This section tells you how to set up budgetary control in Oracle Purchasing and Oracle Payables.

Define a Document Hierarchy

You must set up a document approval hierarchy in Oracle Purchasing before you can approve documents in Oracle Purchasing. A document approval hierarchy is not specifically required for budgetary control, but you cannot approve a document without some type of approval hierarchy. In some cases the approval options and document controls affect when you can reserve funds for a transaction. For example, if you are using requisition budgetary control, a requisition is not available to create a purchase order until it is fully approved (someone with enough monetary authority has approved it) and you have fully reserved funds for it.

Implement Internal Requisitioning

To requisition goods from inventory, you must implement internal requisitioning in Oracle Purchasing and Oracle Inventory.

Define Financials Encumbrance Options

Using the Define Financials Options window, you must enable encumbrance options in Oracle Payables or Oracle Purchasing:

• Use Requisition Encumbrance - Enable the check box for Oracle Purchasing to create encumbrances for requisitions automatically. If you encumber requisitions, you must also encumber purchase orders.

• Reserve at Completion - Enable the check box to allow requestors to reserve funds for requisitions before submitting them or obtaining approval of them.

• Use PO Encumbrance - Enable the check box for Oracle Purchasing to automatically create encumbrances for purchase orders.

  Attention: To create encumbrances for accounts in Purchasing or Payables, you must enable encumbrance accounting on accounts in the Define Budget Organizations window in General Ledger.

  Note: The encumbrance type needs to be associated to Journal Line Types in Subledger Accounting.

Other Sources

• Defining Journal Line Types, Oracle Subledger Accounting Implementation Guide.