1) What do you understand by the term SAP FICO?

We already know that SAP stands for Systems, Applications & Products in Data
Processing. In SAP FICO, FI stands for (Financial Accounting) and CO stands for
(Controlling). To understand the concept well, we can divide the SAP FICO into two
parts: SAP FI and SAP CO. The SAP FI takes care of accounting, preparation of
financial statements, tax computations, etc. On the other hand, SAP CO takes care of
inner orders, cost sheets, inventory sheets, cost allocations, etc.

SAP FICO is the software that stores data, and also computes them, and retrieves the
result according to the current marketing scenario. It is responsible for preventing
data loss and also does the verification and reporting of data.

2) What is the main usage of SAP FICO?

The SAP FICO modules are mainly used within a company to manage financial tasks
within an international framework of languages and currencies.

o The FI part of SAP FICO deals mainly in financial accounting such as fixed
assets, accrual, cash journal, tax accounting, general ledger, and other financial
tasks.
o On the other hand, the CO part of SAP FICO deals with buying orders, stock
sheets, cost sheets, cost assignments, and other tasks in this category.

3) What is the posting key, and why is it used?

Posting Key is a two-digit numerical used to control and determine the transaction
type entered in the line item.

Posting Key is used to determine the following things:

o Account Types
o Types of posting. Debit or Credit
o Field status of a transaction

4) What are the most important organizational elements in SAP

FI?
The most important organizational elements in SAP FI are:

o Company Code
o Business Area
o Chart of Account
o Functional Area

5) What is the best way to manage transactions originating

from different lines of businesses within a company?
The best way to manage transactions originating from different lines of businesses
within a company is to create Business Areas. Another way is to create different
company codes for each business line.

6) What are the other modules to which 'Financial Accounting'

of SAP FICO is integrated?
The other modules to which 'Financial Accounting' of SAP FICO is integrated are:

o Sales and Distribution

o Production Planning
o Material Management
o Human Resource
o Controlling of financial transaction

7) What is the function of credit control in SAP FICO?

Credit control is used to safeguard the business from overstretching its financial
assets. Generally, we set a credit limit for the customers using SAP when the payment
is made after the product's sale. Using this way, we can restrict the customer's
amount to clear in their account before further starting a new purchase.

8) What is the use of company code in SAP FICO?

In SAP FICO, the company code generates financial statements such as Profit and
Loss Statements, Balance sheets, etc.

9) What are the options in SAP FICO for Fiscal years?

In SAP FICO, the fiscal year is the way to store the financial data in the system. In SAP,
you have 12 periods and four special periods. These periods are stored in fiscal year
variant in the following way:

o Calendar Year: From Jan-Dec, April-March

o Year dependent fiscal year

10) How many Chart of Accounts can a company code have?

You can have only one Chart of Accounts for one company code that is assigned.

11) What is the use of Chart of Accounts in SAP FICO?

In SAP FICO, the Chart of Accounts is used to meet the daily needs of the company
as well as the legal requirements of the country.

The Chart of Accounts has two types:

o Operating Chart of Accounts (COA): The Operating Chart of Accounts or

operating COA is a record assigned to the company code and contains all the
general ledger accounts.
o Country Chart of Accounts (COA): The Country Chart of Account is the list of
general ledger accounts required to meet the country's legal requirements.

12) How many currencies can we configure for a Company

Code?
We can configure three currencies for a Company Code, one is a local currency, and
two are parallel currencies.
13) What do you understand by 'year shift' in the SAP
calendar?
The SAP system does not understand what a broken fiscal year is. For Example, from
April 2020 to March 2021, it will only understand the calendar year. Suppose that the
fiscal year is not a calendar year but the combination of the different months of two
different calendar years for any business. In that case, one of the calendar years has
to be classified as a fiscal year for SAP and the month falling in another year has to
be adjusted into the fiscal year by shifting the year by using the sign -1 or +1. This
shifting in the year is called the 'year shift'.

For ExampleExample April 2020 to Dec 2020 is our first calendar year, and Jan 2021
to March 2021 is our second year, now if you are taking April-2020 to Dec-2020 as
your fiscal year, then Jan-2021 to March-2021 automatically becomes the second
year, and you have to adjust this year by using -1 shift, and vice versa if the scenario
is reversed, here you will use +1 shift.

14) What are the different types of modules to which FI is

integrated?
FI is integrated into the following types of modules:

o Production Planning
o Human Resource
o Material Management
o Sales and Distribution

15) How input and output taxes are handled in SAP FICO?
Every country has a tax procedure where tax codes are defined within this. It provides
the flexibility to either expense out the Tax amounts or capitalize the same to stocks.

16) What is the field status variant and field status group?
The field status variants are contained within field status groups. On the other hand,
the field status groups are maintained within the General Ledger account. You use it
to define the fields while you post to the general ledger.

17) What are validations and substitutions in SAP FICO?

In SAP FICO, validations are used in the FI and CO modules to help ensuring data
integrity when entering actual transactions online or in batch. On the other hand, the
substitutions are used in the FI / CO / EC modules to derive or correct values being
passed via integration or entered into the FI / CO modules.

Validation and Substitution are defined for each functional area at the following
levels:

o Document Level
o Line item Level

18) What are the application areas in SAP that use validation
and substitutions?
Following are the application areas in SAP that use validation and substitutions:

o FI- Financial accounting
o CO- Cost accounting
o AM- Asset accounting
o GL- Special purpose ledger
o CS- Consolidation
o PS- Project system
o RE- Real estate
o PC- Profit center accounting

19) What do you understand by year-dependent fiscal year

variant?
A year is called a year-dependent fiscal year variant if the number of days in a month
is not as per the calendar month. For Example, in the year 2021, the month January
ends on 30th, the month February ends on 27th, etc.

20) How can you make vendor payments?

There are two methods to make the vendor payments:
Manual Payment: The manual payment method is done without the use of a
medium such as cheques.

Automatic Payment: The automatic payment method is done through DME (Data

Medium Exchange), such as wire transfer or cheque.

21) What is the use of FSV (Financial Statement Version) in

SAP FICO?
The Financial Statement Version or FSV is a reporting tool in SAP FICO. It can be used
to extract final accounts from SAP like Profit and Loss Account and Balance Sheet.
We can use multiple FSV's for generating the output of various external agencies
such as Banks and other statutory authorities.

22) What are the different steps involved in G/L posting?

After completing the payroll run, we have to add results to the GL accounts,
including cost centers. GL posting includes the following steps:

17) What are validations and substitutions in SAP FICO?

In SAP FICO, validations are used in the FI and CO modules to help ensuring data
integrity when entering actual transactions online or in batch. On the other hand, the
substitutions are used in the FI / CO / EC modules to derive or correct values being
passed via integration or entered into the FI / CO modules.

Validation and Substitution are defined for each functional area at the following
levels:

o Document Level
o Line item Level

18) What are the application areas in SAP that use validation
and substitutions?
Following are the application areas in SAP that use validation and substitutions:

o FI- Financial accounting
 o CO- Cost accounting
o AM- Asset accounting
o GL- Special purpose ledger
o CS- Consolidation
o PS- Project system
o RE- Real estate
o PC- Profit center accounting

19) What do you understand by year-dependent fiscal year

variant?
A year is called a year-dependent fiscal year variant if the number of days in a month
is not as per the calendar month. For Example, in the year 2021, the month January
ends on 30th, the month February ends on 27th, etc.

20) How can you make vendor payments?

There are two methods to make the vendor payments:

Manual Payment: The manual payment method is done without the use of a

medium such as cheques.

Automatic Payment: The automatic payment method is done through DME (Data

Medium Exchange), such as wire transfer or cheque.

21) What is the use of FSV (Financial Statement Version) in

SAP FICO?
The Financial Statement Version or FSV is a reporting tool in SAP FICO. It can be used
to extract final accounts from SAP like Profit and Loss Account and Balance Sheet.
We can use multiple FSV's for generating the output of various external agencies
such as Banks and other statutory authorities.

22) What are the different steps involved in G/L posting?

After completing the payroll run, we have to add results to the GL accounts,
including cost centers. GL posting includes the following steps:

o Groups together posting-relevant information from the payroll results.

o Creates summarized documents.
o Performs the relevant postings to appropriate GL accounts and cost centers.

23) What do you understand by a field status group?

A field status group is used to control the fields which come up when the user does
the transactions. In FIGL (Financial General Ledger) master, the field status group is
stored.

24) What are the most common G/L reports in SAP FI?
Following are the several most common G/L reports that can be generated in SAP FI:

o G/L Chart of Accounts List

o G/L Account Balances
o G/L Account List
o G/L Account Totals and Balances

25) What is the importance of financial statements within a

business in SAP FICO?
In SAP FICO, the financial statements are used to manage the company's financial
assets. By creating and handling such financial statements and records, we create
data that we can use later to develop further plans and investments for our company.

26) How can you manage the credit limit for the customer in
SAP FI?
In SAP FI, the credit control is used to check the credit limit for the customer, and it
can use one or more codes. It is used for credit management in Application
components- Account Receivable (AR) and Sales and Distribution.

27) How many fiscal year variants can you use at a time?
We can define up to 16 posting periods in a fiscal year in the controlling component
CO. We need to specify the fiscal year variant for each company code. When you
create a controlling area, you also need to specify the fiscal year variant. Each
company code requires a specific fiscal year variant. Thus, while creating a controlling
area, you should also specify that code's fiscal year variant.

The credit control area is determined in the following sequence:

o User exit
o Distribution channel
o Customer master
o Company code for the sales organization

28) What is the use of Account Receivables in SAP FI?

In SAP FI, Accounts Receivable components are used to record and manage the
accounting data of all customers, and it is also an integral part of sales management.
All postings in Accounts Receivable are also recorded directly in General Ledger.
Different G/L accounts are updated depending on the transaction involved (for
example, receivables, down payments, and bills of exchange).

29) What are the benefits of using Business areas in a

company?
Business areas in a company can be used if other company codes require the same
areas. Following are the benefits of using Business areas:

o The business area is easy to configure as you need to attach to the company
code and the other details in the business area, and it will get attached by
itself.
 o By using Business areas in controlling, you can create Profit and loss
statements, Balance sheets, etc., for business areas, which is used for
management accounting in a few companies.

30) What do you understand by company and company code in

SAP FICO?
In SAP FICO, a company is an organizational unit used in the legal consolidation module to
roll up financial statements of several company codes. On the other hand, the company code
is the smallest organizational unit for which a completely self-contained set of accounts can
be drawn up for external reporting purposes.

31) What is the relationship between company code and

controlling area in SAP FICO?
A controlling area may contain one or more company codes that must use the same operative
chart of accounts as the controlling area. A controlling area can contain multiple company
code assignments, but a single company code can be assigned to only one controlling area.

32) What are the problems faced when we configure the

business area?
The main problem encountered when a business area is configured splitting of account
balance which is more pertinent in the case of tax accounts.

33) What do you understand by parallel and the local currency

in SAP FICO?
The local currency is the currency that is entered in the company code creation. The other
two additional currencies are called parallel currencies. Parallel currencies can be used in
foreign business transactions, and it is also used to do international transaction. The examples
of two parallel currencies are GROUP CURRENCY and HARD CURRENCY.

34) What are the customizing prerequisites for document

clearing?
The customizing prerequisite for document clearing is to check the items cleared and
uncleared. This is done by open item management. Open item management is a process used
to manage outstanding accounts, i.e., account payable and accounts receivable. For example,
an invoice item that has not yet been paid is considered an open account until it is paid.

35) What do you understand by FI-GL Accounting? Why is it

used?
The FI-GL Accounting stands for Financial- General Ledger. It is used to get an overview of
external Accounting and accounts. It records all business transactions incorporated with all
other operational areas in a software system and ensures that the Accounting data is always
complete and accurate.

36) What are the methods used to make vendor invoice

payments?
There are two methods used to make vendor invoice payments:

Manual payment method is done without the use of any output medium like cheques etc.
Automatic payment method is done using some output medium such as DME (Data Medium
Exchange), cheques, Wire transfer, etc.

37) What is the default exchange rate type picked up for all
SAP transactions?
For all SAP transactions, the default exchange rate type is M (Average Rate).

38) What is the importance of GR/IR (Good Received/ Invoice

Received) clearing account in SAP FICO?
In SAP FICO, GR/IR stands for Good Received/ Invoice Received as an interim account. If
the goods are received in the legacy system, and the invoice is not received, the provision is
made. It passes the Accounting entry debiting the Inventory and crediting the GR/IR account.
In the same way, when an invoice is received, the vendor account is credited, and the GR/IR
account is debited. The GR/IR shows as un-cleared items till the time invoice is not received.

39) What are the different accounting groups that can be

created in Account Receivable in SAP FI?
Following are the different accounting groups that can be created in Account Receivable in
SAP FI:

Group Name

X001 Domestic Customers

X002 Export Customers

X003 One Time Customers

40) Is it possible to calculate depreciation to the day? How can

you do that?
Yes, it is possible to calculate depreciation to the day. The depreciation to the day function
becomes active for an asset as soon as the asset has a corresponding depreciation key and is
capitalized (posted to). Once this takes place, you cannot switch off this function for the
asset, even if you change the depreciation key.

41) What is the use of Account payable in SAP FI? How is it

related to G/L?
In SAP FI, Accounts payable is used to manage and record the accounting data for all the
vendors. It is related to G/L in the following ways:

o All invoices and deliveries are managed as per vendor requests.

o Payables are managed as per the payment program, and all payments can be
made using checks, transfers, electronic transfers, etc.
o All the postings made in Account payable are also updated in General Ledger
simultaneously, and the system also maintains forecasts and standard reports
that can be used to keep track of all the open items.

42) What are the internal orders in SAP FICO? Where can you
use this?
Internal orders are generally used to plan, collect, and settle the costs of internal jobs and
tasks. Internal orders can also be used to track the cost, and they are proposed to be incurred
over a short-term basis.
43) What do you understand by blocking a customer in SAP FI?
When you block a customer account in AR so that postings are no longer made to that
Account, this process is called blocking. We have to block a customer account before
marking a customer master record for deletion.

We should also block a customer that we use only as an alternative dunning recipient to
ensure that nobody can post to that customer by mistake. We can set the following blocks for
a customer in the Sales and Distribution (SD) application component:

o Posting block
o Order block
o Delivery block
o Invoicing block

44) What are the different blocks that can be applied to a

vendor account in SAP FI?
We can apply the following blocks to a vendor account in SAP FI:

o Posting block for certain company codes or all company codes.

o Purchasing block for certain purchasing organizations or all purchasing
organizations. This block is only used if you have purchased and installed the
purchasing application component.

45) What is the chart of depreciation in Asset Accounting?

In Asset Accounting, the chart of depreciation is rated as the highest node, which is
assigned to the company node. All the depreciation calculations are stored under the
chart of depreciation.

46) How can you create Credit Control Area in SAP FI?
We can create Credit Control Area in SAP FI by using transaction code OB45 or path.
To do this, follow the steps given below:
1. SPRO> enterprise structure >maintain structure>definition>financial accounting>ma
intain credit control area and then enter the following description:   

o Update
o Name of the credit-control area in SAP
o Currency
o Description
o Credit Limit
o Risk Category
o Fiscal Variant
o Rep group

47) How can you manage the relationship between two

currencies in SAP FI?
To define and manage the relationship between two currencies in SAP FI, we use
exchange rates. It is also used to translate an amount into another currency.

Exchange rates are defined in the system for the following purposes:

o Posting and Clearing: It translates amounts posted or cleared in foreign

currency or checks a manually entered exchange rate during posting or
clearing.
o Exchange Rate Differences: It is used to determine gains or losses from
exchange rate differences.
o Foreign Currency Valuation: It is used to evaluate open items in foreign
currency and foreign currency balance sheet accounts as part of the closing
operations.

48) What is the field status group, and what does it use to
control?
The field status group is configured in FSV (Field Status Variant) to maintain field
status for G/L (General Ledger) accounts.
49) What are some most important tables in SAP FICO?
SAP FICO tables are used to store the data on a screen. Sometimes, more than one
table is linked to a particular screen. An SAP FICO consultant must know the table in
the SAP software and its data structure.

Following is a list of some most important tables of SAP FICO:

SAP Tables: Enterprise structure

Table Description

T001 SAP Company-Code

T005 Countries in SAP

TCURC SAP Currency-codes

TCURR Exch-rate in SAP

TCURT Currency-name in SAP

T077S G/L Account-group

T009 Fiscal year variants in SAP

T880 Global-company-data in SAP

T014 Credit-control-area SAP

T004 SAP Chart of accounts (COA)

T010O SAP Posting-period-variant (PPV)

T010P Posting period variant names in SAP

T001B Permitted posting periods in SAP

T003 Document-types in SAP

T012 House-banks in SAP

SAP FI G/L Tables

 Table Description

SKA1 Chart of accounts segment GL master data

SKB1 Company code segment G/l master data

BNKA Bank master record in SAP

BKPF SAP Accounting documents header

BNKA Bank master record SAP

BKPF Accounting documents header in SAP

SAP Accounts Receivable Table

Table Description

KNBK Bank details

KNVK Contact persons

KNVH Customer hierarchy

KNVI Customer master tax indicator

KNB1 Customer master-Company code data

KNA1 Customer master-General data

KNVV Customer master-Sales data

KNVP Customer partners

KNVS Shipment data for customer

SAP FI Accounts payable tables

Table Description

LFBK Bank details

LFM2 Purchasing data

 LFM1 Purchasing organization data

LFB5 Vendor dunning data

LFB1 Vendor master-Company code data

LFA1 Vendor master-General data

SAP tables: Assets Accounting

Table Description

ANKB Asset classes: Depreciation area

ANKT Asset classes: Description

ANKA Asset classes: General data

ANEP Asset line items

ANLU Asset master record user fields

ANEK Document header asset posting

ANLZ Time-dependent asset allocation

SAP CO Tables
Following is the list of important SAP CO tables:

Cost Center accounting tables

Table Description

CSKS Cost center master data

CSKT Cost center texts

CRCO Assignment of work center to cost center

COSP Cost totals for external postings

COEP Line items (by period)

 COBK Document header

COST Price totals

Profit center Accounting tables

Table Description

GLPCA Actual line items - Profit center

GLPCO Object table for the account - Profit center

GLPCP Plan line items - Profit center

GLPCC Transaction attributes - Profit center

CEPC Profit center master data table

CEPCT Texts for profit center master data

50) What do you understand by posting period variants?

In SAP FI, the posting period variants are accountable to control which Accounting
period is open for posting and ensure that the closed periods remain balanced. In
the fiscal year, the posting period is a period for which the transactions figures are
updated.

51) What is APP in SAP FICO?

In SAP FICO, APP stands for "Automatic Payment Program". It is an SAP tool provided
to companies to pay their vendors and customers. APP tools facilitate users to avoid
mistakes that take place in posting manually. Another benefit is that payment
through APP becomes more feasible when the number of employees is more in the
company.

52) How can you define the tolerances for invoice verification?
In SAP FICO, the term tolerance specifies whether the payable places matching or tax
hold on the invoice.
Following is the list of instances of tolerance that can be defined for Logistics
Invoice Verification:

o Small differences
o Moving average price variances
o Quantity variances
o Price variances

53) What do you understand by the short-end fiscal year?

A short-end fiscal year comes into existence when you change from a normal fiscal
year to a non-calendar fiscal year or the other way around. This type of change
occurs when an enterprise becomes part of a new co-corporate group.

54) What do you understand by account group, and what is the

use of it?
Account group exists for the definition of GL account and Customer Master and
Vendor. It is mainly used to control the data that needs to be entered at the time of
the creation of a master record.

55) What do you understand by cost center and profit center in

Controlling?
Cost Center: A Cost center is a component in an organization that is added to the
cost and indirectly added to the organization's profit. For example, Marketing and
Customer Service. A company's business unit can be classified as a profit center, cost
center, or investment center. The simple and straightforward division of an
organization can be classified as a cost center as the cost is easy to measure.

Profit Center: In SAP FICO, a profit center is used to manage internal controlling.
When a company is divided into profit centers, it allows you to delegate
responsibility to decentralized units and allows you to treat them as separate
companies in a company.
56) What is the purpose of "Document type" in SAP FICO?
Following is the list of main purposes of "Document type" in SAP FICO:

o It is used to define the number range for documents.

o It is used to control the types of accounts posted, such as Assets, Vendor,
Customer, Normal GL account, etc.
o It is also used for the reversal of entries.

57) In which application areas, validation and substitutions are

used?
Validation and substitutions are used in the following application areas:

o AM-Asset accounting
o CS-Consolidation
o CO-Cost accounting
o FI- Financial accounting
o PC-Profit center accounting
o PS-Project system
o GL-Special purpose ledger
o RE-Real estate

58) Is the business area at the company code level?

No. Business area is at the client level instead of the company code level, and it
means other company codes can also be posted to the same business area.

59) What are the one-time vendors in SAP FICO?

In such companies especially dealing with high cash transactions, it is not practical to
create new master records for every vendor trading partner. In these cases, one-time
vendors come into existence, and they allow a dummy vendor code to be used on
invoice entry and the information usually stored in the vendor master.
60) In SAP, at what level the Customer and Vendor codes are
stored?
In SAP FICO, the Vendor and Customer codes are stored at the client level. By
extending the company code view, any company code can use the customer and
vendor code.

61) What do you understand by accounting period variants and

posting period variants in SAP FICO?
In SAP FICO, accounting period variants are used to manage the accounting periods
open for validation and for all closed periods to be deleted. These are used for
opening and closing periods of the financial year for reservation purposes. These
posting periods can be assigned to one or more companies.

In SAP FICO, posting period variants are used to maintain accounting periods open
to post while all closed periods are balanced. These are used to open or close
periods in the fiscal year for posting. We can also use these posting periods to assign
to one or more company codes.