Encumbrance types let you classify and track expenditures according to the purchasing approval process. You can define encumbrance types in addition to the General Ledger standard encumbrance types or disable existing encumbrance types.
General Ledger has the following predefined encumbrance types:
- Commitment An encumbrance you record when you complete a purchase requisition.
- Obligation An encumbrance you record when you turn a requisition into a purchase order.
You can define as many additional encumbrance types as you want or change the names of the standard encumbrance types to reflect the terminology you use within your organization. You specify an encumbrance type when you enter an encumbrance and when you perform inquiries.
To define an encumbrance type
1. Navigate to the Encumbrance Types window.
2. Enter a name and description.
3. Enable the encumbrance type.
4. Save your work.