Reserving Funds for a Purchase Order
Purchasing attempts to reserve funds for a purchase order when you take an action such as Reserve or Approve and Reserve. If you create a purchase order from one or more requisitions and then reserve funds for the purchase order, Purchasing creates reversing entries for the encumbrances associated with the selected requisition lines.
Reservation Options
If a purchase order distribution fails funds reservation, you can take different actions depending on how you created the purchase order.
1. If a purchase order was created from a requisition using the AutoCreate Purchase Orders window, you can do one or more of the following:
- Change the quantity of items on the purchase order line containing the account
- Transfer funds (increase the budgeted amount for the account) from other accounts in the same budget organization
- Increase the budget amount for the account on the purchase order distribution
- Change the unit price on the purchase order line, if all the distributions corresponding to that line fail funds reservation
2. If a purchase order was created from a paper requisition using the Enter Purchase Orders window, or is a release of a blanket purchase agreement or planned purchase order, then, in addition to the above options, you can also do the following:
- Delete the distributions failing funds reservation
- Change the account of the distribution failing funds reservation to one that has adequate funds
Purchasing does not approve a purchase order until you have fully reserved funds for it and fully approved it. Purchasing also notifies the buyer who created it that the purchase order failed approval because of insufficient funds.
