Are you still handling your CAPEX and OPEX budgets manually on spreadsheets outside of SAP? It's a common scenario where many clients are using SAP for their operations while also witnessing Controllers relying on Excel sheets to manage budget items, updates, and expenditures. This approach not only duplicates efforts since the data is already within SAP but also lacks proactive measures to address deviations.
Wouldn't it be more advantageous to embrace a standardized SAP solution, eliminate spreadsheet usage, and exercise complete proactive and instantaneous control over your budgets? This means that as orders and invoices associated with budgets are input into the system, you gain real-time insights.
SAP's Investment Management offers the standard toolset for effectively overseeing company CAPEX acquisitions. It goes further by providing a hierarchical representation of planned and budgeted costs for investment projects.
Leveraging SAP's inherent functionality enables efficient CAPEX and OPEX budget management:
CAPEX - Capital Expenditures
This category includes purchases of assets owned by the company and not intended for resale. It's divided into:
- Final Fixed Assets: Assets fully completed and depreciable, like office furniture.
- Fixed Assets in Progress: Assets under construction, not yet depreciable. For instance, an SAP implementation project.
OPEX - Operational Expenditures
This covers operational materials and services involved in day-to-day business operations. Indirect purchases like rent, utility expenses (water, electricity, gas), salaries, and travel expenses fall under this umbrella.
SAP's budget management process commences with the creation of the company's investment plan/budget. Subsequently, investment orders are generated and assigned budgets. Orders can be categorized as investment (capitalizable and settled against Fixed Assets) or statistical (applicable to expense items).
As orders/budget items are fed into the system, an availability control mechanism verifies the budget. It cross-checks against Committed amounts (MM orders associated with orders) and Actual figures (invoices). If consumption exceeds limits, the system issues warnings or errors at the point of MM order or FI invoice creation. Configurable thresholds trigger these alerts, typically at 80% consumption (warning) and 100% (error).
SAP also offers standard budget management reports that provide essential insights. In a flowchart, we outline the operation of a general expense order in SAP. Similar procedures apply to investment orders, with connections to the Fixed Assets module.
One notable feature of SAP is the seamless management of multiple budget versions. This allows the company to simultaneously handle optimistic (post-COVID) and pessimistic (COVID-affected) budget scenarios. Additionally, budgets can be created, factoring in inflation (a prevalent scenario).
Advantages of adopting SAP's standardized functionality include:
- Inherent Solution: SAP's budget management capabilities are part of the standard package, requiring no additional licensing expenses.
- Deviation Detection: Real-time availability control helps pinpoint budget deviations promptly.
- Integration: Integration with the Fixed Assets module streamlines investment project management.
- Version Management: Easy handling of various budget versions enables better scenario planning.
- Efficient Reporting: Rapid generation of management reports facilitates quick decision-making.
- Reduced Errors: Eliminates data transfer errors from spreadsheets to SAP.
- Time Optimization: Maximizes user efficiency and minimizes redundant efforts.
- Documentation: Possibility to attach supporting information/documentation to orders.
- Monthly Budget Control: Activate monthly budget control by account and order for enhanced oversight.
To explore further insights into our project management approach, feel free to contact us at info@cuviv.com. We're here to assist you promptly.
