SAP FICO is a basic functional component of SAP ERP Central Component that assists organisations in managing their financial data. SAP FICO allows organisations to keep track of their financial activities in great detail. SAP FICO is designed to assist firms in generating and managing financial statements for analysis and reporting, as well as in successful business planning and decision-making.
SAP ERP Central Component (SAP ECC) is an on-premise enterprise resource planning (ERP) system that is also known as "SAP ERP." SAP FICO assists ECC with financial accounting and control.
SAP Finance (FI) and SAP Controlling (SC) are the two sections of SAP FICO. Every one of them is used in a specific financial transaction.
SAP FI is in charge of financial reporting and accounting, whereas SAP CO is in charge of cost planning and management. SAP FI and SAP CO were launched as different modules at first, but they are now so tightly interwoven that many people refer to them as one.
Other SAP Logistics modules, such as Sales and Distribution (SD), Production Planning (PP), Plant Maintenance (PM), Quality Management (QM), and Materials Management (MM), are also integrated with SAP FICO (MM).
FI modules in SAP
SAP FI may be used to construct financial statements for reporting and analysis by businesses. Financial statements include balance sheets and profit and loss statements, among others. SAP FI is made up of a number of sub-modules that handle certain accounting tasks:
The General Ledger is a chart of accounts that contains all of the company's transaction data. This page displays a list of all of the accounts in the system. Transactions are recorded in sub-modules that can be synced with general ledger data in real time.
Client transactions are captured and customer accounts are managed by Accounts Receivable. Invoice posting, credit memo posting, down payments, invoice payments, and customer report execution are all examples of transactions.
Accounts Payable is responsible for all vendor transactions and controlled vendor accounts. Invoice posting, credit memo posting, down payments, invoice payments, automatic payments programme, and executing vendor reports are all examples of transactions.
All transactions involving the company's permanent assets, such as land, buildings, and heavy equipment, are managed by Asset Accounting. Asset acquisitions, retirement, sales, transfers, revaluations, and depreciation are all examples of transactions.
All of the company's bank account transactions and data are handled by the Bank Ledger. It can match all transactions on bank statements to transactions in the system and reconcile them.
Consolidation allows a corporation to consolidate financial statements from numerous companies, resulting in a comprehensive picture of the company's financial status.
Funds Management is in charge of the company's revenue and cost budgets.
SAP FI's Special Purpose Ledger defines the ledgers used for reporting.
Travel Management is responsible for all aspects of the travel process, including trip planning and expenditure management.
CO modules in SAP
SAP CO enables processes to plan, report on, and monitor expenses from business activities, whereas SAP FI deals with a company's accounting and internal and external reporting. SAP CO helps you increase the company's profitability. SAP CO, like SAP FI, is made up of sub-modules that deal with various processes:
Cost Elements, which is based on profit and loss statements, also known as income statements, and offers an overview of all of the company's expenses and revenues. The genesis of expenses is described by cost element accounting. Specific costs incurred by the firm are represented by cost factors.
The expenses related with the company's internal divisions or departments, such as sales, production, marketing, or human resources, are dealt with by Cost Centers. Cost Centers are exclusively concerned with expenditures, not earnings.
Profit Centers is in charge of all cost data for the company's many business lines. Unlike Cost Centers, which solely deal with expenditures, it deals with both expenses and income.
Internal Orders is a cost-control tool for smaller internal projects or non-fixed assets, such as a one-time marketing campaign.
The corporation can assess the profitability of its products using profitability analysis. Profitability Analysis, for example, may help you make decisions about product price, distribution routes, and target market groups. It also enables for other levels of analysis, such as profitability for each area or nation, product kinds and distribution routes, or individual customers.
Product costing keeps track of the expenses of making the company's goods and services. Product costing analysis can assist in the management of production costs and efficiency.
