SAP FICO stands for Financial and Controlling.

It is used to record the day to day business

transactions take place in an org on real time basis and generate financial statements like P&L
and Balance sheet for external reporting purpose whereas CO stands for controlling and It is
mainly used for Internal Reporting Purpose. We can also generate the financial statements
internally for management to take the effective decisions.
Enterprise Structure: - An enterprise structure is the structure that represents our
business/org/enterprise in SAP ERP system. The structure defines the various levels in an org.
Each and every org level has some specific functionality associated with it.
Company and Company Code:- Company represents an Enterprise or the Organization and
Company code represents the subsidiary/Branch of that enterprise.
Ex:-TCS is a group company with operations in many countries. For example, TCS China, TCS
Australia and TCS UK. These are represented as separate companies and each has to generate
the financial statements for the respective countries. To achieve this, these individual
companies should be defined as company codes in SAP ERP system. The main company is
created as Group Company and subsidiaries are defined as Company codes.
Business Area: Business area represents the geographical area or product line with in SAP and
this is not assigned to any company code.
Lets take an example of TATA Motors. It manufactures Cars like Indica, Nexon, Hexa, Safari and
Sumo.
Here you consider Car as a Business Area and These different cars represent Profit centers.
General Ledger Accounts (GL Accounts):- GL is like a book or magazine that is used to record all
the business transactions in an org. A company might have thousands of GL accounts.
Account Groups:- GL Accounts with similar characteristics are grouped together and this is
called Account Group. Ex:- All asset accounts, All Revenue accounts.
We can maintain the number ranges for each group so that we can get the report for all
accounts of same group in one shot.
Chart of Accounts (COA):- This is nothing but the list of all GL accounts (belong to All account
groups) that are used to record the business transactions in a company.
There are three kind of Chart of Accounts being used in SAP.

1. Operational COA
2. Country COA
3. Group COA
Operational COA:- These are the GL accounts that are used by all countries. Like TCS China, TCS
India and TCS UK. By default this is assigned to all company codes.
Country COA:- If any country has specific requirement that they should generate the Financial
statements by using specific accounts. Then we can use country COA.
Group COA:- When we want to generate the financial statements for Group country (where the
company’s main branch is located), we have to consolidate the reports from all branches (i.e.
from all countries). For this purpose, we will link the group chart of accounts with operational
COA so that all the transactionas we do in operational COA, will get updated into the Group
COA. It is mainly used for consolidation purpose.
Company code global settings:- This refers to the set of parameters that need to be maintained
for a company code. Whenever any business transaction happens, corresponding accounting
doc needs to be posted. For this, few parameters need to be setup.
Fiscal year Variant:- Fiscal year variant contains the no of posting periods in a fiscal year and no
of special periods. Special periods are used to post adjustment entries. We can define up to 16
posting periods.
Posting Period Variant: - It controls whether any accounting doc can be posted in specific period
or not. Doc can be posted only in the period which is open for posting.
To restrict the document posting in future/previous months, corresponding posting periods are
closed. Normally one period is kept open for posting that is current month.
Financial statement Version: Financial statement Versions are used to generate the financial
statements. We can also define multiple financial statement versions to generate the financial
statements in different formats.
Field Status Variant: - Field status variant is the collection of field status groups. FSG refers to
the status of all the fields which are available for input while document posting. FSV is assigned
to the company code. Then all the FSG’s belong to that FSV, are available for assignment to the
GL master in the company code. FSG is assigned to the GL account.

Document Type: - Document type is used to segregate the docs based on the nature of business
transaction. Let’s say there are thousands of docs from which you need to segregate the docs
like Vendor Invoice, Customer Invoice, Customer payment and Vendor Payment.
Customer invoice – DR
Customer Payment – DZ
Vendor Invoice – KR
Vendor Payment – KZ
Posting key: - Posting key is a two digit number which plays an important role in posting an
accounting document. It tell us which is the debit entry and which is the credit entry in an line
item.
Ex:- Vendor Invoice :

31 – Vendor Credit
40 – GL Account (Expense) Debit
Vendor Payment:

25 – Vendor Debit
50 – GL Account (Bank Sub account) Credit
Customer Invoice:

01 – Customer Debit
50 – (Revenue) G/L account Credit
Customer Payment:

15 – Customer Credit
40 – GL Account (Bank Sub account) debit

Exchange Rates: - Exchange rates are used to define a relationship between two currencies and
are also used to translate an amount from one currency to another currency.
Payment Terms:- Terms of Payment is used in SAP to determine the due date and discount
calculation.
Foreign Currency Valuation: - This is nothing but valuating the transaction currency amount into
local currency amount.
Orgs do have transactions in foreign currency. When document is entered into the system, the
local currency amount is derived by using the currency exchange rate existing at the time of
document posting. But later on the exchange rate might change. Hence the amount in local
currency derived by using exchange rate at the time of reporting will not be the same as amount
in posted document.
Company code currency: INR and Group Currency: USD
Ex: On 5th august, I posted vendor invoice. 100 – GBP. As per the exchange rate on 5th Aug
65INR = 1USD & 1GBP = 1.3USD. USD is the reference currency.
Hence the vendor invoice is posted in below currencies.
CR Vendor 100 GBP- 8450 INR - 130 USD
DR Expense 100 GBP - 8450 INR - 130 USD
Lets assume, month end report is getting prepared. On 31st Aug. As per this date the currency
exchange rate is 70INR = 1USD and 1 GBP = 1.5 USD
To arrive at exact position of the day of reporting, below adjustment entry needs to be posted.
CR Exchange rate loss account 0 GBP 2050 INR 29.28 USD
DR Balance sheet adjustment 0 -2050 - 29.28
This step of posting an adjustment entry is referred to as Foreign Currency Valuation. Hence
Foreign currency valuation is needed to incorporate the impact of exchange rate changes
Retained Earnings Account:- Retained Earnings Account is used to carry forward the balance
from one fiscal year to next fiscal year.
This RE account is assigned to each and every P&L GL account. Once it is declared, then sap by
default assigns this Retained Earnings Account to each and every P&L GL account. But in case
when more than one RE account are declared, then while creating the GL master for P&L A/C,
one has to choose it manually.
Tolerance Groups:- SAP Tolerance groups define posting authorizations of users in SAP ERP
system. These posting permissions define the amounts that certain groups of accounting clerks
are allowed to post.
1. The maximum document amount the employee is authorized to post.
2. The maximum amount the employee can enter as line item in Customer/Vendor account.
In case of Business Partners, tolerance is minor difference between invoice amount and amount
received from the customers and paid to Vendors. Tolerance groups are defined and assigned to
Business Partners master records. When there is a difference, system calculates whether it is in
the range of predefined limits or not. If it is in range, system will post the document without
blocking. And the difference is posted to the Price difference accounts.
Dummy Profit Center:- In SAP, a Profit Center (PC) is not designed to get posted directly. All the
PCs are getting posted through a cost object like cost center, internal orders etc. If such cost
objects are not assigned to a PC, transaction figures will not get updated properly. For this
purpose, we will define a dummy profit center. Whenever we do any postings with the cost
object (For which PC is not updated), transaction figures are updated in the dummy profit
center.
Sample Document: - Sample document is nothing but the reference document, which can be
used by the user whenever the similar situation comes in the real business world.
Recurring Entry Documents: - A document containing the fixed data for every recurring posting
(for example -> posting key, -> account, -> amount…. These 3 never change).
Recurring Entry Program: - For Postings that recur on regular basis, such as Payments for Rent,
Interest of Loan. It must be run on regular intervals within specified period. This program selects
all original documents in which the date of next posting falls within the specified period, and
then generates a Batch Input Session.
Open Item Management: - If any account is open item managed and we post any transaction to
that account, then this entry will be awaiting for the offsetting entry to be cleared.
For example:- Vendor invoice is posted and it is open item. When we post the vendor payment,
the invoice will be cleared with Payment. Here, Vendor payment is offsetting entry for an
Invoice.
Reconciliation Account: It is a general ledger account assigned to the business partner master
record to record all transactions made in the sub ledger. For Business Partners with similar
characteristics, we can assign the same recon account.
Credit Control Area: - CCA is an FI organizational unit that specifies and checks a credit limit for
customers. In essence, the credit control area is where customer credit is given and monitored.
A credit control area can be assigned to more than one company code, but each company code
can only be assigned to one credit control area. It is also referred to as credit Control Key.

Document Clearing Process: Document clearing is a process to clear open transactions. Open
transactions are nothing but Open items. Open Items need to be cleared for a transaction to be
completed. Open items are incomplete transactions such as invoices that have not been paid.
We do clear this by doing the vendor/customer payment. Clearing process is applicable for
Vendors, Customers and GL accounts. Day end closing Activities: 1. Exchange Rates
Month end closing activities:

1. Automatic payment program

2. Dunning
3. Open and close posting periods
Year end closing Activities:

1. Inventory Valuation
2. Opening posting period for Next year
3. Balance carry forward for Vendors/Customers
4. Copy number ranges for next year
5. Closing the asset fiscal year
 6. Balance carry forward for General ledgers

Different types of currencies:

1. We have different types of currencies available in SAP. Like Company code/Local

currency, Group currency and Hard currency.
2. Company code/Local currency will be mostly Country currency and Group currency will
be the country currency where main branch is located.
3. Few countries will want to prepare the Financial statements in other than company code
currency due to inflation. This is nothing but Hard Currency. Eg: USD. Since it is
considered as most stable currency in the world.

Accounts Payable
P2P Cycle:-

1. Generally it starts with the Purchase Order creation and it is sent to Vendor– ME21N
2. We do receive the goods from Vendor and will make an entry for this in SAP as Goods
Receipt – MIGO
3. We do receive the Invoice from Vendor– MIRO
4. Vendor Payment/Outgoing payment – F-53/F110

Accounting Entries in P2P (Procure to Pay) process:

1. During Goods Receipt: Inventory A/c Dr

To GR/IR Clearing Account
2. During Vendor Invoice: GR/IR Clearing A/c Dr
To Vendor A/c.
3. During Vendor Payment: Vendor A/c Dr
To Bank sub account 4.
After bank statement: Bank sub A/c Dr.
To Main bank Account

MM and FI Integration: When good receipt (GR) and invoice receipt (IR) is performed,
accounting document gets generated. Movement of material leads to automatic generation of
accounting document and this is referred as MM FI integration.
Movement type and transaction key and valuation class plays an important role in MM – FI
integration.
Movement types are defined in OMJJ and the assignment of Movement types and Transaction
event keys is done in OMWN.

1. From the nature of goods movement, Movement type is determined by the System.
2. From Movement type, SAP will determine the transaction key linked to the Movement
type.
3. From Material master, SAP will come to know the Valuation class.
With combination of these, the GL account is maintained in OBYC. That’s how, the Inventory
account is picked during Goods receipt.

Automatic Payment Program (APP): This is the process where we can make the payments to
multiple vendors and for multiple customers in one go. We can execute this by using the T-code
– F110.
The configuration for APP can be done in FBZP t-code. Here we do maintain the company codes
involving in the Payment program, Payment methods applicable for the company code and
house bank accounts and Bank sub/clearing accounts.
Parameters: Vendors/Customers, Payment method, Company code and Next Payment date and
free selection.
The use of next payment date is used to recognize the invoices which are due before the next
payment run. So that they are included in the current payment run.
Next step is scheduling the Payment proposal – Check here if there are any errors and whether
the intended Vendor/Customer/Invoice items are picked up or not.
The last step is Scheduling the payment run – after successful execution of payment run, check
the output as per the configuration of payment method.

Special GL Transactions:- The transactions which will not follow the normal posting logic, are
referred to as Special GL Transactions. (Normal posting logic: Generally, whenever we post any
transactions for Vendor/Customer Account, transaction figures get updated in Recon account
maintained in their Master Records.)
But, when it comes to Special GL Transactions like Down Payment and Bill of Exchange, The
transaction figures will get updated in the GL account which is maintained in OBXR/OBYR
against to standard Recon account (Standard Recon accounts are maintained in
Customer/Vendor Master.)
Vendor Account Groups:- Vendors with similar characteristics can be grouped together and this
group is called Vendor Account groups. We can put the number ranges for each group. By using
this Account group, we can extract the report for the vendors of same group in one shot.
Invoice Verification:- Invoice verification is the process of verifying the invoice details with the
purchase order details whether quantity and price are same or not. If not, the invoice is blocked
and respective person will have to act on it.

Accounts Receivable
O2C Cycle:

1. It starts with Sales Order creation – VA01

2. We do the Outbound Delivery and Post Goods Issue – VL01N
3. We do create Billing Document – VF01 and we will release this to Finance team by using
VF02.
4. Customer Payment/Incoming payment – F-28

Accounting Entries in O2C (Order to Cash) process:

1. During Delivery: COGS (Cost of good sold) Dr

To Inventory A/c
2. During Billing document: Customer A/c Dr
To Revenue A/c.
3. During Customer Payment: Bank sub account Dr
To Customer A/c 4.
After bank statement: Main bank Account Dr.
To Bank sub Account

SD and FI Integration:
Automatic generation of accounting document due to sales activity is referred as SD and FI
integration. Like Delivery and Billing document.
Since goods are moved, material document is created and corresponding finance document gets
created as a result of MM-FI integration. GL account for inventory account is picked from OBYC
setting (transaction key BSX). GL account for COGS is picked from OBYC setting (transaction key
GBB).
In billing document, the Revenue account is determined automatically based on the
combinations of Customer A/c assignment group, Material A/c assignment group and Account
key.
Material A/c Assignment group is known from the Material Master, Customer A/c Assignment
group is known from the Customer Master and Account key is known from the Pricing
procedure. Once everything is found, system will go to VKOA t-code and find the suitable GL
account.
Pricing Procedure: It is a list of all condition types applicable for the customer.
Like Net price, gross price and Discount.
Account keys are linked to these condition types.
Customer Account Group: Customers with similar characteristics can be grouped together and
this group is called Customer Account groups. We can put the number ranges for each group. By
using this Account group, we can extract the report for all the customers of same group in one
shot.
Dunning: It is a periodic process of sending the notices to the customer about their outstanding
payments.
Dunning Level: Dunning level controls the flow of dunning process. The maximum dunning
levels offered by SAP is 9. But we use maximum 3 to 4.
Dunning Area: Dunning area basically refers to the level at which customers are dunned. It can
be at plant/Sales org or company code level.
Dunning execution - F150.

Asset Accounting

Assets are two types:

Current Assets: Asset which can convert into cash or be consumed within one year is referred as
current asset.
Long term/Fixed Assets: Assets which are not expected to be converted into cash or not
consumed within a year are called long term assets. Benefit of such asset goes beyond one year.
Asset Accounting: Every company has to report current asset and fixed asset in its balance
sheet. Hence company needs to record all the transactions of the asset.
Some of the transactions are:
Asset acquisition:

Asset can be acquired (purchased from vendor or build in house).

Asset depreciation/ amortization:
Asset can be put to use and hence economic value of an asset should reduce. The amount by
which asset value is reduced is called depreciation (in case of tangible asset) and amortization (in
case of intangible asset.)
Net book value = acquisition value – total depreciation amount
Asset transfer:

Asset can be transferred from one department to another department, from one plant to
another plant, from one company code to another company code etc.
Asset sold:

Asset which is no longer of use can be discarded or scraped.

Whenever asset transaction happens, recording and reporting of transaction along with
financial impact (accounting document) is referred as asset accounting.

Few definitions to remember before we go to Asset Class:

Useful life: Life, over which asset is supposed to be used.
Salvage value: It is the value of the asset at the end of its useful life
Depreciation key: Depreciation key is basically method of depreciation. For example: Straight
line method.
Example: 1. Cost of the asset: $100,000 and salvage value of $20,000
Cost of the asset – Estimated salvage value: $100,000 – $20,000 = $80,000 total
depreciable cost.
Useful life of the asset: 5 years
Divide step (2) by step (3): $80,000 / 5 years = $16,000 annual depreciation amount.
Account Determination Key: Whenever any transaction is performed with asset, corresponding
accounting document gets generated automatically. SAP picks GL account for posting accounting
document by using account key. Account key holds the information about which GL account is
to be picked for what transaction.
Screen Layout: When you try to create an asset, you will come across various fields in asset
master which can be mandatory, optional or suppressed. This filed status setting is captured in
screen layout.
Number range: Asset class is assigned a number range. When asset is created under the asset
class, asset is created with a number belonging to asset class in sequential order.

Asset Class: Assets which have common characteristics like same useful life, same method of
depreciation and uses same GL account for posting accounting document are said to belong to
same asset class. Hence asset class is grouping of assets which have same common
characteristics.
Asset inherits the below properties from Asset class.

1. Useful life
2. Screen layout
3. Depreciation key
4. Account determination key
5. Number range

Chart of depreciation area: The list of depreciation areas applicable for one country is referred
to as chart of depreciation.
For example, Philips India bought an asset for 1000/-. As per the Indian GAAP, useful life is 5
years and as per Netherlands GAAP, it is 3 years. Hence the depreciation amount will vary from
country to country.
Here Asset needs to be evaluated in two Accounting principles. We can create these two
depreciation areas for these two account principles and will group these two. And this group is
referred to as Chart of Depreciation.
Integration between Asset accounting and GL accounting:

In AO9O tcode, we will maintain the GL accounts for each Account determination key. This
account determination key is assigned to Asset class.
Hence, if we post any transaction for an asset of this asset class, automatically the GL accounts
will be picked.
Ordinary Depreciation: Ordinary depreciation is the planned deduction for wear and tear during
normal usage of an asset.
Unplanned Depreciation: This is used when you want to post the depreciation more than what
the standard depreciation key has posted.
This might be needed in unforeseen circumstances. For e.g. You have a car that depreciates
20000/- for every year for 20 years.
Unfortunately, the car met with a minor accident, now the value of the car has to go down
more.
Important t-codes:

1. Asset master data Creation – AS01/AS02/AS03

2. Asset Depreciation run (Planned/Ordinary)- AFAB
3. Asset depreciation unplanned – ABAA
4. Asset Sale – ABAON (Without customer)
5. Asset Sale – F-92 (with customer)
6. Asset transfer – ABUMN
7. Asset Scraping – ABAVN
8. Asset Class - OAOA
Bank Accounting:
House banks: House banks are the banks that a company uses to make payments to vendors
and to receive the payments from Customers.
Bank is referred to as house bank in sap. E.g. HDFC, SBI, ICICI, CITI, BARCLAYS etc.
Bank Key: It’s basically a bank branch. Each bank will have several bank branches. Hence in sap
each house bank will have several bank keys. It's alphanumeric number which stores the
address of the branch. In India, bank key is equivalent to IFSC code.
Account ID: Each bank account is created as account ID in sap.
Bank Reconciliation: It is the process to reconcile the difference between the balance shown in
the bank statements that you receive from your banks and the balance shown in your
accounting books at a particular point of time.
The reason of difference mainly is Bank charges and Interest on the amount in account. And it
can also be bounced cheques. (Unsuccessful cheque payments).
Electronic Bank Statement (EBS): we receive the bank statement in electronic format from the
bank and it will be loaded into sap and the postings will be done automatically. if it is not
loaded, then we will upload it manually into the SAP and do the postings.
If there are any errors, we will process these by using FEBAN tcode.
Bank Sub accounts/Clearing accounts: Bank sub or clearing accounts are nothing but the
temporary accounts like Incoming cheque and Outgoing cheque.
Once the amount has been paid/Credited to the Main account, these accounts will be
cleared/nullified.
GL Main bank account: This is nothing but the GL account to which the transaction details get
updated after bank statement processing.
Ledgers: This is one of the new GL functionality and it is used to satisfy if there are any specific
country requirements are there.

1. India fiscal year – April to March.

2. UK fiscal year - January to December.
For instance, Company did purchase an asset in January. As per the UK accounting standards,
this transaction should be recorded in Posting period 1. But as per India accounting standards,
the same transaction should be recorded in 10 Posting period.
To satisfy this, we can assign the India company code to Non leading ledger and UK is Leading
ledger. And posting periods also are maintained respectively. Now if we post the document, it
will be recorded in two company codes (India and UK) with different posting periods. Thus,
ledgers help us in satisfying the different country requirements.
Document Splitting: This is another New GL functionality. With this function, the document split
the line items based on the characteristics we define in the system. Often, this is used to get the
financial statements correctly for segment reporting.
Important T-codes:
Define house bank: FI12_HBANK

Controlling (CO)
Controlling is mainly used for internal reporting purposes and we do generate the financial
statements for management to take the better decisions.
Controlling Area: Controlling area is the highest level of organization and it may contain one or
more company codes, which can operate in different currencies. These all company codes must
use the same operational chart of accounts.
For example: Tata Motors is existing in multiple countries. If we segregate like, Europe is region
1, Asia is region 2 and Australia is region 3. And these 3 regions can be created as 3 controlling
areas in SAP.
NOTE: The company codes, which are assigned to the same controlling area, can have the
intercompany transactions between them.

Cost Elements: Cost elements are used to classify and analyze the cost for internal reporting
purposes. In other words, Cost elements are the cost carriers from FI to CO.
We have two types of cost elements.

1. Primary cost elements: All primary cost elements will have the corresponding GL
accounts in FI. And in controlling these cost elements are assigned to Cost centers or
Internal Orders.
2. Secondary Cost elements: These are only used in controlling and they do not have
corresponding GL accounts in FI. These can be used only settlements.
Primary cost element creation – KA01
Secondary cost element – KA06
Cost element group – KAH1.
Cost Element Group: Cost elements with specific purpose, are grouped together and this is
called Cost element group.

Cost Center: Cost center is a location where the cost is incurred inside the organization.
Cost center Creation – KS01
Cost center Group – KSH1
Cost center Report – KSB1
Cost Center Group: Cost centers with similar characteristics, are grouped together and this is
known as Cost center Group.
Ex: HR department, Administrative department.
We can make the planning at the cost center level and extract the reports for that cost center.

Internal Orders: Internal order is also a cost object and it is used for specific purpose.
(Temporary cost object).
For example: we are celebrating Christmas at office and we do make some expenses for
decoration and some other stuff.
We can use the IO to record all the transactions and later we can settle these expenses to cost
centers.
Internal order creation – KO01
Internal order group – KOH1
Internal order settlement – KO88
Display Actual cost line items for IO – KOB1
Profit Center Accounting: Profit center accounting lets you to determine the profits and losses
at profit center level. This is mainly used for internal reporting.
Profit Center creation – KE51
Profitability Analysis: COPA – This is used to analyze the profit as per the market segments like
particular product or Particular customer.
Product Costing: This is used to calculate the cost of the product being manufactured in our
company.

Partner bank Type:

If several bank accounts exist in a customer or vendor master record, you can assign different
keys for these accounts.
To use a particular bank of the business partner for the payment, enter the appropriate key in
the line item during document posting. The payment program then pays the invoice via the
business partner's predefined bank.

Distribution and Assessment cycle: Both are cost allocation methods and they are used to
allocate/distribute the cost from one object to another object.

For example: The rent has been paid to the building owner about 9000/-
The building has 3 departments. HR, Administrative and Maintenance department. We can
consider these 3 are Cost centers.
HR – Cost center 1
Admin – Cost center 2
Maintenance – Cost center 3

Rent has been recorded in Expense account (1001) with Account assignment HR Cost center.
(This expense a/c is nothing but cost element in CO)
Now this cost needs to be distributed to other two cost centers. We can use any of the method.

If we use distribution method, the original cost elements (1001) are retained in the receiver cost
object. ( Cost center1 and 2)

If we use an assessment method, the original cost elements are combined into the Assessment
cost elements (i.e. Secondary cost elements) and the original cost elements are lost.
Assessment cycle execution – KSU5
Distribution execution – KSV5

Document Splitting: New GL offers an important feature i.e. Document splitting.

With this functionality, the accounting line items are split according to the specific
characteristics like profit center and segment.
The main purpose of using this is, we can prepare the financial statements like P&L
statement/Balance sheet correctly according to the characteristics.
Example: Before document splitting (Sales invoice)
1. Customer A/c Dr: 500 ??
2. Sales A/c Cr: 250 PC1 3. Sales A/c Cr: 250 PC2
4. Output Tax : 100 ??

In this case, we can’t prepare the correct financial statements for profit centers because the
above document is not balanced for the profit centers.
Note: Splitting always is possible in GL view but not in an entry view.
Types of Document splitting:
1. Active splitting: It is known as Rule - based splitting. The system splits the line items in
the accounting documents according to pre-defined rules. Here predefined rules are
nothing but the predefined configuration. (Derivative rule).
2. Passive Splitting: It is applicable for clearing documents. Clearing docs may be Incoming
payments (OR) Outgoing Payments. In Passive splitting, system uses the same rule which
is already applied in the Active splitting. The rules in passive splitting can not be changed
as the Clearing documents/Payment documents are split according to the original
documents (Invoice documents).
3. Zero balancing splitting: It ensures not only the document is zero balanced but it is also
balanced for the characteristics.
After document splitting:

GL Line items:
Only Just to make the document or line item balanced, this zero balanced splitting is applicable
here. If we not apply the zero balance account here, tax amount will not get split. In this
example, we have applied active splitting and zero balancing splitting.
Before splitting, the customer a/c and tax a/c are not updated with any profit centers. And profit
centers 1 and 2 are updated with credit entries and debit entries are not available.
As we discussed, passive splitting can be seen in payment documents/clearing documents. Lets
post the incoming payment for the above customer invoice. As per the payment terms, the
discount % is 3.

Here discount amount has been split by using the passive splitting functionality. Accordingly,
profit centers were also updated with the cash discount amount. We can also see the GL view.

Once the Incoming payment is posted, check the document.

Here cash discounts are P&L accounts. Hence profit center is updated for these. But we do not
have the profit center for Customer a/c and Cash account. Let’s go to the GL view.

This is passive splitting. Whatever the rule applied in active splitting, same rule is applied here as
well. Here we sorted the data profit center wise. Profit center 1 and profit center 2 are zero
balanced now.
Partial Payment/Residual Payment: When we make the payment with the amount less than the
Invoice amount, then it is called as partial payment.
Difference between Partial Payment and Residual Payment:
Both payments are posted with the amount less than the Invoice (Open Item) amount. In
Partial Payment, the open item will not be cleared until it is fully paid whereas in residual
payment, open item will be cleared with the payment and new open item will be created for the
difference amount.

Definitions:

Purchase Order: This is like formal request sent to the vendor to supply you the materials.
Generally it is sent by the Purch.Org in company.
Goods Receipt: This is like acknowledgement that we do enter in the system for the goods
received by the Vendor.
Inbound document: It does not necessarily mean goods receipt. INBOUND DELIVERY in SAP
pertains to all incoming goods, which may refer to either a vendor delivery or a return of a
rejected delivery to a customer. It may cover the schedules of deliveries from your
vendors/suppliers or even a rejected delivery to a customer.

Sales Order: Once the customer places the Order to our company for a product, Order no will
be generated and this is nothing but the PO from customer perspective. With reference to this
PO, we do create the Sales order in the SAP system and will track everything by using this SO.
This is for tracking purpose. In one word, If we have the sales order no, then we can get all the
details related to this particular sale.
Outbound Delivery: we use this process in order to support all shipping activities like picking,
packing, transport and goods issue. All information regarding shipping planning is stored in
outbound delivery, the status of shipping activities is monitored, and data gathered during the
course of shipping processing is recorded. By creating outbound delivery, shipping activities are
started and data is transferred that is generated during shipping processing.
Post Goods Issue: This is the phase, in which the products are exactly moved from inventory
and they are loaded into the truck for delivery to the customer.
Some Important Tcodes:
Accounts Payable:
1. Purchase Order creation - ME21N
2. Post Goods Receipt - MIGO
3. Post an MM Invoice - MIRO (With PO reference)
4. Reversal of MM Invoice - MR8M
5. Post Outgoing/vendor Payment - F-53 (For single vendor)
6. Post an FI Invoice - FB60/Old tcode - F-43 (Without PO reference)
7. Payment run - F110 ( For multiple vendors)
8. Vendor Credit memo - FB65
9. Vendor Line item display - FBL1N
10. Vendor Account Balance - FK10N (Classic GL) – FAGLB03 (New GL)
11. Clearing Vendor - F-44
12. Down payment request - F-47 ( Noted Item)
13. Actual Down payment made - F-48
14. Clearing down payment - F-53
Accounts Receivable:
 1. Creation of Sales Order - VA01
2. Creation of Outbound delivery & PGI - VL01N

3. Creation of billing document - VF01 (With reference to SO)

4. Releasing the Billing doc to FI - VF02
5. Reversal of SD invoice - VF11
6. Creation of FI invoice - FB70/Old tcode - F-22 ( Without reference to SO)
7. Post incoming/Customer Payment - F-28 (For single customer)
8. Payment run - F110 (for Multiple customers)
9. Post customer credit memo - FB75
10. Customer line item display - FBL5N
11. Customer Account Balance - FD10N
12. Clearing customer - F-32
13. Customer Down Payment request - F-37 ( Noted item)
14. Actual down payment made - F-29
15. Clearing customer down payment- F-39
Reversal Tcodes:

1. Reversal of FI invoice ( AP/AR) doc - FB08

2. Reversal of cleared/Payment doc - FBRA
General Ledger Accounting:

1. Posting the GL document - FB50 (Old tcode - F-02)

2. G/L Account Clearing - F-03
3. Automatic Clearing - F.13
4. Enter Recurring document - FBD1
5. Posting docs from Recurring entries - F.14
6. Enter Accrual/Deferral doc - FBS1
7. Reversal of Accrual/Deferral doc - F.81

Differences between New tcodes ad Old tcodes (FB60/F-43, FB70/F-22 and FB50/F-02)

1. If we use old tcodes, we need to enter the Posting keys manually but in case new tcodes,
posting keys don’t need to be entered and they are defaulted.
2. If we want to enter multiple line items, then each line item has to be entered in different
screen but in case of new one’s, all items can be entered in single screen.
Difference between Operating concern and Controlling Area:
Operating concern is like an individual entity within a large organization which has its own
structure for sales. For example under company X we have X motors, X textiles etc. Therefore X
motors has it's own entity and is an operating concern for the CO-PA.
Under X motors, we have 2 regions, for example, Region 1 (India), Region 2 (ROW - Rest of the
world). For region 1 we have Controlling area A managing all the operations and for Region 2 we
have controlling area B managing the operations. So one Operating Concern can have multiple
Controlling areas.
Tables in SAP FI:
Vendor Tables:

1. Vendor General selection: - LFA1

2. Vendor master data by Cocode - LFB1
3. Vendor Bank details - LFBK
4. Vendor Purchasing data - LFM1
Customer Tables:

5. Customer General selection - KNA1

6. Customer master data by Cocode - KNB1
7. Customer Bank details - KNBK
8. Customer master Sales Data - KNVV
G/L Tables:

1. G/L Account Master (COA level) - SKA1

2. G/L Account Master by CoCode - SKB1
3. G/L Accounts Totals table - FAGLFLEXT
House Banks Tables:
4. House Banks - T012
5. House Bank Accounts - T012K
Accounting Document Tables:

1. Accounting Document Header data - BKPF

2. Accounting Document Line item data - BSEG
3. Settlement data from Payment
Program - REGUH
4. Processed Items for Payment
Program - REGUP
Differences between REGUH and REGUP tables in SAP:
REGUH contains the information on the payment, such as the Payment method, Payment
document number and Payee.
REGUP Contains the information on the Paid items, such as the amount, cash discount and
invoice document number. The payment program creates a REGUP record for each paid item in
Payment.
Sales Order Tables:

1. Sales order header data - VBAK

2. Sales Order item data - VBAP
Purchase Order tables:
1. Purchase order Header data - EKKO
2. Purchase Order Item data - EKPO

SM35: It is used to monitor the batch sessions that are created by the users from different
modules transactions.