Entering Budgets 
You must first create a funds center hierarchy and a commitment items hierarchy within the master data maintenance, usually comprising more than one partial hierarchies. The funds center hierarchy represents the organizational structure of your business. The commitment item hierarchy represents a functional split of the revenues and expenditures in your business.
In Funds Management budgeting, the two hierarchies are combined. This means that every funds center contains all the available commitment item sub-hierarchies. The graphic illustrates this combination principle:
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You allocate your budget by distributing it directly to the funds centers and commitment items.
You can allocate the original budget on the top-down principle or the bottom-up principle.
Top-Down Budgeting
With top-down budgeting, you assign the budget from superior funds centers and commitment items to subordinate ones. This is an analytical procedure with which the budget estimate for the organizational and functional sub-areas of an organization is developed bit by bit.
Top-down budgeting is to be recommended, for example, if the funds in your organization are available as a total for a fiscal year and you want to distribute the budget to subordinate funds centers and commitment items with the help of the system. The system then verifies the consistency of the budget allocation.
Bottom-Up Budgeting
With bottom-up budgeting, you enter budget values to subordinate funds centers and commitment items. The system then totals them for each superior level and displays them there.
We recommend this procedure if, for example, budget values exist for the individual sub-areas of your organization.
Entering Budgets Functions
The efficient entry of budget values according to the Top-down and Bottom-up supports the SAP system with a variety of practical functions.
You can allocate the budget within a hierarchical view to parts of or to the whole funds centers and commitment item hierarchies. Budget allocation within the hierarchy is recommended if you are planning budget for a new fiscal year. However, you can enter your budget in the form of a budget entry for individual FM account assignments. This procedure is recommended after a budget is approved, if changes to the original budget or the budget updates need to clearly identifiable. A preliminary posting of budget controlled by Workflow, can only be achieved via the document entry.
Note
You can only budget revenues and expenditures (that is, commitment items assigned to item categories 2 and 3). Of these, only those assigned to financial transaction 30 can be budgeted.
Budget values are usually managed in FM area currency. You define the FM Area Currency when you create your FM areas in Customizing for the Enterprise Structure .
Budget allocation is usually controlled by means of authorizations. For more information, read Authorizations .
See also:
Budget Allocation: Maintenance in the Hierarchy
Budget Allocation: Budget Entry