When does Negative encumbrance occur in Funds Inquiry screen?

1. Negative encumbrance will be shown in funds inquiry form; if any of the following conditions are met,
   
   
   When un-reserved amount > total encumbrance shown in funds inquiry for that period in which the Un-reserve action is taken 
   Scenario: If a purchasing document is reserved in one period and unreserved in different period by doing Cancel/Final close/Un-reserve action without consuming the funds (receipt and invoice not done), it will create negative encumbrance.

2. When received amount > total encumbrance shown in funds inquiry for that period in which the receipt is done 
   Scenario: If a Purchase Order is reserved in one period and received in another period, it will create a negative encumbrance hitting the current period's budget even though the PO has consumed the previous period's budget.  
   
   
   But this negative encumbrance does not increase the funds availability as the encumbrance is getting converted to actual.
   
   

3. When billed amount > total encumbrance shown in funds inquiry for that period in which the invoice is matched 
   Scenario: If a Purchase Order is set to accrue at period end is reserved in one period and billed in another period without performing receipt, it will create a negative encumbrance hitting the current period's budget even though the PO has consumed the previous period's budget . 
   
   
   But this negative encumbrance does not increase the funds availability as the encumbrance is getting converted to actual.

4. 
   
   When cancelled amount in Invoice > total encumbrance shown in Funds Inquiry for that period in which the invoice is canceled. 
   Scenario: If a non PO matched Invoice is validated in one period and canceled in different period without consuming the funds, it will create a negative encumbrance hitting the current period's budget even though the PO has consumed the previous period's budget. 
   
   
   Note: 
   
   
   Another scenario where negative encumbrance can happen is, 
   
   
   For Purchase orders set to accrue at period end, encumbrance reversal will get created at the time of generation of accrual entries by Receipt Accruals Period end program. If this encumbrance reversal is not reversed and posted in the period next to the one in which accrual is created and when invoice is accounted in that next period, it will create a negative encumbrance.
   
   
   

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Identifying sales order transactions that have been finally accounted but have no revenue recognition transactions

With the help of the following script, we can find out the sales order issues which got finally accounted, but have no revenue recognition transactions like COGS & DCOGS.

SELECT * FROM mtl_material_transactions

WHERE organization_id IN

(SELECT organization_id FROM gmf_organization_definitions

WHERE legal_entity_id = &Legal_entity_id)

AND TRUNC (transaction_date) > :p_from_date

AND transaction_date < :p_to_date

AND transaction_source_type_id = 2

AND transaction_action_id = 1

AND opm_costed_flag IS NULL

AND trx_source_line_id IN

(SELECT DISTINCT trx_source_line_id FROM mtl_material_transactions

WHERE organization_id IN

(SELECT organization_id FROM gmf_organization_definitions

WHERE legal_entity_id = &Legal_entity_id)

AND TRUNC (transaction_date) > :p_from_date

AND transaction_date < :p_to_date

AND transaction_source_type_id = 2

AND transaction_action_id = 1

AND opm_costed_flag IS NULL

MINUS

SELECT DISTINCT trx_source_line_id FROM mtl_material_transactions

WHERE organization_id IN

(SELECT organization_id FROM gmf_organization_definitions

WHERE legal_entity_id = &Legal_entity_id)

AND transaction_source_type_id = 2

AND transaction_action_id = 36

);

Parameters to be passed are – legal entity id, from date & to date.

To find legal entity id, execute the below query

Select * from gmf_legal_entities

To know about how to generate revenue recognition transactions click the following link

http://dj-oracleapps.blogspot.in/2013/07/cogs-recognition-and-concurrent.html 

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How to restrict users from changing unit selling price in an order line?

The Profile option “OM: Discounting Privileges” provides us an opportunity to restrict users from changing the price in sales orders.

 

The profile option has 4 values,

Full - Ability to apply any valid discount against an order or order line, as long as the order type of the order does not enforce list prices.

Non Overridable only - Ability to apply only non-overridable discounts against an order.

Unlimited - Ability to apply any valid discount against any order or order line, regardless of whether the order type of the order enforces list prices.

None - The user cannot update the selling price (view only access)

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You are not allowed to update warehouse because: This is an internal order

When the shipping warehouse in an internal sales order is manually changed, the following message appears

You are not allowed to update warehouse because:

This is an internal order.

This is an intended functionality.

This is due to a system processing constraint which prevents the update of warehouse field in internal orders.

This constraint is to keep the internal sales order and Internal requisition data in sync as currently there is no change management between OM & PO, once the data is transferred from PO to OM interface tables.

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How to reserve purchasing documents using override limit when there are insufficient funds?

As per standard functionality, purchasing documents will fail funds check when 'Absolute' funds check level is used if funds are insufficient. If you want to have override limit for reserving the purchasing documents, override amount has to be specified under Budgetary Control Group in GL – Budget – Define - Controls. 

Enter or Query the budgetary control group.

Enter a Source and Category combination. Sources identify the origin of journal entry transactions, such as Purchasing or Payables. Categories describe the purpose of journal entries, such as purchase requisitions or purchase orders. You can enter other to denote all sources or categories other than those you explicitly define.

Enter either Tolerance percent or Tolerance amount. If you are using Absolute budgetary control, it is advisable to enter an Override Amount.

Note:

If General Ledger cannot find the budgetary control rule for a source and category combination, it applies the default budgetary control rule.

After creating the budgetary control group you can assign it to users through “Budgetary control group” profile option.

 

To reserve the document using this override amount, the profile option “PO:Override Funds Reservation” should be set to Yes or the option “Use GL Override” available in document approval form should be enabled manually. Otherwise this override authority will not take into effect.

 

Now we will see a sample transaction of how this functionality works.

The budget – 80551 DERAKANE have funds available of only INR 484, 900 & we have set the override amount as INR 500, 000.

Raise a purchasing document by providing the budget a/c, reserve & approve. The document value is INR 495, 100 (amount higher than the funds available).

 

Without GL override functionality the document would have failed funds check but now you will receive a message stating “Your budgetary control action completed with warnings”. Click view results to find out more details.    

 

The excess amount (in this case INR 10, 200) will be shown as negative funds available.

 

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How to unreserve the purchasing document in the same period in which the document originally got reserved?

As per the functionality, when an unreserve action is taken in a purchasing document, encumbrance reversal will happen in current GL period considering the system date. If you want the reversal to happen in the same period in which the document originally got reserved, you can use the check box "Use Document GL Date to Unreserve" so that the reversal will happen based on GL date entered in PR/PO distributions. 

 

This check box would be available only when doing Unreserve/Cancel/Final close where you can manually enable it and get the encumbrance reversal in the same period in which it got created.

But if you perform a Reject action on the PO or Return the PR or delete the lines which are in Incomplete,Reserved status, this check box will not be available. In such cases, you may need to set the profile option “PO:Use Document GL to Unreserve” to Yes so that the encumbrance reversal will happen automatically in the same period in which it got created.

Note:

This unreserve action or the encumbrance reversal will happen based on the GL date of purchasing documents only when that past PO period and past GL period is in Open status. If that PO/GL period is already closed, then the reversal would happen only in the current period based on system date inspite of this profile option being set to Yes.

But if the profile option “PO:Validate GL period” is set to No, then the reversal would happen in that past period even if the GL period is closed provided the PO period is opened.

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