Using Encumbrances to Keep Financial Reports Limited to Actual Spending

Learn how to record committed costs as encumbrances, so your reporting periods and payment requests include only money you’ve spent.

About encumbrances

Euna Grants lets you classify every expense as either an Expense or an Encumbrance.

An Expense is money that has been spent.
An Encumbrance is money that has been committed but not yet spent.

Every new expense is saved as an Expense unless you choose to categorize it as an Encumbrance. Existing expenses will remain in the Expense category, so you don’t need to update any existing records.

Adding an encumbrance

To record a committed cost, select Encumbrance for the Actual Cost Type when you add the expense. The field appears in the Expense create window, and the rest of the steps are the same as for any expense.

For step-by-step instructions, see How To Add an Expense.

Changing an expense’s type

If you have expense edit permissions, you can change an existing expense’s type. What you can change depends on whether the expense is already in a reporting period or payment request.

If the expense isn’t in a reporting period or payment request, the change takes effect when you save.
If the expense is in an unsubmitted reporting period, periodic report, or payment request, a warning appears when you select Encumbrance. It says the expense will be removed from that item if you continue. The expense is removed only when you save the record, so you can cancel the change before then.
If the expense is in a submitted or approved reporting period or payment request, the Actual Cost Type is locked.

To change an Encumbrance back to an Expense, select Expense and save. If the expense was removed from a reporting period or payment request, add it back to the appropriate report or request.

For step-by-step instructions, see How To Edit an Expense.

Viewing encumbrances on the grid

The Actual Cost Type column appears on the Expense grid by default. You can sort, filter, group, and export by this column, which makes it easy to separate spent costs from committed ones.

If you enter an Encumbrance without a description, the grid shows Encumbrance in the Description column so the record is easy to identify. This is a display value only. The word isn’t saved to the Description field, and the field stays blank when you reopen the record.

For step-by-step instructions, see How To View an Expense.

How encumbrances affect reporting

Encumbrances are excluded from the expense lists used to build reporting periods, periodic reports, and payment requests. You can’t add an Encumbrance to these items, so your submitted financial reports include only actual spending.

In Custom Reporting, the Expense category includes an Actual Cost Type field that shows either “Expense” or “Encumbrance.” Use it to filter, group, or display expenses by type. Existing expenses show as “Expense.”

Importing expenses

Account Admins can map an Actual Cost Type column when they import expenses. Each row should contain either “Expense” or “Encumbrance.” The import preview flags any other values so you can correct them before you import. Rows with no value are imported as Expenses.

For step-by-step instructions, see How To Import Expenses.

Before you use encumbrances

Encumbrances can create indirect costs. If system-generated indirect expenses are turned on for both the grant and the budget line item, creating a direct Encumbrance also creates a matching indirect Encumbrance. The indirect amount uses the same rate and base as indirect expenses. If either setting is off, no indirect Encumbrance is created.

Encumbrances are optional in the API. The Expense v1 and v2 APIs include an optional Actual Cost Type field that accepts “Expense” or “Encumbrance.” Existing integrations don’t need to change, because the field is optional. Expenses default to the “Expense” category when it’s left out.

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