This document provides information regarding creating Cost Pool Groups.
A Cost Pool Group should be set up (at a minimum) for each legal entity for which indirect rates will be calculated. To set up a Cost Pool Group, navigate to Admin > Setup > Accounting > Cost Pool Groups. Click the +Cost Pool Group link and perform the following:
1. Enter Cost Pool Group Summary information
Enter the required Name and Legal Entity values. A description is optional. click Save.
Note: The Legal Entity cannot be changed once a cost pool definition has been specified as the organizations used in the definition are validated against the legal entity specified here.
2. Add Cost Pool(s)
Click the edit pencil icon for the desired Cost Pool Group.
Select the Cost Pools tab. Click the +Cost Pool link to add a new cost pool to this group.
Enter the appropriate information and click Save when finished.
Note: Cost Pools must appear in the grid in the order in which they should be calculated. This can be accomplished by adding them in the order they should calculated, or by reordering them using the blue arrow icon. Click the icon to see the popup dialog containing move direction options.
3. Enter Cost Pool Header
Cost Pool - Description of Cost Pool.
MTD (Month-To-Date) - Typically only used for monthly allocations of intermediate cost pools such as Facilities or IT.
YTD (Year-To-Date) - All cost pools that update rates should use this option.
- Base Calculation Method
- Actual Amount - Use amounts posted to the general ledger accounts and organizations included in the Base.
- Fixed Amount - Use amounts entered in the Amount Column in Base grid (e.g., ratio of square footage used to total square footage).
- Hours - Use hours posted via the labor cost post to the general ledger accounts and organizations included in the Base.
- Percent - Use percentages entered in the Amount Column in Base grid (e.g., pre-determined percentages to allocate IT department).
- Post to GL - If checked, the result of the cost pool allocation is posted to the GL. Examples of when this would be checked include:
- User wants fringe allocation to appear in their financial statements.
- MTD pools should always be posted to the GL assuming that the amounts will be required in subsequent indirect rate calculations.
- Cost Pools where the result of the calculation is later used in a MTD pool (e.g., fringe costs are allocated to the IT Department).
Note: Posting to the GL is not required to calculate rates except as noted above. The results of all calculations are stored in intermediate tables for use in succeeding calculation steps (e.g., results of fringe allocation will be available for use in subsequent overhead and G&A calculations).
- Post Rate to Cost Structures - Should be checked if the pool is directly related to an indirect cost element in an associated cost structure. Should never be checked for an intermediate calculation pool.
Note: Cost pools where this is checked should always have a Calculation Period of YTD and a Base Calculation Method of Actual Amount.
- Cost Element - Cost element to update with the actual indirect rate calculated in associated cost structures.
Note: Cost elements should only be selected once within a cost pool group.
4. Enter Pool definition
Specify the ACCOUNTand ORGANIZATION combinations that define the Pool. Parent accounts and organizations in the associated Cost Pool hierarchies should be used to simplify entry. Subsequent changes to the hierarchies (e.g., addition or deletion of accounts and organizations from the specified parent) will automatically flow into the cost pool calculations using this approach.
Specify the offset/contra Post Account that should be posted to represent the allocation out of the pool. This will be the account (typically) credited for the allocation out of the pool. It is best practice to use a single contra account (e.g., fringe allocation contra) here so the history of the postings to the original accounts is not lost.
Specify a Post Organization if you want the posting to go to a specific organization. This value is normally left blank, in which case the postings will be made against the organizations of the original pool amounts.
5. Enter Base definition
Specify the Account and Organization combinations that define the Base if the Base Allocation Method is Actual Amount or Hours. Parent accounts and organizations in the associated Cost Pool hierarchies should be use to simplify entry. Subsequent changes to the hierarchies (e.g. addition or deletion of accounts and organizations from the specified parent) will automatically flow into the cost pool calculations using this approach.
Specify the Amount values if the if the Base Allocation Method is Fixed Amount or Hours.
Specify the allocation to POST ACCOUNT that should be posted to represent the allocation into the Base of the pool amounts. This will be the account (typically) debited for the allocation out of the pool into the base-related accounts. It is best practice to use a separate allocation to account for each line (e.g. fringe allocation to direct labor, fringe allocation to overhead) here so the results can be used in subsequent calculations.
Specify a POST ORGANIZATION if you want the posting to go to a specific organization. This value is normally left blank if the Base Allocation Method is Actual Amount or Hours, in which case the postings will be made against the organizations of the original pool amounts. If the Base Allocation Method is Fixed Amount or Percent this field is required as no Base Organizations are available.
6. Save the Cost Pool
Once you have set up all cost pools in the cost pool group, they will be available in Financials > General Ledger > Cost Pool Calculation for calculation and later posting as necessary.
The following items must be configured in Unanet prior to setting up Cost Pool Groups:
- Cost Elements defined - This includes all of the direct and indirect cost elements used in the Cost Structures .
- Cost Structures defined - This includes the rules used to allocate indirect costs to projects .
- Post Accounts used by Cost Pool Edit set up:
- Pool Contra accounts - These are the accounts that will be typically credited for the allocation of the cost pool amounts (e.g., Fringe Allocation Contra).
- Base allocation accounts - These are the accounts that will be typically debited for the allocation of the cost pool amounts (e.g., Fringe Allocation to Direct Labor).
- Cost pool hierarchies defined.
- Accounts - Rollup accounts that are used to define amounts that should be included in the Pool or Base amounts within a cost pool (e.g., Fringe Expenses, Direct Labor).
- Financial Organizations - Typically a rollup to the legal entity level unless indirect rates are calculated at a lower level of the organization.
This function is only available to users with the following roles: Administrator.