Practicing commitment accounting

As previously mentioned in the Commitment Type section of this chapter, we can use commitment type accounting as a tool to provide financial information before "budget to actual" reports, and prevent budget overrun. In the following sections, we will implement commitment accounting and analyze the accounting facts/GL journal entries generated.


We can activate commitment accounting through the Accounting Schema window. There is a list of options that can be used to enable commitment accounting. The options are:

  • PO Commitment only
  • PO Commitment & Reservation
  • SO Commitment only
  • SO Commitment & Reservation
  • PO;SO Commitment
  • PO;SO Commitment & Reservation

For our reference, monitoring the expenses incurred in the ...

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