Welcome to SAP FICO Tutorials. The objective of these tutorials is to provide an in-depth understanding of SAP FICO. In addition to free SAP FICO, we will cover common interview questions, issues and how to’s of SAP FICO.
Introduction to SAP FICO
SAP FICO module consists of SAP Finance (SAP FI) and Controlling (SAP CO). It also includes some side modules such as Asset Accounting (AA), Financial Supply Chain Management (FSCM) and Project System (PS).
SAP FICO is divided into 2 sub-modules - FI & CO. SAP FI handles the company financials while CO provides Cost Accounting. This course is designed for beginners as well as for intermediate learners.
SAP Controlling (CO) is another important SAP module offered to an organization. It supports coordination, monitoring, and optimization of all the processes in an organization. SAP CO includes managing and configuring master data that covers cost and profit centres, internal orders, and other cost elements and functional areas.
SAP FI comprises of the following sub-components :
- Finance Accounting General Ledger.
- Finance Accounting Accounts Receivable and Payable.
- Finance Accounting Asset Accounting.
- Finance Accounting Bank Accounting.
- Finance Accounting Travel Management.
- Finance Accounting Fund Management.
- Finance Accounting Legal Consolidation.
SAP FI module enables you to manage financial accounting data within an international framework of multiple companies, currencies, and languages. SAP FI module mainly deals with the following financial components :
- Fixed asset
- Cash journal
- Accounts receivable and payable
- Tax accounting
- General ledger
- Fast close functions
- Financial statements
- Parallel valuations
- Master data governance
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Advantages of SAP FICO
The Financial Accounting module in SAP is created to portray a company’s business transactions in a way such that it satisfies external reporting requirements. The system has the facility to track and report on multiple companies across countries with different currencies. The software also enables integration with sales and distribution, materials management and purchasing and enables the user to drill down to the original transaction, be it a sales order a purchase order or the movement of materials.
SAP FI, the Financials module is believed to be the central point of an integrated SAP system because everything that has a financial impact in the other modules actually results in flowing to FI, automatically in real-time. The financial impact of the transactions in other modules gets posted to FI. Hence it is important to configure the FI/CO system as soon as possible, as this will be the supporting skeletal framework of the entire system as a whole.
One of the biggest advantages of SAP is system integration. SAP FI provides one of the most comprehensive worldwide financial management solutions available today. Using SAP FI, an organization can improve corporate performance. Besides, SAP FI enables you to quickly read, appraise, and respond to changing business situations and come up with effective strategies. Besides enabling faster process closes, one can simplify process scheduling, consolidation, collaboration and process workflow. Besides the above, SAP systems also allow for better transparency across units or departments, and improves corporate governance. SAP also provides a greater adherence to federal regulations, accounting standards and provides an improved overall administration of internal controls.
SAP FI also automates credit and collections management and disputes if any. SAP FI also offers generation of bills and invoices as well as payments electronically, which enhance the traditional accounts payable and accounts receivable functions.
Another advantage of SAP FI is a better ability to manage cash across countries, locations or continents. Apart from this, it also allows you to report, assess, and allocate cash in real-time, and set up in-house payment centres or banks.
Besides improving financial and managerial reporting, SAP provides the flexibility to report performance according to an organization, cost centre or business unit and also improves integration of finance and treasury processes. One can also integrate risk and treasury functions with those of accounting and financial reporting.
The SAP provides for a more competitive cost of finance and also helps you innovate processes, team up with partners across a supply chain, and establish service operations worldwide in a collaborative manner.
In addition to the above advantages, SAP FI also deals with a wide range of governance as well as compliance issues, such as the segregation of duties, compliance to the Sarbanes-Oxley standards, as well as adherence to IFRS and Basel II rules and regulations.