Pre-Encumbrance Management

Pre-Encumbrance is a budget control feature that reserves available budget when a purchasing document is submitted for approval. This gives your team real time visibility into pending spending and helps reduce the risk of overspending.

This article explains how pre-encumbrance works, which documents it affects, how to enable it, and how to review it in the Budget vs Actual report.

How Pre-Encumbrance Works

Pre-encumbrance applies when a document enters an approval workflow. The budget is reduced at submission, not after final approval.

Once the document is fully approved, the pre-encumbrance is released and converted to a standard encumbrance. If the document is rejected or canceled, the pre-encumbrance is released and the available balance is restored.

Pre-Encumbrance Lifecycle

Note: Pre-encumbrance only applies to documents that are pending approval in workflow. Once a document is fully approved, the amount moves to standard encumbrance. Completed or posted transactions are not affected.

What Documents Are Covered

Pre-encumbrance applies to these document types when they are submitted into an approval workflow:

1. Purchase Requisitions
2. Purchase Orders
3. Change Orders

Each pre-encumbrance entry is tied to the originating document ID for accurate tracking and reporting.

Configuration

Enabling Pre-Encumbrance

Pre-Encumbrance must be enabled by Aclarian Client Support.

Important: To add the Pre-Encumbrance feature, contact Aclarian Client Support at ClientSupport@aclarian.com.

Include Pre-Encumbrances in Budget Tolerance Configuration

Pre-encumbrance inclusion is controlled by a setting in your budget tolerance configuration. This setting determines whether pre-encumbrances are included in budget availability calculations for purchasing documents.

To configure this setting:

1. Go to your Budget Tolerance Settings.
2. Find the Include Pre-Encumbrances option.
3. Select Yes to include pre-encumbrances in budget calculations, or No to exclude them.
4. Save the configuration.

The setting is global and takes effect immediately for new document submissions.

Important: If this setting is changed while documents are already in workflow, existing pre-encumbrances remain visible in reports. If the setting is changed to No, those existing pre-encumbrances will no longer be included in balance calculations for new submissions.

Budget vs Actual Report

Accessing Pre-Encumbrance Data

When pre-encumbrance is enabled, the Budget vs Actual report provides additional visibility into pending document amounts.

There are three ways to work with pre-encumbrance data in the report.

1. Report Filter

On the Budget vs Actual report filter screen, the Include Pre-Encumbrance option lets you decide whether pre-encumbrance should be included in the remaining balance calculation.

• Yes: Remaining balance subtracts both encumbrances and pre-encumbrances from budget
• No: Remaining balance uses encumbrances only
• If pre-encumbrance is not enabled at the system level, this filter does not appear

2. Pre-Encumbrance Column

When pre-encumbrances exist and reporting is configured to show them, a Pre-Encumbrance column appears in the report summary.

This column shows the total pending pre-encumbrance amount for each budget account row.

• A value of $0 or a blank value means there are no pending pre-encumbrance items for that account
• The amount reflects all in workflow requisitions, purchase orders, and change orders tied to that account

3. Pre-Encumbrance Detail Tab

A dedicated Pre-Encumbrance detail tab provides an itemized list of pending pre-encumbrance entries.

Each row includes:

1. Form type
2. Form name
3. Vendor name
4. Fiscal year
5. Description
6. Amount
7. PO number

Note: Requisition Number and Form Status columns are planned for a future update to the Pre-Encumbrance detail dropdown.

The totals in the detail tab match the amount shown in the summary column for the same account.

Reading the Budget vs Actual Report with Pre-Encumbrance

In this example, account 456.9089.542006 includes pending pre-encumbrance activity, which reduces the available balance. Account 456.9089.542010 has no pending pre-encumbrance, so the available balance reflects actuals and approved encumbrances only.

Budget Tolerance and Duplicate Warnings

How Pre-Encumbrance Affects Tolerance Checks

When Include Pre-Encumbrances is set to Yes, budget tolerance checks include active pre-encumbrance amounts during document submission.

The system evaluates the submission against:

1. Current approved budget
2. Actuals
3. Existing approved encumbrances, if enabled
4. Active pre-encumbrances for documents still in workflow

If the submission would exceed the available balance, the system blocks or flags the submission based on your configured tolerance rules.

Frequently Asked Questions

Does pre-encumbrance appear on the Purchase Order or Change Order form?

No. Pre-encumbrance does not display directly on purchasing document forms. Its impact appears in budget availability calculations and in the Budget vs Actual report.

What happens if I cancel a document that has an active pre-encumbrance?

The pre-encumbrance is fully released when the document is canceled. The available balance is restored immediately.

Does pre-encumbrance affect completed or posted transactions?

No. Pre-encumbrance only applies to documents that are pending in an approval workflow. Fully approved, posted, or completed transactions use standard encumbrance accounting.

Can I see which documents make up the pre-encumbrance total?

Yes. The Pre-Encumbrance detail tab in the Budget vs Actual report shows the pending documents that make up the total for each account.

What happens if I change the Include Pre-Encumbrances setting while documents are still in workflow?

Existing pre-encumbrances remain visible in reports. If the setting is changed to No, those existing pre-encumbrances are no longer included in balance calculations for new submissions. New documents submitted after the change will not create pre-encumbrances.