Encumber a general budget reservation (Public sector) [AX 2012]

Updated: February 9, 2015

If you are in the public sector, you can enable the encumbrance process for general budget reservations. This involves configuring the settings for budget control and commitment accounting. When you enable encumbrance processing, the pre-encumbrance and encumbrance processes for both the purchase requisition and purchase order are also enabled, which ensures that the correct relieving entries are created for the general budget reservation.

General budget reservations are available only if the Public Sector configuration key is selected and if Microsoft Dynamics AX 2012 R3 Cumulative Update 8 is installed with the following hotfix: KB3047235

When the encumbrance process has been enabled, the following two entries are created when you create a general budget reservation:
  • A budget source tracking entry is created to make sure that actual expenditures do not exceed the available budget.

  • A general ledger accounting entry is created to reflect the financial accounting impact.

You can specify that the general budget reservation can either precede or follow a purchase requisition. You will see the selection options for the purchase requisition and purchase order as either pre-selected or required on the various configuration forms.

Budget control is often enabled when the encumbrance process is enabled. This is not required, but it can be useful if you use both encumbrances and budget control. For example, the Purchase order year-end process form is used to close general budget reservation encumbrances in the fiscal year that is ending and to re-encumber them in the new fiscal year. The process includes an option to carry forward budget amounts to a new fiscal year. This option cannot be used unless budget control is enabled. For more information, see Carry forward general budget reservation information to a new fiscal year (Public sector), Process purchase orders at year end, and Set up budget control.

To enable encumbrance and pre-encumbrance processing, follow these steps.

  1. Click Budget > Setup > Budget control > Budget control configuration.

  2. Click Select source documents, and then select the General budget reservation and Enable budget control for line item on entry check boxes.

  3. Close the form.

  4. Click General ledger > Setup > General ledger parameters.

  5. Click Ledger, and then click the Accounting rules FastTab.

  6. Select the Use posting definitions check box. Click Yes if you are asked to confirm the selection.


    You should create and test all posting definitions before you select the Use posting definitions check box. When you select that check box, all posting definitions are active immediately. For more information, see Test Posting Definition Wizard (form). Posting definitions can be used only for the transaction posting types that are shown in the Transaction posting definitions form. Transaction posting types that are not shown in this form always use posting profiles. For more information, see About posting definitions, Posting definitions (form), and Transaction posting definitions (form).

  7. Select the General budget reservations check box. The Purchase requisition and Purchase order check boxes are automatically selected. You can also select the Enable budget control for line item on entry check box.

  8. Close the form.

Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services (LCS).

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