馃攳
What is SAP FICO Explained | Introduction to SAP FICO Overview & Basics - YouTube
Channel: Learn with Whiteboard
[0]
Welcome to whiteboard programming,聽
where we simplify programming with聽聽
[2]
easy to understand whiteboard videos,聽
and today, I'll be sharing with you聽聽
[6]
what is sap fico and provide you with a brief聽
introduction to it ... so lets get started!聽聽
[15]
FICO in the name stands for Financial Accounting聽
and Controlling... and allows an organization聽聽
[19]
to store a complete version of their financial聽
transaction data. Specifically, the purpose of聽聽
[24]
SAP FICO is to help companies generate and manage聽
financial statements for analysis and reporting,聽聽
[30]
as well as to aid in effective business planning聽
and decision-making. Now, if we see closely,聽聽
[37]
the FICO module consists of two sections,聽
finance accounting and controlling, which聽聽
[42]
map to SAP Finance (FI) and SAP Controlling (CO)聽
respectively. Each of which is used for a specific聽聽
[51]
financial processes in the system. SAP FI deals聽
with overall financial reporting and accounting,聽聽
[59]
while SAP CO focuses more narrowly聽
on planning and monitoring costs.聽聽
[66]
And to clear out the confusion for many, SAP FI聽
and SAP CO were originally released as separate聽聽
[72]
modules but are now so tightly integrated that聽
many people refer to them as simply one module,聽聽
[78]
which we generally call as SAP FICO. So, in order聽
to understand them, let's into each section, one聽聽
[84]
by one, starting with SAP FI or SAP Finance, the聽
SAP FI enables organizations to make financial聽聽
[90]
statements for reporting and analysis. The types聽
of financial statements covered include balance聽聽
[96]
sheets, ledger statements or profit, and loss聽
statements, etc. The SAP FI consists of several聽聽
[101]
sub-modules that handle specific accounting聽
processes, these include 1. Accounts Receivable,聽聽
[108]
that captures customer transactions and manages聽
customer accounts. Transactions include invoice聽聽
[114]
posting, credit memo posting, down payments,聽
invoice payments, or executing customer reports.聽聽
[120]
2. Accounts Payable, which involves all聽
of the transactions with vendors and聽聽
[126]
managed vendor accounts. Here, transactions can聽
include invoice posting, credit memo posting,聽聽
[131]
down payments, invoice payments, automatic聽
payments program, and executing vendor reports.聽聽
[137]
3. General Ledger, it contains all of the聽
company's transaction data in a chart of accounts聽聽
[144]
and lists all of the accounts in the system.聽
Transactions are recorded in sub-modules that聽聽
[150]
can be recorded in real-time with general ledger聽
data. Next, 4. Bank Ledger, it deals with all of聽聽
[157]
the company's bank account transactions and data.聽
It can reconcile all transactions recorded on bank聽聽
[163]
statements and compare them with the transactions聽
in the system. 5. Asset Accounting, this聽聽
[169]
manages all of the transactions related to the聽
company's fixed assets, such as land, buildings,聽聽
[175]
and heavy equipment. Transactions include asset聽
acquisitions, retirement, sales, transfers,聽聽
[181]
revaluations, and depreciation. 6. Consolidation,聽
it enables the company to combine financial聽聽
[188]
statements for multiple entities, which provides聽
an overview of the company's financial position聽聽
[194]
as a whole. Next, 7. Funds Management which聽
manages the budgets for the company's revenues and聽聽
[200]
expenses. 8. Special Purpose Ledger, it defines聽
the ledgers in SAP FI for reporting purposes.聽聽
[207]
9. Travel Management, it manages all of the聽
transactions for travel processes, including聽聽
[213]
booking trips and handling travel-related聽
expenses. So, to sum it up, SAP FI module mainly聽聽
[220]
deals with the components like Fixed asset, Cash聽
journal, unit Inventory, Tax accounting ledger,聽聽
[226]
Parallel valuations, and master data governance,聽
etc. Next, let's learn about SAP CO module,聽聽
[234]
so, while SAP FI deals with a company's accounting聽
and internal and external reporting, SAP CO聽聽
[242]
supports processes to plan, report on, and monitor聽
costs from business operations. To state simply,聽聽
[248]
SAP CO can be instrumental in improving the聽
company's profitability. Similar to SAP FI,聽聽
[254]
SAP CO is comprised of sub-modules too that聽
handle specific processes of business functions,聽聽
[260]
these include 1. Profitability Analysis, which聽
enables the company to analyze the profitability聽聽
[266]
of its products. For example, Profitability聽
Analysis can be useful for making decisions聽聽
[271]
on matters like product pricing, distribution聽
channels, and target market segments. It聽聽
[276]
also allows levels of detail in analyzing聽
profitability, such as for each region or country,聽聽
[281]
product types and distribution channels,聽
or individual customer profitability.聽聽
[287]
2. Product Costing, it manages data about the聽
costs required to produce the company's goods and聽聽
[293]
services. Product costing analysis can help manage聽
manufacturing costs and optimize efficiencies. 3.聽聽
[301]
Cost Elements, which provides an overview of聽
all the company's costs and revenues based on聽聽
[306]
profit and loss statements, also known as聽
income statements. Cost element accounting聽聽
[312]
describes the origin of the costs and represents聽
specific costs that the company incurs. 4. Cost聽聽
[321]
Centers, it deals with the costs associated with聽
the company's internal divisions or departments,聽聽
[326]
such as sales, production, marketing, or human聽
resources. Also, please note that Cost Centers聽聽
[332]
involve only expenses, not revenues. 5. Internal聽
Orders, it is used to manage the costs for smaller聽聽
[341]
internal projects or non-fixed assets, like a聽
limited-time marketing campaign, for example. 6.聽聽
[348]
Profit Centers, that helps in handling all of the聽
cost data related to the company's business lines.聽聽
[353]
It deals with both expenses and revenues, unlike聽
Cost Centers, which deals only with expenses. So,聽聽
[361]
in all, you can say that the main purpose聽
of SAP controlling module or SAP CO聽聽
[365]
is planning. It enables you to聽
determine variances by comparing聽聽
[369]
actual data with plan data and thus enables you聽
to control business flows in your organization.聽聽
[375]
So, to sum up, Both SAP CO and SAP FI modules聽
are independent modules in an SAP system. The聽聽
[382]
data flow between these components takes place聽
regularly. Data flow is applicable to cost flows聽聽
[388]
to Controlling from Financial Accounting. At聽
the same time, the system assigns the costs聽聽
[394]
and revenues to different CO account assignment聽
objects, such as cost centers, business processes,聽聽
[400]
projects, or orders. Lastly, as a conclusion,聽
I'd like to say that SAP FICO (Finance and聽聽
[408]
Controlling) is one of the modules which purely聽
deals with finance-related roles. It is the most聽聽
[412]
widely apprehended products in terms of scope and聽
implementation. This shows that it is already used聽聽
[417]
in many organizations and many of the enterprises聽
are adopting it as their financial software聽聽
[422]
platform. With that, I hope this video was helpful聽
to you and served value, if you love my content,聽聽
[428]
feel free to smash that like button and if聽
you haven't already subscribed to my channel,聽聽
[432]
please do as it keeps me motivated and helps聽
me create more content like this for you.
Most Recent Videos:
You can go back to the homepage right here: Homepage