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[SAP] Overview of Financial Accounting

投稿日:2020-07-01 更新日:

FI module knowledge for absolute beginner, including me

Some people take me as financial accounting specialist even in SAP implementation project, just because I have a USCPA license, and I have an experience working in M&A advisory firm previously.

In the end, I am now a member of FI team in SAP implementation project, mainly in charge of consolidation design, however, I am completely new to FI module.

My SAP experience so far is only in rather SCM related, such as MM, SD, or CS, so, from now on, I would like to get FI module knowledge by writing down them to these series of posts.

Major component of Financial Accounting (FI)

Major components, or fields of functions in FI module are below.

  • General Ledger Accounting
  • Accounts Payable
  • Accounts Receivable
  • Asset Accounting
  • Bank Accounting

In the following section, I would like to take a look at summary information for each of them. I am going to post details for them in different pots.

General Ledger Accounting

General ledger serves as a complete record of all business transactions. It is the centralized, up-to-date reference for the accounts.

If you want to see what is happening in the company in financial transaction and you require really detailed information, the general ledger would be the information you should check.

Recording all the value related business transaction in General Ledger, integrated with all the other operational areas of company will enhance the company's accounting data to be accurate and complete for analysis point of view, and internal audit point of view.

Actual individual transactions can be checked at any time in real-time processing by displaying the original documents, line items, and transaction figures at various levels.

General ledgers is maintained by different levels, such as corporate level, or corporate group level.

Accounts Payable

Accounts Payable records and administers accounting data for all vendors.

Accounts payable is, one of the liability for your company to pay money to vendor in the future, for some product or service provided by the vendor.

Accounts payable in FI module integrate with Material Management module, or purchasing system, where deliveries and invoices are managed according to vendors.

System automatically posts accounts payable data in accordance with the status of purchasing activity, such as goods receipt.

By integration with payment program, accounts payable would be automatically paid.

Posting in accounts payable would be simultaneously recorded in general ledger. System has due date forecast and report program to monitor open items.

Accounts Receivable

Accounts receivable records and administers accounting data of all customers.

Accounts receivable is a money to be paid by customer to your company in the future, for some product of service provided by your company, on contrast to the accounts payable.

Posting in accounts receivable are also recorded in general ledger.

Several tools for users to monitor open items, such as account analysis, alarm reports, due date lists, and flexible dunning programs are provided as standard functionality in SAP.

Accounts receivable is not only the balance but it also provides data required for effective credit management. By integration with sales and distribution module, optimization of liquidity planning is conducted.

Asset Accounting

Asset Accounting is used to manage and supervise fixed assets.

In Financial Accounting, it serves as a subsidiary ledger to the General Ledger, providing detailed information on transactions involving fixed assets.

Asset Accounting is closely integrated with Material Management or Production Planning module. When an asset is purchased or produced in-house, invoice receipt, goods receipt, or material withdrawn from the warehouse would be posted in the Asset Accounting module. At the same time, depreciation and interest would be passed on Financial Accounting and Controlling.

There is also an integration with Plant maintenance. When settlement for maintenance activity is executed in Plant Maintenance, the capitalization to assets would be integrated with Asset Accounting.

Bank Accounting

Bank accounting is used for transaction between your company and bank.

Bank accounting includes management of bank master data, cash balance management such as check and bill of exchange management, and creation and processing of incoming and outgoing payment as its related processes.

Summary

Financial Accounting in SAP has financial transaction data, which are categorized into 5 components, general ledger, accounts payable, acsounts receivable, asset accounting, and bank transfer data.

These data are closely related to other modules such as MM, SD, CS, PP, and so on. From now on, I would like to dive into each component of financial and accounting deeper.

-SAP/IT

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