Overview
When a Purchase Order (PO) is approved, Spendesk immediately creates a budget commitment: a reserved amount that reflects spending you have contractually committed to, before any invoice is received.
All budget commitment calculations use the net amount (excluding VAT).
How your PO is spread across your budget
Once approved, the PO's net amount is spread across each month of the PO period, proportionally to the number of days each month represents in the total period.
Example:
PO net amount: €5,900 PO period: Jan 1 → Feb 28
January (31 days): €3,100
February (28 days): €2,800
This committed amount is visible in your budget as "Committed spend", separate from actual spend (invoices already validated).
What happens when an invoice is validated
When an invoice linked to a PO is validated, two things happen simultaneously in your budget:
Committed spend decreases by the invoice net amount
Actual spend increases by the invoice gross amount
The total budget consumption (committed + actual) stays consistent throughout the PO lifecycle.
Learn more about how invoices impact budgets
PO period spanning multiple budget periods
If your PO start and end dates span more than one budget period or fiscal year, the monthly amounts are automatically allocated to the relevant budget period.
This works even if the next fiscal year's budget has not been created yet.
The committed amounts are recorded as soon as the PO is approved. They will automatically appear in your budget view as soon as the corresponding budget period is set up, no action required.
Example
PO net amount: €12,000
PO period: Oct 1, 2024 → Sep 30, 2025
→ Oct 2024 – Mar 2025 (6 months): €6,000 — visible immediately in 2024 budget
→ Apr 2025 – Sep 2025 (6 months): €6,000 — recorded, and will appear in 2025 budget as soon as it is created
Key things to remember
Budget commitment is created at PO approval, not at submission.
PO budget commitment are calculated on the net amount, excluding VAT.
The commitment is spread proportionally per month based on the number of days in each month.
As invoices are validated, committed amounts are progressively replaced by actual spend.
If a PO is cancelled, the remaining committed budget is fully released.