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Budget Scenario

To create a new budge scenario you need to set up budgets first.

Here is the general information for setting up budgets:

To get to the Budget Initialization Settings in SAP, go to:
Administration > System Initialization > General Settings

Below the Budget Initialization checkbox, you will see a few options involving Deviations.
A “Deviation” may occur when you or your coworker submits a transaction into the system that will cause you to exceed or “deviate” from the Budget setup in that account.
When this occurs you have 3 options:

  • Block Deviation from Budget – prevents the employee from taking any further action
  • Warning – warns the employee/their superior of the impending deviation
  • Without Warning – No warnings or preventions occur and the transaction proceeds


You can also modify which budget, and which documents may trigger these alerts

Defining Budget Accounts

Next, how does SAP know which accounts are relevant to the Budget?
There are a few ways you can define these accounts.
Let’s first see how to do it manually. Go to:
Financials > Chart of Accounts > > Account Details
Once there Check the box that says “Relevant to Budget”


When you are first initializing your Budget, this may not be the best route to take. When you first initialize your Budget, there will be an option to mark all your P/L accounts as Budget Relevant.
If there are different accounts you wish to include after initialization, you can do that manually as shown above, or through the Data Transfer Workbench as well.

Budget Scenarios

Now that you have your Budget Relevant Accounts all established, let’s setup Budget Scenarios.
To get to Budget Scenarios go to Financials > Budget Setup Budget Scenarios

“Budget Scenarios” allows us to create multiple different Budget Scenarios
Budget Distribution Methods
Within each Budget Scenario, you can set up the Budget Distribution Method.

  • You can make it Equal
  • Ascending
  • Descending
  • Or you can create your own Custom Distribution Method



Even within a certain Budget Scenario, you can choose the Method Distribution for each Expense!
Alternate Budget Scenario Setup Options
Instead of creating a Budget Scenario from scratch, you also have a few other options that may be quicker.
One option is to Copy a past scenario.
From your Budget Scenario Setup Screen:
Copy Scenario > >

The other option is to Import a scenario.
Starting again from your Budget Scenarios Setup Screen:
Import Scenario > Choose Company > >

Be aware that the “Actual Balances” shown are only from years that were Budgeted.

Budget Reporting

Now that your budgets are set up, how do you know they are being followed?
Easily keep track of your budget with Budget Reports.
Go to Financials > Financial Reporting > Budget Reports

1.Budget Report

2.Balance Sheet Budget Report

3.Trial Balance Budget Report

4.​Profit and Loss Statement Budget Report

 

Some tips:
Cost Centers

Parent Accounts

 

Once your budget scenario is created, you need to open up the budget scenario. Financials-->Budget Setup-->Budget Scenario. 

From the drop down choose the year you want to create a budge for. Then right click in the area up above and add a row. From there you can configure your budge scenario. 

 

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Budget scenarios are used mainly for displaying budget reports. Scenarios are used to create a prognosis of a particular situation in the company's budget and to obtain important information about what the budgetary balance would be according to the selected scenario e.g. an optimistic scenario versus a pessimistic scenario. Each budget scenario is assigned to a particular fiscal year.

When setting up a new company, there is a default main scenario called the 'Main Budget'. This scenario cannot be altered.

Defining a New Budget Scenario

Fiscal Year – the scenarios assigned to the selected fiscal year are displayed in this window. From the drop down menu choose a different fiscal year in order to display its assigned scenarios.

For example, an "Optimistic Budget", that is, a budget based on the main budget plus an extra 20%. When you generate budget reports according to the "Optimistic Budget ", the budget amount will be calculated as 120% of the main budget amount.

How it works

In the course of routine work, when you create a transaction against a relevant to budget expense G/L account, a check for deviation from the budget is executed, and if the budget is exceeded, an alert is issued. If the boxes Purchase Order, Goods Receipt POs and Accounting had all been checked under General Settings 􀃆 Budget tab page, a check for deviation from the budget will be performed during the generation of Purchase Orders, Goods Receipt

Pos and A/P Invoices. If the budget is exceeded, the following message is displayed:

If you defined to block when exceeding budget, an alert is displayed at the bottom of the screen in red indicating that the budget would be exceeded, and that the transaction cannot be added.

 

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