Budget Planning or

Preparation Process
SAP FM BCS Business Blueprint

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SAP Funds Management

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Document Code : 2030 01
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Budget Planning or Preparation Process

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Neither this document nor any part thereof may be copied or reproduced in any
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consent of FmBcs.com. The information contained in this document is subject to
change and supplement without prior notice.

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Budget Planning or Preparation Process

Contents
Overview ................................................................................................................................................. 4
Budget Planning or Preparation process ................................................................................................ 5
Budget planning process diagram....................................................................................................... 7
Organization Overview ........................................................................................................................... 8
Master Data ............................................................................................................................................ 9
AS IS Process ......................................................................................................................................... 15
Budget Preparation process in SAP....................................................................................................... 16
Planning Tools I - SEM BPS ................................................................................................................ 17
Data Extraction from SAP System to SAP BW ............................................................................... 18
Data Retraction from SAP BW to FM ............................................................................................ 19
Planning Tools II - CO ........................................................................................................................ 20
Planning Tools III - Planning in FM .................................................................................................... 21
Document Version History .................................................................................................................... 22

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Budget Planning or Preparation Process

Overview

This document can be used as,

1. Sample Business Blueprints for SAP Budget preparation process.

2. This document as been made on general assumption and you may find difference in business
process depending upon your industry and organization practice.
3. This document has been created for demo company “Dolphin Corporation” for illustrative
purpose.
4. You need to change this document before actually using it for your live project.
5. This document is a part of entire documents of fmbcs.com
6. This document tries to cover most of the business requirements. List will not be exhaustive.

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Budget Planning or Preparation Process

Budget Planning or Preparation process

The budget planning process is a very important step in order to run a successful business - small or
big. An entrepreneur will take into consideration all anticipated incomes and all expenditures,
profits, future needs while planning a budget. Budget will show how thorough our business plan is
while showing the inherent strengths and weaknesses and preventing costly mistakes.

A budget is a very effective tool to manage business finances. Comparing the actual results with the
projected goals is an excellent way to constructively demonstrate where and what adjustments are
needed to make the business more successful. Monthly comparisons will keep a business running
smoothly.

Budget Concepts

For business budgets may have varying line items, depending on the nature of the business –
product based or service oriented. However, the most common concepts are:

1. Revenue
2. Costs
3. Profits

Revenue

The income you bring in for products that are sold or for services that are rendered is called
revenue. All streams of revenue should be included and it is very important to correctly estimate it
for easier calculation of expenses/cost to achieve the targeted growth.

Costs

There are two main kinds of expenses, direct and indirect. Some costs will be fixed costs, some
variable and some semi-variable costs. All expenses must be included. It is important that you do not
forget to include unexpected contingency expense – like repair/repurchasing essential equipment. It
is crucial to calculate the expenses accurately because it is the only way to determine the amount of
revenue to cover the costs and still make a profit.

Profits

Profit is calculated after taxes are deducted. It should cover payment for your services as well as a
return on the invested capital. If the business plan is well-planned and realistic, there should be a
fair amount of profit right from the first year itself.

Notes

It is important to understand industry standards. If it is a new business, use the internet or a market
survey to figure out what could be the weekly revenue/expenses and the traffic patterns. For an

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Budget Planning or Preparation Process

existing business, use last year’s results. The return on investment (ROI) for the past year and
expenses can give an idea to know how much revenue needs to be generated this year to reach the
goals/profits targeted.

The numbers should reflect the details of the business plan allowing us to learn from the past
mistakes and to search for alternatives to achieve the set goals. They can help you determine
whether to cut down on operating expenses, or trimming the overheads to control cost is easier
with a well-planned budget. Estimating the costs should be from actual facts and figures.

The budget planning process may look too much a task and a difficult preposition but it is a very
important tool. There are a number of excellent software programs available in the market to help
organize and calculate budgets. It is a good idea to make a customized budget to suit individual
needs and enjoy the benefits of a successful budget planning process.

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Budget Planning or Preparation Process

Budget planning process diagram

A sample budget planning process can be defined as below,

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Budget Planning or Preparation Process

Organization Overview
Dolphin Corporation Inc, is an incorporated under prevailing corporate law. This organization is
having business of manufacturing and trading cars.

Dolphin Corporation is an illustrative set up. This organization does not in existence. This name is
used to demonstrate concepts and understanding for SAP Funds Management.

Any resemblance with this setup or organization profile does not have any meaning and it should
not be linked with any other organization.

Dolphin Group has following two legal entities to run business.

1. Dolphin Manufacturing Corporation (DMC)

2. Dolphin Service Corporation (DSC)

For More Details ref our documents

“2010 01 Organization Profile”

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Budget Planning or Preparation Process

Master Data

Note : This section is illustrative and you need to put your real master data which you are going to
use. It depends upon your organization structure, department hierarchy, division structure.

Following master data will be created for Dolphin Corporation.

Company Codes

DM01 Dolphin Manufacturing Corporation (DMC)

DS01 Dolphin Service Corporation (DSC)

FM Area
DC01 Dolphin Corporation

Functional Area
FM-CAR CAR - Passenger Car
FM-SUV SUV - Sports Utility Vehicle
FM-MUV MUV - Multi Utility vehicle

Funds
INTERNAL Internal
EXTERNAL External

Fund Center
DMC10 DMC - Corporate
DMC20 DMC – Finance
DMC30 DMC – Manufacturing
DMC40 DMC - Procurement
DMC50 DMC – Sales and Distribution
DMC60 DMC – HR
DMC31 DMC East – Plant
DMC32 DMC West – Plant
DMC33 DMC North – plant
DMC34 DMC South – plant

DSC10 DSC - Corporate

DSC20 DSC – Finance
DSC30 DSC – Service Station
DSC40 DSC - Procurement

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Budget Planning or Preparation Process

DSC50 DSC – HR
DSC31 DSC East – Service Station
DSC32 DSC West – Service Station
DSC33 DSC North – Service Station
DSC34 DSC South – Service Station

Commitment
Items

Asset Accounts

Current Assets

1000 Petty Cash

1010 Cash on Hand (e.g. in cash registers)
1020 Regular Checking Account
1030 Payroll Checking Account
1040 Savings Account
1050 Special Account
1060 Investments - Money Market
1070 Investments - Certificates of Deposit
1100 Accounts Receivable
1140 Other Receivables
1150 Allowance for Doubtful Accounts
1200 Raw Materials Inventory
1205 Supplies Inventory
1210 Work in Progress Inventory
1215 Finished Goods Inventory - Product #1
1220 Finished Goods Inventory - Product #2
1230 Finished Goods Inventory - Product #3
1400 Prepaid Expenses
1410 Employee Advances
1420 Notes Receivable - Current
1430 Prepaid Interest
1470 Other Current Assets

Fixed Assets

1500 Furniture and Fixtures

1510 Equipment
1520 Vehicles
1530 Other Depreciable Property
1540 Leasehold Improvements
1550 Buildings

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Budget Planning or Preparation Process

1560 Building Improvements

1690 Land
1700 Accumulated Depreciation, Furniture and Fixtures
1710 Accumulated Depreciation, Equipment
1720 Accumulated Depreciation, Vehicles
1730 Accumulated Depreciation, Other
1740 Accumulated Depreciation, Leasehold
1750 Accumulated Depreciation, Buildings
1760 Accumulated Depreciation, Building Improvements

Other Assets

1900 Deposits
1910 Organization Costs
1915 Accumulated Amortization, Organization Costs
1920 Notes Receivable, Non-current
1990 Other Non-current Assets

Liability Accounts

Current Liabilities

2000 Accounts Payable

2300 Accrued Expenses
2310 Sales Tax Payable
2320 Wages Payable
2330 401-K Deductions Payable
2335 Health Insurance Payable
2340 Federal Payroll Taxes Payable
2350 FUTA Tax Payable
2360 State Payroll Taxes Payable
2370 SUTA Payable
2380 Local Payroll Taxes Payable
2390 Income Taxes Payable
2400 Other Taxes Payable
2410 Employee Benefits Payable
2420 Current Portion of Long-term Debt
2440 Deposits from Customers
2480 Other Current Liabilities

Long-term
Liabilities

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Budget Planning or Preparation Process

2700 Notes Payable

2702 Land Payable
2704 Equipment Payable
2706 Vehicles Payable
2708 Bank Loans Payable
2710 Deferred Revenue
2740 Other Long-term Liabilities

Equity Accounts

3010 Stated Capital

3020 Capital Surplus
3030 Retained Earnings

Revenue
Accounts

4000 Product #1 Sales

4020 Product #2 Sales
4040 Product #3 Sales
4060 Interest Income
4080 Other Income
4540 Finance Charge Income
4550 Shipping Charges Reimbursed
4800 Sales Returns and Allowances
4900 Sales Discounts

Cost of Goods
Sold

5000 Product #1 Cost

5010 Product #2 Cost
5020 Product #3 Cost
5050 Raw Material Purchases
5100 Direct Labor Costs
5150 Indirect Labor Costs
5200 Heat and Power
5250 Commissions
5300 Miscellaneous Factory Costs
5700 Cost of Goods Sold, Salaries and Wages

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Budget Planning or Preparation Process

5730 Cost of Goods Sold, Contract Labor

5750 Cost of Goods Sold, Freight
5800 Cost of Goods Sold, Other
5850 Inventory Adjustments
5900 Purchase Returns and Allowances
5950 Purchase Discounts

Expenses

6000 Default Purchase Expense

6010 Advertising Expense
6050 Amortization Expense
6100 Auto Expenses
6150 Bad Debt Expense
6200 Bank Fees
6250 Cash Over and Short
6300 Charitable Contributions Expense
6350 Commissions and Fees Expense
6400 Depreciation Expense
6450 Dues and Subscriptions Expense
6500 Employee Benefit Expense, Health Insurance
6510 Employee Benefit Expense, Pension Plans
6520 Employee Benefit Expense, Profit Sharing Plan
6530 Employee Benefit Expense, Other
6550 Freight Expense
6600 Gifts Expense
6650 Income Tax Expense, Federal
6660 Income Tax Expense, State
6670 Income Tax Expense, Local
6700 Insurance Expense, Product Liability
6710 Insurance Expense, Vehicle
6750 Interest Expense
6800 Laundry and Dry Cleaning Expense
6850 Legal and Professional Expense
6900 Licenses Expense
6950 Loss on NSF Checks
7000 Maintenance Expense
7050 Meals and Entertainment Expense
7100 Office Expense
7200 Payroll Tax Expense
7250 Penalties and Fines Expense
7300 Other Taxes
7350 Postage Expense
7400 Rent or Lease Expense

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Budget Planning or Preparation Process

7450 Repair and Maintenance Expense, Office

7460 Repair and Maintenance Expense, Vehicle
7550 Supplies Expense, Office
7600 Telephone Expense
7620 Training Expense
7650 Travel Expense
7700 Salaries Expense, Officers
7750 Wages Expense
7800 Utilities Expense
8900 Other Expense
9000 Gain/Loss on Sale of Assets

Note For updated list ref our document

“2040 20 Key Data Structure”

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Budget Planning or Preparation Process

AS IS Process

In this section you need to collect the information how budget planning happening within
organization. You need to figure out functional process of budget planning, in most of the
organization budget planning data will be filled by individual department and it will be consolidated
by budget control department and after that it will be send for management approval.

Your questions may be like,

1. What is budget software used for planning purpose.

2. Who enter the plan data initially and when?
3. What is basis of budget planning?
4. What is approval level required for budget planning?
5. Annual budget or overall budget planning?
6. Planning approach “bottom up” or “top down”
7. How the consolidations of budget planning happen? Who is doing and when?

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Budget Planning or Preparation Process

Budget Preparation process in SAP

Budget Preparation is totals-oriented, and contains an aggregation of the amounts per FM account
assignment.

In the SAP system, BW Budget Planning and Simulation (BPS) enable you to carry out detailed budget
planning.

For less complex situations, planning can be done directly in BCS.

Following Planning tools available for Budget Planning

1. Planning Tools I - SEM BPS

2. Planning Tools II – CO
3. Planning Tools III - Planning in FM

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Budget Planning or Preparation Process

Planning Tools I - SEM BPS

Budget preparation with SAP Strategic Enterprise Management (SAP SEM) is useful if planning is
based on historical values (master data, transaction data) so that you can access master and
integration data already available.

SAP provides extractors for SAP system applications which load the data in SAP Business Information
Warehouse. An extractor is a program that loads the dataset of the SAP source system in BW.

Based on the historical data, you begin your planning activities in the separate planning environment
of SEM Business Planning and Simulation (SAP SEM BPS) which is kept separate from your operative
environment. You can plan both "bottom up" and "top down". Then run the iterative approval
process over it, and you will have an approved budget, at the end of it which you can then post in
your operative environment.

The Retractor (program that returns the data of SAP Business Information Warehouse to the source
system) makes sure that the relevant results of your planning are posted in the SAP system and are
available as budget for the next budget execution period.

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Budget Planning or Preparation Process

Data Extraction from SAP System to SAP BW

1. You extract data from your operative environment if you want to carry out planning using
historical values and existing master data structures. As SAP guarantees the integration
between Sap System and BW, the extractors are a part of the Business Contents that are
already available in BW.
2. A prerequisite of the extraction of data is that your SAP system and your BW system are
connected to each other.
3. The extraction is triggered from the Administrator Workbench in your SAP BW which is
linked to your SAP SEM (BW can be installed either locally or via RFC).
4. Choose InfoSource in order to choose the data that you want to load in SAP BW (for
example, Funds Management).
5. The data to be extracted is structured according to SAP applications in BW. You will find
extractors for CO, FI, HR, FM and so on.
6. The FM-related data (budget, actual values, commitment, master data) can be found in SAP
BW InfoSource
7. Public Sector Management --> Funds Management (master data, budgeting in FM, CO line
items, commitment and actual line items, FI line items)
8. Create an info package for each line item and extract the data. Start with master data (for
example, FM area, fund, budget,...) and then update the transaction data.
9. This updates the standard InfoCubes.

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Budget Planning or Preparation Process

Data Retraction from SAP BW to FM

1. You use the retractor in order to post the results of your planning activities back to SEM BPS
in the operational environment.
2. The retractor program for FM is part of Customizing and is available at
3. Public Sector Management --> Funds Management Government.
4. You create your planning in SEM-BPS.
5. You create a BW query in BW which collects planning data ( the ODBO flag must be activated
in the query).
6. You define a number range for postings in the Customizing for the retractor.
7. You also maintain field assignments (mapping) of BW and FM data by using derivations.
a. Example: you can define that BW budget values from planning version 150 are
regarded as approved "budget" and are posted in budget version 000 (as original
budget) in the SAP system.
8. Start the data transfer from the SAP system. You can use a variant of a query in order to
select the data in the query created in BW.
9. The data transfer usually results in an error message if master data is imported from BW
that does not exist in the SAP System. The reason: you need additional master data in the
budget preparation phase, which is why you created this in BW. In this case, you must create
the missing master data and start the retraction again.

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Budget Planning or Preparation Process

Planning Tools II - CO
Program FMCYCOPI_CO copies plan version data from Controlling (CO) into a budget version in
Funds Management (FM). You use this program to create the same budgets in FM by transferring CO
planning data.

This data transfer can take place as often as desired. Please note that this transfer will overwrite all
manual changes made in BCS. However, even if manual changes are overwritten, CO and BCS are still
synchronized. CO acts as the reference in this case. In this respect, the budget in Funds Management
is therefore independent of the CO planning data.

The program determines the recipient in Funds Management based on the assignments from FM
account assignments to CO account assignments using the account assignment derivation tool. If

You make changes to the assignment, the planning data transferred into Funds Management until
now will be transferred automatically to the new recipient with the next planning data transfer.

The program considers the primary CO planning data in table COSP and the secondary CO planning
data in table COSS.

As you can assign the fund and functional area directly in CO planning starting from Release 4.62A,
you can use program FMCYCOPI_CO and execute the entire budget planning process in Controlling.

You can only generate budget data in the target version using the internal budgeting process ENTR.

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Budget Planning or Preparation Process

Planning Tools III - Planning in FM

BCS planning is based on planning functions of the Special Ledger component that were adjusted to
suit the requirements of Funds Management.

BCS planning data is fully part of you budget data, and is based on BCS features like: Budget Type,
Status Management, Process.

All the BCS planning data is created with process PREP, without entry documents.

It is a totals-based process in contrast to a delta-based process as used in the Budgeting Workbench.

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Budget Planning or Preparation Process

Document Version History

Document Version Date Author Remarks

V 1.0 01Jan2011 FmBcs.com Initial Release
V 1.2 12Aug2012 FmBcs.com 1st Revision
V 1.3 02Jan2014 FmBcs.com 2nd Revision
V 1.4 30Jun2015 FmBcs.com 3rd Revision

For any help, suggestion or feedback please write us at

Help@FmBcs.com

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