Fico Intervew Questions
Fico Intervew Questions
Top most important SAP FICO interview questions and answers by Experts:
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Client | Operating Concern |Controlling area1 Controlling Area 2 | Co. Code 1 Co. Code 2| Bus area 1 Bus area2 Bus Area3 Bus Area 4
2) How many Normal and Special periods will be there in fiscal year, why do u use special periods?
12 Normal posting period and 4 special periods are in the fiscal year which can be used for posting tax and audit adjustments to a closed fiscal year.
PPV is used to open and close the periods based on a/c types considering GL Accounts. Tr.Code. OB52.
City
Country
Currency
Language
Address
Document type is nothing vouchers containing line items. Several business transac! tions can be identified within a particular document type.
These are special classification keys. Two character numerical key it controls the entry of line items.
Posting key determines Account type, Debit/credit posting, Field status of transaction.
FSG is mandatory field in ! GL Creation. You use this field to define which fields are displayed when you post business transactions to a G/L account.
– Suppressed
– Display
– Optional
– Required
8) What is chart of account and how many charts of accounts can be assigned to a company?
Chart of account is a list of all G/L accounts used by one or several company codes.
For each G/L account, the chart of accounts contains the account number, account name, and the information that controls how an account functions and how
You have to assign a chart of accounts to each company code. This chart of accounts is the Operating chart of accounts and is used for the daily postings in this
company code.
You have the following options when using multiple company codes. You can use the same chart of accounts for all company codes
If the company codes all have the same requirements for the chart of accounts set up, assign all of the individual company codes to the same chart of accounts.
This could be the case if all company codes are in the same country.
In addition to the operating chart of accounts, you can use two additional charts of accounts If the individual company codes need different charts of accounts,
you can assign up to two charts of accounts in addition to the operating chart of accounts. This could be the case if company codes lie in multiple countries.
The use of different charts of accounts has no effect on the balance sheet and profit and loss statement. When creating the balance sheet or the profit and loss
statement, you can choose whether to balance the co! mpany codes which use different charts of accounts together or separately.
Name
Maintenance language
Controlling Integration
Block Indicator
Account group determines which fields you can configure on the G/L master record. It is necessary to have at least two one for B/S and another one for P&L
a/c.
The status of fields of the master record of GL belongs to company code area.
12) What is reconciliation account; can you directly enter documents in that a/c?
When you p! ost items to a subsidiary ledger, the system automatically posts the same data to the general ledger. Each subsidiary ledger has one or more
13) How do you control field status of GL master records and from where do you control!
Field status variant is maintained all FSGs.
COA Segment
A/C group
Nature of account
Short text
Trading partner
Account currency
Tax
OIM,LID,FSG.
15) What does Field status group assigned to a GL master record controls?
It controls the account assignments that are made to the account. Specifically the field status group controls whether postings to cost centers, internal orders,
16) What is Country and operational chart of account? Why do you use group chart of account?
Country COA – It’s used for legal specific requirement of each country. It’s additional and optional.Group COA used for consolidation of Company codes. This is
18) What is open line item management? What do you mean by clearing open line items?
Open item management is further reconciliation function. OIM allows you to display the open and cleared items and amounts in an account. OIM should be
used if an offsetting entry is made for every line item posted in the account. The a/c is reconciled and cleared against another account. Ex. Salary clearing
Residual payment it clears original invoice with incoming amount and create new line item for remaining outstanding amount.
Partial payment it leaves the original invoice amount and creates new
Internal Number Ranges: Doc. No will be provided by the system automatical! ly in serial order allotting the next available progressive number. The number
must be in numerical.
External Number ranges: Doc. No will be given manually by the end user. System will not lock no automatically in this case. User can pick the number randomly.
21) How can be or in what way baseline date is important in Automatic Payment Program run?
The Baseline date is used to calculate the due date by taking into account the payment terms. On the APP, the baseline date helps to pick the relevant invoices
for payment. During the APP run when invoices are pulled into the run, the system checks the ‘Next Payment Date’ before picking the invoices to be paid.
Procurement cycle – a sales order is placed on a requirement made by a customer, after which it is passed on to create a purchase order (this could either
happen based on the requirements on the SO, or a planned SO). the value flow gets passed on to FI at the time of goods movement. In the case of SD(Sales and
What is APC?
The GR/IR – the goods receipt/Invoice Receipt account is used to post to whenever goods that are not yet invoiced have been received or when invoices arrive
During the time between the invoice being created and delivery of goods, there can be a timing difference, in order to accommodate this timing difference, a
25) What are the accounting entries take place in MM and SD?
Value from MM to FI is defined in OBYC…. on the material master the flow of values are assigned on the Costing, acctg, etc tabs where the system helps to post
the necessary stock values into the appropriate GL accounts. helps to determine, the GL accounts updated when there is a movement of goods.
SD-FI – VKOA
26) Can we assign one Controlling area to two different Company Codes (but the company codes having different fiscal years/different currencies
Company code should have same financial year, may have different currencies.
You can assign 2 or more company codes to one controlling area as long as the chart of accounts are same. Furthermore, if you have different fiscal year variant
in the company code, then make sure that the number of period remain the same.
27) While posting transaction, can we give cost centre / production order at time.
Yes it is posiiable , but in such situation cost centre will be real and production order is stastical.
If you assign both cost center and Prd Order then since Prod. Order are real co object, Cost center entry would be statistical.
The question is not very clear. If you are talking about CO Master data. Then Cost center need to be uploaded. You can use Data Transfer Workbench or write
29) Can we run Payment Programe giving ( Hdfc vendor detailes ) City bank in Payment run programe?
Yes can be possible , this can resolved through ranking order and bank optimization in FBZP.
You use use further selection in proposal paramater, if you would like to filter the open item based on the city
Field status.
31) After entering a document can you delete the entry? Can you change the document? Which fields’ can/not is changed?
Document header cannont be changed, after posting the document you cannot change. only if you want to change the document the reseversal entry.
The transaction other than A/P and A/R is called the special g/l transaction for ex: Bills of exchange, Interest payable , aqusition
34)What is base line date? Why is that used? Can this be changed?
35) How many statistical objects can be selected in when you post an FI document? Where CCtr, PCtr, OM are active?
Implementation exp.:
Brief about the project you did: w.r.t. the main activity of the client, How many plants they had, What modules were implemented, Who were the
implementers, What’s the implementation team size, How many were in your module team, What’s your role in the project with respect to the activities you
partook in the project, The Enterprise Structure with regard to the no. of Company Codes, any Business Areas or Profit Centers defined, Cost Centers defined,
What’s the period of the project, When did they Go-Live?, Any issues you’d solved during ‘Support’ phase?
36)What is APC?
APC stands for Acquisition and Production costs. Acquisition means any asset which you may acquire/ purchase externally. It includes invoice price and other
related exp. Associated with it like customs, octroi, freight which you add and arrive at total cost of acquisition for capitalisation of the asset.For ex Say a
computer. The total cost which you incurr for the acquisition of the computer including installation will be your APC
Production cost means any asset which is created internally within the organisation. This is normally created by means of AUC and you go on adding cost to the
AUC as and when you incurr exp. for the same.For ex. say addition to the office building. Therefore APC incudes any external acquisition or internal
Implementation exp.:
Brief about the project you did: w.r.t. the main activity of the client, How many plants they had, What modules were implemented, Who were the
implementers, What’s the implementation team size, How many were in your module team, What’s your role in the project with respect to the activities you
partook in the project, The Enterprise Structure with regard to the no. of Company Codes, any Business Areas or Profit Centers defined, Cost Centers defined,
What’s the period of the project, When did they Go-Live?, Any issues you’d solved during ‘Support’ phase?
37.What is a breakpoint ?
Breakpoint is used to help the user scrutinize how the system behaves at a certain point in the ABAP code. At that point the system goes into debug mode. This
breakpoint is useful in investigating how routines and requirements function. By accessing the routine source code and setting a breakpoint at its execution
37)What is a CATT ?
CATT means Computer Aided Test Tool. It is SAP’s tool for processing transactions automatically.CATT is used in bringing in data, such as a mass maintenance of
User exit is a point in an SAP program at which a customer’s own program can be called. User exits allow developers to access program components and data
objects in the standard system. There are two types of user exits –
user exits that use includes (customer enhancements that are called from the program)
and user exits that use tables, which are used and managed directly via customizing.
39)What is a client ?
Client in a SAP work environment is the highest organizational structure. Many clients can be found in each system. QA (quality analysis) and Development are
40)What is an authorization ?
41)Who is a user ?
Anyone who is given access to the SAP system by the system (basis) administrator is known as a user.
42)What is a variant ?
When executing a program, different selection parameters may be used. These selection parameters are stored in the SAP system as variants.
SQL trace records all open, prepare, fetch, execute and actual SQL statements and the duration time for each step in a procedure.
Master data is used in an SAP system to represent the basic components of a procedure and to ensure data integrity throughout the SAP business process. This
gaurantees that one common record is accessed for different procedures. Example – a customer master record may be referenced by more than one functional
IMG is Implementation Guide that SAP system developers use to customize the client they are working in.
46)What is ASAP ?
ASAP is Accelerated SAP, a project management software tool that is used on SAP implementations to guide the project through different phases. ASAP can
take a project from the designing of the “blueprint” through to “going live”. Accelerated SAP is SAP’s total process-oriented solution for accelerated
The core functional modules in SAP R/3 are Financial Accounting (FI) usually in combination with Controlling (CO) or Treasury (TR) – Human Resources (HR), and
logistic modules : Sales and Distribution (SD), Materials Management (MM), Quality Management (QM), Plant Maintenance (PM), and Production Planning (PP).
ABAP Workbench is SAP’s graphical programming environment. It is used to write ABAP code, design screens, create user interfaces, obtain database
Each sales document comprises of three main levels and each level is represented by a table that holds the data for that level. Data for the header level is
stored in table VBAK, data for the item levels is stored in table VBAP, and data for the schedule line level is stored in table VBEP.
User profile is a set of authorizations that enable user access to certain parts of the SAP system.
Sales area is a segment that combines the sales organization, the distribution channel, and the sales division.
Logical database is an ABAP program that combines the contents of database tables. It is linked to an ABAP report program as one of the program attributes. It
supplies the report program with a set of hierarchically structured table entires derived from different database tables. This saves the developer from having to
53)What is a requirement ?
Requirement is a portion of code that is used to determine if a function or formula should be executed.
ABAP Query is a reporting tool that uses a logical database (LDB), individual table, or combined tables to form a report.
Functional area is assigned to the query. It is the representation of a logical database or tables with their respective table joins. This defines which tables and
Batch input facility in SAP is a convenient tool for capturing data into SAP or updating large amounts of information in SAP transactions. The simplest way to
utilize batch input is by : 1) Record the batch input for the transaction used to enter the data in SAP; 2) Then export the batch input recording to a text file.
From the recording, you know what data is required. Create a spreadsheet or word processor document containing all the data to be captured or changed.
Then mail merge the exported text file with the data in a word processing program. Finally, import the merged file, upload the file into SAP, and execute the
57)What is LIS ?
Inventory Controlling
These information systems can be used to plan, control, and monitor business events at different stages in the decision-making process. They are flexible tools
for collecting, aggregating, and analyzing data from the operative applications.
58)What is OSS ?
OSS is an Online Service System which can be used to access information about a module in a given release. OSS is a database of notes on known issues and
their remedies. Any user with a logon name and password can access this information. OSS can be used to obtain quick responses from the SAP help desk
GUI means Graphical User Interface. It is responsible for the graphical layout of the SAP software. GUIs in SAP R/3 differ from version to version of SAP
FICO Questions
Courtsey of ZZ:
Tax Jurisdiction codes are used in conjunction with tax codes to further specify the taxes applied to a purchase. This is recommended for implementations
crossing multiple tax jurisdictions. Tax Jurisdiction codes are tied to customer/vendor master records. Using tax jurisdiction codes allows the user of fewer tax
codes and easier tax determination by deriving tax information from the master record. This minimizes the burden of determining the appropriate tax
Yes/No
The longest of Minimum days in the system, Life by Document Type and Life by account determines the life of any document before it is archived(These are to
be configured).
63) Once a change is made to the coding block, it is permanent and can not be deleted.
True/False
Light Mode: Only the absolute minimum amount of information required to create a field is entered. Expert Mode: More detailed data dictionary and table
information to be entered to create a new field. This is more complex. After a field is been entered a subscreen is generated to build the particular posting
65) Describe how cost center accounting differs from financial accounting?
CO is for internal reporting where FI is more for external legal reporting. CO relates more to indirect and overhead costs, which don’t affect G/L. These costs hit
the G/L once, after that all the allocations are behind the scenes.
66) Describe the possible options for a controlling area – company code relationship Put emphasis on the option you have in terms of different currencies.
A controlling area can encompass one or more company codes. These company codes may have different currencies, but they must use the same chart of
accounts. The controlling area is assigned a currency, but can also support multiple company code currencies. If all the companies have the same currency,
then the object currency is freely definable (if currency type 10 is used). If the company codes do not have the same currency, then the object currency inherits
Cross-company-code controlling enables cross-company transfers and reports to be made in CO, but increases the organizational overhead at the cost center.
In cross-company-code accounting involving different currencies, the CO account assignment object (e.g. cost center) inherits its currency from the company
code.
68) What are the three types of currencies used in cross-company-code accounting and what conversion rates are used?
Each CO document is updated in three currencies. In cross-company-code accounting with different currencies, these are designated the document currency,
the company code currency and the controlling area currency. Conversions in CO use the average exchange rate (M).
69) Define the types of master data that exist in cost center accounting?
Cost center – units of a company that incur costs
70) Define the relationship between the chart of accounts and cost elements in cost center accounting.
The chart of accounts contains all G/L accounts for financial accounting and all primary cost elements for cost accounting. Secondary cost elements are not
71) What is the difference between primary and secondary cost elements?
Primary cost elements are costs that originate outside of the company (posted to G/L). Secondary cost elements are costs resulting from the internal exchange
of activities, and do not exist in the G/L. They exist solely within Controlling.
72) Is it possible to plan on cost centers in more than one plan version – elaborate youranswer?
Yes, when planning for cost centers, changes can be made to all plan versions This includes copying these planning versions, to create separate scenarios with
When calling up the planning screen you will be asked to enter the plan version number.
73) Discuss how distribution for cost center allocation is used in the system.
Primary postings are pooled in a cost center and allocated out at the end of the period specified by user. Original cost elements are retained, and line items are
produced for sender and receiver. Receiver line items contain information about the sending cost center.
74) Discuss how assessment for cost center allocation is used in the system.
Designed for cost center settlement, primary and secondary postings are allocated at the end of period according to a user defined key. The original cost
elements are totaled and posted to a secondary cost element (assessment cost element). Line items for sender and receiver are provided, with receiver cost
center getting information on sender cost center. Assessments can include all or a portion of costs from the sending cost center.
75) Distinguish between the two cost allocation techniques: assessment and distribution.
In a distribution, all receiving cost objects are debited with a portion of an original cost element that had been posted to a sending cost center. This portion is
determined as part of configuration. In assessment, a secondary assessment cost element is used. Within the sending cost center, all costs to be allocated are
totaled and the sender is credited with this assessment cost element while all receivers are debited with a portion of assessment costs. This could be all costs
or a portion of the costs (both primary and secondary that had been originally posted to the sending cost center).
76) What is the difference between direct and indirect activity allocation?
With direct activity allocation an individual activity confirmation takes place. Thus the activities are directly allocated to the cost centers.
The purpose of indirect activity allocation is to automatically allocate planned and actual activities. There are two kinds of indirect activity allocation.
77) What are the two allocation categories for indirect activity allocation?
Activity volume known: The planned and actual activity volume is known. The total actual volume is manually entered for the sender and allocated to the
receiver cost centers (or orders) based upon some planned/actual quantity/ statistic.
Activity volume not known: This uses management units to provide an actual activity quantity to the sender cost center using statistical key figures so that the
system can calculate an operating rate for the target cost calculation.
display variances for each activity type, it is necessary to split (apportion) the actual costs to each activity type.
79) What are the two stages which splitting actual costs based on the activity type occurs?
The actual costs are split in two stages (1st stage is not necessary in planning):
1) In the first stage, the actual cost are apportioned by cost element to the activity type based on the target costs or target quantities. If no costs exist for a cost
element, the target cost of the cost element group is used as the first splitting step.
2) In the second stage, the remaining costs on the cost center level are apportioned to the activity types according to the splitting rules (user defined). If the
splitting rules are not defined, the actual costs are split based on the equivalence numbers for the activity type.
A statistical order collects costs for informational purposes and does not settle costs against another object. You would use this to track costs in a separate
fashion without double counting them. An example would be one car in a fleet of cars. Typically, a statistical order could collect data that also was posted to a
cost center.
An order can be processed individually or with collective processing. An example of this is that it is possible to call all orders which have already been released
but not yet have a settlement rule. Users can enter recipient cost centers in the list screen or alternatively, they can reach the entry of the distribution rule via
the Settlement rule function. (This is not the same as choosing an order group.)
This allows you to select a group of orders so that you can change them all quickly and accurately. Manual collective processing requires the use of a list variant
and allows changes to be made to the order master data. Automatic collective processing is used to release orders or settle them. This changes the status of an
83) What is a selection variant and what is it used for within CO?
A selection variant is SAP or user-defined to select orders. The variant chosen determines which master data fields are offered for selection of collective
processing, whether a status profile can be used, whether a selection rule can be used and what default values will appear in the fields.
A list variant defines which master data fields can be maintained for collective processing.
85)What options do you have for additional account assignments within a CO posting and when would you get a statistical posting?
There can be two additional account assignments excluding business areas and profit centers. These can be chosen from an order, project, or profitability
segment. If the order or other object is not marked for statistical postings, the profit center is always statistical.
86) What are the different commitment types the system can record for an internal order? For which type do you have to perform a manual reduction?
Purchase Requisition
Purchase Order
The availability control allows you to warn a user if/when budget is exceeded. You set tolerances for these availability controls.
The settlement hierarchy is used to ensure that settlement of orders is occurring in the right sequence. An example would be if order A is settled to order B and
this is settled to order C, then you want to make sure that order B is not settled before A, otherwise you will not be able to settle order A to order B because it
will be closed.
The hierarchy is setup in the settlement parameters, and each order can be given a number from 0 to 999 allowing up to 1000 orders in the hierarchy. The
The Reconciliation Ledger is a Standard Ledger configured and delivered by SAP. The data model and functionality defined for specific business requirements
A reconciliation posting is used to transfer costs to financial accounting which were made across company code or business area boundaries in controlling. This
allows for more freedom with CO postings, and the ability to reconcile back to FI.
91)What are the 3 levels that a customer master record can be maintained at? Why do these three levels exist? Give an example of the information stored on
these levels.
Client, company code, and sales (if maintained centrally). Exists so that you can tailor the customization at each level. Adds more flexibility to the structure of a
master record. For example, if you have one customer named ABC Co., you define it once for your client Pepsi Co. That customer exists in two companies of the
client, Taco Bell and Frito Lay. However, in Taco Bell the customer has different dunning areas, banks, payment terms than in Frito Lay. This is an example of
how all information is the same for ABC at the client level, but different at the company code level. Of course, Sales information would be different in each
92)What are the 3 levels that a vendor master record can be maintained at? Why do these three levels exist? Give an example of the information stored on
these levels.
See the example given above. Exists so that you can tailor the customization at each level. Adds more flexibility to the structure of a master record. In the
above example, if ABC Co, is a vendor in the companies Taco Bell and Frito Lay, under the client Pepsi Co, and the payment terms, payment methods are
different at the company level. Of course, purchasing information would be different in each company code as well.
93)What are the two purposes of the customer/vendor Account Group? Give an example of how the Account Group is used.
1) Establishes number range of the customer/vendor master records – a number range is assigned to an account group. This adds flexibility, you are able to
keep similar accounts numbered distinctly. For example customers are 1-100,000, vendors might be 200,000 – 300,000. One-time customers might be 400,000-
500,000.
2) Establishes the screen layout for customer/vendor master records. All fields at the client and company code level for customer/vendor master records can
be designated either suppressed, optional, required or mandatory. For example, some vendors may not use dunning areas, so you would establish a separate
account group for those vendors, where the dunning fields are suppressed.
94.What are screen layout link rules? Why are screen Layout link rules used for customer/vendor master records? Why are they used for line items?
Since the same information can be designated required, optional, mandatory, suppressed in 3 different places, the link rules determine which designation rules
out over another. These 3 places are at the account group level, company code level, and the activity/transaction level.
For line items, the same information can be designated required, optional, mandatory, suppressed in 2 different places. The link rules determine which
designation rules out over another. These 2 places are at the posting key level, and the field status group of the G/L master record.
T or F. Account Groups are mandatory when creating a sub-ledger account.
True. Account Groups are always mandatory when creating customer/vendor master records.
True. When setting up number ranges for account groups of customer/vendor master records, you cannot create one that overlaps with an existing number
range.
Define bank directory, house bank, bank account, bank ID, bank key, and account ID. Describe the relationship between all of these and G/L accounts. Draw a
picture if necessary.
The bank directory is the repository in SAP that contains all of the banks. It can be downloaded into the system or manually keyed in. In order to establish
house banks, which are banks in which your company does business, the bank must first exist in the bank directory. The house bank is named with a bank ID,
All of the accounts in a house bank are referred to as bank accounts and are named with an account ID. Each bank account must contain a respective G/L
account. Each G/L account must contain the house bank and account ID. This allows SAP to maintain the bank books accurately. For example, when you are
running the payment program, you specify the bank accounts that you are paying out of. When a payment is made, it is accurately reflected in the
95)What are payment terms? Why are they used? How are they define in SAP?
Payment terms define how you deal with a customer/vendor in terms of payment. For a customer, it defines when a customer must pay you, in order to
receive discounts. For a vendor, it defines when you must pay the vendor in order to receive discounts.
The terms can be set up with 3 terms, which are usually cash discount term 1, cash discount term 2, and due date for net payment.
Every transaction in SAP creates a document. This is a means of documenting all transactions, being able to trace your actions in the system.
97)What are the two pieces of a document? What must all line items consist of ?
Header and line items. All line items must at least consist of a posting key, account and amount.
Document types:
1) distinguish between the types of business transactions – you specify the type. Ie. Is it a general ledger accounting document, customer payment, etc.
2) controls which account types may be posted to – you specify the account types that may be posted to. Ie. Some document types are only for asset accounts.
3) assigns the document number – each document type is assigned a number range
4) and is used as a sort criteria – by all of the above, you are grouping the documents or sorting them accordingly.
Define posting periods, fiscal year variants, company codes and the relation between each. Draw a picture if necessary.
Posting periods define which periods are open for posting documents, and also which accounts are open for posting within these periods.
Fiscal year variant define what your posting periods are, in relation to the calendar year. For example, if your fiscal year runs from July to June, you need to
define, through a fiscal year variant, how that relates to the calendar year, so that SAP can interpret your fiscal year.
Fiscal year variants and posting periods are assigned to a company code.
2) what account type – posting keys are designated for specific account types
3) field status – how are the line items going to look if you use this posting key??
100)What are automatic line items? How are they configured in the system? Give some examples of automatic line items.
There are certain activities defined at the Chart of Account level in FI that create automatic line items. Examples include discount expenses, revenue from
over/under payment, taxes. There is a 3-character system-specific code in SAP that corresponds with each of these activities, and usually you must specify a G/L
account to correspond with these. This determines which G/L account is hit when the automatic line item is generated.
Define composite profile, profile, authorization, value, field, authorization object, and object class. Describe the relationship between each, draw a picture if
necessary.
Composite profile is assigned to a user and contains one or several profiles. The profiles contain the authorizations or allowed activities that a person may
perform on an object, for a particular value. Similar authorizations can be grouped in to object classes – such as an SD object class, and FI object class.
They control the maximum amount that employees are allowed to post. All control the maximum payment difference that employees are allowed to post. This
is a control or authorization mechanism. An example would be, you wouldn’t want a brand new clerk to be able to post more than $100,000 and wouldn’t want
them to post an incoming payment that was 10% less than the total. All users must be allocated to an employee tolerance group in order to post.
They control the maximum payment difference allowed for customers/vendors, specify how to post residual items from payment difference, and contain
details of clearing procedures. An example would be: Customer One can post a 5% difference b/c they’ve been a customer longer and are more credible.
Customer Two can only post a 1% difference b/c they are a new customer and haven’t established credibility.
103)Define sort key, allocation field. Describe the relationship between the two.
Line items are displayed in the order designated by the allocation field. The allocation field is populated by the sort key. The sort key specifies the fields that the
104)Why would a project team want to configure its own line item layout? Why would a project team want to configure its own fast entry structure?
Some fields are more relevant for some customers than others. For instance, maybe the value date or dunning areas are not important for a group of
Accounting clerks to see. So a line item layout would be made that did not include these fields. Also, it may be typical that clerks always retrieve line items
according to the posting date. This would be a necessary field located in the line item layout.
The SAP functionality that allows you to maintain credit for customers on various levels, based on the customer’s creditworthiness. Basically credit checks can
be performed for customers throughout the sales cycle. Credit management is hugely integrated with SD.
You can set up risk categories, automatic credit checking, and update groups to check invoices as they proceed throughout the sales cycle.
107)What is a Credit Control Area? Where does it fall in the organizational structure?
Credit Control Area is the highest hierarchial level in Credit Management. It falls below the client level, above companies. You create credit control areas and
assign companies to them. Each company can only be assigned to one credit control area. Obviously, customers can span Credit Control Areas since the same
First, a credit limit can be assigned to a credit control area. Then, any customer assigned to that credit control area, will have that limit. On the next level,
specifications can be made for each customer individually. For each customer, you specify the maximum limits across all credit control areas and per credit
control areas. Then on the lowest level, you specify the current limit across all credit control areas and the current limit per credit control area.
109)T or F The credit for a customer can be checked at various points along the sales cycle?
True.
110)What is a payment advice? Why would one be used? Give some examples of payment advices.
A payment advice contains information about an incoming payment, such as amount, payment date, reasons for underpayment, and document number. It is
used for the automatic search and matching of open items during the clearing process. Instead of matching an incoming payment against the open items
manually, the clerk only needs to enter the payment advice in order to clear.
111)What is a reason code? Why would a reason code be used? Give an example.
The reason code specifies the reasons for over or under payment. It also determines if the difference will be written off to a G/L account. An example would be
a reason code set up for damaged goods. If a business decision is made to write off damaged goods to a G/L account then all payment advices with that reason
code specified will cause differences to be written off to the G/L account.
False.
Dunning is a process whereby customer and vendors can be sent late notices for overdue amounts.
What are the 4 necessary inputs for running the dunning program? Define each and give examples of the data in each.
114)Why are separate dunning levels supported by SAP? What is the purpose of the levels?
Because you may want to specify amounts, charges, texts depending on the number of days an amount is outstanding. For example, you would want to send a
115)T or F You may not change the dunning letters that are shipped with SAP.
Dunning areas are used when you want run different procedures for different groups of customer/vendors. For example, you would send a different letter to
your more reliable customers, than for brand new customers b/c the reliable letter may be more friendly. Also, you may send a differently worded letter for
Payment program is the procedure whereby payments are made to customer/vendors for outstanding amounts. The procedure automatically clears
outstanding items and updates the corresponding bank accounts to reflect outgoing payments. They system evaluates all open items based on payment terms
117)What are the 4 necessary inputs for running the payment program? Define each and give examples of the data in each.
2)Configuration – payment procedure includes banks, payment methods in co. code, payment methods in country, specifications for sending and paying co.
codes
3)On-line parameters – things you specify when running the program like the company code, the payment method
4)OI -open items. The payment method in the open item, the payment terms. The amounts.
118)What are the 3 levels that the payment program in configured at? Give examples of the data that is configured on each level?
Bank – specify your house banks, bank accounts you are paying or receiving money from.
Also configure the balances in the accounts, and their rank order per payment method
Payment Methods – must specify payment methods for in the country and in the company code.
T or F The payment method must be configured for a country before it can be configured for a paying company?
True.
Describe how SAP decides which open items must be paid by the payment program.
First, you specify whether you want to always maximize your cash discounts, or always minimize. Then each open item is looked at individually by the system.
In particular, the payment terms are evaluated. If you are always maximizing, the program looks at the first payment tier, if the payment program will not be
run again in time to get the maximum discount then the amount if paid. If the payment program will be run again before the first payment tier expires, then the
If you specify to always minimize the discount, the amount will only be paid when the program will not be run again before the net amount is due (the third
payment tier).