SAP FICO is one of the most popularly used SAP modules. This is used by companies for handling their financial data. It is a combination of two modules – SAP FI and SAP CO. As business operations are executed daily, a lot of financial data is generated. This includes sales orders, transactions, and purchases. The software is also used along with SAP ECC.
In this post, we will talk about the different features of SAP FICO, its functions, advantages, and implementation.
SAP FICO consists of two modules - SAP Finance (FI) and SAP Controlling (CO). Both of these modules are designed for specific functions. The SAP FI module deals with financial accounting and reporting. The CO module deals with monitoring costs and financial planning. The software aims to assist companies to make the process of financial planning and analysis easier. All this helps in making better financial decisions.
SAP FICO can be integrated with other SAP Logistics modules, including –
SAP FI can integrate different modules into a single system for the company. This software offers all the features for handling financial transactions and accounts. The reports generated by SAP FICO are used widely by banks, tax authorities, managers, and stakeholders. The software also generates financial statements. These include profit/loss statements and balance sheets.
SAP FI has the following sub-modules that have specific functionalities –
i) General Ledger –This is used to provide a complete report for internal/ external accounting. It contains the company’s transaction data and lists all the accounts. These can be recorded in sub-modules in real-time.
ii) Accounts Receivable –These are records that are used to manage all customer accounting data. It is also used to manage customer accounts and transactions. These transactions include invoice payments, down payments, invoice posting, and customer reports.
iii) Accounts Payable –These records have vendor accounting data. It also consists of data regarding vendor transactions and vendor accounts.
iv) Asset Accounting –This sub-module is used for managing the company’s assets. This includes all fixed assets such as heavy equipment, land, and buildings. The module also has asset transactions including sales, transfers, revaluations, and asset acquisitions.
v) Bank Ledger –This contains all the bank account transaction data. It can merge all transaction data on bank statements. Then, it can compare the data with transactions stored in the system.
vi) Consolidation –This sub-module allows the company to combine all financial statements from multiple entities. It also provides a complete view of the firm’s financial health.
vii) Funds Management– It is used for managing the budgets for revenues and expenses.
Special Purpose Ledger– This defines the SAP FI ledgers for financial reporting.
Travel Management– This manages all transactions regarding travel processes. This will include booking trips and managing travel expenses.
To implement SAP FI, it needs to be configured. The Business Manager has to make the primary configurations. These configurations are required to gather client needs, business requirements, and other configurations. After this, all financial statements and Master Data is migrated to SAP FI. This configuration process also requires currencies, fiscal year variants, and charts of accounts.
After the process is over, document posting is posted automatically. This allows companies to observe their financial status in real-time. This, in turn, enables the company to track all their financial transactions, which also helps in financial reporting at the end of their financial year.
This module supports monitoring, controlling, and optimization of business processes. It includes facilities for managing master data. This data covers cost centres, internal orders, cost elements, and other areas. The main purpose of introducing this module is planning. Companies can compare their planned data and actual business data to analyze the variances.
The different sub-modules of SAP CO are given below along with their functionalities –
i) Cost Elements –This provides you with an overview of the costs and revenues of the company. These are based on income statements. Cost element accounting defines the cost origins and also represents different company costs. Most of these values are transferred from Financial Accounting to Controlling.
ii) Cost Centers Accounting –This sub-module is used for controlling activities. It deals with the expenses associated with the company’s internal departments. These departments include marketing, production, sales, and HR. The Cost Center includes only expenses and not revenues.
iii) Profit Centers –It consists of all the cost data about the company’s business lines. This module deals with expenses and revenues.
iv) Internal Orders –The module is used for managing all expenses of smaller internal projects/ non-fixed assets.
v) Profitability Analysis –Companies analyze their profit and losses using this sub-module. This is a vital process for decision-making. Measuring product profitability, pricing, and evaluating target markets. This eases the process of profitability analysis for each region of business. Additionally, customer profitability, distribution channels, and product types can also be analyzed.
vi) Product Costing –This module deals with all the costs related to the company’s goods and services. This helps in optimizing business efficiency and manufacturing costs.
The implementation of SAP CO is essential for any company to analyze cost data of internal management processes. SAP CO implementation helps companies to handle the database of business information. A proper implementation will lead to business reporting and decision making.
The most useful benefits of using SAP FICO are –
Having a solid background in SAP FICO helps employees to handle reporting and finance accounting better. It is important to learn about the business environment, financial planning, and asset accounting. There are several training paths which you can choose –
Some institutes also offer a comprehensive SAP FICO course. This usually lasts for 6 months.
An individual having comprehensive knowledge about SAP FICO and its sub-modules can get employed as a SAP FICO Consultant. Having 2 to 3 years of experience in working with SAP FICO modules will help them become a successful SAP FICO consultant.
Read Here: SAP FICO Training
To become a successful employee in the FICO field, he/ she needs to have an educational background in Finance, Accounting, and Management. A UG degree in any of these subjects will be great for candidates to understand the SAP FICO courses better. Additional courses in Accounting and Financial Management will be a plus.
Skills required to be a SAP FICO Consultant –
The primary role of a SAP FICO Consultant is to implement the SAP FICO module for his/her company. They refine existing financial methods and perform system configuration. All this is based on the particular business needs and financial condition. The consultant must also have the ability to understand the client’s point of view.
On average, a SAP FICO Consultant earns INR 6,87,233 annually. The salary starts at 359 LPA. With a few years of experience and skills in finance and accounting, the candidate can rise in the ranks of the finance department with a SAP FICO certification under his belt.
Major companies hiring SAP FICO Consultants –
The SAP FICO software set has been proven to be the foundation of finance and controlling for modern organizations. It has successfully enhanced the financial operations of many companies. Thus, many more companies are adopting it. And career-wise, it is great for employees in finance or human resource looking to take their career to the next level.