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Utilize allocations to distribute lease costs among various segments of the organization
What are allocations?
Some businesses utilize allocations to distribute their expenses across various segments of the organization. For instance, lease expenses may encompass both office space and warehouse facilities. Therefore, it is essential to determine the appropriate allocation of lease expense for each part of the business.
Why do allocations matter?
Accounting allocations assist companies in equitably distributing lease expenses. Various methods, such as square footage (for larger sections of the building), headcount (for departments with more employees), or sales revenue (for divisions generating more income), are employed. These allocations ensure that each business segment contributes its fair share towards expenses.
How does Occupier help?
Occupier offers the functionality to distribute lease expenses from a specific business segment to multiple segments of the same type. This means you can allocate costs from one cost center to several others, or from one department to multiple departments. Occupier also provides separate journal entries for these allocations, which can be exported either from the lease amortization schedule or directly from the journal entry page.
