Budget Category

[Former Member]

Hi Experts,

Can any one throw some light on Budget Category

The difference between Payment Budget & Commitment Budget, and their application in real time scenario with some example.

Regards,

Purnima

[Former Member]

Hi,

I can only give you some 'not so complete' info:

1. Payment budget is for current year - somewhat a firmed budget; Commitment budget is for several years.

2. Payment Budget has control function: Availability Control only uses Payment Budget.

3. You can choose to have Payment Budget alone or Payment budget and Commitment Budget but you can not say you only want to use Commitment Budget.

Ask the budget officer or somebody in charge of budgeting in your organization for more accurate defination.

Regards,

Ming

[Former Member]

Hi Ming,

Thank you for the response.

Payment budget i got it.

What is the use of Commitment budget? Where is it used?

If my budget is spread over 5 years then, if i use commitment budget category, as you said - Availability Control does not check for budget, then how can I control the expenses?

Regards,

Purnima

[Former Member]

Hi Purnima,

I did a little more research for you. I believe point 2 in my last message may not be correct. Suppose you use both Commitment Budget and Payment Budget and your current year budget is 10 mil CB and 8 mil PB. What happens is all commitments (PR,PO, Earmarked Funds) update CB, invoices update both CB and PB and payments only update PB. So, I believe AVC also works with CB because you would not want commitments go beyond 10 mil.

Since we do not use CB and our system is a live system, I can not swich the Update Profile to do some actual test for you. If you are still at the early stage of a project, you can change the system setting and find out how exactly it works.

Regards,

Ming

p.s. I just checked BCS. Yes, AVC can also be activated for CB ledger.

Edited by: Minghong Ji on Apr 29, 2009 8:26 PM

[CesarCarreno]

Hi Purnima,

Budget categories are connected with FM update profile. For example, for commitments and actuals update profile 00101 only updates payment budget but profile 00351 updates the two categories payment and commitment.

So regarding this definition you should chose which budgeting categories you need to use.

More that one budget category is used if you want to update and check the budget information from different points of view, usually budget commitment and cash.

An example again, you chose the profile 00351, the commitment budget (9B) is updated based in posting date and the payment budget (9A) is updated based in due date, if you post an invoice 15/12/2009 with payment term 30 days then the commitment budget is update with FM date 15/12/2009 and payment budget is update with FM date 15/01/2010. So you have to have budget in Commitment budgeting category (9G) for 2009 and for Payment budgeting category for 2010 (fiscal year ends 31/12/2009).

Each category have its own AVC ledger, except Financial budget 9J that only has budgeting purposes.

Regards

César

[Former Member]

Hi

Thank you

Regards

Purnima