Commitments with PO’s on project budget
When a purchase order is created “Account assignment category – P”, the order value is raised as an commitment value on the project budget and adjusts the availability. This order value includes service/material costs and condition values such as freight. The next step is GR/service entry and during this step the actual cost is posted to the WBS element and hence the commitment value on the project has to reduce accordingly. Day to day transactions are not as simple as the example I mentioned. So I will take one step more advance example and explain in detail what happens in the background.
Say you had done GR for only partial value, in such case the balance of the PO value that had not yet been received will still be as a commitment. What if the invoice is for a lesser amount than the PO value and you do not want to hold that balance as a commitment on the project. There is “final invoice” indicator in PO – invoice tab, once the indicator is checked the balance value is no more a commitment on the project. See the example below.
PO value: 7500
GR value: 6554
COOI table before final invoice being checked. You can check table COOI or run transaction CJI5. Here it shows a balance of $946 as a commitment on the project.
After checking “final invoice” indicator in PO, the commitment is set to 0.
Material/Service and Freight
Say you have created a PO for quantity 2 and value $10,000 and freight cost of $1000 maintained using condition type.
Post GR for quantity 1 and that would result an actual cost posting of $5,500 (including $500 freight) to project and reduce the commitment to $5,000 + $500.
Now check the final invoice indicator in PO. (Informing system that there would be no more GR’s or Invoice for this PO). This should reset the commitment to “0”. That is not the case when freight is involved.
Surprisingly it resets the material/service line commitment on the PO but the balance freight value for quantity 1 ($500) still stays on the project commitment. This is why at time users complain that they should still have enough budget to create a PO but system issues error say no budget available, this is because of such commitments on the PO. See the screen shot from COOI table after final invoice is checked in the PO. The second line is reset to 0 but the first line “freight” still has a balance of $500.
As of now I am not sure if there is any setting in the condition type that would avoid this but will update if I find anything.
FICO bites 