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Best practice: orders and contract management


I am currently working with a client who has impropriety set-up their contract management. I am trying to find out what the best practice in SAP PS is to harmonize such practice with the standard.

The situation is as follows (picture in the attachment):

Project structure: SAP Investment Management >>>> Investment Program >>>> Investment Measure >>>> SAP Project System >>>> Top level WBS element >>>> Network

How do resources get consumed? (e.g. materials)

To consume resources, I formalize my request through a contract. This request then becomes a contract, which successively becomes a 'buy order'.

The problem:

The budget only gets consumed when my contract becomes a 'buy order'. So during the formalization phase, the budget value will remain static. E.g. I want to plan 5 investments and have 0 buy orders at the moment. For each plan, I will have the same budget figure and when I go to implement these contracts, I will go under-budget. So the system does not calculate that maybe plans 1 and 2 will use 90% of the budget leaving not enough for plans 3,4, and 5 (who all see a full budget).

What is the best standard in SAP PS to deal with this issue and what tools can I use to implement this? I was thinking the project builder. If so, could someone explain how to appropriately configure this?

I sincerely appreciate any feedback,

Best regards,


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2 Answers

  • Best Answer
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    Former Member
    Jan 19, 2015 at 10:44 AM

    Hi Maria,

    Thanks for helping.

    To be clear, can you confirm that what you are saying goes against what has been previously mentioned by Paulo? According to your comments, the standard does the following:

    Maria: Once the PR is instantiated, the system automatically charges the budget with actual + committed value. Therefore: Any new PR during the period PR >>> PO will consider the previous PR's budget consumption.

    Paulo: The contract does not need an account assignment (yet just fixes price and quantity) and does not consume the budget until its becomes PO.

    Which of two is correct?

    I have been searching within the SAP forums however have not yet found a solution.. I have attached a diagram which illustrates my problem. Hope it helps.



    pastedImage_1.png (12.9 kB)
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    • Hi Jessica,

      As i told you in earlier post before GRN all kind of cost is commitment, once GRN done it commitment will convert in actual cost.

      and budget consumption is depend on budget profile and parameter what you have configured.

      so budget functionality will work as you want but you have to configure system accordingly.


  • Jan 09, 2015 at 04:37 PM

    Hi Jess,

    Let me try to answer for the part that I have understood (hopefully), as overall your post seems bit confusing to me.

    Within the project structure (or as a stand-alone project) you can have a WBS without any budget control, and we can call it Pre-Project that is a kind of study work while there is no budget approved by the client.

    Once the project becomes a "buy order" and approved by the client you will create another WBS or another subtree of WBS-elements with a budget control.  I believe in the make-to-order scenario you can generate automatically a new project from the sales order.

    Next you can transfer the cost from Pre-Project to the "buy order" by reposting or settlement or just leave it apart, whatever the scenario is.

    I'd assume if Pre-Project is not transformed into "buy order" at the end of the day that is on the company cost as a kind of "practice development".



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    • Hi Jessica,

      !Contracts: Budget (100) >>> Contract (30) >>> Buy Request (budget = 100, this value is wrong, it  should be 70)  >>> Buy Order (budget = 70)

      With respect to your quote above.

      Budget = 100

      Your Contract = 30 (This i raise a external service activity in PS, which will have the contract assigned)

      When you raise this PR, this falls under commitment. Budget consumption will be calculated has Actual + Commitment

      So if the Actual + Commitment is exceeded the budget value system will give an error message.

      This you need to configure how you want the budget check happen in system. For PS budget availability check refer below document.

      SAP PS - Configure Budget Availability Control

      Can you please confirm, is this the scenario you are looking ? I am trying to manipulate whether this can be covered in standard PS stuff.