Using Partial and Final Liquidation
If you are using commitment control, you can specify partial or final liquidation of a requisition when it is sourced to a purchase order. When you create or modify a purchase order, you can designate that the purchase order is final, prompting the system to liquidate the preceding requisition. You can make your purchase order the final document to be affected by the preceding requisition, for less money than you originally authorized. You can also reverse the finalization of the document.
In PeopleSoft Purchasing, you can perform partial or final liquidations where the successor transaction references and liquidates its predecessor, including:
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Requisition to purchase order.
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Purchase order to payment voucher.
The system fully liquidates document lines automatically upon completion of the subsequent transaction when you designate the transaction as final. The system then creates the appropriate accounting entries to relieve outstanding pre-encumbrances and encumbrances, performing the reversing entry according to the document type and entry event of the referenced transaction.
Using partial and final liquidation, you can:
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Liquidate requisition or purchase order lines and relieve the outstanding pre-encumbrance and encumbrance from the budget ledger.
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Create the appropriate accounting transactions in the budget to relieve outstanding pre-encumbrances and encumbrances as applicable.
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Perform the correct accounting and available (open) amount calculations for modifications and cancellations of predecessor or successor transactions.
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Process final liquidations at the schedule line level of transactions, that is, orders can have some lines open while others are closed.
The corresponding voucher lines that reference (liquidate) the lines determine this.
At times, multiple transactions reference the same predecessor. If two payment vouchers for two invoices of 500.00 USD each are associated to the same 1000.00 USD purchase order, only the second payment voucher is considered final. The first 500.00 USD payment voucher is considered partial, because an additional 500.00 USD encumbrance remains outstanding. If the first 500.00 USD actually represents the last expected action against the order, you can designate the voucher as final for less and relieve the entire 1000.00 USD encumbrance.
Partial and Final Liquidation Example
For example, suppose that you create a requisition for 200.00 USD and run budget checking. The system shows an increase of 200.00 USD to the existing pre-encumbrance amount of 40.00 USD.
| Ledger | Amount |
|---|---|
|
Budget |
5,000,000.00 USD |
|
Expense |
0.00 USD |
|
Encumbrance |
1000.00 USD |
|
Pre-encumbrance |
240.00 USD |
Then create a purchase order that references this requisition for 165.00 USD. When you run budget checking, the pre-encumbrance decreases and the encumbrance increases by 165.00 USD.
| Ledger | Amount |
|---|---|
|
Budget |
5,000,000.00 USD |
|
Expense |
0.00 USD |
|
Encumbrance |
1165.00 USD |
|
Pre-encumbrance |
75.00 USD |
Create another purchase order that references this requisition for 25.00 USD, finalize the purchase order and run budget checking. The total for all purchase orders is 190.00 USD, but the pre-encumbrance is liquidated with the full requisition amount of 200.00 USD. The pre-encumbrance decreases and the encumbrance increases by 25.00 USD.
| Ledger | Amount |
|---|---|
|
Budget |
5,000,000.00 USD |
|
Expense |
0.00 USD |
|
Encumbrance |
1250.00 USD |
|
Pre-encumbrance |
40.00 USD |
To liquidate a requisition for an amount lower than the original:
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Reduce the quantity or price total on the purchase order to the correct amount
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Click the Finalize Document button.
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Save the purchase order.
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After approving the revised purchase order, run budget checking to confirm the correction.