SAP FICO PROCESS

advisory | digital | managed services

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History & Introduction - SAP
SAP Stands for Systems, Applications and Products in Data Processing

•Founded in the year 1972 by five ex-IBM employees

Dietmar Hopp, Hasso Plattner, Hans-Werner Hector, Klaus
Tschira, and Claus Wellenreuther,
•SAP was headquartered in Weinheim, Germany.
•SAP Systemanalyse und Programmentwicklung ("System
Analysis and Program Development" / "SAPD") company,
as a private partnership under the German Civil Code.
•At present, SAP is a multinational software corporation
headquartered in Walldorf, Germany.
•SAP’s first customer was Imperial Chemical Industries in
Östringen. where they developed mainframe programs for
payroll and accounting.

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What is SAP and different modules of SAP

Modules of SAP
What is SAP Software?

SAP is an industry-leading software application

company, head- quarters in Waldorf, Germany,
providing Enterprise Resource Planning (ERP)
for large and multi-national companies.

What is ERP?

Enterprise resource planning (ERP) is a software

system that helps you run your entire business,
supporting automation and processes in
finance, human resources, manufacturing,
supply chain, services, procurement, and more.

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The journey of SAP ERP from R/1 system to SAP S/4 HANA system.

R – Real Time

• SAP R/1 : 1972 - SAP entered the ERP software domain with its SAP R/1 system. R1 stands for single tier
architecture. All layers Presentation, Application and Database are placed in the same system.

• SAP R/2: 1982 - Based on mainframe architecture, SAP R/2 system was designed to manage large global
enterprise. R/2 stands for 2 tier architecture.

• SAP R/3 and SAP ECC : 1992 - R/3 stands for 3-tier architecture with well defined separate Database layer,
Application layer and Presentation layer. The three layers are connected to each other with networks.
ECC stands for Enterprise Central Component and is successor of SAP R/3 system. With ECC the popularity of
SAP as a business software provider increased manifold. The underneath SAP Netweaver technology made
ECC robust and scalable.

• SAP S/4HANA: 2015 - S in ‘S/4HANA’ stands for Simple and 4 represents 4th generation; the complete name
is SAP Business Suite 4 for SAP HANA (S/4HANA). It come with modern user experience of SAP Fiori.

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Evolution of SAP

1972 1973 1979 1992 1994- 2004 2009 2015- Till date
SAP Business SAP S/4
Founded R1 R/2 R/3 My SAP ERP
Suite 7 HANA

SAP R/3 was built In May 1999, SAP

Improve process on the announces a new SAP launched its
coverage client-server strategy that 4th generation
Better Database concept, having a completely business suite
1973, SAP and technology. uniform graphical realigns the SAP S/4HANA to
releases its first SAP R/2 was a interface, company and its leverage the
product— mainframe dedicated use of product portfolio: features of the
a financial software relational [Link]. SAP HANA
accounting application databases, and (integration with platform. Real-
1972- ERP is clubbed
system called RF. capable of support for Web) time analytics,
Developing with advanced
R over here integrating all of servers from R/3 was replaced on the fly-
Mainframe applications, i.e.
stands for real- an enterprise’s various with the computation,
programs SRM,SCM,PLM,
time. During this business manufacturers. introduction of completely re-
phase, SAP functions, CRM
1993 SAP begins SAP ERP Central defined data
worked on IBM including material working with Component models
servers and DOS management and Microsoft, the (ECC) 5.0 in supported by
operating system production world’s largest 2004. modern SAP
planning, with software maker, More application Fiori UX are
real-time to port SAP R/3 were added like some of the
processing. to the Windows CRM,PLM,SRM, features of SAP
NT operating SCM etc S/4HANA.
system

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SAP - Landscape

DEVELOPMENT QUALITY PRODUCTION

Development of
Testing Live server
configurations

Create User Day-to-day

transports acceptance operations

100 – Golden SHQ – 100 SYS – SIT

Client -01 SHP – 100 SYS Live
200 – Unit Test SHQ – 200 SYS – SIT Server)
Client -02 / UAT

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SAP S/4 HANA System Architecture

Database Layer HANA DATABASE

Application Application
Layer Layer SAP S/4 Hana

Presentation Presentation Presentation SAP Logon

Layer Layer Layer PAD, SAP FIORI

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Business Process Cycle
Sales invoice
(SD)

Delivery of
Receipts and goods
payments (FI) Reduces FG
inventory

Release new
Arrange Batch of
Manpower production
order (PP)

Procure
Materials

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Enterprise Structure MASTER DATA

COMPANY CODE
G L ACCOUNTS

PLANT
VENDORS(BP)
CLIENT COUNTRY - INDIA

PURCHASING
ORGANISATION
CUSTOMERS(BP)

SALES
ORGANISATION

ASSETS

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Financial Accounting Module (FI)

Functionality Key Elements

• Designed for automated • General Ledger
management and • Accounts Payable
external reporting and • Accounts Receivable
some of Internal • Fixed assets
statement/report. Helps •
to know profit/loss of the Closing
org, outstanding • Reporting
payables/receivables,
taxes etc.
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FI Process

CLIENT

COMPANY
CODE

Global General Accounts Accounts

Fixed Assets
Settings Ledger Payable Receivable

Financial G L accounts Vendor/BP Receipts from Asset

parameters COA and CC Payments Customers/BP Accounting

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Global Settings
FISCAL YEAR
VARIANT

POSTING PERIOD
VARIANT
CLIENT - X

GROUP COMPANY DOCUMENT

TYPES

COMPANY GL GLOBAL DOCUMENT NO

CODE 1 ACCOUTS SETTINGS RANGES
CHART OF
ACCOUNT POSTING KEY

FIELD STATUS
VARIANT

TOLERANCE
GROUPS

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Ledger & Currency Settings
COMPANY CODE

COMPANY
CODE
CURRENCY-10 LEADING
LEDGER/STANDARD NON LEADING LEDGER
GROUP LEDGER EXTENSION LEDGER
CURRENCY - 30

GLOBAL
CURRENCY - 60
FISCAL YEAR VARIANT FISCAL YEAR VARIANT

DOCUMENT
CURRENCY - 00

POSTING PERIOD POSTING PERIOD

CO AREA
CURRENCY - 20 VARIANT VARIANT FOLLOW THE
LEDGER WHICH
HARD WE ASSIGN AS
CURRENCY - 40
UNDERLYING
CURRENCY CURRENCY
INDEX BASED LEDGER
CURRENCY - 50

CO OBJECT
CURRENCY -70 EXCHANGE RATE EXCHANGE RATE
FREELY
DEFINED
CURRENCIES
ACCOUNTING ACCOUNTING
PRINCIPLES PRINCIPLES
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General ledger accounting

Foundation
for FI

Chart of Company
accounts code level

Posting Reporting
operational Group Country
parameters parameters

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G/L Process

MANUAL
JOURNAL ENTRY
GL ACCOUNT POSTING
DIRECT
GROUPS ( NUMBER
POSTING
RANGES FOR GL)

CHART OF MASS UPLOAD

ACCOUNT LEVEL OF JOURNAL
ENTRY
RUN REPORT
POSTING
MASTER DATA COMPANY CODE
TRANSACTIONS
CREATION LEVEL
WORKFLOW
PROCESS
REVIEW,
CENTRALLY (COA APPROVE &
& CC) POST

3RD PARTY
SYSTEM (VIA
IDOC OR OTHER
INTERFACE)
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Overview Of Account Payable

MATERIAL PURCHASE PURCHASE

GOODS RECEIPT
MANAGMENT REQUESTION ORDER

INTEGRATION BETWEEN MM TO FI

FI-
ACCOUNTS INVOICE OUTGOING
REPORTS
PAYABLE PROCESSING PAYMENTS
PROCESS

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Accounts Payable Process YOU CHECK
TRANSACTION
WILL GET
BALANCE AT ANY POSTED TO
BUSINESS LEVEL MAIN A/C
VENDOR MANUAL
PARTNER
GROUP BALANCE BANK
GROUP RECON
CHECK
POSTED RUN
BUSINESS PAYMENT REPORT
PARTNER TRANSACTION
DOWN (OUTGOING
(VENDOR
PAYMENT A/C) BALANCE
MASTER DATA)

DOWN PAYMENT
CHECK
DOWN PAYMENT REQUEST
GENERAL
LEVEL
BUSINESS PARTNER

POST FI
INVOICE
DI
S MANUAL AUTOMATIC
D
P (DIRECT, PAYMENT RECON
COMPANY WORKFLOW&

DOWN PAYMENT
TRANSACTION
CODE LEVEL 3RD PARTY

INVOICE PAYMENT
WILL GET POSTED
SYSTEM TO MAIN A/C
AUTOMATIC
BUSINESS PARTNER

PAYMENT
PROGRAM
D
MIRO POSTING DI
P (DIRECT, S
PURCHASE
WORKFLOW,
ORG LEVEL 3RD PARTY LESS DIRECT
DME

SYSTEM
CHEQUE ACH TRANSFE

DISCOUNT TRANSFER R

RECEIVED
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Overview Of Account Receivable
Credit
Check

SALE &
SALES INVENTORY DELIVERY/
DISTRIBUTI ENQUIRY QUOTATION
ORDER SOURCE SHIPPING
ON

INTEGRATION BETWEEN SD TO FI

FI-
POST INVOICE
ACCOUNTS RECEIPT
GOODS PROCESSIN REPORT
RECEIVABLE PAYMENT
ISSUE G
PROCESS

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Accounts Receivable Process YOU CHECK TRANSACTION
WILL GET
BALANCE AT
ANY LEVEL MANUAL POSTED TO
BUSINESS MAIN A/C
CUSTOMER POSTED BANK
PARTNER BALANC RECON
GROUP RECEIPT OF
GROUP E CHECK PAYMENT RUN
TRANSACTION REPORT
(INCOMING)
BUSINESS A/C)
DOWN
PARTNER PAYMENT - AUTOMATIC
(CUSTOMER RECEIVED RECON BALANCE
MASTER DATA) CHECK

DOWN PAYMENT REQUEST

PAYMENT RECEIPT
DOWN PAYMENT RECEIVED
MANUAL TRANSACTION
POST FI
DIS
PAYMENT WILL GET
GENERAL LEVEL
BUSINESS PARTNER

POSTED TO
D INVOICE RECEIPT MAIN A/C
RECEIPT
P
(DIRECT, PAYMENT

WORKFLOW&
COMPANY 3RD PARTY
AUTOMATIC
SYSTEM RECEIPT

CODE LEVEL PAYMENT

PAYMENT
PROGRAM
BUSINESS PARTNER

POSTING DUNNING
NOTICE
SALES INVOICE CHEQ
ACH
LOCKB WIRE

(DIRECT, DI UE OX
D
SALES ORG P
S

NOTICE
DUNNING
WORKFLOW,
LEVEL 3RD PARTY ADD
DISCOUNT
SYSTEM ALLOWED DUNNING
NOTICE
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Asset Accounting
Create Asset
Master Data
Client
Asset
Chart of Classes Posting Asset
Transaction
Depreciation
Number
Screen
Creation of ASSIGN GL Account Ranges for Asset Asset Asset
Scrap
Layout Depreciation Transfer Retirement
GLs Determination
Rules
Asset Acquisition
Master

Base Method Asset Explorer

Company Company Company
Code 1 Code 2 Code 3 Direct ABZON
Acquisition Asset
Diminishing
RUN
Balance Method
AUC
Legacy REPORTS
Asset

Multilevel Method Create Depreciation Key

Period Control
Method
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What is SAP Controlling and Modules of CO
What is SAP Controlling ?
Modules of SAP CO
SAP CO (controlling) is an important module of SAP
system used for organization internal reporting. SAP
controlling module provides supporting information to •Cost Element Accounting
management for effective planning, reporting and
monitors the business operations of organization. With
the help of information that provided by SAP CO
•Cost Center Accounting
module, that organization can make effective
management decision making process. •Internal Orders
•Product cost accounting
•Profit Center Accounting
•Profitability Analysis
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Controlling Module (CO)

Functionality Key Elements

• Represents the • Overhead Cost
company’s flow of cost Controlling
and revenue. • Cost element accounting
• A management • Cost center accounting
instrument for • Activity based costing
organizational decisions • Internal Orders
• Internal reporting • Profit Center Accounting
purpose which helps to • Profitability Analysis
decision making
• Product Cost Controlling
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Structure of Controlling Module (CO)
MULTIPLE [Link] SINGLE [Link]

CLIENT CLIENT

OPERATING OPERATING
CONCERN CONCERN

CONTROLLING AREA CONTROLLING AREA

COMPANY COMPANY COMPANY COMPANY

CODE 1 CODE 2 CODE 3 CODE 1

CHART OF CHART OF
ACCOUNT
ACCOUNT

COST COST
FISCAL POSTING FISCAL POSTING
CENTER CENTER
YEAR PERIOD YEAR PERIOD
STD STD
VARIANT VARIANT VARIANT VARIANT
HIERARCHY HIERARCHY
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CO Processes
POSTING COMES
Posting Secondary Cost
FROM FI – COST
Element
ELEMENTS
Executive Offices
Rent Expense
Debit Credit
1,800
1,500 Copy en
t
em
Prim
Center st El
a ry . Co Maintenance
Cos c
t Elem Se
ent Department
Supplies Expense 1,500
Debit Credit 2,500 3,000
2,500 2,000
t
en Se
El e
m c.
Co
Information Services
st
Labor Expense Co s tE
ar y le
Debit Credit P rim m
en
t 1,200
2,000

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Distribution & Assessment
Distribution Assessment
Sending cost center
Receiving cost centers Sending cost center Receiving cost centers

Primary cost element

specifies allocation type
Primary cost element
specifies allocation type
A005 –
D010 – $200 A005 – $705
$275 A020 – IT D010 – $470
A010 – Administration Software Expense
Rent Expense Distribution
A010 – $4,200 A010 – $235
$1,500 $300 Assessment D005 – $940
D005 – A020 – IT
$450 Supplies Expense
$500 A020 –$0
A015
A020 $75
S010 – $470
S005 – $1,410
$50
S010 – $50 S005 –
$100

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QUESTIONS ?
Thank You!

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