SAP Fund Management

Budget Control System

(FM - BCS)

Prepared By-
Mohit Verma
 Agenda

 Budget Overview
 Fund Management Budget Control System (BCS) Overview
 Business Benefits
 Organizational Structure in FM
 Funds Management Master Data
 FM-BCS Functionality
 Activate Business Function EA-PS
 Funds Management-BCS Component View
 Challenges in Funds Management Module
Budget Overview

 What is Budget
 Type of Budget
 Budget

What is Budget

 An important instrument of the

financial management used as
aid in planning, programming
and control

 A budget may be defined as a

financial and quantitative
statement, prepared and
approved prior to defined
period of time, of the policy to
be pursued during that period
for the purpose of achieving
the given objective.
Type of Budget

 Operating revenue budget- related to volume of work

anticipated

 Operating expenditure budget: recurring expenditures for

operation and maintenance of services e.g. salaries and wages,
supplies, support utilities, maintenance

 Capital budget ( non recurrent ): meant for growth ( new

facilities), replacement of obsolete. Needs are many –
prioritize

 Cash budget : provision for anticipated cash expenditures , for

planning the cash flow e.g. salaries, bills etc.
 Funds Management

The functions in this component support you in creating and executing

budgets. The purpose of Funds Management is to budget all expenditures
for individual areas of responsibility, to control future funds transactions in
accordance with the distributed budget, and to stop the budget being
exceeded. You can adapt the budget to changes in conditions by entering
releases, supplements, returns, and transfers.

Funds Management is fully integrated with other components of the SAP

System, especially with the Budget Control System (BCS).

A basic requirement for the use of Funds Management is integration with

the General Ledger Accounting (FI-GL) component.
 Funds Management - Business Benefits

Funds Management enables you to:

 Budgeting all expenditures for individual responsibility areas.

 Monitoring funds movements in the light of budget available.
 Preventing budget over-runs.
 Online activation availability control – warning and/or mail for
insufficient funds, error in case of over consumption etc.
 A well-defined and transparent Budget utilization and
monitoring.
 Integration with all other SAP Modules.
 Budgetary control and reporting through the system.
Organizational Structure in FM
 Funds Management-Master Data

SAP Funds Management has following six master data to be used as

account assignment,

 Commitment Item
 Funds Center
 Fund
 Functional Area
 Funded Program
 Grants
Funds Management-Master Data
 Basic Use
 Fund Center and Commitment Item are always used and mandatory.
 Fund and Functional Area can also be used in funds management it is
optional.
 Grants and Funded program has to be used with Grants Management.
 You can also create hierarchies and groups (such as fund groups).
 Commitment item: revenues and expenditures
 Funds centers set up the organizational units hierarchically
 Funded Program: project and organizational related activities
 Functional area: program- and subprogram-oriented
 Fund Center and Commitment Item are always active
 If the fund / functional area / funded program or grant are used in
Funds management, they must be activated in customizing of Public
Sector Management.
 If the account assignment elements should also be used in Asset
Accounting, the account assignment elements must also be activated
in Asset Accounting.
FM-BCS Functionality
Basic functionality of fund management is,

 Budget Planning
 Budget Entry
 Budget Control
 Integration with other Modules
 Year End Closing
 Budget Planning

FM BCS provide very flexible and robust tool for planning.

 Budget planning can be done with various level, it may follow
“bottom up” to “top-down” approach.
 Planning can be done for capital items and revenue items.
 Planning can be done for balance sheet GL as well as P and L GL.
 Planning value can be entered by various users within system with
the help of authorization. It will help to follow bottom – up approach
of budget planning.
 Planning data can be stored in the various version as per business
requirements
 Planning data can loaded from MS Excel.
 Planning data can be copied from CO actual or plan data.
 BCS planning can be integrated with other external tool like BW and
SEM.
 External interface can be integrated with planning
 Workflow can be made from plan entry to plan released.
 Budget Entry

In SAP funds management budget control system budget entry as one

of the very easy task. This functionality can be used for various
business requirements.
Budget entry screen is very flexible and user friendly. It is just a copy
paste from excel you do not need any upload program to enter budget
in FM BCS.
Budget can be prepared or tracked at following process like
 Enter
 Return
 Supplements
 Transfer
 Budget Entry

 Budget can be entered for capital budget and revenue items.

 Budget can be entered for balance sheet GL and as well as P&L GL
too.
 Budget entry documents can follow the workflow.
 Budget entry can have functionality to release budget. Once budget
is released then only available for consumption. This depends on
configuration.
 Budget can be entry periodically (i.e. monthly). Monthly budget
entry can be entered in the system for reporting purpose.
 No monthly budget check is available.
 Budget reports can be prepared on monthly budget.
 Budget data can be stored in the system with different version.
 Entire budgeting cycle can be controlled through authorization
management and version status management.
 Budget documents can be hold, pre-post and post functionality.
 Entered budget documents can be reversed.
 Budget Execution

The Budget Execution component helps prevent budget overruns.

We can set a warning, error message or a mail to the Fund Manager
depending on the percentage of the budget utilized. This is the
most important feature in the Funds Management Module.
 Standard Process

 Every year starting, business must upload budget / planned

figures in SAP against their fund centre and commitment
item.
 Manually enter the supplement budget, if required after
proper approval.
 System automatically controls actual figures do not exceed
the budget /planned figures.
 System also gives warning message if budget consumed is
more than the set standard.
 SAP facilitates several standard reports for getting actual
values / budgeted values.
 System also facilitates the carry forward of balance budget to
the new fiscal year.
SAP provides budget transfer between different combination of the
fund center and commitment item.
 Integration with other Modules

Funds Management Module is fully integrated with all other module in

SAP ERP and BW/BI/BPC, to prepare, execution and control the funds
movements.
Integrating the components Materials Management and Funds
Management means that you can reproduce and monitor a procurement
transaction from the purchase requisition to the invoice for example.
Integration also ensures that all the data you need for budget
execution is available in Funds Management without additional data
entry.
 Integrated with FI/CO
 Integrated with MM
 Integrated with HCM
 Integrated with PM
 Integrated with PS
 Integrated with FI-CA
 Integrated with ISU
 Integrated with BW/BI/BPC
 Year End Closing

Year end in Funds Management means, the transfer of open

commitments (commitment carry forward) and a different transfer
of non-consumed budget (budget carry forward of residual
budgets) from old fiscal years to the new.

Basic Activity in Funds management year end-

1. Prepare for Year end

2. Commitment carry forward
3. Budget carry forward
Year End Closing
 Activate Business Function EA-PS

If you are not able to see these menu in your SAP System, follow the
following steps for the same.
Funds Management (Budget Planning and Execution), the Public
Service-specific core function, is part of the Enterprise Add on EA PS
It is delivered as part of the SAP system extension set.
The technical name is EA PS 6.0
Activate Business Function EA-PS
On easy access
On configuration IMG
Funds Management - Component View

Preparation

Basic Settings

Budget Control System (BCS)

Actual and Commitment Update/Integration

Closing Operations

Master Data
Challenges in Funds Management Module

All SAP modules will get affected when we activate funds

management module. The more affected are Material Management,
Plant Maintenance, Project Systems, Finance and controlling, Human
resource etc.

 System load and extra transactions will take place.

 Extra cost to maintain and support the System.

 Not necessary for companies who have single Business area/ profit
center/ Plant and very less number of the employees.

 At each and every stage the system will check the budget
availability and if there is no sufficient budget then the system will stop
the business transaction until the necessary approved supplementary
budget is uploaded in the proper time frame.
 Challenges in Funds Management Module

All the business transaction will get affected with the availability control
of funds management.

 Work load of the employees will increase.

 Annual closing activity also needs to be performed separately for this

module. This requires extra efforts for the employees.

 There will be a lot of maintenance work you have to take into

consideration for funds management every time when you create new
profit center/ plant/ GL etc.

 All cost objects must have a fund center and commitment item.