An overview of Investment Management in SAP
In this blogpost we will see basics of IM, Why IM is needed and what is use of IM? Major Config. and end user transactions in SAP Investment Management.
Flow of Blogpost:
- IM in SAP
- Configuration steps of IM
Basics – What is Investment Management in SAP?
Investment Management is a budgeting tool that helps organizations to budget, plan and structures investment goals. Investment programs are used on top of Project System. Now you might say, project system itself have budgeting functionality, then what is the need of Investment management?
Lets understand this with one example; Consider your organization have international presence. The head office is in Europe. And there are hundreds of different projects going on at different locations. All projects are undergoing for different purposes. Some projects are for setting up new offices, some for restructuring existing plants, building new stores etc.
So project level expenditure management and budgeting is the lowest level management in organization hierarchy. On top of projects business needs investment programs to categorize and allocate budget as per business priorities and decisions.
Investment programs can be created based on geographical areas and then further drilled down to different segments of business. For e.g. there will be separate Investment program for each country and then under that investment program budget can be allocated to different segments like IT, Sales & Marketing, Accounting, Manufacturing etc. or based on product mix, revenue mix.
It can also be done vice versa, Multiple investment programs as per business segments and then under each segment different geographies can be added.
Before it gets too confusing lets have look at sample Investment program:
Highest level node is the main node of Investment Program, it tells you about investment program. We can see in above image this Investment program is for Mexico. After first node you can assign multiple levels as per business requirement (99 level drilldown is supported)
Each node can have organization units assigned to it along with responsible person. Budget has to passed on from top to down. Which can be monitored and validated with allocation and approval approach.
Projects are assigned to the lowest level nodes. In above structure you can see under CAPEX there is lowest level node for New Stores. So all the projects in Mexico created for New stores can be assigned to this node. This node will have certain amount of approved budget that can be distributed to all assigned projects based on requirement or management decisions.
Lets understand the life cycle of Investment programs in bullet points:
- Decision of Investment (appropriation request)
- Creation of Investment Program
- Budgeting the Investment program nodes
- Creation of Project (Investment Measure)
- Transferring budget from IM to Project
- Booking actual expenses during project completion time
- Periodic settlement to AUC
- Upon Project completion final settlement to Final Asset
- Asset Depreciation will be booked as per legal and other valuation methods.
If you want to know more about it from business standpoint, how things happens in business from top to down? How budgets are approved, allocated and monitored, then you can give try to this eBook which is written by a project manager to understand things from high level management.
Hope you got the high-level overview of IM, In next chapter we will see end user activities in Investment Management followed by backend configuration chapter.
Investment Management in SAP (End user activities)
Earlier we saw the use of Investment program. Based on it you can guess the basic things, we will require to create Investment program. Below is the list of activities that users do in SAP:
- Create Investment program definition IM01
- Create top position of Investment program IM11
- Change/Create IM Program structure IM22
- Budget Program IM32
- Supplement budget IM30
- Budget return IM38
- Assign Investment program position to Project CJ20N
- Allocate budget to project IM52
- Return budget from project IM52 (with return radio button)
And that’s pretty much that you can do in Investment Management. Let’s check each activity in little deep:
Create Investment program definition IM01
While creating investment measure you will have option to enter person responsible for the investment program. You have to enter fiscal year variant and currency. Based on fiscal year variant, year end budget transfer will take place.
Create top position of Investment program IM11
In IM11 you will have to create top positions of budget which can be restricted to organizational units like controlling area, company code, profit center etc. In our initial example we discussed how we can have same investment program created for different geographies. And it can be drilled down to multiple countries and company code. So we can assign each node of investment program to separate controlling area/company code (currency validation will be there).
Change/Create IM Program structure IM22
Here you can create whole structure of Investment program
You can double click on any node to assign it to any organizational unit.
Budget Program IM32
Once the structure is created, you can budget the program nodes as per requirement in IM32
In above screen budget can be entered on various nodes, following top-down or bottom-up approach.
Supplement budget IM30
Once the initial budget is updated through IM32 then afterwards you can supplement more budget through IM30 or can return the budget by IM38 transaction.
Assign Investment program position to Project CJ20N
Once the investment programs are created and budgeted, it needs to be assigned to projects in CJ20N
Allocate budget to project IM52
Now projects are assigned to investment programs, then we have to transfer budget to projects from Investment program positions. This is done through IM52 transaction.
We can notice that project is reflecting on level 4 under level 3 investment measure.
And you are done with budgeting in Investment management.
Further you will have to budget lower levels of project then you can use WBSE to capture cost.
Investment Management reporting transactions: S_ALR_87012824 and S_ALR_87012813
In next chapter we will see major configuration that are required in Investment Management in SAP.
Read eBook: SAP DME – A Simplified Guide
Configuration steps of Investment Management in SAP
Configure Program Type
First step in IM configuration is to configure Program type. You enter program types at the time of create of Investment program (in IM01)
So, let’s see what program type controls:
SPRO – Investment management – Investment Program – Master data – Define Program Types
You can notice that we entered budget profile and plan profile in program type. These needs to be created separately. It controls that how many years of future / past planning / budgeting you can do.
Status profile will allow the approval and rejection functionality in IM.
Represent. Form will decide how IM structure should be displayed. (In coding format or text format)
Object class help to categorize CO class for IM
Investment profile will control automatic creation of AUC while creating WBS/IO
Budget dist. Overall & Budg. Dist. Ann. Vals – these check box will affect the budget distribution.
On left hand side you have one tab for assignable operative object
Here you can select what are the object type to which Investment program can be assigned.
Define Person Responsible
Here you have to define responsible person that can be assigned in investment programs. Same will be used in various workflows.
SPRO – IM – Investment Programs – Master Data – Allowed Values for certain master data fields – Define responsible person
In this config node you can configure below values:
Enter numeric value in responsible person field and in Office user enter the SAP user ID.
Define Plan Profile
Plan profile will control how much years in future you want to plan your investment. (this is assigned in Program Type)
SPRO – IM – Planning in programs – Cost Planning – Maintain Plan profile
Which values should be allowed to plan – Total / Annual
Past, Future, Start enter the number of year system should allow to enter and change values. If you enter 2 in Past field. Then you will be able to change and enter past two years plan data.
Decimal Places, scaling factor can be decided in plan profile.
Planning currency – Co area currency / object currency
Define Budget Profile
It is similar like Plan Profile, only this time the budget will be controlled as per profile maintenance.
SPRO – IM – Investment program – Budgeting in program – Define budget profile for investment program
Define Number range for budgeting line items
SPRO – IM – Investment program – Budgeting in program – Define number range for budgeting line items
Define Investment profile
When you settle Investment Measure (WBS, Internal Order) it gets settled to AUC. In IM AUC is created automatically at the time of release of Investment Measures. During periodic settlement system collects all debit items from WBS / IO and settle it to AUC. You don’t have to enter settlement rule manually.
This is controlled in Investment profile:
If you tick manage AUC, system will automatically create AUC while releasing WBS / IO.
For that you will have to enter asset class in Inv. Meas. Ast. Class field. If selected fix default class, then system will not allow you to change asset class manually at investment measure level.
You can enter different asset class for depreciation simulation.
Assign this investment profile to project profiles.
With this set of configuration you should be able to start using IM. Hope you got an overview of Investment Measures along with end user activities and backend configuration related to it.
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