Funds Management
Day 1
Funds management overview:
Funds management module is used by private sector companies.
Either government or the private companies provide funds to the companies.
So these companies have to show their expenses, budget, approved budget and the left over budget.
So the reports have to prepare for that.
There are some other budgeting also like internal order budgeting(order level budgeting), project budgeting but in
internal order we cannot capture the procurement side budgeting whereas the FM can capture expense related and
MM side expense.
FM hierarchy and currency:
FM area --> highest node, Single FM area can be assigned to multiple companies (1:N)
Criteria for assigning same FM to multiple company codes:
1. Single COA
2. Same fiscal year
3. Same FM currency
Fiscal year --> have to assign fiscal year variant of FI to FM area
Budget currency --->can be company code currency or group currency.
FM master data
Fund center = cost centre or group of cost centers or plant or internal order or WBS elements etc. (FMSA),
Display - (FMSC)
Commitment item = GL account (FMCIA), Display - (FMCIC)
Fund
Funter center group --> multiple fund center can be grouped
Commitment item group --> multiple commitment item can be grouped
Derivation value maintenance
(FMBB) - create, modify , post budgets entries.
Scenario:
For the travel expense, we r having only one fund center and travel expense commitment item is used , but have to
segregate for domestic and international travel expense then funds come into picture.
So, within a fund center two funds can be created.
For the above scenario fund have to be activated and fund to be derived by the derivation rule.
If the fund is activated then it has to be derived for all the cases either dummy fund or the real one.
Points:
Budget can also be maintained at profit center level.
Multiple company code cost centers can be linked to single fund center.
Single cost center can be mapped to multiple fund centers (possible but not much used)
Single GL account can be mapped to multiple commitment items.
During transaction, it is known that the transaction is budget related by the derivation of the FM master data by the
system.
Funds management can be maintained at FI and FM level, only FM level (no internal order involved), internal order
level.
Suppose after one year new fund center is created for existing cost center then the derivation rule has to be
maintained with the respective date .
FM is independent on the FI and CO.
WBS element:
Regarding the capex expenses will be captured in WBS element and it will be settled (AUC) and converted into fixed
asset.
In WBS element cost center or profit center or project type etc will be maintained that can be derived as a fund
center.
Through the function module all data will be derived from the WBS master data.
Same as function modules are available for process order, internal order, maintenance order etc.
If the business not requires budget for the internal order, WBS element then the dummy commitment item will be
maintained where it comes under non - budgeted category.
Total budget:
C + A = total budget
But in the cost center reporting commitment budget will not be involved in the financials.
Commitment - amount is planned prior like from PR, PO usually for PR, PO no accounting doc generated but if we
activate budgets for PR, PO then the accounting doc generated from the budgeting side.
Actuals - Direct postings like FB50, FB60, FB70 etc where the amount is planned before.
Scenario:
Commiting budget
Once the budget is booked, same budget cannot be used for other purpose.
Eg. For some inventory committed budget is 10,000 USD
For each quantity 100 USD
PR - 100 qty = 10,000
PO - 20 qty = 2000
Then system will reverse the committed budget at PR level
So PR = 10,000 - 2000 = 8000 open commitment at PR
PO = 2000
But GR = 15 qtq = 1500 = Actuals
Remaining 500 in PO = open commitment at PO.
Now if we try to post a GR for 600 it cannot be posted as only 500 remains in PO open commitment
Fiscal year:
Carry forward has to be done for utilizing budget in next year.
Budget types:
101- Up-to payment level , budget will be consumed
102 - It is invoice based payment budget, up-to invoice, budget will be consumed.
350 - For PR PO and invoice and payment
Commitment item Master data:
These are the financial transactions in commitment item master data
Expenses or budgeted item ----> 30
GR / IR ---> 40
Balance sheet (non budgeted ) ---> 50
AR and AP ---> 60
Cash and bank related ----> 80 or 90
FM scenarios in Finance :
OPEX postings - posting in FB60, FB50, cash journal
CAPEX postings - asset postings
Procurement side:
In OPEX For internal order F and cost center K is used.
In CAPEX For projects P and Q is used
Budget consumption date:
Posting date
Delivery date
