Commitment Accounts
In Maconomy, you can use the commitment accounts to check if a given budget is kept when creating and approving purchase orders.
Commitment control is made according to the parameters defined in the windows Commitment Levels and Commitment Rules.
Commitment Levels are used along with the window Purchase Orders in the A/P module. When a purchase order is approved, the amounts are transferred to the commitment accounts. When the amount is committed, it can be checked against the budgeted, actual, and previously committed amounts. This way, there is an automatic check ensuring that the budget is kept.
Each commitment level consists of a combination of dimensions against which you wish to check your purchase order amounts. The levels define the dimensions on which dimension control is to be made, for instance account number, company, and location.
As you may not want to check committed amounts in the same amount of detail throughout the chart of accounts, you can use the window Commitment Rules to specify the detail levels for different parts of the chart of accounts. This is done by assigning each commitment level to one or several commitment rules where you specify for each dimension the range of values which should determine the commitment level to be used when checking committed amounts against the budget.
Commitment Rules determine if committed amounts should be checked to see if the budget is exceeded as a consequence of the commitment. If automatic commitment control is used, you will thus not be able to approve a purchase order with a given allocation combination if the amount exceeds the budget for that allocation combination.
You can choose to check amounts against the budget for the beginning of the fiscal year to the posting date (Year to Date) or against the budget of the whole year (Year Total).
Example
The following commitment levels are created:
| Level | Company No. | Project |
|---|---|---|
| 1 | X | — |
| 2 | X | X |
The following commitment rules are created:
| Level | Location From | Location To |
|---|---|---|
| 1 | 0 | 10 |
| 2 | 11 | 50 |
In this example, the set-up defines that commitment accounts should be kept for the Company dimension on commitment level 1, and for the dimensions Company No. and Project on commitment level 2. Next, automatic control of committed amounts is selected in the window Commitment Rules, and commitment levels 1 and 2 are inserted on different commitment rule lines in the table part of the window. It is specified that control should be made on level 1 for purchase order amounts regarding locations 0-10. Similarly, control should be made on level 2 for purchase order amounts regarding locations 11-50.
The following purchase order line is created:
| Amount | Company No. | Location | Entity | Project |
|---|---|---|---|---|
| 2000 | 12 | 8 | 0 | 5 |
This purchase order line is checked against the commitment rules. The value in the Location dimension lies within the range of dimension values specified in the top commitment rule line, pointing out commitment level 1. For commitment level 1 it has been specified that amounts to be committed should be checked against the budget for the Company dimension only, and the 2000 units in the base currency of the current company is therefore checked against the amount budgeted for company 12 which is the company on the purchase order line.
If the 2000 USD is less than or equal to the amount left in the budget of company 12, the purchase order line will, in this case, be approved.