Business enterprises have to be profitable to sustain their operations. Profitability boils down to two things. They can either increase the revenue or decrease the costs through some initiatives. In this blog post, we’ll be focusing on how SAP S/4HANA can help intelligent enterprises control costs on their cost centres.
Cost Controllers are very particular in tracking the budgets that an organization plan to spend. This could be project specific for which internal orders or WBS are created in the system or simply the budgets for each cost centre. Cost controllers regularly review budget vs actual spending to monitor the deviation from the plan. However, this control is detective and could possibly go unchecked. In SAP system, the functionality of budget availability control is a preventive control where the system could respond with a warning or error message during transaction processing whether the budget, depending on the threshold, has been reached.
The budget availability control has been there for a while for internal orders and WBS. However, the same functionality did not exist for cost centres and workarounds were proposed. You can refer to this note which talks about it 68366 – Active Availability Control for Cost Centers. This is about to change with the Budget Availability Control for Cost Centres which is available in SAP S/4HANA 1909. This update seems to have been reflected in note 101030 – FAQ: Availability Control for Cost Centers but it doesn’t explain that much.
There are various business transactions where the budget availability control can be defined. I have done a quick test on this functionality just to see how the system responds.
In this scenario, I have configured the system to issue an error message if 100% of the budget has been exceeded. The system issued a warning message during PR creation.
After my first testing, I thought of giving a try on GUI and Fiori to see how the check is triggered.
FI Posting using GUI
In this scenario, I have configured the system to issue a warning message if 100% of the budget has been reached. The system does not issue a warning message during simulation. It only sends the warning message the moment we try to post the document.
FI Posting using Fiori
For Fiori, I have used the Post General Journal Entries Fiori app. It is interesting to note that the warning message prompts right away unlike the GUI transaction.
There are few differences in the configuration compared to what we used to do for internal order/project budget availability control. I will post in the next blog post on what needs to be configured to enable this functionality. That’s all SAP Folks for now!