Budgeting Projects

Budgeting in the SAP Project System (SAP PS) is not a single transaction, but a process.

You can manage budgets in several ways, including the following:

• Maintenance of original budget
• Update of budget (supplement, return, and transfer)
• Budget releases
• Budget carry-forward

The figure, Budgeting Overview, illustrates the budget management functions in the SAP PS. You can use the SAP PS transactions to maintain an original budget to allocate funds for a project or a part of a project. When configuring budgeting, you can specify whether funds are assigned as overall values, or distributed by year, or both.

Budgeting Views:

The following budgeting views are available for displaying the budget and checking the consistency of a budget:

• You can use the distributed or distributable views to check the distribution of the budget throughout the project structure. Budgets within the project must be distributed consistently. This implies that the budget of a WBS element must be greater than or equal to the aggregated budgets of the lower-level WBS element assigned directly to it.
• You can use the cumulative or remaining views to check the distribution of the budget over a fiscal year. The total budget of each WBS element in a cumulative view must be greater than or equal to the total of the annual values.
• The planned total is derived from cost planning and can be transferred to budgeting in the budgeting view.

You can prevent users from maintaining the overall budget for a project by assigning appropriate user statuses. If you lock (freeze) the original budget in this way, you can only change it by defining supplements, returns, and transfers. You can use the Budget Release function to make funds available at various points within a fiscal year. You can use the Budget Carryforward function to transfer any funds that are not used in the previous fiscal year to the budget of the new fiscal year.

Once a project is budgeted, you can use the availability control to check the budget and assigned funds. The availability control is activated automatically or manually. Once activated, the availability control checks whether assigned funds, such as actual costs, exceed the budget.

While a project is being executed, various business processes use available funds. For example, commitments are created and actual costs are incurred. Together with the planned costs of apportioned orders, these forms of fund commitments result in what are referred to as assigned funds.

The funds overview can be regarded as a passive availability control. During the availability control, the corresponding assigned funds are calculated and checked against the budget. If certain tolerance thresholds are breached (shortfall in budget or budget exceeded), this can trigger various system reactions (such as a warning or an error message). In Customizing for tolerance limits, you can specify which reaction should be triggered and when. Once activated, the availability control is run for each subsequent posting in the project.

The following activities are carried out during the availability control:

• The budget-bearing WBS elements (controlling elements) are determined.
• The corresponding assigned funds are determined.
• The assigned funds are checked against the budgets of the controlling elements. The assigned funds can be found in the subordinate WBS element itself, and in the lower-level assignable WBS elements.