Cost-centre owners hear about overspends the week they happen

Every Monday the AI checks each cost centre's spend and open purchase orders in SAP against its budget, and tells the owner on Teams what drove any overspend.

Used day to day by
  • Department heads
  • FP&A team
  • Financial controllers

How it runs with AI

Every Monday the AI compares each cost centre's spend and open purchase orders in SAP with its budget to the end of the month. When one goes over, it finds the postings behind it and tells the owner on Teams, with the main causes. Owners reply in the chat, and the FP&A team has every answer by Monday afternoon.

How it is done today

Cost-centre owners see their spend in the monthly MIS, well into the next month. By then an overspend that began early in the month has run for weeks, and the purchase orders behind it are already placed. The FP&A team then spends days emailing owners for the reasons.

Step by step

Where the work happens, what the AI does, and where it hands over to a person.

  1. Step 1, AI

    Pulls last week's postings, open purchase orders and budgets from SAP

    Needs to know: Cost centres and owners

    In SAP S/4HANA

  2. Step 2, AI

    Compares spend plus open orders with each budget to the end of the month

    Needs to know: Monthly budgets, Overspend threshold

    In SAP S/4HANA

  3. Step 3, AI

    Finds the purchase orders and invoices behind each overspend

    Needs to know: Usual spend by cost centre

    In SAP S/4HANA

  4. Step 4, AI

    Tells the owner on Teams, with the causes, and asks which costs will repeat

    Needs to know: Owner of each cost centre, Plant finance controllers

    In Microsoft Teams

    Exception to step 4

    Reminds the owner after 2 working days, then tells the plant finance controller

  5. Step 5, Person

    Decides what spending to hold, and finance approves any budget transfer

    In Microsoft Teams , SAP S/4HANA

What stays with a person

  • Decides what spending to hold, and finance approves any budget transfer

What counts as an overspend

The check adds what each cost centre has already spent to what it has ordered on open purchase orders, and compares the total with its budget up to the end of the current month. Spend that simply lands early in the month stays within that budget, so each flag is a real overspend. Finance sets the threshold. The owner hears when a cost centre first crosses it, and again each time the gap grows by the same amount.

Apps in this example

  • SAP S/4HANA
  • Microsoft Teams

The same flow works with the apps you use.

This fits you if

  • You run more than 50 cost centres, each with a named owner
  • Each cost centre has a monthly budget, in SAP or in Excel
  • Owners first see their spend in the monthly MIS
  • Your FP&A team spends days each month asking owners why spend moved

What to watch for

  • Close each purchase order once its last invoice is in, since the check counts every open order as spend
  • The assistant reads SAP and reports. Holding spending and moving budget stay with the owner and finance
  • Spend booked to the wrong cost centre looks like an overspend. Owners can say so in the chat, and finance moves the posting

Read more

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