SAP FICO TRAINING

By Rajeev Kumar
SAP FI sub Modules

 Organizational Elements/Basic Settings

 General Ledger (FI-GL)
 Accounts Payable (FI-AP)
 Accounts Receivable (FI-AR)
 Asset Accounting (FI-AA)
SAP CO sub Modules

 Cost Element Accounting (CO-OM-CEL)

 Cost Centre Accounting (CO-OM-CCA)
 Internal Orders (CO-OM-OPA)
 Profit Centre Accounting (EC-PCA)
Other Topics

 Procurement to Pay (Procurement to AP)

 GR to Inventory (Inventory)
 Order to Billing (SD)
 WBS to Asset Capitalization (Project)
 Profit Centre accounting and Reconciliation with FI
 Controlling areas – Concept on Budgetary control
Introduction of ERP with special reference to SAP

 ERP stands for Enterprise Resource Planning. It is an IT system meant to

manage the resources of the enterprise.
 The SAP AG, a German based company is the world leader in providing the
ERP solutions all the medium and large companies in the world across various
industries.
Brief history of SAP

 Set up in the year 1972.

 5 Ex IBM Engineers
 Various products of SAP: R/1, R/2, R/3, ECC 5.0, ECC 6.0, HANA Etc
Introduction to SAP System

 SAP is a real time integrated IT system meant to mange resources of the

company and helps the management and the employees of the company to
take the day to day and strategic decisions efficiently by giving them the real
time information related to any area of the company.
 SAP system is a collection of various modules and various systems meant for
various purposes.
 It is being used worldwide across industries and even in the government
departments.
SAP System architecture
SAP System Landscape
SAP Modules
System Navigation and some important terminologies
used in SAP

 SAP GUI:
System Navigation and some important terminologies
used in SAP

 Log on screen:
System Navigation and some important terminologies
used in SAP

 Client:
 Master data:
 Transaction data:
 Tables:
 User ID:
 Password:
 Settings: System configuration and customization.
 SAP Easy Access screen
 SAP IMG screen
System Navigation and some important terminologies
used in SAP

 Menu Path
 Transaction Code or T code
 Variant Principle
SAP Easy Access screen
SAP IMG screen
Introduction to SAP FICO Module

 The SAP Financials solution is a comprehensive financial management solution

engineered for the most complex, multinational companies across a broad
range of industries. As the leading enterprise software solution, SAP
Financials enables companies like yours to thrive in a business environment
characterized by intensified competition, uncertain market conditions, and
increased regulatory oversight.
SAP FI sub Modules
Organizational Elements/Basic Settings

 Organization Structure
 Company
 Company Code
 Business Area
 Controlling area
 Operating concern
SAP FI sub Modules
Organizational Elements/Basic Settings

 Data Flow in the SAP System:

SAP FI sub Modules
Organizational Elements/Basic Settings

 Company
 Company Code
 Business Area
SAP FI sub Modules
Basic Settings

 Fiscal Year Variant

 Document Type
SAP FI sub Modules
Organizational Elements/Basic Settings

 Field Status Variant: SDRO

SAP FI sub Modules
Organizational Elements/Basic Settings

 Field Status Variant: SDRO

SAP FI sub Modules
Organizational Elements/Basic Settings

 Posting Keys
SAP FI sub Modules
General Ledger (FI-GL)

 Chart of Account: List of GL accounts in SAP system

 Account Groups:
SAP FI sub Modules
General Ledger (FI-GL)

 GL Master Records
SAP FI sub Modules
General Ledger (FI-GL)

 Accounting postings in SAP System

SAP FI sub Modules
General Ledger (FI-GL)

 Foreign Exchange Management

SAP FI sub Modules
General Ledger (FI-GL)

 Reconciliation Accounts – All subledger account.

 Automatic Account Assignments:
 Automatic Account assignment for Tax A/c
 You can use transaction code OB40 or Menu path
SAP FI sub Modules
General Ledger (FI-GL)

 Cross company code automatic a/c assignment

 Transaction code OBYA
SAP FI sub Modules
General Ledger (FI-GL)

 TAX Procedures: Defined at Country Level

 GL Reports: Line Item Display – FBL3N
 GL Balance Display: FS10N
SAP FI sub Modules
Accounts Payable (FI-AP)

 Vendor Master Records

 Account Groups
SAP FI sub Modules
Accounts Payable (FI-AP)

 Input Tax Code

SAP FI sub Modules
Accounts Payable (FI-AP)

 Vendor Payment Procedures

 Manual and Automatic Payment processes
 F-43: Vendor Invoice
 F-53: Manual Vendor Payment
SAP FI sub Modules
Accounts Payable (FI-AP)

 F110: Automatic Payment Program

SAP FI sub Modules
Accounts Payable (FI-AP)

 Vendor Reports:
SAP FI sub Modules
Accounts Receivable (FI-AR)

 Customer Master Records

 Account Groups
SAP FI sub Modules
Accounts Receivable (FI-AR)

 Recon A/c
 In customer Master
SAP FI sub Modules
Accounts Receivable (FI-AR)

 Output Tax code

SAP FI sub Modules
Accounts Receivable (FI-AR)

 Credit Management
SAP FI sub Modules
Accounts Receivable (FI-AR)

 Dunning Procedures: Dunning is a German word which means Payment chasing

letters.
 Settings needs to be done in FBMP T code
 Dunning run in F150 T code.
SAP FI sub Modules
Accounts Receivable (FI-AR)

 Customer reports:
SAP FI sub Modules
Asset Accounting (FI-AA)

 Chart of Depreciation or COD

 Depreciation Areas- Book Depreciation, Tax depreciation, Group Depreciation
 Depreciation Key: Various Calculation methods for depreciation valuation
 Like, SLM, WDV,
SAP FI sub Modules
Asset Accounting (FI-AA)

 Chart of Depreciation
 Depreciation Areas
SAP FI sub Modules
Asset Accounting (FI-AA)

 Asset Class
SAP FI sub Modules
Asset Accounting (FI-AA)

 Asset Master Records

SAP FI sub Modules
Asset Accounting (FI-AA)

 Asset accounting and GL linking – AO90

SAP FI sub Modules
Asset Accounting (FI-AA)
 Asset Transactions:
 Acquisition,
 Addition,
 Retirement,
 Transfer
SAP FI sub Modules
Asset Accounting (FI-AA)

 Depreciation Run: AFAB T code

SAP FI sub Modules
Asset Accounting (FI-AA)
 Asset Reports:
SAP CO Introduction

 SAP Controlling or CO: SAP CO supports processes to plan, report on, and
monitor costs from business operations. SAP CO can be instrumental in
improving the company's profitability.
SAP CO Introduction

 SAP CO Organisation Structure:

 Controlling area:
 Operating Concern:
SAP CO sub Modules
Cost Element Accounting (CO-OM-CEL)

 Different categories of Cost Elements

 Primary cost element
 Secondary cost element
SAP CO sub Modules
Cost Element Accounting (CO-OM-CEL)

 Primary cost element: The primary elements should be assigned to a

corresponding object in CO such a cost centers, an internal order, etc. This is
necessary for the identification of the origination of the cost. The revenue
element is also a primary cost element but unlike primary cost elements it
has a corresponding revenue G/L account in the chart of account under the
P&L. 
 1 Primary costs/cost-reducing revenues
 3 Accrual/deferral per surcharge
 4 Accrual/deferral per debit = actual
 11 Revenues
SAP CO sub Modules
Cost Element Accounting (CO-OM-CEL)

 Secondary cost element: These elements are only used in CO for the
identification of internal costs for settlements or assessments. They are used
in overhead calculation, internal cost allocation, settlements, etc.
 21 Internal settlement
 31 Order/project results analysis
SAP CO sub Modules
Cost Element Accounting (CO-OM-CEL)

 Automatic Creation of Cost Elements

SAP CO sub Modules
Cost Centre Accounting (CO-OM-CCA)

 Cost Centre: Cost center in SAP is a location where the costs are occurred
inside the organization. In SAP cost center is the lowest organizational unit in
controlling enterprise structure.
 Standard Hierarchy:To create a cost center a structure in master data
maintenance is needed to which you can assign cost centers. This is created
while creating the Controlling Area.
SAP CO sub Modules
Cost Centre Accounting (CO-OM-CCA)

 Cost Centres
SAP CO sub Modules
Cost Centre Accounting (CO-OM-CCA)

 Cost Centre Groups: Cost center groups enable you to perform evaluations for
each decision-making, responsibility, or control area. They also support the
processes during planning and internal allocations. You can assign each cost
center to only one group in the standard hierarchy, but to as many
alternative groups as you require.
SAP CO sub Modules
Cost Centre Accounting (CO-OM-CCA)

 Assessment, Distribution & Reposting: Transactions are not posted directly

into controlling module.
 Reposting, distribution and assessment in SAP used in controlling module to
allocate costs within the module between cost centers and
other cost objects. Reposting in SAP is used to rectify incorrect postings.
SAP CO sub Modules
Internal Orders (CO-OM-OPA)

 Internal Order: Internal orders are cost objects in Controlling-Overhead

Management. These cost objects are intended to be used as “temporary cost
collectors” for short-term projects or events in the organization. They are not
as structured or permanent as cost centers
SAP CO sub Modules
Internal Orders (CO-OM-OPA)

 Internal Order
SAP CO sub Modules
Internal Orders (CO-OM-OPA)

 Usage of Internal Order

 Monitor internal jobs settled to cost centers (overhead orders)
 Monitor internal jobs settled to fixed assets (investment orders)
 Offsetting postings of accrued costs calculated in CO (accrual orders)
 Display the cost controlling parts of Sales and Distribution customer not affect
the core business of the company (orders with revenues)
SAP CO sub Modules
Internal Orders (CO-OM-OPA)

 Real Order: All transactions related to primary costs are posted to real orders.
At the end of the period, all the actual costs captured in the internal order
get settled in the form of allocation to relevant cost objects.
 Statistical Order: In this type of internal order, the cost center is maintained
in the order as the real cost object. Thus, when a transaction is posted to this
type of order, the real cost is incurred by the cost center and the internal
order maintains a statistical balance. No settlement is required for this order
type and costs may not be allocated to multiple cost centers. In this way,
statistical orders are useful for internal analysis and decision making.
Other Topics

 Procurement to Pay (Procurement to AP)

 GR to Inventory (Inventory)
 Order to Billing (SD)
 WBS to Asset Capitalization (Project)
 Profit Center accounting and Reconciliation with FI
 Controlling areas – Concept on Budgetary control
 Procurement to Pay cycle

 Procurement to Pay (P2P)

 Procurement to Pay (Procurement to
AP)
P2P is a cross module topic where FI and MM modules connects with each other.
GR to Inventory postings happen during the process.
 Purchase Requisition (PR)
 Purchase Order (PO)
 Goods Receipt (GRN)
 Invoice (Invoicing)
 Payment
Procurement to Pay cycle
There is no accounting entry for creation of PR, Purchase Order, accounting
entries start from posting of GRN. At the time of GRN Accounting Entry will be
 Raw Material a/c Dr – (GRN Qty X PO Price) [310000]
 To GR-IR a/c [191100]
Procurement to Pay cycle
At the time of Invoice Accounting Entry will be
 GR-IR a/c Dr – (Invoice Qty X Invoice Price)  [191100]
 To Vendor a/c  [16000]
Procurement to Pay cycle
At the time of Payment to Vendor Accounting Entry will be
 Vendor a/c Dr – (Invoice Qty X Invoice Price)
 To Bank a/c
Procurement to Pay cycle
Transaction codes used in the P2P cycle are as below:
 Vendor a/c Dr – (Invoice Qty X Invoice Price)
 To Bank a/c
 ME51N – To Create purchase requisition
 ME21N – To Create purchase Order
 MIGO – To create Goods Receipt
 MIRO – To Create Vendor Invoice
 F-53 or F110 – To Make Vendor Payment
 Procurement to Pay (Procurement to AP) GR to
Inventory (Inventory)

 Important settings in SAP for FI-MM Integration are as below:

 Material Master
 Valuation class
 Movement Types
 Transaction Key
 GL accounts
P2P

 MM03 T Code
P2P

 OMSK T Code
P2P

 OMJJ T code
 Movement Types:
P2P Transaction Key
OBYC T code
P2P – Purchase order view – ME23N
Order to Billing (SD) or O2C
Order to Billing (SD) or O2C
Order to Billing (SD) or O2C
 Order to Billing (SD) or O2C

O2C is a cross module topic where FI and SD modules connects with each other.
 Sales Order (SO) – VA01 – No Accounting entry
 Pick/Pack/Ship/Delivery – VL01N
 Customer Invoice (Billing) – VF01
 Incoming Payment - F-28
O2C- Sales Order creation– VA01
O2C-Pick/Pack/Ship/Delivery – VL01N
 O2C-Pick/Pack/Ship/Delivery – VL01N

 Posting goods issue process is integrated with SAP FI (Financial

Accounting) module and generates automatic postings on G/L accounts:
 [debit] Cost of Goods Sold (COGS) account
 [credit] Inventory account
O2C - Customer Invoice (Billing) – VF01
O2C - Customer Invoice (Billing) – VF01

 Creation of a billing document usually automatically generates the following

entries in FI module:
 [debit] Customer account
 [credit] Revenue account
 [credit] Tax account
O2C - Incoming Payment - F-28
FI-SD Integration – Important settings
 T code – VKOA
 Condition Type: KOFI
 Chart of Accounts
 Sales Org
 Customer Account Assignment Group
 Material Account Assignment Group
 Transaction Key
 GL account
 Material Master
FI-SD Integration – Important settings
 WBS to Asset Capitalization (Project)
 AUC asset capitalization via WBS element needs integration of SAP PS module to SAP FI
Asset Accounting module. If materials are involved then even MM module will come into
picture.
 In SAP FI – AA- AUC asset class needs to be created with relevant settings.
 AUC Settlement Profile to be created.
 And in SAP PS module following needs to be created:
 Projects with Investment profile
 WBS Elements
 Other Relevant settings
 WBS to Asset Capitalization (Project)

 Creation of Project – CJ20N

 Creation of WBS under that project
 Creation of settlement Rule in WBS
 Budget allocation to the project
 Release of WBS
 Booking of cost either through direct FI posting or by MM route by creating PR. PR
should be created with account assignment P (for direct consumption) or Q (for
project Stock).
 Initial settlement through CJ88, it will reverse the cost booked on expense GL and
transfer the same to capital work in progress.
 TECO of the project
 Final settlement through CJ88 - it will reverse capital work in progress and transfer
the to Final asset.
WBS to Asset Capitalization (Project)

 Accounting Entries involved in the process.

 For Cost booking
 Expense a/c Dr (on WBS) to Vendor a/c Cr
 On GRN (P) - one step recording
consumption a/c Dr To GR/IR a/c Cr
 On GRN (Q) -two step recording
 Step 1 GRN movement type 101
 Inventory Dr to Gr/Ir cr
 Step 2 - Issue of material movement type 221 Q
 Consumption Dr(WBS) to Inventory Cr
 WBS to Asset Capitalization (Project)

 At the time of initial settlement ( WBS to AUC Asset)

 CWIP ac Dr
Expense Cr
Consumption Cr
 On final settlement (AUC Asset to Final Asset)
 Fixed Asset Dr
CWIP Cr.....
WBS to Asset Capitalization (Project)
WBS to Asset Capitalization (Project)
 AUC Asset Capitalization (Project)

 AUC Asset class

Project
WBS Elements
WBS to Asset Capitalization (Project)

 CJ31 T code
WBS to Asset Capitalization (Project)
CJ88 T code
AUC Settlement
 Profit Center accounting and
Reconciliation with FI
SAP New GL functionality:
 Segment Reporting
 IAS/IFRS/US GAAP requires Segmental reporting.
 Segment is provided in addition to Business area / Profit center.
 It is one of the standard account assignment object available for running
analyses of objects below the company code level.
 The objective is to give a detailed look at the various business activities
(markets / products) at a broad based enterprise. 
 Profit Center accounting and
Reconciliation with FI
 Features of New GL in SAP.
 Profit Center accounting and
Reconciliation with FI
 New GL Settings in SAP System
 Controlling area settings
 OKKP T code
 Profit Center accounting and
Reconciliation with FI
 Document Splitting
 Profit Center accounting and
Reconciliation with FI
 Document splitting settings in SAP.
Profit Center accounting and
Reconciliation with FI
 Controlling areas – Concept on
Budgetary control
 Budgetary control in SAP can be enabled at various levels.
 Project systems Level.
 Internal order Level
 By Implementing Funds Management Module and commitment management.
 Controlling areas – Concept on
Budgetary control
 Budgetary control in WBS Element:
 Controlling areas – Concept on
Budgetary control
 If you wish to control Budget at Internal Order - you need to do settings in
IMG > Controlling > Internal Orders > Budgeting

 Create a budget profile and assign it to your Int Order Type and Set up
availability control messages i.e. issue error when budget reaches 100%

 If you wish to control budget at cost center/cost element level - Then you
need to use Funds Management
Budget profile - IO
 Controlling areas – Concept on Budgetary
control – Funds Management
 The tasks of Funds Management are to budget all revenue expenditures for
individual responsibility areas, monitor future funds movements in light of the
budget available, and prevent budget overruns.
 SAP Funds Management enables us to keep a precise check on:
 1. The revenue expenditures
 2. Budget

 SAP Funds management is tightly integrated with other components of SAP such
as:
 1. Finance & Controlling: All expenditure booking updated in FM
 2. Material management: All PR, PO, GR and IV updated in FM
Thank you