Preface – This post is part of the SAP FI series.
Table of Contents
The SAP FICO acronym stands for SAP Financial Accounting and Controlling and is one of the most important SAP modules. It can be integrated with SAP MM, SAP SD, SAP PP, SAP SCM, etc.
SAP FI is a financial management system that analyzes the financial data of an organization. SAP CO is responsible for monitoring, coordinating, and optimizing all the processes of an organization.
Subcomponents of SAP FI
The SAP FI system is divided into several subcomponents for specific account processing. The following are the SAP FI subcomponents:
- Finance Accounting General Ledger: It contains all the transactions of companies.
- Finance Accounting Accounts Receivable: Records customers’ transactions and manages their accounts.
- Finance Accounting Accounts Payable: Records all vendor and manpower transactions.
- Finance Accounting Asset Accounting: Captures all the transactions related to the company’s fixed assets such as land etc.
- Finance Accounting Bank Accounting: Keeps track of the company’s financial account transactions and data.
- Finance Accounting Travel Management: It manages all aspects of the travel process, including booking trips and handling travel expenditures.
- Finance Accounting Fund Management: Manages the company’s revenue and expense budgets.
- Finance Accounting Legal Consolidation: It provides an overview of the company’s financial position as a whole by combining financial statements for multiple entities.
- Finance Accounting Special Purpose Ledger: The ledgers are defined in SAP FI for reporting purposes.
Figure 1: SAP FI Subcomponents
Why use SAP FI?
SAP FI manages financial accounting data across multiple companies, currencies, and languages. The objective is to record all financial transactions posted by an entity and prepare an accurate financial statement at the end of the trading period.
There are several financial components involved.
- Fixed asset
- Cash journal
- Accounts receivable and payable
- Tax accounting
- General ledger
- Fast close functions
- Financial statements
- Parallel valuations
- Master data governance