This article describes the Purchase Order Commitments functionality in Microsoft Dynamics GP 9.0.
Note To use the Purchase Order Commitments functionality, you have to enable this functionality. For more information, see the "Setting up purchase order commitments" section of the Purchase Order Enhancements Help file.
Commitments are amounts that are not invoiced in purchase orders. These amounts are committed to be paid in the future. The Purchase Order Commitments functionality can validate commitments against a budget. Then, the functionality can generate financial statements that include the commitment.
If you add line items to a purchase order, the Purchase Order Commitments functionality will perform a calculation to determine whether the purchase order will exceed the budget. For example, if you have an annual budget of $10,000 and a purchase order is created for $2,000, the available budget is $8,000. A new purchase order for $8,500 will exceed the budget.
The Purchase Order Commitments functionality performs this calculation against the budgeted amounts for each line item. When you enter a line item in the Purchase Order Entry window, the Purchase Order Commitments functionality checks the inventory account, the required date, and the extended cost of the line item. Then, the Purchase Order Commitments functionality uses these factors to perform the calculation against the budgeted amount in the Budget Maintenance window.
Note You can set the inventory account, the required date, and the extended cost of the line item in the Purchasing Item Detail Entry window.
If the commitment on a line item does not exceed the budget, the process for this line item continues. However, if the commitment exceeds the budget, you receive the following message:
This item has exceeded the budget for account number