FI MODULE

FI module is a financial accounting module which is used in SAP ERP. This module is used
to record all the day to day financial transactions and pull the external reports like Balance
Sheet, Profit & Loss and Trial balance.

DEFINE COMPANY CODE – OX02

Company code is a legal entity / Small organizational unit within the company. It represent
as an independent legal entity. For which business will draw an external reporting like
balance sheet, profit and loss and trial balance report.

In SAP we define the company code with 4 alpha numeric characteristics. Defining company
code in SAP is mandatory.

While defining the company code country post office fields are mandate. This is the standard
which is made by SAP.

NOTE: As a consultant we decide to define the company code based on the geographical
area wise and as per the client or customer requirement for the external report.

COMPANY – OX15

Company represent as a group. Company is an individual legal entity for which the business
will draw the external reporting like consolidated Balance sheet and Profit and Loss
Statements. Company will include all the company codes which are defined in the system to
get the consolidation report. Company is defined by 6 alpha numeric characteristics.

NOTE: It is not mandate to use the same currency which is used at the time of defining the
company code to company.

ASSIGNING COMPANY CODE TO COMPANY – OX16

This activity we do to link all the company codes which are defined under that company to
get the consolidation report.

CREDIT CONTROL AREA – OB45

In SAP from FI module we define credit control area this is used to evaluate the creditability
of the customer. This controlling area is taken by the SD consultants. To this controlling area
the SD consultants will assign the sales. The SD consultants will give the inputs of customers
to evaluate the creditability of the customer.

ASSIGNING THE CREDIT CONTROL AREA TO COMPANY CODE – OB46

BUSINESS AREA – OB13

Business area is a small organizational unit within the FI module. Business area which is used
for the internal reporting purpose (managerial report) basically the consultant will treat or

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decide the business area based on the branches or based on the products where the clients
need the reports. Business area is decided based on two parameters.

1. Based on area of activity

2. Based on line of activity

BASED ON AREA OF ACTIVITY

This indicates that the branches which is having from the client or business distance to
distance.

Ex: suppose a client have branches in different cities or in different states the consultant will
decide to define this as a business area.

BASED ON LINE OF ACTIVITY

This indicates that if the client or a business wants an individual reports based on the products
which the client is manufacturing or giving the service.

NOTE: We cannot assign the business area to company code because this same business area
can be used by the other company code. Defining the business area in SAP is optional.

CHART OF ACCOUNTS

While creating the COA we will create 4 alpha numeric characteristics.

COA Chart of accounts – OB13

It is the list of all G/L’s used by the business transactions.

Assigning the COA to company code – OB62

NOTE: We can assign n number of company code to single COA. It depends on the business
or requirement from the client where we can use different COA.

We (consultants) decide (on the clients requirement) to use the same COA when the business
or the client are into same business verticals.

Ex: if they are into service or manufacturing and they have the business in different
geographical places or if they have the same line of product lines. We use different business
verticals.

Ex: Service sector is a separate entity; manufacturing sector is a separate entity.

NOTE: When we are assigning the COA to company code we can assign 2 COA at a time i.e.

1. Operational COA

2. Country Specific COA

Skeletonof COA or structure of COA

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 1. Defining the COA, we define the COA in 4 alpha numeric characteristics.
2. After defining the COA we will give the description for the COA which is been
defined.
3. Mode of the language – By default the mode of the language will be in English,
we can change the mode of the language as per the business requirement.
NOTE: we can define the currency in SAP but we cannot define the country (41)
4. Length of the G/L
This we use to define the length of the G/L’s in account groups where it can be
seen at the time of creating the G/L master.
SAP suggests maintaining the length of the G/L should be 6.
NOTE: The maximum length of the G/L can be used till 10 in SAP.
5. Cost element
While defining the COA the system will be updated to automatic creation of cost
element, we should change the option to manual creation of cost elements. We do
this step because all the G/L’s which we create in the SAP system cannot be cost
elements.
The cost elements can be created to P&L A/C’s not to B/S A/C’s.
6. Block
If we tick on the block field at the time of defining the COA the system does not
allow creating the G/L master.
This we do very rarely at the time of implementation phase to avoid the
duplication of G/L creation in the system.

Types of COA

In COA we have 3 types

1. Operational COA
2. Country specific COA
3. Group COA

Operational COA – Operational COA is a list of all the G/L’s which is used by business to
record their day to day business transactions.

Country specific COA – Country specific COA is a G/L A/C which is used as per country
norms of that particular country. Ex: India, US, UK

Group COA – Group COA is G/L A/C which is used to get the consolidated reports of all the
co. codes. This group COA will be assigned in the G/L master.

Segments (Part) of COA

In segment of COA in SAP we have 3 types

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 1. Centrally creation of COA
2. COA level
3. Company code level

 CENTRALLY CREATION OF COA: FS00

This we use to create the G/L A/C centrally where we can see all the 3 tabs like Type &
description, centrally and create bank tabs. When we are creating the G/L at central level we
can see both the levels i.e. COA level & company code level.

 COA LEVEL: FSPO

This is the level if we create the G/L A/C at COA level we can see only single tab i.e,.type&
description tab. If a client have more than one company code & the client is using the same
COA, when we create the G/L master at company code level that G/L no. along with the
account groups to which the G/L A/C belongs and the type & description will be refelecting
in all the company codes.

If we create the G/L A/C at COA level we can see

G/L No.

COA

Account groups (Which A/C group does that G/L belongs & whether it is a B/S A/C or P&L
A/C)

Short text

Long text

 COMPANY CODE LEVEL: FSSO

In this level company code level is a level which is used purely for the transaction purpose in
this company code level we can see 2 tabs i.e. Central tab and Create bank tab. When we
create the G/L’s at company code level the G/L belongs to that company code & it is
restricted to that company code.

If we make any changes at company code level the changes will be effected to that company
code and the changes does not effect to other company codes.

At company code level we can see G/L no. & Bank create tab.

We cannot see which A/C’s group belongs to and whether it is a B/S A/C or a P&L A/C and
also we cannot see the long or short description of the G/L.

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 FISCAL YEAR VARIANT : OB29

Fiscal year variant means which determine the fiscal year for that client. We can create our
own fiscal year variant or we can use the standard variant which is given by the SAP. We can
define the fiscal year variant in 2 alpha numeric character.

Fiscal year variant means a company can do the audit for single day, week, month, and
quarter, half yearly or yearly.

Fiscal year in SAP is nothing but financial year or Accounting year.

In SAP we have 3 types of calendar year:

1. Standard calendar year

2. Nonstandard calendar year
3. Short end Fiscal year

Standard calendar year

Standard calendar year is a year which depict as a financial year or a accounting year
which starts from Jan to Dec this we call it as a Standard calendar year.
From SAP they have given a standard variant K4 which identified as standard
calendar year which starts from Jan to Dec.

Nonstandard calendar year

Nonstandard calendar year in SAP which shows as a financial year or an accounting
year which starts after Jan.
For ex: April to March, July to June, Oct to September
For nonstandard calendar year SAP has given 3 standard variants i.e.,

V3: April to March

V6: July to June
V9: Oct to Sept
K4: Jan to Dec (Standard calendar year)

Short end fiscal year

This is the year which has less than 12 months. In SAP we use this short end fiscal
year to record all the business transaction in SAP system which is used for auditing
purpose.

YEAR SHIFT
In SAP we use year shift to make the nonstandard calendar year to standard calendar
year. SAP ERP is built in such a way that the SAP ERP will understand the standard
calendar year. We use -1 or +1 as a year shift for calendar year.
Here -1 or +1 will determine the periods or the months to fall under that financial
year.

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Assigning the fiscal year variant to company code – OB37

Special period
In SAP we have 12+4 special periods.
The extra 4 periods which is given by SAP for the yearend activities, like to pass a
correction entry for auditing purpose or to pass a provisional entry.
It is not mandate to use the special period.
NOTE: When we are using the special period and post an entry in the special period
that effect of the posting will be effected in the last period of the fiscal year or the
financial year.

ACCOUNT GROUPS – OBD4

Account groups are a set of similar G/L A/C’s which is used by the client to record
their day to day business transactions. We use the account groups to segregate the
business transaction and to get the reports of that particular group of transaction.
This will help on restricting the consolidation of the transaction.
Account groups are a client level data. This means that this data can be used to
another client.
NOTE: The functionality of the A/C group is it controls the field of the G/L master
data. We have 4 radio buttons i.e.
* Suppress radio button
* Required radio button
* Optional radio button
* Display radio button

How many A/C groups are mandate in SAP?

When we define the A/C groups at least we should define 2 A/C groups i.e. Balance
sheet A/C groups and P&L A/C groups.
While defining the account groups we will give the COA first and we will give all 4
characteristics of the A/C after that we will give the description for that A/C and next
we will assign the number range for that group as per the length of the COA is been
defined.

Suppress radio button

In SAP if we consider the suppress field that field will not appear in the G/L master
data screen or in end user transaction screen. We do this based on the client
requirement. Because in SAP we have more than 300 fields to create a master data or
to post a transaction in SAP. We do suppress whichever the field is not required for
the master data creation or to post the transaction.

Required radio button

In SAP if we consider a radio button field, that field will become a mandate field to
give a data in that field. The required field will be seen in the screen in a tick mark.

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If we will not give the proper or the correct data in the required field the system
doesn’t allowthe user to go to the next step or to save the data. The system will throw
an error.

Optional radio button

In SAP all the fields whether in master data creation or in the end user screen will be
open. In this field the user can enter the data or he can keep the field as blank.

Display radio button

In SAP if we consider the display radio button in the creation of master data (G/L,
creation master, customer master) or in transaction screen we can see that field but
that field will be grade out. We cannot give any data or we cannot change any data.
This is purely meant to display the fields.

POSTING PERIOD VARIANT – OBB0

Posting period variant is a variant which is used for the posting of business
transaction. We define the posting period variant with 4 alpha numeric character.

NOTE: Without defining the posting period variant we cannot configure the open and
close period.

ASSIGNING POSTING PERIOD VARIANT TO COMPANY CODE – OBBP

OPEN AND CLOSE PERIOD – OB52

In SAP we do open and close period activity to post the business transaction in the
respective periods.
In this step we can open the period and also we can close the period. When we are
defining the open and close period we will assign the posting period variant which is
defined for the company code in SAP system.

NOTE:In this screen we have authorization field where we can give the authorization
to the end users to perform some activities.
In SAP from FI side we can keep all the 12 periods open. But usually in the real time
we keep open only the current period.
This is the control which is given by the SAP to stop the posting to the future or the
back dated periods.
From MM side we can keep open only 2 periods this is the standard behaviour of the
SAP system.

RETAINED EARNINGS ACCOUNT – OB53

Retained earnings account is an account which is used to C/F the balances of P&L
A/C of the current for the next year under liability side. The system will transfer the
balance automatically.

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NOTE:If we do not configure the retained earnings A/C the system will not allow
creating the G/L Master. While defining the retained earnings A/C we will define in a
single characteristic to which we will link the retained earnings G/L account. We can
define nnumber of retained earnings A/C as per the client’s requirement. This is used
to know the cash flow or the P&L statement of the business.

FIELD STATUS VARIANT – OBC4

AND FIELD STATUS GROUP
In SAP we have standard 41 field status group to copy this standard field status group
we will define the field status variant.
After defining that field status variant we will copy all the 41 field status group in that
variant.

FIELD STATUS GROUP

Field status group is a group which controls the fields of end user transaction screen
where we have required option and suppress radio field. This field status group is
restricted at company code level.

NOTE:We can create our own field status group by copying the existing standard
field status group.
Field status variant is used to define the fields which are used for input like cost
center, profit center, plant etc. which are entry fields and hidden fields. Field status
variant is a tool which is provided by SAP to assign the same set of properties to more
than one object.

DOCUMENT TYPE AND NUMBER RANGE – OBA7

Document type in SAP which is used to identify the different types of transactions
which is posted in the SAP system such as – whether it is a general ledger posting or
vendor posting, vendor payment, customer posting, customer payment, asset posting,
asset depreciation, reversal of the entry.

From SAP they have given standard document types which are as follows:
SA – G/L posting

KA vendor document
KR vendor invoice, posting without PO reference (direct FI posting)
KZ vendor payment

DA customer document

DR customer invoice, posting without SO reference

DZ customer payment

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 AA asset posting
AF depreciation
AB reversal of the entries

NOTE: Apart from SAP standard document type we can create our own document
type based on the business requirement.

NUMBER RANGE – FBN1

Number range is linked to the document types to generate the document no. in a
sequential order.
In number range we have 2 types of no. ranges
1. Internal number range
2. External number range

Internal number range: Internal number range is a number range in SAP where the
system generates the document no. in a sequential order.

External number range: External number range is a number range in SAP where the
system does not generate the document no. the document number should be given
manually.

NOTE: In the number range on SAP screen if we tick the external check box means,
we are telling the system that the number range will be given manually by the user.

TOLERANCE GROUP FOR G/L – OBA0

Here tolerance group for G/L is related to the payment differences at the time of
payment clearance.

For ex:

SALARY 15000/-
WAGES 9002/-
TOTAL 24002/-
When we are making the payment we will do the payment for 24000/- the remaining
2/- will be shown as an open item (Need to be paid).

If we set a tolerance limit for these G/L’s the system will clear the invoice amount and it will
transfer the difference amount to sundry return of account, where the system does not show
the 2/- as an open item.

We can set a tolerance limit for the G/L for debit line items or credit line items. The tolerance
can be assigned as a percentage wise or amount wise or in the combination of both.

NOTE: When we assign the tolerance group in both the combination i.e. at percentage wise
and amount wise the system will pick whichever is higher.

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TOLERANCE GROUP FOR EMPLOYEE – OBA4

Tolerance is related to payment difference with respect to vendor or a customer. Here we will
set the upper limit and the lower limit for the payment transactions.

NOTE: When we create the tolerance group for employee or for G/L account these tolerance
groups need to be maintained in the tolerance group screen i.e. in the tolerance group G/L
screen and this tolerance group need to be maintained in the respective G/L masters.

In the real time we keep the tolerance group blank so that the system will consider as a blank
tolerance group for the respective company codes.

NOTE: The tolerance group are created at account level not at company code level.

TOLERANCE GROUP FOR USERS –

This is the authorization which is set to the user ID’s where through this user ID’s they can
post the transaction as per the limit set to the user ID’s.

COMPANY CODE GLOBAL PARAMETERS – OBY6

In global parameter screen we can see what is being configured for the company code. Here
we can see which is COA, fiscal year and the company is been defined to the company code.

If we have not done any assignments like assigning company code to company, fiscal year
variant, posting period variant, field status variant these can be assigned in the global
parameter screen.

In this screen we will make fiscal year variant and value date as a default.

We also need to consider the negative posting field. By clicking the negative posting field the
system will reverse the posting keys and not the entire posting entries.

CONTROLLING AREA

In SAP controlling is referred as a separate module which is used for the costing purposes.
The controlling module is used for the internal reporting purpose (management report).

Organizational structure (org structure) or Enterprise structure of controlling module

CLIENT

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 COPA

CONTROLLING AREA

PROFIT CENTER

COST CENTER

CLIENT:

In SAP client is referred to servers which comes with a standard SAP configurations and set
of tables along with master data. The client is identified by 3 numeric numbers. The client
number is been generated by the basis team. Ex: The server numbers are as follows 000
means this server represent as a SAP server in which there will be no data. For this the basis
team needs to install all the OSS and the SAP software in this client. 1000 this is the client
that comes with all the installation and with SAP software where we can see the standard
configuration master data and the tables. 800 it is a server which is purely used for training
and education purposes. This server can also install in the system where it doesn’t require the
internet option.

COPA:

In SAP COPA means controlling profitability analyses if the customer implement the
controlling module and if he wants to know the profitability of its each product or with area
wise or with region wise COPA needs to be implemented.

If we implement COPA then COPA will become the highest hierarchy level where we can
pull the B/S and P&L Account along with we can see all the sales related reports like product
wise, area wise, region wise etc.

CONTROLLING AREA:

Controlling area is an organizational unit for which we can pull internal reports like B/S and
P&L accounts. These reports are purely used for internal purposes where the management
uses these reports for decision making. Without defining the controlling area we cannot post
any master data like profit center, cost center, internal orders etc.

NOTE: We can assign the controlling area at company level and also at company code level.
We will assign the controlling area at company level if the COA and the fiscal year are same.
We assign the controlling area at company code level where the COA is same but the fiscal
year is different.

PROFIT CENTER

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FOR CREATION – KE51

FOR CHANGE – KE52

FOR DISPLAY – KE53

Profit center is a legal entity within controlling area. Profit centers are defined with the
geographical wise or by product lines for which a separate B/S and P&L account reports need
to be drawn.

NOTE: In real environment profit centers are created branch wise and from MM side they
will create as plants.

COST CENTER

FOR CREATION – KE01

FOR CHANGE – KE02

FOR DISPLAY – KE03

Cost center is a legal entity within the controlling module for which an internal report is
drawn. At cost center level we can pull only P&L statement not B/S. Cost centers are created
for the different departments in the businesses for which we can capture the costs.

EX: Finance department,

HR department

Sales department

Purchase department

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