SAP Funds Management is a financial module within SAP ERP. In particular, SAP FM is part of the collection of SAP PSM (Public Sector Management). The latter implies that it only has an application functionality for the public domain, but nothing is less true. Originally, Funds Management was part of Finance, only later it was moved to the Public label.
SAP FM is usually used with SAP FI (Financial) and SAP CO (Controlling). However, most users only have set up FI and CO. Is the lack of a set up FM module due to ignorance or is there simply no application?
In 3 blog articles, the applications of SAP FM are explored and we will look at the capabilities it offers for companies. In addition, we discuss how you make the functional wishes come true with SAP Funds Management. In short, we answer the question: "When should I use SAP FM in my organization?"
Business uses accruals-based accounting to keep track of their financial administration. Many governments work with the cash system or the cash settlement system. In SAP, the Cash Settlement System is maintained in the Funds Management (SAP FM) module. This module is complementary to SAP FI and SAP CO, which keeps track of the balance and costs respectively. The 3 SAP components together can be visually displayed as three pillars that track separate data. By deploying all 3 modules, in SAP it is possible to run both a Cash Settlement System and an Accruals-Based Accounting administration at the same time.
In order to be able to serve each organization as well as possible, SAP FM knows settings that indicate "how” to keep track of data. With “how” is it meant which date to use when recording data in FM. In case of an order, the booking date can be the date of the expected goods issue or the expected invoice date. The choice is based on the information requirement. This can be set up separately for the obligation and the cash. SAP FM is, therefore, a possible application if you want to report (additionally) on an expenditure basis.
SAP FM has its own master data. How many you want to use is adjustable. You are required to use at least two. You can extend this to a maximum of five. These five master data (Budget place, Budget position, Fund, Function area and Budget program) are available in all SAP modules in which something financially is done. Think of: MM (Purchasing), SD (Sales), FI (Financial), CO (Controlling), HR (Human Resource), TM (Travel Management) and AM (Activa Management). The FM master data can be entered manually for each transaction. To make it easier, it is also possible to make derivations based on other data.
Some possibilities of using one of the elements:
With this blog article, we made a start with answering the question: “When would I use SAP FM within my organization?” We have now described the first two specific features of SAP Funds Management. In the next two articles, we will take look at the possibilities of a number of other features of SAP FM.