Understanding the Commitment Control Feature in PeopleSoft Payables

The Commitment Control feature is an optional feature of Oracle's PeopleSoft Financials, Enterprise Service Automation, and Supply Chain Management product lines that enables you to control commitments and expenditures automatically by checking them against predefined, authorized budgets. It is a subsystem of PeopleSoft General Ledger that you can activate for specific products and business units.

With the Commitment Control feature, the procure-to-pay cycle is populated with pre-encumbrances, encumbrances, and expenditures, all of which are tracked against a designated budget. Here is a high-level overview of the procure-to-pay cycle when using the Commitment Control feature:

1. When you generate a requisition, a pre-encumbrance is created in the budget records by the budget-checking process.

2. When a requisition becomes a purchase order, the Commitment Control feature relieves the pre-encumbrance and creates an encumbrance.

3. When the purchased goods or services are delivered and the purchase order becomes a voucher, the Commitment Control feature relieves the encumbrance and creates an expenditure.

The Commitment Control feature deducts each type of financial obligation from the available budget amount and tracks them by obligation type so that you can see how much money you have committed in pre-encumbrances, encumbrances, and expenditures.

The Commitment Control feature enables you to receive advance warning about all activities that might send controlled budgets over their approved amounts, and it enables you to stop any transactions that might go over budget. When transactions exceed budget amounts, the Commitment Control feature issues exceptions, which trigger workflow so that responsible parties can take corrective action. You can specify the degree of control and corrective action that you want to allow individual users to exercise over exceptions.

In PeopleSoft Payables, budget checking occurs at voucher creation, deletion, closing, and posting. You also perform budget checking after the payment posting process to check exchange rate realized gains or losses and earned or lost discounts. You can run budget checking for a single voucher during voucher entry or for many vouchers using a batch process. In any case, when you enable the Commitment Control feature for PeopleSoft Payables, you cannot pass a voucher to the general ledger until it has been budget-checked and posted unless you use the Period End Accrual Process. And you cannot post a voucher if it is over budget (although you can give certain users the security clearance to override budget-checking for over-budget vouchers).

Third party vouchers created to pay GST authority are excluded from Commitment Control because expenses will be logged for commitment control when processing GST Reverse Charge applicable related vouchers. GST Reverse Charge applicable regular vouchers are copied to third party vouchers to calculate the amount payable to GST authority and distribution lines that are copied are not applicable for commitment control. Budget Status is 'V' for India GST third party vouchers created to pay GST authority.