Managing allocations

In the cost accounting process, you can apply dollars incurred by one department to other departments using the reclasses and/or allocations. For example, applying costs for inpatient transportation, building maintenance, or marketing to a clinical department. In the cost accounting process, you can apply dollars incurred by one department to other departments using the reclasses and/or allocations. For example, applying costs for inpatient transportation, building maintenance, or marketing to a clinical department.

To reflect these transactions, Axiom uses a single account for allocations and a single account for reclasses to offset costs in source departments and write costs to receiving departments. Each of these accounts includes a flag that indicates the department and version.

In Axiom, allocation definitions define the rules and order in which to move overhead expenses from support departments (security, IT, utilities, etc.) to revenue-producing departments (usually in-patient departments).

Axiom uses the step-down method to allocate costs from one department to other departments using a sequential process. When setting up the allocation sequence, we recommend allocating costs starting with the most supported departments (based on count) and working your way down to the fewest supported departments. Keep in mind that this may not always correlate to the departments with the highest cost.

For example, if an overhead administration department holds $500,000 in C-level salaries, you may want to allocate this first since administration supports the entire system. On the other hand, a group of clinical support departments may hold $1 million in cost, but since they would support a more limited amount of departments (clinical only), you would allocate this cost after the administration department.

TIP: Your Syntellis Implementation Consultant can help you set up the allocation definition run order.

You manage the allocation definitions and run order for a cost model in Reclasses and allocations > Manage allocations. From this page, you can add, edit, and delete definitions as well as order their run sequence.