SAP FICO stands for Financial Accounting (FI) and Controlling (CO). These modules of your ERP solution that has been designed to meet all accounting and reporting requirements. With a click of a button, you can gather information, prepare financial statements, analyze, reports and generate charts that can present to the management with higher accuracy and relevance. It is the go-to buddy that helps you carry out all the accounting and controlling responsibilities on time. Both the FI and CO modules store large amounts of financial data and the required tools that assist you in performing the various transactions, generate important reports and maintain a highly reliable financial system.
SAP FI Module
SAP Financial Accounting (FI) offers highly sophisticated means of financial transaction reporting and better handling of accounts. Banks are increasingly utilizing the external reports generated with the help of SAP FICO, administrators, Tax Authorities, stockholders, and managers, in line with their specific requirements. SAP FI is responsible for integrating different modules and generating a single system for the entire organization. In a nutshell, it draws data for external reporting procedures while its SAP Controlling Module (CO) emphasizes data for internal users.
Sub-components of SAP FI
- SAP FI General Ledger accounting
- Asset Accounting
- Funds Management
- Accounts Receivables
- Accounts Payable
- Special Purpose Ledger
- Consolidation
- Travel Management
- Bank Accounting
SAP CO Module
SAP Controlling (CO) is another essential SAP module offered to an organization. It supports monitoring, coordination, and optimization of all the processes in an organization. SAP CO involves recording both the consumption of production factors and the services provided by an organization.
SAP CO includes managing and configuring master data that covers cost and profit centers, internal orders, and other cost elements and functional areas.
Sub Components of SAP CO
- Cost Element Accounting
- Profit Center Accounting
- Cost Center Accounting
- Internal Orders
- Profitability Analysis
- Product Cost Controlling
The main objective of SAP controlling module is planning. It enables you to manage variances by comparing actual data with plan data and thus allows you to manage business flows in your organization.
SAP CO Integration with Financial Accounting. Both SAP CO and SAP FI modules are independent components in a SAP system. The data flow between these components gets the place on a regular basis.
Data flows relevant to cost flows to Controlling from Financial Accounting. The system assigns the revenues and costs to different CO account assignment objects, such as business processes, cost centers, projects or orders.
Benefits of Getting SAP FICO Certification
- The Financial Accounting module in SAP is designed to portray a company’s business transactions in a way such that it provides external reporting requirements. The system can track and report on multiple companies across countries with different currencies. The software also enables integration with sales and distribution, materials management and purchasing and allows the user to drill down to the original transaction, be it a sales order or purchase order or the movement of materials.
- SAP FICO module is believed to be the central point of an integrated SAP system because everything that has a financial impact on the other modules results in flowing to FICO automatically in real time. The financial influence of the transactions in other modules gets posted to FI. Hence it is essential to configure the FI/CO system as soon as possible, as this will be the supporting skeletal framework of the entire system as a whole.
- One of the most significant advantages of SAP is system integration. SAP FICO provides one of the most comprehensive worldwide financial management solutions available today. Using SAP FI/CO an organization can increase corporate performance. Besides, SAP FI enables you to quickly read, appraise, and respond to changing business situations and come up with effective strategies. Besides allowing faster process closes, one can simplify process scheduling, consolidation, collaboration and process workflow. Besides the above, SAP systems also allow for better transparency across units or departments, and improves corporate governance. SAP also provides a higher adherence to federal regulations, accounting standards and provides an improved overall administration of internal controls.
- SAP FICO also automates credit and collections management and disputes if any. SAP FICO also offers the creation of bills and invoices as well as payments electronically, which improve the traditional accounts payable and accounts receivable functions.
- Another advantage of SAP FICO is a better technique to manage cash across countries, locations or continents. Apart from this, it also enables you to assess, report, and allocate cash in real time, and set up in-house payment centers or banks.
- Besides improving financial and managerial reporting, SAP provides the flexibility to report performance according to the organization, cost center or business unit and also enhances integration of finance and treasury processes. One can also integrate risk and treasury functions with those of accounting and financial reporting.
- SAP gives a more competitive cost of finance and also serves you innovate processes, team up with partners across a supply chain, and build service operations worldwide in a collaborative manner.
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