SAP FICO is an SAP ERP module that is used for both external and internal financial reporting. The goal is to record all financial transactions that an entity makes and create accurate financial statements at the conclusion of the trading session. FI (Financial Accounting) and CO (Controlling) are the full forms of SAP FICO.
This SAP FICO basics tutorial will go over the SAP FICO overview as well as the SAP FICO module’s main functions.
Table of Contents
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SAP FICO sub modules make up SAP FI. Accounts receivables, accounts payables, asset accounting, general ledger accounting, and bank accounting are some of the most commonly utilized sub-modules.
All of the sub-modules are interconnected and work together in real-time. Because all the submodules are connected, a trial balance can be extracted at any time and it will always balance.Â
General ledger Accounting
General ledger accounting is used to manage all general ledger accounts that are used for reporting. A chart of accounts is a collection of all general ledger accounts used by a firm or a group of enterprises in SAP. These are the accounts that will be used in the financial statement preparation. The majority of transactions are recorded in sub-modules and reconciled in real-time with the general ledgers. Journal vouchers, which are posted to alter or correct transactions, are an example of transactions that can be done directly in general ledger accounting. General ledger accounting can also be used to perform reversals. Trial balances can be taken from the system and balances in general ledger accounts can be presented.
Accounts ReceivablesÂ
Accounts receivables is a submodule in FICO SAP that records all client transactions and manages customer accounts. Customer accounts will be kept separate, and when transactions are posted to customer accounts, reconciliation accounts in the general ledger will be updated in real-time with the figures. Invoice posting, credit memo posting, down payments, invoice payment, dunning, and executing customer reports are all transactions in accounts receivables.
Accounts payablesÂ
Accounts payables is a submodule that records all vendor transactions and keeps track of vendor accounts. Vendor accounts are kept separate, and when transactions are posted in customer accounts, reconciliation accounts in the general ledger are updated in real-time with the figures.Â
Asset accounting
Asset accounting in SAP FICO keeps track of all transactions involving an entity’s assets. Reconciliation accounts in the general ledger are updated in real-time when transactions are posted in asset accounts. Asset purchase, asset retirement, asset sale, asset transfer, asset revaluation, and asset depreciation are all transactions in asset accounting.
Bank accounting
All transactions with banks are recorded in bank accounting. Bank reconciliation is the process of comparing all transactions on bank statements to transactions in the system and reconciling them.
All SAP FI sub-modules are integrated, and transactions are updated in real-time, allowing for the extraction of accurate financial statements from the system.
Conclusion:
One of the modules that deals with finance-related roles are SAP FICO (Finance and Controlling). In terms of breadth and implementation, it is the most commonly accepted product. This demonstrates that it is already in use in a large number of organizations and that many businesses are embracing it as their financial development platform.
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