SAP is the pre-eminent business software that helps to evaluate business and resource planning as well as control and monitor the cost of a business or an organization.
If you want to explore FICO, then you should start with an Introduction to SAP FICO, its benefits, and its drawbacks of SAP FICO. Also, we will learn what are the uses of the FICO module in SAP.
Let’s start with the meaning of FICO and how to use it in daily business transactions.
What is SAP FICO
In SAP ERP, SAP FICO is a major functional component that consists of two fragments, such as SAP FI (Financial Accounting) and SAP CO (Controlling). Both have different characteristics in business processes.
In a company, SAP FI handles all the financial data, records, and reports related to the business whereas SAP CO manages cost controlling, planning, and monitoring.
What is SAP FI
One of the key components of SAP ERP is called SAP FI, which stands for Financial Accounting. It is used to keep an organization’s financial information on hand.
SAP FI supports market analysis of a company’s financial standing. It is compatible with several SAP modules, including SAP SD, SAP PP, SAP MM, SAP SCM, etc.
Uses Of SAP FI
With the help of the SAP FI module, you may handle financial accounting data across a global network of different businesses, currencies, and tongues. The following financial components are what the SAP FI module primarily addresses:
- General Ledger(FI-GL):
- Accounts Receivables (FI-AP)
- Accounts Payable (FI-AR)
- Bank Ledger (FI-BL)
- Account for Assets (FI-AA)
- Management of Funds (FI-FM)
- Management of Travel (FI-TV)
- Unique Purpose Ledger (FI-SL)
Uses Of SAP CO
Although SAP FI handles an organization’s accounting as well as internal and external reporting, SAP CO supports procedures to plan, report, and monitor costs associated with business activities.
Enhancing the company’s profitability may be made possible by SAP CO. SAP CO is made up of sub-modules that deal with particular processes, just like SAP FI:
- Cost element accounting
- Cost center accounting
- Activity-based accounting
- Internal orders
- Product cost controlling
- Profitability analysis
- Profit center accounting
Benefits Of SAP FICO
- SAP FICO’s major goal is to assist businesses with creating and managing financial statements for analysis and reporting as well as with successful business planning and decision-making.
With SAP FI, businesses may manage their global budget and finances.
- SAP FICO creates tools and processes for assessing and monitoring the overheads necessary for financial reporting.
Combining financial accounting with additional elements
- The technology is able to monitor and report on several businesses in various nations and currencies. Moreover, the software offers connection with purchasing, materials management, and sales and distribution.
- It also enables users to drill down to the original transaction, whether it be a sales order, purchase order, or the movement of materials.
- In addition to enhancing corporate governance, SAP systems enable greater openness between units or departments.
- Moreover, SAP offers improved general internal control administration, and increased constancy to federal legislation, and accounting standards.
- The ability to report performance according to the organization, cost center, or business unit is one of the benefits offered by SAP, which also facilitates the integration of finance and treasury processes.
- SAP also improves financial and managerial reporting. Together with accounting and financial reporting, risk and treasury management can be integrated.
Drawbacks Of SAP FICO
- It includes hardware, software, consultants, training, and implementation. Or, you could engage one or two programmers as staff members, do all customization and end-user training in-house, and just purchase business consultancy from outside sources. It might be economical to do that.
- Almost anything can be adjusted using SAP. In Navision, practically anything may be developed in a matter of days. Other software might not be adaptable.
To promote corporate growth, SAP FICO is essential. It gives firms the ability to grow on a solid basis of a suitable accounting channel. All the accounting and financial needs of a firm can be satisfied by SAP FICO.
We can combine financial transactions with other business activities like sales, production, marketing, etc.
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I am Chris Waldron, working as a Senior SAP HANA Consultant at Halliburton, Houston, Texas, United States. I have been working in SAP for more than 15 years, especially in SAP IT consulting and business consulting. I worked in various industries in Sales & Distribution, Customer Relationship Management, banking, Risk Management, etc. And I am an SAP Certified Development Specialist – ABAP for SAP HANA 2.0 and SAP HANA Modeling Certified consultant. Read more