Example: Global Expenditure Shortfalls

If a global expenditure shortfall is displayed in the budget, the person responsible for the budget must carefully manage the budget to meet this amount by spending less money than is actually forecast in the budget.

In the SAP system, you can map out global expenditure shortfalls by creating specific FM account assignments in which you enter the necessary reduction in expenditures as a negative budget value and you can reconcile this expenditures FM account assignments by making budget transfers in the course of the fiscal year.

This graphic gives a simplified representation of this procedure. The agreed budget looks like this:

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Therefore, the budget of this organization has a budget deficit of 100, that is, the expenditures exceed revenues by this amount. The person responsible for the budget is aware that he must cut down costs by this amount in the course of the year.

All the relevant FM account assignments have been created in the system together with the corresponding plan values. These are revenues FM account assignment R1 (2000), expenditures FM account assignments E1, E2 and E3 (each 700), and expenditures FM account assignment Expenditure Shortfall (-100) . The expenditure shortfall is specially flagged in the commitment item master record to allow you to enter negative budget values for it. For more information, see: Master Data for Negative Budget .

In the course of the year, the person responsible for the budget monitors the progress of expenditures in the expenditures FM account assignment. If less funds are used in an account assignment than had been forecast in the budget, he can transfer the surplus amount to the Expenditure Shortfall expenditures FM account assignment and consequently help to clear (that is, reduce to zero) the negative budget value of this account assignment at the end of the year.

The availability control and the budget consistency check make no connection between the FM account assignments of the global expenditure shortfall and the expenditures FM account assignments in which a saving is made. As a result, no unnecessary restrictions are made on the flexibility of the line item(s) you work with. You can naturally create alternative commitment item hierarchies and use them to display surplus values in the information system (program RFFMALH).