Deltek Insight 2012: Interpreting the Statement of Indirect Expenses
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Transcript of Deltek Insight 2012: Interpreting the Statement of Indirect Expenses
Abstract
GCS Premier’s Statement of Indirect Expenses (SIE)
is critical to fully understanding your indirect rates and rate
structures. Attend this session and unlock the mysteries of
the SIE! Topics on the agenda include a discussion on the
differences between Company-Wide and Divisional Reports,
tiering, variances and unabsorbed amounts. A Deltek
expert will provide tips and tricks and reveal the power behind
this valuable GCS Premier report.
2 ©2012 Deltek, Inc. All Rights Reserved
Agenda
Statement of Indirect Expenses (SIE) Overview
Company-Wide or Divisional SIE Report
Inter-divisional Allocations
The Tiering Process & Inter-pool Allocations
Unabsorbed Amounts
Target vs. Actual Rate Comparison
TIPS
3 ©2012 Deltek, Inc. All Rights Reserved
Statement of Indirect Expenses
What is the Statement of Indirect Expenses (SIE)?
A report that provides the calculations that derive your company’s
indirect rates.
Each pool contains two pages.
Page 1 – Detailed listing of all accounts assigned to the pool (the
numerator). Basically this shows you the pool costs.
Page 2 - Shows what cost elements are included in the base (the
denominator) and how the costs are applied. Basically this shows you
the pool base.
Pool Costs divided by Pool Base = Indirect Rate
5 ©2012 Deltek, Inc. All Rights Reserved
Statement of Indirect Expenses
SIE Legend
Section Line Color
Company Wide or Divisional SIE
Actual Costs
Budgeted Costs
Base Amounts
Indirect Rate
Applied Amounts
Unabsorbed amounts
Target vs. Actual variance
Tiering
6 ©2012 Deltek, Inc. All Rights Reserved
How do I know if I should run the Co-Wide SIE or the
Divisional SIE?
Company-Wide or Divisional SIE Report
9 ©2012 Deltek, Inc. All Rights Reserved
Company-Wide or Divisional SIE Report
Army-Div1
Fringe 32.0%
Open
Co OH 35.14%
Cust OH 27.13%
MH 5.32%
Sub H 4.97%
G&A 16.73%
10 ©2012 Deltek, Inc. All Rights Reserved
Company-Wide or Divisional SIE Report
Army-Div1
Fringe 32.0%
Open
Co OH 32.14%
Cust OH 27.13%
MH 5.32%
Sub H 4.97%
G&A 16.73%
Navy-Div2
Fringe 32.0%
Open
Co OH 32.14%
Cust OH 27.13%
MH 5.32%
Sub H 4.97%
G&A 16.73%
Air Force-Div3
Fringe 32.0%
Open
Co OH 32.14%
Cust OH 27.13%
MH 5.32%
Sub H 4.97%
G&A 16.73%
11 ©2012 Deltek, Inc. All Rights Reserved
Company-Wide or Divisional SIE Report
Army-Div1
Fringe 35%
Open
HQ OH 76%
Army OH 34%
Pentagon OH 45 %
M&S 3%
G&A 14%
Navy-Div2
Fringe 35%
Open
HQ OH 76%
Navy OH 92%
Open
M&S 3%
G&A 14%
Air Force-Div3
Fringe 35%
Open
HQ OH 76%
Air Force OH 88%
Edwards OH 56%
M&S 3%
G&A 14%
12 ©2012 Deltek, Inc. All Rights Reserved
Company-Wide or Divisional SIE Report
General Guidelines
If you only have 1 division - Co-Wide SIE
If you have multiple divisions and:
Rates are the same for all divisions – Co-Wide SIE
Rates vary by division – Divisional SIE
When you run a Co-Wide SIE
Division 1’s pool structure is used as a template for entire company
13 ©2012 Deltek, Inc. All Rights Reserved
Inter-divisional Allocations
What does the Inter-divisional allocation do?
The inter-divisional allocation transfers amounts from a pool in one
division to all pools with the same pool number in other divisions
The inter-divisional allocation is a horizontal allocation across
divisions.
It allows you to collect pool costs in one division and allocate
them to other divisions in the G/L.
JE’s are prepared. You must post these JE’s
Does my company need to perform these allocations?
©2012 Deltek, Inc. All Rights Reserved15
Inter-divisional Allocations
Army-Div1
Fringe 35%
Open
HQ OH 76%
Offsite OH 43%
Open
M&S 3%
G&A 14%
Navy-Div2
Fringe 35%
Open
HQ OH 76%
Offsite OH 43%
Open
M&S 3%
G&A 14%
Air Force-Div3
Fringe 35%
Open
HQ OH 76%
Offsite OH 43%
Open
M&S 3%
G&A 14%
16 ©2012 Deltek, Inc. All Rights Reserved
The Tiering Process
Tiering is a process used to group “Like Type Costs”
GCS Premier offers 3 tiers
Lower pool numbers can tier to higher pool numbers
Typical Tiering setup is:
Tier 1 – Fringe, pool numbers 1 - 2
Tier 2 – Overhead, pool numbers 3 - 6
Tier 3 – G&A, pool number 7
Inter-pool JE’s are prepared to post the tiering amounts to the
G/L.
©2012 Deltek, Inc. All Rights Reserved20
Inter-pool Allocations
Does my company need to perform the inter-pool allocations?
If you have a Divisional SIE – Yes
If you have a Co-Wide SIE - Optional
If you want the tiering to be reflected on the Income Statement – Yes
The inter-pool allocation transfers amounts between pools in
the same division
Think of it as a vertical allocation
Remember to post the inter-pool journal entries
21 ©2012 Deltek, Inc. All Rights Reserved
Inter-pool Allocations
Army-Div1
Fringe 35%
Open
HQ OH 76%
Offsite OH 43%
Open
M&S 3%
G&A 14%
22 ©2012 Deltek, Inc. All Rights Reserved
The Tiering Process
©2012 Deltek, Inc. All Rights Reserved24 12/11/2012
Fringe is
applied to G&A
Labor
Fringe &
Overhead is
applied to B&P
Labor
Inter-divisional & Inter-pool allocations
Army-Div1
Fringe 35%
Open
HQ OH 76%
Army OH 34%
Pentagon OH 45 %
M&S 3%
G&A 14%
Navy-Div2
Fringe 35%
Open
HQ OH 76%
Navy OH 92%
Open
M&S 3%
G&A 14%
Air Force-Div3
Fringe 35%
Open
HQ OH 76%
Air Force OH 88%
Edwards OH 56%
M&S 3%
G&A 14%
28 ©2012 Deltek, Inc. All Rights Reserved
Unabsorbed Amounts
Unabsorbed amounts are on page 2 of the SIE
Only a concern if they are large amounts
Truncating the rate to four decimal points creates small
“unabsorbed” amounts
SIE Legend
Section Line Color
Unabsorbed amounts
Target vs. Actual variance
30 ©2012 Deltek, Inc. All Rights Reserved
Target vs. Actual Rate comparison
This tells you what the rate variance is for each pool.
Located on the second page of each pool calculation
Why is the Pool Base different for the G&A Pool
See page 12
When posting revenue the system will ask you if you want to
post the variances to the IS and BS
©2012 Deltek, Inc. All Rights Reserved31
Descriptions on the SIE
Where do the descriptions come
from?
Identify /Change descriptions in
the contract suffix file
Put the suffix number in the
description – i.e. Direct Labor 39
Remember to reconcile the
SIE back to your G/L each
month
Toggling between Co-Wide
vs. Divisional SIE
Can you do this?
When it doesn’t make sense to
run both reports
First run the inter-div
allocation then run the inter-
pool allocations by tier
Rate calculation should be
across-down-across-down-
across
Tips
©2012 Deltek, Inc. All Rights Reserved34
Questions?
35 ©2012 Deltek, Inc. All Rights Reserved
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