Commitment item 

Definition

Commitment items represent the functional grouping of an organization within a financial management area (FM area).

Use

Commitment items classify budget transactions and business transactions affecting liquidity into revenue, expenditure, and cash balance items. You can assign budget for particular responsibility areas (funds centers) to the commitment items. Budget is used up as postings commitment items and funds centers with commitment and actual values. Funds reservations and business transactions entered in the feeder systems also affect the budget.

Structure

Commitment item hierarchy

Commitment items in Funds Management are arranged in hierarchies. You can create more than one hierarchy for an FM area. Example: one hierarchy for revenues and another for expenditures. However, you can also set up different hierarchies for expenditures. Example: one hierarchy for personnel costs and one for equipment purchases. You will find an example under Example: Commitment Item Hierarchies.

There are two types of commitment items:

You can post to and budget these items.

You can budget these items, but cannot post to them. Summarization items are needed for setting up a commitment item hierarchy. You define a commitment item hierarchy by combining accounting assignment items at any summarization level you want. Within the hierarchy, a summarization item can be succeeded by a summarization item or an account assignment item. This means that budget assignment is not tied to the lowest level in the hierarchy. The system totals up the posting data from the account assignment items and displays it in the appropriate summarization items.

Commitment item master record

The commitment item master record contains important information, including:

- Financial transaction
The financial transaction represents commercial business transactions from the Funds Management feeder systems; it has a central role in passing on data from those systems to Funds Management.

- Item category
The item category determines whether this commitment item is a revenue, expenditure, or cash balance item.

The financial transaction and item category in a commitment item hierarchy are identical.

Integration

For posting data from the feeder systems to be updated in Funds Management, you must always specify a complete Funds Management account assignment (funds center, commitment item, and, if required, fund) in the posting transaction. You can keep manual input work to a minimum using the link to the basic data. The system derives the FM account assignment from the link.

Link Between Basic Data Elements in Funds Management

Link Between Basis Data Elements in Other Components