SAP FICO expert and SAP Controlling speaker Mohamed Elshinnawy answers our question with the following easy-to-understand explanation:
The three main differences between budgeting and planning are as follows:
When you plan in SAP, you are able to detail your planning by cost element, activity type, resource, etc. You can also plan using quantities and capacities.
Budgeting on the other hand uses one amount per object.
Availability control is the function you use to check the available amount to be spent on a specific object and issue warning or error messages at different levels of spending.
You can activate availability control using budgeting but not for planning. This means that you are just able to report on the variances occurred between planning and actual expenditures, but you cannot automatically stop spending over the planned amounts which is possible only using budgeting.
For more on availability control view our related blog: How To Create An SAP Internal Order Budget
You can plan on many types of Controlling objects, including cost centers, profit centers, internal orders, and WBS elements, while budgeting is applicable only on the temporary or project-related CO objects, internal orders and WBS elements. You can record a budget for a cost center but you can’t use availability control with it which is the main purpose of budgeting.
Note: Budget Availability Control for Cost Centers is available from SAP S/4HANA 1909.
For more on Controlling objects view our related blog: What is an SAP Internal Order
Mohamed Elshinnawy began his career as an accountant and has worked as an SAP consultant for more than 7 years. He has worked on several implementations in Egypt and the Middle East, in addition to global projects in cooperation with teams from the U.S. and Europe. He also works as an SAP trainer for IT and accounting professionals, and new graduates. He has worked for several SAP partners.
To learn more about SAP planning and budgeting, and more SAP FICO topics become a member click here now:
For the latest updates