Detail level
The system will use a posting account to edit the budget. Because each transaction line could be within the available budgeted amount, but the total of all the lines for the same posting account might be over the available amount, edits will occur at the point of entry and upon release.
Example
LGE Corporation has an annual budget of $60,000 for accounting unit 201, account 55110. Year to date, there are actual amounts of $10,000, leaving a remaining budget balance of $50,000.
| Company | 4321 |
| Accounting unit | 201 |
| Account | 55110 |
| Annual budget | $60,0000 |
| Actuals | 10,000 |
| Budget balance | $50,000 |
On May 1st, a purchasing agent at LGE Corporation enters a requisition for one computer at a cost of $2,000.
With a total budget of $60,000 and a new commitment of $2,000, the system calculates that the new requisition added to the $10,000 in actuals is within the budget.
| Annual budget | $60,000 |
| Actuals | 10,000 |
| Commitment/Encumbrance | 2,000 |
| Budget balance | $48,000 |
On July 10th, a purchasing agent at LGE Corporation enters a purchase order for two computers at a cost of $1,500 each. When determining if the purchase order is within the remaining budget, the system adds together the $10,000 in actuals, the $2,000 commitment, and the new $3,000 encumbrance and compares the total to the budgeted amount. Because the amount does not exceed the full budget amount, the new encumbrance is allowed.
| Annual budget | $60,000 |
| Actuals | 10,000 |
| Commitment/Encumbrance | 5,000 |
| Budget balance | $45,000 |