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Deployed with customized, composite applications that provide users with seamless transparency and flexibility across their expenditure system landscapes, the Funds Commitment Processing ES bundle enables organizations to create, update, complete, search for, and display funds commitment documents, which are used to block or reserve budget amounts for a particular purpose, or to reflect expected revenues.

Many of today's organizations work with large budgets spread over extended periods. To ensure that they account for and reserve funds required for future transactions, organizations must earmark the funds for use in advance. A funds commitment document is evidence that the funds have been earmarked and that they are unavailable for use in other transactions unless the commitment document is set to completed. If the status of a document has not been set to completed, the funds cannot be released for another purpose.

To create a funds commitment document, the user needs to know the estimated amount of funds to be earmarked and the account assignment to which the funds are to be assigned. It is not necessary to know the exact nature or costs of the potential transaction at the time the reservations are created. For instance, users need not specify the vendor with whom business is being conducted nor must they specify any payment terms.

 

Funds Commitment Processing


Whereas some organizations use procedures like this as a means of monitoring their budgets, others are compelled by law to earmark funds for future transactions in the very first step of their expenditure process. This prevents them from creating invoices at a later date for which no funds were originally earmarked.
Expenditure processes can involve three possible steps:

  1. Reserve funds for a planned transaction.
  2. Precommit the funds for a planned transaction
  3. Commit the funds for the transaction

Each of these steps, from a technical point of view, reserves the budget amount for that expenditure until such time as the Funds Commitment Document (the business object in this process) is set to completed. In this way, organizations can use these steps to mirror more detailed processes, where required, or can simplify the process to a single step if desired. If the entire amount that was blocked is not used, it is released back into the budget.
When one or more funds commitment documents are created with regard to a potential transaction, they form a document chain. Since the expenditure process begins with allocating funds for planned transactions and concludes with spending those funds, the created documents always refer to one another, in chronological succession.
This bundle addresses three main processes. These processes concern:

  • Earmarking funds in the expenditure process chain by creating a new funds commitment document
  • Searching for and displaying an existing funds commitment document
  • Setting the status of an existing funds commitment document to completed

The System Landscape

The Funds Commitment Processing ES bundle leverages enterprise SOA through providing enterprise services that interact with SAP for Public Sector. Third-party systems (for example, third-party grantor systems) could use the enterprise services in this ES bundle to create funds commitment documents.

Audience

All public service entities using public sector management will benefit from the Funds Commitment Processing ES bundle.
The roles in these industries that will use this bundle include:

  • Accounting Clerk
  • Budget Officer
  • Project Manager

    For details on Service Operations, Business Objects and Process Components, please check the ES Workplace.


How To Use This ES Bundle

Since the Funds Commitment Processing ES bundle contains enterprise services that enable businesses to monitor commitment chains and earmark funds for potential future transactions, all within a standardized platform that seamlessly integrates processes across varied systems and SAP applications, the overall expenditure process is greatly condensed and simplified. The enterprise services in this ES bundle could be used to create composite applications or web portals that allow users to create, modify, complete, search for, and display funds commitment documents.

This following section will explore three use cases for the Funds Commitment Processing ES bundle. Each use case provides concrete examples and shows how different outcomes can be achieved by using the enterprise services in different combinations. Note that these examples may refer to users directly invoking enterprise services. This illustrates the flow of the service operations; in fact, service operations are invoked by an application, by an application's user interface, or by another service operation. While these examples illustrate a few of the ways that this ES bundle could be used, the intention is to show the flexibility and reusability of these business objects and enterprise services operations so that you will have a clearer understanding of how to best deploy them in your own environment. This wiki is also a space for you to share knowledge and collaborate with others who are implementing the Reserve and Commit Budget ES bundle.

Use Case 1: Earmarking Funds by Creating a New Funds Commitment Document

To prevent a budget from being improperly managed and to ensure that funds are available for planned transactions when presented with invoices, an organization can earmark funds by creating a funds commitment document. Before creating it, however, the budget officer or project manager verifies that a sufficient amount of funds is available in the budget.

Sara, a project manager, checks to see if budget is available for the color laser printer her department is planning to buy. She wants to wait until the new model comes out in a month or so, but she designates the funds for this purpose invoking the Create Funds Commitment Document service operation, which uses the Funds Commitment Document business object. The funds are now earmarked for the new color laser printer.

Use Case 2: Searching for and Updating a Funds Commitment Document

Prices for the color laser printers have dropped so significantly that for just slightly more, Sara can buy two printers?one for each of the printer rooms. She checks the budget availability and confirms that she can allocate just a bit more for the laser printers. She searches for the funds commitment document she created using the Find Funds Commitment Document by Basic Data service operation. She selects the funds commitment document she created from the listing created by the find service. Choosing her document invokes the Read Funds Commitment Document service operation and displays its details.

She then updates the amount of the funds commitment document to reflect the cost for the two laser printers, adding some additional funds for toner cartridges. To increase the amount, she invokes the Update Funds Commitment Document enterprise operation.

Use Case 3: Completing an Existing Funds Commitment Document

Sara increased the amount of the funds commitment document to cover two laser printers and toner cartridges, but the price for these items went still lower, so when Sara sets the funds commitment document to complete, $185 is released back into the budget. Setting a document to complete means that funds have been disbursed or that the earmarked funds aren't needed, so any remaining funds are released back into the budget. To complete the funds commitment document, Sara invokes Find Funds Commitment Document by Basic Data followed by Read Funds Commitment Document to display the document. She then invokes the Complete Funds Commitment Document service operation, which closes out the document and sets its status to complete.

System Requirements

Related ES Bundles