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Update the carry-forward budget after reductions in purchase orders and invoices

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Important

Some or all of the functionality noted in this article is available as part of a preview release. The content and the functionality are subject to change. For more information about preview releases, see Service update availability.

This article describes how to control what happens to the carry-forward budget when purchase orders are canceled or reduced, and when invoices are reduced.

For information about how purchase orders are processed at year-end, see Process purchase orders at year-end.

Turn carry-forward budget reductions for invoice variances on or off

The carry-forward budget can always be updated when a purchase order is canceled or reduced. However, if you want to update the carry-forward budget when an invoice is reduced, you must turn on the Reduce carry-forward budget when an invoice against a purchase order is reduced with a variance feature. This feature can be found in the Feature management workspace. For more information, see Feature management.

Purchase order reductions and cancellations

Regardless of whether the Reduce carry-forward budget when an invoice against a purchase order is reduced with a variance feature is turned on, the carry-forward budget will be updated when a qualifying purchase order is canceled or reduced. You can set each general ledger fund to respond in one of the following ways:

  • Preserve the carry-forward budget as it was created.
  • Automatically adjust the carry-forward budget to remove the canceled or reduced amount.

Only purchase order lines that have distributions that include a fund are available for automatic budget adjustment. The automatic budget adjustment occurs when the purchase order is finalized or a purchase order reduction is confirmed.

Invoice reductions

When the Reduce carry-forward budget when an invoice against a purchase order is reduced with a variance feature is turned on, you can specify whether each fund should reduce the carry-forward budget when an invoice is reduced, in addition to when a purchase order is reduced or canceled. The invoice must be for a purchase order that has carry-forward budget. Reductions include price variances, charge variances, and tax variances. When a carry-forward purchase order is reduced during invoicing, a variance is created. When the invoice is posted, the purchase order encumbrance will be reduced by the amount of the variance. The feature will also create the automatic budget adjustment for the amount of the variance.

When the Reduce carry-forward budget when an invoice against a purchase order is reduced with a variance feature is turned off, the carry-forward budget isn't reduced in this scenario. Therefore, the remaining carry-forward budget for the amount of the variance is left behind.

Configure the carry-forward budget options for each fund

Follow these steps for each general ledger fund that should be able to reduce carry-forward budget when a purchase order or invoice is reduced.

  1. Go to General ledger > Chart of accounts > Funds > Funds.

  2. Select the fund that you want to set up.

  3. Under Purchase order year-end process, select the Override selected year-end option option.

  4. Under Carry-forward budget status, set the Reinstate the budget when a carry-forward purchase order is canceled or reduced field as needed. The settings have slightly different effects, depending on whether the Reduce carry-forward budget when an invoice against a purchase order is reduced with a variance feature is on.

    • When the feature is turned off, the system reacts only to canceled or reduced purchase orders. The option settings work in the following way:

      • No – When purchase orders have been canceled or reduced, a budget register entry is created for the remaining balance.
      • Yes – Purchase orders can be canceled or reduced, but doesn't create a budget register entry. The carry-forward budget remains available for consumption by other documents.

    • When the feature is turned on, the system reacts both to invoice variances and to canceled or reduced purchase orders. The option settings work in the following way:

      • No – For invoice variances, the system creates a budget register entry against the purchase order for the variance reduction amount. For canceled or reduced purchase orders, this setting has the same effect that it has when the feature is turned off.
      • Yes – For invoice variances, the system allows the invoice reduction but doesn't create a budget register entry. The carry-forward budget remains available for consumption by other documents. For canceled or reduced purchase orders, this setting has the same effect that it has when the feature is turned off.

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