Financial Commitments

If you use the JD Edwards EnterpriseOne Job Cost system, you can create financial commitments for project tasks. A financial commitment represents recognition of a future payment obligation. Creating financial commitments enables you to:

Review the budget and remaining amounts.
By comparing the projected final cost to the actual cost-to-date, you can calculate a percentage complete. This percentage complete facilitates profit recognition because it enables you to avoid variances in the costs that you incur and in the revenue that you record for different periods.
Calculate final project costs.
Facilitate the processing of change orders.
Provide information as a basis for recouping losses that are associated with committed inventory when a project is canceled.

In addition to creating encumbrances for purchasing, you can create financial commitments for stock components on manufacturing work orders. The financial commitment occurs when the material is hard-committed. You do not create commitments for labor costs that are associated with work orders.

Note: To perform financial commitments for manufacturing work orders, you must set up AAI 3120 (Work in Process) for use in projects in the Project Accounting UDC table (31P/AI) and include the manufacturing work order in the Commitment Document Types UDC table (40/CT).

When you attach the parts list and routing to the work order either interactively or by running the Order Processing program, the system creates a financial commitment for a work order by calculating the total amount that is committed for inventory. It updates the PA/PU ledger amounts in the related record in the F0902 table and enters the transaction in the F43199 table. It also maintains the original and remaining committed amounts in the F4801T table.

Note: To avoid doubling financial commitments for subassembly items, the system removes committed amounts from the parent work order when you attach a parts list to the subassembly work order. When you attach components to a parent work order, the system determines whether subassembly work orders already exist for the components. In this case, their cost is included in the calculation of the total financial commitment.

Financial commitments for stock components on manufacturing work orders are relieved when you complete work orders. The system decommits financial commitments when the issue transactions for project-related work orders are posted, and it updates the committed amount in the F4801T table, the F0902 table, and the F43199 table. Then, the system posts actual amounts with ledger type AA.

Run the Commitment Integrity report (R40910) to determine whether the open order amounts match the committed amounts and the amounts in the F0902 table. If these amounts do not match, you can purge financial commitments and then create an audit trail using the Commitment Rebuild program (R31P993).

When needed, you can use the Post Committed Costs to Jobs program (R00932) to repost PA ledger commitments in the F0902 table, including values from manufacturing-related records in the F43199 table.

When you create a purchase order for a component on a manufacturing work order, the system relieves the financial commitment for the work order. From this point forward, the financial commitment is created and maintained within the JD Edwards EnterpriseOne Procurement system.

When you post material transactions to the general ledger by running the Post General Journal program (R09801), the system relieves the related financial commitments. When the work order number in the subledger field in the Account Ledger table (F0911) identifies the work order as a project work order, the system relieves the financial commitment for the work order. Relieving the financial commitment updates the F4801T table, the F0902 table, and the F43199 table.

If you must roll over financial commitments that still exist at the end of a fiscal period, you can use the Encumbrance Rollover program (R4317) to relieve committed lines on purchase orders and work orders for the previous year and recommit them with the general ledger date for the current year. You must set a processing option for the program to include financial commitments for manufacturing work orders.