budgetary-control-solutions-sap-finance-controlling-material-fund-management-pdf.pdf

SAP Budgetary Control
Solutions
By Infocost Solution Pvt.Ltd

Overview of Funds Management
Definition:
The tasks of Funds Management are to budget all revenue expenditures for individual
responsibility areas, monitor future funds movements in light of the budget available,
and prevent budget overruns.
Purpose:
Funds Management enables us to keep a precise check on:
• The revenue expenditures
• Budget, with the following questions in mind:
− What funds will the responsibility areas receive?
− What are the funds used for? (Use of funds)
• The financial equilibrium of business, by comparing commitment and actual values
with the current budget.
Integration:
Funds management is tightly integrated with other components of SAP such as:
• Finance & Controlling : All expenditure booking updated in FM
• Material management: All PR, PO, GR and IV updated in FM

Additional Activities for FM
´ Maintenance of expense head wise budget for each responsibility area
once in a year
´ Time to time release & supplement of funds based on requirement
´ Additional year end closing activities such as commitment carry forward
and budget carry forward ( if carry forward of funds and commitment item
is required)
´ Master data maintenance for FM such as:
´ Fund centre: Responsibility area
´ Commitment item: Head of expenses
´ Maintenance of derivation strategy for FM account assignments

SAP Org Level Changes by FM
Client
Funds Management Area
Controlling Area
Company Code
FI FM
CO
Company
Code
FI
Funds Management Area
FM
Assignment

Master Data-Commitment Item
Definition:
It classify budget transaction that affects revenue and expenditure. Assignment of
budget on responsibility area is based on commitment items.
Examples :
1. Wages & Salary
2. Repairs & Maintenance
3. Stores & Spares
4. Office expenses
Integration:
1. With FI: Define commitment item with the GL account master
2. With MM: System derive commitment item based on derivation strategy

Master Data-Fund Centres
Definition:
Organizational unit within an FM area which represents the structure of an
organization ,areas of responsibility, departments
Examples :
1. Purchase
2. Production
3. Finance
4. Employee welfare
Integration with FI & MM:
System derive Fund centre based on derivation strategy for FI and MM at the time of
MM Transaction and FI Transactions

Budgeting and Controls
Budgeting:
Budget allocation among fund centre and commitment item based on function and
responsibility. Budget can be entered, released, supplement, return and transfer.
Availability Controls:
It influences the posting procedure of funds management. System checks whether
the budget or released funds available are sufficient for execution of any business
transaction which involve outflow of funds.
In order to fine tune availability control following features are available;
• Activation of Availability Control
• Tolerance limit
• How system reacts (with warning, with mail, with errors)

Recommendations for Activation of FM
Module Integration Points Recommendation for
activation of Funds Management
Remark
FI GL account posting Only for revenue expense postings
AR / AP / Assets Not to be activated Not Applicable
CO Allocation of cost Not to be activated Not Applicable
Settlement of cost Not to be activated Not Applicable
MM Purchase requisition For all revenue purchase requisition
Purchase order For all revenue purchase orders
Goods receipts For all GR w.r.t. revenue Pos
Goods issue Not to be activated Not Applicable
Invoice verification For all IV w.r.t. revenue Pos
PM PM order processing Only for Direct Expenses Postings For Service entry sheets
SD Billing Not to be activated Not Applicable

Demo for FM
We have prepared the Demo for entire Funds
Management Cycle to Showcase the following
processes in FM
- Entry & Release of the Budgets with reports
- Procure to Pay Cycle with Reports
- Finance expenses posting cycles with reports
- Availability Control and budget monitoring
- Supplement, Return and Transfer of Funds

ENTRY & RELEASE BUDGET
´ Transaction code :- FR50 (Entre Original Budget)
´ In the above screen as highlighted we see that Fund center “Purchase” with
commitment item has been assigned with Rs.50,000 Budget under FM Area.
´ Document Number Generated:- 0000000014

´ Transaction code :- FMRP_RFFMTO50 (Annual Budget List)
´ As we can see in the above the original budget which was assigned by us
Rs.50,000 has reflected in the report Annual Budget List this is an standard report
provided by SAP.

´ Transaction code :- FR51 (Entre Release Budget)
´ After assigning the budget we have to release the budget we can release the
budget fully or either partially as per our requirement.
´ In our case we had assigned the original budget of Rs.50,000 but we are just
releasing partially which is Rs.20,000.
´ Document Number Generated:- 0000000015

´ Transaction code :- FMRP_3FMB4006 (Released Budget Report)
´ As highlighted in the above screenshot we can see that Rs.20,000 which was
released out of Rs.50,000 which was assigned has reflected into the report
Annual Budget List

PROCURE TO PAY CYCLE (FM-MM)
´ Transaction code :- FMRP_RFFMEP30X (Annual Budget vs. Commits/Acts List)
´ At start of our P2P Cycle after every step we will be able to notice the changes
happening in fund centre and commitment item with budget values.

´ Transaction code :-ME51N (Purchase Requisition)
´ As you can see that in the above screen I have created a PR for raw material
and it has automatically taken the under account assignment tab the fund
centre and commitment item.
´ Now the we have ordered 15 Quantity for raw material for which price is
Rs.162.46 which gives and valuation of 162.46*15 = 2436.9 PR No :-0010014954

´ As we can seen in the Below screen the PR for Rs.2436.90 has been seen in the
report and we can also see that how much is utilised and how much is left in
the budget through this report.

´ Transaction code :- ME21N (Purchase Order Creation)
As we can see I am intentionally changing the price in PO and making the PO
Price higher than PR i.e. Rs.3150 . PO Number: - 4500017685

´ As we can see in the above report when I created PO for Rs.3150 the amount
available in out of Rs,20,000 released budget got reduced to 4,250 so we can
keep a track on the line item wise report and see that how the budget is
getting utilised and have the control of our budget.

´ Transaction code :- MIGO (Goods Receipt)
´ As we can see in the above screen Goods Receipt for 15 Quantity has been done
and now I will check the Report and see what are the effects into that report.
Material Document Number: -4015

´ Transaction code :- FMRP_RFFMEP30X (Annual Budget vs. Commits/Acts List
´ As we can see in the above report there is a difference of 713.10 which was
because there is a variance between the material master price and purchase
price. The difference also loaded on material master subsequently.

´ Transaction code :- MIRO (INVOICE)
´ I have intentionally booked more than invoice amount i.e. 3150/- while doing
MIRO so that we can see the difference i.e. 150/- is captured at MIRO level.
´ MIRO Document Number:-5105609414

´ Transaction code :- FMRP_RFFMEP30X (Annual Budget vs. Commits/Acts List
´ Above we can see that Rs.150 which was booked in invoice has been taken
into consideration and has been reflected in this report.

´ Transaction code :-FMRP_3FMB4006
´ Budget overview at fund centre and commitment item level is displayed in the
above report

PROCURE TO PAY CYCLE (FI-FM)
´ Transaction code :-FB60 (Vendor Invoice)
´ During this we will book an vendor invoice more than the released budget and
see if the system tries to stop us. As you know we have released a budget of
Rs.2,000 Out of Rs.5,000 Now we will try to post Rs.3000

´ As you know we have released a budget of Rs.2,000 Out of Rs.5,000 Now we will
try to post Rs.1000

´ As you know we have released a budget of Rs.2,000 Out of Rs.5,000 Now we have
posted Rs.1000

Thanks
From : Infocost Solution Pvt.Ltd.

budgetary-control-solutions-sap-finance-controlling-material-fund-management-pdf.pdf

More Related Content

What's hot (20)

Similar to budgetary-control-solutions-sap-finance-controlling-material-fund-management-pdf.pdf (20)

Recently uploaded (20)

budgetary-control-solutions-sap-finance-controlling-material-fund-management-pdf.pdf