SAP S4 HANA FICO
Interview Questions
What do you mean by Company in SAP?
• Company is an organizational unit (a legal entity), where we will store all the company code info. and
company may contain more than one company code.
• Company is the highest Hierarchy in the FI structure, where it is represented by company code.
• Path: SPRO SAP Reference IMG Enterprise structure Definition Financial Accounting Define Co.
What do you mean by Company Code in SAP?
• Company code is an organizational unit used in accounting, used to structure the business from a financial
perspective.
• At company code level accounting entries are posted.
• At company code level only, we will generate F.S. individually but they are linked for consolidated financial
reporting at the group level.
• Whatever currency is maintained during company code creation is the local currency of specific co. code.
• Path: SPRO SAP Reference IMG Enterprise structure Definition Financial Accounting Edit, Copy,
Delete, Check Company code.
What do you mean by Segment in SAP?
• Segment means dividing.
• Why Segments? Generally, principles of US GAAP, IFRS requires company to perform segment reporting.
• Segment reporting is particularly important for internal management reporting and performing analysis.
• Segments are used to create Consolidated financial reports for different parts of the company.
• Path: SPRO SAP Reference IMG Enterprise structure Definition Financial Accounting Define Segment.
What is Profit Center and use of it?
• One of the New GL Concepts.
• Profit Centers in SAP allow organizations to track and analyze the profitability of different business segments, divisions, or units, and support
internal decision-making, budgeting, and performance management. They are an essential tool for financial management within the Controlling
(CO) module.
• Uses: Profitability Analysis, Budgeting and Forecasting, Internal Decision making, Costs and Revenue allocations.
• Configuration:
• 1)Profit center has to be activated in controlling Area.
• SPRO Financial accounting GL A/Cing Master data Profit center Activate profit center accounting in controlling area. (enable)
• 2) Define profit center standard hierarchy in Controlling Area.
• SPRO Financial accounting GL A/Cing Master data Profit center Define profit center standard hierarchy in controlling area. (give any name for
ex: JKCA_PCA).
• 3) Define standard Hierarchy (Profit center group) T- Code: KCH4.
• SPRO Financial accounting GL A/Cing Master data Profit center Define standard hierarchy.
• 4) Create Profit Center T- Code: KE51
• SAP Menu A/Cing Financial A/Cing GL Master records Profit Center individual Processing Create.
• Have to activate after creating Profit center.
What is the use of Cost center?
• Cost Center is primarily used to track Costs and allocate them to the correct part of the business for internal
accounting and reporting.
• USES: Cost tracking and Management, Internal reporting, Cost planning and Budgeting, Cost Allocation,
Integration with other modules FI (effects the financial a/c ing reports), MM (material costs incurred can be
assigned to specific cost centers), SD (Revenues and Sale activities can be linked to Cost centers for analysis
and reporting).
• Chat GPT:
• Create Cost Center T-Code: KS01.
What is Chart of Accounts and use of it?
• Chart of Accounts is a set of general ledger (G/L) accounts used for recording financial transactions in the
Financial Accounting (FI) module.
• A Chart of Accounts outlines how financial data is organized in SAP, and it plays a crucial role in the General
Ledger , where the majority of financial data is posted. It also provides a standardized structure for
generating financial reports such as balance sheets, income statements, and other financial statements.
• USES: Financial data organization, GL Posting, Budgeting and Forecasting etc..,
• Chart of Accounts will be assigned to Company code, Chart of Accounts is used to create accounts group and
from there GL’s are created, Document entries are posted, generation of reports.
How many types of chart of accounts are there in SAP and use of each one?
• TYPES: There are three types (five types as per Chat GPT)
• Operational COA: GL’s that are used for daily/monthly/yearly transactions. (Ex: Rent, electricity etc..,) This is
the primary chart of accounts used by the company to record and manage financial transactions in the
general ledger. It serves as the central point for creating financial statements. (Mandatory)
• USES: This chart is used to maintain and manage all the company's financial accounts and is linked with other
financial structures such as company codes and controlling areas.
• Country Specific COA: A country-specific chart of accounts is required for compliance with local statutory
accounting regulations and tax laws.
• USES: This chart of accounts is used when the company is required to comply with country-specific legal
reporting requirements. It is often mapped to the operating chart of accounts for consolidated financial
reporting.
• Group COA: GL’s used for high level reporting purpose or for corporate reporting.
• USES: It is used when multiple companies or legal entities (often in different countries) are consolidated at
the group level. This allows the organization to produce group-wide financial statements.
• Segment and Functional.
Is it possible to assign one COA to multiple Company codes?
• Yes, we can assign.
• Assign Company code to COA: T-Code: OB62.
• Define Accounts Group: T-Code: OBD4.
How many COA can be assigned to one Company code?
• Only one,
What do you specify in COA?
• In summary, when setting up a Chart of Accounts in SAP, you define key components such as:
• The COA ID and description. T-Code: OB13.
• Account groups for various types of accounts.
• The length of account numbers and their structure.
• Posting restrictions and account lock configurations.
• Integration with other modules and tax categories.
• Reconciliation accounts and account assignments for accurate financial reporting and transaction processing.
