SAP FUNDS

MANAGEMENT

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SAP FUNDS MANAGEMENT ( FI-FM )

 SAP Funds management ( FI-FM ) is another sub component under FI

module. As the name it helps the organization to manage funds
 Budgeting all revenues and expenditures
 Monitor funds movements in the light of budget available
 Prevent budget overruns
 Integration with other SAP modules like,
 Financial Accounting (FI)
 Material management ( MM )
 Human Capital Management (HCM)

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ADVANTAGES OF FM:

Funds Management enables to keep;

 A thorough check of the revenues and expenditures and thus the funds-
relevant business transactions of an organization.
 A thorough budgetary control, for all areas from Sources of Funds till its
application / Utilization in the Business
 A control of the financial equilibrium of your business, by comparing
commitment and actual values with the current budget values
 Funds Management is more flexible than Controlling

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ORGANIZATION STRUCTURE OF FM:

 The Financial Management (FM) area is an organizational unit within accounting

which structures the business organization from the perspective of Funds
Management

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ORGANIZATION STRUCTURE OF FM (Cont...)

Integration with Financial Accounting

 The FM area is derived from Financial Accounting organizational unit,

the Company code by assigning the company code relevant for Funds Management
to an FM area.
 Business transactions posted in Financial Accounting are updated in Funds
Management. The following business transactions are relevant for the updating:
 G/L accounting
 Accounts payable accounting
 Accounts receivable accounting

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ORGANIZATION STRUCTURE OF FM (Cont...)

Integration with Controlling

 Controlling area is the organization unit of controlling must be assigned to an

FM area.
 Assign controlling area relevant for Funds Management to the company codes
relevant for FM.

Integration of other components

 All other organizational units, such as the plant, purchasing organization, the
personnel area, sales organization are linked to Funds Management via the
company code.

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 MASTER DATA:
1.Commitment items
 Used to represent functional aspects (expenditure and revenue structures) in a hierarchy.
 They are used to split budgets according to contents and business transactions affecting
liquidity into revenue items and expenditure items.
 Three important elements in the commitment item master record are,
 Financial-transaction
 Item-category
 Funds center

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MASTER DATA (Cont…)

Commitment item master record

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MASTER DATA (Cont…)

2.Funds Centers
 Funds Centers represent an organizational unit within a Financial Management area,
which represents the structure of an organization or an area of responsibility e.g.
departments or projects.
 Funds centers in Funds Management are arranged in hierarchies.
 There is only one top funds center in a funds center hierarchy. Every other funds
center has one superior funds center.

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MASTER DATA (Cont…)
Fund center master record

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MASTER DATA (Cont…)

3.FUND
 Funds represent financial resources that are provided for a specific purpose
by a sponsor and managed separately. This enables the exact source of the
funds to be determined.
 Two important elements in the fund master record are:
 Funds type
 Budget profile

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MASTER DATA (Cont…)

Fund master record

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LINK BETWEEN BASIC DATA ELEMENTS IN FUNDS MANAGEMENT:

 Funds center in a commitment item

In the posting transaction, the system derives the funds center from the
commitment item and proposes it as a default value
 Fund in the fund center master record

Link Between Basis Data Elements in Other Components

 Assignment of a funds center to a CO account assignment (cost center, profit center)

In the posting transaction, the system derives the funds center from the CO account
assignment
 Assignment of commitment item in GL master record
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ACCOUNT ASSIGNMENT DERIVATION:
 The account assignment derivation consists of a sequence of derivation steps -
known as the derivation strategy.
 It is used to sequentially derive the values for FM account assignments from other
account assignments.

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AVAILABILITY CONTROL IN FM:

Availability control can promptly identify an excessive funds assignment in a Budget

Structure and trigger various actions.

A breach of any of the tolerance limits triggers the action defined in that
tolerance limit. Possible actions are:
1.Warning
2.Warning with Mail to funds center manager
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3.Error message
ORIGINAL BUDGET (FMBBC)

 The budget entry in the system will be combination of Fund center and commitment item.
 Other functionalities like budget transfer and budget supplement can be done.

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HOW BUDGETING HAPPENS…?

 The financial transaction plays a central role in the transfer of data from Funds Management feeder systems to
Funds Management
 Only line items containing commitment item with financial transaction 30 are updated in Funds management
 GR/IR GL accounts will be in financial transaction 40
 Reconciliation GL will be in financial transaction 60
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 Bank GL will be in financial transaction 90
BUDGET CONSUMED THROUGH FB60:
 FM document will be created for all postings based on pre defined document type and
number ranges
 Fund center will be derived automatically in the line item from the account
derivation rule in FM

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BUDGET REPORT:
 Budget report can be extracted based on,
 Fund center
 Commitment item
 Fund

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YEAR END ACTIVITIES:
 Fiscal Year End leads to some major decision regarding the carry forward of
Commitment, Fund balances & Budgets.
 For Year-end activities in Funds Management Following Activities require to be
defined:
 Carry forward rules must be defined.
If at the end of a Financial Year there are unused Budget still remaining for
some individual Budget items it can be carried forward to the next year.

 If the Year End process is not correctly carried out then:-

 Any budget not used remains in the old year and cannot be used in the new
year.

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SAP Service Team – FICO
ivlservices@ivldsp.com
www.ivldsp.com

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