An Allowance can be specified to either Overcut (negative number will cut smaller) or Undercut (positive numbers will cut larger) the selected shape. If the Allowance = 0 then the toolpaths will machine to the exact size.
Last Pass Allowance
A separate allowance can be specified for the last pass. If this allowance is given then all but the last pass will be undercut by the specified allowance with the final pass being the only pass which cuts to size.
This is straight out of the user manual… basically what it is saying is that if your set an allowance your cut will be oversized or undersized by the amount you specify. SO if you make a square that is 1 inch by one inch and set an offset allowance of .125, your final product will be 1.125 inches.
Page 181 of the user guide which can be downloaded from the Vectric website and is very educational.
It sounds like what you are wanting is a two stage (two bit) operation. The allowance feature seems to be designed for use as a single bit operation…basically cutting over-sized or undersized until the final pass which is at desired dimension.