government commitment control and cash management

[arun_kumar664]

In a government accounting environment using SAP S4/HANA, is it possible to do commitment control for procurements etc. for each of the months ( for any time of the year) but controlling cash outflow through payables(which could be based on monthly cash availability). In other words, cash flow can be managed monthly while the commitment control is managed for the entire fiscal year.

At present our commitment control is linked to cash budget. Because of tight cash position, the government is only allocating cash budgets on a month to month basis. This has thrown the commitment control out of gear. We can only commit for a month for which the cash is available. Item procurements typically can take a couple of months, so we are not able to commit these in the system and therefore not able to issue POs. Orders are being issued outside system, which is highly irregular.

I am sure there is a work around, but we are not able to do it.

We shall be grateful if some guidance is available from the community!

[mlabrude]

Hi,

Through standard, commitment budget and payment budget can be checked separately but it depends on your update profile.

Regards.

Marc

[arun_kumar664]

Thanks Marc!

If I understood correctly, you are saying that we can record commitment budget separately and payment(cash) budget separately!

So while committing an expenditure, we can go upto the budget allotment for that month(period). So the commitment gets recorded and the budget is shown as committed therefore not available to further use, unless the entry is reversed. For example, if I have $500 budget this month, 600 next month etc. I can commit 450 from first month 550 from second month.

And

When time comes to make payment, we can control the payables and cash through a separately budget. In other words, suppose if we have cash of only 300 in month one; we can choose to pay only upto 300 in this month. And if next month we have more cash we can pay more for this as well as for the next month.

[iklovski]

Hi,

Yes, you can manage two ledgers (within standard framework) in PSM-FM for budget: commitment and payment. Regarding managing your budget on monthly basis, it is technically possible, but has to be managed in a very specific way, as you would need to take care of residual budget by the end of each period, making transfers. So, you should consider whether your budget is really worthwhile managing on a monthly basis.

Regards,

Eli