Introduction to SAP FICO

INTRODUCTION 

SAP stands for System Application and Products in data Processing. SAP FICO is one of the most widely used SAP module. SAP FICO module includes SAP FI configuration and SAP CO configuration. SAP FI module records and maintains the financial transaction of the organisation for external reporting. SAP CO module deals with internal accounting. SAP FICO modules can be integrated with other SAP modules like SD (Sales and Distribution), MM (Material Management), HR(Human Resource), PP (Production Planning), QM (Quality Management), PS (Project System) etc.

 FI stands for Financials CO stands for Controlling

 SAP was released in 1972 - Head quarters in Germany. 

 What is ERP?
 ERP stands for Enterprise Resource Planning, it integrates all functions into one system.

                                                        

There are many departments in an organisation. ERP integrates all the function into one system. It facilitates free flow of data among various departments.

 ERP Packages: 

 1972 - SAP R/1 - Real Time Data Processing
 1980 - SAP R/2 - Included Countries and Currencies
 1990 - SAP R/3 - Application Server, Data based Server and Presentation
 2004 - NetWeaver - Integrates all Information, People and Processes.

Area Covered under SAP FICO

Financial Accounting manages the financial transaction of the organisation. Financial transaction are recorded in the balance sheet and Income Statement(P&L)

FI:

1. General Ledger Accounting

2. Accounts Payable

3. Accounts Receivable

4. Asset Accounting

The CO Module supports the processing, planning, reporting and monitoring the business operations. It involves around managing the cost and increasing profitability.

CO:

1. Cost Element Accounting

2. Cost Center Accounting

3. Internal Orders

4. Profit Center Accounting

5. Product Costing

6. Profitability Analysis

SCOPE OF SAP FICO

Business Path: 
Join as an enduser in an organisation in their corporate finance or any other finance related departments. CocoCola, Pepsi, Unilever, Reliance etc

Consulting Path: 
Join a Consulting firm and develop a career towards becoming a SAP Consultant. Accenture, IBM, Capgemini, Infosys, TCS, Deloitte etc

ROLE OF SAP FICO CONSULTANT

1.Project Implementation
2.Business blueprint
3.Realization
4.Final preparation
5.Go live and support

Company Creation in SAP

DEFINE COMPANY
Company represents the group. It comprises of 6 alphanumeric characters. A company consists of one or more company codes.

Path: SPRO - Select SAP reference IMG - Enterprise structure - Definition - Financial Accounting - Define company (transaction code is OX15)

SPRO stands for SAP Project Reference Object

SAP Reference IMG: This is called customization area or configuration area or implementation area.
In the Sap Reference IMG activity select the menu path



Step 1) Select New Entries button

Step 2) Enter the Company Details in the next screen



Step 3) Press the save button in the same screen (Ctrl + S)

Step 4) Press Enter to save in the request.

Company Created.

                

Define Company Code

DEFINE COMPANY CODE
Company code is organisational unit of financial accounting for which complete set of books of accounts are maintained for external reporting to draw individual financial statements. Business transaction that occur are entered at company code level. It comprises of 4 alphanumeric characters.

Path: SPRO - Select SAP reference IMG - Enterprise structure - Definition - Financial Accounting - Edit, Copy, Delete, Check Company Code (transaction code is OX02)

In the Sap Reference IMG activity select the menu path

Step 1) Choose Activity - Edit Company Code Data (Double Click)



Step 2) Select the New Entries button in the next screen

Step 3) Enter Details in the next screen

Step 4) Press the Address button in the same screen

Step 5) Fill the Address Details for the Company here
Press Enter



Step 6) Select save button and press enter to save in the request

 You have Successfully created a new Company Code.    

Assign Company Code to the Company

ASSIGN COMPANY CODE TO THE COMPANY

Path: SPRO - Select SAP reference IMG - Enterprise structure - Assignment - Financial Accounting - Assign company code to company (transaction code is OX16)

In the SAP Reference IMG select the menu path

Step 1) In the next screen scroll down to find the position button and click on it

Step 2) Enter the company code that we defined previously
Press Enter

Step 3) For the company code assign the company defined

Step 4) Press save and enter the customizing request number
Press enter to save in the request

You have now assigned the Company Code to the Company  

Define Business Area

DEFINE BUSINESS AREA
Business area is organisational unit within FI module that represents separate area of operations or responsibilities in a business organisation. It comprises of four-character alpha numeric key and the name of business area. Multiple business areas can be defined. Transactions are posted pertaining to the business area. Business areas are part of company operations.

Path: SPRO - Select SAP reference IMG - Enterprise structure - Definition - Financial Accounting - Define business Area (transaction code is OX03)

In the SAP Reference IMG select the menu path

Step 1) Select the New Entries button

Step 2) In the next screen enter the business area with description

Step 3) Select the save button and press enter to save in your request

You have now defined Business Area

* Assignment of business area to the company code is not required

Creation of Chart of Accounts (COA)

CREATION OF CHART OF ACCOUNTS
Chart of Accounts is used while creating the account groups. Chart of accounts account groups is a list of General Ledger accounts used by the organisation. Before creating Account groups defining Chart of Accounts is compulsory. Chart of Accounts is defined at client level and assigned to company code. Multiple company codes can use the same Chart of Accounts.

Types of Chart of Accounts

1) Operating Chart of Accounts - It is the list of all general ledger accounts to which daily business transactions are posted. It is mandatory for every company code to be assigned to one operational chart of accounts.

2) Group Chart of Accounts - It contains list of general ledger accounts used by the corporate group to prepare the consolidated financial statements.

3) Country Specific Chart of Accounts - It contains the general ledger accounts necessary to meet country specific legal requirements.

Path: SPRO - Select SAP Reference IMG - Financial Accounting - General Ledger Accounting - GL accounts - Master Data - Preparation - Edit Chart of Accounts List (transaction code is OB13)

Select the menu path

Step 1) Select New Entries button

Step 2) Enter the data in the next screen

Note: Under Status deselect the Blocked check box (do not select blocked check box)
Length of G/L account number (min 6 max 10)

Step 3) Select the save button and press enter to save in your request

You have now created a new Chart of Accounts. 

Assign Company Code to Chart of Accounts

ASSIGN COMPANY CODE TO CHART OF ACCOUNTS

Path: SPRO - Select SAP Reference IMG - Financial Accounting - General Ledger Accounting - GL accounts - Master Data - Preparation - Assign Company Code to Chart of Accounts (transaction code is OB62)

Select the menu path

Step 1) Select the position button ( Scroll down to find)

Step 2) Give the company code and press enter

Step 3) For the company code MML assign Chart of Accounts MML

Step 4) Select save button and press enter to save in your request

You have successfully assigned the company code to the Chart of Accounts.

How to Create Chart of Accounts Account Groups in SAP

ACCOUNT GROUPS 
Account groups are used to manage and control large number of General Ledger Accounts.

Path: SPRO - Select SAP Reference IMG - Financial Accounting - General Ledger Accounting - GL accounts - Master Data - Preparation - Define Account Group (transaction code is OBD4)

Select the menu path

Step 1) Select the New Entries button

Step 2) In the next screen populate the following fields: COA, Account Group, Name, From acct and To account details

Note:- Do not press enter while creating Account Groups
Use tab button on keyboard to move to the next column

Step 3) Select the save button
Select your request and press enter to save in your request

You have successfully created Chart of Accounts Account Groups.