What is SAP FICO?
SAP FICO is a module of SAP ERP designed to facilitate financial reporting both internally and externally. It captures all transactions posted by an entity and produces accurate financial statements at the end of a trading period. The full form of this module is FI (Financial Accounting) and CO (Controlling).
This SAP FICO tutorial will give a fundamental overview of SAP FICO and highlight its major capabilities.
SAP Financial Instruments (FIN) consists of several sub modules. Examples include accounts receivable/payable, asset accounting, general ledger Accounting and bank accounting.
FICO SAP modules are fully interconnected and run in real-time, enabling trial balances to be extracted at any given moment and always balance due to their interconnection. The diagram below illustrates this integration between FICO SAP modules.
General Ledger Accounting
All general ledger accounts used for reporting are managed through general ledger accounting. In SAP, this collection of all general ledger accounts used by an organization or group of organizations is known as a chart of accounts. These accounts form the basis for preparing financial statements. Most transactions are recorded in sub modules and reconciled with general ledgers real-time. General ledger accounting allows direct transactions to adjust or correct errors as well as reversals from that same system. Account balances in general ledger accounts can be displayed and trial balances extracted from within the system.
Accounts Receivables
Account receivables in FICO SAP is a submodule that records customer transactions and manages customer accounts. Separate customer accounts should be maintained, and when transactions post to these accounts, reconciliation accounts in general ledger are updated real-time with the figures posted there. Account receivables encompass invoice posting, credit memo posting, down payments for invoice payment, dunning services and executing customer reports.
Accounts Payables
Accounts payables is a submodule that captures all vendor transactions and manages vendor accounts. Separate vendor accounts are maintained so when transactions post in customer accounts, reconciliation accounts in general ledger are updated real time with the figures posted there. Transactions processed through accounts payables include invoice posting, credit memo posting, down payments for invoice payment, automatic payment program execution of vendor reports.
Asset Accounting
SAP FICO asset accounting keeps track of all transactions related to assets for an entity. When posting transactions in asset accounts, reconciliation accounts in general ledger are updated in real-time as well. Asset accounting includes acquisition, retirement, sale, transfer, revaluation and depreciation - everything related to an organization's assets!
Bank Accounting
Bank accounting keeps track of all transactions with banks. Reconciliation takes place to verify the accuracy of those transactions against what appears on bank statements, comparing them against those recorded in the system.
SAP Financial Modules are fully integrated and updated in real-time, ensuring accurate financial statements can be extracted at any time from the system.
Summary
SAP FICO Overview: SAP's FICO module is an essential element for financial reporting both externally and internally.
SAP FICO stands for SAP Financial Accounting and Controlling, covering both areas. In SAP, all general ledger accounts used in reporting are managed using general ledger accounting. A collection of all these accounts used by a company or group of companies is known as its chart of accounts.
Accounts receivables is a sub module that records all customer transactions and manages customer accounts.
Accounts payables oversees payments to vendors, while asset accounting handles asset-related activities for an entity.
Bank accounting records all financial transactions with banks.
What is SAP FICO?
SAP FICO is a module of SAP ERP designed to facilitate financial reporting both internally and externally. It captures all transactions recorded by an entity and produces accurate financial statements at the end of a trading period. The full form of this module is FI (Financial Accounting) and CO (Controlling).
This SAP FICO tutorial will give a fundamental overview of SAP FICO and highlight its main features.
SAP Financial Instruments (FIN) consists of several sub-modules. Examples include accounts receivable/payable, asset accounting, general accounting, and bank accounting.
FICO SAP modules are fully interconnected and run in real time, allowing trial balances to be extracted at any time and always balanced due to their interconnectedness. The diagram below illustrates this integration between FICO SAP modules.
General Accounting
All general ledger accounts used for reporting are managed through general ledger accounting. In SAP, this collection of all general ledger accounts used by an organization or group of organizations is known as the chart of accounts. These accounts form the basis for the preparation of the financial statements. Most transactions are recorded in sub-modules and reconciled with general ledgers in real time. General accounting allows direct transactions to adjust or correct errors as well as cancellations from this same system. Account balances in general ledger accounts can be viewed and trial balances retrieved from the system.
Accounts Receivable
Accounts Receivable in FICO SAP is a sub-module that records customer transactions and manages customer accounts. Separate customer accounts should be maintained, and when transactions are recorded on these accounts, the reconciliation accounts in the general ledger are updated in real time with the figures recorded there. Accounts Receivable includes recording of invoices, recording of credit notes, deposits for payment of invoices, dunning services and execution of customer reports.
Accounts Payable
Accounts Payable is a sub-module that captures all vendor transactions and manages vendor accounts. Separate accounts payable are maintained, so that when transactions are recorded in accounts receivable, the general ledger reconciliation accounts are updated in real time with the figures recorded there. Transactions processed through Accounts Payable include posting of invoices, posting of credit memos, installments for payment of invoices, automatic execution of the payment schedule for vendor reports.
Asset Accounting
SAP FICO asset accounting keeps track of all transactions related to an entity's assets. As transactions are posted to asset accounts, general ledger reconciliation accounts are also updated in real time. Asset accounting includes acquisition, disposal, sale, transfer, revaluation, and depreciation - anything related to an organization's assets!
Bank accounting
Bank accounting keeps track of all transactions with banks. Reconciliation takes place to verify the accuracy of these transactions against what appears on the bank statements, by comparing them to those recorded in the system.
SAP financial modules are fully integrated and updated in real time, ensuring that accurate financial statements can be extracted from the system at any time.
Summary
Overview of SAP FICO: SAP's FICO module is an essential component for both external and internal financial reporting.
SAP FICO stands for SAP Financial Accounting and Controlling, covering both areas. In SAP, all general ledger accounts used in reports are managed using general ledger accounting. A collection of all these accounts used by a business or a group of businesses is known as a chart of accounts.
Accounts Receivable is a sub-module that records all customer transactions and manages customer accounts.
Accounts Payable oversees payments to vendors, while Asset Accounting manages asset-related activities for an entity.
Bank accounting records all financial transactions with banks.
