Encumbrance tracking
Sparkrock ERP tracks encumbrances on the following levels:
Current: Sparkrock ERP calculates encumbrances at the time of the release of the purchase order. Sparkrock ERP adjusts the calculation with invoicing.
Detailed: Sparkrock ERP calculates encumbrances for a specific date. This level requires that Sparkrock ERP be set up to keep historical information about changes in the encumbrance entries.
When detailed tracking is turned on, in the following situations, Sparkrock ERP posts entries to the encumbrance ledger:
- Purchase orders are released or reopened.
- Purchase invoices are posted.
- The effective date of the encumbrance entries are updated.
G/L Accounts for Encumbrances
When calculating encumbrances, by default, Sparkrock ERP includes all G/L accounts that have Account Type set to Posting.
Reopened purchase orders
When a purchase order is reopened, Sparkrock ERP removes the encumbrance entries.
Historical detailed commitment entries for reopened purchase orders can have different effective dates and therefore may appear in reports.
Purchase orders
When a purchase order is invoiced, Sparkrock ERP reduces the encumbrance entries.
The posting of a purchase invoice while a purchase order is open does not generate a negative entry in the detailed encumbrance entries. Sparkrock ERP reflects the posting in a single detailed encumbrance entry when the purchase order is released. After you start receiving and invoicing, Sparkrock ERP automatically changes the purchase order status to Released. Sparkrock ERP creates an encumbrance entry for the whole purchase order, and for each purchase invoice, Sparkrock ERP creates a negative entry.
Dimensions
Sparkrock ERP includes all dimension on a purchase order line in the encumbrance entry.
Tax expense
When calculating encumbrances, Sparkrock ERP always uses the amount including the tax expense.
Encumbrances workflow
The following tables includes information about the encumbrance workflow.
| Document Type | Action | Result |
|---|---|---|
| Purchase Order | Release | Sparkrock ERP creates an encumbrance. |
| Purchase Order | Reopen | Sparkrock ERP clears the encumbrance balance. |
| Purchase Order | Release | On a subsequent release of a purchase order, Sparkrock ERP updates the encumbrance balance. |
| Purchase Invoice | Post | Sparkrock ERP credits the encumbrance balance with the purchase invoice amount that is posted. Sparkrock ERP only credits up the encumbrance amount. There are no negative encumbrances. |
| Purchase Order | Post | Sparkrock ERP credits the encumbrance balance with the purchase order amount that is posted. Sparkrock ERP only credits up the encumbrance amount. There are no negative encumbrances. |
| Purchase Order | Close | Sparkrock ERP does not create a detailed encumbrance ledger entry. |
| Purchase Order | Delete | Sparkrock ERP credits the encumbrance balance with the balance of the purchase order. |
Workflow example
| Document Type | Action | Amount Including Tax Expense of the Purchase Order (Amount of the Purchase Order Lines) | Amount Including Tax Expense on the Encumbrance Ledger Entry | Additional Information |
|---|---|---|---|---|
| Purchase Order | Release | $1,000 | $1,000 | |
| Purchase Invoice | Post | $200 | -$200 | Encumbrance balance is always greater than or equal to 0. |
| Purchase Order | Reopen | $1,000 | -$800 | |
| Purchase Invoice | Post | $300 | $0 | There is no entry in the detailed encumbrance ledger. |
| Purchase Order | Release | $1,000 | $500 | The $500 amount is based on the quantity not invoiced, for example, $1,000 - $200 - $300. |
| Purchase Order | Reopen | $1,000 | -$500 | |
| Purchase Order | Change | $200 | Sparkrock ERP updates the quantity, the unit cost, or tax. | |
| Purchase Order | Release | $1,200 | $700 |
Dates
The following table includes information about the different types of dates that affect encumbrance tracking.
| Date | Purchase Order | Purchase Invoice | Additional Information |
|---|---|---|---|
| Encumbrance Date | Purchase Line Encumbrance Date | Posted Purchase Invoice Posting Date | The encumbrance date represents the date on which the encumbrance is due from the purchase order. |
| Effective Date | The date of the action that triggered the encumbrance entry. | Posted Purchase Invoice Posting Date | The effective date represents the period in which the encumbrance entry must be considered. |
| Entry Date | The date of the action that triggered the encumbrance entry. | The entry date represents the date when the entry occurred. |
Related information
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