SAP Financial Accounting (SAP FI) module is the back bone of SAP accounting as it records financial transactions of all movements of goods, services and all other business transactions between the company and its customers and vendors. SAP FI application represents from an accounting perspective a company general ledger (G/L). SAP FICO (FI & CO) are two separate books of accounting, where the SAP FI is used for external reporting with Balance sheets and Profit & Loss statements and SAP CO (Controlling) for internal reporting purpose.
SAP Financial accounting module components enables to meets all the requirements of financial accounting department of an organization. The important features of FI are
- SAP FI records all the business transactions with an unbroken audit trial from financial statements to the individual documents.
- The postings made in sub ledger accounts always generate a postings in a corresponding G/L account.
- The data is available in real time, so the financial accounting data can be access through out the organization.
- All the transactions processed in logistics are posted to financial accounting module through automatic account determination. So ensuring that value of goods and services are exactly reflects in accounting.
- Prepares an operational information and provide effective decision making within the organization.
The important organizational elements of SAP FI are
The important sub-modules of SAP financial accounting are
- General Ledger (FI-GL)
- Accounts Receivable (FI-AR)
- Accounts Payable (FI-AP)
- Asset Accounting (FI-AA)
Chart of Accounts: – Minimum one chart of accounts to be defined in SAP system. Each G/L is configured according to the chart of accounts. The chart of accounts consists a list of general ledger accounts that contains account number, account name and type of G/L account.
Currencies: – In Financial Accounting, the currencies need to be specify for each company codes in which currencies ledgers to be maintained. Different types of currencies in SAP are company code currency, document currency and group currency.
Fiscal Year: – A fiscal year is also known as financial year. Fiscal year can be defined as year independent or year dependent. To separate business transactions into different periods, a fiscal year with posting periods has to be defined in SAP.