Constantly monitoring the costs and margins of orders with reference to the budget is one of the most complex issues to deal with, especially for businesses working on commission. This type of company is often faced with managing long-term expenses.

SAP has developed a solution for managing budgets: the Funds Management (FM) module, which provides real-time control of expenditure levels and long-term information.

This solution is particularly advantageous in a business context characterised by the management of orders that can last up to several years: for example, a project spread over three years starts with the allocation of a predefined budget, the management of which can, however, be very complex and interconnected with other phases, from purchasing to reporting. It is therefore essential for management to have all the information on the levels of expenditure made available in real time and in the greatest detail.

SAP FM offers this very possibility: to monitor in detail when and how the allocated budget is consumed. FM is also characterised by a level of detail that varies according to the needs of the company, from the generic budget associated with a given category to the individual item: the system assigns the corresponding budget to the individual item and, as the allocated amount is spent, the data is updated in real time. In this way, by monitoring fund expenditure at source, the CFO and the management in general know in real time at what point the expenditure is, so that they can make the most strategic decisions in time on possible budget adjustments, increasing or reducing the size of the fund according to needs, also ensuring better and faster coordination with the unit that deals with purchases.

The advantages of SAP FM are:

  • Automatic budget management on various degrees of item detail, through the setting of derivation rules; 
  • Reports monitored and updated in real time;
  • Possibility for management to coordinate and intervene with all the other functions responsible for spending funds.

In addition, SAP FM allows companies to move to computerised and technological budget management, without having to resort to handwritten documents, which are not updated in real time and are always at risk of errors or inconsistencies.