Guidelines to setup and configuration of Allocation Rules for IBM Cognos Controller

Transcription

1 Proven Practice Guidelines to setup and configuration of Allocation Rules for IBM Product(s): IBM Area of Interest: Financial Management

2 2 Copyright and Trademarks Licensed Materials - Property of IBM. Copyright IBM Corp IBM, the IBM logo, and Cognos are trademarks or registered trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the Web at While every attempt has been made to ensure that the information in this document is accurate and complete, some typographical errors or technical inaccuracies may exist. IBM does not accept responsibility for any kind of loss resulting from the use of information contained in this document. The information contained in this document is subject to change without notice. This document is maintained by the IBM Business Analytics Proven Practices team. You can send comments, suggestions, and additions to cscogpp@ca.ibm.com. Adobe, the Adobe logo, PostScript, and the PostScript logo are either registered trademarks or trademarks of Adobe Systems Incorporated in the United States, and/or other countries. IT Infrastructure Library is a registered trademark of the Central Computer and Telecommunications Agency which is now part of the Office of Government Commerce. Intel, Intel logo, Intel Inside, Intel Inside logo, Intel Centrino, Intel Centrino logo, Celeron, Intel Xeon, Intel SpeedStep, Itanium, and Pentium are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries. Linux is a registered trademark of Linus Torvalds in the United States, other countries, or both. Microsoft, Windows, Windows NT, and the Windows logo are trademarks of Microsoft Corporation in the United States, other countries, or both. ITIL is a registered trademark, and a registered community trademark of the Office of Government Commerce, and is registered in the U.S. Patent and Trademark Office. UNIX is a registered trademark of The Open Group in the United States and other countries. Cell Broadband Engine is a trademark of Sony Computer Entertainment, Inc. in the United States, other countries, or both and is used under license there from. Java and all Java-based trademarks and logos are trademarks or registered trademarks of Oracle and/or its affiliates.

3 3 Table of Contents INTRODUCTION... 4 PURPOSE OF DOCUMENT... 4 APPLICABILITY... 4 EXCLUSIONS AND EXCEPTIONS... 4 ASSUMPTIONS... 4 ALLOCATION SET UP INCLUDING EXAMPLES... 5 ALLOCATION INTRODUCTION... 5 DEFINING AND ACTIVATING ALLOCATIONS... 5 ALLOCATION DETAILS... 6 ESTABLISHING TARGETS... 9 ALLOCATION JOBS EXECUTION OF ALLOCATION CURRENCY TRANSLATION EXAMPLE #1 ALLOCATION ACROSS SUBSIDIARIES ALLOCATION GUIDANCE GUIDANCE ON HOW TO BEST TO DESIGN ALLOCATIONS FOR IBM COGNOS CONTROLLER... 19

4 4 Introduction Purpose of Document The purpose of using allocations in IBM is to allocate values (source) according to a factor (weight) to a specific target. Here are some allocation examples: Most allocations can be expected to be created between Companies and Accounts and between Extended Dimensions Light to medium allocations (for example, shared costs of a holding company allocated to subsidiaries) Allocations needed for the final close and part of the consolidation process Journal based allocations (allocations booked in an AJ) The allocations feature does not execute complex and full allocations of costs (TM1 should be used in this case). You should map out your allocations to determine where it is best to perform allocations. Applicability IBM 8.5 and higher Exclusions and Exceptions There are no known exceptions and exclusions at the time this document was created. Assumptions This document requires the user to understand automatic journal control tables in IBM. The document will refer to set up of automatic journals, especially defining of the allocation rules.

5 5 Allocation Set up including Examples Allocation Introduction General concept of allocations in IBM Allocation between Companies and Accounts Allocations between Companies and Accounts/Dimensions Allocations are booked on a predefined automatic journal type and can be booked to a journal type as well Part of the consolidation processes as well and can be run as a batch Only I, C and their equivalent statistical accounts (T, U) can be used. Defining and Activating Allocations Allocations must be activated before being used. Go to Maintain\Configuration\Automatic Journals\Define Activate Automatic Journal Code EALC Figure 1 shows EALC automatic journal

6 6 Allocation Details Defining the Source Source - Company Source - Account, which can be an account and/or summation accounts Actuality and the total percentage you want to allocate (you can allocate less than 100%) Journal Types (Closing Version and Contribution Version) -NB- The Contribution Version can be base value or base value and allocation. Extended Dimension if you have accounts that have extended dimensions like departments, product groups, etc. The extended dimensions can be identify as the source and then can be push out to the target companies/accounts/dimension. Figure 2 shows defining source for the allocation

7 7 Define the allocation weight Define the reference account and period The amounts in the reference accounts for the different companies are related to the total for all companies. This gives the percentage to use for each target company. -NB- The account can be either a statistical or an I (income) or C (Cost account) o Relative Period a different period from the run time period can be selected for the reference account. o Fixed coefficient a defined percentage for each target company Best Practices/Weights The weights (allocation base) can be I (Income) or C (Cost) along with their equivalent or statistical accounts. There maybe a requirement to load the allocation bases as a separate data load (i.e. # of calls, # of units, # of orders, # of Invoices, etc) using a specific form. The specific form can store the appropriate allocation drivers. If you use the fixed coefficient method or load in specific percentage then you need to be careful when these percentages change or if you add a particular company. It is important to review all your allocations to ensure they reflect the correct/updated information. Also note if you update the allocation bases (fixed coefficient and/or reference account) and try to re-run previous consolidations then the allocations may not be correct, especially around the fixed coefficients. You need to be careful around the changes and how they can impact historical numbers if you were to re-run prior years consolidations/allocations.

8 8 Figure 3 shows the allocation weight method

9 9 Establishing Targets Enter the target parameters Select one or several companies -NB- The target company can be the same as the source company. Account the account in which the allocated will be booked -NB- The target account must not be an arithmetical (summation) or AFC or IC account. Manual Journal type on which the journal type of the allocation will be booked -NB- the allocation will automatically be booked on the predefined automatic journal type 37 Extended Dimensions select a dimension distribution method for the extended dimension (Target, Source or Reference) Figure 4 shows the allocation target information Dimensionality Allocation can be booked on extended dimensions using three options 1. Source - Extended Dimension 2. Reference - Extended Dimension 3. Target - Extended Dimension Example of using the Source and Reference options Admin costs to be allocated = $1000 This $1000 is booked on the product dim Admin 600/6000 = 10% of admin cost ($100) to be allocated on Target Company 1 On which extended dimension should the allocation be booked?

10 10 Handling of Extended Dimensions with the option source Total reference value = $ Admin costs to be allocated=$ /6 000 = 10% ($100) of admin cost to be allocated on Target Company 1 $ 100 to be booked on Target Company 1 on the product dim Admin -NB- If the system tries to post to a dimension code that is not available (due to linked structure, etc) it will default to posting value to the first available code in the dimension list. Handling of Extended dimensions with the option reference The reference account of the target company is split between three product dimensions: Car: $100 Buses: $200 Trucks: $600 So, the amount of $ will be allocated through these three products: 17 cars (100/600), 34 in buses (200/600) and 50 in trucks (300/600).

11 11 Allocation Jobs Creation of Allocation jobs in the menu Maintain/Jobs. Selection of Allocations to be part of the job. The allocations will be run in the order specified in the job definition. Figure 5 shows defining the allocation jobs Execution of Allocation The execution of allocations can be done the following ways Consolidation with Status Allocations are automatically included in consolidation with status. There is an option to disable the automatic calculation of allocations. Note that Consolidations run without Allocations, clears (deletes) the allocations figures (data) which have already been calculated by a previous consolidation with status. Only the allocations job linked to the consolidation type and the actuality specified in the mapping table will be run. Creation of Allocation mapping table in the menu Maintain/Jobs Figure 6 shows allocation job mapping table In this example the allocation job 2000 will be run only for the consolidation type L0 (for all actualities).

12 12 Figure 7 shows Consolidation with status filters Consolidation by Steps It is possible to run Allocations as a separate steps It is possible to schedule allocations as batch jobs It is important to understand how the allocations have been added to a job. If the order is important or if the allocations have a dependency on previous allocations, then you will need to ensure you have the allocations correctly listed in the right order. Currency Translation The following example is used to demonstrate the flow (the source in SEK and the Target in CAD). Allocation will be created in SEK and then translated into the relevant currencies: CAD, NOK and USD. Note: Historical rates are not handled in the latest version of IBM Cognos Controller.

13 13 The execution of allocations can be done the following ways Figure 8 shows currency translation flow for allocations Example #1 allocation across Subsidiaries There maybe a requirement to allocate shares services from corporate to subsidiary companies of a particular group. These share costs could be Information Technology, accounting/finance, Senior Management, Marketing, etc. Company 1201 is a corporate head office that has shared costs for subsidiary companies like 1202, 1203, 1204 and Drivers for the allocations % of sales for Dept 180, 210, 220

14 14 Figure 9 show the allocation drivers by department You will need to set up the allocation automatic journal to identify the source, weight and target information. Company 1201 Allocation

15 15 Figure 10 show the allocation by company and department Company 1202 Figure 11 shows the allocation results for Company 1202

16 16 Figure 12 shows the defining of the allocation source Define the weight

17 17 Figure 13 shows the defining of the allocation weight

18 18 Define the Target Figure 14 shows defining of the allocation target

19 19 Allocation Guidance Guidance on how to best to design allocations for IBM Allocations can be performed on accounts/dimensions when there is a need to review the level of allocations required. If you are planning on allocated costs across product dimensions, then it may be better to do these allocations in TM1 and then push them back into IBM as a journal entry upload. There could be a performance impact if you are doing large allocations, because the system needs to push this information across the dimensions and that process takes time. If you are doing department and/or smaller type allocations then the system should perform very well and the allocations will be useful. Overall, you need to look at your account/company/dimensional structure design to determine the amount of allocations required for product dimensional allocations, department allocations. Allocations between periods are not supported