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Budgetary Control - Pros and Cons
We have a common footprint we are implementing amongst alot of hospitals using a shared service to manage the database. One install of Financials and one operating unit and one GL set of books per hospital. One of the hospitals is keen on implementing budgetary control.
Instead of implementing budgetary control I am thinking of suggesting that the business managers have a greater control over their departments and compare budgets with actuals more regularly. Make them more accountable. Also they should look at their delegation authorities and make this lower to stop more expenditure.
I am investigating the issues of implementing budgetary control.
I have identified the following issues;
1. More work on the finance department - an extra ledger eg. encumbrances, budget journals
2. Increased demand on server and database. Is this true?
3. Come the last 2 months of the year, there is no budget left and the organisation comes to a grounding halt.
4. Increased support time - fixing stuck transactions etc.
What are some of the other problems users will experience with implementing this?
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- Some of the tips to avoid initial hic-ups:-
Note:- Budgetory control are on Accounting Flexfield Combinations.
1. Yes, slightly more work on finance department, but you will have financial control too.
3. Organisation can never come to a grounding halt, the managers are also responsible to act within budget limits, and if they require more it should be thru appropriate financial approval/concurrence. But if you want this luxury, you can initially go with advisory type of budgetory control, where it will just show a warning and don't stop the transactions.
4. Fixing stuck transactions will be only for a month or two and that also can be reduced to minimum if you get the budget from respective departments accounting flexfield combinationwise and the encumrance a/c in item master should be inline with these budgets. For expense items keep budget in relavant expense a/c as it uses the expense a/c as encumbrace a/c for such cases.
Budgetary Control work beautifully in Oracle Apps, exploit it. Afterall in todays competitive environment financial discipline in spending is recommended.#1; Fri, 22 Feb 2008 17:14:00 GMT