Abstract: An expense allocation method utilizes matrix multiplication to transform a set of reciprocal or cascading allocation rules into a new set of one-step allocation rules. The new set of rules reallocates amounts directly to the ultimate destination without going through numerous intermediate levels of reallocation. By taking advantage of the specific structure of the matrix, and partitioning the matrix into four (4) subparts, the matrix multiplication process is greatly simplified. The expense allocation method can be easily and efficiently implemented on a computer system, including computers based upon parallel or vector architectures. This invention permits most allocation work to be done before the end of an accounting period, allowing end-of-period accounting work to be completed sooner. Alternatively, expenses can be allocated as they occur, rather than waiting until the end of a period.