FUNDS

MANAGEMENT
 INDEX
• Overview of SAP Funds Management (FM) • Original Budget(FMBBC)

• Advantages of FM • Overview of Budgeting

• Organizational Structure of FM • Budget consumption

• Master Data • Budget report

• Prerequisites of funds management • Year End Activities

• Account Assignment Derivation

• Availability control in FM
01 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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02 ADVANTAGES OF FUNDS MANAGEMENT
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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03 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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03 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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03 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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04 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 centre

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04 Master Data (Cont..)
Commitment item master record

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04 Master Data (Cont..)
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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04 Master Data (Cont..)
Funds Centers master record.

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04 Master Data (Cont..)
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:

1 2

Fund Type Budget Profile

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04 Master Data (Cont..)
Fund master record.

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05 LINK BETWEEN BASIC DATA ELEMENTS IN FM
 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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06 PREREQUISITES OF FUNDS MANAGEMENT
Fiscal year
Budget profile variant
Budget profile enables to control Used to control the
budgeting and availability control parameters of financial
ina a number of different ways year

Number ranges
Predefined document type and
number ranges specifically for
Funds Management posting

Status profile
SAP status management gives
Field Status different option of adding your
own user status to the system
Variant statuses sipplied by SAP.
Enables to control fields in
different ways by making fields
into, suppress, optional, display &
Required.
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07 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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08 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
3.Error message

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09 ORGINAL 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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10 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
 Bank GL will be in financial transaction 90

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11 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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12 BUDGET REPORT
 Budget report can be extracted based on,
1.Fund center 2.Commitment item 3.Fund

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13 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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Thank You
IVL SAP Services Team