What Is the Definition of “revenue Allocation”?

GP Kidd/Blend Images/Getty Images

Revenue allocation is the distribution or division of total income, or revenue, in a business, corporate or government structure. It involves a complex process that entails how and where to allocate revenues in order to ensure the viability of departments and maintain the operating structure of the organization.

Typically, revenue allocation involves proper distribution of revenues across all areas of a country, business or organization. The amount allocated to a specific area depends on the performance, current condition and challenges of that particular area. The management or a special committee is responsible for identifying and assigning revenues to different areas of an organization.