AC100 Funds Management Configuration and Functionality

1 1.2 1.3 1.4 1.5 Clients represent technical entities in which general data and tables used by multiple organizational structures are stored.

The Financial Management (FM) area is an organizational unit within accounting that provides the structure for funds management and cash budgeting management.

One or more company codes can be assigned to a controlling area. In turn, one or more controlling areas can be assigned to the FM area.

Company codes are also assigned to the FM area in which you want to track funds. The system determines the FM area to use when a user posts a transaction to a company code.

Consistency between all relationships is required.

1.6 The FM area comes between the client (whole organization) and the company code (financial accounting) in the hierarchy of organizational units

The currency and fiscal year variant managed in the FM area are not dependent on those in the company codes assigned to the FM area. The monetary values in Funds Management (budget values, commitment values, actual values, and so on) are managed in the FM area currency. Commitment and actual values are also stored in the company code and transaction currencies. The period determination used for postings attached to the fiscal year variant is described in the Update unit.

You use commitment items to distinguish the functions in the postings in Funds Management. This means that the FM area is not dependent on the charts of accounts in the assigned company codes.

1.7 1.8 Sources of financing are represented in the R/3 System by a fund.

The organizational and functional breakdown structure (funds center hierarchy and commitment item hierarchy) may be automatically used by each fund.

If a specific fund is not entered in a transaction, the system will default a value of blank fund.

1.9 The fund master record contains the following important fields:

Customer for fundThis field links the fund with a customer master record from Financial Accounting. Here you can define additional information on the fund (sponsor).

Funds applicationA grouping criterion of fund master records for evaluation purposes, i.e., reports can be run by application. The application of funds is defined as time-dependent and this way determines the validity period of the fund.

Fund budget profileBy defining a budget profile, you can control budgeting and the availability control for each individual fund.

Maintain balanceThis indicator ensures that the totals records are carried forward for each fund when changing to the next fiscal year.

Fund reports display revenues and expenditures grouped by commitment item.

1.10 Funds centers are used to represent organizational units (areas of responsibility, departments, projects) and are arranged in a hierarchy.

Fund centers are created for a given FM area.

Each funds center hierarchy has one Top Funds Center located at the top of the hierarchy. Every other funds center is assigned to a more superior center, to denote its location in the hierarchy.

The funds center master record contains important information, such as the name and description of the funds center and the name of the person responsible for the funds center.

You can maintain both the name of the person responsible (text field) as well as the person's user name (SAP user name) in the system. The person responsible for the funds center defined in the user name is the recipient of automatically generated system messages (mails) in certain situations.

You can only have one Funds Center hierarchy per FM area.

1.11 This course will use the case company Institute of Medical Research (IMR) to illustrate the functionality and configuration of the Funds Management module.

In each Funds Management area, one funds center hierarchy is defined.

This hierarchy represents the responsibility area structure of your business.

Budgets can be assigned to each fund center. Often budgets are entered down to the level of commitment items.

1.12 Commitment items describe an organization's functional breakdown structure.

There are two types of commitment items:

Summarization items (= hierarchy nodes) - You can assign a budget to a summarization item, but cannot post to them.

Account assignment items - You can assign budgets and post to these items. These items represent the lowest level in the commitment item hierarchy.

A commitment item's master record contains important control parameters:

The financial transaction categorizes business transactions from the feeder application components (Financial Accounting and Materials Management).

The commitment item category sorts actual/commitment and plan values into revenues, expenditures, and inventory.

You can create one or more sub-hierarchies within each category of items (hierarchy level). The commitment item category is identical in all commitment items within a given sub-hierarchy.

Financial transactions of 50 and greater do not affect the fund balance, e.g., reconciliation accounts, bank accounts.

1.13 The main factor affecting any decision on assignment of G/L accounts to commitment items is not the commercial character of the G/L account, but its position in the processing run for a revenue or expenditure.

Accounts providing the base for a revenue or expenditure must be linked to a commitment item with financial transaction 30 and item category 2 or 3. This is the only way the SAP system can recognize a revenue or expenditure. Material stocks and asset portfolios require this type of control too.

Bank and cash accounts, along with the related clearing accounts, show a cash balance. The commitment item must have financial transaction 90 and item category 1.

The Invoice status is based on clearing accounts for customers and vendors and require a commitment item with transaction 60. The system does not require that these be distinguished between revenues and expenditures, but makes assignment clearer.

The GR/IR clearing account requires a 40/3 commitment item.

Enter a commitment item with 50/3 in all non-relevant accounts.

1.14 For ease of use, you can group commitment items into commitment item groups. When defining a group, you determine the function (budget object/posting object) for the commitment items contained in the group.

When defining the budget structure with group assignment (generate budget structure from group), you assign the commitment item groups to funds centers.

Changes made afterwards to the functions of the object in a funds center group also affect all funds centers within the budget structure.

For year-dependent budget structures, you have to create groups as year-dependent. For budget structures that are not year-dependent (fund with a total value), you set up groups as year-independent.

1.15 Users can create only one commitment item hierarchy for each FM area. This hierarchy can then consist of various sub-hierarchies.

The above diagram represents an expenditure commitment item hierarchy.

Examples of commitment item information:

40010 wages: FinTrans = 30 (post revenue, expenditure, asset, inventory stocks); Item Category = 3 (expenditure item)

40020 welfare: FinTrans = 30; Item Category = 3

1.16 The above diagram represents IMR's revenue budget structure.

1.17 To represent an organization's budget structure in the R/3 System, you use an analytical process to break down the whole organizational structure according to:

Organizational views

Functional views

A common result is one funds center hierarchy and several commitment item hierarchies.

Funds centers are used to represent organizational units (areas of responsibility, departments, projects) and are arranged in a hierarchy.

Commitment items are used to represent functional aspects (expenditure and revenue structures) in a hierarchy.

The Funds Management application component is used to bring together organizational and functional structures (funds center hierarchies and commitment item hierarchies) into one structure in which each funds center contains the complete commitment item hierarchy.

1.18 Funds management master data is used to track individual funds and budgets.

Funds management master data is consists of commitment items, funds, and funds centers.

Budgets are maintained in FM, whereas commitments and actuals are mostly posted from other R/3 modules.

1.19 1.20 The above graphic is a budget represented in a vertical, hierarchical fashion.

Alternatively, the funds center and commitment item hierarchies can be maintained through graphic display.

Selection of the graphic display can be limited by choosing a sub-tree in which you want to work.

1.21 The information system offers various reports for displaying master data in the node titled Master Data Indices.

Users can streamline their budget display by entering the budget combinations required in the original budget selection screen.

Correct flagging of budget objects in the budget structure also provides efficiency for processing hierarchies.

1.22 In FM, users can create, maintain, and display master data hierarchies using SAP network graphics.

It is possible to change the funds center and commitment item hierarchies even when values or budgets have already been posted for the funds centers and commitment items.

Commitment items can be maintained in either the hierarchy structure, or through individual maintenance. Individual maintenance is generally only efficient when there are a small number of commitment items or simple hierarchies that require change. For larger structures, the hierarchy graphics should be used.

Generating budget structure is found in the IMG in Funds Mgt > Budgeting.

1.23 You can change the names of account assignment items without changing the hierarchy. You can allocate changed attributes to specific time periods.

You need special authorization to make hierarchy changes for items with budget and actual values (activity 47 in the FM area authorization).

The programs to reconstruct distributed values and assigned values are found in R/3 > Treasury > Funds Mgt > Tools > Budgeting. Assigned values are the total of commitments plus actual postings.

The reconstruction of assigned values ensures that the system can recognize excessive funds commitments in the new hierarchy.

1.24 Before you can enter assignments between CO and FM, you must assign the controlling area to the FM area. You can only do this if you have activated the company code.

For each FM area, you can stipulate whether the assignments made in Funds Management master data maintenance between CO account assignments and FM account assignments are year-dependent or not. The year assignment is always derived from the document posting data in the other components (for example, Financial Accounting or Controlling). You cannot change this in Customizing.

In Master Data, Assignments in R/3, FM assignments can be allocated to the follow CO account assignments.

Cost elements

Cost centers

Orders

WBS elements

1.25 When making a posting, the system looks for the FM account assignment in the following sequence:

1. Enter funds reservation or purchase order reference2. Manual entry3. Commitment item from G/L account/funds center for commitment item master record/fund from funds center master record4. Assignment to CO account assignment per table5. Commitment item from assignment to cost element

The system issues a warning if the entries are not the same.

1.26 1.27 If HR/FM integration is active, the system posts the trip costs per the following order of priorities:

.If you specify manual account assignments for an individual trip in the coding block, the posting is to the funds center/commitment item/fund entered.

.If infotype 0027/02 contains an apportionment of the costs for the last day's travel, the system charges costs to the funds center(s)/fund(s) in this apportionment.

.If not all the trip costs have been apportioned, the residual percentage is posted to the funds center/ fund specified in the travel privileges (infotype 0017).

.If there is no account assignment in the travel privileges, the trip expenses or the undistributed remainder in infotype 0027/02 are distributed to the funds center/fund specified in the cost distribution for wages and salaries (infotype 0027/01) using the account assignment stored there

.If the cost apportionment for wages and salaries (infotype 0027/01) does not distribute all the costs, the percentage not distributed is posted to the funds center/fund from infotype 0001.

As soon as all the costs have been assigned, the system stops querying infotypes. This means that funds centers/funds must be defined parallel to other cost relevant account assignments, so that the system can take them into account.

1.28 IF HR/FM integration is active and you make a posting in wage and salary accounting, the order of priorities for the individual assignments is as follows:

.If wage and salary types are given as recurring payments and deductions (infotype 0014) and additional payments (infotype 0015) and if there is a cost assignment for these infotypes, the posting goes to the funds center/fund stipulated there.

.If there is a cost apportionment for wages and salaries (infotype 0027/01), the costs are charged to the funds center(s)/fund(s) specified there in accordance with this apportionment.The cost distribution function enables you to distribute wage and salary costs for one employee to more than one fund/funds center. If there is no cost assignment for the recurring payments and deductions (infotype 0014) or the additional payments, infotype 0027/01 is queried for them.

.If no cost apportionment is given for wages and salaries or if there is but it does not apportion all of the costs, the posting goes to the funds center/fund specified in the organizational assignment (infotype 0001).

1.29 1.30 Classification allows:

The grouping of master data objects, such as commitment items, funds centers and funds, by common characteristics for reporting purposes.

The storage of large amounts of information regarding master data that cannot be stored in the master data records themselves.

Searches for master data objects by class as well as the characteristics defined for the class.

1.31 Every class must be assigned to a superior control unit, called a class type. The standard system includes the following class types:

041funds center

042fund

043commitment item

1.32 Step 1: Create object, e.g., fund.

Step 2: Define characteristics, such as country.

Step 3: Create a class. Assign characteristics to this class.

Step 4: Assign one or more classes to a given master data object (fund).

Step 5: Use the new classification to search for objects.

1.33 (C) SAP AGAC1001-1