Calculating and displaying financial commitments
Contract lines generate financial commitments in Planon. Financial commitments represent expected payments or revenues and are calculated based on the contract line amounts, payment frequency, and commitment periods. Planon also calculates when these amounts are due to be paid or received.
To view financial commitments, go to: > >
 | For lease accounting contract lines, Planon calculates accounting commitments. For more information, see Accounting commitments. |
Financial commitments generate postings in Planon for journal entries in your financial system. See Generating postings and journal entries.
Calculating financial commitments
Financial commitments can be calculated and displayed for contracts with the Active, Renewed, Terminated, Expired, or Blocked status.
Financial commitments are calculated separately for each contract line, based on the amount defined on that contract line.
If a contract line has an end date, financial commitments are calculated up to that date.
If a contract line does not have an end date, one of the following methods is used:
If a contract line does not have an end date, the following applies:
• If a horizon date is specified, Planon calculates commitments up to the horizon date. For more information, see Using a horizon date.
• If no horizon date is specified (only possible for non-lease accounting contracts), Planon uses the Cash flow calculation – years setting in Field definer . This setting determines the number of years for which financial commitments are calculated and displayed. The maximum value is 100 years. If you change the Cash flow calculation – years setting, existing financial commitments are not updated automatically. To update them, go to the Contracts selection level and click Recalculate commitments.
When an amount-related change is applied, the financial commitments are re-calculated automatically, taking the Cash flow calculation – years setting in to account. For more information, see Contract settings.
Automatic recalculation
Planon automatically recalculates the financial commitments when:
• A contract is terminated or renewed. Contract options marked as reasonably certain are included in financial commitment calculations as if they have already been exercised.
• Contract prices are adjusted
(manually, through indexation, discount percentages
or tax rates).
(manually, through indexation, discount percentages
or tax rates).
• The payment frequency has changed.
For changes to amounts that have already been closed, Planon automatically creates a supplement. For details on closing amounts, see Closing amounts. For details on supplements, see Supplements.
Several data fields are available for financial commitments. For a description of these fields, see Financial commitments data fields.