Encumbrance Accounting has always been one of those tricky areas to understand and it is often quite complex and time consuming to resolve issues that arise. Having a detailed understanding of how Encumbrance Accounting works in General Ledger, Payables and Purchasing will get you on the right track faster.
Recently a new document was created that attempts to pull together all the information that relates to Encumbrance Accounting so that you can understand everything from what it is, to how the applications are setup to use it, to using diagnostic tools and checking patch levels when something doesn't work just how you expect it to.
Please review R12: MASTER TROUBLESHOOTING GUIDE (MTG) for Encumbrance Accounting Issues in Oracle PO and AP (Doc ID 1578275.1) available on MyOracleSupport which discusses the following topics:
- What is Encumbrance Accounting
- How does Encumbrance Accounting work in Oracle?
- Funds Reservation Statuses on PO Documents
- Required Setups (GL, AP, PO)
- Seeded Oracle Reports for Encumbrance Accounting
- Recommended Patches
- Diagnostic Tools
- Hot Topics
- More Resources
One of the additional resources referenced within the above document is R12 Encumbrances Accounting Bulletin (Doc ID 1583781.1). This interactive document allows you to filter the knowledge based on a topic of choice and includes Encumbrance Transactions for both Accrue on Receipt and at Period End and shows you the transactions you would see and the values of DR and CR that would be inserted into the XLA tables at the various stages.
Together these two fantastic documents should enlighten the reader and provide a detailed understanding of Encumbrance Accounting in Oracle Applications.