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.
The Solution Detail is for search purposes only, please see attachment for more
information.
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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.
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Question 15 - What is the purge/rebuild/repost process?
Answer: The process consists of:
1. Running the Ledger (F43199) Purge (R43199P) to purge all of the P.O. Detail
Ledger (F43199) records with PA ledger type for the user-defined data
selection
2. Running the Create F43199 Commitment Audit Trail (R00993) to rebuild the
P.O. Detail Ledger (F43199) PA records from the existing Purchase Order
Detail (F4311) record
3. Running the Repost Committed Costs (R00932) to repost the Account
Balances (F0902) from the P.O. Detail Ledger (F43199) PA records.
Note: If some records were missing from the P.O. Detail Ledger (F43199), just
running the Create F43199 Commitment Audit Trail (R00993) will not create the
records. The user must follow all three steps above to add new records to the P.O.
Detail Ledger (F43199) file.
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Question 16 - Why are there still integrity problems after Purge/Rebuild/Repost?
Answer: Depending on the business process, the Commitment Integrity (R40910)
report may display variances after the Purge/Rebuild/Repost is run, even when there
are no true data integrity issues. The date range used when running of the
Commitment Integrity (R40910) report may give variances. This is not an integrity
issue, but is a display issue.
Data that has gaps in Fiscal Years can be the cause of this type of variance. Example:
Transactions against 1999 and then 2001, with no transactions in 2000. This can occur
in circumstances where legacy system data has been entered for past years but not
continuously thru to the present. If there are gaps in the data the year-end process
should be run for the interim years. The Encumbrance Rollover (R4317)will get the
correct beginning and closing balances for each fiscal year.
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Question 17 - When should Purge/Rebuild/Repost process occur?
Answer: As soon an integrity issue has been identified, waiting to run this process
can cause further corruption in the data. There are two cases that are critical indicators
that the process should be done.
1. If a transaction had occurred after a receipt or voucher but before the
post. (See Question # 1)
2. When the Commitment Integrity (R40910) report show a variance.
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Question 18 - When should Commitment Integrity (R40910) report be run?
Answer: The frequency of running the Commitment Integrity (R40910) report
depends a great deal on the number of transactions being processed. The client
manager should assist in determining how often this is necessary on a by company
basis. Running the Commitment Integrity (R40910) report in proof mode will not
effect data any but will be a good indicator of integrity issues in the database. The
earlier these issues are detected the faster a resolution can be found. Waiting to long
to fix integrity issues may result in further issues.
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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?
Answer: Changing more than one trigger field may have unpredictable results. To
correct integrity issues in commitments, perform the purge/rebuild/repost process.
Note: This is based on the current Purchase Order Detail (F4311). If a change is
made to a purchase order line, this original commit and decommit will be overwritten
during the rebuild process with the current Purchase Order Detail (F4311)
information.
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Question 20 - What is the difference between decommitment and relief of
commitment?
Answer: A decommitment occurs when an order line is cancelled or decreased. The
following is an example of the Purchase Order Detail (F4311) records before and after
a line is canceled.
After Purchase Order Entry (P4310):
AEXP
150
UORG
10
AOPN
150
UOPN
10
ARLV
0
URLV
0
AREC
0
UREC
0
UOPN
0
ARLV
150
URLV
10
AREC
0
UREC
0
After Decommitment:
AEXP
150
UORG
10
AOPN
0
A relief of a commitment occurs when the order is Received (P4312) and Posted
(R09801) or Vouchered (P0411/P4314) and Posted (R09801).
After Purchase Order Entry (P4310):
AEXP
150
UORG
10
AOPN
150
UOPN
10
ARLV
0
URLV
0
AREC
0
UREC
0
AOPN
0
UOPN
0
ARLV
150
URLV
10
AREC
150
UREC
10
After relief:
AEXP
150
UORG
10
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Question 21 - What happens to the amount committed if all quantity is received
but for a lesser amount per unit?
Answer: Units drive the amount of commitments relieved. If all units are relieved,
the entire amount committed will all be relieved.
Example:



Enter a purchase order for 10 units at $15 each for a total amount of $150.
At time of receipt, all 10 units were received at $11 each for a total received of
$110.
After posting the receipt the order will show an amount received (AREC) =
110 and an amount relieved (ARLV) = 150. No commitment will remain
open for the order.
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Question 22 - How can the history of changes to lines on an order be viewed?
Answer: Across the procurement module, the history of the line is not stored in the
Purchase Order Detail (F4311) file. Only the line as it currently exists is written in the
Purchase Order Detail (F4311) file. Possible results in budgeting caused by changes
to existing lines include:


Release Held Orders (P43070): Only the current amount to be released from
budget hold will be displayed, even if the line had been on hold multiple times
with different amounts, account number information, or G/L dates.
Commitments may need to be rebuilt if the line amount is reduced while the
order is on hold. Rebuilding the commitments, i.e., the PA Ledger Types in
the P.O. Detail Ledger (F43199) table, will occur based on current Purchase
Order Detail (F4311) lines only.
If a business case requires a more detailed audit trail, PeopleSoft recommends new
lines be added to the order, instead of changing existing lines. Functionality such as
change orders, base order protection or detail line protection based on line statuses
can be combined to restrict users from making changes.