Chargebacks › About Chargebacks

About Chargebacks

Chargebacks represent the inter-account transfers of investment or service costs to departments. Chargebacks debit (or charge) departments for their shared cost of investments or services that were delivered during a specified period. A chargeback represents the debit-side of an accounting system. A corresponding credit is issued to departments that provide the investment or service crediting them for the work they completed during a specified period.

To process chargeback transactions, 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 setup by the investment or service manager to charge departments for the cost of work delivered.
• Standard Rules. A general, global debit rule setup by the finance manager.
• Credit Rules. A rule to credit departments for the resources that perform the work. The finance manager sets up credit rules.
• Overhead Rules. A rule that determines which GL accounts are debited for any overhead costs. The finance manager sets up overhead rules.

More information:

Standard Rules

Credit Rules

Overhead Rules