Efficient Overhead Allocation Across the Group
When you’re working across a group of companies, overhead allocation isn’t just a back‑office task — it’s strategic. With Forecast 5, allocating group administrative costs to subsidiaries becomes transparent, meaningful and aligned with business activity.
Key features include:
🔹Define a meaningful cost driver — Whether it’s head‑count, revenue share, service hours or other indicators, you choose the basis.
🔹Build dynamic allocation logic — Forecast 5 links the cost driver directly to each subsidiary’s forecast footprint so allocations evolve as business activity shifts.
🔹Reflect true cost burdens — Each subsidiary’s forecast absorbs the correct portion of group admin, so the consolidated view accurately represents each entity’s cost‑base.
📊 Handling Proper Allocation
Forecast 5 handles this simply by:
🔹Setting up Key Performance Indicators (KPIs) in the parent forecast with the relevant percentage of the overheads to be borne by each subsidiary. These are recorded in the parent “Memo” records in Forecast 5.
🔹The resulting product of the KPIs with the overheads are charged across from the parent company into each subsidiary via Forecast 5’s hotlinking function.
🔹As KPIs can be reported on a monthly basis in Forecast 5 P&L reports, the share of these group overheads both in budget and actual can be monitored at a group level to ensure fair review across the subsidiaries can take place.
🔹Upon preparation of consolidation forecasts, these intercompany charges are set off in the normal way as inter-company profits and losses to ensure no double counting of the group overhead.
🚀 Turn Overhead Allocation From Routine to Strategic
Don’t treat group admin as one big cost bucket to divide — make it a lever of insight. With Forecast 5 you gain the transparency, rigour and flexibility to align overheads with actual business dynamics. The outcome? Clean, reliable consolidated forecasts and empowered discussions around cost, profitability and investment.
