An Overview of SAP Financial Accounting (FI)

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Today we’ll be learning about SAP FI.

The SAP FI stands for Financial Accounting. SAP FI is an essential module in SAP ERP, and it works on the ECC model. The FI module covers complete business processes related to Financial Accounting and Management Accounting.

It is a functional module that controls most of the standard financial reports supervised by an organization, both internally and externally. It allows multiple operating companies to chart accounts, currencies, and languages for complete company-wide control of the financials.

Financial management demands are constantly evolving, and it’s more important than ever to keep your skills current. The SAP Financial Accounting (FI) in enterprises is the expertise professionals need to better report financial accounting.

An organization looking to drive innovation with SAP financial management solutions must have the thorough knowledge they need for FI’s success. SAP FI module deals in handling financial transactions within companies. This financial accounting module assists employees in managing data involved in any financial and business transactions in a centralized system.

The SAP FI module is very adaptable and performs well in any financial situation. Be it a smaller or larger organization; SAP implementation helps streamline data for particular business transactions and legal requirements. The Financial Accounting module enables one to get the real-time financial status of an enterprise in the market. SAP FI consolidates other SAP modules such as SAP SD, SAP MM, SAP PP, Payroll, and more valid work results.

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SAP FI comprises the below sub-components:

• Finance Accounting General Ledger.
• Finance Accounting Accounts Receivable and Payable.
• Finance Accounting Asset Accounting.
• Finance Accounting Bank Accounting.
• Finance Accounting Travel Management.
• Finance Accounting Fund Management.
• Finance Accounting Legal Consolidation.

Why do Enterprises use SAP FI?

SAP FI module empowers enterprises to manage financial accounting data of multiple companies, currencies, and languages. SAP FI module primarily deals with the following financial elements:

• Fixed asset
• Accrual
• Cash journal
• Accounts receivable and payable
• Inventory
• Tax accounting
• General ledger
• Fast close functions
• Financial statements
• Parallel valuations
• Master data governance

SAP FI – Business Area

Business Areas are used to distinguish transactions that come from various lines of business in an organization.

The benefits of using Business Areas are:

• Business areas can be used if other company codes require the same areas.
• With the help of Business Area, it becomes easy to configure, as only company code must be attached, and the additional details in that business area will get associated automatically.
• With the help of Business Areas in controlling, the Profit and Loss statement can be created along with the Balance Sheet, etc. Business Areas is also used for management accounting in a few companies.

SAP FI – Functional Area

Function Areas in finance accounting are used to determine the costs in a company according to individual functional units. The most common Functional Areas are listed below:

• Manufacturing
• Production
• Administration
• Sales and Distribution

SAP FI modules

Let’s understand what SAP FI sub-modules are and how they handle particular accounting processes:

• General Ledger:

  It contains all of the company’s transaction data in a chart of accounts. The lists of all of the accounts in the system are present in the ledger. Transactions are recorded in sub-modules which can be recorded in real-time with general ledger data.

• Accounts Receivable:

  It captures every customer transaction and manages their accounts. Transactions include invoice posting, credit memo posting, down payments, invoice payments, or executing customer reports.

• Accounts Payable:

  Involves all of the transactions with vendors and their managed accounts. Transactions can include invoice posting, credit memo posting, down payments, invoice payments, automatic payments program, and executing vendor reports.

• Asset Accounting:

  It manages all of the transactions related to the company’s fixed assets, such as land, buildings, and heavy equipment. Transactions include asset acquisitions, retirement, sales, transfers, revaluations, and depreciation.

• Bank Ledger:

  This deals with all of the company’s bank account transactions and data. It can reconcile all transactions recorded on bank statements and analyze them with the transactions in the system.

• Consolidation:

  Enables the company to consolidate financial statements for multiple entities, which summarizes the company’s financial position as a whole.

• Funds Management:

  Manages the budgets for the company’s incomes and expenditures.

• Special Purpose Ledger:

  Defines the ledgers in SAP FI for reporting purposes.

• Travel Management:

  Manages all of the transactions for travel processes, including booking trips and handling travel-related costs.

The Benefits of SAP FI:

• SAP FI module is very flexible; it can easily alter the records in any expected manner.
• The data stored in the database is secured.
• SAP FICO is very reliable.
• It provides excellent reporting features, and companies can get an efficient report in less time.
• SAP FI has better management features.
• SAP FI provides a complete comprehensive solution for financial management. With the help of the FI module, an organization can improve its corporate performance.
• SAP FI module helps to evaluate, examine, and respond quickly to the developing business requirements and provide practical solutions.
• The SAP also delivers a more reliable attachment to the accounting standards and federal regulations and offers updated internal control management.
• With the help of the SAP-FI module, it is feasible to automate the collections and credit management and the arguments, if any.
• SAP systems allow better transparency across the departments and strengthen corporate governance.
• The SAP FI module also offers invoice generation and electronic bills and payments, enhancing the accounts receivable and the account payable functions.
• SAP FI can supervise the cash across locations, countries, and continents.
• SAP provides a competitive cost of finance and helps process revolutionize, team up with partners across the supply chain, and start the service operations collectively globally.
• SAP provides the compliance to report performance as per the organization, business unit, or cost center and improves the integration of finance procedures, including managerial and financial reporting.
• SAP FI can manage an inclusive variety of governance and compliance issues, for example, compliance with Sarbanes-Oxley standards, duties separation, and devotion to the Basel II rules and regulations and IFRS.

SAP FI Consultant Skills, Jobs, and Salary

SAP FI is the pillar of SAP as this is an excellent application for finance-related functions.

A career in SAP is promising both in terms of salary structures and career growth. One can be an SAP functional consultant or can move to the technical side of SAP, which means learning SAP Basis programming.

SAP FI is the highest paid salary with an excellent growth rate. Many companies are looking for certified SAP FI Professionals. But finding a job as an SAP FI Consultant might be difficult as the competition is very high. The position of SAP FI consultant symbolizes one of the most lucrative career paths in the market today.

SAP FI Manager, this role requires a strong command of the SAP modules that run a company’s financial, accounting, and back-office processes. The SAP FI Manager also coordinates the implementation of new SAP modules in the economic area and ensures that existing modules comply with internal and external IT standards.

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As a certified fresher, SAP FI Consultant will get about 3.15-3.6 LPA, depending on the location/organization. As a rule of thumb, in SAP, the maximum salary in LPA is 2x your experience. So if you have 5 years experience, your salary would be approx 2×5 = 10-12 LPA.