SAP FICO Stands for FI (Financial Accounting) and CO (Controlling). It is one of the important modules of SAP systems, where the SAP FI and SAP CO modules store the complete financial transaction data of an organization.

SAP Financial Accounting is one of the components of SAP, which enables the recording of financial transactions with a multiple currencies, languages, ledgers (leading & non leading ledgers). It helps to generate the consolidated statements as per the legal requirements.

What is the SAP FICO Module?

Here a complete an overview of SAP FICO module and how it helps the business in the creation of financial statements for reporting:

  • SAP FI  is an important module of all SAP implementations
  • SAP FI ( Financial Accounting ) is used for external reporting and reports like Balance sheets and profit and Loss statements can be generated for reporting purposes.
  • SAP FICO Module integrates with various other SAP Modules such as MM (Materials Management), SD(Sales and Distribution),  PP (Production Planning), PM (Plant Maintenance), and PS (Project Systems).
  • SAP FI (Financial Accounting) Module receives postings from various other modules such as Materials Management, Sales and Distribution, and Human Resource through integration.
  • With the integration, the data flow from FI to other SAP modules and enables the data available in real time.
  • All accounting-relevant transactions that are made in Logistics (LO) are posted in real-time to the FICO module through automatic account determination. This data can also be passed on to Controlling (CO). 
  • At least one company code must be created in SAP to implement the FI module.

what is sap fico

SAP FI Sub Modules

SAP FI Modules contain the following sub-modules

The SAP Financial Accounting module is further divided into several sub-modules, such as

General Ledger Accounting:-

General ledger accounting is to provide a complete report for external and internal accounting i.e Accounts, Journals, Monthly debits and Credit, Balance sheet, and Recording all business transactions.

  • G/L accounting is the backbone for SAP FICO module as it records all the financial transactions and helps in the generation of financial statements for reporting.
  • The amount values are recorded through the GL accounts; no accounting document exists without G/L accounts
  • Leading Ledger & Nonleading Ledger helps to record the transactions for reporting.
  • The GL accounts are created at two levels – Chart of Accounts area & company code area level.
  • New G/L Functional enables – real-time reconciliation process, parallel accounting, document splitting, faster close of month-end & year-end activities.
  • Now in SAP S/4HANA, the new G/L functionality is mandatory, whereas in SAP ECC, it is optional to use.

Note: Most the organizations, still using the classic G/L without the activation of the New G/L in SAP.

Accounts Payable:- 

Accounts Payables(AP) is a sub-module of financial accounting where it records and manages all accounting data related to vendors.

  • AP is directly integrated with SAP MM module to manage the procurement process.
  • In the SAP ECC system, the vendor master data is created using the transaction code XK01/XK02.
  • Now in S4 Hana, the creation of vendors/suppliers is through the BP (Business Partners) as a role.

Accounts Receivable:-  

Accounts receivable(AR) is one of the sub-modules of the SAP FICO module that records and manages all accounting data related to Customers.

  • Accounts Receivable is directly integrated into the sales & distribution module.
  • AR is used to manage all the financial processes like Sales, Billing, incoming payments, clearing, and reconciling customer items.
  • Customer master data is created as Business Partners in S4 Hana.

Asset Accounting:-

Asset Accounting(FI-AA) helps in the management of a company’s Assets. SAP allows you to categorize assets and set values for depreciation calculations in each asset class.

Bank Accounting:-

Bank accounting is used to manage the bank transactions. It includes the Bank master data and enables in processing of incoming and outgoing payments manually and automatically. 

 

Funds Management:-

Funds Management manages budgets for revenues and expenses within your company as well as tracks these in the area of responsibility.

SAP CO Module:-

SAP Controlling plays an important role in management decision making and the CO Module is used for internal reporting purposes. The  Controlling Area is the organizational unit used to represent the controlling activities of Cost Center Accounting, Profit Center Accounting, Product Costing, Profitability, etc.

SAP CO Module contains the following sub-modules:-

  • Cost Element Accounting
  • Cost Center Accounting
  • Profit Center Accounting
  • Internal Orders
  • Product Cost Controlling
  • Profitability Analysis.

Major changes of SAP FICO in S4 Hana Version

SAP Hana is a memory database that runs on a memory-inbuilt database only. The S4 Hana application supports only the Hana Database(HDD), whereas the previous ECC application supports any traditional database. The important changes according to the SAP FICO module in the S4 Hana version are as follows

  • G/L accounts are created with the G/L account type
  • The cost elements are created as General Ledger accounts and categorized with cost element category in G/L master data
  • The secondary index and aggregated index tables such as BSIK, BSAK, BSID, BSAD, etc are removed.
  • A new table called ACDOCA universal journal table was introduced which consists of fields from different components.
  • The Customer/supplier master data are created as Business Partners with customer-vendor integration as a single data.
  • The Bank accounts are created through Fiori
  • User interface Fiori was introduced for a better user experience
  • Technical clearing account was introduced for asset clearing account as offset account.