In the Financial result and controlling – See also – Expense items list, on the Main tab, specify for each expense item:
- Item group. Determines the item location in the hierarchical structure of the list and is used to simplify search and item usage.
- Expense type. Determines target addressing of expenses (goods purchase, warehouse storage and processing, goods sales, etc).
- Expenses for activity. Determines whether expenses are allocated to the main and other activity of the company.
- Allocate in compl. accounting. Sets up compliance accounting settings.
- Allocate in man. accounting. Sets up management accounting settings.
- The Control dimension filling check box provides completeness of source data specification.
- Expense dimension type. Shows an object (reason) of expenses and is used as an independent analytical section of expense accounting.
- The Separate VAT accounting by expenses group helps you select a VAT allocation method by taxation types:
- The VAT is classified as taxation kind of purchase document option means that VAT accounting procedure is determined by VAT activity type directly in the document.
- The VAT is allocated in proportion to revenue option means that VAT does not depend on the VAT activity type specified in the document and is allocated to different activity types in proportion to revenue within the Month-end closing procedure.
You can set up expense recording parameters in bookkeeping and tax accounting on the Compliance accounting and IFA tab:
- GL account. Bookkeeping account used by default. Click Configure accounts by companies and departments to configure advanced account settings.
- Classification of expenses for tax accounting and recording in acc. reporting:
- The Entered in profit tax accounting check box shows whether expenses by this expense item are recognized when calculating a profit tax.
- For expenses entered in profit tax accounting, specify Kind of expenses for core activity or Kind of expenses for other activity depending on their belonging to the core or other enterprise activity. The selected value affects how tax accounting registers and a profit tax declaration are filled in, as well as company accounting reporting.
- The Recognize as STS expenses check box determines whether costs by this expense item are recognized as expenses when using simplified tax system with the Income minus expenses taxation object.
- If a company using general tax system is a tax payer of the uniform tax on imputed income (UTII), specify a line of business with tax system the expenses refer to. For expense items with To line of business allocation option, you can select GTS and UTII if expenses cannot be allocated to a line of business with a certain tax system. Such expenses are allocated according to the base specified in the company accounting policy.
If the Restrict usage in business transactions check box is selected on the Usage restriction tab, you can select business transactions (by documents) in which this expense item is allowed to be used. Restrictions allow you to reduce user errors when specifying business transactions, restrict time for expense item selection when filling.
Allocation option determines whether expense usage registered by a certain expense item is financially reasonable. You can use the following options:
- To goods cost
- To financial result
- To deferred expenses
- To manufacturing costs
- To capital assets
There is a certain allocation order for each allocation option:
- To goods cost – Allocation rules
- To financial result – Allocation methods
If there is no need to allocate expenses, you can use the Do not allocate option. Expenses by such expense item can be reimbursed.
"To goods cost" allocation option
Expense items with To goods cost allocation option are used to build up costs of tangible assets outside the manufacturing processes. To allocate additional expenses, you can use the following allocation rules:
- Proportionally to product quantity. Cost allocation base is determined according to the quantity of selected products.
- Proportionally to product cost. Cost allocation base is determined according to the cost of selected products.
- Proportionally to product weight. Cost allocation base is determined according to the weight characteristics of selected products.
- Proportionally to product volume. Cost allocation base is determined according to the volumetric characteristics of selected products.
Depending on the expense type, the following dimension types are available:
- Warehouse. Amount of costs is allocated to all items located in a particular storage location (at the warehouse). If the warehouse is not selected, expenses are allocated by all warehouses.
- Product. Amount of costs increases balance value of a particular product at all enterprise warehouses (for all characteristics, series, and assignments).
- Purchase of goods and services. Amount of costs by the selected allocation rule increases balance value of the product recorded as received by selected Purchase of goods and services documents.
- Purchase order, Transfer order, Assembly (disassembly) order, Assembly (disassembly), Goods transfer, Goods handover between companies, Balance input. Amount of costs by the selected allocation rule increases balance value of the product specified in documents of the respective type.
For more information on options of allocation by purchase documents, see chapter "Purchases".
"To financial result" allocation option
Expense items with To financial result allocation option allow you to enter in the books general business costs (if using direct-costing) and business costs. Economic (cost generation order) or financial (participation in financial result generation) substance of such costs is determined by the allocation method. The option is selected from the Methods of allocating income and expenses by lines of business list.
Costs by such expense items require additional settings for recording in bookkeeping. Method of tax accounting is specified in the expense item profile.
You can use various dimension types depending on the expense type.
Simultaneous selection of a dimension type and allocation method allows you to set two-dimensional analytical view of costs. For example, in the expense item, you select Sales order as a dimension type and Warranty repair as an allocation method to line of business. It allows you to generate overall cost value for warranty repair drilled down to costs of sales orders.
"To deferred expenses" allocation option
Expense items with To deferred expenses allocation option are used to count costs that are included in the costs, but are deferred. Dimension types match those of above mentioned allocation options. In this case, these are secondary types and only show where costs occurred. You should specify an expense write-off item by which deferred expenses are carried over to cost accounting objects that participate in cost generation. Expense write-off item is selected from the Expense items classifier that have another allocation option. As a rule, these are expense items with To line of business allocation option. You do not have to specify a write-off item in the expense item profile and fill in an allocation method in the previous option. Leaving these parameters blank, you can allocate expenses later when you need to calculate the costs, i.e. perform period-end operations of month-end closing. Regular and complete filling of master data allows you to save time on month-end closing and get reliable data to analyze.
On the Compliance accounting tab, specify the Asset kind parameter that defines a bookkeeping balance line recording unallocated expenses by this expense item.
"To manufacturing costs" allocation option
Expense items with To manufacturing costs allocation option are used to build up production costs allocated to the costs of manufactured products. Dimension type of expenses determines an object of costs. It can be a department, production order, selected kind of other expenses, facilities.
Itemized expenses can be allocated to production batches, left in unfinished production, or reallocated to other expense items (asset or liability items). Allocation rules of itemized expenses are set in the catalog of the same name and refined during allocation. You can configure a complex allocation rule by specifying allocation to batches and expense items, and cost shares for each option simultaneously.
There are the following settings options of expense allocation to production batches:
- Manually – production batches (Production stages and Production without orders documents) are picked manually during allocation.
- Manually – production batches (Production without orders documents) are picked manually during allocation.
- According to rule – expenses are allocated between departments and releases in departments according to the specified rule.
The rule determines:
- Departments the expenses are allocated to:
Current, subordinate, and superior departments are specified regarding department costs.
- Allocation base between departments and batches. When allocating by a common base, batches between which expenses are allocated according to the selected allocation option and filters are determined for all picked departments. Filters can be set for quantitative and cost bases.
Itemized expenses are included in products as far as an allocation base appears for the products. For allocation bases related to products (product quantity, volume, weight), arrival time depends on the expense itself, and can be related only with actually released products. To leave some itemized expenses in unfinished production and allocate them later to planned products, use allocation bases considering future releases.
A planned indicator of products by batches (cost, volume, etc.) is taken as an allocation base.
When allocating to different bases, the following options of allocation between departments are used:
- Set manually. Cost shares are entered for departments manually on the Departments tab.
- By indicator. Indicators are set according to the selected regulation Entered manually on a monthly basis (used for low data correlation of adjoining months which requires entering new values), or Entered manually on change (allocation base is rather stable, changes in allocation proportion occur rarely and are recorded as they occur).
- Material cost. Cost of materials passed to departments for manufacturing process execution.
- Labor compensation amount. Amount of accrued salary (Accrued (by piece) transaction type in Recording of salary in financial accounting documents).
- Material cost and labor compensation amount.
You can set filters by product groups (kinds) for the allocation base generated by rule. Filters can be set in the rule settings by clicking Specify groups (kinds) of products, or in the Expense allocation to product cost documents additionally to the selected rule.
If an expense item is allocated to other expense items, fill in a list of expense items and specify cost shares in the allocation rules.
Expense allocation rules are used in expense items with allocation to manufacturing costs.
For expense items with To manufacturing costs allocation option, you can specify a costing item according to which these costs are included in the self-cost (the Costing item field on the Main tab).
Expense allocation rules are used in expense items with allocation to manufacturing costs. You can set different allocation rules for an expense item by companies and departments by clicking Allocation settings. To navigate to settings from the expense item, click Set up allocation rules by companies and departments.
When generating documents of expense allocation to costs, the allocation rule is selected depending on its priority:
- Rule set for the department and company
- Rule set for the company
- Rule from the expense item
"To capital assets" allocation option
Expense items with To capital assets allocation option are used to record expenses that build up costs of capital assets. Dimension type divides expense items by recording expenses that build up initial cost of:
- Fixed assets (FA)
- Capital construction (by construction objects)
- Intangible assets (IA)
- Research and development expenses (R&D)
Generating itemized expenses
Itemized costs are generated in value terms with specifying expense item. The main generation documents are:
- Purchase of goods and services:
- Product items with Work product type for which the Write off as expenses check box is selected in the document.
- All items with Service product type.
- Purchase of services and other assets
- Expense report.
- Depreciation and wear of fixed assets.
- IA depreciation and writing off R&D expenses.
- Recording of salary in financial accounting. As an allocation base, you can use commitment of certain employees to the manufacturing process recorded with Employee output documents.
- Internal goods consumption (Commissioning, Write off as expenses transaction types).
- Goods handover between companies (product items with Service product type, and those with Work product type for which an expense item is specified in the document).
- Product release and work performance (the To department release direction, product items with the Work product type for which the Write off as expenses check box is selected).
Allocating expenses at the end of month
Final selection of allocation rules for itemized expenses is made within the Expense allocation to product cost workplace. Workplace location may vary depending on the version of Production Management you use. If you use Production Management 2.1, the Expense allocation to product cost workplace is located at Manufacturing – Manufacturing costs. If you use Production Management 2.2, the Expense allocation to product cost workplace is located at Manufacturing – Intrashop accounting. A new Expense allocation to product cost document is created for each expense item.
In the document header, you can see information on amount of expenses accumulated by the expense item for a month. If receipt by the expense item for a month is only in total terms, the overall amount of the receipt is specified. If materials are written off as expenses within a month, you can see a message showing that amount of expenses will be defined after cost calculation.
The document is filled in as follows:
- Allocation rule specified for the expense item is used by default.
- In the document header, you can change expense write-off shares and leave some expenses in unfinished production (the To unfinished production in the amount of ... shares field).
- When allocating expenses to batches according to rules, you can find all settings on the Allocation rules tab. Departments included in allocation direction are saved in the document. For example, if you select a superior department, it is saved in the document so that the allocation document still refers to the same superior department if the enterprise structure is changed. To overwrite departments, repost the document.
- For the selected rule, you can refine usage parameters (actually generate a new rule based on the existing one), add filters by product group (kind) or allocation base, refine costing item (the Costing item field).
- If you select To other expense items allocation option in the expense item, data is specified on the Other items tab.
You can also use a "line of business" dimension for costs located at Master data and settings – Master data and sections – Financial result and controlling – Financial result. In this case, the following rules are applied when allocating costs to release:
- Costs with specified line of business are allocated according to the allocation base considering filters by this line of business.
- Costs without specified line of business are allocated according to the allocation base generated regardless of line of business.
You can save the allocation setting specified in the document by clicking Save allocation setting so that it can be used in other months of expense item allocation. You can choose whether to save the setting For all departments or For document department only.
The Expense allocation to product cost documents build up the required allocation base. Calculation by allocation base is performed by calculating cost within month-end closing procedure.
Entering start balance of itemized expenses
In the Master data and settings – Initial filling – Documents of entering start balance workplace, you can enter start balance with Other expenses transaction type. With this transaction, you can record itemized expenses unallocated as of the entry date.
GL account is specified according to the general rules of itemized expense allocation (by expense item).
Recording salary in financial accounting
Recording of salary in financial accounting documents are created based on results of all salary accruals and used to enter costs of such kind when calculating cost and to determine financial result of the enterprise.
There are the following ways of data filling to display:
- Register values calculated outside the unified infobase. Values can be entered manually, and automatically by external data processors. When generating a document for exchange, a required display method is picked. If the method is not found, it is created.
- Register values calculated in the current infobase. Data is filled in according to the results of performed salary calculation by clicking Fill in by accruals. Filled out data can be edited manually. On document filling, accrual dimension is converted from regulatory company departments to a management structure. Management departments are picked for time-workers according to the settings set in the employee profile (considering days). Departments for piece-rate workers are picked by employee output.
In the document, you can choose a format of specified values (the Summary without company employee details check box). Details by employees are required if the dimension by employees is enabled on account 70 (the Record labor compensation expenses setting in the company accounting policy), or you need to allocate employee payroll to product costs exactly.
Accruals with the Accrued (by piece) transaction type are recorded according to the registered employee output. If the application cannot find an allocation base (output is not registered), an error message appears.
In BORs and output documents by repairs and other works, an additional dimension is specified to record insurance contributions. Insurance contributions accrued to piecework earnings can be registered by other expense items and included into cost with separate costing items.
In the Salary record methods list, you can see:
- Additional attributes of expense items for insurance contributions. You can specify an individual item for all contributions, or for each contribution.
- Items to record expenses by UTII activity. In the Recording of salary in financial accounting documents, required expense items are inherited from the record method.
In the Recording of salary in financial accounting documents, the record method can be changed only on the whole.