SAP FI stands for Financial Accounting and it is one of important modules of SAP ERP.

It is used
to store the financial data of an organization. SAP FI helps to analyze the financial conditions of
a company in the market. It can integrate with other SAP modules like SAP SD, SAP PP, SAP MM,
SAP SCM, etc.

SAP Controlling (CO) is another important SAP module offered to an organization. It supports
coordination, monitoring, and optimization of all the processes in 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.

This is an introductory tutorial that covers the basics of SAP FICO and how to deal with its various
modules and sub-modules.

Audience
This tutorial will be extremely useful for professionals who aspire to learn the ropes of SAP FICO
and implement it in practice. It is especially going to help consultants who are mainly responsible
for implementing Financial Accounting and Cost Accounting with SAP ERP Financials.

Prerequisites
It is an elementary tutorial and you can easily understand the concepts explained here with a
basic knowledge of how a business deals its Financials. However, it will help if you have some
prior exposure to accounting and how to deal with financial data.
SAP FI stands for Financial Accounting and it is one of important modules of SAP ERP. It is used
to store the financial data of an organization. SAP FI helps to analyze the financial conditions of
a company in the market. It can integrate with other SAP modules like SAP SD, SAP PP, SAP MM,
SAP SCM, etc.

SAP FI comprises of the following sub-components −

 Finance Accounting General Ledger.

 Finance Accounting Accounts Receivable and Payable.

 Finance Accounting Asset Accounting.

 Finance Accounting Bank Accounting.

 Finance Accounting Travel Management.

 Finance Accounting Fund Management.

 Finance Accounting Legal Consolidation.

Where Do We Use SAP FI?

SAP FI module enables you to manage financial accounting data within an international
framework of multiple companies, currencies, and languages. SAP FI module mainly deals with
the following financial components −

 Fixed asset

 Accrual

 Cash journal

 Accounts receivable and payable

 Inventory

 Tax accounting

 General ledger

 Fast close functions

 Financial statements

 Parallel valuations

 Master data governance

SAP FI consultants are mainly responsible for implementing Financial Accounting and Cost
Accounting with SAP ERP Financials.

SAP FI has a collection of submodules, as depicted in the following screenshot −

Finance Accounting - General Ledger

A General Ledger contains all the transaction details of a company. It acts as the primary record
to maintain all accounting details. Common general ledger entries are customer transactions,
purchases from vendors, and internal company transactions.

Common T-codes that are used to maintain G/L accounting −

 F-06

 F-07

 FBCJ

 FB50

 FB02

Finance Accounting - Accounts Receivable and Payable

(AR / AP)
It includes the details of amount that is paid by the customer and the amount that is paid by
company to the vendors. In other words, AP includes all the vendor transactions and AR includes
all the customer transactions.

Common SAP AR T-codes −

  FD11

 FD10

 FRCA

 VD01

Common SAP AR Tables −

 KNA1

 KNVV

 BSIW

Common SAP AP T-codes −

 XK01

 MK01

 MK02

 FCHU

Common SAP AP Tables −

 LFA1

 LFM2

 LFBK

Finance Accounting Asset Accounting

Asset Accounting deals with all the fixed asset of the company and provides all the transaction
details about fixed assets. The asset accounting module of Finance Accounting works closely with
other modules like SAP MM, SAP Plant Management, EWM, etc.

Common T-codes used for Asset Accounting −

 AT01

 AT03

 AUN0

 ASEM

Example − When a company purchases an item that can be considered as an asset, the details
will be passed to Asset accounting module from the SAP MM module.
 Finance Accounting Bank Accounting
It deals with all the transactions done through bank. It includes all the incoming and outgoing
transactions performed, balance management and bank transaction master data.

You can create and process any type of bank transactions using the Bank accounting component.

Common Bank Accounting module tables that are used for this are −

 LFBK

 BNKA

 KNBK

Common T-codes with bank accounting −

 FIBLAROP

 OBEBGEN

 FI13

 FF_6

 RVND

Finance Accounting Travel Management

This module is used to manage all the travel expenses of a company. It involves all the travels
request, their planning and expenses involved in all the requested trips.

It helps an organization to manage travel expenses in an efficient manner, as it provides

integration with all the other modules of SAP.

Common Travel Management T-codes −

 PR05

 PRTS

 TRIP

 PR00

Common Travel Management tables −

 TA22B
  PTRV_HEAD

 FTPT_PLAN

 FTPT_ITEM

Finance Accounting Fund Management

This module is used to manage funds in a company. Fund Management module interacts with
other modules like Bank accounting, General Ledger (G/L, SAP AR/AP, and SAP Material
Management, etc. to get fund details.

It involves all the transactions for fund receiving, fund expenditure, and future expenses. It helps
a company to create budget forecasting and to use the funds in a proper way.

Common tables that store Funds management data −

 FMFCTR

 FMIFIIT

 FMIT

Common SAP Funds Management T-codes −

 FM5I

 FMWA

 FMEQ

Finance Accounting Legal Consolidation

It helps an organization to treat its multiple units as a single company, hence it enables to view
all the details as a single financial statement for all the companies under that group. An
organization can get a clear idea of its financial conditions as a single entity.

Common tables in FI Legal Consolidation module −

 FILCP

 MCDX

 GLT3

 T000K
Note − FI-Legal Consolidation module was supported in older versions of SAP ERP
implementation. This work is performed by SAP Business Process Consolidation BPC and SEM-
BCS now.

A company is defined as the smallest unit for which financial statements can be created in
accordance with commercial legal regulations.

In SAP FI, a company can comprise of multiple codes, however it acts as a single unit for which
financial statements are available. All the company codes must use the same chart of accounts
list and fiscal year, however each code can have a different local currency.

A chart of accounts list consists of all the chart of accounts that can be used and each code must
have one chart of account.

A fiscal year normally consists of twelve months’ time period where company creates the financial
statements.

SAP FI – Create Company

Login to SAP FICO
Use T-code SPRO → click on SAP Reference IMG → New window will open.
Expand SAP Customizing implementation guide → Enterprise Structure → Definition → Finance
Accounting → Define Company → click on Execute (see the pointer in the screenshot).

A new window will open → click on New Entries → New Entries: Details of added entry

You need to provide the following details to create a new company −

 Enter the company code to represents group of company.

 Enter the company name.

 Enter the full address-street, PO Box, postal code, city.

 Enter the Country.

 Enter the Language key.

 Enter the currency

The next step is to save the company details → CTRL+S or as shown in the above screenshot.

SAP FI – Create Company Code

In SAP FI, a company can comprise of multiple codes, however it acts as a single unit for which
financial statements are available. Company code is the smallest unit in an organization for which
financial statements (profit-loss statement, etc.) can be generated.

Create, edit, delete a company code

Let us discuss how to create, edit, and delete a company code. Take a look at the following
screenshot.
Expand Enterprise Structure as mentioned in the previous topic → Definition → Financial
Accounting → Edit, Copy, Delete, check company code → Execute using click on the watch image
→ New window will open → You can create a new company code by selecting both the options.

Select Edit, Copy, Delete, and Check Company Code. It allows you to copy all the configurations
and tables automatically.

If you select Edit company code, you will get the following window → click on New Entries and
update the code details.
You can click on the Address button and update the following fields. Once the Address field is
updated, click the Save button.
Business Areas are used to differentiate transactions that come from different lines of business
in a company.

Example

There is a big company XYZ which runs multiple businesses. Let us assume it has three different
domains like manufacturing, marketing, and sales.

Now you have two options −

 First is to create different company codes.

 And the other better option is to create each of these business lines into the business
areas.

The benefits of using Business Areas in this case are as follows −

 You can use these business areas if other company codes require the same areas.

 It is easy to configure if you use a Business Area, as you just need to attach to the
company code and the other details in that business area will get attached automatically.

 By using Business Areas in controlling, you can create Profit and Loss statement, Balance
Sheet, etc. for business areas. Hence it is used for management accounting in a few
companies.

Note − Business areas are used more in Controlling as compared to Finance Accounting.

How to create a new Business Area in SAP FI?

Expand Enterprise Structure as mentioned in the previous topic → Definition → Financial
Accounting → Define Business Area → Execute → Go to New Entries.
Enter the 4 digit Business Area code and save the configuration.
Function Areas in finance accounting are used to define the expenses in a company according to
individual function units. The most common Functional Areas are −

 Manufacturing

 Sales and Distribution

 Production

 Administration

How to Define a Functional area in SAP FI?

You can define a Functional Area using the T-code FM_FUNCTION (Earlier it was OKBD, but this
is obsolete). It will open a new window.

Click on Create Functional Area as shown below and a new window will open.

Enter the following details −

 Name of Functional Area.

 Description

 Validity to and from date

 Expiration date and Authorization.

Once all the details are provided, click the Save button at the top. Once you click Save, you will
see a message at the bottom that a new functional area has been created.
Functional Areas are used to create Profit and Loss statements using the cost of sales accounting
and they are also used to analyze the cost of sales accounting. For this, you need to activate the
cost of sales accounting as follows −

Go to SPRO → SAP Reference IMG → Financial Accounting → FI Global Settings → Company Code
→ Cost of Sales Accounting → Activate cost of sales accounting for preparation.
Credit Control in FI is used to check the credit limit for the customer and it can use one or more
codes. It is used for credit management in Application components such as Account Receivable
(AR) and Sales and Distribution.

The credit control area is determined in the following sequence −

 User exit

 Distribution channel

 Customer master

 Company code for the sales organization

How to define a Credit Control Area?

A Credit Control Area is defined in accordance with the areas of responsibility for credit
monitoring. Use the T-code SPRO → click SAP Reference IMG. It will open a new window.

Expand SAP Customizing implementation guide → Enterprise Structure → Definition → Finance

Accounting → Define Credit Control Area → Execute.
Click Execute → New entries → Enter the below details → Save. Now you have successfully
configured the Credit Control Area.

Once you create the Credit Control Area, the next step is to assign a company code to the credit
control area.
Expand Enterprise structure → Assignment → Finance Accounting → Assign company code to
credit control area → Execute.

A new window will open → click Position → it will open another new window. Enter the company
code and click Continue.

Enter the Credit Control Area in CCAR and save the details.
The General Ledger is used to record all the business transactions in a software system.

SAP FI – Chart of Accounts

The FI chart of accounts represents the list of GL accounts that are used to meet the daily needs
and the operating country’s legal requirement in a company. The master chart of accounts must
be assigned to each company code.

Chart of accounts (COA) can be divided into the following types −

 Operating Chart of Accounts − It contains all the General Ledger accounts that are
used to meet the daily needs in a company. The operating chart of accounts has to be
assigned to a company code.

 Country Chart of Accounts − It contains a list of all General Ledger accounts that are
required to meet the operating country’s legal requirements. You can also assign a
company chart of account to the company code.

 Chart of Accounts Group − This COA group contains a list of all the G/L accounts that
are used by the entire company.

How to create a new Chart of Accounts?

You can create a new Chart of Accounts by using the T-code OB 13 or by going to Finance
Accounting → G/L accounts.

Type the T-code OB13 in SAP Easy Access and it will take you to the following screen −

This window can also be opened by following the path −