Enhanced interface

Spend Management validation

Spend Management automates validation against a specified budget. The budget administrator still has control to resolve budget overages based on individual situations that cannot always be predicted.

After you configure Spend Management, expenses in selected applications (Purchasing, Accounts Payable, or General Ledger) are validated against the specified budget. If posting a transaction exceeds the budget, Spend Management either warns you of the budget overage, or it prevents the transaction from being posted, depending on your configuration.

How does Spend Management validation work?

Spend Management validates at the line-item level. Furthermore, it validates transactions against the remaining balance in the budget. If an individual line passes the budget validation, the next line is validated. If 1 line item fails validation, you’ll receive a stop or warning message when you post the transaction. If all line items affect the same expenditure accounts, after each line item is validated, Spend Management checks at the document level, making the validation at the summary level.

If an account is credited during one of your transactions, then Spend Management takes that credit into consideration. For example, if the budget for an account is R1000, but it gets credited for R500, then Spend Management now considers the total budget of this account to be R1500.

Only enabling Spend Management does not automatically check everything. Spend Management requires an explicit budget value or indication that you want to stop or warn on spending for accounts with no budget entered. This means you need to do one of the following:

Input budget information for each desired account and dimension combination.
Select the If a budget has no match, treat budget as zero option so that transactions do not accidentally pass validation.

Dimension-based validation

For dimensions in the budget, Spend Management compares the transaction value directly against the dimension. If you include a value for a dimension, the line item is validated. If the dimension has no value in the specified budget, the line item passes through unvalidated. To prevent unvalidated items, select the If a budget has no match, treat budget as zero checkbox.

Spend Management validates only against the child dimension in any parent-child dimension relationships. Enter your budget for child-level dimensions for validation.

If you validate by dimensions, make sure that you select the dimensions to be validated based on how you input your budget.

For example:

Your budget includes the Location dimension.
You want to control spending by location.

To set this up, configure Spend Management to use Location in its validation.

In this case, Spend Management ignores all other dimensions because they are not selected, even if they’re included in a line item or in the budget. This transaction might have multiple lines for the same location but multiple departments. Unless Department is a required dimension, only the combined budget for Location is used for validation. This is because Department has no budget to consider and is not included in the Spend Management configuration.

Any dimension you intend to use for Spend Management validation, ensure that the dimension is enabled in Purchasing, Accounts Payable, and General Ledger. If it's not, you won't be able to select the dimension when you configure Spend Management.

For example, if you plan to use Department, Location, and Class dimensions in Spend Management, then all of these dimensions must first be enabled in Purchasing, Accounts Payable, and General Ledger. You would then enable the dimension in Spend Management. This is true, even if you only use the Class dimension in Purchasing transactions only and plan to use Spend Management only in Purchasing.

Enforce validation against dimensions or reporting periods without a budget

Spend Management checks for funds available in the specified budget using the dimensions specified during configuration. Spend Management requires a transaction to have a value to enforce the budget. If an account-dimension combination is not defined in the budget, Spend Management cannot validate the spending, and the transaction posts without being validated.

To enforce validation when there's no budget value, select the If a budget has no match, treat budget as zero checkbox. Spend Management then validates dimensions or other items with no budget as if the budget is zero.

Validate against a specified time frame

You can choose which time frame to use for your Spend Management validation.

Default duration

You can configure Spend Management to validate a budget for a certain length of time. Typically, the reporting period selected as the default duration in Spend Management matches the reporting periods used in your budget.

Project begin and end dates

If you use the project dimension, you can configure Spend Management to use a project start and end date to validate for a project so that you can include project budget data in the validation process.

To use project start and end dates, you must define a project in either the Projects application or as a dimension in Accounts Receivable. Additionally, the project must have a start date and an end date defined.

When enabled, Spend Management uses the begin and end dates defined for the project for the validation. Be sure to include the full start and end date. When entering start and end dates, consider the date for purchases made before the project starts. This is necessary to include the purchases in the validation.

If your project does not have start and end dates specified, then Spend Management validates against the Duration field on the Configure Spend Management page.

Validate committed expenses

Enable the Include committed expenses feature to include transactions that have been recorded in Purchasing, but are not yet recorded as an actual expense.

When enabled, expenses that are committed, but not yet spent, can be tracked in 1 or more user-defined books and included in the validation. When the initiating transaction is posted, it's factored into the calculation that determines the funds available in the budget. When you release the committed expense by converting it into an actual expense or canceling it, the reserve no longer applies.

To use this feature, you must enable user-defined books. And if you're using Purchasing workflows, the related transaction definitions must be set up to manage committed expenses.

If you track committed expenses in a user-defined book and use Purchasing

Spend Insight calculates based on the primary General Ledger posting that's set up for the transaction definition. If you've enabled additional posting, that secondary posting is not reflected in Spend Insight.

For example:

You've set up Spend Management to include committed expenses and created a user-defined book to track them.
You have a purchase order transaction definition set up to post to the committed expenses book.
You want the amount posed in the committed expenses book to be deducted from your committed expenses when you view Spend Insight information in the purchasing AR sales invoice.

The best practice:

Create a transaction definition that falls immediately before the AR sales invoice in the purchasing workflow.
Set up this transaction to release the invoice amount from the committed expenses book.

This step also ensures proper clearing of the committed expenses book and avoids the need to adjust for variances between the purchase order total and the AR sales invoice total.

Validation special cases and exceptions

In Sage Intacct, the following items are special cases and exceptions during expense validation:

Item	Details
Special cases: These items require extra attention due to expenditure validation
Imported transactions	If Spend Management is enabled and you're importing transactions into an application where validation is enforced, the transactions in the import file must be within the specified budget. This is true whether you have the application set to Stop or Warn because intervention is necessary. To import these transactions, you can either turn off Spend Management for the application area during the import or adjust your budget. See Training: Budgets for more information about working with budgets in Intacct.
Recurring transactions	If Spend Management is enabled and recurring transactions exist in an application where validation is enforced, the recurring transactions are generated only if they are within the specified budget. This is true whether you have the application set to Stop or Warn because intervention is necessary. To generate these transactions, you can turn off Spend Management for the related application while the transactions are generated, or you can adjust your budget. See Training: Budgets for more information about working with budgets in Intacct.
Exceptions: Spend Management does not validate these items
Purchase transactions generated from Process Transactions	Process transactions in Purchasing are used to merge or split purchase documents. Spend Management does not support transactions generated using this method. If they transactions are later converted to another transaction type, Spend Management can then validate them.
Reversals	To support the ability to enter corrections, Spend Management does not validate transactions generated by entering a reversal.

What if the budget changes?

If your budget changes, Spend Management handles the change going forward. Past transactions posted in applications validated by Spend Management aren't affected by the change, but new or revised transactions are validated against the updated budget.

For example, if a department has a budget of 5,000 USD for a validation period, transactions will be validated against that budget value. If the budget is changed halfway through the period and the department's budget is now 8,000, any new transactions are validated against the 8,000 budget. Also, if a transaction that exceeded the 5,000 budget limit is edited and saved, the updated transaction is validated against the updated budget, not the original one.

Track your spending

You can view the budget impact of a transaction both before and after you post or submit it.

Spend Insight lets you proactively check the spending of the current transaction against the budget funds available as you create a transaction. Select Show Spend Insight on a supported transaction to see the budget impact of the transaction.
Spend Insight is the only part of Spend Management that has a permission associated with it. To grant permission, open the Subscriptions window in a role or user, then go to the Company permissions window. Grant or deny the Spend Insight - Run permission from there. The permission is given to users by default.
Spend history tracks your expense validation for each transaction at posting time in the Audit Trail. View the audit trail for each transaction to see if the expense was within budget or exceeded the budget.