Question:
How can a purchase order be removed from an encumbrance in Fund accounting?
 

Answer:

In order to remove the Purchase Order from an encumbrance the Purchase Order must be received and invoiced.

Resolution

Purchase orders post to the encumbrance accounts and are then removed when the purchase order is received and invoiced.

The encumbrance account is the account that is debited when a purchase order is issued if the Post Encumber check box is selected on the General tab of Purchase Order, module preferences. This enables you to track funds that have been encumbered by outstanding purchase orders. Select the Post Encumber check box in options, module preferences to post dollars encumbered by a purchase order at the time the purchase order is issued. You must be integrated to General Ledger to use this option.

Leave the post encumber box unchecked to post dollars encumbered by a purchase order at the time the goods are received and invoiced. If this
box is unchecked, printing the edit report, posting, and batch processing are not available from the Enter POs menu.

If the post encumber box is selected, the purchase order is posted to the Encumbered and Reserved Accounts specified on the GL Accounts Tab in module preferences. The Reserved Account is a liability account which is credited when the purchase order is issued. The Encumbered Account is an
expense account that gets the debit entry. When the goods or services are received and invoiced, the Encumbered Account is
credited and the appropriate expense account is debited. The Reserved Account is debited and the appropriate payable account
credited.

More Information

Please review the Fund Accounting users guide for more information on encumbrances. The Fund Accounting users guide is installable from the Reporting to the MAX including Point of Sale and Non-profit Versions CD.