SAP FICO



Components of the Financial (FI) Module
General Ledger Accounting
Accounts Payable
Accounts Receivable
Treasury 
Asset Accounting 
Consolidations


Organizational Units in FI

The Client
 The client is the highest hierarchical level in the SAP System. Specifications that you make or data that you enter at this level are valid for all company codes and for all other organizational structures. Each client is a self-contained unit with separate master records and a complete set of tables.

The Company
A company is the smallest organizational unit for which legal individual financial statements such as balance sheets and profit and loss statements can be created according to the respective commercial legislation. A company can include one or more company codes. The financial statements of a company are also the basis of a consolidated financial statement.

The Company Code
 A company code is the smallest organizational unit for which complete, independent accounting can be carried out. A legally independent company is generally represented by one company code in the SAP System. In accounting, you enter, save and process business transactions, and manage accounts fundamentally at company code level. A further subdivision is possible via internal organizational Units (Ex: Business Areas)

The Chart of Accounts
The chart of accounts is the second highest hierarchical level in the SAP System. It is assigned to the company code. It is a list of all natural accounts available to all company codes.





Terminology in FICO

Company Code
Smallest organizational unit of external accounting for which a complete, self-contained set of accounts (COA) can be created. Similar to what is now considered a legal entity.

Document
 Representation of an accounting document or entry in the SAP system

Chart of Accounts
A framework of GL accounts for the recording of values to ensure an orderly rendering of accounting data. The operational chart of accounts is used by financial accounting and cost accounting. The items in a chart of accounts can be expense or revenue accounts in FI and cost or revenue elements in cost accounting. Each company code is assigned to a chart of accounts.

Profit Center
 An organizational unit in Accounting used for Controlling purposes. Similar to what is now considered an origin.

Cost Center
 An organizational unit that represents a defined location of cost incurrence. Similar to what is now considered a department.

Customer Master
 Customer data that includes addresses, account balances, and credit limits that are maintained centrally to prevent duplication.

Vendor Master
Vendor data that includes addresses, payment details, and account balances of all vendors with which AOI conducts business. Vendor master records are centrally maintained to prevent duplication.

Posting Key
 A two-digit numerical key that determines the way line items are posted. This key determines several factors including the account type, type of posting (debit or credit) and layout of entry screens.

Account Group
Used to categorize accounts that have similar master data requirements. It determines the required master data needed for creating G/L accounts. It also determines the number range in which the customer account should be placed, and whether that number is to be assigned by the user or by the system.

Ledger
In G/L Accounting, you can use several ledgers in parallel. This allows you to produce financial statements according to different accounting principles, for example.

Fiscal Year Variant
 A period as defined by the financial calendar. The fiscal year variant contains the number of posting periods in the fiscal year and the number of special periods. You can define a maximum of 16 posting periods for each fiscal year in the Controlling component (CO).

Posting Period Variant
 You can specify which company codes are open for posting in a posting period variant. Posting period variants are cross-company code and you have to assign them to your company codes. The posting periods are then opened and closed simultaneously for all company codes via the posting period variants.

Reconciliation
Account Summary account for sub ledgers such as Accounts Receivable, Accounts Payable, and Asset Accounting. No direct postings to reconciliation accounts are allowed.

Cost Element
 A cost element classifies the organization's valuated consumption of production factors within a controlling area. A cost element corresponds to a cost-relevant item in the chart of accounts.

Primary Cost Element
A cost element whose costs originate outside of CO and accrual costs that are used only for controlling purposes.

Open Item Management
A stipulation that the items in an account must be used to clear other line items in the same account. Items must balance out to zero before they can be cleared. The account balance is therefore always equal to the sum of the open items.

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