SAP FICO Definitions

Posted by on Jun 12, 2019 in Tutorials | 0 comments

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.

Asset Accounting: deals with all the fixed asset of the company and provides all the transaction details about fixed assets.
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.

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

Company Code: is the smallest unit in an organization for which financial statements (profit-loss statement, etc.) can be generated.

Business Areas: are used to differentiate transactions that come from different lines of business in a company.

Function Areas: in finance accounting are used to define the expenses in a company according to individual function units.

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.

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 Group: effectively manage and control a large number of G/L accounts, you should use COA groups.

Retained Earnings Account: is used to carry forward the balance from one fiscal year to the next fiscal year. You can assign a Retained Earning Account to each P&L account in the chart of accounts (COA).

General Ledger (G/L) Accounts: are used to provide a picture of external accounting and accounts and to record all the business transactions in a SAP system.

Financial Statement Versions: are used to create the financial statements, to run account balance reports and for General Ledger accounting planning.

Journal Entry (JE) Posting: in SAP FI is to take a batch, validate it for consistency, and create FI documents and post those entries in various line item accounts needed for subsequent business processing.

Fiscal Year Variant: contains the number of posting periods in a fiscal year and the number of special periods. You can define up to 16 posting periods in a fiscal year in the controlling component CO.

Posting Period Variant: is used to maintain accounting periods that are open for posting and all closed period are balanced. This is used for opening and closing period in the fiscal year for posting purpose.

Field Status Variant: is used to define the fields which are used for input like cost center, profit center, plant, etc., which are entry fields, and hidden fields. Field status Variant is a tool which is provided by SAP to assign the same set of properties to more than one object.

Field Status Group: is assigned to GL account. Through field status group, one can define a field as optional, suppressed, or mandatory. According to the field status groups, respective fields will be displayed are mandatory or suppressed when the postings are made to that GL account.

Posting Keys: are used to determine Account types (A, D, K, M, and S) and also the type of posting. It is 2-digit numerical key.

Document Type Key: is used to distinguish between different business transactions and to classify the accounting documents. It is also used to determine the number range for documents and account types such as asset, material, vendor, etc. for posting.

Accounts Receivable: component records and manages accounting data of all customers. It is also an integral part of sales management.

Accounts Payable: is used to manage and record accounting data for all the vendors. All invoices and deliveries are managed as per vendor requests. Payables are managed as per the payment program and all the payments can be made using checks, transfer, electronic transfers, etc.

Vendor Master Records: are used by both the Accounting component and the Purchasing component.

Cost Center: is defined as a component in an organization that adds to the cost and indirectly adds to the profit of the organization.

Profit Center: is used for managing internal controlling. When you divide your company into profit centers, it allows you to delegate responsibility to decentralized units and treat them as separate companies in a company. It also allows you to calculate key figures in cost accounting like ROI, Cash flow, etc.

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