How Budgetary Control and Spend Authorizations Work Together

If your organization requires the ability to track and control expenditures against a budget, you can enable Oracle Budgetary Control. This is especially helpful for public sector and commercial organizations that require:

Visibility into budget commitments and expenditures
Adherence to legal requirements
Control of excessive spending
Approval of anticipated expenses
Validation of anticipated expenses against a specific budget for an applicable ledger and business unit

To support this requirement, Expenses integrates with Budgetary Control. The process begins when an employee creates and submits a spend authorization for approval. The approving manager checks whether funds are available against the budget and optionally views the results. When the manager approves the spend authorization, funds are automatically reserved. After the employee incurs expenses, he or she creates an expense report and attaches the approved spend authorization estimated lines to it. After the manager approves the expense report, it's processed for reimbursement, which results in a payment request. The payment request generates an invoice, which is validated, and subsequently the employee or the card issuer is paid.

This diagram shows how the spend authorization and the budgetary control process work together to control excessive spending.

Effects of Enabling Budgetary Control

When your company enables budgetary control, these actions are available:

When an employee submits a spend authorization for approval, Budgetary Control evaluates whether funds are available for the anticipated expenses for a specific business unit, ledger, and budget date.
The status of the funds check is visible to the approving manager.
The approving manager can recheck funds and view results directly from the authorization approval notification.
After the manager approves a spend authorization, funds are reserved automatically.
After the employee incurs expenses, he or she can associate the approved spend authorization with the actual expenses and submit the expense report for approval.