Overhead pools are generally used to allocate shared expenses that relate to two or more contracts. If an expense can be identified to a single contract, it is considered a direct cost and not an overhead expense. If an expense is not related to contract performance and instead is incurred to administer the company, it is considered to be a G&A expense.
GovBooks allows you to set up as many as 10 overhead pools with an allocation base selected in the Account Assignment screen.
Two-tier and three-tier allocation bases are supported. A two-tier allocation base excludes the associated fringe allocation from the base, whereas a three-tier allocation base includes the associated fringe allocation. You may create separate two-tier and three-tier pools simultaneously to meet your requirements.
If you use non-labor expenses as a base allocation for an overhead pool, for instance, travel expense as a means to allocate the cost of a travel department, you may do so by associating the desired general ledger accounts in the Account Assignment screen to create custom allocation pools.