Commitment Management in SAP Controlling

Commitment Management in SAP Controlling  : A contractual or scheduled commitment that is not yet reflected in Financial Accounting but that will lead to actual expenditures in the future.

Commitment management gives you an early recording and analysis of such commitments for their cost and financial effects.

Commitment management can be entered for the following objects:

1), CO production orders

2), Production orders

3), Internal orders

4), Maintenance orders

5), Sales orders

6), Cost centers

7), Networks

8), Network activities

9), Projects (work breakdown structure elements)

CO Commitments Management enables you to enter and analyze commitments at an early stage, and thus to account for them in controlling.

Commitment Management Flow 

How Purchase Order Commitments are Created

Creating Purchase Order Commitments

Reducing Purchase Order Commitments to Zero

Example: Individual Purchase Order on an Internal Order

Creating Purchase Order Commitments

Partial Reduction of Purchase Order Commitments

Updating Purchase Order Commitments

Reducing Purchase Order Commitments to Zero

Increasing the Actual Costs

Commitments Information System

Calling Up Total Cost Reports

Calling Up Cost Element Reports

Calling Up Line Item Reports

Commitment Management in SAP Controlling

The Some of the Features as follows:-

Creation of Commitments

For example, specific goods are ordered for an internal order, a cost center, or a project. A purchase order commitment is created that is equivalent to the purchase order value.

Commitments Display

Commitments are always displayed with a value and, if required, a quantity for the cost element, the fiscal year, and the period when the costs are expected to be incurred.

Commitments Currency

The system executes all commitments in the currency used, in the original business transaction (for example in the ordering transaction). It then translates the amount into the controlling area currency, company code currency and the object currency. The PO currency exchange rate is used for currency translation.

Reducing the Commitment:

The commitment is reduced by business transactions (such as goods receipts) and actual costs are incurred by the corresponding account assignment object. This continues until, for example, the business transaction “Purchase order” is closed and the purchase order commitment is reduced to zero.

Carrying Forward Commitments at Year-End-Closing

At year-end closing, you can carry the open commitment values from purchase requisitions, purchase orders and fund commitments forward to the first period of the next fiscal year. You can select by account assignment object (order, cost center or project). You can also process individual documents if required.

Commitments are carried forward for each controlling area.

Also See: What is the difference between SAP financials and Controlling?