Streamline Your Capital Investment Process with Appropriation Requests

  • by Siva Prasad Ramachendruni, Senior Consultant
  • April 28, 2009
Learn how appropriation requests in SAP Investment Management can help you plan cash flows and carry out a cost benefit analysis.
Key Concept

Most SAP users use SAP Investment Management to plan investment programs. In SAP Investment Management, the focus is on the initial capital outlays. The SAP Investment Management programs are then linked to the investment measures (e.g., internal orders or work breakdown structure [WBS] elements). Actual postings happen against the investment measures. In this case, investments refer to money spent on acquiring fixed assets, carrying out research and development, or performing long-term advertising campaigns — not financial assets such as stocks or bonds themselves.

Imagine the following business process. Your company has plans for annual capital budgets. It has divided the plans into various investment programs. You need to evaluate each program for its technical and financial feasibility going forward.

Within SAP Investment Management, you can use a feature called appropriation requests to carry out cost benefit analysis by planning cash flows and evaluate financial feasibility with pre-investment analysis figures.

Figure 1 displays the life cycle of an investment and the tools used at the various phases in SAP Investment Management. Many SAP users have non-SAP software to plan and approve investment proposals, but I recommend using an appropriation request for this purpose. The customizing steps are easier to implement than add-on programs or manual processing. Appropriation requests serve as the crucial link between investment program planning and their execution. With appropriation requests, the entire life cycle of an investment is captured within an SAP system for easy tracking and effective control.

Siva Prasad Ramachendruni

Siva Prasad Ramachendruni is a senior consultant (SAP Financials) working for a multinational corporation in the IT sector with 12 years of functional and SAP experience. He helps companies streamline business processes and gain efficiency through effective cost management. He is an Indian Cost and Management Accountant and has a master’s degree in financial management.

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