Encumbrance/Commitment Processing
Encumbrances are a key piece of Budgetary Reporting and Government Finance to say in compliance with state and local law by providing up-to-date information on unrealized revenues and uncommitted balances of appropriations. Uncommitted balance of appropriations that have not yet resulted in expenditures must include commitments. As encumbrances are sometimes based on estimates, automated systems must be able to remove any disparity between the encumbrance and the appropriation once the expenditure is recorded.
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40/CT UDC table
Line Type Inventory Interface: A, B or C
Order Generation
Requisition
Cancel
Program Ids:
Commitment Relief Constants (P0026)
Encumbrance Inquiry (P40230A)
On-Line Budget Comparison (P09210A)
Post (R09801)
Commitment Integrity (R40910)
Purge Purchasing Ledger (F43199) (R43199P)
Rebuild Purchasing (PA) Ledger (R00993).
Post Encumbered Costs to Accounts (R00932)
Files Used:
Purchase Order Detail (F4311)
P.O. Detail Ledger (F43199) - Used to track encumbrances. Note: These are denoted with a Ledger Type (OLLT) of 'PA' or 'PU'.
Purchase Order Receiver (F43121)
Account Balances (F0902)
Commitment/Encumbrance FAQ
Table of Contents
Question 1 - Why are commitments incorrect after a receipt or a receipt reversal?
Question 2 - What happens to commitments if the order is received at an amount over the order amount?
Question 3 - What unit of measure will be used when posting with different unit of measures than the original order?
Question 4 - How are the commitment amounts handled when an order goes on budget hold?
Question 5 - Can financial commitments be made for stock based items?
Question 6 - Can the Unit Cost on an order be increased after post?
Question 7 - Do financial commitments work for Blanket and Quote Orders?
Question 8 - When generating a Purchase Order (OP) from a Quote (OQ), should the Quote (OQ) amounts to be included in commitments because the Release Open Quotations (P43360) processing option is set to leave the quantity/amount unchanged on the quote.
Question 9 - Why doesn’t setting the status manually to 999 cause the commitments to be cancelled?
Question 10 - EnterpriseOne 8.9 only: Do commitments function with configured items?
Question 11 - Will functionality to summarize journal entries work with financial commitments?
Question 12 - When adding a line at Voucher Match (P0411/P4314) is the commitment created at Voucher Match (P0411/P4314) or at General Ledger Post (R09801) for new line?
Question 13 - What is the difference between final and proof mode in the Commitment Integrity Report (R40910)?
Question 14 - Why does the Purge, Rebuild and Repost process delete all manually entered the PA ledger types in the P.O. Detail Ledger (F43199) records and any temporary the PA ledger types in the P.O. Detail Ledger (F43199) records created by running Commitment Integrity (R40910) in final mode?
Question 15 - What is the purge/rebuild/repost process?
Question 16 - Why are there still integrity problems after Purge/Rebuild/Repost?
Question 17 - When should Purge/Rebuild/Repost process occur?
Question 18 - When should Commitment Integrity (R40910) report be run?
Question 19 - If an integrity issue is seen on commitments when multiple simultaneous changes to a line have been made (e.g., change the amount and the account), how can that be corrected?
Question 20 - What is the difference between decommitment and relief of commitment?
Question 21 - What happens to the amount committed if all quantity is received but for a lesser amount per unit?
Question 22 - How can the history of changes to lines on an order be viewed?
Question 1 - Why are commitments incorrect after a receipt or a receipt reversal?
Answer: Users must post the receipt before further processing orders associated to a financial commitment. Not posting a receipt or receipt reversal will cause an inaccurate commitment or no commitment at all.
For example: A purchase order for $100.00 is created. First $20.00 is received and posted. Next $30.00 is received, posted and then reversed. The original purchase order line is canceled. Then the reversal is posted.
There will be five records written:
· $100 for the original order committed.
· $20 relieved for the order received and posted.
· $30 relieved for the order posted.
· -$50 committed for the canceled line.
· -$30 relieved for the reversed receipt.
The result would be $30 still committed after the line was canceled.
In this example the user should have posted the reversal before canceling the order. This would have given the following 5 correct records written.
· $100 for the original order committed.
· $20 relieved for the order received and posted.
· $30 relieved for the order posted.
· -$30 relieved for the reversed receipt.
· -$80 committed for the canceled line.
If purchase order is mistakenly canceled or changed before posting the reversals batch, Purge (R43199P), Rebuild (R00993), and Repost (R00932) process will need to be run to get the commitments in balance.
This has been changed in release 8.11 (SAR 6960811) so that an error will appear if users attempt to receive a line that was previously reversed and the batch for the reversal has not yet been posted.
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Question 2 - What happens to commitments if the order is received at an amount over the order amount?
Answer: If the amount to be relieved is greater than the amount on the order then entire amount on the order will be relieved. Over relieving an order will not result in an over relief of the commitment.
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Question 3 - What unit of measure will be used when posting with different unit of measures than the original order?
Answer: In order to commit units, first option on Branch/Plant Constants (P41001) must be activated to write units to journal entries.
XE and ERP 8.0: When dealing with commitments and multiple unit of measure transactions, the amount will always use the Transaction UOM for any relief or commitment.
EnterpriseOne 8.9 Only: When dealing with commitments and multiple unit of measure transactions, the amount will always be converted to the primary UOM before any relief or commitment for stock items.
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Question 4 - How are the commitment amounts handled when an order goes on budget hold?
Answer: Amounts that go on budget hold are not committed or decommitted until the hold is released. The design of budget holds and commitments relies on the Amount on Hold (ACHG) and Units on Hold (UCHG) fields.
For example, if an order is originally entered for $50 and does not go on hold, ACHG is zero. The $50 will be committed. Then, the amount in Purchase Order Entry (P4310) program is changed to $500, forcing the order to go on budget hold. The ACHG will be populated with $450, which is the net change to the order. This is the amount on hold, and ACHG is used in the held order release functionality for proper release and commitment. Once the hold is released, the $450 will be committed. If an order were changed multiple times, the ACHG is the only value that keeps track of the held order amount .
Note: Other types of Hold Codes do not affect commitments.
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Question 5 - Can financial commitments be made for stock based items?
Answer: Prior to EnterpriseOne 8.9, stock based commitments are not supported.
EnterpriseOne 8.9 Only: A new Inventory Interface of 'C' was added to enable the functionality of stocked based commitments. Use a line type with an inventory interface of 'C' to create the commitments for stocked items.
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Question 6 - Can the Unit Cost on an order be increased after post?
Answer: No, unit cost should not be increased on the order after post. There is no way to track the cost changes in history. There are downstream programs that rely on the Unit Cost staying consistent. The rebuild and repost will not ever balance given this type of change. It is recommended that the client not allow changes of this nature once part of the order line has been paid and posted. The client can set the Detail Line Protection processing option on the Default tab to the correct status to ensure that such changes are not allowed. To achieve the desired result, clients can close out the original line, and recommit a second line for the remaining quantity at the new unit cost.
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Question 7 - Do financial commitments work for Blanket and Quote Orders?
Answer: Financial commitments work with both blankets and quote orders, where the inventory interface on the line is account-based, (i.e., A or B, additionally in EnterpriseOne 8.9, C or D with a project). Make sure that the respective Document Type is set up in the 40/CT UDC table. When the blanket order or quote order is generated into the purchase order, the original commitment will be decommitted and a new commitment will be made for the purchase order. Note: Over generating the order will not cause a decommitment over remaining amount on the order.
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Question 8 - When generating a Purchase Order (OP) from a Quote (OQ), should the Quote (OQ) amounts to be included in commitments because the Release Open Quotations (P43360) processing option is set to leave the quantity/amount unchanged on the quote.
Answer: Release Open Quotations (P43360) program has a processing option to allow the quote to remain open, not be decremented, if an order is generated. We do not recommend that the quote document type (e.g. OQ) be included in the 40/CT UDC table, since any commitment would not be "transferred" to the generated order.
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Question 9 - Why doesn’t setting the status manually to 999 cause the commitments to be cancelled?
Answer: To cancel a line the user must use the system’s cancel functionality, such as the Cancel Line row exit functionality in Purchase Order Entry (P4310) program, the Cancel mode in Order Release (P43060) program, the Cancel option (9) in P.O. Receipts (P4312) program, the Cancel (7) or Close (9) option in Match Voucher to Open Receipts (P4314), to push that status to 999. There is a considerable amount of logic associated with the cancel functionality. Using the cancel functionality instead of manually entering it will avoid integrity issues.
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Question 10 - EnterpriseOne 8.9 only: Do commitments function with configured items?
Answer: Commitments with configurator must be on the parent item with an inventory interface of C. Commitments will not be made if account is on the component line item.
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Question 11 - Will functionality to summarize journal entries work with financial commitments?
Answer: No, summarize journal entries cannot be used in conjunction with financial commitments. The following processing options need to be set to turn off summarization.
PO Receipt (P4312) – Processing Option 12 on the Process Tab must be 'blank'.
Voucher Match (P4314) – Processing Options 1 and 2 on the Summarization tab must be 'blank'.
However, the Purge, Rebuild and Repost process will work to clean up the commitments if summarization is accidentally turned on.
Note: Do NOT turn off G/L interface - this could cause data integrity issues. No journal entries would be written so there would be NO tracking of commitments. Data integrity can occur if the G/L interface flag is turn off in the middle of a transaction, in which case there would be some records in the ledger for the transaction.
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Question 12 - When adding a line at Voucher Match (P0411/P4314) is the commitment created at Voucher Match (P0411/P4314) or at General Ledger Post (R09801) for new line?
Answer: The commitment is made at the time of Voucher Match (P0411/P4314). When the voucher is posted the commitment for the existing line and the new line will be relieved.
Note: The user must make sure processing option #1 on the New Order Line tab of Voucher Match (P4314) is set to ‘2’ to write create a new Purchase Order Detail (F4311) record. If a new order detail line is not written Purchase Order Detail (F4311) table, financial commitments will not be made.
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Question 13 - What is the difference between final and proof mode in the Commitment Integrity Report (R40910)?
Answer: Proof mode only performs and displays variances between the Purchase Order Detail (F4311) table and the PA ledger types in the P.O. Detail Ledger (F43199) records, and between the PA ledger types in the P.O. Detail Ledger (F43199) records and the Account Balances (F0902) records. No updates to tables are made.
In Final mode temporary records are written to the PA ledger types in the P.O. Detail Ledger (F43199) records and the Account Balances (F0902) tables in order to remove the variances.
PeopleSoft recommends that the Commitment Integrity (R40910) report always be run in proof mode. If the report shows variances, the recommended action is to run the Purge, Rebuild and Repost process.
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Question 14 - Why does the Purge, Rebuild and Repost process delete all manually entered the PA ledger types in the P.O. Detail Ledger (F43199) records and any temporary the PA ledger types in the P.O. Detail Ledger (F43199) records created by running Commitment Integrity (R40910) in final mode?
Answer: By purging the P.O. Detail Ledger (F43199), all PA records for the data selection orders lines will be deleted from P.O. Detail Ledger (F43199). The rebuild will create the new P.O. Detail Ledger (F43199) records from information in the Purchase Order Receiver (F43121) table and the Purchase Order Detail (F4311) table. If a P.O. Detail Ledger (F43199) was manually entered (into the table) there will be no record of the transaction in either the Purchase Order Receiver (F43121) or the Purchase Order Detail (F4311) tables. For this reason PeopleSoft strongly suggests that the Commitment Integrity (R40910) report never be used in final mode. Instead of manually creating PA ledger types in the P.O. Detail Ledger (F43199) table, changes should be made directly to the Purchase Order Detail (F4311) table through Purchase Order Entry (P4310) or the Purchase Order Receiver (F43121) through the P.O. Receipts (P4312) or Voucher Match (P0411/ P4314) programs.