Commitments Not updated in projects side

Question

Hi all, I've created one invoice and validated , and after that i've run PRC: Update Project Summary Amounts and PRC: Interface Supplier Costs programs for that project. But stil the prjects side the commitments not updated when i check in PSI screen . Please advise.
Thanks & Regards
-RG

Answer 1

Well, entering an accounts payable invoice and moving to job cost will update actual cost amount, not commitment amount. Commiitments, generally speaking, come from the Purchasing/Procurement module in any ERP software that I have seen, including Oracle. The general situation that creates a commitment is when you create a Purchase Order in Purchasing. That indicates you have placed an order to buy something and thus have a "commitment" to pay for it when it arrives. Once the order is received and cost is incurred, the commitment is reversed and actual project cost is updated. You don't see commitments in accounts payable because when you enter the invoice, you will debit Cost and Credit Liability.
When you create a purchase order, there is no general ledger entry created at that time. Thus the concept of committed cost was developed for project accounting to indicate to project management that you do have a pending cost. By adding commitment amount + actual cost amount, the project manager could see his total expected cost. If you also have budgeting active, you could set up to set an error if Committed cost + Actual Cost is > Budget Amount.
Look at the Project Costing User Guide. Search for the word "Commit" to get more information about commitments. In the EBS 11i guide, there is a section called "Overview of Expenditures" that gives examples of expenditures and commitments. Chapter 7 also has the integration to Oracle Purchasing information and talks a bit about commitments in there.
Hope this helps some.
John Dickey