---
sourceDocument: Xanadu Finance and Supply Chain
sourceDocumentLink: https://servicenow-prod.fluidtopics.net/r/xanadu/source-to-pay-operations

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    - xanadu

ft:locale :

    - en-US

ft:publication_title :

    - Xanadu Finance and Supply Chain

ft:clusterId :

    - stpop

bundleId :

    - stpop

workflow :

    - Creator


---

# Invoice cost allocation

# Invoice cost allocation {#ariaid-title1}

* Release version: Xanadu
* 
* Updated September 25, 2024
* 
* ![](https://www.servicenow.com/docs/portal-asset/ico-clock) 1 minute to read

Cost allocation is a process of identifying and allocating the costs across different cost centers or ledger accounts. Accounts Payable specialists allocate invoice line cost across multiple cost centers or ledger accounts for
accurate cost analysis and invoice processing.  
Accounts Payable specialists can allocate invoice cost in the following ways:

* Cost allocated at purchase order level-
  * When the invoice line is matched with the purchase order line and the invoice moves to PO matching completed status, then the cost allocation related to the purchase order line is copied to the invoice line. Any existing cost allocation record is overridden.
  * When you change the invoice type from PO to non-PO invoice, you're prompted with a warning message to confirm that updating the invoice type restarts invoice processing, closes any open exceptions and deletes any cost allocations associated with the invoice. Upon confirmation, the cost allocation record is deleted.
  {#invoice-line-cost-allocation__ul_ynk_dxy_ddc}
* Manual cost allocation- add cost allocation at invoice line level. For more information on manual cost allocation, see [Create invoice cost allocation manually](https://servicenow-prod.fluidtopics.net/zRMAAXTKrAz6pIPLWFZdMw "Manually allocate invoice line cost across multiple cost centers.").
{#invoice-line-cost-allocation__ul_gkm_mjy_ddc}

Accounts Payable specialists can allocate invoice line cost by:

* Quantity
* Quantity percentage
* Amount
* Amount percentage

{#invoice-line-cost-allocation__ul_a3s_fxn_vcc}  
For more information on cost allocation, see [Allocations](https://www.servicenow.com/docs/access?context=c_Allocations&version=xanadu&pubname=xanadu-it-business-management&ft:locale=en-US).

* You can create a new invoice line record and cost allocation record only when the invoice is in draft state and exception found state.
* During cost allocation, you must confirm that the total allocated quantity or amount across different cost centers or ledger accounts must be equal to the invoice line quantity or subtotal, or else invoice cost allocation exception occurs.
* Approval rules are configured by the approval engine that directs the invoices to cost center owners for approvals. For more information on approvals, see [Invoice approvals](https://servicenow-prod.fluidtopics.net/PG1sid3U56ZYMH8iYfsNQA "Invoices with the No exceptions found status are eligible for approval.").
* Invoices approved by cost center managers are pushed to ERP for posting. For more information on invoice outbound cost allocation, see [Outbound cost allocation staging table](https://servicenow-prod.fluidtopics.net/rr6SgaepoaTSY83h9FA08A "The outbound cost allocation [sn_spend_intg_outbound_invoice_cost_allocation] staging table stores important data about cost allocation information so that an ERP integrator can export this data to a third-party ERP system.").
{#invoice-line-cost-allocation__ul_wqj_rx4_vcc}
* **[Create invoice cost allocation manually](https://servicenow-prod.fluidtopics.net/zRMAAXTKrAz6pIPLWFZdMw)**   
  Manually allocate invoice line cost across multiple cost centers.