What is economic classification in SAP PSM-FM - Funds Management?

SAP Term: economic classification

• Component: PSM-FM

• Component Name: Funds Management

• Description: A code that categorizes a government expenditure according to how it is distributed within the economy. For example, the economic classification can be expenditure for salary and benefits, expenditure for infrastructure development, or a payment of interest for an international liability.

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• Key Concepts: 
  Economic classification is a feature of SAP Funds Management (PSM-FM) that allows users to classify and analyze financial data according to economic criteria. This includes classifying data by cost centers, funds, and other economic categories. It also allows users to create reports that compare the performance of different economic categories.
  
  How to use it: 
  To use economic classification in SAP Funds Management, users must first define the economic categories they want to use. This can be done in the Funds Management configuration menu. Once the categories are defined, users can assign them to transactions and documents in the system. This will allow them to generate reports that compare the performance of different economic categories.
  
  Tips & Tricks: 
  When setting up economic classification in SAP Funds Management, it is important to ensure that all transactions and documents are assigned to the correct category. This will ensure that reports generated from the system are accurate and reliable.
  
  Related Information: 
  For more information on economic classification in SAP Funds Management, please refer to the official SAP documentation.