Hierarchy for Funds management

[atif_farooq]

Hi:

Client has defined its own budget heads e.g Computers & Related equipments .Under these heads we have sub categories like Laptops , Desktop PCs e.t.c .

Now budgets for laptop or Desktop is further distributed to the departments. How can we cater this in system. I have an idea to regarding this. Its to create FUND for the main budget head , top fund centers for laptop, Desktop PC e.t.c and fund centers for the relevant department to whom these budget and then do the budgeting . Is this Ok ?  if not then please correct me.

Regards

[iklovski · Accepted solution]

Hi,

I would say, that departments are fund centres and Laptops, etc. are funds. But, of course, it's a matter to interpretation: you can choose whatever you find convenient for your business case, considering the volume of objects, maintenance, etc. You can even define Laptops, Desktop, etc. as commitment items if the situation allows it, G/L account wise.

Regards,

Eli

[atif_farooq]

Hi Eli:

Thanks, well your suggestion looks more logical to me. Now what about the main budget head that is of Computer & Related Equipment. Client in legacy system have defined their budget in to two broad categories.

Operating Budget (OPEX)

Capital Budget (CAPEX)

In my post i have taken a budget head from CAPEX category. Now for me and as per your suggestion budget hierarchy that is to be mapped in SAP goes like

Budget Type OPEX or CAPEX

Budget Head ..this will be taken from either from CAPEX or OPEX. Lets us say Traveling Expenses is the budget head taken from OPEX,how will this be treated in FM-BCS. Will this be Commitment items ?

Fund...Local Travel, Foreign Travel e.t.c

Fund Center: These will be department as per your suggestion.

Please correct me if i am wrong in above.

Thanks

[iklovski]

Hi,

When you define a structure and select the objects to use, don't forget about their derivation, assuming that users won't insert them manually. For example, how these local/foreign travels will be determined? By what parameter? If you have separate G/L account for it, then no need to use 'fund', but rather commitment item (even if your budget will be under general 'travel').

Regarding the budget type, please keep in mind, that's purely budgetary aspect: you won't be able to post on budget type. I believe, that what you refer to as operational or capital budget should also be determined by G/L, thus by commitment item. Or here you can use 'fund', which also make sense, but again you have to think of derivation of this object, under assumptions that users who insert POs, invoices, etc. no nothing about the budget and won't be able to enter it manually in the documents.

[Former Member]

Hi,

Operating Budget and Capital Budget should not be mapped to Budget Type. If your client is a Genman government organization, the documentation below answers all the questions you have in your post. Otherwise it gives you a really good clue regarding how to define and derive FC, CI, Operating Budget, Capital Budget.

http://help.sap.com/erp2005_ehp_06/helpdata/EN/06/1c6561986111d596fc0000e835339d/frameset.htm

Regards,

Ming

[atif_farooq]

Hi Eli:

CAPEX & OPEX will simply denote the budget types. By selecting them in Budget workbench and posting budget on relevant funds, fund center and commitment items combination user will be able to distinguish them in reporting by making use of budget type. No budget will be assigned to CAPEX or OPEX. They are sub categorized in to budget heads to which we can assign budgets, under budget heads i believe there fall commitment items hierarchy like Administrative Expenses is a budget head falling under Budget type OPEX.  Now in my mind hierarchy structure is going like

Budget Type : OPEX

Budget Head: Admin Expenses...I am treating it as Fund or top fund center

Commitment Items: Admin Salaries, Foods & Meal e.t.c

Fund centers: It can be defined as per requirement and set in derivation rules. Budget is assigned to the budget head and through derivation rule , fund center assigned to fund will make use of it. I will create budget address for the same as well..Is my approach right?...I am interpreting user requirement in my words here

Thanks

[atif_farooq]

Hi All:

Any update on this.

Regards

[iklovski]

Hi Atif,

Once more: budget type is not a part of the budget structure. It's OK to use different budget types, but there purpose is more relevant if you want to establish different sources of budget for your reporting and/or you are defining AVC ledgers based on this information. Also, try and not get confused between matriw and hierarchical dimensions, i.e. some parameters could be treated by creating a group of existing parametes, e.g. 'Admin. expenses' as a group of certian commitment items, and therefore won't require additional dimension: fund, funded program, etc. Try and make a drawing of your objects and see how they will fit in the system of FM objects, exactly as you may do in CO with cost centres; internal orders, etc. Then, if you have a sandbox environment try and see how it's going with the real business flows, if the paper charts still leave this ambiguous.

Regards,

Eli

[atif_farooq]

Hi:

Thanks i will revert back when i will actually discuss it with stakeholders and draw the whole budget structure as per own understanding. One more question regarding the subject matter, you have given good idea of creating commitment items groups . Ok i create a group for admin expenses which includes around 20 commitment items, i want to create budget structure based on CI Group. In FMBSBO_MULT, i select multiple FM account assignment and CI group can be seen there, but how to assign them to the a fund center A?

Thanks

[iklovski]

Hi,

You are assigning objects, not the group. Also, consider well if you need at all budget structure or you can manage without it.

Regards,

Eli