Microix and Adding the MIP Encumbrance Module

The MIP Fund Accounting Encumbrances Module allows organizations and agencies to easily reserve budget for committed future purchases. With this module, organizations can ascertain at any time exactly where your organization’s budget is at present and plan for those what-if scenarios proactively. Nonprofit Procurement Software | MIP Accounting

Advantages/Disadvantages

The main purpose of an encumbrance is to:

• Make sure you don’t over-spend your budget.
• Make sure you know how much of your budget you have left to spend

Encumbrance – Will allow MIP FA to see all encumbered transactions and apply it against the budget

The purchase order in Microix is encumbered in MIP and later liquidated through  MIP A/P . If you decide on using encumbrances, it will require the A/P person to enter the invoice header information into an A/P session in MIP. The encumbrance account coding and $ amounts cannot be changed easily without going through an encumbrance modification. Encumbrances are liquidated automatically via the Invoicing process but if amounts are left over or not being used, it must be liquidated on a regular based so it does not go against your budget.   

Non-Encumbrance -  MIP Fund Accounting will not see all purchased until it’s been invoiced. However, the Microix system will show these amounts and also apply it against their budget.

The purchase order is matched with the vendor invoice in Microix then transferred to MIP A/P.  Not using encumbrances will give more flexibility to the A/P person when it is time to make changes to account codes, $ amounts, see receiving information and it reduces the data entry as the system will automatically produce the A/P invoice directly in MIP. 

Display Account Balances in Microix does all of that by displaying your Budget, your Actual expenses (reads the balance table from MIP), AND a column for your outstanding PO’s. It then give you a total of you actual expenses + you outstanding PO’s, compares that to your budget, and shows you the balance. You don’t even have to create an encumbrance since Microix already knows about the outstanding PO’s.