What is differens between Budget & Encumbrance ?

This forum is to discuss different features/issues of Oracle Financials modules ( GL - General Ledger, AP - Accounts Payable, AR - Accounts Receivable, FA - Fixed Assets & CM - Cash Management ).
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k_amjad
Posts: 34
Joined: Sun Jul 06, 2008 8:39 am
Location: India

What is differens between Budget & Encumbrance ?

Post by k_amjad »

ANY one tell me

What is differens between Budget and Encumbrance

advance thanks
khan
Erikson
Posts: 49
Joined: Sun Sep 09, 2007 6:43 am
Location: India

Post by Erikson »

Budget is Funds Estimate
Encumbrance is Funds Reservation from Budget.

Example:
Budget = 1000
There is a Purchase Order for 400 which is not converted to Invoice, this 400 is the Encumbrance.

When the Purchase Order is converted to Invoice, then Encumbrance will become zero which will be moved to Actual.
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