How to Configure Budgeting for Internal Orders in SAP S/4HANA

A major part of the internal orders process addresses budgeting for internal orders.

Internal orders are used for specific projects such as marketing campaigns, R&D projects, or IT implementation projects. As such, usually they’re associated with particular budgets that must be adhered to. If the budget is reached, no more postings should be allowed for the internal order, although various settings can control how stringent this rule is.

Let’s learn how to configure a budget profile in SAP S/4HANA Finance. Follow the menu path Controlling > Internal Orders > Budgeting and Availability Control > Maintain Budget Profile. Then, select activity Maintain Budget Profile. You’ll see a list of the available budget profiles; the standard one is the 000001: General budget profile. Select it, and make a copy by selecting Copy As from the top menu. Then, rename the new copy to “Z00001”, as shown in this figure.

On this screen, configure the following fields:

• Budget profile: The name of the budget profile.
• Text: A meaningful description of the budget profile.
• Past/Future/Start: In these fields, you’ll define how long into the past and how far into the future you can budget for. For example, a value of “3” in the Past field means you can budget three years before the start year; a value of “5” in the Future field means you can budget five years into the future. In the Start field, you can specify a different start year from the default, which is the current fiscal year.
• Total values: Specifies that budgeting overall values is possible.
• Annual values: Specifies that budgeting annual values is possible.
• Rate Type (exchange rate type): Specifies the exchange rate type to be used when converting into the controlling currency from another currency.
• Value Date: Enter a default value date for exchange rate conversion. If you don’t enter a value date, currencies will be translated by period.
• Activation Type: Controls how the availability control functionality should be activated, with three options:
  • 0 = Cannot Be Activated: This option means that active availability control isn’t possible for orders with this budget profile.
  • 1 = Automatic Activation during Budget Allocation: Availability control is automatically activated during budgeting, which means that it’s activated when you enter a budget for the order.
  • 2 = Background Activation when Usage Exceeded: Availability control is activated in the background automatically for all orders in which the commitments exceed the usage number entered in the budget profile.
• Usage: This field is used in conjunction with activation type 2 controls when availability control should be activated. For example, if you enter “70” in this field, when 70% of the budget is reached, availability control will be activated.
• Overall: Indicates that availability checks are conducted against the overall value.
• Object Currency: If you select this checkbox, availability control will be performed in the object currency.
• Representation: Using the Scaling factor and Decimal places parameters, you can control how values are represented.
• Budgeting Currency: In this section, you’ll select in which currency the budgeting should be done from the following options:
  • Controlling Area Currency
  • Object Currency
  • Transactional curr.
• Default Object Currency: If budgeting is performed in a user-defined transactional currency, and you set this indicator, then the relevant object is budgeted by default in the object currency. If the indicator isn’t set, then the relevant object is budgeted by default in the controlling area currency.

After maintaining the settings, save the budget profile with the Save button.

In the next step, you must maintain number ranges for budgeting by following the menu path Controlling > Internal Orders > Budgeting and Availability Control > Maintain Number Ranges for Budgeting. As shown in the next figure, the number range object for budgeting is BP_BELEG. Click the (Change Intervals) button to maintain the number ranges.

As with other number range objects, you’ll provide a number range number, as shown in the next figure (e.g., 01, 02, 03, etc.) and the starting and ending numbers of the range. In the NR Status column, the system displays the current last assigned number. In the External column, you can specify that the number range should use an external document number, which is a rarely used option for budgeting.

After maintaining the number ranges, save your entries by clicking the Save button.

In the next step, configure the tolerance limits for availability controls by following the menu path Controlling > Internal Orders > Budgeting and Availability Control > Define Tolerance Limits for Availability Control.

On the screen shown in the following figure, you can configure, for each controlling area, the percentage of the assigned budget that will trigger the relevant action when reached. For this example, we specified 90% of the budget for controlling area A000.

Change the percentage as appropriate, and then save your entry by clicking the Save button.

In the next step, you’ll specify cost elements exempt from availability control. This functionality is used when you need to exclude postings to some cost elements from the availability control calculation. To specify exempt cost elements, follow the menu path Controlling > Internal Orders > Budgeting and Availability Control > Specify Exempt Cost Elements from Availability Control. Then, select New Entries from the top menu to enter the exempt cost elements, as shown in this figure.

Enter the cost elements to be exempted. The following fields must be configured:

• COAr (controlling area): The controlling area for which you configure cost elements to be exempted.
• Cost Element: The cost elements to be exempted.
• Group (origin group): The origin group is used for subdividing material and overhead costs. You can enter“*” to select all origin groups or specify an origin group.
• Recovery Ind. (recovery indicator): You can enter a default value date for the exchange rate. If your company belongs to a joint venture, incurred costs can be shared among partners using a recovery indicator, which can alter the budgeting if specified in this field.

After entering the cost elements to be exempted, save your entries by clicking the Save button.

Editor’s note: This post has been adapted from a section of the book Configuring SAP S/4HANA Finance by Stoil Jotev. Stoil is an SAP S/4HANA FI/CO solution architect with more than 25 years of consulting, implementation, training, and project management experience. He is an accomplished digital transformation leader in finance. Stoil has delivered many complex SAP financial projects in the United States and Europe in various business sectors, such as manufacturing, pharmaceuticals, biotechnology, chemicals, medical devices, financial services, fast-moving consumer goods (FMCG), IT, public sector, automotive parts, commodity trading, and retail.

This post was originally published 4/2025.