Cost Center 1:1 Relationship with fund center

[atif_farooq]

Hi:

I have defined derivation based on material and valuation class and have derived fund center and commitment items based on it. I read on most of the occasion that there is 1 to1 relationship of fund center to cost center but here in this stock budgeting routed through MM, we do not need any cost center , stock GL account is balance sheet item and is a current asset, so in this case we will not need any cost center linked to fund center ..Right? I just want to confirm the assumption i have made.

Thanks

Regards

[Former Member · Accepted solution]

Hi,

I assume you want to budget and update the commitments for your inventory purchasing. So you defined a derivation rule to derive FM address from material and valuation class. That is correct. We do somthing very similar to this too. One- to-one relationship between a cost center and a funds center or a GL account and a CI is certainly not necessary.

Regards,

Ming

[atif_farooq]

Hi:

So it means we do not need cost center here in this stock based budgeting scenario. ?

[Former Member]

That is correct. In our case, we derive FC's from plants when it comes to stock purchasing.

[former_member195434]

Hi Atif,

I know this is a slightly old post. But I am configuring FM for the first time

and am facing the same issue. I was wondering how to assign fund center at

the time of material purchase (since no cost center is hit at the time of

PO). Here you say you derive it from material and valuation class. So do you

create a fund center especially for this? that is, this derived fund center

does not have a corresponing cost center?

The reason i am asking this is because i am using budget structure and i have

defined fund centers corresponding to profit center as budget addresses and

fund centers corresponding to cost center as posting addresses. Now, when

creating PO, budget must be posted to a posting address account assignment. What should be the fund center at the time of PO creation?

Please advice.

[atif_farooq]

Hi:

Normally organizations use budget structure when they use top down budgeting. Budget is held at top level (fund center) and its subordinate or child fund centers (posting address) consumes its. In MM we are using purchasing group which represent departments at client side to derive fund center . Derivation of fund center through purchasing group will not be done straightaway through FMDERIVE , you need to use BADI_FMDERIVE to derive fund center from purchasing group. Hope it will help.

Regards

[former_member195434]

Yes, that's very helpful. thanks.