Financing from the Organization Component 
Financing from the Organization Component
Purpose
This process describes how you can finance employees in your organization using the budgets of
budget structure elements.The financing process is closely linked to the
Budget Allocation process (since both processes supply budget funds to cover personnel expenditures).However, in the Financing process, funding is supplied using a position or person as the point of departure, whereas a budget structure element is the point of departure in the Budget Allocation process.
Basically, there are two ways of financing an employee in your organization:
If you finance an employee directly using the budget of a budget structure element, you can allocate funds (monetary amounts and FTEs) to cover the personnel expenditures incurred by this employee. This type of financing is referred to as direct financing because funds are assigned directly to the employee (and not via a position). This means that you can finance employees who are not assigned to positions.
You have hired a temporary worker for 6 months. This worker is not assigned to a specific position. By financing the employee directly (in the
If you finance employees indirectly, you allocate funds (monetary amounts and FTEs) from the budgets of budget structure elements to a position, and in this way cover the personnel expenditures incurred by the employees assigned to the position in question. This type of financing is referred to as indirect financing because funds are assigned via positions (and not directly to employees).
You can also use indirect financing to reserve funds for positions that have not yet been staffed.
You can combine both types of financing as you please (in other words, you can finance a portion of the personnel costs incurred by an employee directly, and a portion indirectly).
If you have already defined a financing assignment, and you want to change/supplement this, you can only use budgets of budget structure elements with the same budget unit as the object that already provides financing.
When you supply the funds required for an employee (i.e. finance the employee), the employee’s absences (infotype 2001) are also taken into account. This means, for example, that no financing is required for an employee who has taken unpaid leave. In Customizing, you can define how absences are to be handled in HR Funds and Position Management.
Prerequisites
Depending on the circumstances in your organization, you must have defined a budget hierarchy with budget structure elements and budgets, an organizational structure with positions, and relationships between positions and persons. You can only finance objects with the budgets of allocatable budget structure elements (i.e. the budget structure elements in question must not be summarization items).
In Customizing (step: Overall Budget ®
Settings for Financing Persons/Positions ® Define Financing Types for Each Object Type), you must also have specified which types of financing (monetary values and FTEs) are allowed for positions and persons. Furthermore, you must have defined how the employee’s absences affect financing (step: Overall Budget ® Settings for Financing Persons/Positions ® Define How Absences Are Handled).You must also have specified how the financing required for specific employee groupings is to be determined (step: Overall Budget ® Settings for Financing Persons/Positions ® Determining Financing Requirements).
Process Flow
See also:
Financing Employees Directly from the Organization Component Financing Employees Indirectly from the Organization Component Financing Employees Directly in the Employee Component Financing Employees Indirectly in the Employee Component Financing Wizard Deleting Existing Financing Assignments Reconciling the Outgoing Funds of a Position That Has Been Financed Displaying the Financing Overview Display: Financing Details in the Organizational Structure