100 SAP FI

Terms in
English/English

Consultor SAP FI: Bruno Primiano

Account Assignment Model

In SAP is a tool that simplifies the entry of repetitive or complex financial

transactions by providing a pre-defined template of account assignments. It
allows users to save frequently used combinations of accounts, cost centers,
profit centers, and other assignment objects, making data entry faster and
reducing errors. Account assignment models simplify repetitive data entry.

Account Balance Display

Refers to the function in financial systems, such as SAP, that provides a

detailed view of the current balance of a specific general ledger (G/L)
account or subledger account, such as a customer or vendor account. It
helps users quickly access the financial position of an account at any given
time. Account balance display helps in financial analysis and
reconciliation.

Account Determination

Is the process in financial and ERP systems (such as SAP) used to

automatically assign specific general ledger (G/L) accounts to financial
transactions based on predefined rules. This ensures that transactions are
posted to the correct accounts without manual intervention, streamlining
the accounting process and reducing errors. Account determination is based
on transaction types and account assignments.

Accounts Payable (AP)

Refers to the money a company owes to its suppliers or vendors for goods
or services that have been received but not yet paid for. It represents a
liability on the company's balance sheet, as these are obligations that need
to be settled in the future. AP is a subledger that feeds into the General
Ledger and is critical for managing cash flow and vendor relationships.

Accounts Receivable (AR)

Consultor SAP FI: Bruno Primiano

Refers to the money owed to a company by its customers for goods or
services that have been delivered but not yet paid for. It represents an asset
on the company's balance sheet, as it is expected to be converted into cash
in the future. AR is a subledger that integrates with the General Ledger and
is essential for managing customer credit and collections.

Accruals and Deferrals

Are fundamental concepts in accounting that relate to the timing of revenue

and expense recognition. They help ensure that financial statements reflect
the true financial position and performance of a business according to the
accrual basis of accounting.

Accruals refer to the recognition of revenues and expenses that have been
incurred but not yet recorded in the financial statements. This means that
transactions are recorded when they occur, rather than when cash is
exchanged.

Deferrals refer to the postponement of recognizing revenues and expenses

until a future date. This means that cash has been received or paid, but the
revenue or expense will be recognized in future periods. Accruals and
deferrals ensure accurate period-end reporting.

Advanced Intercompany Sales

In SAP S/4HANA is an enhanced process that automates and streamlines

intercompany transactions between affiliated companies within the same
corporate group. It is designed to improve efficiency, compliance, and
transparency in intercompany sales. Advanced intercompany sales
streamline intercompany transactions.

Alternative Reconciliation Account

In SAP is a substitute general ledger (G/L) account used to post specific

types of transactions for a particular vendor or customer instead of using
the standard reconciliation account. The primary purpose of a
reconciliation account is to aggregate subledger data (e.g., from customer
or vendor accounts) into the general ledger without allowing direct

Consultor SAP FI: Bruno Primiano

postings. Alternative reconciliation accounts are used for specific vendor or
customer transactions.

Asset Accounting (AA)

Ensures that all financial transactions related to assets are accurately

recorded and reported, helping organizations maintain proper asset
management and comply with accounting standards. It supports asset
lifecycle management, including acquisition, depreciation, and retirement.

Asset Under Construction (AuC)

Refers to fixed assets that are still in the development or installation phase
and are not yet ready for regular use. These assets are recorded on the
balance sheet as AuCs until they are completed and operational. AuCs are
capitalized upon completion.

Audit Trail

Refers to a detailed record that traces the sequence of activities or

transactions in a system or process, allowing for transparency and
accountability. It is often used in financial, legal, and IT environments to
track actions such as system changes, financial transactions, or data access,
providing a historical record of who did what, when, and how. Audit trails
are essential for compliance and internal controls.

Automatic Clearing

In SAP refers to a process that matches and clears open items in accounts
automatically based on predefined criteria. It is primarily used in Accounts
Payable (FI-AP), Accounts Receivable (FI-AR), and General Ledger (FI-
GL) to streamline financial reconciliation. Automatic clearing reduces
manual reconciliation effort.

Automatic Payment Program (APP)

Consultor SAP FI: Bruno Primiano
In SAP is a feature designed to automate the processing of payments to
vendors and suppliers. It streamlines the payment process, reduces manual
intervention, and ensures timely payments while maintaining accurate
financial records. The APP can handle mass payments and generate
payment advice.

Balance Carryforward

In SAP refers to the process of transferring account balances from the

previous fiscal year to the new fiscal year. This ensures that financial
accounting data remains consistent and up to date. Balance carryforward
ensures accurate opening balances.

Balance Sheet

Is a financial statement that provides a snapshot of a company's financial

position at a specific point in time. It outlines three main components:

1. Assets: What the company owns (e.g., cash, inventory, property).

2. Liabilities: What the company owes (e.g., loans, accounts payable).
3. Equity: The owner's interest in the company after liabilities are
subtracted from assets (e.g., retained earnings, capital stock).
The balance sheet is a snapshot of the company's financial position at
a specific date.

Bank Accounting

Refers to the management and recording of all transactions related to an

organization's bank accounts within its accounting system. This includes
processes such as cash receipts, payments, bank transfers, and
reconciliation of bank statements. Bank accounting ensures that all
transactions involving the bank accounts are accurately reflected in the
financial records and properly reconciled with actual bank balances. It also
includes managing bank master data and electronic bank statements.

Business Area

Consultor SAP FI: Bruno Primiano

In SAP is an organizational unit used to represent a specific area of
business operations or a segment of the company that can be distinguished
by its products, services, or geographical locations. It allows for separate
reporting and analysis of financial performance across different segments
of the organization. Business areas are used for segment reporting and
analysis.

Cash Journal

In accounting, particularly in systems like SAP, is a specialized accounting

record used to track all cash transactions within an organization. It provides
a detailed overview of cash inflows and outflows, helping to manage cash
flow effectively. The cash journal is used for petty cash management.

Central Finance (CFIN)

In SAP is a solution within SAP S/4HANA that allows organizations to

replicate financial transactions in real-time from multiple source systems
(SAP and non-SAP) into a centralized S/4HANA system. It enables a
single, unified financial reporting and management platform without
disrupting existing ERP landscapes. CFIN provides a single source of truth
for financial reporting.

Chart of Accounts (CoA)

It is a structured list of all the accounts used by an organization to record its

financial transactions. Each account in the chart corresponds to a unique
code or number, representing different categories such as assets, liabilities,
equity, revenue, and expenses. The CoA is customizable and can be
tailored to meet organizational or regulatory requirements.

Clearing

Refers to the process of matching and settling open items, such as unpaid
invoices or outstanding payments, in an accounting system. When an
invoice is paid or a payment is received, the clearing process closes or
offsets these open items, ensuring that no outstanding amounts remain in
Consultor SAP FI: Bruno Primiano
the financial records. In systems like SAP, clearing can be applied to
customer accounts, vendor accounts, and general ledger accounts. It helps
maintain accurate financial records by ensuring that all transactions are
fully reconciled and properly accounted for. Clearing ensures accurate
financial reporting by reconciling open items.

Company Code

In SAP is a unique organizational unit that represents an independent legal

entity within the system. It is the central element for financial accounting
and serves as the basis for generating financial statements, such as balance
sheets and profit and loss statements. Each company code can have its own
financial structure, accounting policies, and reporting requirements. Each
company code has its own set of books for financial reporting.

Cost Center

Is a unit or department within an organization where costs are tracked, but

which does not directly generate revenue. It is used to monitor and control
the expenses associated with specific activities, processes, or departments,
such as manufacturing, administration, or marketing. By assigning costs to
different cost centers, a company can better analyze its spending and make
informed decisions to improve efficiency, reduce unnecessary expenses,
and manage budgets. Cost centers are used for internal cost allocation and
budgeting.

Credit Control

Refers to the process of managing and monitoring a company's credit

policies to ensure that customers are paying their invoices on time and
within the agreed-upon credit limits. It involves setting credit limits for
customers, assessing their creditworthiness, and implementing measures to
reduce the risk of bad debts. Credit control helps minimize bad debt and
improve cash flow.

Cross-Company Code Transactions

Consultor SAP FI: Bruno Primiano

Refer to financial transactions that occur between different company codes
within the same organization in an ERP system, such as SAP. A company
code is an independent accounting unit within the organizational structure
of a business that has its own set of financial statements (balance sheet,
profit and loss statement, etc.). Cross-company code transactions require
intercompany reconciliation.

Customizing

In SAP refers to the process of configuring the SAP system to meet specific
business requirements without modifying the core program code. It
involves setting up system parameters, defining rules, and adjusting
standard processes to align with an organization's needs. Customizing
tailors SAP to meet business needs.

Customer Master Data

Refers to the essential information stored about a company's customers

within an enterprise resource planning (ERP) system, such as SAP. It is
crucial for managing customer relationships, facilitating sales, billing, and
delivering services. Customer master data includes credit limits, payment
terms, and contact information.

Data Medium Exchange (DME)

In SAP refers to an electronic process used for generating payment files

that can be transmitted to banks or financial institutions. It is commonly
used in Automated Payment Transactions (such as vendor payments,
payroll, and direct debits). DME supports electronic payment processing.

Debit and Credit

Are fundamental accounting terms used to record financial transactions in

double-entry bookkeeping. They are essential for maintaining the
accounting equation (Assets = Liabilities + Equity) and ensuring that the
financial records are balanced.

Consultor SAP FI: Bruno Primiano

Debit (Dr)

1. Definition: A debit is an entry recorded on the left side of an

account. It typically increases asset or expense accounts and
decreases liability, equity, or revenue accounts.

Credit (Cr)

1. Definition: A credit is an entry recorded on the right side of an

account. It typically increases liability, equity, or revenue accounts
and decreases asset or expense accounts.

Debits and credits must balance in double-entry bookkeeping.

Depreciation Run

Is a process in accounting systems, like SAP, where periodic depreciation

is calculated and posted for fixed assets. This automated process
determines the expense for asset depreciation based on predefined
schedules, typically on a monthly or annual basis, and posts it to the
general ledger. Depreciation runs are scheduled based on asset useful life.

Document Number

Refers to a unique identifier assigned to each financial transaction or

accounting entry in an accounting system. It ensures that every transaction
is easily traceable and can be referenced for audit or reporting purposes.
The document number helps maintain order and transparency in financial
records by linking specific transactions to their respective details, such as
amounts, accounts, and dates. Document numbers can be system-generated
or manually assigned, depending on configuration.

Document Parking

In SAP is a feature that allows users to save incomplete or preliminary

financial documents without posting them to the general ledger. It enables
review, approval, and completion before final posting. Document parking
ensures review and approval before posting.

Consultor SAP FI: Bruno Primiano

Document Splitting

In SAP is a functionality that allows a company to automatically split

accounting documents to enhance financial reporting and meet specific
regulatory requirements, particularly in segment or profit center
accounting. With Document Splitting, SAP can produce balanced financial
statements (such as balance sheets) at a more granular level, such as by
segment, profit center, or other dimensions, ensuring that all relevant costs
and revenues are properly attributed to the respective entities. Document
splitting ensures balanced financial statements.

Document Type

In SAP refers to a classification that defines the nature and purpose of a

business document within the system. It helps categorize different types of
transactions and controls the processing and accounting treatment of those
documents. Document types are essential for managing various financial
activities, such as postings, invoices, and journal entries. Document types
control the numbering range and account determination.

Down Payment

Is an initial upfront payment made by a buyer when purchasing goods or

services, typically as a percentage of the total purchase price. It is often
used in large transactions, such as real estate, vehicle purchases, or major
contracts, where the buyer agrees to pay the remaining balance over time
through installments or upon delivery. Down payments are recorded as
liabilities until the final payment is made.

Dunning

Refers to the process of systematically communicating with customers to

remind them of overdue payments and request settlement of outstanding
invoices. It involves sending a series of increasingly firm reminders, often
in multiple stages, until the debt is paid or further action is taken. Dunning
can be automated in SAP, with customizable dunning levels and texts.

Consultor SAP FI: Bruno Primiano

Electronic Bank Statement (EBS)

In SAP is an automated tool for importing and processing a company's

bank account transactions directly into the SAP system. It simplifies the
reconciliation process by allowing financial transactions—such as
payments, bank transfers, and fees—to be automatically posted and
matched to open items in accounts receivable and accounts payable. EBS
reduces manual effort in bank reconciliation.

Electronic Funds Transfer (EFT)

In SAP refers to the electronic transfer of funds between bank accounts,

typically used for payments or receipts. It is an integrated process that
allows organizations to process payments (such as vendor payments or
employee salaries) and receipts (such as customer payments) electronically,
bypassing paper-based methods like checks. EFT reduces manual effort in
payment processing.

Exchange Rate

Is the value at which one currency can be exchanged for another. It

determines how much of one currency you need to spend to purchase a unit
of another currency and is essential for international trade, investments, and
financial transactions involving multiple currencies. Exchange rates are
used for currency conversion in international transactions.

Extended Withholding Tax

In SAP is a system that allows for the detailed calculation, tracking, and
reporting of withholding taxes according to complex tax requirements. It
enables companies to manage withholding tax obligations on payments
made to vendors or received from customers, following the tax regulations
in different countries. Extended withholding tax supports complex tax
calculations.

Consultor SAP FI: Bruno Primiano

Fast Entry

In SAP is a feature designed to speed up the entry of data, especially when

entering multiple similar records or transactions at once. It allows users to
enter data quickly by minimizing repetitive inputs, displaying essential
fields in a simplified format, and enabling the posting of multiple line items
within one screen. Fast entry reduces data entry time and errors.

Field Selection

Refers to the configuration that determines the behavior of fields in a

particular transaction or screen. It defines whether a field is mandatory
(required), optional, display-only (read-only), or hidden based on business
requirements. Field selection is configured in customizing.

Field Status Group

In SAP controls the appearance and behavior of fields in financial

transactions, such as posting to a general ledger (G/L) account. It
determines whether specific fields are required, optional, suppressed
(hidden), or displayed when entering transactional data. Field status groups
are configured in the G/L account master data.

Financial Closing Cockpit (FCC)

In SAP is a tool that helps organizations streamline, automate, and monitor

the financial closing process across multiple periods, entities, and systems.
It ensures efficient and compliant period-end and year-end closing. FCC
automates and monitors the financial closing process.

Financial Statement

Is a formal record of an organization’s financial activities and performance

over a specific period. It provides a summary of the company's financial
position, cash flows, and profitability. The three main types of financial
statements are:

Consultor SAP FI: Bruno Primiano

 1. Balance Sheet: Shows the company’s assets, liabilities, and equity at
a specific point in time.
2. Income Statement (Profit and Loss Statement): Reports the
company’s revenue, expenses, and profits or losses over a period.
3. Cash Flow Statement: Details the cash inflows and outflows from
operating, investing, and financing activities.
Financial statements are used by stakeholders, such as investors,
creditors, and management, to assess the financial health and
performance of the company. They are also used for internal
decision-making and external reporting to stakeholders.

Fiscal Year

Any accounting period of 12 months. It may or may not align with the
calendar year, depending on the organization’s accounting policies. The
fiscal year is used to prepare financial statements, report earnings, and track
the financial performance of an organization over time. Fiscal years can be
divided into posting periods for better financial control.

Foreign Currency Valuation

Refers to the process of revaluing assets and liabilities that are denominated
in foreign currencies to reflect their value in the local (functional) currency
at the end of a specific period, typically a financial reporting period. This
process ensures that the financial statements present accurate and up-to-
date values in accordance with changes in exchange rates. Foreign currency
valuation ensures accurate financial reporting.

Functional Area

Is an organizational unit used primarily in Financial Accounting (FI) to

classify expenses according to their function. It helps in preparing financial
statements based on function-based accounting. Functional areas are used
for function-based reporting.

General Ledger (GL)

Consultor SAP FI: Bruno Primiano

Refers to the central record of all financial transactions within an
organization's accounting system. It contains all the accounts used to record
transactions related to assets, liabilities, equity, revenue, and expenses. The
General Ledger provides a complete and comprehensive record of a
company's financial activities and forms the basis for preparing financial
statements such as the balance sheet and income statement. It is the
foundation for financial reporting and compliance.

GR/IR Clearing Account

(Goods Receipt/Invoice Receipt Clearing Account) is a temporary or

intermediary account used in accounting and enterprise resource planning
(ERP) systems, such as SAP, to manage timing differences between goods
receipt and invoice receipt in the procurement process. The GR/IR account
ensures accurate matching of goods and invoices.

House Bank

In SAP refers to a bank that a company uses to manage its financial

transactions, including payments, collections, and other banking activities.
It represents a bank where the company holds its accounts and performs
transactions such as outgoing payments, incoming payments, and cash
management. House banks are used for managing multiple bank accounts.

Incoming Payment

Refers to any payment that a company receives from its customers, clients,
or other sources. In financial accounting, this is a transaction that increases
the company’s cash or bank account balances. It is typically recorded when
customers settle their invoices by paying for goods or services rendered.
Incoming payments are matched with open invoices.

Integration with Controlling (CO)

In SAP refers to the seamless data flow between the Financial Accounting
(FI) and Controlling (CO) modules. This ensures that all financial
transactions recorded in FI are automatically reflected in CO for internal
Consultor SAP FI: Bruno Primiano
management reporting and cost control. FI-CO integration ensures accurate
cost allocation.

Interest Calculation

Interest Calculation in finance refers to the process of determining the

amount of interest that accrues on a principal sum over time. In an ERP
system like SAP, interest calculation is often used in financial modules for
managing customer or vendor balances, calculating penalties for late
payments, and managing loans or investments. Interest calculation is used
for late payments and investments.

Intercompany Posting

Refers to the accounting process of recording financial transactions

between different legal entities (or company codes) within the same
corporate group or organization. These transactions involve activities such
as sales, purchases, or expense allocations that occur between the internal
divisions, subsidiaries, or business units of the organization. Intercompany
postings ensure accurate consolidation of financial statements.

Internal Bank Accounts

Refer to accounts within an organization’s financial system that represent

its own bank accounts used for internal transactions and cash management.
These accounts track the organization’s cash flow, fund transfers,
payments, and receipts in real-time and are distinct from external customer
or vendor accounts. Internal bank accounts are used for fund management.

Internal Order

Is a tool used in financial accounting and controlling to track costs for a

specific project, event, or task within an organization. It is typically used
for short-term, temporary purposes, such as monitoring expenses related to
marketing campaigns, repairs, or small projects. Internal orders allow for
detailed tracking and controlling of costs, ensuring they are correctly

Consultor SAP FI: Bruno Primiano

allocated. They can also be used for tracking costs for specific projects or
events.

Invoice Verification

In SAP refers to the process of matching and verifying vendor invoices

with purchase orders (PO) and goods receipts (GR) before posting them for
payment. It ensures that the invoice amounts are correct and comply with
the terms of the agreement, helping to prevent errors and discrepancies in
the accounts payable process. Invoice verification ensures accurate vendor
payments.

Ledger

Is a central record-keeping system in accounting that contains all the

financial transactions of an organization. It is used to track and categorize
every financial activity, such as revenues, expenses, assets, liabilities, and
equity. The ledger is the foundation of the double-entry bookkeeping
system, where every transaction is recorded as both a debit and a credit to
ensure balance. In systems like SAP, different types of ledgers are
maintained, such as the General Ledger (which contains the overall
financial transactions) and Sub-Ledgers (which track specific areas like
Accounts Payable or Accounts Receivable). The ledger provides a
comprehensive view of a company's financial status. Ledgers can be
standard or parallel, depending on reporting requirements.

Line Item Display

In SAP is a feature that allows users to view detailed information about

individual transactions or line items within financial accounts. This display
includes essential details like the document number, posting date, amount,
and account assignment data, making it a powerful tool for tracking and
analyzing transactions. Line item display helps in detailed transaction
analysis.

Liquidity Forecast

Consultor SAP FI: Bruno Primiano

Is the process of predicting a company's future cash inflows and outflows
over a specific period to assess its ability to meet financial obligations. This
forecast helps businesses manage their liquidity, ensuring they have enough
cash on hand to cover expenses, make investments, or plan for potential
shortfalls. Liquidity forecast helps in cash flow planning and management.

Lockbox

Is a banking service used by companies to streamline the process of

receiving and processing customer payments, especially for high volumes
of incoming checks. It involves a physical or electronic location where
customers send their payments, which are then collected, processed, and
deposited by the bank on behalf of the company. Lockbox processing
reduces manual effort in payment reconciliation.

Manual Journal Entry

Refers to the process of recording financial transactions directly into the

general ledger without the use of automated systems or sub-ledger inputs. It
is typically done manually by an accountant or a financial professional to
correct, adjust, or record transactions that were not captured by the system's
automated processes. Manual journal entries are used for adjustments and
corrections.

Open Item Clearing

In SAP refers to the process of matching and settling related debit and
credit transactions in accounts such as Accounts Payable (FI-AP),
Accounts Receivable (FI-AR), and General Ledger (FI-GL). Open item
clearing ensures accurate account reconciliation.

Open Item Management

In SAP is a feature used in financial accounting to track and manage

outstanding transactions, typically related to accounts receivable and
accounts payable. It enables organizations to monitor and reconcile open

Consultor SAP FI: Bruno Primiano

items, ensuring that financial records are accurate and up to date. Open
item management ensures accurate reconciliation of accounts.

Outgoing Payment

Refers to any payment that a company makes to its vendors, suppliers,

employees, or other parties to settle its liabilities or obligations. It is a
transaction that decreases the company's cash or bank account balance and
is recorded as part of the company's accounts payable process. Outgoing
payments are processed based on payment terms.

Parallel Accounting

In SAP refers to the practice of maintaining multiple sets of financial books

to comply with different accounting standards or regulations. This is
particularly useful for organizations operating in multiple countries or
jurisdictions, as they may need to report financial results based on different
frameworks. Parallel accounting supports multiple accounting standards.

Payment Advice

In SAP is a document that provides details about a payment made by a

customer or to a vendor. It serves as a reference for reconciling incoming
or outgoing payments with open invoices in Accounts Receivable (FI-AR)
or Accounts Payable (FI-AP). Payment advice helps in reconciling
payments with invoices.

Payment Block

In SAP refers to a control mechanism used to prevent a payment from

being processed for a specific vendor invoice or payment document. It can
be applied to ensure that invoices or payments requiring additional
approval, clarification, or investigation are not paid until the block is
removed. Payment blocks prevent unauthorized payments.

Consultor SAP FI: Bruno Primiano

Payment Program

Refers to an automated process within an ERP system, like SAP, that

facilitates the efficient management of outgoing payments to vendors,
suppliers, or creditors. It helps streamline the payment process by selecting
due invoices, determining payment methods (such as bank transfer or
check), and executing payments according to predefined criteria. The
Payment Program is designed to ensure timely and accurate payments,
reduce manual effort, and minimize errors in the payment process. It also
generates relevant documentation, such as payment advice notes and bank
transfer files, while updating the company’s financial records. The payment
program can handle multiple payment methods (e.g., checks, wire
transfers).

Payment Terms

Refer to the conditions and agreed-upon rules under which a seller expects
to receive payment from a buyer for goods or services rendered. These
terms define how and when payment is due and can include discounts for
early payment, penalties for late payment, or installment arrangements.
Payment terms can include cash discounts and due dates.

Periodic Processing

In SAP refers to scheduled financial processes and activities that need to be

completed at regular intervals—monthly, quarterly, or annually—to ensure
accurate financial reporting and accounting compliance. This includes a
series of recurring tasks such as accruals, depreciation, currency
revaluation, and balance carryforward, which help maintain updated and
correct financial records. Periodic processing ensures accurate period-end
reporting.

Posting Date

In SAP refers to the date on which a financial transaction is recorded in the

accounting books. This date is crucial for determining the accounting
period to which the transaction belongs and affects financial reporting and

Consultor SAP FI: Bruno Primiano

analysis. The posting date determines the accounting period for the
transaction.

Posting Key

Refers to a two-digit code in SAP Financial Accounting (FI) that

determines how a financial transaction is posted in the system. It defines
whether the transaction will be a debit or credit, the type of account (such
as a general ledger, customer, or vendor account), and the type of entry
(such as an invoice, payment, or adjustment). Posting keys are also used to
determine the account type (e.g., asset, liability, revenue).

Posting Period

Refers to a specific time frame during which financial transactions can be

recorded (posted) in the accounting system. In SAP and other ERP systems,
posting periods are often aligned with months or quarters, but they can be
customized according to the organization's financial reporting needs. Only
within an open posting period can transactions such as invoices, payments,
and journal entries be entered into the system. Posting periods can be
closed to prevent further postings, ensuring accurate period-end reporting.

Profit and Loss Statement (P&L)

Also known as an Income Statement, is a financial document that

summarizes a company's revenues, costs, and expenses over a specific
period, usually a quarter or a year. The P&L statement is used to assess
profitability over a period.

Profit Center

Is a branch or division of an organization responsible for generating its own

revenue and profits. It is treated as a separate unit for financial reporting
purposes, allowing the organization to assess the profitability of different
parts of the business independently. Profit centers are used for
decentralized management and performance evaluation.

Consultor SAP FI: Bruno Primiano

Profitability Analysis (CO-PA)

In SAP is a component of the Controlling (CO) module that allows

businesses to evaluate their profitability based on different dimensions,
such as products, customers, sales regions, or market segments. It enables
the analysis of revenues, costs, and profit margins, providing detailed
insights into which areas of the business are performing well and which
need improvement. CO-PA provides insights into profitability by segment.

Reconciliation Account

Is an account in the general ledger that connects subsidiary ledgers, such as

Accounts Payable (AP) or Accounts Receivable (AR), to the main ledger in
an ERP system like SAP. It ensures that any entries made in the subsidiary
ledgers are automatically reflected in the general ledger without the need
for duplicate entries. Reconciliation accounts are not directly posted to but
are updated automatically via subledgers.

Reconciliation Ledger

In SAP is a component of Controlling (CO) that ensures real-time

reconciliation between Financial Accounting (FI) and Controlling (CO) by
tracking cross-company and cross-functional cost flows. Reconciliation
ledgers ensure FI-CO integration.

Recurring Entries

Refer to accounting transactions that happen regularly, such as monthly

rent payments, utility bills, or depreciation expenses. Instead of manually
entering the same transaction each time, these entries are automated and
posted at predefined intervals (e.g., weekly, monthly, quarterly) to ensure
consistency and accuracy in the financial records. Recurring entries are
used for periodic expenses like rent or subscriptions.

Release Procedure
Consultor SAP FI: Bruno Primiano
In SAP refers to a control mechanism used to manage and approve
documents (such as purchase orders, invoices, or purchase requisitions)
before they can be processed further. It is primarily used to enforce a
structured approval process, ensuring that documents are reviewed and
approved by the appropriate personnel before being finalized or posted.
Release procedures enforce approval workflows.

Residual Item

In SAP refers to an amount that remains outstanding after a partial payment

or clearing of an open item. It typically occurs in accounts receivable and
accounts payable scenarios when a transaction has not been fully settled,
leaving a remaining balance that still needs to be addressed. Residual items
are cleared when the remaining balance is settled.

Reversal Posting

Refers to an accounting process in which a previously posted transaction or

journal entry is reversed to correct an error or adjust a record. The reversal
entry negates the original posting by making an entry with the same
amounts but in the opposite direction (i.e., debits become credits and
credits become debits). This ensures that the error is corrected while
maintaining a clear audit trail. Reversal postings maintain an audit trail for
corrections.

SAP Ariba Integration

Refers to the process of connecting SAP Ariba, a cloud-based procurement

and supply chain management solution, with SAP ERP or SAP S/4HANA
to enable seamless data exchange and automation in procurement
processes. SAP Ariba integration streamlines procurement processes.

SAP Fiori Apps

Are a collection of web-based applications that provide a simplified,

intuitive, and responsive user interface (UI) for SAP software, designed to
improve the user experience. Built on the SAP Fiori design principles,
Consultor SAP FI: Bruno Primiano
these apps are role-based and aim to streamline business processes by
offering only the most relevant features and data for specific user roles.
SAP Fiori apps provide a modern user experience.

SAP Workflow

Refers to a tool in SAP that automates and manages business processes by

defining, controlling, and monitoring the flow of tasks within and between
SAP applications. It allows for the automation of manual processes,
ensuring that tasks are completed efficiently and in the correct order. SAP
workflow automates and monitors business processes.

Segment Reporting

Refers to the practice of breaking down a company's financial performance

into distinct business segments or units, enabling detailed reporting for
each area of the organization. A segment can represent a specific product
line, geographic region, customer group, or other operational divisions.
This allows for a more granular view of financial data, giving stakeholders
insights into which parts of the business are performing well and which
may need improvement. Segment reporting provides insights into business
performance.

Special Ledger

In SAP is a tool used to define and manage custom financial reporting

requirements that go beyond the standard financial accounting (FI) and
controlling (CO) modules. It allows businesses to create specialized
financial reports or meet specific regulatory or management reporting
needs by creating additional ledgers tailored to their requirements. Special
ledgers are used for custom reporting and regulatory compliance.

Special Purpose Ledger (SPL)

In SAP is a flexible reporting tool used to create and maintain additional

ledgers in the system for specific purposes, apart from the standard General
Ledger (G/L). It allows businesses to define their own ledgers to meet
Consultor SAP FI: Bruno Primiano
reporting or regulatory requirements that are not covered by the regular
financial accounting structure. SPL supports custom reporting
requirements.

Tax Code

In SAP is a key element used in the financial and accounting processes to

classify and manage different types of taxes applicable to transactions. It
defines how sales tax, value-added tax (VAT), or other taxes are calculated
on goods and services within the system. Tax codes are used to calculate
and post taxes in financial transactions.

Tax Jurisdiction Code

In SAP is a code used to identify a specific geographical or legal tax area

that governs tax rates and tax rules for transactions. It is primarily used in
the Sales and Distribution (SD), Materials Management (MM), and
Financial Accounting (FI) modules to ensure that the correct tax rates are
applied based on the jurisdiction where the transaction takes place. Tax
jurisdiction codes ensure accurate tax calculations.

Tolerance Group

In SAP refers to a set of parameters that define limits for permissible

variances in certain financial transactions, such as payments or invoices.
These variances could include payment differences, cash discounts, or
invoice discrepancies. Tolerance groups are primarily used to ensure
control and to avoid unauthorized or incorrect postings beyond a specific
threshold. Tolerance groups prevent unauthorized postings beyond defined
limits.

Transaction Code (T-Code)

In SAP is a shortcut that directly accesses a specific task or function within

the SAP system. Each T-Code corresponds to a particular transaction, such
as creating a sales order, generating a report, or updating master data,

Consultor SAP FI: Bruno Primiano

allowing users to perform various operations more efficiently. T-Codes are
used for quick navigation and task execution in SAP.

Transfer Posting

In SAP refers to the process of moving inventory or financial values from

one account or location to another within a company. It involves the
reclassification or reassignment of materials, assets, or costs without
affecting the quantity or the original value in some cases. Transfer postings
can occur between different stock types, plants, storage locations, or even
accounting classifications. Transfer postings are used for reclassifying
assets or inventory.

Value Date

Refers to the date on which a financial transaction is considered effective

for the purposes of interest calculations or settlement in banking and
finance. It indicates when the funds are available for use or when a
transaction will impact an account balance. The value date is used for
interest calculations and cash flow management.

Variance Analysis

Is a financial and operational tool used to assess the differences between

planned (or budgeted) figures and actual results. In SAP and broader
financial contexts, variance analysis is critical for identifying discrepancies,
understanding their causes, and making informed decisions to improve
performance. Variance analysis helps in identifying cost-saving
opportunities.

Vendor Master Data

Refers to the critical information and records maintained about a

company’s suppliers or vendors in an enterprise resource planning (ERP)
system, such as SAP. This data is essential for managing supplier
relationships and includes details that are necessary for procurement,

Consultor SAP FI: Bruno Primiano

payment processing, and compliance. Vendor master data includes
payment terms, tax information, and bank details.

Year-End Closing

Refers to the process of finalizing a company's financial records at the end

of a fiscal year. This involves ensuring that all financial transactions for the
year are properly recorded, reconciled, and reported, so the company's
financial statements accurately reflect its performance for that period. The
year-end closing process is critical for preparing financial reports that
comply with accounting standards (such as IFRS or GAAP) and tax
regulations. Year-end closing ensures accurate financial reporting and
compliance.

Consultor SAP FI: Bruno Primiano