SAP FICO External and Internal Reporting.
The acronym SAP FICO stand for Financial Accounting (FI) and Controlling (CO). It is one of the most important module of all SAP Implementations and it stores the financial transactions data of a organization in real time.
Importance of FICO module for Implementation
- SAP FI module is used for purpose of external reporting of an organization, you can draw balance sheet, profit & loss account statements for external reporting.
- SAP CO module is used for Internal reporting, with the help internal reporting management take better wise decisions.
- SAP FICO modules can be tightly integrated with other modules of MM, PP, SD, PM HR, PS, etc. With integration, SAP FICO external and internal reporting can be done in real time.
- All the accounting related transaction that are done in logistics, are posted to financial accounting and controlling in real time by automatic account determination.
FICO External Reporting and Internal Reporting
The accounts of an organization should be record, classify and present business transaction for
- External reporting – Tax reporting
- Internal Reporting – Management decision making
Let discuss briefly how the external and internal reporting can be done in SAP.
Transactions record in FI – Every single transaction of company is recorded in Financial accounting through date entry, integration with other modules like Asset accounting, Material Management, HR-Payroll, Sales and distribution, etc. The data that recorded in FI module can be used for external legal reporting.
The transactional date of FI flows to CO through Primary Cost elements. Primary Cost Elements and General Ledger account codes are related on one to one relationship. By design, every expense and revenue GL account there is one Cost Element.
Company Codes and Currencies – Company code in SAP can represent a organization unit i.e. company. All the companies are required to make reporting in particular local currency. So company codes are configured with currency in FI module.
With the help of Financial Statement Versions, you can group all the related account to get the balance sheet and profit loss account statements for external and internal reporting.