SAP Financials 2011 Prakhina Leverage Budget Management Functionality in SAP

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SAP Financials 2011 Conference presentation by Michael Prakhina "Leverage Budget Management Functionality in SAP to Administer Budgets for Investment Management, Project Systems, Internal Orders, and Cost Centers"

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SAP Financials 2011 Prakhina Leverage Budget Management Functionality in SAP

  1. 1. Source: SAP 0
  2. 2. Leverage Budget ManagementFunctionality in SAP toAdminister Budgets forInvestment Management, ManagementProject Systems, InternalOrders, and Cost CentersMichael PrakhinaLazar Consultants © 2011 Wellesley Information Services. All rights reserved.
  3. 3. In This Session …• This session examines strategies for configuring and deploying SAP applications to support Budget Management scenarios• Review functionality available across the SAP landscape to manage budgets and receive best practices for streamlining the budgeting processes for projects, internal orders, and cost centers• Get a handle on budgeting for more than one currency• Examine the prerequisites for budget allocation and walk through configuration of Budget Management functionality for projects and internal orders 2
  4. 4. In This Session … (cont.)• Learn how to compare actual postings versus budgets using cost center budget planning functionality• Understand the impact that purchase order and invoices have on budget through Commitments Management• Get unique tips for displaying budget line items, and learn how to run budget update reports• Get tips for approving and releasing the budget on the Internet 3
  5. 5. What We’ll Cover ...• Overview of Budget Management in SAP ERP 6.0• Understanding Availability Control• Understanding C U d t di Commitments Management (CO) it t M t• Budgeting in Investment Management• Looking at Budget Management for Cost Centers• Looking at Budget Management for Internal Orders• Looking at Budget Management in Project Systems g g g j y• Web-Enabled Budgeting in SAP ERP 6.0• Wrap-up 4
  6. 6. What Is Budgeting? • Budget is the device by which management approves the expected development of order costs over a given timeframe p p gSource: SAP 5
  7. 7. Planning vs. Budgeting The budget is the approved cost structure for an order or a project • You administrate the approved cost framework for an order or an pp order group using Budget Management • You can enter the order budget manually or copy budget information from any plan versionSource: SAP 6
  8. 8. Budget Types• Original budget  This is the budget originally assigned, before any updates were made• Budget updates  Unforeseen events, additional requirements, for example, price rises for external activities, and so on. This may mean you need to update the original budget, in the form of:  SSupplements l t  Returns• Current budget  This is derived from the budget types already mentioned 7
  9. 9. How Budgeting Works• To create a budget for an order, you must define a budget profile and assign it to the order type• The budget profile defines the parameters for budgeting• In Customizing, you must define a number range for your budget documents• When you save the budget, the system checks that the sum of the annual values matches the overall value for the order You can: Order: 400010 Original Current • Update and make changes Budget Budget to the budget Overall 40,000 50,000 2000 15,000 19,000 • Freeze the budget using 2001 2002 15,000 2,000 18,000 3,000 status management Budget Line Items 2003 3,000 4,000 Order 400010 Chicago Trade Fair • Display the budget line Document Year Activity Amount ... items from the budget 030000001 2000 Original 15,000 screen 030000200 2000 Supplement 5,000 030000306 2000 Return 1,000- • Enter text for budget line items to provide supporting Total 2000 19,000 information for the budget transaction 8
  10. 10. Define Budget Profile The budget profile defines the parameters for b d ti f budgeting Is Availability Control activated manually or automatically during budgeting?• To create a budget for an order, you must define a budget profile and assign it to the order type g yp 9
  11. 11. What We’ll Cover …• Overview of Budget Management in SAP ERP 6.0• Understanding Availability Control• Understanding C U d t di Commitments Management (CO) it t M t• Budgeting in Investment Management• Looking at Budget Management for Cost Centers• Looking at Budget Management for Internal Orders• Looking at Budget Management in Project Systems g g g j y• Web-Enabled Budgeting in SAP ERP 6.0• Wrap-up 10
  12. 12. What Is Availability Control? Is availability control active? For which transactions will availability control apply? What are the tolerance limits? • As an order or project is executed, business events are recorded that call upon available funds • These events result in the posting of actual costs and commitments to the order or project • Commitments represent obligations that lead to actual costs through subsequent business events; e.g., a purchase order may result in a CO commitmentSource: SAP 11
  13. 13. How Budgeting Works with Availability Control Use tolerances to define how the system sho ld s stem should respond to a given degree of budget overrunSource: SAP 12
  14. 14. Budget Carry Forward • You can transfer unused funds to the next fiscal year using the budget carry forward function • SAP carries forward the difference between the budget and actual amounts for the year specifiedSource: SAP 13
  15. 15. Budgeting in Different Currencies • You can choose different currencies to enter your budget • All budget items are converted and saved automatically in the controlling area currency and the object currencySource: SAP 14
  16. 16. What We’ll Cover …• Overview of Budget Management in SAP ERP 6.0• Understanding Availability Control• Understanding C U d t di Commitments Management (CO) it t M t• Budgeting in Investment Management• Looking at Budget Management for Cost Centers• Looking at Budget Management for Internal Orders• Looking at Budget Management in Project Systems g g g j y• Web-Enabled Budgeting in SAP ERP 6.0• Wrap-up 15
  17. 17. About Commitments Management • By recording commitments as well as actual costs, you can compare the funds you have allocated to your budgeted cost to determine funds availabilitySource: SAP 16
  18. 18. Commitments Carry Forward • You can carry forward open commitment values into the first period of the next fiscal year as part of year end closing year-endSource: SAP 17
  19. 19. Types of Commitments Management• There are three types of commitments, depending on the account assignment object:  Order commitment  The commitment is initially assigned to an order  Cost center commitment  The commitment is initially assigned to a cost center  Project commitment  The commitment is initially assigned to a project or to a work breakdown structure element 18
  20. 20. Activate Commitments Management• You activate Commitments Management:  For each controlling area from a chosen fiscal year  F orders per order type For d d t  For cost centers  For cost centers per cost center type 19
  21. 21. Commitments Reports• In addition to the actual values and budget values, this report displays commitment values 20
  22. 22. What We’ll Cover …• Overview of Budget Management in SAP ERP 6.0• Understanding Availability Control• Understanding C U d t di Commitments Management (CO) it t M t• Budgeting in Investment Management• Looking at Budget Management for Cost Centers• Looking at Budget Management for Internal Orders• Looking at Budget Management in Project Systems g g g j y• Web-Enabled Budgeting in SAP ERP 6.0• Wrap-up 21
  23. 23. Budgeting in Investment Management • Budgeting is not possible on appropriation requests. Appropriation requests allow planning only (costs and revenue). • Distributed values are the sum of the budget values from the next lowest level f fSource: SAP 22
  24. 24. Budgeting in Investment Management (cont.) • Bottom up: Bottom-up: Planning investments in an investment program • Top-down: Budget distributionSource: SAP 23
  25. 25. Overall and Annual Budget Values • Budget values of the measures are run separately from the values of the program • You can compare the values of the program and measures in reporting p p g p g • The budget values from the program can be distributed to the assigned measuresSource: SAP 24
  26. 26. Budget Distribution • If you need the indicator for budget distribution of annual values, you can enter it in the program definition • It is only possible to set the indicator f budget distribution of annual values if for f f budget distribution for overall values is already setSource: SAP 25
  27. 27. Consistency Check for Budget Values • There is an additional check between the program positions and the measures assigned to them • The system checks that the sum of the budget that is distributed to the f investment measures is not higher than the budget of the program positionSource: SAP 26
  28. 28. Budget and Availability ControlSource: SAP 27
  29. 29. Budget CategorySource: SAP 28
  30. 30. Budget Category (cont.) Standard Assignment of Actual Values to Budget Categories • Those settled to a fixed asset (= budget category 1, costs for capitalization) • Th Those settled to costs l d (= budget category 2, incidental costs not eligible for capitalization)Source: SAP 29
  31. 31. What We’ll Cover …• Overview of Budget Management in SAP ERP 6.0• Understanding Availability Control• Understanding C U d t di Commitments Management (CO) it t M t• Budgeting in Investment Management• Looking at Budget Management for Cost Centers• Looking at Budget Management for Internal Orders• Looking at Budget Management in Project Systems g g g j y• Web-Enabled Budgeting in SAP ERP 6.0• Wrap-up 30
  32. 32. Define a Budget Profile for Cost Centers• You create a budget profile to specify technical and administration values for budgeting by cost center 31
  33. 33. Maintain Cost Center Budget Information You can manually enter budget for cost centers t Use Excel to upload values automatically• Entering a cost center budget is simple! You can enter it manually, copy/paste manually copy/paste, or just simply upload from spreadsheets spreadsheets. 32
  34. 34. Cost Center Budget Planning in Excel Type Report• You can upload budget information into SAP from Microsoft Excel 33
  35. 35. Cost Center Budget and Commitments Reports Via the Report/Report Interface you can branch to the Cost Centers: Actual Line Items report 34
  36. 36. Budget Upload Using Excel You can upload budget values from Excel You can copy actual costs or other p planning profiles to gp your budget• To be able to upload the files, you must specify the characteristic values in the lead column of the corresponding planning layout• It is not enough to simply specify the characteristic text 35
  37. 37. What We’ll Cover …• Overview of Budget Management in SAP ERP 6.0• Understanding Availability Control• Understanding C U d t di Commitments Management (CO) it t M t• Budgeting in Investment Management• Looking at Budget Management for Cost Centers• Looking at Budget Management for Internal Orders• Looking at Budget Management in Project Systems g g g j y• Web-Enabled Budgeting in SAP ERP 6.0• Wrap-up 36
  38. 38. Assign Budget Profile to Internal Order You assign a Budget Profile to an Internal Order Type. You can allocate the budget after the Created status is reached. If you want to prohibit budget allocation in the Created status, you need to define a user status. 37
  39. 39. Change Budget for Internal Order You can use Excel to upload values automatically• You can manually enter a budget per internal order or per order group• Internal order commitments will reserve funds 38
  40. 40. Internal Orders Commitments Report• Internal Order Commitments report enables the internal orders p manager to compare budgeted and allotted costs on internal orders• It also includes postings on statistical internal orders l i l d ti t ti ti l i t l d 39
  41. 41. What We’ll Cover …• Overview of Budget Management in SAP ERP 6.0• Understanding Availability Control• Understanding C U d t di Commitments Management (CO) it t M t• Budgeting in Investment Management• Looking at Budget Management for Cost Centers• Looking at Budget Management for Internal Orders• Looking at Budget Management in Project Systems g g g j y• Web-Enabled Budgeting in SAP ERP 6.0• Wrap-up 40
  42. 42. Budget for Project Systems • You use the Maintain Original Budget transaction to assign funds for the project and its parts • In the budget profile, you can specify whether funds are to be assigned as overall values, or distributed by di t ib t d b year i t d instead • You can prevent users from maintaining the overall budget for a project by assigning appropriate user statusesSource: SAP 41
  43. 43. Distributing Budget from Investment Program • The items are budgeted in the investment program • You can use the cost planning data of the investment program as a proposal for budgeting • You can copy the plan versions of your choice to the budgetSource: SAP 42
  44. 44. Releasing the Budget • You have used the budget to prescribe approved funds • To ensure that the available funds are not exhausted at an early stage you stage, release the budget in stagesSource: SAP 43
  45. 45. Enter Budget Information for Projects• You can enter or use an Excel upload to import budget amounts per project or for WBS elements 44
  46. 46. Assign Budgeting Profile to the Project Definition • You store a budget profile or order type in the project definition • The period of time during which budgeting is allowed • Whether budgeting is allowed for total annual values and/or annual values In Order for Budget Control System (BCS) to work you should not maintain budget profile 45
  47. 47. Releasing the Budget Release• You can release the budget on a total or an annual level• The release is based on the current budget, meaning the original budget changed by supplements, returns, or transfers supplements returns 46
  48. 48. Budget Foreign Currency Recalculation for Projects• Regardless of which currency you use for budgeting, the system always translates the entered planning and budget line items into the controlling area currency and object currency and updates the values in both currencies 47
  49. 49. Consistency Check • Consistency check of plan/budget • Transfer of plan to budget • Mass release of budget for projects • Currency recalculation for plan/budget• The consistency checks you activated are run in the background when you post or pre-post a budget amount 48
  50. 50. Budget Carry Forward for Projects You cannot carry forward a negative budget into the following year 49
  51. 51. Project Budget and Commitments Reports• Using the navigation menu, you can break down a report by a number of features, such as business transactions• p g g You can report overall budget as well as budget commitments informationDrilldown 50
  52. 52. What We’ll Cover …• Overview of Budget Management in SAP ERP 6.0• Understanding Availability Control• Understanding C U d t di Commitments Management (CO) it t M t• Budgeting in Investment Management• Looking at Budget Management for Cost Centers• Looking at Budget Management for Internal Orders• Looking at Budget Management in Project Systems g g g j y• Web-Enabled Budgeting in SAP ERP 6.0• Wrap-up 51
  53. 53. Web-Enabled Budget Requests Request for Budget Request (scenario SR61) Budget Request with Approval (scenario SR62) In SAP ERP 6.0 there are multiple predefined Web-Enabled forms such as this one: Components  Internet/ Intranet Services  Internal Service Request  Scenario Definition  Define Scenarios 52
  54. 54. Internal Tasks• You can define a follow-up action for an Internal Task that will automatically be triggered and executed by the system• A follow-up action can call one or more function modules that execute specific functions (for example, printing or calling up a transaction) 53
  55. 55. Document Flow• The document flow allows you to identify:  Preceding documents  Documents from which the current notification originated  Subsequent documents  Documents that originated from the current notification  “To-and-from” references between documents  Document number  Additional data (if available) 54
  56. 56. What We’ll Cover …• Overview of Budget Management in SAP ERP 6.0• Understanding Availability Control• Understanding C U d t di Commitments Management (CO) it t M t• Budgeting in Investment Management• Looking at Budget Management for Cost Centers• Looking at Budget Management for Internal Orders• Looking at Budget Management in Project Systems g g g j y• Web-Enabled Budgeting in SAP ERP 6.0• Wrap-up 55
  57. 57. Resources • SAP Service Marketplace*  Cost Center and Internal Order Accounting  htt // http://service.sap.com/~form/sapnet?_SHORTKEY=01200252 i / f / t? SHORTKEY 01200252 310000079805& • SAP Help Portal  http://help.sap.com/erp2005_ehp_03/helpdata/EN/a9/ab7f684141 11d182b10000e829fbfe/frameset.htm • SAP Developers Network  www.sdn.sap.com/irj/sdn/bpx-forums* Requires login credentials to the SAP Service Marketplace 56
  58. 58. 7 Key Points to Take Home• You can budget by investment program, cost center, internal order, and project/WBS• The main configuration feature is to create and assign a budget profile• All reports are Excel-enabled• You can upload budget information into SAP from Excel• You can display, enter, and request budget information over the Internet/intranet I t t/i t t• You can monitor your budget spending with Commitments Management• The Availability Control feature prevents you from spending unapproved funds 57
  59. 59. Your Turn! How to contact me: Michael Prakhina michaelprakhina@lzar.com 58
  60. 60. DisclaimerSAP, R/3, mySAP, mySAP.com, SAP NetWeaver®, Duet®, PartnerEdge, and other SAP products and services mentioned herein as well as theirrespective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other productand service names mentioned are the trademarks of their respective companies. Wellesley Information Services is neither owned nor controlled bySAP. 59

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