9 Setting Up Purchase Order Commitments

A commitment is the recognition of a future obligation.

This chapter contains the following topics:

9.1 Setting Up Commitment Tracking

This section provides an overview of commitment tracking and discusses how to:

  • Set up commitments.

  • Set up commitment relief.

9.1.1 Understanding Commitment Tracking

You can set up commitment tracking to monitor purchasing obligations for a specific job or project. Each time you enter an order detail line, the system recognizes the amount on the line as a commitment and applies it to a job or project. You can review individual commitments and the total amount of outstanding commitments for a specific job or project.

Commitment tracking applies only to purchases for nonstock items and services. You must charge each order detail line to a general ledger account number. The number represents the job or project for which you are tracking commitments.

You must specify the order types for which the system is to track commitments in UDC table 40/CT. For example, if you want the system to track commitments on orders and requisitions, you must specify these order types.

For a detail line to be eligible for commitment tracking, it must have a line type with an inventory interface code of A, B, or C. These codes indicate that the line is charged directly to a general ledger account number.

Each time you enter a purchase order detail line for which commitment tracking is applicable, the system records the amount in the purchase amount (PA) ledger and the purchase unit (PU) ledger.

The PA ledger contains committed purchase amounts. The PU ledger contains committed purchase units.

When you receive goods or create a voucher for purchases, the system relieves commitment amounts by subtracting them from the total commitment amount for the job or project.

You set up commitment relief to determine whether the system relieves commitments automatically. When you specify automatic commitment relief and you are using a formal receiving process, the system relieves commitments when you post either receipts or vouchers to the general ledger. If you use an informal receiving process, the system relieves open commitments when you post vouchers to the general ledger.


Important:

When you are completing commitment relief, the Job Cost Projections field must be set to No if you are in a non-job cost environment. Note that the default value in the Job Cost Projections field is Yes.

9.1.2 Forms Used to Set Up Commitment Tracking

Form Name Form ID Navigation Usage
User Defined Codes W0004AI Commitment Setup/Rebuilds (G43B411), Commitment Document Types

On the Work With User Defined Codes form, click Add.

Encumbrance Setup/Rebuilds (G43C411), Encumbrance Document Types

On the Work With User Defined Codes form, click Add.

Subcontract Setup/Rebuild (G43D411), Commitment Document Types

On the Work With User Defined Codes form, click Add.

 Set up commitments.
Job Cost Constants W0026A Commitment Setup/Rebuilds (G43B411), Commitment Relief

On the Work with Job Cost Constants form, click Add.

Encumbrance Setup/Rebuilds (G43C411), Encumbrance Relief Constants

On the Work with Job Cost Constants form, click Add.

Subcontract Setup/Rebuild (G43D411), Commitment Relief Constants

On the Work with Job Cost Constants form, click Add.

 Set up commitment relief.

9.1.3 Setting Up Commitments

Access the User Defined Codes form.

Find UDC 40/CT.

9.1.4 Setting Up Commitment Relief

Access the Job Cost Constants form.

Commitment Relief

Enter a code that specifies whether the system automatically relieves open commitments when you post accounts payable vouchers to the general ledger.

These vouchers are related to noninventory purchase orders and contract progress payments. Values are:

Y: Automatically relieve open commitments.

N: Do not automatically relieve open commitments.