About labour and revenue allocation

For information about how to set allocation rules, see: Set allocation rules

In Visma.net ERP, allocation is the process of allocating amounts to specific accounts, account groups, or both to acknowledge expenses and revenues.
The allocation process is governed by allocation rules you specify by using the Allocation rules (PM207500) window.

The allocation process consists of two basic stages:

  • Selection of transactions:
    By using allocation rule settings, Visma.net ERP selects only those transactions that conform to the rule settings.
    These are used as underlying transactions for allocating amounts and quantities.
    For instance: You can use as an underlying transaction an invoice your employee paid when providing service to a customer.
  • Allocation:
    Visma.net ERP generates one or more allocation transactions with the amounts and quantities calculated based on those of the underlying transactions.
    You can specify rules that generate any transactions involving any accounts and posting; however, you normally use allocation to account for your current reimbursable costs (based on the completion percents of project tasks) and future revenues from the project.
    For instance: If you use a cost-based pricing model that implies a 15 percent up tick, you can specify an allocation rule that adds up all the cost transactions' current amounts, multiplies the sum by 1.15, and debits the resulting amount to the account you use for tracking your non-invoiced revenue.

You may want to view future revenues as they are accumulated during project execution, regardless of when they will be actually recognised, charged to the customer, or both.
For instance, the project may be invoiced monthly but you may need to track the amount you will invoice to the customer weekly or even daily.
This way, you can continuously monitor how the actual revenues align with the projected revenues for the project.

In Visma.net ERP, you can track future project-related revenues as they are accumulated by allocating the corresponding amounts to special account groups.
To track future revenues, you need to create the following account groups:

  • Non-invoiced revenue:
    This is an account group of the Asset type used to accumulate future revenue.
    When you view the allocation rule in the Invoicing rules (PM207000) window, this account group appears in the Debit column.
    This way, each time you run allocation, you post to this account group the amounts that you plan to invoice to the customer.
    This account group may include multiple accounts to enable allocating different amounts for different allocations, for instance, allocating amounts for travel, labour, and services.
    Alternatively, you can use different accounting groups for each of these categories.
  • Unrecognised revenue:
    This account group of the Liability type is used to accumulate unrecognised revenue.
    When you view the allocation rule in the Allocation rules (PM207500) window, this account group appears in the Credit column.
    This way, each time you run allocation, you post the amounts that you plan to recognise as revenue to this account group.
    This account group may include multiple accounts to enable allocating different amounts for different allocations.

Each time you run allocation, you debit the account group used for non-invoiced revenue and credit the account group used for unrecognised revenue for the same amount.
Later, you will recognise this amount as revenue and charge it to the customer when you run invoicing for the project.

For allocation purposes, you normally use the cost transactions.

In Visma.net ERP, this method is called Transaction and is defined in the allocation rule for the project.

This method can be used in multiple steps of an allocation rule.

With this method, the pricing for the project is based on direct costs associated with the project.

Using multiple steps of the Transaction type, you can allocate future revenues for different activities.
For example: The first step can allocate reimbursable travel expenses, while the second step can allocate labour time.

  • If the Projects module is not enabled, the release of a transaction in the Time and expenses workspace generates the corresponding transactions in the Leverantörsreskontra workspace. Enabling the Projects module in Visma.net ERP changes the way transactions are released in the Time and expenses workspace.

  • When non-project transactions are released, Visma.net ERP generates regular supplier ledger transactions.
    If you enable the Projects module functionality, the release of a transaction associated with a specific project does not generate a supplier ledger transaction, but instead generates the corresponding Projects module transactions.

  • The further processing of the project transactions originating in the Time and expenses workspace is handled in the Projects module using allocation and invoicing rules.
    This workflow with the extra stage allows you to use costs in allocating and invoicing for projects and implement a cost-driven pricing model.
    Once you have all direct labour costs for the project entered in the Projects module, you can use the transaction information to allocate for the project any amounts and quantities enforced by your pricing model.