If you purchase multiple items during a trip to the store, you may want to categorize each of these items individually. Alternatively, you might share certain expenses across your enterprises that you want accurately represented in your records.
In Ambrook, there are two ways to split a transaction:
Line Items: break a transaction into multiple line items that you can tag separately.
Percentages: assign a percentage to multiple categories or enterprises based on a percentage share of the cost or income.
Below is a video that walks through examples of each of these methods in Ambrook.
Below, we'll discuss when it's most useful to use one method or the other to split out your expenses.
Line Items
Line items are most useful in several instances:
When you know the exact dollar amount. When you know the dollar amount (for example, you have a receipt in hand), it's best to split into line items. You will notice that uploading a receipt will automatically create line items on the transaction.
For loan payments. You can find the principal and interest amount on the payment from your loan statement. This will allow you to tag the principal as a liability adjustment to the loan account, and the interest as an interest expense. Read more here.
When you need to split by both category and enterprise. If you need to split out a transaction by both category and enterprise, it's best to use line items. As an example, say you went to the local hardware store and bought both feed and a few tools. The feed is only for your pigs (your enterprise), but your tools you share with both your pigs and chickens. If you apply a percent on both the category and the enterprise, you wouldn't be able to represent that the feed should only apply to your pig enterprise. Instead, create two line items, one for the feed and one for the tools. You can then tag the feed to your pigs enterprise, and use a percent split for the tools to show the shared cost between your pigs and chickens.
Percentage Splits
Using percentage splits is most common for enterprises, where expenses are shared across multiple parts of your business. Figuring out a good way to allocate these expenses can help you get better insights on your enterprise analysis. There are a few methodologies you can consider for splitting these expenses:
Use approximations. You might have a general sense of how much each of your enterprises uses - this is a really great place to start, and then as you learn the Ambrook system, you might consider finding a more quantitative way to do it.
As a percent of revenue. If you're splitting out income between sales categories, or breaking out credit card fees from your Point of Sale, you might use the revenue each enterprise contributes as a way to split the expense.
By space or count. If you know how much space a certain enterprise takes up (such as acreage for a farming enterprise), you can use these splits to determine the right percentage. Similarly, if you know how many a certain enterprise used (for example, how many miles you traveled for each enterprise to split fuel costs), you can use that to determine the percentages.
Start with what is simplest, and you can always get more specific from there. Percentages allow you to take advantage of automations for certain expense types and are useful for ensuring that your enterprise tags are up to date.
Implementing Splits
To add line items, either add them by clicking on the three dots next to the transaction, or by clicking on the transaction and selecting "Add Line Items".
To split by percentage, select split after choosing your first category. This will allow you to select multiple enterprises or categories. It will default to equally splitting the transaction, but you can adjust the percentages to your desired splits.
