Use Document Types for Budget Availability Control in SAP PS

  • by Paulo Vitoriano, Freelance SAP Solution Architect
  • January 30, 2013
See how, why, and where you can configure budget availability control based on document types to improve your project controlling efficiency with a standard SAP system.
Key Concept

Budget availability control in the Managerial Accounting (CO) and Project System (PS) modules is a standard SAP functionality that automates budget control through warnings and error messages. It also can send notification emails automatically to respective budget holders based on defined conditions. Certain cost elements can be excluded from budget availability control, but it does not allow excluding budget value assignment based on document types. A document type is a key characteristic of the accounting document that is flexibly definable by the project team. For example, vendor invoices, customer invoices, credit notes, payment documents, and accrual documents, to name just a few, are all usually defined with designated document types. The document type field is available in almost all financial line-item reports in Financials. The possibility to link the document type within the logic of budget availability control can cover most business requirements related to budget control within standard CO and PS functionality.

Many companies opt not to use active budget control in Project System (PS) owing to a combination of reasons. On one hand this functionality has a strong dependency on business process design, whereas on the other hand, SAP offers little flexibility on the configuration side. Mostly because of functional limitations it can be difficult to get an accurate calculation for the remaining budget available.

I focus on the extension of functional possibilities to adapt availability control for most of business scenarios. Project cost controlling remains a top priority for many companies with extensive capital expenditures activities or customer make-to-order projects (for example within engineering and construction businesses). Introducing a document type as an additional dimension for budget availability control can help make an organization’s project controlling more efficient. Further down in this article I provide three practical scenarios that can be unlocked for standard budget availability control through the introduction of a document type into the logic of availability control.

To demonstrate the business requirement of using document types within availability control logic in the PS module, I use a few common business scenarios. The following examples show why budget control does not work properly unless you exclude some document types from the budget availability control. A standard SAP system does not provide such an option, but I explain how it can be achieved.

  1. Accruals. Some companies use original general ledger accounts (cost elements) for posting accruals in FI. These documents contribute to an assigned value for active availability control. At the same time, they also can duplicate (fully or partially) existing purchase order (PO) commitments in the CO module that are already included into assigned value of the budget availability control. For example, you have a purchase order commitment for $ 1 million. There is no doubt that this amount should be included into the budget availability control for the project at the earliest stage. However, this CO commitment has no reflection on the FI General Ledger. If for any reason the accounting team needs to make an accrual at period end related with this purchase order, the accrual amount is duplicated from the budget availability control perspective.
  2. SAP Joint Venture Accounting (JVA) cutback. Upstream (i.e., exploration and production) oil and gas companies usually prefer to post the cutback function under original GL accounts to provide more transparency in joint venture partner reporting. Cutback posting brings the budget back to Work Breakdown Structure (WBS) elements. For example, your subsea project spent $10 million during a given period. As an operator you own 40 percent in this project. Therefore, after cutback you are left with $4 million of your own cost and the rest is re-invoiced to other JV partners. The project budget is controlled for the total amount, but after the cutback function it looks like you have spent only $4 million. Therefore, system-enabled budget control is made completely meaningless and operational budget reports are pushed into BI.
  3. Settlement. When settlement is done under original cost elements, the concept of budget availability control is often ruined for the same reason. Credit line items decrease the total spent on WBS and the remaining budget value goes up. Introduction of designated settlement accounts may be in conflict with reporting requirements or complicate mappings in Dynamic Item Processor (DIP) profiles for customer projects.

Paulo Vitoriano

Paulo Vitoriano started his consulting career with Arthur Andersen Business Consulting in 1997. Since then, he has helped many global clients on SAP implementation projects, including DHL, Carlsberg, Nestle, Shell, AXA, Electrolux, and Maersk. During the last 18 years he has covered more than 10 end-to-end SAP implementations working on-site in 16 different countries. He has project experience with seven different oil and gas companies, and his current focus is on SAP IS-Oil and system integration. 

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