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Cost Allocation

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What is Cost Allocation?

Cost allocation is the process of systematically associating costs to a specific focus (such as a department, a business project, or even a product).

Using General Ledger (GL) Codes

Though businesses are often already heavily engaged with accounting for general costs throughout their organization to specific projects or departments, parcel costs remain somewhat of a gray area that could use more examination. At GMT, we make it simple to systematically (and automatically) assign costs to different GL strains or cost centers, based on a customer’s specific set of business rules for how they allocate their cost out among departments, brands, or even divisions.

What are the Benefits of Parcel Cost Allocation?

Cost allocation brings greater visibility into the true costs of your operations, meaning you gain increased forecast accuracy, as well as additional data to analyze and validate your business strategies. For parcel in particular, automatic cost allocation that keeps your business rules in mind means:

  • Time and resources saved normally spent reviewing carrier invoices line by line, contract by contract, carrier by carrier, and sometimes situation by situation.
  • Removal of costly human error and reallocation.
  • Increased Big Data to validate and model your parcel network, allowing you to accurately forecast network changes and make data-based decisions faster.

Recent Resources


1 year ago

Parcel 101 Video Series: Cost Allocation

What are the best practices regarding cost allocation in large parcel networks? GMT's Director of Strategic Accounts, Jon Sharp, explains cost allocation and why an automated solution is vital.


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