Oracle Purchasing supports encumbering or reserving funds for purchase requisitions and purchase orders. This feature helps in budgetary control. To meet business requirements, buyers can make changes to order documents for which funds have already been reserved (or encumbered). For example, buyers may have these requirements:
Make changes to order documents such as change the need date or order quantity of the approved document without unreserving the orders.
Increase or decrease the amount of approved order documents without reversing the fund.
The budget amount to be available in the Order document during amendment of the order and the budget amount should not be placed in the backing requisition during amendment.
Oracle Purchasing enables buyers to make modifications to encumbered documents without unreserving the documents. Using Buyer Work Center, buyers can:
Make changes to Quantity, Price and Need Date without unreserving the order document that is at the Approved Status.
Make incremental reservation of funds without going through the process of Unreserve, Modify and Re-reserve Process.
Without unreserving the document, buyers can:
Select the 'Change Amount' action in the purchase order line amount to modify the encumbrance factors: Quantity/Amount, Price, Tax, and Conversion Rate details. Accordingly, Purchasing adjusts the distribution lines with increase or decrease in quantity in encumbrance accounting. Similarly, buyer can select the 'Change Amount' action to edit the Amount to Encumber field to modify blanket purchase agreement (BPA).
Increase or decrease the amount in the encumbered purchase orders. Oracle Purchasing calculates the changed amount whether it is the increased or decreased amount for all the modified distributions during the next reserve action and the changed amount is posted to the encumbrance accounting entries. For example, if the price increase is from $100 to $130, then the changed amount posted to the encumbrance accounting entries is $30.
Oracle Purchasing provides the Change Amount action to help buyers to modify encumbered documents without unreserving the documents. For an encumbered purchase order, the Change Amount action is available at the header, line, shipment, pay items, and distribution levels. For a blanket purchase agreement, buyers can select the Change Amount action to modify attributes in the Controls tab region.
The following examples explain how as a buyer, you can modify an encumbered document and the result of each task during the process:
| Step | Task | Task Result |
|---|---|---|
| 1 | Create a standard purchase order with a supplier name and supplier site. | Order created is at the "Incomplete" status. |
| 2 | Specify line details for the order document and save changes. | Line details saved for the order. |
| 3 | Select the Action as "Manage Funds" and reserve the order document. | Purchase order document is set to Incomplete, Reserved. |
| 4 | Approve the document that is at the "Reserved and Incomplete" status. | The status of the document is set to Approved, Reserved. |
| 5 | Select the Action as "Change Amount" and click the Go button. | The purchase order is editable. Quantity, Price and Tax details can be changed. |
| 6 | Inrease/decrease the quantity/Price/Tax details of PO lines and save and reserve it. | The status is set to Requires Reapproval, Reserved. |
| 7 | Approve the purchase order. | The status is set to "Approved, Reserved". |
| Step | Task | Task Result |
|---|---|---|
| 1 | Create a standard purchase order with a supplier name and supplier site. | Order is at the "Incomplete" status. |
| 2 | Specify line details for the order document and save changes. | Line details saved for the order. |
| 3 | Select the Action as "Manage Funds" and reserve the order document. | Purchase Order Document is set to "Incomplete, Reserved". |
| 4 | Approve the document that is at the "Reserved and Incomplete" status. | The status is set to "Approved, Reserved |
| 5 | Receive the full quantity referring the order document. | The Purchase Order status is set to "Closed for Receiving" |
| 6 | Select the Action as "Change Amount" and click the Go button. | The Purchase Order should be editable. Quantity and Tax details can be changed. |
| 7 | Increase the quantity details of purchase order lines and save and reserve it. | The status is changed to Requires Reapproval, Reserved" |
| 8 | Approve the purchase order. | The status is Approved, Reserved. |
| Step | Task | Task Result |
|---|---|---|
| 1 | Create a standard purchase order with a supplier name and supplier site. | Order is at the "Incomplete" status. |
| 2 | Specify line details for the order document and save changes. | Line details saved for the order. |
| 3 | Select the Action as "Manage Funds" and reserve the order document. | Purchase Order document is as the "Incomplete, Reserved" status. |
| 4 | Approve the document that is at the "Reserved and Incomplete" status. | The status is set to Approved, Reserved |
| 5 | Receive the full quantity referring the order document | The order status is set as "Closed for Receiving". |
| 6 | Select the Action as "Change Amount" and click the Go button. | The Purchase Order is editable. Quantity and Tax details can be changed. |
| 7 | Increase the quantity details of order lines and save and reserve it. | The status is changed to Requires Reapproval, Reserved. |
| 8 | Approve the order and ensure that the GL Date that is available as part of distribution tab is within the closed period. | The status is set to "Approved, Reserved" with the GL Date taken as current date. |
Buyers can select the Change Amount action to modify details of an encumbered purchase order document. The Change Amount action for a purchase order is visible only if the document is encumbered. The following sections describe the details that you can modify for an encumbered purchase order document:
Header Details
When you select the Change Amount action for a purchase order, the following fields in the Header tab become editable:
Supplier
FOB
Supplier Site
Currency
Rate
Rate Type
Rate Date
Bill To Location
The Manage Funds action, which is used to unreserve the encumbered amount at document, line, schedule, and distribution level will not be visible, if the user selects the action as "Update" from the Purchase order entry page for an encumbered order document. Any modifications or changes to the document can be done by only taking the action as "Change Amount". Note that the Manage Funds option is available when a user clicks the Change Amount action and saves the Order, even if there have been any incremental changes or not. Until this stage, Oracle Purchasing does not perform calculations even if there are any incremental or decremental changes. Only during the Reserve action, the application determines the change quantity. If the change is 0, then nothing is posted to the Subledger accounting entries.
If you select "Manage Tax" action, then you change the tax information only for those reserved shipments for which the Change Amount action is selected.
Lines Details
When you select the Change Amount action for a purchase order, the following fields in the Lines tab become editable:
Quantity
UOM
Amount (Amount based lines)
Price
Schedules Details
When you select the Change Amount action for a purchase order, the following fields in the Schedules tab become editable:
Ship-to-Location
Need by Date
Quantity
Amount
Distribution Details
When you select the Change Amount action for a purchase order, the following fields in the Distributions tab become editable:
Quantity
GL Encumbered Date
Rate
Rate Date
The Unreserve action is not available in the Distribution Details page
Pay Item Details
You can select the Change Amount action to make modifications to Quantity, Price, and Tax related details of the order document.
Value% for Milestone pay-items in complex purchase order becomes editable.
For information on purchase orders in Buyer Work Center, see: Entering Purchase Order Information
When you select the Change Amount action for a blanket purchase agreement, the Amount to Encumber field in the Controls tab of the BPA document becomes editable without unreserving the committed amount.
The Manage Funds action, which is used for unreserving the encumbered amount will not be visible, if you select the Update action on the entry page of a BPA, which is encumbered. Any modifications or changes to the document can be done by only taking the Change Amount action.
For information on agreements in Buyer Work Center, see: Entering Agreements
The following table describes the fields that buyers can update at each stage of an encumbered document:
| Status of the Document | Attribute Changes | Changes that User can Make |
|---|---|---|
| Approved | Increase Quantity/Price | User can increase the distribution line amount or quantity. |
| Approved | Decrease Quantity/Price | User can increase the distribution line amount or quantity. |
| Closed for Receiving | Increase Quantity | User can increase the distribution line amount or quantity. User can either put the whole quantity in one distribution line or among various distribution lines. |
| Closed for Receiving | Decrease Quantity | User cannot decrease the distribution line quantity. The error message that quantity ordered cannot be less than quantity received will appear. |
| Closed | Increase Quantity | User can increase the distribution line amount or quantity. User can either put the whole quantity in one distribution line or among various distribution lines. |
| Closed | Decrease Quantity | User cannot decrease the distribution line quantity. Error message is "Quantity ordered cannot be less than quantity billed". |
The following rules apply when you modify encumbered documents in Buyer Work Center:
This functionality is available from OAF Buyer Worker Center application pages only and the changes are applicable to Purchase Order and Global Blanket Purchase Agreements. This enhancement is not available in Oracle Purchasing forms. The Forms functionality continues to work in the existing manner.
Oracle Purchasing does not consider the distributions that are modified using the Change Amount action in the Buyer Work Center page for unreserve action in the AutoCreate Documents window. The application will display the following warning message:" All distributions modified using the "Change Amount" action will not be unreserved".
Purchase requisitions are not re-reserved if there are changes to the order document.
The 'Manage Funds' option is not visible for a completely reserved purchase order or BPA document. Buyers must use the "Change Amount" action to modify purchase orders or blanket purchase agreements. Note that the Manage Funds option is available when a user clicks the Change Amount action and saves the Order, even if there have been any incremental changes or not. Until this stage, Oracle Purchasing does not perform calculations even if there are any incremental or decremental changes. Only during the Reserve action, the application determines the change quantity. If the change is 0, then nothing is posted to the subledger accounting entries.
If a buyer modifies a document using the Buyer Work Center Change Amount action, then the document cannot be unreserved from the Enter Purchase Order form if the change amount is not yet reserved.
When a buyer select the Change Amount action and modifies quantity or price in an encumbered document and later cancels the purchase order document, Oracle Purchasing displays a warning message.
The following section explains what happens when a cancellation is done for a modified purchase order that is encumbered:
A purchase order is created on 1st of January 2012 with Quantity as 10 and Price as $ 20 and the order is reserved and approved. In this case, the journal entries are posted with the GL Date as 1st January 2012 with the amount as $ 200. The status of the order document will be "Approved and Reserved". The buyer performs the Change Amount action on the order document. The status of the order document will remain as "Approved, Reserved" and Quantity/Price fields are opened up for editing. The buyer changes the Quantity in the order document from 10 to 20 and saves the document. The status of the order document is now "Requires Reapproval, Reserved". In such a scenario, when the buyer cancels the order document without reserving the incremental changes done to the order document, then the application will display a warning message and if the user can proceed with the cancellation. The changes will not be considered and the budget will be credited back with $ 200. The status of the order document will be updated as "Canceled" if the order has single line with single schedule and distribution and "Cancel" action is applied at line or schedule level. When there are partial receipts and invoices for the order document, then the cancellation will Unreserve the balance amount between ordered and invoiced/receipt amount and post it back in the budget.