# Flexible Allocation System

> Source: https://parallelworks.com/docs/organization-admin/billing/flexible-allocation-system

# Flexible Allocation System

The flexible allocation system replaces per-group allocations with shareable **allocations** (budgets) and user-owned **resource groups** that decide which allocation pays for each resource. This page explains what changes when you turn it on and how to set it up.

:::info Feature Preview

The flexible allocation system is in preview. Organizations stay on the legacy group allocation system until an admin enables it.

:::

## Legacy vs. flexible

| | Legacy group allocations | Flexible allocation system |
|---|---|---|
| Budget lives on | Each group (**Allocation Total** on the Groups page) | Allocations, created under **Monitor > Allocations** |
| What pays for a resource | The **Billing Group** picked on the resource | The allocation billed by the resource's **Resource Group** |
| Who can bill a budget | Members of the group | Anyone the allocation (and resource group) is shared with |
| Units | U.S. dollars | U.S. dollars, or custom units such as core-hours |
| Restricting what a budget pays for | Not available | **Allowed resource types** per allocation |
| Thresholds (notify / freeze / shutdown) | Applied to group allocations | Applied to allocations |
| Capacity reservations map to | A group | An allocation |
| Cost dashboard | [Cost](/docs/monitoring/costs), by group | [Allocation Cost Dashboard](/docs/monitoring/allocation-costs) (**Monitor > Reports**), by allocation |

Both pipelines keep importing cloud costs, so switching systems doesn't lose cost data.

## What changes for users

- Create forms show a required **Resource Group** field instead of **Billing Group**. Resources can't start without a resource group.
- Only cloud resources go into resource groups. Kubernetes namespaces, AI requests, and usage events bill allocations directly.
- A resource group's allocation can be changed at any time. Its allocation history keeps every cost on the allocation that was active when the cost was incurred.
- The **Resource Groups**, **Allocations**, and **Reports** pages appear in the sidebar. **Reports** opens the [Allocation Cost Dashboard](/docs/monitoring/allocation-costs), which charts each allocation's spend by type, user, or SKU, with real-time estimates.
- Enforcement comes from the allocation behind the resource's resource group: an allocation with no budget, or one past a freeze threshold, blocks new work for every resource group it funds.
- Session cost limits on clusters are checked against the resource group's allocation, and cannot exceed its budget.

See [Resource Groups & Allocations](/docs/resource-groups) for the user guide.

## What changes for admins

- The **Groups** page no longer shows **Allocation Used**, **Allocation Total**, or **Edit Allocations**. Budgets are managed on [Allocations](/docs/organization-admin/billing/allocations).
- [Reservations](/docs/organization-admin/cloud/reservations) map capacity reservation IDs to allocations instead of groups.
- Each cloud account can have a [Default Allocation](/docs/organization-admin/billing/cost-attribution#cloud-account-default-allocation) for charges that don't belong to any resource group.
- Deleting a group keeps the allocation that was created for it, because resource groups may still bill it.

## Enabling the flexible allocation system

From the **Organizations** list, select your organization. In the sidebar, under **Settings**, click **Policies**, and set **Flexible Allocation System** to **Flexible allocation system**.

The change applies immediately; users see the new forms without reloading. If a platform administrator has already set this policy at the platform level, the control is disabled for your organization. See [Organization Policies](/docs/organization-admin/settings/policies#flexible-allocation-system).

## Setup checklist

1. **Provision billing** on your cloud accounts if you haven't already, and on AWS activate the [cost allocation tags](/docs/organization-admin/billing/cost-attribution#aws-cost-allocation-tags) the platform uses. See [Provisioning Billing](/docs/organization-admin/cloud/cloud-accounts/billing/provisioning-billing).
2. **Create allocations** for your projects or budgets, and set each one's **Total**. See [Creating an allocation](/docs/organization-admin/billing/allocations#creating-an-allocation).
3. **Share allocations** with the groups that should bill them, at the **Use** level. Users can't create resource groups until at least one allocation is shared with them.
4. **Set thresholds** so users are notified, and optionally frozen or shut down, as allocations fill up. See [Allocation Thresholds](/docs/organization-admin/billing/thresholds).
5. **Set billing policies**: an [allocation start date](/docs/organization-admin/settings/policies#allocation-start-date) if your budgets reset yearly, and a [default billing username](/docs/organization-admin/settings/policies#default-billing-username) for untagged cloud costs.
6. **Set a Default Allocation** on each cloud account for charges that no resource group owns, such as support, tax, and untagged resources. See [Cost Attribution](/docs/organization-admin/billing/cost-attribution).
7. **Map capacity reservations** to allocations under **Cloud > Reservations**.
8. **Enable the policy.** Resources created under the legacy system usually already bill an auto-managed resource group. Any that don't show **Required to start** until their owner assigns one.

:::tip Existing groups

Organizations that used the legacy system already have an allocation per group, and resource groups marked **Auto-managed** that bill them. After you switch, these become ordinary allocations and resource groups: you can change their totals, share them more widely, change a resource group's allocation, or move resources to new resource groups.

:::