701 - Encumbrances Policy


The University of North Carolina at Chapel Hill Finance Policy 701- Policy on Encumbrances



Encumbrances provide an effective method of tracking commitments across a wide range of departmental end-users - an important control feature given that some procurements require a long lead time for the vendor to supply the merchandise or perform the service.


Policy Statement

To maintain accurate accounting for all budgets, the University utilizes encumbrances. Encumbrances are Commitment Control entries that record a commitment of funds by removing them from the budget balance available (BBA). Purchase requisitions and purchase orders encumber funds.



Special Situations


Additional Information

Frequently Asked Questions

Q: Why doesn't my purchase order show up as encumbered for the same amount as the requisition?
A: The requisition amount is generally an estimate of the cost for the merchandise. The purchase order will state the actual cost based on contract prices, discounts, etc.

Q: How do I liquidate outstanding encumbrances on a PO after invoicing is complete.
A: Request for liquidations may be submitted on a $0 requisition to Purchasing Services indicating the lines you wish to have liquidated on the PO, or entire PO if you would like to clear all encumbrances. For projects having a budget end date: if the budget end date has passed and the project has been closed, then you must first contact the budget holder to reopen the chartfield prior to submitting your request to liquidate.

Related Requirements



Policy Contact
Subject Contact E-Mail
Purchase order liquidation Accounts Payable and Vendor Services accountspayable@unc.edu



  • February 2, 2015: Updated references to campus vouchers and chartfield strings; removed Q&A and procedure.
  • May 20, 2010
  • July 27, 2007
  • October 14, 2003
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Article ID: 131532
Thu 4/8/21 9:11 PM
Mon 1/24/22 1:14 PM
Responsible Unit
School, Department, or other organizational unit issuing this document.
Finance and Budget
Issuing Officer
Name of the document Issuing Officer. This is the individual whose organizational authority covers the policy scope and who is primarily responsible for the policy.
Issuing Officer Title
Title of the person who is primarily responsible for issuing this policy.
Director, Accounts Payable and Vendor Services
Next Review
Date on which the next document review is due.
09/15/2023 12:00 AM
Last Review
Date on which the most recent document review was completed.
09/15/2021 12:00 AM
Last Revised
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03/04/2020 12:00 AM
Effective Date
If the date on which this document became/becomes enforceable differs from the Origination or Last Revision, this attribute reflects the date on which it is/was enforcable.
09/15/2021 12:00 AM
Date on which the original version of this document was first made official.
03/01/1998 12:00 AM