Chargeback Administration › About Chargebacks

About Chargebacks

Chargebacks are the inter-account transfers of costs, representing the debit-side of an accounting system. Chargebacks charge departments for their shared cost of investments and services they consumed during a specific time period.

Credits represent the credit-side of an accounting system and give financial credit to departments for work they delivered during a specified period of time.

To process chargeback transactions, you must set up general ledger accounts and create chargeback rules, such as standard debit rules, credit rules, or overhead rules. The rules you create depend on the type of chargeback processing you want to implement.

Rules drive chargebacks and credits and determine the shared costs of investments and services. A chargeback rule is a set of unique properties that are matched to transactions when debiting and crediting departments. Chargeback rules are composed of:

• Header containing a unique set of properties that are matched with transactions during processing.
• General ledger (GL) account - department combinations to identify departments charged or credited for specified investments or services.
• Allocations to determine the distribution of shared costs or credits to departments.

The following debit and credit rules are supported:

• Debit Rules. An investment-specific rule set up by the investment or service manager to charge departments for the cost of work delivered.

  Note: See the Financial Management User Guide for more information.

• Standard Rules. A general, global debit rule set up by the finance manager.
• Credit Rules. A rule to credit departments for the resources that perform the work. Credit rules are set up by the finance manager.
• Overhead Rules. A rule that determines which GL accounts are debited for any overhead costs. Overhead rules are set up by the finance manager.

Note: See the Financial Management User Guide for more information.

More information:

Standard Rule Headers

Credit Rule Headers

Overhead Rules