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Author's profile photo GIANLUCA TACCONE

SAP S/4HANA Funds Management: Automatic Creation of Master data

This blog post can be considered valid from SAP ERP 6.0 enhancement package 3 to  

SAP S/4HANA 2020 On Premise and Private Cloud.


I have already talked in this blog post about the possibility to use Funds management for Budget Availability Control.

In this blog post I want to talk about the possibility to automatically create Funds Management Master data from other Master Data (e.g Cost Centers, Wbs Elements, Cost Elements).

One of the main objections I receive to the implementation of Funds Management is the fact that business users’ work is actually augmented because of the creation of master data. Actually this is true specially if you want to relate funded programs to WBS elements (If you use Project System you may need a big number of WBS elements to monitor your project and if you want the budget availability control to be executed on each Wbe, you may need same number of Funded Programs).

TIP: when possible to represent Wbe I prefer to use Funded Programs instead of Funds cause Funded Program master data field has the same length of WBS element master data, so If I do not need the Funds for other reasons, I use the Funded program.

PERSONAL OPINION: Funds management is part of Public Sector Management solution; therefore it is mainly used for Public Sector Customers.  Despite that I have used it in many private customers’ implementations and it works perfectly for their requirements as well.  I have never found discrepancies between FM and CO mentioned by oss note 195122.

I am also an SAP Controlling consultant and I know CO contains functionalities to execute the budget availability control (internal order and wbs element availability control is available in ECC and S/4HANA and new cost center budget availability control in S/4HANA).

Despite that when I receive a more complicated requirement that I cannot solve in CO I may want to check whether Funds Management fulfills this requirement.

Classical requirements I usually receive are:

  • I would like to control my expenses towards opex and capex budget independently on the controlling object, so I want to check my budget globally independently on the posting regarding Cost Centers, Orders or Wbs Elements.


  • My budget belongs to departments and they are responsible to post their expenses in different objects (Cost Centers, Activities, Projects).


  • I would like to check my expense budget by cost element and on the general project level (level1) not wbe by wbe.


In these examples SAP Controlling does not give you the possibility of fulfilling the requirements so instead of adopting a custom procedure I prefer to use Funds management.

To be honest I have seen customers opting for a custom procedure, but this is highly expensive cause it will probably need a maintenance in near future. Coding block may change by adding new cases for Budget Availability Control and new processes may be implemented, so why not using SAP standard?

PERSONAL OPINION: I believe the reason for that is related to the fact that Funds Management is not well known in the SAP world and this is really a pity.

If you know a bit about Funds Management you may be aware that it is based on the fact of using new Master data (e.g. Funds Centers, Commitment items, Funded Programs, Funds) to execute the budget availability control on postings made on CO  objects (Cost Centers , Cost Elements, Orders/Wbe).

So you create these new master data, you put the budget on them (directly or taking it from other sources) and you use powerful Funds management derivation rules to derive these master data (from CO and FI master data) and to check budget on them. In this scenario, for example when a user posts a purchase order or a cost in Finance, Funds management Master Data may be automatically derived from FI/CO master data.

Of course to be used, Funds Management master data must be previously created, and usually if you decide for example to check availability control of your Work Breakdown Structure’s element,  you need to create an FM master data for each Wbe.

This may actually require some Business user’s effort and it is usually a big argument against FM.

That’s the reason why I am going to explain how to automatically create master data in FM using standard SAP.



First of all let me say that to allow usage of this functionality it is necessary to activate the business function PSM-F_CI_1.  This is valid since SAP Enhancement Package 3 for SAP ERP 6.0 and of course it can be used in S/4HANA.


Of course this has to be done after the activation of Extension set EA-PS that is a prerequisite to general FM usage. If you want more info on how to execute EA-PS activation, please read OSS 2503381

So this is a prerequisite to use the automatic creation of FM master data functionality. If you have problem here you may check OSS note 2371294 (Please pay attention to the note’s pdf attachment to find documentation).



The transaction to create master data is FMMDAUTO.

If you have correctly executed the previous steps the User Menu should appear like this.

And if you execute it you obtain the following screen:

This program automatically creates the following master data:

  • Funds Centers from Cost Centers or Internal Orders
  • Commitment Item from G/L Account or cost elements (if you are in ECC)
  • Funded Program from Internal Orders or Wbs Element

Of course the program works as per execution but you can schedule it in order to obtain a periodic execution to automatically create the FM master data once the other FI/CO master data are created.

But how does this program work?

EXAMPLE: To give you an example on how the program works,

I have started from the following cost center

and by executing the creation program with the following selections:

I have obtained, after the program execution, the creation the following funds center



Please be aware that FMDERIVE normal derivation rules should be active for your case. In the example I am mentioning FMDERIVE itself should contain the derivation rule to create a Funds Center From a Cost Center.

Of course the program needs his own derivation rules to understand how to create FM master data and where to take info for mandatory (and if necessary) not mandatory fields. These derivation rules are quite similar to the Funds management Derivation rules to derive Funds Management Master Data in postings.   Rules can be reached directly from the programs selection screen by pushing the

button Attribute Derivation


This is an example of derivation rules I have created for Funds Center Fields

with this detail as an example for CC responsible (taking it from the cost center master data)


TIP: The program can be used to create and to update master data so for example if the cost center responsible user is going to change you can also update the funds center responsible user.

TIP: If you are not happy with the derivation rules you can also use BadIs to enhance the possibility to create the FM master data. To do that you may want to prepare and activate the badis and to choose “enhancement” on the program derivation rules.

Badis are in customizing under the following path



In this blog post I have tried to explain how the automatic creation of FM master data could facilitate the adoption of Funds management.

This is part of my direct experience and I am really curious to hear from you.

What do you think about it?



Brought to you by the S/4HANA RIG

Gianluca Taccone
Product Expert
SAP S/4HANA Regional Implementation Group

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      Author's profile photo Bushair Bushair Thayyil
      Bushair Bushair Thayyil

      Thanks for the article going to try it. will give you my feedback

      Author's profile photo Vinayak Patil
      Vinayak Patil

      While you have mentioned:

      Funds management is part of Public Sector Management solution; therefore it is mainly used for Public Sector Customers.  Despite that I have used it in many private customers’ implementations and it works perfectly for their requirements as well.

      does it need license to be bought if we are not a public sector company?

      Does the activation of the FM components from PSM solution prevented if not licensed for?


      Vinayak Patil

      Author's profile photo GIANLUCA TACCONE
      Blog Post Author

      Hello Vinayak Patil,

      As far as I know the implementation of PSM is not subject to further licenses to be bought.



      Author's profile photo Marc Olivier Labrude
      Marc Olivier Labrude

      Hi Gianluca,


      thank you for you post and your tips. I think it's a great solution but I have a further question regarding automatic master data creation.

      You described mainly a program that creates FM master data based on other components master data, but as far as I understand, it's not an online run, right? I mean, if a cost center is created, the funds center is not created until this program is run, is that true?

      In this case, what would be the solution for the funds center to be created (or modified) when the cost center is saved (modified)? Normally when cost centers are created, users need to use it right after and I understand that with this program, a JOB have to be scheduled so the funds center is created automatically.


      Moreover, regarding commitment items, I guess that this program does the master data creation but the assignment to the account still should be done manually? What would be the best practice to create this master data?


      Thank you very much in advance,

      Best regards


      Author's profile photo GIANLUCA TACCONE
      Blog Post Author

      Hi Marc,

      I am sorry, somehow I missed your comment and I am now replying very late.

      You are right the program has to be scheduled via a JOB, in this way you will obtain the creation of FM master data.

      Regarding assignment, what I usually do is to create Derivation rules that are mostly automatic at least when I can.

      For example, I derive the Funds Center from the cost center. In some cases they are 1:1 and even equal so there is no need to maintain a 1:1 table in derivation rules, I just use derivation rules to derive the Cost Center code in the Funds Center itself. This is also true in projects where otherwise the will need to manually create Funded Programs related to WBS element (and they are usually many more than the Funds Centers).

      In other cases when you have Funds Center: Cost Center Relation 1:n you can for example use the initial characters of Cost Centers to derive the Funds Center. So when you discuss the code of FM master data you keep this problem in your mind. Usually Business Users do not mind to find a rule to derive the FM master data from FI-CO master data.

      Only when I have no other alternatives I ask the final user to directly maintain the direct relation table between cost centers and funds centers. Of course in this case you need to maintain the relation in FMDERIVE, but as said I try to avoid it. I usually explain the final user the fact he will need to maintain this table as a further task and I usually succeed .   😉

      Of Course to maintain the relation table in FMDERIVE the Funds Center Master data must exist.

      In the rare case where I do not succeed I tell the business user to change the creation of master data to insert this step in the creation process.

      Coming back to the Creation job, if the FMDERIVE is doing its job but the Funds Center is not derived, because for example it is still not existing, the final user who is doing the posting will receive an error. If you schedule the creation job frequently (e.g every 10 minutes)  you minimize the receipt of this error.

      Hope I was clear enough if not shoot again.






      Author's profile photo Ravi Kumar Grandhi
      Ravi Kumar Grandhi

      Hi GIANLUCA ,

      Thank you for your post. I have a question.

      When we do internal order settlement to cost center the FUND is not updating in settlement document line items even though the FUND is available on document line items posted to internal order . Can you please help.

      Thanks and Regards

      Ravi Kumar