What is commitment budget in SAP PSM-FM - Funds Management?

SAP Term: commitment budget

• Component: PSM-FM

• Component Name: Funds Management

• Description: A standardized framework within a particular area of responsibility for entering commitments that will lead to expenditures or costs in the current year or in subsequent years.

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• Key Concepts: 
  Commitment budget is a type of budget in SAP Funds Management (PSM-FM) that is used to plan and control the financial commitments of an organization. It is a type of budget that is used to plan and control the financial commitments of an organization. It is a forward-looking budget that helps to ensure that the organization does not exceed its financial commitments. 
  
  How to use it: 
  Commitment budget can be used to plan and control the financial commitments of an organization. It can be used to set limits on the amount of money that can be committed for a particular purpose or project. It can also be used to track the progress of projects and ensure that they are completed within the allocated budget. 
  
  Tips & Tricks: 
  When setting up a commitment budget, it is important to ensure that it is realistic and achievable. It should also be regularly monitored and updated to ensure that it remains accurate and up-to-date. 
  
  Related Information: 
  Commitment budget is closely related to other types of budgets such as actual budget, planned budget, and forecasted budget. It is also related to other SAP modules such as Controlling (CO) and Project System (PS).