Financial Accounting (FI)

internal group

includes the executives, senior management, administrative staff, and employees.

external group

comprises legal authorities, banks, auditors, shareholders, insurance, taxing authorities, media, and financial analysts

The FI organizational structure consists of the following organizational units:

• Client

• Company Code

• Chart of Accounts

• Credit Control Area

• Business Area

Client

an independent environment in the system. A client may have more than one (1) company code

Company Code

the smallest organizational unit where a legal set of books can be maintained. A balanced set of books, as required by law, are prepared at this level.

Chart of Accounts

a classification scheme consisting of a group of general ledger (G/L) accounts used by one or more company codes. It also provides a framework for recording values to ensure an orderly rendering of accounting data.

Credit Control Area

an organizational entity that grants and monitors a credit limit for customers. It can also include one or more company codes

Business Area

represents a separate area of operations or responsibilities within an organization and to which value changes recorded in Financial Accounting can be allocated

The FI Master Data has three (3) types:

• General Ledger (G/L) accounts,

• Customer Master Data, and

• Vendor Master Data.

General Ledger (G/L) Accounts

This master data is the data storage area created by the unique combination of Company Code and Chart of Account.

Customer and Vendor Accounts

balances are maintained in FI through fully integrated accounts receivable and accounts payable sub-ledgers.

Accounts Receivable Sub-ledger (FI-AR)

It is the information concerning customers who purchase the enterprise’s goods and services, such as sales and payments made.

Accounts Payable Sub-ledger (FI-AP)

It is the information concerning vendors from whom the enterprise purchases goods and services, such as purchases and payments

Balance Sheet

It is the presentation of an organization’s assets, liabilities, and equity at a point in time.

Assets

define what the company owns.

Liabilities

define what the company owes

Equity

defines the difference between assets and liabilities

Income Statement

It presents an organization’s revenues and expenses for a period, such as monthly, quarterly, or annually.

Revenues

are cash inflows due to selling activities or the disposal of company assets.

Expenses

are outflows of cash or the creation of liabilities to support company operations.

Statement of Cashflows

These are considered the associated changes, both inflows and outflows, that have occurred in cash, which can be viewed as the most important of all assets – over a given period such as monthly, quarterly, or annually

Audit Trails

begin with an account balance on a financial statement and trace through the accounting records up to the transactions that support the account balance

SAP Document Principle

It provides a solid and important framework for a strong internal control system, a law requirement for companies that operate in most countries

financial document

can not be deleted from the database once written to the SAP database. However, it can be changed to some degree.