FICO is a combination of two modules i.e., Finance and Controlling. It is a critical module in SAP as it deals with all the finance-related data. It ensures the flow of financial resources is done in a controlled manner and allows efficient decision making. SAP Finance module includes various sub-topics including GL, AR, AP, SL, AM, and CON. CON or Controlling comes as a separate module handled separately that we will discuss later in the section. Let us discuss other aspects of the Finance module
Fig. 3.1 FI submodules
1. GL – GL stands for General Ledger. Any transactions that will happen in an enterprise will be maintained in General Ledger. There are also sub-ledgers that are maintained under General Ledger. It will be visible in external reporting. All reports that are for legal reporting purposes are considered GL. Example: Balance sheets, Statement of Financial Position, and income statement.
2. AP – AP stands for Accounts Payable. The accounts payable transactions that happen in an enterprise are considered sub-ledger. It includes the creation of master data linked to vendors and activities related to the vendor- finance attributes such as payment terms and account groups.
3. AR – AR stands for Accounts Receivable. AR transactions are also sub-ledgers. Finance module includes AR activities like creating customer master data and handling customer related finance activities such as payment terms and account groups.
4. AA – AA stands for Assert Accounting. It handles all the assets of an organization. Any kind of depreciation, such as a software company, has laptops or desktops for which the value is going to be reduced next year. For those assets, we need to calculate the depreciation and maintain in Assert accounting.
5. SL- SL stands for Special Ledger. It is a receiver system in Finance and Controlling module that allows you to enter data created in another application in SAP, but it is not a sender system for other SAP applications.
Controlling deals with internal management reporting or internal reporting by cost centers or with other cost objects, and cost elements. All the information related to Cost Centers, Orders and Projects, Budget or plan, and Actual vs. plan is included in the controlling module.
Internal Accounting includes Executives, Controllers, Department Managers, and Senior management. Controlling for internal accounting handles reports like Departmental expense reports having salaries, overhead costs, and other costs in any department. Below activities are included in Controlling:
Cost Center Accounting
Cost Element Accounting
Internal Orders
Activity-based Accounting
Profitability Analysis
Product Cost Controlling
Profit Center Accounting
So, controlling overall helps the FI module to be monitored, coordinated, and optimized. All the processes in an organization are controlled using the CO module, and it also helps to analyze the actual figures with the planned data.
Study Material