SAP FICO Enterprise Structure

  Variant Principle in SAP The Variant Principle is a standard SAP methodology used to assign properties to one or more objects in a controlled way. It consists of three steps: Define a Variant Maintain / Determine Values in the Variant Assign the Variant to the Company Code  Path: - In IMG Screen >> This principle is used for: Fiscal Year Variant Posting Period Variant Field Status Variant Chart of Accounts, etc. I Fiscal Year Variant A Fiscal Year Variant in SAP defines the financial year structure used to post business transactions and prepare financial statements. It determines how posting periods are derived from posting dates and how a fiscal year is structured in the system. A fiscal year: Covers a 12-month period May be a calendar year (Jan–Dec) or a non-calendar year (e.g., Apr–Mar) Must follow the matching concept, where income and related expenses are recorded in the same accounting period Key Concepts Fiscal Year vs Calendar Year Calendar Year: January to Dec...

  GAP Analysis identifies the difference between business requirements and standard SAP functionality.

T-code - OBY6 or  SPRO>IMG>Financial Accounting>Global Parameters for Company code>Enter Global Parameters   Includes: Currency Fiscal Year Variant Chart of Accounts Posting Period Variant Field Status Variant 👉 These are critical for FI configuration

Company Code O Represents an independent balancing/legal accounting entity and is used for external purposes e.g., a company with independent accounts within a corporate group O Financial Statements required by law can be created at company code level O A separate company code is usually created per country in order to fulfill the legal requirements such as taxation etc. O To create a company code, copy an existing company code template. This copies the Definition, Global parameters, Customizing tables, GL accounts and Account determination O its Table: T001 can be viewed through T-code: SE16N to display the list of information O Transaction code: OX02 O Menu path: Display IMG -> Enterprise Structure -> Definition -> Financial Accounting -> Edit. Copy, Delete, Check Company Code 

 Below are the different BP roles : - FLCU00(Customer -Company Code) -FLCU01(Customer-Sales) -FLVU00 (Vendor-Company Code) -FLVU01 (Vendor-Purchase)

 Below are the segments in customer master data - General Data - Company Code Data - Sales Area Data

 Customer dispute management in SAP FSCM is used to manage and resolve disputes related to customer invoices or payments. It helps track and investigate customer complaints, disputes, and claims efficiently

 The customer credit memo request in SAP FICO is used to request a credit memo or refund for returned goods, overpayments, or billing errors. It initiates the process of issuing a credit memo to the customer. Normally, it is created under SAP SD Module. A custoemr credit memo request is created, Once it is approved, It will be create a customer credit memo request. Once it is approved, it will created as a credit memo and customer line item will be created.

 You perform a customer down payment in SAP FICO through transaction code F-29.

 The customer down payment in SAP FICO is a payment made by a customer in advance for goods or services to be delivered in the future. It serves as a partial prepayment towards the total invoice amount

 The cash application process in SAP FICO Accounts Receivable involves matching incoming payments received from customers to open items on their accounts. It ensures accurate recording and reconciliation of customer payment.

 You set a payment block in SAP FICO by selecting the appropriate payment block indicator in the customer master data, invoice or open item. Payment block can be se t manually during document entry or through mass processing.

 The payment block in SAP FICO Accounts Receivable is used to temporarily prevent the clearing of specific customer invoices or open items. It allows for manual review and approval of payments before processing.

 The interest calculation in SAP FICO Accounts Receivable is used to calculate and apply interest charges on overdue customer invoices. It helps incentivize timely payments and compensates for the cost of delayed payments

 You generate a customer account statement in SAP FICO through transaction code FD10N or FBL5N

The customer account statement in SAP FICO provides a summary of all transactions and open items related to a specific customer, including invoices, payments, credit memos, and account balances. It helps customers reconcile their accounts and verify transaction details.  Go to FBL5N Execute the open item List of open item will be shown up Go to Environment>Correspondence>Request Different type of list of report will be shown up, in which we save that report in the system and such as select the Account Statement  enter Posting from 01.01.24 enter Posting to 12.31.24 Click on save  "Account statement was requested " message will shown up Go to Environment>Correspondence>Display             Press Enter Click on save Enter the output device  : lp01 What is correspondence  Answer It is nothing but different type of document to our customer and vendor. For eample, we can send account statement to the customer and vendor a...

Credit management in SAP FICO is used to monitor and control customer credit limits, evaluate creditworthiness, and manage credit exposure. It helps minimize the risk of bad debts and optimize the cash flow. 

 The customer credit limit in SAP FICO defines the maximum amount of credit that can be extended to a customer. It helps mitigate credit risk and prevents excessive exposure to bad debts.

 The recurring billing in SAP FICO Accounts Receivable issued to automate the invoicing of recurring charges such as subscription fees, rent, and service contracts. It eliminates manual effort and ensures consistency in billing. and every month bill should be sent to the customer it is an recurring billing and it not  be done manually.

 The customer aging report in SAP FICO provides an overview of outstanding customer balances categorized by due dates. It helps identify overdue receivables and prioritize follow-up actions with customers

 The Payment advice in SAP FICO Accounts REceivable is a document generated during the payment posting process to provide customers with details of the payments received, including invoice number amount and payment dates It serves as a remittance advice for customers

We need to configure Dunning Procedures for how many dunning letters to be sent to different customer, what would be the intervals between different dunning letters, message in dunning letters etc.  -------------------------------------------------------------------------------------------------------------------------------- Defining the Dunning Procedure This chapter explains what dunning is and covers basic settings involved in customizing the dunning procedure. At the end of this chapter, you will be able to: • Define a dunning procedure. • Defining dunning levels. • Specify G/L transactions that allow the system to dun special G/L transactions. • Assign a dunning procedure to customer master data. Dunning It is a normal business practice for business partners to sometimes fall behind in invoice payments. Hence a form of reminder mechanism needs to be in place that will remind business partners of overdue invoices. Dunning is an automatic process of sending reminder notices to ...

The dunning process in SAP FICO Accounts Receivable is used to remind customers of overdue invoices and request payment. It involves sending dunning notices with escalating reminders based on predefined dunning levels and intervals. 

 You access the customer line item display in SAP FICO through transaction code FBL5N.

The customer line item display in SAP FICO provides a detailed view of all transactions and open items related to a specific customer, including invoices, payments, credit memos, and account balances 

A customer invoice records a receivable for goods or services sold to customer, whereas a customer credit memo reduces the receivable by reversing part or all of the invoice amount due to returns, discounts, or corrections.  

 The order to cash process in SAP FICO involves the entire sales cycle, starting from the creation of a sales order to deliver, goods issue, invoice processing and finally, receipt of payment from customer. There are no accounting entries for sales order creation At the time of good issue, system will debit the COGS (OBYC) & credit inventory A/c(OBYC). At the time of invoice, Customer A/c will get debit & Revenue A/c (VKOA) will be credited At the time of Payment, Bank A/c Will be debit  Customer A/c will be credit.

Key component include customer master data, term on payment, payment method and reconciliation accounts. These components store essential information about customer and payment.

 Accounts Raceable in SAP FICO is a submodule responsible for managing and recording all customer-related transactions, including invoice processing, payment processing, and customer account reconciliation.

 You release a payment block in SAP FICO by removing the block indicator from the invoice or vendor master. The payment block in SAP FICO Accounts Payable is used to temporaril prevent the payment of specific invoices or vendors. It allows for manual review and approval of payment before processing. first Go to fbL1n> click on open item and process > open the document and remove the payment block in at the document line item screen

 "Removing 100 payment blocks individually is not practically feasible for an end-user. Depending on the source of the block, I would use one of the following two professional methods: Method 1: The Logistics Approach (MRBR) Since the block is 'R' (Invoice Verification), it usually originates from a variance in the Purchase Order or Goods Receipt. The standard way to handle this is via Transaction MRBR (Release Blocked Invoices) . In MRBR , the user can filter by Company Code and Vendor, execute the list, and then select multiple invoices to release them in a single action once the dispute is resolved. Method 2: The Finance Mass Change (FBL1N) If the requirement is to remove the blocks directly from the Finance side for a large volume of open items: Go to FBL1N (Vendor Line Item Display). Select all 100 relevant open items. Navigate to Environment > Mass Change > New Values (or click the 'Mass Change' icon). In the pop-up, locate the Payment Block field...

 The Payment block in SAP FICO Accounts Payable is used to temporarily prevent the payment specific invoices or vendors. It allows for manual review and approval of payment before processing. Open Line item report > open specific invoices > edit mode enabled > assigne "pmnt block" indicator under additional data section If we want to apply payment in which vendor is not paid entirely, then we will apply payment block  ------------------------------------------------------------------------------------------------------------------------- Defining Payment Block Reasons When defining reasons for blocking payments, there are a few specifications you need to consider. You can specify whether payment blocks can be changed in payment proposals or during manual payment. You can also specify whether documents defined with block keys can be cleared during manual payment processing or if changes are not allowed. The reasons you define in this exercise allow you to differentiat...

 You reconcile the GR/IR clearing account in SAP FICO by matching the goods receipt(GR) with the invoice receipt(IR) and clearing the open items. GR/IR Clearing It is a normal business practice for goods to be delivered before the associated invoice arrives. This type of transaction is referred to in SAP R/3 as “Delivered but not yet invoiced.” It is also possible for an invoice to arrive earlier and the goods be delivered later. This is referred to in SAP R/3 as “Invoiced but goods not yet delivered.” To account for movement of invoice and goods in the system, Provisional Accounts (clearing accounts) are defined for off-setting postings when goods are delivered but invoice not yet received and vice versa to account for timing differences between invoice receipt and goods delivery. For example, when an invoice is received and the goods have not yet been delivered or vice versa, you define adjustment accounts and targets accounts for automatic posting of Goods Receipt/Invoice Receip...

 The Goods Receipt/Invoice (GR/IR) clearing account in SAP FICO is used to temporarily record the difference between goods receipt and invoice receipt until they are reconciled and cleared. It helps ensure accuracy in inventory valuation and accounts payable

 You configure recurring entry posting in SAP FICO through transaction code = FBD1.

 There is one standard transaction code - S_ALR_87120778   in SAP. Accounts Payable>Information System> Reports for Accounts Payable Accounting > Vendor Items > S_ALR_87120778 - Due Date Analysis for Open item

 The vendor aging report in SAP FICO provides an overview of outstanding vendor balances categorized by due dates. It helps identify overdue payments and prioritize follow-up actions with vendors.

 Withholding tax in SAP FICO Accounts Payable is a mechanism used to deduct taxes at source from vendor payments. It ensures compliance with tax regulations and facilitates reporting and remittance of withheld taxes to tax authorities.

 You configure the payment advice in SAP FICO by defining the layout and content of the payment advice form using SAP script or Smart Forms. You can customize the payment advice to include relevant payment details and company information.

 The payment advice in sAP FICO Accounts Payable is a document generated during the payment run to provide vendors with details of the payments made, including invoice numbers, amounts and payment dates. It serves as a remittance advice for vendors.

 The payment run in SAP FICO Accounts payable is the process of executing the automatic payment program to generate payment documents, such as checks, bank transfers, or electronic payments, for selected vendors based on due dates and payment terms

 The automatic payment program in SAP FICO streamline the payment processing by automatically generating payment documents based on predefined selection criteria and payment methods. It reduces manual effort and ensures timely payments to vendors.

 APP can be executed using transaction F110 . Below are the 4 Ps steps of execution 1. Enter Parameters 2. Generate & Edit Proposal 3. Perform Payment 4. Print Payment Advice & send to vendor Automatic Payment Program (APP) is functionality of posting accounts payable like payment to a vendor based on vendor invoices automatically. APP is used to find out due/overdue invoices and to process a list of customer and vendor invoices to make payments in one go. The Transaction code F110 is for managing automatic payments. Automatic Payment Program is divided into 4 steps (4 P's) : Parameter Proposal Payment Print                                         Steps to Run APP  Enter Run Date & Identification code  Run Date: Enter the date for transaction to run Identification: Enter a Five-character alphanumeric code that will be used to identify the pay...