A” to Dimension value"B" and “C” which is an allocation. I want to see both the cost charged initially as well as its allocation. I dont mind debiting and crediting the same GL account.
I do appreciate your second suggestion but right now my client doesnt have budget for this module. So I have find solutions from with the financials module.
Thanks and regards
Actually, I believe I know what you mean.
I tried to illustrate my proposal as below:
1 - post some cost (here, LCY 1000 to cost center ADM)
2 - Post allocations, for instance 50% of the original amount to SALES from the original ADM department:
3 - here is what you get in the “G/L Balance by Dimension” view. The original amount is in the “Total Amount” column. (You should enforce the Dimension on the relevant G/L Accounts, as in the example below there are amounts without department code.):
Hope this solves your problem.
Thank you so much for your explanation. I really appreciate your support. I will try it practically and check if it meets my need. Thank you once again
Dear gelolu , i have same question as SGNBH, but with your example , our client want have the two result: before allocation and after allocation.
So I think your solution is the result after allocation. my question is how can I get the original result after allocation?
additionaly, does Dynamic have the automatical function for this kind of allocation if i define the allocation factor?
Thanks in advance
Use “Reason Codes” for allocation posting, which you can filter for when you do analysis. Everything posted with that Reason Code is "after: allocation. Perhaps you’ll have to define some report modification, e.g. in the Trial Balance for convenience, based on your requirements.
Yes, take a look at NAV’s Cost Accounting modules, this functionality is provided there. Otherwise try to use a Periodic Journal.