Encumbrance Management enables funds to be reserved from a budget when a purchase order is created. The creation of encumbrances reduces the risk of overspending and ensures that funds will be available when payments become due. This module is often used by non-profit organizations as a part of their budget and fund accounting.
Encumbrances and PO Commitments are very similar in form and function, but there are differences in how Dynamics GP handles them. The basic differences are:
Encumbrance Management tracks history in Dynamics GP, whereas PO Commitments does not
Encumbrance Management requires each open year to have a budget selected for encumbering transactions, whereas PO Commitments allow individual years to have a budget defined against them
Encumbrance Management does not integrate with Business Portal Requisition Management, but PO Commitments does
In this chapter we will take a look at the setup of Encumbrance Management, entering purchase orders,...