Encumbrance Types

Encumbrance is funds reserving against budget. When budgetary control is enabled in the set of books, GL automatically creates encumbrance entries for purchasing and payables.

Encubrances can also be created in GL by manual entry of Journals, MassAllocation, or jounal import. If you do not want to use automatic encumbrances, Budgetary Control need not be enabled in a set of books unless Budgetary controls are defined and implemented.

Encumbrances Types

GL has two predefined encumbrance types: Commitment and Obligation. The former implies that the funds have been reserved or committed for the transaction -for example a requisition. The later implies that a liability has been incurred and budgeted funds are permanently reduced ( for example a purchase).