SAP Ebooks

Product Costing IO Budgeting

Internal order is going to be used for budgeting, collection of cost. Internal order will be used for control of Capital Expenditure, Advertisement cost, R & D expenses, Exhibition Cost, Manufacturing meet, Project etc.

During planning stage planned cost is estimated and once the planned cost is approved, funds equivalent to approved planned cost is prescribed as budget.
In case of unforeseen events, additional budget requirement due to for example Price rise in external activities will be updated as Supplementary Budget and similarly in case of reduction, budget can be reduced by updating Return.

Type of Budget

1) Original Budget: After approval of budget, Divisional Head, MFG Eng Head/Dept Head will update the budget in Internal order and inform to FI/MM/CRM/SD Dept. Concerned department will update the budget in internal order and inform to all concerned department for entering the internal order at transaction viz PO/SO or any finance transaction pertains to assignment.
Budget will be mandatory for Capital expenditure, expenses like advertising, exhibition cost, R& D Expenditure or any event.

2) Supplementary Budget: Internal order will alarms for exceeding budget and will not allows further Finance transaction on real as well as accrue basis. If required, Concerned Divisional Head, Manu Eng Head, Dept Head will revised the Budget after approval and informs FI/MM/SD/PP.

3) Return: In case of unforeseen events, the budget can be reduced. Divisional head, Manu Eng Head, Dept Head will reduce the budget amount with as per approval and informs FI/MM/SD/PP. The budget can be reduced up to extend of unspent amount.

SAP T code to be Used

Change in Original Budget :KO22
Display in Original Budget :KO23
Change in Supplement :KO24
Display in supplement :KO25
Change in Return :KO26
Display in Return :KO27

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