Definition of Budget Hierarchy 

Purpose

This process describes how you define and maintain a budget hierarchy for an overall budget that you want to set up in HR Funds and Position Management.

The budget hierarchy is used to determine what the individual budget structure elements are and to show how they are linked hierarchically. Defining a budget hierarchy is the first step in setting up an overall budget.

Budgets (either monetary or FTE budgets) are assigned to the budget structure elements in the budget hierarchy. These budgets can then be used for the purposes of financing persons or positions.

The budget of a budget structure element is the funding that can be used for financing the persons or positions in an overall budget.

In this process, you define the basic structure of the overall budget. This process does not, however, involve assigning budgets to budget structure elements.

Prerequisites

In Customizing, you must have made the necessary settings in the section entitled Overall Budget (especially the step Define Budget Structure Element Types). You can then define the budget hierarchy to suit the individual needs of your organization.

Process Flow

  1. You specify the basic characteristics for the new overall budget - and in particular, the financial year and the top budget structure element (root object).
  2. You create budget structure elements underneath the root object, and in this way define the hierarchical structure of the overall budget.

 

Example of a Budget Hierarchy

The following budget hierarchy is used in the examples given in this documentation.
  1. If required, you can specify additional information for the budget structure elements (who is responsible for a budget, the external budget number, or a descriptive text).
  2. You can also assign the budget structure elements and their budgets to employee groups and subgroups, or to organizational units and positions (via earmarkings).

Result

You have defined a budget hierarchy with budget structure elements to which you can assign budgets.

If the overall budget already exists, you can copy the budget hierarchy over to the subsequent financial year by working through the process entitled Carrying Forward of and Overall Budget. In this case, you do not have to re-enter the budget structure elements that are already contained in the budget hierarchy.

You can also create supplementary budget structure elements in an overall budget (if additional funds have been authorized by the authorities in question, for example).

 

See also:

Defining a Budget Hierarchy

Maintaining a Budget Hierarchy

Budget Structure Element