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Staying in good financial condition is almost as important as maintaining good physical health. After setting a budget, it’s important to remember the parameters are not static. Monitoring spending closing and ensuring everyone is committed to meeting financial goals can go a long way toward success.

Simply put, a budget is an itemized summary of likely income and expenses for a given period.  It helps you determine whether you can grab that bite to eat or should head home for a bowl of soup.  Planning and monitoring your budget will help you identify wasteful expenditures, adapt quickly as your financial situation changes, and achieve your financial goals. When you actually see the breakdown of your expenses, you may be surprised by what you find; this process is essential to fully grasping how things can add up.  Creating a budget will decrease your stress levels because, with a budget, there are no surprises.

With Success factors we manage customers Budget. There are many types of budget that can be set up

Success factors has different Budgeting methods –

Success factors budgeting is a very robust tool that provides various standard options to perform bottom-up budgeting for compensation planning. Apart from providing options to base budget on standard fields in the compensation form, Success factors provides great agility to allow organizations to perform calculation (allocated and used) based on custom fields.

Below are few questions that clients need to answer before we manage their Budget-

  • How is the budget determined?
  • Are there multiple budget pools?
  • Which components have budget? (Merit, Lump Sum, Total Salary, so on...)
  • Can planners go over budget? Is the budget limit hard or soft?

SALARY:  Budget Based on % of Salary

In this method the budget is calculated as % of the current salary. This method is easy to configure and test, less risk involved. The drawback for this is that once forms are launched, you cannot change the percentage. Everyone gets the same percentage.   

SALARY:  Budget Based on Targets

Here the budget is calculated as % of the Merit Target, LumpsumTarget, Lumpsum2Target. It is calculated as a percentage of a field other than current salary. For example, calculate 3% budget of eligible earnings (imported using Merit Target field), rather than salary. You must enter the percentage in the Budget Value field. This method is flexible as it is not based on salary.

A drawback is that it is not dynamic – even if targets are reloaded, the budget does not recalculate.

SALARY:  Budget Based on Guideline

This helps customers determine budgets based on performance and benchmarks without the need to calculate outside of the system. When this mode is used, the based On field is ignored. This budget is flexible as it is not based on Salary.

One drawback is that the customer must display the default guideline (cannot keep default as an increase to 0%).

SALARY: Percent Loaded at Employee (User) Level

This method uses fields on the employee import file to pass in the % each employee can contribute to the manager’s budget. This is Flexible because it is not based on salary. It is Dynamic!  If budget needs change, just reload the new percent.

A drawback is that more calculations needs to be done outside of SF.

SALARY:  Budget Based on Cascading

Cascading budget is the process of starting with a top level planner and creating a budget that is then drilled down throughout the organisation. Since it is a UI based budgeting tool, planners can go to the system and move percentages or currency down to the system to the planners below them.

If direct reports have direct reports of their own (two or more levels below), the cascade Budget check box gives them permission to cascade budgets to the direct / indirect reports.

In the example below–

Maya allocates 60% and 40% to Dana & Geoffery respectively to her direct reports. Dana allocates 70% (of her 50%) to Carries and 30% to Mallory


Managing Cascading

Click on the “Add Head of Hierarchy” button and select the user to be the person at the top of the budget “chain” using the Find User capability

Put a % or an amount that person has to allocate

Click Blue Arrow to Send Budget to head of hierarchy

Click on the person’s name

Cascade Budget Check Box gives permission to allow person to cascade budget to their direct/indirect reports.  Only employees who have a 2 or more levels below will have the cascade budget checkbox available.

By Clicking on the Cascade Budget check box, and clicking on the propagate button next to that planner’s name, it will cascade the budget down to that planner where he/she can then determine the amount to be applied to his/her planners budgets.

The above steps show how the cascading can be done by someone who has admin rights to the system.  In the example above we gave Sid Mormony Cascade Budget rights, but he does not have access to cascade his budget yet, because he has not been setup with Compensation Admin Privileges.

SALARY:  Budget Based on Groups

This budgeting tool allows the managers to determine budget for group of employees. Grouping can be done by division, department or location. IT is Flexible because it is not based on same the % for everyone. It is quite dynamic!  If budgets need to be changed, just change in UI or import file based – admin can control.

This method is complex to setup for the client. Not a lot of clients are using this, but this is used a lot more than Cascading Budgets.

SALARY:  Budget Based on Custom Field

  • Salary budget is based on percentage of a custom field.
  • mode = 'PercentOfCustomField‘
  • Applicable only to salary and basedOn = 'user|template|group’
  • The custom field must be specified in baseCustomField.
  • When basedOn='user', the percentage must be imported through the import key specified by attribute importKey

This functionality provides configuration capability to only show the first custom column value in the budget label and mask the rest of the custom columns used to construct the budgets. This option can be XML primarily. There is no need to build a UI for the configuration option.

This functionality can be used when there is an EC integration-

For instance- If your client wants to allocate budget based on Department, fetch Department from EC on a custom field, take another custom field and use lookup table on it to return budget % based on first field. Base your budget on this field.and use lookup table on it to return budget % based on first fieldBase your budget on this field.


Salary budget by custom fields with grouping

  • You can now build budgets based on a custom field and group that information
  • Enable to view budget in different grouping based on groupBy

Budget Grouping with localCurrencyCode+customField

Happy Budgeting!!

This blog is also available at http://www.ddg.biz/blog/Budgeting-in-SuccessFactors-DDG-Blog/index.php

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