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Funds Management for a public sector client

We are debating the use of Funds Management for a public sector client in the UK. I don't like it because of the overhead (we already have cost-centres and profit centres) however it seems to be the only practical way of stopping budget overspends. I have two questions:

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Firstly I have heard that if you go with FM you have to implement it from the outset, as switching it on later causes big problems with any outstanding orders (Purchaee/Sales). Do you have any experience / advice to offer.

Secondly although I have read the help many times, I am still not clear on the difference between a payment budget and a commitment budget. Which one do I need to set up for the standard solution. I assumed it was the commitment budget but when I tested it I get an error saying the payment budget isn't big enough. Surely I don't need both?

If you turn on funds management after you have gone live there will be an issue with outstanding purchase orders and sales because the would not have had a fund designated on them at the time they were created. New purchase orders and sales would have the funds designated. You could set up a reserve for old purchase orders and do a manual adjustment at year end for those items created without a fund.

Secondly although I have read the help...

You should be using payment budgets. There is no need to use both payment and commitment budgets. Commitment budgets meet certain countries specific requirements.

This was first published in July 2001

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