Track Encumbrances and Commitments With Sage Intacct’s User-Defined Books

By - January 25, 2021

January is an ideal time to take a look at how your company handles its budget. User-defined books in Sage Intacct can help you manage commitments and encumbrances more effectively.

A user-defined book is an alternate book that your company can set up to record transactions that don’t necessarily need to be incorporated in your accrual or GAAP books. Commitments or encumbrances can be recorded to show funds have been earmarked, but not used. As you create reports, you can include data from your user-defined books, which allows you to compare projected spending against actual costs, for example.

Benefits of User-Defined Books

User-defined books in Intacct are a low-cost way of managing spending and confirming allotments for costs that have already been earmarked so your company won’t overspend. They help track your budget and make sure funds are properly spent. User-defined books can also be used in a purchase-order system, allowing you to see employee budget requests as a whole, instead of when each purchase order is submitted.

User-defined books work well for any small business that wants to monitor its spending without investing in additional Intacct modules. With user-defined books, nonprofit organizations can benefit from tracking spending while governmental agencies can manage their encumbrances.

How to Set Up User-Defined Books in Intacct

  1. Verify that user-defined books are turned on within Intacct. This step is done in the General Ledger configuration. Under “Advanced GL Options,” check “enable user-defined books.”
  2. Once you have user-defined books turned on, review the list of employees who need to have the ability to create these books and associated journals. Then, make sure each one of them has the right user permissions within Intacct.
  3. To create a user-defined book, look in the “More” section of the General Ledger setup in Intacct. Click the plus sign and give your user-defined book a name, such as “Commitments.”
  4. After you set up a user-defined book, you can then create user-defined journals, which can be found under “Journals” on the same configuration screen. Click on the plus sign for “User Defined” and give the journal an abbreviated name, like CM or COM.
  5. When you’ve done that, you’re ready to start adding data. The biggest step to tracking commitments and encumbrances would be creating journal entries to earmark those funds.

Reporting on User-Defined Books

The key to successfully utilizing user-defined books is creating reports that include them. You can create a report that combines the data from the main book and a user-defined book or show information from a user-defined book in its own separate column.

For showing encumbrances and commitments, a report could include a column for the budget, one for committed expenses, one for actual expenses, and one for total expenses. Budget minus total expenses could be shown in a column called “remaining.” As actual invoices come in, you would reverse the entries that were put in the “Committed” book so as not to overcount the numbers in committed and actual expenses.

User-defined books can be created by all Intacct users and don’t require additional modules. However, if your company is seeking a more sophisticated way to handle its budget, you may consider Intacct’s Spend Management module, which is available as an add-on.

Want to find out more about how Intacct’s user-defined books can help your company manage its commitments and encumbrances? Schedule a call with one of the experts at RSM today.

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