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What is Encumbrance?

Discussion in 'Oracle Financials' started by symtom, Oct 7, 2012.

  1. symtom

    symtom Active Member

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    Forum Gurus,

    What is the use of Encumbrance in Purchasing or any other modules?Can any one explain the significance with an example?
     
  2. Bharat

    Bharat Community Moderator Forum Guru

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    Hi mate,

    In short, Encumbrance refers to "Reserving funds for documents (Purchase orders, requisitions etc)".

    for Encumbrance setup check Oracle Payables User guide Financial Options setup.

    pls check metalink notes complete Encumbrance Accounint Flow for different settings[ ID 386807.1].
    Encumbrance and Funds Inquiry - Setup and Usage [ID 389485.1]


    Please refer to the following for detail explanation.

    accounting-fundamentals-for-techies-encumbrance/

    encumbrance-budgetory-control-in-oracle

    purchasing-encumbrance-accounting

    general-ledger-encumbrance-accounting