Disabling and Reenabling Encumbrance in Microsoft Dynamics GP

Hi all,

I wanted to share some information regarding disabling and reenabling encumbrance with you today.   

There are situations where disabling and reenabling encumbrance is the best option to correct data corruption, and/or 3rd party/customization issues that are causing error messages to appear with processes like the Encumbrance Year-End Transfer or the Encumbrance reconcile routine.   But the question that always come up is “what data will I lose” if I do this process.  This blog will describe and give you examples of what exactly happens after disabling and reenabling encumbrance in hopes to shed some light on the subject and put you at ease if you should need to do this to correct data or avoid an error message.

In a nutshell, disabling encumbrance does not mean you will lose actual Purchase Order Processing data. All Open, Closed, Received, Change Orders, Cancelled and Closed POs will remain in the system regardless of whether they are in the Open or History files.  ONLY data for POs you have in the history table and specific historical encumbrance data will be removed.  If the PO is in HISTORY (The Remove Completed Purchase Orders was process was ran on the PO), then encumbrance will not look at that PO when enabling and rebuilding the encumbrance tables.

Below illustrate what changes and what stays the same:

• POs will still have encumbrance data recreated for them (excluding historical POs).
• For those POs in the open table, you lose the back and forth details of what transpired (when it was prebudget or pre-encumbered etc), BUT the net affect will be recreated. There will be a record for when it was encumbered and a record for when it was received).
• POs in the history file will be there, but the encumbrance data will not be recovered, however the GL will still show value and be included against the budget.

Below is where you disable Encumbrance.

Purchasing >> Setup >> Encumbrance Management

Below are 4 examples of the data before and after disabling encumbrance to help illustrate what you will see.  

• Example: 1: Closed PO in Open table (No Changes)
• Example: 2 - A line that was pre- encumbered, encumbered, and liquidated. This PO is Closed in the Open table (not moved to history) (Details are Summarized)
• Example 3: PO that was shipped and invoiced (liquidated) and moved to the history file.  (The Remove Completed Purchase Orders was process was ran on the PO) (No Details are recreated, but GL balance still counts against the budget)
• Example 4: PO is the Open table and encumbered, but not liquidated. (No Changes)

SUMMARY PERSECTIVE: Below is what the summary window looked like before and then after disabling.  As you can see, from a summary perspective, NOTHING changed.

Before disabling:

After disabling and reenabling:

DETAILS ILLUSTRATED BEFORE AND AFTER DISABLING AND THEN REENABLING:  You will find that only 2 of the 4 examples changed.  The 1^ST and the 3^rd example:

Example: 1:  Closed PO in Open table (NOTHING changes)

1. 4/12/2027 – PO entered and Encumbered for $100
2. 4/15/2027 – Shipment entered for $100

Before disabling:

After disabling and reenabling:

Example: 2 - A line that was pre- encumbered, encumbered, and liquidated.  This PO is Closed in the Open table (not moved to history) (Only change is that the detail is summarized)

1. 5/1 - PO entered and NOT encumbered for $200 (overbudget) – Pre-encumbered
2. 5/12 – PO was Encumbered in the Mass encumbrance window.
3. 5/15 - Shipment/Invoice entered and liquidated for $200

Before disabling:

After disabling and reenabling: (detail is summarized but balances)

Example 3:  PO was shipped and invoiced (liquidated) AND moved to History.  (PO in History).  This is a scenario where the details don’t rebuild.  However, the amount is still included in GL and is considered against your budget.

Before disabling:  (BEFORE/AFTER MOVING TO HISTORY IT LOOKED THE SAME)

After disabling and reenabling:

Example 4:  PO is the Open table and encumbered, but not liquidated. (No changes)

Before disabling:

After disabling and reenabling:

So, in a nutshell, you don’t lose ANY of your purchase order data.  What is affected is just encumbrance data which is just summarized when Encumbrance is re-enabled based on the scenarios above. 

I use this process of disabling, moving old POs to history and reenabling if having many issues with Encumbrance year end transfer or reconcile and continue to have issues that come up.  Again, just an option I wanted to share.

Hope this helps give you a better understanding of what it means when it’s suggested to disable and reenable encumbrance and what you would “lose”. 

Warmest Regards,

Angela Ebensteiner | SR Technical Advisor | Microsoft Dynamics GP