Budgetary Control

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Oracle Financials provides a variety of powerful, flexible, easy-to-use budgetary control capabilities to control your expenses and prevent you from spending beyond your budgets.  Oracle Payables, Oracle General Ledger, and Oracle Purchasing are fully integrated to provide a complete solution to your budgetary control needs.
Business Needs
With Oracle Financials you can:
•        Ensure that your actual and planned expenditures do not exceed your available funds
•        Check funds on-line for all transactions which affect available funds, at any level of a transaction
•        Update your funds available balances immediately when you reserve funds for a requisition, purchase order, invoice, or journal entry
•        Choose the degree of budgetary control you want over your expenditures by account or spending document type
•        Check funds and reserve funds at multiple levels within your organization
•        Control your expenditures regardless of your accounting method or currency
•        Choose the detail and summary accounts for which you want to enforce budgetary control
•        Perform budgetary control by journal entry source and category
•        Specify tolerances for budgetary control. For example, you may want to allow transactions for which there are insufficient funds available if the transactions exceed available funds by $1000 or less
•        Override transactions selectively for which there are insufficient funds available
•        Import your journal entries from other non-Oracle applications
•        Record manual encumbrances and review and adjust manual encumbrances, just as you review and adjust your regular journal entries
•        Selectively liquidate excess encumbrances or carry them across year-end boundaries
•        Record cancellations of encumbrances differently from reversals
•        Report on your funds available
Major Features
Unlimited Encumbrance Types
Oracle General Ledger allows you to define an unlimited number of encumbrance types.  Because your business may use terminology for budgetary control that is different from other organizations, you can take advantage of this and name your journal entries in accordance with your organization’s terminology.
For example, the term requisition encumbrance refers to the journal entry Oracle Financials creates when you reserve funds for a requisition, and the term purchase order encumbrance refers to the journal entry Oracle Financials creates when you approve a purchase order.  You can call these journal entries "commitment" and "obligation," "pre-commitment" and "commitment," or "pre-lien" and "lien," for example.
On-line Funds Checking
You can check funds on-line independently of reserving funds for your transaction. Oracle Financials notifies you on-line whether you have enough funds available for a transaction. You can check funds at any level of a journal entry, requisition, purchase order, or invoice.
Immediate Update of Funds Available
Oracle Financials automatically updates your funds available balances when you successfully reserve funds for a transaction. Your funds available balances are always up-to-date.

Update funds available immediately
Absolute or Advisory Budgetary Control
With Oracle Financials, you decide whether to allow transactions which exceed your available funds. If you use absolute budgetary control, Oracle Financials does not allow you to reserve funds for a transaction unless you have funds available. If you use advisory budgetary control, Oracle Financials provides you with on-line notification that you do not have available funds, but reserves funds for your transaction anyway.
Oracle Financials allows you to specify absolute or advisory budgetary control, or no budgetary control for individual cost centers, accounts, product lines, or combinations to give you maximum control over your expenses.
Multiple Levels of Funds Checking and Funds Reservation
You can define many funds checking levels for budgetary control. You may choose to have Oracle Financials check your funds at the detail level of an account or at a summary level of a group of accounts. You can also decide to check funds at both a summary and detail level.
Summary Accounts for Budgetary Control
With Oracle General Ledger, you can easily define a summary account, whose balance is the sum of other detail accounts.  Define as many summary accounts as you want.  Whenever you update the balance of your detail accounts, Oracle General Ledger automatically updates your summary account actual, budget, and encumbrance balances at the same time.  When you create a group of summary accounts, you simply indicate whether you want to use the summary accounts for budgetary control. And, you can review summary budget balances, summary encumbrance balances, summary actual balances, or summary funds available on-line.
Multiple Interval Types
You can specify the interval for which you want Oracle Financials to exercise budgetary control. Oracle Financials gives you flexibility in how you perform budgetary control. Choose whether your boundaries are hard (you do not have access to available funds over the boundary) or soft (you automatically have access to funds available past period boundaries).
Encumbrances for Multi-Currency Distributions
Oracle Financials performs funds checking based on the functional currency equivalents of your multi-currency purchase order distributions or invoice distributions. Oracle Financials automatically creates encumbrances in your functional currency.
Budgeting
Oracle General Ledger provides the flexibility to define budgets and budget organizations the way you want. You can use budget rules, budget formulas, and the spreadsheet interface to complete or revise your budgets. You can transfer amounts between budgets. You can easily spread budget amounts across many budget accounts. And you can record budget journal entries to provide an audit trail of your budget preparation process.
Funds Reservation Options
Oracle Financials gives you all the flexibility you need to control your expenses the way you want. Define budgetary control options by journal entry source, category, and responsibility. Or, define the range(s) of accounts for which you want to perform budgetary control.
Tolerances
For each journal entry source and category for which you perform budgetary control, you can specify a tolerance amount and/or a tolerance percent. You can exceed your budget for a particular account by the smaller of the tolerance amount you specify and the tolerance percent you specify, on a per transaction basis.
Funds Check Override
For each journal entry source and category for which you perform budgetary control, you can allow manual override of transactions that have insufficient funds. And, you can specify an override amount (in functional currency) by which you want to limit manual overrides.
Journal Import
With Journal Import, automatically import budget, actual, and encumbrance data from your existing non-Oracle applications. Journal Import lets you quickly integrate Oracle General Ledger with new or existing non-Oracle applications. And, check funds and reserve them (where appropriate) for your transactions imported through Journal Import.
Journal Entries
With Oracle General Ledger, check funds and reserve funds for your manual journal entries. You can check funds on-line at any level of your manual journal entry. Check funds and reserve funds on-line, or check funds and reserve funds in batch. Oracle General Ledger notifies you if there are insufficient funds for your manual journal entry.
Cancellations and Reversals
Oracle Financials treats cancellations of encumbrances differently from reversals, so you can easily report on gross encumbrances-to-date (gross obligations-to-date or gross commitments-to-date) as well as net encumbrances (net obligations or net commitments).
Funds Available Inquiry
Oracle General Ledger provides on-line access to funds available so you always know how your actual and planned expenses compare with your budgets and/or appropriations. Review period-to-date, quarter-to-date, project-to-date, or year-to-date budget, actual, encumbered, and funds available for any account.
Budgetary Control Reporting
Using the Financial Statement Generator, you can report encumbrances as easily as you report actual or budgeted amounts.  Design and build your own custom funds available reports without programming.  Oracle General Ledger provides standard accounting reports, such as General Journals, to report encumbrances as well as expenses.
Year-End Encumbrance Processing
Selectively carry forward encumbrance balances across year-end boundaries using Oracle General Ledger's year-end carry forward. Carry forward encumbrances only, encumbrances and an equal budget amount, or funds available only. Specify the range or ranges of account numbers which you wish to carry forward. Oracle General Ledger carries forward your encumbrance and budget amounts into beginning balances and provides an audit trail of your carry forward activity.