Funds Management 

Purpose

The Funds Management scenario describes the planning and execution of the budget and the execution of year-end operations. It also represents the master data processing and use of the information system in Funds Management.

You implement the business functions of the R/3 components in the following list, as part of the Funds Management scenario. The values you have posted in these components are updated in Funds Management, if a commitment item with the financial transaction 30 was stated as an additional account assignment on posting. The following table highlights if posting of expenditures with such an additional account assignment can also take place with or without an active availability control of the required funds.



R/3 component



Functions

Availability control

G/L accounting

G/L account posting, parked documents, settlement cancellation, incoming payments, outgoing payments

Ö

Accounts payable accounting

Invoices, credit memos, down payments, internal transfers,

Ö

 

outgoing payments, incoming payments

-

Accounts receivable accounting

Invoices, credit memos, down payments, internal transfers, incoming payments, outgoing payments

-

Asset accounting

Asset acquisition, transfer posting, other transactions, document reversal

Ö

 

Asset retirement, document changes

-

Travel Management, HR administration

Travel expenses

Ö

Overhead cost controlling

Actual line item reposting, manual funds reservation

Ö

 

Actual assessment, actual posting of primary costs, actual distribution, indirect activity allocation, surcharge calculation, order settlement. Activity allocation actuals, actual accrual calculation

-

Purchasing

Purchase requisition, purchase order, outline agreement, scheduling agreement

Ö

Inventory management

Goods receipt, goods issue, transfer posting, service entry, goods movement for return deliveries, transfer from own stocks

Ö

Invoice verification

Invoice receipt, logistics invoice verification

Ö

Maintenance processing

Settlement of plant maintenance orders

-

Purchasing, shipping, invoicing

Customer invoice processing, goods issue

-

Payroll, HR administration

Payroll accounting

Ö

Process Flow

The process flow of the scenario is divided into budget planning, budget execution and the execution of year-end changes. Master data processing and use of the information system in Funds Management takes place in parallel.

Master data processing

  • You define the budget structure at the beginning of master data processing. This consists of the following objects:
    • Commitment items (structural content of the budget)
    • Funds centers (organizational structure)

    If you require an additional structure, you can make this using funds. Funds, e.g. funds from secondary sources, are supplied by a sponsor for a particular application of funds and administered separately.

    • Commercial transactions in Funds Management are controlled by the assignment of one or more statuses to a master data object (funds center, commitment item, fund).
    • Master data indexes are available for checking the budget structure.
    • You store a Funds Management commitment item in each selected G/L account of Financial Accounting, to prepare for budget execution.
    • Finally, you prepare integration of Funds Management with Inventory Management or Cost Accounting. You, for example, assign cost elements of cost accounting to commitment items of Funds Management to integrate Funds Management and Cost Accounting.

    Budget planning

    1. Budget planning begins with preparatory activities:
        • First, you process budget versions to execute budgeting in several versions. You can emphasize different steps in budget planning with budget versions.
        • First, you process budget versions to execute budgeting in several versions. A budget structure plan defines which combinations of fund, funds center and commitment item can be budgeted or posted for a budget year.
        • You define rules for revenues increasing the budget to increase the expenditure budget by revenues.
      1. In connection with these preparatory activities, you estimate the budget. You can use an already existing budget version as a template for the original budget processing. If you are working with budget versions, you can provide these with blocks.
      2. You process the original budget as soon as the budget plan has been approved and the budget is available. You also have the option of working with budget version copies and blocks for this purpose.
      3. You can choose when to release budget during the subsequent budget execution. You can use releases to increase the available budget in the case of foreseeable budget exhaustion or overrun.
        During a budget year, it might be necessary to execute the following budget updates:
        • Supplements serve to increase the available budget or to create a supplementary budget. If you are working with budget version blocks, you first have to unlock the appropriate version. The supplementary budget is estimated and then approved. You can release the budget after entering the supplement.
        • Transfer postings are for increasing the available budget or they enable you to consume budget resulting from a budget increase. If you are working with budget version blocks, you first have to unlock the appropriate version. If you are working with releases, you have to reduce these before the transfer. You can release the budget after executing the transfer.
        • Returns are for returning budget. If you are working with budget version blocks, you first have to unblock the appropriate version. If you are working with releases, you have to reduce these before the return.

      Budget execution

      1. You execute the following functions of Funds Management as part of the budget execution:
          • Payment transfers to move actual data in Funds Management from one FM account assignment to another.
          • Funds reservations to reserve funds for later expenditures.
          • Payment selections to convert line items from invoices, which are completely cleared in Financial Accounting, from the status Invoice to the status Payment.
          • Budget increases, to increase existing budget for certain functional areas according to the purpose-related additional revenues.
        1. You also implement business functions of the R/3 components listed in the Purpose section. The values you have posted in these components are updated in Funds Management. This might result in an availability control of the required funds.
        2. Depending on the results of these postings, you then carry out additional processes in Funds Management:

        If ...

        Then...

        the posting was executed, but a warning of foreseeable budget exhaustion was issued...

        OR

        the posting was rejected because the budget was exceeded...

        you have the options of releasing, supplementing and transferring budget in the Budget planning section of Funds Management.

        you are working on a payment basis and payments are posted...

        you select the posted payments. After payment selection, you can execute a budget increase on payment basis.

        you are working on invoice basis, outgoing invoices were posted and you would like to increase your budget on the basis of posted invoices...

        you execute the budget increase. In order to be able to consume budget, you need to carry out the budget transfer described in the section Budget planning.

        Year-end operations

        If you want to execute year-end operations, prepare for this by completing closing operations in R/3 feeder components.

        You have the following options as part of year-end operations:

        • Carryforward of the open commitment: You select open commitment documents and carry them forward. You can cancel this carryforward if required.
        • Carryforward of budget remainders: First, you define carryforward rules. In connection with this or with the carryforward of commitment documents, you carry out preparation of the budget carryforward, determination of the budget carryforward and budget carryforward.
        • Carryforward of actual balances of funds: First, you assign the carryforward item categories to the commitment item categories and mark the appropriate funds for inventory management. You then execute the balance carryforward.

        Information System

        You can use the information system to analyze the business transactions relevant to Funds Management using the following reports:

        • Master data indexes
        • Summarized reports (totals evaluations)
        • Line item reports
        • Overview of closing operations executed
        • Matching line items and totals records