Overview of Budgetary Control and Encumbrance Accounting

In Oracle ERP Cloud, Budgetary Control and Encumbrance accounting are two independent features.

Budgetary Control refers to a group of system options and the processes that's used to determine which transactions are subjected to validation against budgets and budget consumption to prevent overspending. Encumbrance accounting is an accounting practice that creates journal entries for requisitions and purchase orders that becomes expenditures when goods and services are invoiced or received.

Budgetary Control and Encumbrance accounting, at a high level, lets you perform these functions:

• Control real-time spending

• Generate General Ledger journals for requisitions and purchase orders