Commitment Management in SAP #3 Activation

Commitment Management in SAP #3 Activation

Overview

Commitment Management in SAP tracks future commitments against cost objects; this enables users to make a realistic comparison of actual cost plus committed cost against plan / budget on that cost object. Commitments are made when user creates purchasing document to purchase goods or services at a future date. Comparing actual against budget is misleading unless you factor in the outstanding commitments that will convert to actual cost in the future.
In this blog, I will provide an overview of the steps to activate and configure Commitment Management in SAP.

 

Blogs on Commitment Management

In my series of blogs on Commitment Management, I intend to explain and elaborate the concepts behind Commitment Management. I will demonstrate how Commitment Management works in SAP.

To identify the series of blog, I have categorised the blogs under SAP > Commitment Management in SAP. If you have questions/ comments/ suggestions, please send me your comments in the form below. Sharing your questions and experience using comment box below will help other readers to gain additional knowledge involved in this functionality.

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#1 Commitment Management in SAP #1 An Overview (24/05/2012)

#2 Commitment Management in SAP #2 The process (31/05/2012)

#3 Commitment Management in SAP #3 Activation (07/06/2012)

#4 Commitment Management in SAP #4 Limitations (14/06/2012)

 

Assumption for this blog

This is the third blog in the series of blog on Commitment Management. It is a good idea to read the previous two blogs before you read this blog.

The blog refers to Cost Center as the cost object. However, any reference to Cost Center will apply similarly to Internal Order and Project as Cost Objects.

 

Activate Commitment Management

Commitment Management is, generally, activated at three levels:

  • Controlling Area
  • Cost Object Configuration and/or Cost Object Master Data

 

Activate Commitment Management for Controlling Area

Commitment Management should be activated at Controlling Area level before it can be activated for cost objects.

From IMG Path
[IMG] Controlling > General Controlling > Organization > Maintain Controlling Area

 

 

Activate Commitment Management for Cost Center

For Cost Centers, you can activate Commitment Management by cost center categories. If Commitment Management is activated for a specific cost center category, then all cost centers created under this category are automatically activated for Commitment Management. This is useful if (as an example) you want to track Commitments for all cost centers assigned to “Management” cost center category.

From IMG Path
[IMG] Controlling > Cost Center Accounting > Master Data > Cost Centers > Define Cost Center Categories

 

Alternatively, you can activate Commitment Management by individual cost center. In this case, the user should switch the indicator on cost center master to activate Commitment Management for that cost center.

 

 

Activate Commitment Management for Internal Orders

Commitment Management can be activated for Internal Order Types in the configuration.

From IMG Path
[IMG] Controlling > Internal Orders > Commitments and Funds Commitments > Activate Commitments Management

 

 

Activate Value-based Commitment Management

If values for purchasing documents determine the reduction of a purchase order commitment, then you need value-based commitment management. To activate value-based Commitment Management, switch on the indicator in the Unit of Measurement configuration.

In the IMG Menu
[IMG] SAP Netweaver > General Settings > Check Unit of Measurement.

 

Conclusion

Other than the above activation steps, there is no other configuration required to use the functionality of Commitment Management. Commitment data will stack up in data tables in the background as users process front-end transactions. This data can be used for reporting.

If standard Commitment Management reports do not suit your requirements, you can create new reports using Report Painter/ Report Writer or in your Business Intelligence tool using standard SAP data library.

Commitment Management in SAP is easy to setup and offers useful features. In the next blog, I will reveal some tricky issues faced by SAP customers; I will also list certain limitations in Commitment Management functionality in SAP that you need to be aware of.

 

Please Share

I hope this blog has helped you understand the concept, design and configuration behind Commitment Management. Please do leave your comments below whether this article was helpful; and whether you have any suggestions/ comments; or if you would like to share your experience with document splitting.

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View my presentation on Slideshare

 

 

 

Index of my blogs on Commitment Management in SAP ECC

#1 Commitment Management in SAP #1 An Overview (24/05/2012)

#2 Commitment Management in SAP #2 The process (31/05/2012)

#3 Commitment Management in SAP #3 Activation (07/06/2012)

#4 Commitment Management in SAP #4 Limitations

 

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Rajesh has optimised SAP Finance solutions for several customers. Rajesh has 12 years experience implementing SAP / IT / BPM Finance solutions for several customers globally; with a strong focus on Management Accounting and Reporting primarily Product Costing, Profitability Reporting and Material ledger (Transfer Pricing, Actual Costing). He also has 7 years experience working in the business in Finance and Accounting functions. His business process knowledge combined with his IT expertise enables him to provide his customers with best-of-breed advice on business process / IT implementations.

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Comments

  1. Hi Rajesh,

    I am going through your documents on New GL and others. Excellent documents with very good explanations. Thanks a lot for all these documents, appreciate all your help to SAP community. Thank you.

    Regards,
    Sree

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