By John Jordan
How SAP Internal Order Budgeting Works
SAP Internal Order budgeting allows you to define approved spending limits for an Internal Order and monitor costs against those limits. Budgets can be maintained at an overall or annual level, depending on the requirements of the organization.
To understand how budgeting differs from planning in SAP Controlling, see our guide to SAP planning vs. budgeting.
Availability control monitors actual and committed costs against the available budget. When defined tolerance limits are reached, SAP can issue warning or error messages to help prevent spending from exceeding the approved budget.
The following example explains how to configure a budget profile, define availability control tolerances, enter an original budget, and post a budget supplement for an Internal Order.
Configure the Internal Order Budget Profile
You can maintain a budget profile using Transaction OKOB or through the following IMG menu path:
Controlling - Internal Orders - Budgeting and Availability Control
Double-click a budget profile to display the screen shown in Figure 1.
Figure 1: Internal Order Budget Profile
Activation Type 1 automatically activates availability control when the budget is allocated.
If the Overall checkbox is selected, availability control checks against the overall budget. If it is not selected, availability control checks against the annual budget.
Availability control normally works with the controlling area currency. Select Object Currency to use the object currency instead. You can assign the budget profile to an Internal Order type using Transaction KOAB or through the IMG menu path.
Configure Availability Control Tolerance Limits
You maintain availability control tolerances via the following IMG menu path:
Controlling - Internal Orders - Budgeting and Availability Control - Define Tolerance Limits for Availability Control
Select the possible entries for the Action field to display the options shown in Figure 2.
Figure 2: Availability Control Tolerance Limits
The Action field determines the system response when specified percentages of the budget are consumed. In this example, when budget consumption reaches 90%, a warning is issued. At 95%, a warning is issued with an automatic email to the person responsible. At 105%, the system issues an error message.
Assign a budget manager using Transaction OK14 if you want the system to send availability control notifications to the responsible person.
Enter an Internal Order Budget
You can enter an Internal Order budget using Transaction KO22 or through the following menu path:
Accounting - Controlling - Internal Orders - Budgeting - Original Budget
You can enter the original budget as shown in Figure 3.
Figure 3: Change Original Budget Annual Overview
The overall budget can be greater than the sum of the annual budgets, but it cannot be less. The assigned amount of 95,000.00 results from a manual journal entry and appears in an annual budget row because the Overall checkbox in the budget profile shown in Figure 1 is not selected.
Post an Internal Order Budget Supplement
A budget supplement increases the available budget when additional funding is approved. In Figure 4, the original Planned Total Version 0 amount is 100,000.00. A budget supplement of 20,000.00 was posted using Transaction KO24, increasing the current budget to 120,000.00.
Figure 4 Internal Order Budget Supplement
SAP Internal Order Budgeting Summary
Internal Order budgets help organizations establish approved spending limits and monitor costs against those limits. Availability control can issue warnings or prevent additional postings when defined tolerance thresholds are reached. Budgets can be maintained at an overall or annual level and adjusted with supplements when additional funding is approved.
Learn More About SAP Controlling
This article is based on Tip #14 from John Jordan's 100 Things You Should Know About Controlling with SAP.
More: 100 Things You Should Know About Controlling with SAP
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Glossary
Actual Costs
Actual Costs are costs that have been posted to an Internal Order. Actual costs can be monitored against the available budget through availability control.
Allocation Structure
Allocation Structure groups source costs for settlement and determines how those costs are assigned to settlement cost elements or accounts.
Availability Control
Availability Control monitors actual and committed costs against the available budget. When defined tolerance limits are reached, SAP can issue warning or error messages to help prevent spending from exceeding the approved budget.
Budget Profile
Budget Profile defines how budgeting and availability control operate for an Internal Order, including settings for overall or annual budgets, currency, and availability control. The budget profile is assigned to the Internal Order type.
Budget Supplement
Budget Supplement increases an existing Internal Order budget when additional funding is approved. Supplements can be entered for the overall budget or for individual fiscal years, depending on the budget profile settings.
Commitments
Commitments represent expected future costs from transactions such as purchase requisitions and purchase orders. Availability control can consider commitments along with actual costs when checking the available Internal Order budget.
Controlling Area Currency
Controlling Area Currency is the currency defined for a controlling area. Internal Order availability control normally checks the budget using the controlling area currency unless object currency is selected in the budget profile.
Cost Center
A Cost Center is an organizational unit used to collect and monitor costs for a defined area of responsibility. Unlike an Internal Order, a cost center typically represents an ongoing organizational function.
Cost Element
Cost Element identifies the type or nature of a cost in SAP Controlling. Costs posted to an Internal Order can be analyzed by cost element to understand how the budget is being consumed.
Currency Type
Currency Type identifies the role of a currency in SAP, such as company code currency, controlling area currency, or group currency. Currency settings determine how financial and Controlling values are stored and reported.
Distribution Rule
Distribution Rule specifies how costs are distributed to receiver objects during settlement, including the receiver, settlement percentage or amount, and other settlement parameters.
Internal Order
Internal Order is a Controlling (CO) cost object used to plan, collect, monitor, and settle costs for specific activities or purposes. Internal Orders can also support budgeting, availability control, and reporting.
Master Data
Master Data is relatively stable information used to support business processes in SAP. Internal Orders contain master data that controls characteristics such as assignments, status, and settlement.
Order Type
Order Type controls key settings for Internal Orders, including number assignment, status management, planning parameters, budgeting, and settlement behavior.
Original Budget
Original Budget is the initial approved budget entered for an Internal Order. It provides the starting budget amount before subsequent changes such as supplements, returns, or transfers.
Object Currency
Object Currency is the currency assigned to an individual Controlling object, such as an Internal Order. When selected in the budget profile, availability control can check the Internal Order budget using the object currency instead of the controlling area currency.
Profit Center
Profit Center is an organizational unit used for internal management reporting and analysis. Internal Orders can be assigned to profit centers to support responsibility-based financial reporting.
SAP Fiori
SAP Fiori provides role-based applications for accessing and managing SAP S/4HANA processes. Depending on system configuration and available apps, users can perform Controlling activities and analyze financial information through the SAP Fiori launchpad.
SAP Universal Journal
SAP Universal Journal provides a single source of financial and management accounting data in SAP S/4HANA. Actual postings are stored in ACDOCA, enabling integrated reporting across Financial Accounting, Controlling, and related processes.
Settlement
Settlement transfers costs collected on an Internal Order to one or more receiver objects, such as cost centers, fixed assets, or other eligible cost objects, according to the order's settlement rule.
Settlement Profile
Settlement Profile defines the rules and parameters that control how an Internal Order can be settled, including permitted receiver types and settlement options. The settlement profile is assigned through the order type.
Settlement Rule
Settlement Rule defines how costs collected on an Internal Order are distributed to one or more receiver objects during settlement.
Source Cost Element
Source Cost Element identifies the original cost element from which costs are allocated or settled in SAP Controlling, helping retain information about the nature of the original costs.
Tolerance Limits
Tolerance Limits define the budget consumption percentages at which availability control triggers specific system actions, such as warnings, email notifications, or error messages.
Tracing Factor
Tracing Factor defines how costs are distributed among receiver objects during periodic allocations in SAP Controlling. Examples include statistical key figures, percentages, fixed amounts, or other allocation bases.