SAP FICO stands for FI (Financial Accounting) and CO (Controlling) in SAP ERP. SAP FICO module covers all business process occurred in several industries. SAP FICO is very important and widely implemented in SAP technologies.

Financial Accounting (FI): -

Financial Accounting (FI) application component handles all the processes happened by the financial accounting department of an organization. In another words, it records the financial statements that are produced by all financial transactions.

These explains the major functionalities along with SAP FI module. SAP FI modules is used to report internally and externally.

Features: -

SAP Financial Accounting provides below features -

• All accounting data management and representation.
• Open and integrated data flow between FI and other components.
• Preparing operational information to assist decision-making.

Sub Components: -

The Financial Accounting application component include below sub-components:

• Accounts Payable (FI-AP)
• Accounts Receivable (FI-AR)
• Asset Accounting (FI-AA)
• Bank Accounting (FI-BL)
• Funds Management (FI-FM)
• General Ledger (FI-GL)
• Special Purpose Ledger (FI-SL)
• Travel Management (FI-TV)

SAP Financials accounting enables to manage financial accounting data within an international requirement of an organization.

SAP FI module deals with the below financial components: -

• Accounts receivable and payable
• Accrual
• Cash journal
• Fast close functions
• Fixed asset
• General ledger
• Inventory
• Tax accounting

Controlling (CO): -

SAP Controlling(CO) Module provides supporting information to Management for planning, reporting and monitoring the operations of their business. Management decision-making can be completed with the level of information provided by Controlling module.

Below are the components of the Controlling(CO) Module: -

• Cost Element Accounting
• Cost Center Accounting
• Internal Orders
• Activity-Based Costing (ABC)
• Product Cost Controlling
• Profitability Analysis
• Profit Center Accounting

Controlling (CO) and Financial Accounting (FI) are independent components in the SAP system. The data flow between the above two components takes place on a regular basis.

The data flows automatically to Controlling from Financial Accounting.

At the same time, the system assigns the costs and revenues to different Controlling (CO) account assignment objects, such as cost centers, business processes, projects or orders.

The relevant accounts in Financial Accounting (FI) are managed in Controlling (CO) as cost elements or revenue elements. This enables us to compare and reconcile the values from Controlling and Financial Accounting.

FI - CO Integration: -

Controlling (CO) and Financial Accounting (FI) are independent components in the SAP system. The data flow between the above two components takes place on a regular basis.

The data flows automatically to Controlling from Financial Accounting. At the same time, the system assigns the costs and revenues to different Controlling (CO) account assignment objects, such as cost centers, business processes, projects or orders. The relevant accounts in Financial Accounting (FI) are managed in Controlling (CO) as cost elements or revenue elements.

This enables us to compare and reconcile the values from Controlling and Financial Accounting.

Primary Cost elements are cost carriers from Financial Accounting (FI) to Controlling (CO) module and created to compare the G/L accounts of profit loss statements.

A Primary Cost element is used to transfer cost from Financial Accounting (FI) to Controlling (CO) Module. Each Financial Accounting (FI) general ledger account in profit and loss statement are created as primary Cost element in Controlling (CO).

Every cost related transaction from Financial Accounting (FI) will be carried over to Controlling (CO) by Primary Cost element only. A Primary cost element can be directly posted.

Primary cost element is linked to a G/L account and must be created in the FI Chart of Accounts first.