| # Purchase budget control You can use budget control to check purchase transactions against available budgets. For purchase requisitions, orders, and receipts, you can specify if, how, and when budget checks must be executed. Note To implement budget control, select the Budget Control check box in the Implemented Software Components (tccom0100s000) session. After the available budget is checked, budget transactions are generated in the Budget Transactions (tfbgc4500m000) session and budget balances are updated in the Budget Balances (tfbgc3500m000) session. These budget transactions are generated: Purchase requisitions Generates budget transactions of the Commitment type and updates the commitments budget balance. Purchase orders Generates budget transactions of the Encumbrance type and updates the encumbrance budget balance. Purchase receipts Generates budget transactions of the Receipt Expense type and updates the expense budget balance. If a budget check fails, a budget exception is applicable that must be resolved before the relevant purchase procedure can continue. Budget control master data Before purchase transactions can be checked against available budgets, you must set up the budgets. For more information, refer to: To set up budget control data To set up budget policy data To maintain budget amount details To check and update budgets for purchase requisitions, purchase orders, and purchase receipts, specify these fields in the Budget Control Policy (tfbgc0110m000) session:
Purchase Requisitions tab | Purchase Orders tab | Receipts tab
Check Available Budget | Check Available Budget | Check Available Budget
Requisition Check Available Budget upon | Purchase Order Check Available Budget upon | Receipts Budget Check Date
Requisition Budget Check Date | Purchase Order Budget Check Date | -
- | Purchase Order Include Tax | -
Budget account distribution (BAD) The available budget for a purchase requisition line, order line, or receipt line can only be checked if a correct budget account distribution (BAD) is linked to the line. The generated or defaulted BAD is used to link the purchase transaction to the applicable budget. The following are required to generate a BAD: Financial company The financial company is determined based on the requisition/order's Purchase Office field. If no purchase office is specified, LN cannot generate a BAD and check the budget. Ledger account and dimensions The ledger account and dimensions are determined based on the requisition/order line's General Ledger field. If no general ledger is specified on the line, a default ledger account and default dimensions are retrieved from the Mapping Scheme (tfgld4573m000) session. Budget check date The check date is defaulted from the Budget Control Policy (tfbgc0110m000) session for the relevant document type. Quantity A total quantity that must be equal to the line's ordered or received quantity. Therefore, the percentage in the BAD must be equal to 100. On the appropriate menu of the following sessions, click Budget Account Distribution to start the Budget Account Distribution (tcbgc1100m000) session, in which you can view and modify the generated BAD: Purchase Requisition Lines (tdpur2502m000) Prepare Conversion Purchase Requisition Lines (tdpur2502m100) Purchase Order Lines (tdpur4101m000) Purchase Order Line Details (tdpur4101m200) Purchase Receipts (tdpur4106m000) Note If, for example, a purchase requisition line is converted to a purchase order line, the BAD from the requisition line is defaulted and linked to the purchase order line. To check and update the available budget When the budget is checked for a line, the budget check can fail. In this case, the Budget Exception check box can be selected in the applicable session. If this check box is selected, the budget exception must be handled before you can continue with the purchase procedure. However, the Budget Exception check box is only selected if the following are applicable: Insufficient budget is available for the checked line. The When Budget is Exceeded field is set to Block in the Budget Control Policy (tfbgc0110m000) session. To resolve the budget exception, you can, for example, change the line amount or the BAD. You can then manually check the budget for lines that have the Budget Exception check box selected and have a correct BAD. To check the budget, click Check Budget on the appropriate menu of the following sessions: Purchase Requisition Lines (tdpur2502m000) Prepare Conversion Purchase Requisition Lines (tdpur2502m100) Purchase Order Lines (tdpur4101m000) Purchase Order Line Details (tdpur4101m200) Purchase Receipts (tdpur4106m000) Note If insufficient budget is available for a line and the When Budget is Exceeded field is set to: Continue, the budget transactions are written and the purchase procedure can continue. Warn, the user is notified about the budget shortage, but the budget transactions can be written and the purchase procedure can continue. Purchase requisition approval process When the last approver in the external approval process approves a requisition, the Spend Approved check box is selected on the requisition header. Irrespective of the value of the Requisition Check Available Budget upon field in the Budget Control Policy (tfbgc0110m000) session, the budget check is then automatically executed. If the Budget Exception check box is selected for one or more lines that are not rejected, the requisition cannot be approved. First the budget exception must be handled. To handle the budget exception, requisition lines with the Spend Approved check box selected can be modified, as well as the linked BAD. When the budget exceptions are handled for all lines and the budget check is done for all lines, the requisition status changes from Pending Approval to Approved. Budget exceptions for rejected lines can be ignored during approval. The commitments for these rejected lines are reversed during final approval. Purchase requisition conversion process Approved requisitions can be converted to a purchase order or request for quotation (RFQ). If a requisition line is converted to a purchase order, the requisition line's Commitment transaction is reversed when the purchase order line's Encumbrance transaction is booked. The moment of budget checking and encumbrance booking, is determined by the Purchase Order Check Available Budget upon field in the Budget Control Policy (tfbgc0110m000) session. If this field is set to Document Entry, the requisition commitment is reversed at the moment of purchase order line entry. If this field is set to Document Approval, the check and update are done at the moment of purchase order approval and, therefore, the requisition commitment is reversed when the purchase order line is approved for the first time. The commitment is also reversed when the generated purchase order line is deleted or canceled. Note The link between the requisition and the purchase order line is stored in the Linked Requisition Line Data (tdpur2502s000) and Purchase Order Line - Linked Information (tdpur4502s000) session. When a requisition line is converted to a purchase order line, the BAD is copied to the order line. If a requisition line is converted to an RFQ, the requisition line's Commitment transaction is not reversed, because budget transactions are not booked for RFQs. The reversal of the commitment booking is done when the generated RFQ is deleted or when it is converted to a purchase contract or price book. If the RFQ is converted to a purchase order, the requisition commitment is reversed when the generated purchase order line is created or approved, dependent on the Purchase Order Check Available Budget upon parameter, or when it is deleted or canceled. Note The link between the requisition and the RFQ is stored in the Linked Requisition Line Data (tdpur2502s000) and the link between the purchase order and the RFQ is stored in the Purchase Order Line - Linked Information (tdpur4502s000) and Linked Order Line Data (tdpur1502s000) sessions. When a purchase order line is generated from an RFQ line that was generated from a requisition line, the BAD of the requisition line is copied to the order line. The BAD can only be copied if the financial companies of the requisition and order are still the same. Converted requisitions can only be deleted if the requisition line's Commitment budget transaction was reversed by the linked purchase order line or RFQ line. Purchase backorders After a final receipt, the original purchase order line's Encumbrance transaction is reversed for the total line amount. If a backorder line is created, an Encumbrance transaction is booked for the backorder line amount. The original order line's BAD is copied to the backorder line. If the Combine Open Backorders check box is selected in the Purchase Order Types (tdpur0194m000) session, an existing open backorder line can be updated with a new backorder quantity. If this is the case, the following steps are completed: The existing back order line becomes unapproved. You must manually update the linked BAD with the additional quantity. The budget is checked. If no budget exception is applicable, the back order line is approved again. The budget is checked. Note For potential back orders, the budget is not checked or updated. Copied purchase orders The following are applicable to a copied purchase order line: If the line is copied from an actual purchase order line, the linked BAD is also copied. If the line is copied from a purchase history line, the BAD cannot be copied. If the new line's quantity differs from the quantity on the original order line, the BAD is not automatically updated. You must manually update the linked BAD. You can copy purchase order lines in the Copy Purchase Order (tdpur4201s000) session. Purchase return orders The following are applicable to a Return Inventory purchase order line: No budget check is executed for the return order line, only a budget balance update. If the return order line is linked to an original purchase order line or to an original purchase order receipt, the BAD of the original order line is copied to the return order line. When the purchase receipt is confirmed, the Encumbrance balance is decreased with the quantity of the return order line and the Receipt Expense balance is increased. As a result, a BAD must be copied or generated for the return order line. For a Return Rejects purchase order line, if the Inventory Disposition check box is selected in the Inventory Handling Parameters (whinh0100m000) session, the above actions are also applicable. However, if the Inventory Disposition check box is cleared, the budget balance is not updated when rejected goods are returned. The receipt expense is reversed at the moment of rejection. Purchase additional costs If lines with additional costs must be added to a purchase order, these additional cost lines are generated during the approval of the purchase order. The budget check and update for these additional cost lines is always executed at the moment of line entry. If the budget check fails, the Budget Exception check box is selected and the Approved check box is cleared for the line. If the purchase order is modified after approval, the additional costs can be recalculated. Dependent on the Recalculation of Additional Costs field in the Purchase Order Parameters (tdpur0100m400) session, additional costs are recalculated automatically, interactively, or not. When additional costs are recalculated, first the existing additional cost lines are deleted. Next, new cost lines are retrieved and added to the purchase order. For the newly added cost lines, the budget check is executed. Purchase receipts In the Purchase Receipts (tdpur4106m000) session, the following are applicable to a purchase receipt: The received quantity can be less than or more than the ordered quantity. Various purchase receipts can be specified for one purchase order line. The last receipt is the final receipt. The budget check and Receipt Expense update are performed when the receipt is confirmed. After confirmation, the receipt can still be corrected. Example Ordered quantity: 100
Received qty | Final receipt | Budget check | Budget update
--- | --- | --- | ---
60 | no | no, (60 is less than 100) | Encumbrance-60 Receipt Expense+60
20 | no | no, (60+20=80 is less than 100) | Encumbrance-20 Receipt Expense+20
10 | yes | no, (90 is less than 100) | Encumbrance-20 Receipt Expense+10
Received qty | Final receipt | Budget check | Budget update
--- | --- | --- | ---
120 | no | yes, for 120 pcs | Encumbrance-100 Receipt Expense+120
20 | yes | yes, for 140 pcs | Receipt Expense+20
Price and discount change after receipt If a receipt is registered for an order line, in the Change Price and Discounts after Receipt (tdpur4122m000) session, you can still change price and discounts for the purchase order line. When a price and discount change is saved, a budget check is executed. If the budget check fails, an error message is given and the change cannot be saved. Receipt corrections You can change the received quantity for a confirmed receipt, or make a final receipt non-final in the Correct Purchase Receipt (tdpur4106s100) session. When a receipt correction is saved, a budget check is executed, if required. If the budget check fails, an error message is given and the receipt correction cannot be saved. The following receipt corrections are available: Received quantity is decreased No budget check is required, because the received quantity is less than the original quantity. For a final receipt, the BAD must be updated with the new total quantity for the purchase order line. On the budget balance, the Receipt Expense is decreased with the quantity decrease. In case of a final receipt, the Encumbrance is not increased. In case of a non-final receipt, if the total received quantity is less than the ordered quantity, the Encumbrance is increased with the received quantity decrease. Received quantity is increased The BAD must be updated and a budget check must be executed. On the budget balance, the Receipt Expense is increased with the quantity increase. In case of a final receipt, the Encumbrance is not decreased. In case of a non-final receipt, if the total received quantity is less than the ordered quantity, the Encumbrance is decreased with the received quantity increase. Final receipt is made non-final No budget check is required, because the total quantity is still the same after correction. On the budget balance, the Receipt Expense does not change, but the Encumbrance is increased if the total received quantity is less than the ordered quantity. If the total received quantity is greater than or equal to the ordered quantity, no update is needed. Non-final receipt is made final No budget check is required, because the total quantity is still the same after correction. On the budget balance, the Receipt Expense does not change, but the Encumbrance is decreased if the total received quantity is less than the ordered quantity. If the total received quantity is greater than or equal to the ordered quantity, no update is needed. Related topics To set up budget control data To set up budget policy data To maintain budget amount details Purchase requisition approval process Purchase requisition conversion process Backorders - automatic confirmation Purchase return orders Additional costs on purchase orders Changing prices or discounts after receipt or consumption |