on 09-29-2015 3:09 PM
Good day,
We are currently busy with a project for a Standard Chart of Accounts. Funds Management has been identified as the core for the solution, however FM has only 5 accounts assignments and we need additional 2. Our approach was to activate New GL for the purpose of creating the additional customer fields as additional account assignment elements, however it seems as if this new customer fields might not be available for the budgeting component of FM.
Please assist.
Regards,
Kennedy.
Hi,
Activating New GL won't provide you additional account assignment in FM. Could you specify your business requirement? In 95% of cases, even 3 FM objects are enough to cover the business needs. How come that five are not sufficient for you?
Regards,
Eli
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Hi Eli,
Thanks for your quick response. This is unfortunately not a customer requirement but a legislative requirements where all local governments have to convert to a given Standard Chart of Accounts for uniformity. The new Chart has 7 dimensions and is hierachical, hence my request above.
Regards,
Kennedy.
Still, I'm not following... Chart of accounts is one thing, and FM assignment is another. Additionally, chart of accounts cannot have five dimensions. It can have groups and subgroups, but this can be equally mapped with groups and subgroups of FM object, say, commitment item.
Please, give an example of of FM assignment that you would like to have in your system.
Good day Eli,
I can't appreciate enough the effort you are giving to assist me with the issue. Let me use another approach in explaining the deliverable. The Standard Chart of Account projects is: (1) Legislation, (2) Classification Framework and (3) Business process re-engineering. The project stipulates that you must budget, transact and report based on the Classification Framework.
The classification has 7 segments/dimensions namely Fund, Function, Item, Project, Municipal standard Classification, Costing and Region. Based on the classification, the budget must done based on the 7 segments and also all financial transactions must have a selection for each of these segments.
Our approach first was to identify SAP standard objects that can be used for the 7 segments for the classification. In addition this objects must be available in all modules that triggers/create an entry into General Ledger. The current system is already using 2 of the segments namely GL (Item) and Cost Center (Municipal Standard Classification). All transactions must have been budget for.
Based on the above brief, this is how we are going to map the 7 segments and FM objects.
Fund - Fund in FM
Function - Functional Area in FM
Item - Commitment Item in FM (GL in FI)
Project - Funded Program in FM (WBS or Project from PS)
Municipal Standard Classification - Fund Center in FM (Cost center in CO)
Costing - not mapped
Region - not mapped
Brief explanation of each segment
Fund - where does the money come from?
Function - Where does the money go?
Item - What did we buy, give or receive?
Project - How does municipal spending convert to deliverables (Capital, Operational)?
Municipal standard classification - who is responsible within the municipality?
Costing - Should the cost be reallocated to functions rendering services?
Region - In which region are the goods and services delivered or rendered?
I trust the above elaborates in terms of what needs to be achieved.
Regards,
Kennedy.
Hi,
Interesting pattern... and your description is most exhaustive. Some clarifications to understand it further, though, are required:
a) Suppose your client indeed has 7 dimensions for budget figure. Does he realize the complexity of managing budget on this level?
b) Projects: in theory you can 'outsource' project funding to budget functionality in PS. If not possible (or cumbersome), you can use earmarked funds to map your projects; hence, no need for additional dimension
c) Costing: I don't see how this 'object', from your description, can be incorporated in budgetary model.
d) Region: could be easily integrated within fund centres
Regards,
Eli
Good day Eli,
I am still looking at point (b) about Projects. Point (a) with regards to the complexity of managing the budget is quite clear, unfortunately this is a legislative requirement which is being implemented by Treasury. I have logged a query to check with Treasury if it is compulsory to budget inclusive of Costing and Region as there was a discussion that Region should not be included.
On integrating region with Fund center, does this have to do with substrings almost similar to what Deepak explained? We are currently investigating that, where Commitment Item will integrate with Costing and Region also what you are suggesting.
Much appreciation for your assistance.
Regards,
Kennedy.
Commitment item should not represent other, but G/L account. Otherwise, you will be lost in derivation rules, not mentioning the fact that some of the core FM processes will become complicated, if you try to incorporate other data in this FM object.
Mind me asking what Treasury you speak of? Which country?
Other questions: how will Region be represented in your financial document? And costing? And, as we speak of it, all other dimensions? Without clear representation of these entities in FI (and Logistics, potentially), you won't be able to map it to budgetary structure.
Eli
Hi Kennedy,
You need to use coding structure for combination of Function, Project, Muncipal standard classification, region. Define it is functinal area.
@Eli: Please give your expert comments.
e.g.
Function
Administration 1100
Finance & Accounts 1200
Project
Capital 11
Operation 12
Muncipal standard classification
Manager 09
Vice President 01
Region
Region 1 01
Region 2 02
So your functional area will be
Function (Administration) + Project (Operation) + Muncipal standard classification (Manager) + Region (Region 2)
=1100+12+09+02
=1100120902
Costing
Cost center is equal to fund center.
Hope this will help you.
Regards,
Deepak
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Possible in theory, but derivation, maintenance and reporting of such a structure would be very difficult. I remind that all this budget structure (by name or by functionality) will have to maintained at frequent level and budgetary documents transferring the credits are foreseen. Handling it with 7 dimension (whether it's defined by dimension or via Cartesian matrix) is preposterous. Another point to look at is financial/logistic attributes which would be the source for these FM objects. I.e. if budget is managed in 7 dimensions, then FI document should have them as well in this or other form.
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