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SAP Financial Accounting (FI)

In any business, handling financial transactions and generating financial reports are the key factors for decision making and successful running of the enterprise. SAP has designed several modules that focus on different areas of business. One important module is SAP FI, the Financial Accounting module which deals in processing, recording, and maintaining financial accounting transactions within enterprises.  It manages data involved in any financial and business transactions in a unified system and the module functions satisfy external reporting too. The system has the facility to track and report on multiple companies across countries with different currencies. The SAP FI module is very flexible and is suitable for small and large organizations. This module helps one to get real-time financial position of an enterprise in the market. SAP FI software also enables an integration with sales and distribution, materials management, purchasing, and enables the user to drill down to the original transaction, be it a sales order a purchase order or the movement of materials.

SAP FI is part of SAP FICO, and is believed to be the central point of an integrated SAP system because everything that has a financial impact in the other modules actually flows to FI automatically in real time. The financial impact of the transactions in other modules gets posted to FI and hence FI is the supporting skeletal framework of the entire system.

Advantages of SAP FI

SAP FI provides one of the most comprehensive worldwide financial management solutions available today. Using SAP FI, an organization can improve corporate performance. Besides, SAP FI enables you to quickly read, appraise, and respond to changing business situations and come up with effective strategies. Besides enabling faster closing of processes, one can simplify process scheduling, consolidation, collaboration and process workflow. Besides the above, SAP systems also allow for better transparency across units or departments, and improves corporate governance. SAP also provides a greater adherence to federal regulations, accounting standards and provides an improved overall administration of internal controls. It is also integrated with other modules of SAP.

SAP FI also automates credit and collection management, and disputes if any. SAP FI also offers generation of bills and invoices as well as payments electronically, which enhance the traditional accounts payable and accounts receivable functions. SAP FI also has better ability to manage cash across countries, locations or continents. Apart from this, it also allows you to report, assess, and allocate cash in real time, and set up in-house payment centers or banks.

Besides improving financial and managerial reporting, SAP provides the flexibility to report performance according to organization, cost center or business unit, and also improves integration of finance and treasury processes. One can also integrate risk and treasury functions with those of accounting and financial reporting.

Sub Modules of FI

The different financial and accounting functions of FI are achieved through these sub modules:

Accounts Payable and Accounts Receivable sub ledgers are integrated both with the General Ledger and with different components in the SD module.


All accounting-relevant transactions made in Logistics (LO) or Human Resources (HR) components are posted real-time to Financial Accounting (FI) and data can be also be passed on to Controlling (CO). Apart from this other SAP modules such as, Material Management (MM), Sales & Distribution (SD), Product Planning (PP), can be integrated with FI. So while browsing the SAP FI course, it may be a good idea to check the other SAP modules such as, SAP SD Training, and SAP Materials Management – Purchasing & Material Master Data courses.

Page Last Updated: April 2014

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