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Budget Control point in FM-BCS

atif_farooq
Active Contributor
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Hi Guys:

I have a query in mind since a long time and today i am posting it on forum to get feedback. In a public sector organization where there are lots of department , budget consumption from FM-BCS perspective can occur from following dimensions.

1..MM Procurement and good issuance

2..HCM Payroll and off cycles

3..CO Allocations

4..Assets

4..FI expense postings

My question relates to last point FI expense posting. I will start my question with an example, a person from department A travels and coming back it presents bills to finance department to reimburse him, finance department finds that budget of the department A for commitment item Travel has already exhausted. There is a gap here, there should be some feature within FM that budget should be checked at the time he is departing for travel and estimated  amount should get committed in SAP FM-BCS hence budget gets checked on real time basis and after when he is done with travel he will submit the bills to finance, finance should be able to post bills referencing the document where budget was committed.

The above scenario holds true for all kind of expenses posted through FI. I want to know what is normal practice in public sector organization to accomplish the same..

Thanks

Regards

Atif

5 REPLIES 5

sjajodia
Contributor
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Atif,

You can commit the funds for this using an earmarked funds document (e.g. Funds Reservation). You can then liquidate the EF document by referencing it in the FI document. If you are using SAP Travel Management you can commit the funds for a Travel Request as Trip Commitments (VT52).

Thanks

Shyam

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Hi Shyamal:

So it means for every budget head who will be creating earmarked fund for these kind of posting. Will it be actual user who will be doing this before travel or doing any any kind of expense ? How it will be made sure that the same earmarked fund will be used by the guy doing FI posting . There can be as many as 500 personnel who can incur these kind of expenses.

Regards

Former Member
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Atif,

I quess, the best way is to use Travel Management module, which is integrated with FM: http://help.sap.com/erp2005_ehp_06/helpdata/EN/f0/ca3fec260211d28a430000e829fbbd/frameset.htm

The business processe is: 1. employee submits a travel request. 2. travel coordinator filsl out the itemized estimated costs. 3. manager approves it (he sure consults the budget report). 4. employee gets travel advance. 5. emplyee submits the expense report and settles the cost. I believe one way or another this process can be mapped to SAP.

Regards,

Ming

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Atif,

These are good process related questions. As Minghong Ji said the Travel Management component can provide a better process with workflow. There are, however, some shortcomings:

1. The travel commitment is fully liquidated when the first expense report is posted to accounting. No partial liquidation is supported.

2. The commitment is initially posted as statistical and converted to real after approval (can be a good thing for some customers).

3. This requires configuration of HCM Organization Management and Personnel Adminstration for employees who will travel

In general where we use EF documents, they are entered and liquidated by budget managers not individual employees.

Thanks

Shyam

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Hi Shyamal/ Ming:

Thank you for your suggestions , at our client side these does not fit . I would like to update forum and you guys what i have done to effectively cater these things using PR function in MM

1..In MM we have created two document types for raising Direct expense related PR, one against order ( for sponsored object derivation like Grants & funded programs) and other for Cost center (for FM related derivation)

2. Account assignment categories and item categories for these two documents types have been set as F & D and K & D respectively. These are defaulted for these document types using exit, other fields like plant and materiel group (direct expense)  have also been defaulted. This has been done in order to make direct expense creation process by every one in Organization simple and user friendly.

3..For GLs mapped in FMDERIVE and GMDERIVE , service master with same code as of GL and same description have been open in MM .

4.User will simply go to service tab in PR screen and select the required expense through service master description search query and these will then be copied to GL account screen pop up and cost center or internal order will be also be copied from Purchasing group link created through a simple modification. Estimated amount to commit budget will also be entered in valuation field.

5..With above process, FM account assignment or GM account assignment will be derived automatically .Hence creating commitment thereon, this will then flow to dept HOD and then finance for approval. This is done to regular budget control system in advance.

6. Finance user before posting will set this PR as close and then post the finance entry with reference to this PR.

This is how budget can be controlled in advance..

Regards