Using budgetary control requires funds reservation for any transactions you enter in General Ledger, Oracle Purchasing or Oracle Payables. You can only post journal entries that pass funds reservation. If you enable this option, you must enter a reserve for encumbrance account for the set of books. If you do not enable budgetary control, you cannot perform funds
check or reservation in General Ledger, Oracle Purchasing or Oracle Payables.

Budgetary controls can be enabled or disabled even after a set of books has been defined and transactions entered.

Oracle Receivables Note: Receivables does not use the Enable Budgetary Control or Require Budget Journals options.
(Optional) Check Require Budget Journals to allow only those budget journal entry methods that create journal entries, namely budget journals, budget transfers, MassBudgets, and consolidation of budget balances. If you require budget journals, you cannot upload budgets, enter budget amounts, or use budget formulas.

If you are using budgetary control, General Ledger requires you to create budget journals for your funding budget. If you want to require budget journals for all budgets, choose this option. However, if you want to require budget journals for your funding budget only, do not choose this option. Instead, you can require budget journals for your funding budget when you define the budget.

Reserve for Encumbrance account: If you enter an out-of-balance encumbrance entry, General Ledger automatically posts the difference against the account you specify here. If you have multiple companies or balancing entities within a set of books, General Ledger automatically creates a Reserve for Encumbrance account for each balancing entity.