SAP FICO

Topics
Financial Accounting
General Ledger
Accounts Receivables
Accounts Payables
House Bank
Asset Accounting
 Financial Accounting
The main configuration or customization
needs to handle for following areas
- Fiscal year
- Posting period
- Chart of Accounts
- Retained Earning A/c
 Accounts
Accounts Payables
Receivables (Materials
(Sales & Distr.) Management)

General Ledger

Bank Fixed Assets

 General Ledger

Being the main ledger all sub-ledger balances

are always gets updated in the general ledger
in real time.
The balances from this ledger are shown
in the financial statements.
The control accounts from general
ledger gets link to all sub-ledger accounts (i.e.
Reconciliation accounts)
 Accounts Receivables
(Customer accounting)

All records of customer (master and transactions) are

handled independently in AR module.
Though the AR works independently these
transactions are updated in the general ledger
automatically at the same time.
Separate reports are available to access customer
details such as -
- Customer analysis
- Aging report (due date analysis)
- Individual customer balances
contn
 Accounts Receivables
(Customer accounting)

Generally all the basic entries will be

entered in the Sales and Distribution
module and then subsequently will be
passed to FI automatically. So the
documents from SD module are called as
reference (base) documents.
Transactions
Customer Invoice
It is also called as Outgoing Invoice. Actually this
invoice is generated in the SD module and then
passed (Release) on to the FI.
After invoice, all activities (e.g. payment, dunning,
interest charging, correspondence) are taken care by
FI.
In AR [FI] it is also possible to enter invoice directly
which will be without referencing to any previous
documents (like sales order or delivery).
 Payment can be handled in many ways
- Full payment (Invoice will be cleared)
- Part payment (Inv. will not be cleared
until rest amount is
received)
- Cash discount (Updates Discount a/c)
- Residual payment (Clears invoice and
creates open item for rest
balance)
- Down payment (Payment is received
prior to sending invoice)
 Accounts Payables
(Vendor Accounting)

The functionality of AP module is exactly opposite to the AR.

All records of vendor (master and transactions) are handled
independently in AP module.
Though the AP works independently these transactions are
updated in the general ledger automatically at the same
time.
Separate reports are available to access customer details
such as -
- Vendor analysis
- Individual vendor balances
contn
 Accounts Payables
(Vendor Accounting)

Generally all the basic entries will be entered in

the Materials Management module and then
subsequently will be passed to FI automatically.
So the documents from MM module are called
as reference (base) documents.
The major area handled by MM module is stock
(quantity and value) updating which is NOT by
AP.
In short, these AR and AP sub-ledgers are
called as an extension to SD and MM
modules.
The receipts and payments are taken care by
AR and AP. So these entries by means of
Bank which is another sub-ledger, reaches to
general ledger. Simultaneously customer and
vendor accounts will be cleared from
outstanding list.
Banks
Banks
This sub-ledger also called as House bank (bank
details of your company) .
This sub-ledger allows you to maintain detail
information of your companies bank account and
transactions passed with the same.
This sub-ledger has following features
- Payment methods
- Check printing
- Amount limits (maximum and minimum)
- Bank statements (Reconciliation statement)
 Automatic payment program
Instead of using manual payment method to
pay for more than one invoice in single
activity, you can use Automatic payment
program after configuration.
You need to configure
- Your company details
- Minimum amount to be paid/received
- Foreign currency dealings allowed or not?
- Payment methods (printing program)
- GL accounts, ranking order and so on
Asset Accounting
Asset Accounting
This sub-ledger allows you to maintain all
fixed assets.
The asset values including cost of asset,
depreciation value and retirement (sale value)
of asset are maintained in detail in the Asset
chart (Register).
The assets life, depreciation rates,
depreciation methods are handled very neatly
in the system.
Asset Accounting
Various reports are available to view asset
values
- Asset explorer
- Asset account balances
- Asset history sheet
- Depreciation reports (According to
Company Act and Income Tax Act)
SAP COSTING
Controlling
Controlling
Costing (controlling) module is an extension to
financial accounting.

Data for this is not only contributed by the financial

accounting but also by Sales and Distribution and
Materials Management and production planning.

Controlling module not helps in controlling the cost

but also for planning / budgeting for various cost
objects such as cost center, activity types and so on.
 Reports of Controlling
Helps management in decision making
whether to make or buy
Whether to continue a particular activity or not.
measure profitability of your products in the market.
The management can think on change of any strategy to
follow in the future on the base of such reports.

These reports are used for internal (MIS) purpose,

they are not required to submit to the third parties or
govt. authorities or auditors.
Allocation of Costs
The important aspect of controlling is cost
allocation (distribution of cost).

If the cost which is incurred for a specific

reason, which is not possible to attach to a
particular object such as cost center, then
this allocation methods can be used to
transfer the cost in the required ratio (basis).
Maintain Controlling Area
Cost Element A/c
Cost elements are nothing but classification
of the organization's valuated consumption of
production factors within a controlling area.
A cost element corresponds to a cost-relevant
item in the chart of accounts.
It is not an accounting system as such, but
rather a detailed recording of data that forms
the basis for cost accounting.
Cost Element A/c
They are used as media or purpose for which
a business transaction was took place.

They are or two types

- Primary
- Secondary
Cost Element A/c
Primary Cost elements
These are the GL (Profit and Loss) accounts from
your chart of accounts.

Secondary Cost elements

These are not dependent on GL accounts
and hence they have no financial impact.
Cost element that is used to allocate costs
for internal activities.
Creating Cost Element
Creating Cost Elements (Contd..)
Cost Center A/c
Cost center is nothing but the organizational unit for
whom the cost is being incurred.

Cost center structures and characteristics depend on

the accounting objective you are following and the
cost accounting system you decide to implement.

The cost center accounting can be used in various

ways that the organization wants.
Cost Center A/c
They can be used to measure the cost at each
segment within the organization.

Cost allocation (distribution of cost), planning and

budgeting and so on are some of the functionalities
for which cost center accounting can be used.

Various reports are available for the management for

analyzing variance between plan/actual/target
values.
Creating Cost Center
Cost Center Hierarchy
Cost allocation
The cost incurred by one object (cost center) and be
allocated (distributed) to other cost objects (cost
center, order and so on).

You can use Distribution method for allocation of

cost. You can use certain parameters on the base of
which the allocation is to be made. They are
- Base for sender (fixed amount or percentage)
- Base for receiver (fixed amount or percentage)
- Actual ratio (according to base taken)
 Cost allocation (Contd..)
The result will be
The cost gets allocated according to the
parameters specified for the given period.
Distribution Cycle for Allocation
 The cost incurred by one object (cost center) and
be allocated (distributed) to other cost objects (cost
element , order and so on).

You can use Assessment method for allocation of cost. You can use
certain parameters on the base of which the allocation is to be made . They
are
-Base for sender (fixed amount percentage)
- Base for receiver (fixed amount or percentage)
- Actual ratio (according to base taken)
Assessment