SAP FICO is an important core functional component in the SAP ERP central component that allows the organization to manage all financial data. SAP FICO allows the organization to save the full version of its financial transaction data. Specifically, the purpose of SAP FICO is to help companies produce and manage financial statements for analysis and reporting, as well as to assist in effective business planning and decision-making.

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SAP FICO (SAP Finance and SAP Controlling)
SAP FICO is an important core functional component in the SAP ERP central component
that allows the organization to manage all financial data. SAP FICO allows the
organization to save the full version of its financial transaction data. Specifically, the
purpose of SAP FICO is to help companies produce and manage financial statements for
analysis and reporting, as well as to assist in effective business planning and decision-
making.
SAP ERP Central Component (SAP ECC) is a company resource planning system
(ERP) in places that are commonly referred to as "SAP ERP." SAP FICO AIDS ECC
in the financial accounting and control functions.
SAP FICO consists of two parts, SAP (FI) and SAP Controlling (CO). Each is used
for certain financial processes. SAP FI deals with overall financial reporting and
accounting, while SAP CO is focused more narrowly on the cost of planning and
monitoring. SAP FI and Sap CO were initially released as separate modules but
now it is very integrated so many people call them a module.
SAP FICO is also integrated with other SAP Logistics Modules, including Sales and
Distribution (SD), Production Planning (PP), Factory Maintenance (PM), Quality
Management (QM), and Material Management (MM).

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SAP FI Modules
SAP FI allows the organization to make financial statements for reporting and
analysis. Types of financial statements can include balance sheets or income
statements. SAP FI consists of several sub-modules that handle specific accounting
processes:
The general ledger contains all company transaction data in the account chart. This
includes all accounts in the system. Transactions are recorded in sub-modules that
can be recorded in real-time with general ledger data.
Receivable accounts capture customer transactions and manage customer
accounts. Transactions include invoice posting, credit memo posting, down
payment, payment of invoices, or carrying out customer reports.
The account paid involves all transactions with vendors and managing vendor
accounts. Transactions can include invoice posts, credit memos posts, advance
payments, invoice payments, automatic payment programs, and carry-out vendor
reports.
Asset Accounting manages all transactions related to the company's fixed assets,
such as land, buildings, and heavy equipment. Transactions include the acquisition
of assets, retirement, sales, transfer, revaluation, and depreciation.
Bank books deal with all transactions and company bank account data. This can
reconcile all transactions recorded in bank reports and compare them with
transactions in the system.
Consolidation allows companies to combine financial statements for various entities,
which provide a general picture of the company's overall financial position.
Management funds manage the budget for company revenue and expenditure.
Books Special Purpose Determine the ledger at SAP FI for reporting purposes.
Travel management manages all transactions for the trip process, including ordering
trips and handling costs related to travel.
SAP CO Modules
While SAP FI deals with company accounting and internal and external reporting, SAP
Co supports the process of planning, reporting, and monitoring costs from business
operations. SAP CO can play a role in increasing company profitability. Similar to SAP FI, ​
​
SAP CO consists of sub-modules that handle specific processes:

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The cost element, which provides a general description of all costs and company
revenues based on the income statement - is also known as the income report.
Accounting for cost elements explains the origin of costs. Cost elements represent
specific costs incurred by the company.
The cost center handles costs related to the company's internal division or
departments, such as sales, production, marketing, or human resources. The cost
center only involves costs, not income.
The profit center handles all cost data related to the company's business line. This
is related to costs and income - unlike the cost center, which is only related to
expenses.
Internal orders are used to manage costs for smaller internal projects or non-fix
assets-such as limited-time marketing campaigns, for example.
Profitability analysis allows companies to analyze the profitability of their products.
For example, profitability analysis can be useful for making decisions about things
such as product prices, distribution channels, and target market segments. This
also allows detailed levels in analyzing profitability, such as for each region or
country, types of products and distribution channels, or profitability of individual
customers.
Product Costs Managing data about the costs required to produce company goods
and services. Product cost analysis can help manage production costs and optimize
efficiency.
General ledger accounting
All general ledger accounts used for reporting are managed through public ledger
accounting. In SAP a set of all ledger accounts used by companies or groups of
companies is called account charts. This is an account that will be used in preparation for
financial statements. Most transactions are recorded in the sub-module and they are
reconciled with a general ledger in real-time. Transactions that can be done directly in
general ledger accounting including journal vouchers posted to adjust or correct
transactions. Reversing can also be done from general ledger accounting. The balance in
the ledger account can be displayed and the experimental balance is extracted from the
system.
Accounts Receivables
Accounts receivable in SAP FICO are sub-models that capture all transactions with
customers and manage customer accounts. Separate customer accounts will be
maintained and when transactions are posted on the customer's account, the
reconciliation account in a general ledger is updated with numbers in real-time.
Transactions in account receivables include invoice posting, credit memo posts, down
payment, payment of invoices, dunning, and carrying out customer reports.

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Accounts Payables
The debt account is a sub-module that captures all transactions with vendors and
manages vendor accounts. Separate vendor accounts are maintained and when
transactions are posted on the customer's account, the reconciliation account in a general
ledger is updated with real-time numbers. Transactions in account debt include invoice
posting, credit memo posting, down payment, payment of invoices, automatic payment
programs, and carrying out vendor reports.
Asset accounting
Asset accounting at SAP FICO manages all transactions related to assets for an entity.
When transactions are posted on an asset account, reconciliation accounts in general
ledgers are updated in real-time. Transactions in asset accounting include the acquisition
of assets, asset retirement, asset sales, asset transfer, asset revaluation, and asset
depreciation.
Bank Accounting
Bank accounting captures all transactions with banks. Bank reconciliation is carried out to
reconcile all transactions recorded in bank reports that compare them with transactions in
the system.
All SAP FI sub-modules are integrated and transactions are renewed in real-time, which
means accurate financial statements can be extracted from the system at any time.
Summary
INTRODUCTION SAP FICO: SAP FICO Module is an ERP SAP Module that is
used for financial reporting both externally and internally.
SAP Fico means: SAP Financial Accounting (FI) and Controlling (CO)
All general ledger accounts used for reporting are managed through public ledger
accounting. In SAP a set of all ledger accounts used by companies or groups of
companies is called account charts.
Accounts receivable accounts are sub-models that capture all transactions with
customers and manage customer accounts.
The debt account is a sub-module that captures all transactions with vendors and
manages vendor accounts.
Assets accounting manages all transactions related to assets for an entity.
Bank accounting captures all transactions with banks.
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