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What is the?
SAP FI Module
- Introduction -
The SAP FI Module has the capability of meeting all the accounting and financial needs of an organization. It is within this module that Financial Managers as well as other Managers within your business can review the financial position of the company in real time as compared to legacy systems which often times require overnight updates before financial statements can be generated and run for management review.
The real-time functionality of the SAP modules allows for better decision making and strategic planning. The FI (Financial Accounting) Module integrates with other SAP Modules such as MM (Materials Management), PP (Production Planning), SD (Sales and Distribution), PM (Plant Maintenance), and PS (Project Systems).
The FI Module also integrates with HR (Human Resources) which includes PM (Personnel Management), Time Management, Travel Management, Payroll. Document transactions occurring within the specific modules generate account postings via account determination tables.
The FI (Financial Accounting) Module components.
The FI Module comprises several sub-modules as follows:
· Accounts Receivables 
· Accounts Payable 
· Asset Accounting 
· Bank Accounting 
· Consolidation 
· Funds Management 
· General Ledger 
· Special Purpose Ledger 
· Travel Management 
Accounts Receivables records all account postings generated as a result of Customer sales activity. 
These postings are automatically updated in the General Ledger. It is within the Accounts 
Receivables Module that you can monitor aging of the receivables and generate customer analysis. The Accounts Receivable Module also integrates with the General ledger, Sales and Distribution, and Cash Management Modules.
Accounts Payable records account postings generated as a result of Vendor purchasing activity. Automatic postings are generated in the General Ledger as well. Payment programs within SAP enables the payment of payable documents by check, EDI, or transfers.
Asset Accounting is utilized for managing your company’s Fixed Assets. SAP allows you to categorize assets and to set values for depreciation calculations in each asset class.
Bank Accounting allows for management of bank transactions in the system including cash management.
Consolidation enables the combining of financial statements for multiple entities within an organization. These statements provide an overview of the financial position of the company as a whole.
Funds Management allows management to set budgets for revenues and expenses within your company as well as track these to the area of responsibility.
General Ledger is fully integrated with the other SAP Modules. It is within the General Ledger that all accounting postings are recorded. These postings are displayed in real-time providing up-to-date visibility of the financial accounts.
Special Purpose Ledger is used to define ledgers for reporting purposes. Data can be gathered from internal and external applications.
Travel Management provides management of all travel activities including booking trips and handling of expenses associated with travel.

What is the?
SAP FI Module
- Configuration -
Primary configuration considerations:
Client, company and company code
Once a business has decided to use the SAP FI (Financial Accounting) Module, there are several Configurations prerequisite steps that must be completed. Determining the organizational structure is one of the first steps in setting up the business functions in SAP as well as your reporting requirements. 
The Organizational structure is created by defining the organizational units consisting of the following: 
· Client 
· Company 
· Company Code 
· Business Area 
A Client is the highest unit within an SAP system and contains Master records and Tables. Data entered at this level are valid for all company code data and organizational structures allowing for data consistency. User access and authorizations are assigned to each client created. Users must specify which client they are working in at the point of logon to the SAP system.
A Company is the unit to which your financial statements are created and can have one to many company codes assigned to it. A company is equivalent to your legal business organization. Consolidated financial statements are based on the company’s financial statements. Companies are defined in configuration and assigned to company codes. Each company code must use the same COA (Chart of Accounts) and Fiscal Year. Also note that local currency for the company can be different.
Company Codes are the smallest unit within your organizational structure and is used for internal and external reporting purposes. Company Codes are not optional within SAP and are required to be defined. Financial transactions are viewed at the company code level. Company Codes can be created for any business organization whether national or international. It is recommended that once a Company Code has been defined in Configuration with all the required settings then other company codes later created should be copied from the existing company code. You can then make changes as needed. This reduces repetitive input of information that does not change from company code to company code as well as eliminate the possibility of missed data input.
When defining company codes, the following key areas must be updated: 
Company Code Key- identifies the company code and consists of four alpha-numeric characters. Master data and business transactions are created by this key. 
Company Code Name- identifies the name of the business organization within your organizational structure. 
Address- identifies the street address, city, state, zip code for the company code created. This information is also used on correspondence and reports. 
Country- identifies the country to which your business is based. Country codes within SAP are based on ISO Standards. 
Country currency- identifies the local currency for the company code that you have defined. 
Language- identifies the language to be used for you company code and is also used for text in your documents. SAP unlike other applications, offers over thirty languages including EN( English) , ES (Spanish), FR (French), DE (German), EL (Greek), IT(Italian), AR( Arabic), ZH (Chinese) , SV (Swedish) , and JA (Japanese) to name a few. 



What is the?
SAP CO Module
- Introduction -
The SAP CO (Controlling) Module provides supporting information to Management for the purpose of planning, reporting, as well as monitoring the operations of their business. Management decision-making can be achieved with the level of information provided by this module. 
Some of the components of the CO(Controlling) Module are as follows: 
· Cost Element Accounting
· Cost Center Accounting
· Internal Orders
· Activity-Based Costing ( ABC)
· Product Cost Controlling
· Profitability Analysis
· Profit Center Accounting
The Cost Element Accounting component provides information which includes the costs and revenue for an organization. These postings are automatically updated from FI (Financial Accounting) to CO (Controlling). The cost elements are the basis for cost accounting and enables the User the ability to display costs for each of the accounts that have been assigned to the cost element. Examples of accounts that can be assigned are Cost Centers, Internal Orders, WBS(work breakdown structures). 
Cost Center Accounting provides information on the costs incurred by your business. Within SAP, you have the ability to assign Cost Centers to departments and /or Managers responsible for certain areas of the business as well as functional areas within your organization. Cost Centers can be created for such functional areas as Marketing, Purchasing, Human Resources, Finance, Facilities, Information Systems, Administrative Support, Legal, Shipping/Receiving, or even Quality. 
Some of the benefits of Cost Center Accounting : (1) Managers can set Budget /Cost Center targets; (2) Cost Center visibility of functional departments/areas of your business; (3) Planning ; (4) Availability of Cost allocation methods; and (5) Assessments/Distribution of costs to other cost objects. 
Internal Orders provide a means of tracking costs of a specific job , service, or task. Internal Orders are used as a method to collect those costs and business transactions related to the task. This level of monitoring can be very detailed but allows management the ability to review Internal Order activity for better-decision making purposes.
Activity-Based Costing allows a better definition of the source of costs to the process driving the cost. Activity-Based Costing enhances Cost Center Accounting in that it allows for a process-oriented and cross-functional view of your cost centers. It can also be used with Product Costing and Profitability Analysis. 
Product Cost Controlling allows management the ability to analyze their product costs and to make decisions on the optimal price(s) to market their products. It is within this module of CO (Controlling) that planned, actual and target values are analyzed. Sub-components of the module are: 
· Product Cost Planning which includes Material Costing( Cost estimates with Quantity structure, Cost estimates without quantity structure, Master data for Mixed Cost Estimates, Production lot Cost Estimates) , Price Updates, and Reference and Simulation Costing. 
· Cost Object Controlling includes Product Cost by Period, Product Cost by Order, Product Costs by Sales Orders, Intangible Goods and Services, and CRM Service Processes. 
· Actual Costing/Material Ledger includes Periodic Material valuation, Actual Costing, and Price Changes. 
Profitability Analysis allows Management the ability to review information with respect to the company’s profit or contribution margin by business segment. Profitability Analysis can be obtained by the following methods: 
· Account-Based Analysis which uses an account-based valuation approach. In this analysis, cost and revenue element accounts are used. These accounts can be reconciled with FI(Financial Accounting).
· Cost-Based Analysis uses a costing based valuation approach as defined by the User. 
Profit Center Accounting provides visibility of an organization’s profit and losses by profit center. The methods which can be utilized for EC-PCA (Profit Center Accounting) are period accounting or by the cost-of-sales approach. Profit Centers can be set-up to identify product lines, divisions, geographical regions, offices, production sites or by functions. Profit Centers are used for Internal Control purposes enabling management the ability to review areas of responsibility within their organization. The difference between a Cost Center and a Profit Center is that the Cost Center represents individual costs incurred during a given period and Profit Centers contain the balances of costs and revenues.

Part 1