The term FICO stands for Financial Accounting and Controlling. It is a crucial tool that helps in preparing the financial statements, tax statements, and accounting of an organization. It also serves a primary software to manage the data and generate the results on the basis of the current marketing trends. In short, it is a significant tool who wants to manage their day-to-day transactions.
Fixed assets Management General Ledger Banks.
General ledgers are basically the records of the financial transactions that took place in an organization. It is the primary records that are necessary to track and manage all other accounting details.
The primary organizational elements in the SAP FI are: Business area Functional area Company code Chart of account.
The position key is used to determine the type of transaction that took place in an organization and has entered in the line item. Fico professionals often use it to determine the type of entry, debit or credit, and field status.
The company is significant when it comes to generating profit and loss statement, balance sheet, etc. As an important aspect of the SAP FICO, company code is used to prepare each financial sheet.
Professionals who are using company code to generate financial statement can have only one chart of accounts.
Those who are leveraging company code in the first place can configure three currencies in which one will be local while others can be parallel currencies. However, it is not necessary that users can only 3 currencies, it mainly depends upon the organization.
When it comes to the business calendar, it is not really necessary to have 30 days working. Depending on the nature of the business, the organization can end the month 2 to 3 days earlier. For instance; if the company wants it can end the month of august on 29th day. The same thing can be implemented in the SAP through dependant fiscal year.
Unlike other accounting software, the Fico doesn’t have the previous broker year and it only revolves around the calendar year. However, it is compulsory that for all the organizations that calendar year is the financial year. Professionals can always add or remove months according to their needs through the process of Year shift.
One of the most common issue people faces while calculating the tax is slabs are never the same in every country. As every nation has its own taxes that are applicable, it can be difficult to calculate and pay accordingly. the SAP FICO has various tax procedures defined and divided according to different nations. Plus, users can also make changes in them according to their needs. Hence; calculating taxes in the SAP FICO is not an issue.
In the SAP FICO, FSV works as a reporting tool that is used to extract account related files from the SAP such as profit and loss sheet, balance sheet and more. various FSV can be used to extract different accounting records for external agencies.
Methods that are used to make the vendor invoice payment are: – Manual payment where the users go with an output medium like cheque, drafts, etc. Automate payment where the amount is directly transferred via wire transfer.
The key problem faced by the users during the configuration is dividing the account balance which is relevant during the case of tax accounts.
Good receive and invoice receive are the intern accounts in the SAP FICO. In the general legacy system when the goods are received by the firm but the invoice is not received then the provision will be made in the SAP at goods receipts. When the firm receives the invoice the vendor’s account gets credited at the same time GR/IR account gets debited. During the entire process, the GR/IR account will show the status of un-cleared until the invoice is received.
The internal orders are useful when it comes to tracking down the cost: they are just subject to the short-term changes.
Yes, the SAP FICO allows users to calculate the depreciation to the day. In order to do it, the user has to switch his account to indicator Dep. to the day he wants to calculate the depreciation.
The core components in the charts of accounts include: Name Language Chart of the account key Controlling integration Block indicator Group charts of accounts
To make sure your company doesn’t go through a major loss due to the bad debts and outstanding receivables, SAP FICO allows you to set the credit control area. With this feature, you can stop making the product deliveries on credit based on the credit limit you have set. This will eventually protect you from the big loss in the long-term.
Field status group is the group that is configured in FSV to control the field status for the general ledger account. It controls which status should display, suppress and optional.
The short-fiscal year is the result of the process when the user changes from the fiscal year to non-fiscal year or do the other way around. Such big changes take place when an organization becomes a part of the co-corporative group.
The primary role of document type is to define the number range of documents, types of accounts that are controlled by it and reversal of entries.
When it comes to storing customer and vendor codes in the SAP, they are carefully stored at the client level. Moreover, it also means that extending the company code any organization can leverage the customer and vendor code.
Tolerance defines whether the accounts or tax hold are on the invoice or not. Here are some of the common examples of tolerance that can be further defined in logistic invoice verification: – Small differences Quality variance Price variance
Country charts of accounts contain the general ledger accounts that are necessary to meet the legal requirements of a country.
For companies that deal with the high cash transaction, it is not practical to create the transaction code for each trading vendor. Therefore, the one-time vendor provides the one- time code for a vendor that can be used to make transactions and store the information.
Dunning refers to the process through which the payment chasing letters are issued to the customers. SAP is responsible to determine which letter will be issued to which customer for which overdue.
The user who is creating the credit area in SAP needs to provide the description, controller name, currency, and risk category. Once done, they need to fill the fiscal variant to complete the credit area creation which will limit down their credit.
Posting period variants refers to the time frame in which the transaction figures should be updated. It usually depends upon the control accounting period.
The field status refers to a method that is used to maintain the general ledger accounts in the SAP. It generally controls the fields which provide information to other primary accounts.
Organizations that trade on the international levels are allowed to add more currency options with their local currency. They are free to use any two currencies that are parallel to their local currency. It is often known as group currency in SAP.
The meaning of SAP FICO is FI (financial accounting) and CO (controlling). The financial accounting, as the name suggests, looks at the preparation of financial statements, tax computing, and basic accounts. The control aspect looks at cost allocation, inventory, etc. Overall this software stores prevents loss of and handles the verification of data.
The four other departments which utilize financial accounting are… Human Resources, Sales and Distribution, Production Planning and Material Management.
Some of the organizational elements in SAP FI are as follows…Company Code, Business Area, Functional Area and Chart of Accounts
“Posting key” is the two-digit numerical which is used in order to understand which type of transaction is being inserted in the line item.
The posting key control the following aspects…Types of Accounts, Posting types (debit or credit) and the Field Status of Transaction.
The Company Code is used for generating profit and loss statements, balance sheets, etc. in SAP.
One Company Code can have only one official Chart of Accounts which is predetermined.
In totality the are three currencies which can be configured for a Company Code. Out of these, one would be a local currency and the remaining two would be parallel ones.
There are two options for determining the fiscal year in SAP… the first one is the regular Calendar year from January-December, April-March. The second option is the year dependent fiscal year.
Some of the application areas that use validation and substitutions are as follows… Profit Centre Accounting, Consolidation, Cost Accounting, Financial Accounting, Asset Accounting, Real Estate.
In SAP, FSV stands for Financial Statement Version.
FSV is basically a reporting tool and is used to extract financial data like profit and loss, information from balance sheets, etc.
A field status group is what is used to control the fields which auto-populate when transactions are carried out.
FIGL stands for Financial General Ledger.
Some of the methods by which vendor invoice payments can be carried out are…through cheques, through wire transfer, and through DME (data medium exchange).
Internal orders can be used to track the cost. This is usually preferred when cost is incurred on a short-term basis.
Yes, it can be calculated to the day.
Some of the main components are…chart of account key, maintain the language, controlling integration, block indicator, consolidation group chart of accounts.
This term is used when one changes from a normal fiscal year to a non-calendar fiscal year or vice versa. This usually happens during the time of certain internal mergers.