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An encumbrance is a commitment to spend funds in the future, such as through a purchase order or contract, before the actual payment is made.
Tracking encumbrances reserves part of the budget for specific obligations, helping organizations avoid overspending and maintain accurate financial records.
Aplos enables users to record and monitor encumbrances within their fund accounting system, making it easy to track reserved funds and manage budgets effectively.
Yes, encumbrances reduce the available fund balance by reserving funds for future commitments until the obligation is fulfilled or cancelled.