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Funds Management Overview

Funds Management - Objective

Overview Funds Management Organization Structure Masters Budgeting in Funds Management Availability Control Reports

Funds Management

Overview Funds Management Organization Structure Masters Budgeting in Funds Management Availability Control Reports

Overview Funds Management Purpose


FM Component is used for creating and executing budgets for an organization. To budget all revenues and expenditures for individual areas of responsibility. To control future funds transactions in accordance with the 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

Overview Funds Management Organization Structure Masters Budgeting in Funds Management Availability Control Reports

Organization Structure
Organizational Units

Financial Management Area in FM Module Company Code in FI Module Controlling Area in CO Module Plant in Logistics Module

Organization Structure
Organizational Unit

Financial Management Area: Organization unit used to represent similar budgetary accounting and control rules. A financial management area contains settings that impact master data and/or transactions within that area

Organization Structure
Organizational Assignment

Relevant Company Codes are assigned to FM Area. Relevant Company Codes are assigned to Controlling area also in CO. FM Area is derived from the FI Organizational unit Company Code. All Other Organizational units, such as Plant and Purchasing organization in MM & Personnel Area in HR Module are linked to Funds Management via the Company Code

Organization Structures
CONTROLLING AREA FM AREA

COMPANY CODE

External Reporting Internal Reporting

PLANT

Funds Management

Overview Funds Management Organization Structure Masters Budgeting in Funds Management Availability Control Reports

Master Data - FM

Fund Center Fund Center Hierarchy Commitment Item Commitment Item Hierarchy

Fund Center

Fund Centers represent the structural grouping into departments, areas of responsibility, projects. Organizational unit within FM Area to which budget can be assigned. 1:1 or M:1 relationship between Cost Centers and Fund Centers. Fund Center can also be derived from Orders, WBS Elements. Fund Center has its own Hierarchy structure

Fund Center Hierarchy


GMR GROUP

INVESTMENT S

ROADS

AVIATION

ENERGY

PROPERTY

VARLAKSHMI

AGRO

EDUCATION WING ANNUITY TOLL

COMM SER WING

GTTEPL

GTAEPL

GPEPL

ESTATE & HOSTEL

GMR IT ENGG & PG

GMR PG DIPLOMA

SGSCR COLLEGE

SITE ADMIN

CORPORATE ADMIN

BUILIDNG

VEHICLES

COURSES

DEPEARTMEN TS

COMMON EXPENSES

Commitment Item

Commitment items represent the functional grouping of expenditures and revenues within a financial management area (FM area). Commitment Items can be Created as budget relevant or not relevant for budget. 1:1 or M:1 relationship between GL Account or Cost Element with Commitment Item. Commitment Item has its own Hierarchy structure

Commitment Item Hierarchy

Funds Management

Overview Funds Management Organization Structure Masters Budgeting in Funds Management Availability Control Reports

Budget Structure

Budget Structure is created to specify the budget objects (fund center, commitment item) which can be budgeted & posted.

Budget

There are mainly two types of budgets: Overall Budget is budget which is available for more than one fiscal year but is not distributed to individual fiscal years. Annual Budget is budget which is available for an individual fiscal year. Though you can distribute your annual budget period wise i.e., monthly but the availability control would be on the annual budget only.

Process FM Budgeting

Original Budget entry for the combination of Fund Center & Commitment Item. Budget Updates in terms of Supplements Additions to the original budget Returns Reduction in the original budget Transfers Transfer from one budget object to another budget object.

Process FM Budget Release


Budget Release is used to release the budget bit by bit as per the business requirement. Budget Release functionality can also be used for releasing the annual budget period wise if an organization requires the availability control on the amount released (for the period) which itself would be a separate transaction/activity on the user part.

Process FM Budgeting
The current budget in system is equal to: Original budget + Supplements - Returns +/- Transfers + Year-end closing budget transfer --------------------------------------------------------------= Current budget Availability Control is carried out on the Current Budget.

Business Process: Master Data Maintenance

Master data maintenance will include Commitment Item master Commitment item hierarchy Fund Center master Fund Center hierarchy Derivation Strategy at Company Code level Derivation Rules to derive the FM objects through FI/CO/MM etc.. Objects. Change in Budget Structure due to master data changes.

Business Process: FM object assignment/derivation

Assignment/derivation will include GL accounts to Commitment item Cost elements to Commitment item Cost Center to Fund Centers Orders (Internal & Plant Maintenance) to Fund Centers WBS Element to Fund Centers. Creation of any new master for the above mentioned objects would also require the creation/update of derivation of FM objects.

Business Process: Procurement Budget

Procurement budget would be based on the Fund Center and Commitment Item & would be for transactions -purchase requisitions and purchase orders. Items relevant for the procurement budget would derive the fund center from the Plant Budget for those items would be at Plant Level basically which would be the lowest level org. element for budget as per the business requirement. Purchase budget would be altogether a separate budget from consumption budget. Budget Revision will be made via FM Supplement, Transfer and Return Transactions.

Business Process Requirement: Opex/Department Budget


Operating expenses budget would be based on the Fund Center and commitment item. Department wise operating expenses can be planned at Cost Center. The cost center plan would be transferred to FM. Fund Center and commitment item would be derived from CO assignments. Budget Revisions will be made via FM supplement, Transfer and Return Transactions.

Business Process: Fixed Asset Budgeting


Budget for acquisition/commissioning of Fixed Assets via Projects would be controlled in PS Module. Budget for acquisition of ready to use assets via PR and PO would be controlled through FM budgets/Internal Order.

Business Process: Year End Activities


Open commitments relating to Purchase Requisitions, Purchase Order postings to be reviewed at year end. Reviewed open commitments will then be carried forward to the new financial year. Relevant transactions in the new financial year e.g. Goods / Invoice Receipt, Payments, Cancelled orders will be posted against open commitments carried forward. There will be no impact on current year budget. Year end change to carried out..

Funds Management

Overview Funds Management Organization Structure Masters Budgeting in Funds Management Availability Control Reports

Availability Control

Passive control Funds overview in the information system Active Control Prevent budget overruns which includes Setting the degree of budget usage (percentage or absolute) from which the system reacts How the system reacts: With a warning, with a warning and a mail to the person responsible for the Fund Center, with an error message which rejects the posting.

Funds Management

Overview Funds Management Organization Structure Masters Budgeting in Funds Management Availability Control Reports

Reports

The standard Reports in Funds Management relate to: Master Data-Fund Center, Commitment Items, Assignments Budget Values Actual Values Comparison of Commitment and Actual values And many more..

Overview Funds Management Benefits


Control revenues and expenditures and thus control the funding of business transactions of an organization. Closely control your budget with respect to funds assigned to the areas of responsibility. Funds availability control at the transaction level. Control the finances of your organization by comparing commitment and actual values with current budget values. Repetitive data entry done away with online update.