SAP FICO (SAP Finance and SAP Controlling)
SAP FICO is an important core functional component in the SAP ERP central component that allows the organization to manage all financial data. SAP FICO allows the organization to save the full version of its financial transaction data. Specifically, the purpose of SAP FICO is to help companies produce and manage financial statements for analysis and reporting, as well as to assist in effective business planning and decision-making.
- SAP ERP Central Component (SAP ECC) is a company resource planning system (ERP) in places that are commonly referred to as "SAP ERP." SAP FICO AIDS ECC in the financial accounting and control functions.
- SAP FICO consists of two parts, SAP (FI) and SAP Controlling (CO). Each is used for certain financial processes. SAP FI deals with overall financial reporting and accounting, while SAP CO is focused more narrowly on the cost of planning and monitoring. SAP FI and Sap CO were initially released as separate modules but now it is very integrated so many people call them a module.
- SAP FICO is also integrated with other SAP Logistics Modules, including Sales and Distribution (SD), Production Planning (PP), Factory Maintenance (PM), Quality Management (QM), and Material Management (MM).
SAP FI Modules
SAP FI allows the organization to make financial statements for reporting and analysis. Types of financial statements can include balance sheets or income statements. SAP FI consists of several sub-modules that handle specific accounting processes:
- The general ledger contains all company transaction data in the account chart. This includes all accounts in the system. Transactions are recorded in sub-modules that can be recorded in real-time with general ledger data.
- Receivable accounts capture customer transactions and manage customer accounts. Transactions include invoice posting, credit memo posting, down payment, payment of invoices, or carrying out customer reports.
- The account paid involves all transactions with vendors and managing vendor accounts. Transactions can include invoice posts, credit memos posts, advance payments, invoice payments, automatic payment programs, and carry-out vendor reports.
- Asset Accounting manages all transactions related to the company's fixed assets, such as land, buildings, and heavy equipment. Transactions include the acquisition of assets, retirement, sales, transfer, revaluation, and depreciation.
- Bank books deal with all transactions and company bank account data. This can reconcile all transactions recorded in bank reports and compare them with transactions in the system.
- Consolidation allows companies to combine financial statements for various entities, which provide a general picture of the company's overall financial position.
- Management funds manage the budget for company revenue and expenditure.
- Books Special Purpose Determine the ledger at SAP FI for reporting purposes.
- Travel management manages all transactions for the trip process, including ordering trips and handling costs related to travel.
SAP CO Modules
While SAP FI deals with company accounting and internal and external reporting, SAP Co supports the process of planning, reporting, and monitoring costs from business operations. SAP CO can play a role in increasing company profitability. Similar to SAP FI, SAP CO consists of sub-modules that handle specific processes:
- The cost element, which provides a general description of all costs and company revenues based on the income statement - is also known as the income report. Accounting for cost elements explains the origin of costs. Cost elements represent specific costs incurred by the company.
- The cost center handles costs related to the company's internal division or departments, such as sales, production, marketing, or human resources. The cost center only involves costs, not income.
- The profit center handles all cost data related to the company's business line. This is related to costs and income - unlike the cost center, which is only related to expenses.
- Internal orders are used to manage costs for smaller internal projects or non-fix assets-such as limited-time marketing campaigns, for example.
- Profitability analysis allows companies to analyze the profitability of their products. For example, profitability analysis can be useful for making decisions about things such as product prices, distribution channels, and target market segments. This also allows detailed levels in analyzing profitability, such as for each region or country, types of products and distribution channels, or profitability of individual customers.
- Product Costs Managing data about the costs required to produce company goods and services. Product cost analysis can help manage production costs and optimize efficiency.
General ledger accounting
All general ledger accounts used for reporting are managed through public ledger accounting. In SAP a set of all ledger accounts used by companies or groups of companies is called account charts. This is an account that will be used in preparation for financial statements. Most transactions are recorded in the sub-module and they are reconciled with a general ledger in real-time. Transactions that can be done directly in general ledger accounting including journal vouchers posted to adjust or correct transactions. Reversing can also be done from general ledger accounting. The balance in the ledger account can be displayed and the experimental balance is extracted from the system.
Accounts Receivables
Accounts receivable in SAP FICO are sub-models that capture all transactions with customers and manage customer accounts. Separate customer accounts will be maintained and when transactions are posted on the customer's account, the reconciliation account in a general ledger is updated with numbers in real-time. Transactions in account receivables include invoice posting, credit memo posts, down payment, payment of invoices, dunning, and carrying out customer reports.
Accounts Payables
The debt account is a sub-module that captures all transactions with vendors and manages vendor accounts. Separate vendor accounts are maintained and when transactions are posted on the customer's account, the reconciliation account in a general ledger is updated with real-time numbers. Transactions in account debt include invoice posting, credit memo posting, down payment, payment of invoices, automatic payment programs, and carrying out vendor reports.
Asset accounting
Asset accounting at SAP FICO manages all transactions related to assets for an entity. When transactions are posted on an asset account, reconciliation accounts in general ledgers are updated in real-time. Transactions in asset accounting include the acquisition of assets, asset retirement, asset sales, asset transfer, asset revaluation, and asset depreciation.
Bank Accounting
Bank accounting captures all transactions with banks. Bank reconciliation is carried out to reconcile all transactions recorded in bank reports that compare them with transactions in the system.
All SAP FI sub-modules are integrated and transactions are renewed in real-time, which means accurate financial statements can be extracted from the system at any time.
Summary
- INTRODUCTION SAP FICO: SAP FICO Module is an ERP SAP Module that is used for financial reporting both externally and internally.
- SAP Fico means: SAP Financial Accounting (FI) and Controlling (CO)
- All general ledger accounts used for reporting are managed through public ledger accounting. In SAP a set of all ledger accounts used by companies or groups of companies is called account charts.
- Accounts receivable accounts are sub-models that capture all transactions with customers and manage customer accounts.
- The debt account is a sub-module that captures all transactions with vendors and manages vendor accounts.
- Assets accounting manages all transactions related to assets for an entity.
- Bank accounting captures all transactions with banks.
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