FM Activation

[Former Member]

Hello Experts,

I am basically a FI-CO consultatnt implementing Fund Management.We are on ECC6.0, EHP4 and already implemnted all other modules (FI, CO, MM, PS, SD, RE-FX, PM) in the year  2010. Now we want to activate FM.

I am doing this in our test system and to start with I have following question, need your advice in understanding the same:

In "Basic Setting" node, there are three nodes:

     "Activate Global Fund Management Function (PSM-FM)

          -----> When I activate it, I get message, GL A/c customizing must be adjusted, and system response as "It is not necessary to activate  Fund management

     " Activate Multi year budget Execution"

          --------> what is the impact of activating "Multi Year Budget Execution"? in documentation it is stated that, if it is activated, year end carry forward for budget is not required?

Can you please advise on the above two questions?

Regards

Shailesh

[Former Member · Accepted solution]

Dear Shailesh

You can decide whether multi-year budget execution is suitable for your organization based on the following:

• Your organization has a budget that should allow multi-year availability control and budget execution to take place. The fiscal year change has a subordinate significance on your budget execution.
• You want to work with several independent budgets in an FM area.
• Your organization uses period-based encumbrance tracking. Each business transaction that can be reproduced via a logical document chain must be reflected in the budget against which the commitment was originally posted. However, it should be possible to assign any adjustments made to an account through follow-on documents.

It means that if you click on this checkbox then you can work in the current fiscal year on the purchasing document( PR/PO) which was made in previous fiscal year without getting it carryforward.

Multi-year budget execution makes it easier to handle commitment bound to a budget.  A carryover of the commitment budget is no longer required. A commitment posting can reference budget within a budget that was already entered in the previous fiscal year.

Prerequisites for using Multi-Year Budget execution :

1.) You must have multi-year master data. The FM account assignment element ’fund’ is obligatory.

2.) You must have Budget Control system as your budgeting tool.
3.) The actual/commitment posting requires Period based Encumbrance Tracking.