Introduction to SAP FI/CO Module

SAP FI/CO Material Faculty: N.
Vijay Bhaskar
Introduction to SAP
Responsibility of a Consultant
Responsibility of a Consultant is to “Configure” and “Customize” SAP to “suit the business
process requirements” of client’s Company.
Creation of new objects in SAP system is referred to as “Configuration” whereas making

changes to existing objects is called as “Customization”.
 ERP stands for Enterprise Resources Planning

 Resources can be classified in to 4 categories, they are
 Men
 Machines
 Material and
 Money
 The objective of an Enterprise is to get maximum profit from their investments.

 The exercise “Planning” gives an Enterprise, the direction. Planning helps us to take decision
by providing inputs required.
 As this software helps Enterprises in planning their resource utilization, it is called as
Enterprise Resource Planning Software.
Modules in SAP
SAP is an Enterprise level application. It is difficult for a person to understand and work with the
entire Organization. So, for the convenience the Product is divided in to smaller parts called
“Modules”. When the product is divided in to Modules, business functions are taken as basis.
All business functions like Planning, Procurement (Purchases), Marketing, Accounting, Costing
etc. are identified as “Functional Modules”. As each Module represents a Function in business,
it is called as a “Functional Module”.
Important Functional modules
FI – Financial Accounting
CO – Controlling
SD – Sales & Distribution
MM – Materials Management
PP – Production Planning
PS – Project Systems
Introduction & Basic Settings - Theory Material vijay@kautilyaconsulting.com Page No. 1

SAP FI/CO Material Faculty: N. Vijay Bhaskar
Important Technical Modules
ABAP / 4 – Advanced Business Application Programming (4th Generation)

Basis – Systems & Database Administration
Components in SAP Financial Accounting Module

Part A: SAP Enterprise Structure
Part B: 1. General Ledger
2. Accounts Payable
3. Accounts Receivable
4. Asset Accounting
Part C: Reports
Components in SAP Controlling Module

Part A: Controlling Area and its supporting objects
Part B: 1. Cost Element Accounting
2. Cost Center Accounting
3. Order Management
4. Profit Center Accounting
5. Product Costing
6. Profitability Analysis
Integration
1. Integration of FI/CO with MM Module

2. Integration of FI/CO with SD Module
Integration means “connecting”. All the Modules in SAP system are already inter-connected
with each other. Under this heading, we do not “connect” all these Modules with each other.
We facilitate “automatic posting” of information between different modules to save time and
effort of the end users. We also maintain “Integrity” of the data by integrating all these
Modules with each other.
SAP Name and Architecture
SAP stands for Systems, Applications and Products in Data Processing
and R/3 – Real time – 3 Tier Architecture

3 Tier Architecture:
1. Application Server
2. Database Server
3. Presentation Server (Client)
ECC stands for “Enterprise Central Component”.
Data processing Methods
There are two methods of processing data. They are
1. Batch processing
2. Real time processing
SAP is predominantly a Real time processing system. Batch processing functionality is also
available basin on the requirements of different components.
Consultant: Consultant in SAP context is a person who understands client company’s

requirements and configures / customizes SAP to suit the business process requirements of
Clients Company.
End user: Employee working in a Client’s company is referred to as“End user”or“User.
Implementation Partner: Company which implements SAP for a client company is called as
implementation partner in SAP practice.
Client: This term is used in our classes in two different contexts with two different meanings.
1. In Networking context: A machine in a Network which depends on a Server for

resources.
2. In Business context: An entity getting services from a professional is known as Client.
Business Process: The step-by-step procedure used to carry out a business activity is known as
“Business Process”
Brief Notes on Components in SAP FI Module
Basic Settings / SAP Enterprise Structure: In Basic Settings, we create the Enterprise Structure
and all the supporting objects required to create Master records and to post all types of GL
documents.

We have 4 Components in FI Module. They are
1. General Ledger
2. Accounts Payable
3. Accounts Receivable and
4. Asset Accounting
General Ledger
In this component, we learn topics like creation of GL Master record, posting documents,
displaying balances in GL Accounts, using tools like Sample documents, Recurring documents,
creation of documents in Foreign currencies, setting up of “automatic calculation of Interest”
mechanism etc. Objective of this component is to enable the users to create all GL Accounts
required and post entries pertaining to all possible business transactions. We also need to
facilitate generation of all Reports required.
Accounts Payable
Objective of this component is to facilitate identifying and making all payments to Vendors in
time. We learn topics like creation of Vendor master record including all supporting objects
required, posting of all possible business transactions like purchase invoice, vendor payment,
vendor down payment etc.
Accounts Receivable
Accounts Receivable component is just a replica of Accounts Payable in terms of the

functionality offered. Objective of this component is to facilitate receiving monies from
Customers in time. We learn topics like creating Customer master record, posting of all possible
transactions with customers, including calculation of VAT. The second most important topic in
FI/CO Module is Dunning (which means reminding customers).
Asset Accounting
We deal with only Fixed Assets in this component. Objective of this component is to facilitate
posting of all possible business transactions related to Fixed Assets like purchase of Assets, sale
of Assets, scrapping of Assets etc. and configuration of automatic calculation of Depreciation.
When we run Depreciation program as part of period closing, system picks up all important
details like acquisition value, acquisition date, depreciation method to be used, depreciation
rate to be applied, and business / legal rules to be applied and accordingly calculates
Depreciation, creates an accounting entry also automatically.

Reports
In this component, we learn the art of identifying a suitable Report for every information /
reporting requirement. If the required report is not available, then we need to create a Report.
We have tools like Report Painter and Report Writer to create Reports on the fly. If creating a
Report involves writing ABAP Code, we just need to communicate the requirements, by writing
a Functional specifications document, to an ABAPer in our Project team.
Procedure Log in to SAP System

Double Click on “SAP Logon” Icon and Select the Server allotted, double click on it and Enter the
following details provided by your Systems Administrator:
Client :
User :
Password :
Language : EN (English)
SAP Easy Access Screen

When a user logs in to the System, he lands up on this page. Terms used in this Screen are:
Menu bar: All the Menu options available in SAP are displayed on this bar.
Standard Tool bar: It contains all standard tools like Save, Print, Find, Create Session etc. It also
contains “Command Line Area” from where we enter all the commands in SAP.
Title bar: It contains the title of the Page.
Application Tool bar: It contains screen specific / application specific tools.
Status / Message bar: All the status messages, error messages, warning messages etc. are
displayed on this bar. It also contains Transaction Code of the screen.
Note: Every Screen is given a Technical name in SAP. Technical name of a screen is called its
Transaction Code.
Accessing a Screen in SAP

To go to any screen, we have to 2 options.
1. Menu path: We can use menu path to go to the screen.
Example: Accounting – Financial Accounting – General Ledger – Posting – Enter GL Document

2. Transaction Code: By entering the Transaction Code of the screen in the command line area.
For Example: Enter “F-02” to go to “Enter GL Document” screen directly
To go back to SAP Easy Access: From any other Screen, to go back to SAP Easy Access Screen,
we can use either “Back” button or “/n” command to go back to SAP Easy Access Screen
Using Transaction Codes: Transaction Codes can be used directly only from SAP Easy Access
Screen. From other screens, we have to use “/n” and the Transaction Code together.
Eg: From “F-02”, to go to “F-43”, the command is “/nF-43”
Two important Screens in SAP:

1. SAP Easy Access: All end user activities can be performed from SAP Easy Access Screen.
Creation of GL Masters, Vendor Masters, Customer Masters etc., Posting Entries
(Documents), Generating Reports are known as end user activities.
2. Implementation Guide: All Consultants will be using Implementation Guide for
Configuration and Customization activities. Transaction Code for implementation guide is
“SPRO”. To go to Implementation Guide, type SPRO in Command line and Click on “SAP
Reference IMG”.
Sessions in SAP
SAP allows us to work with several sessions at a time. Maximum number of sessions we can use
at a given point of time is “6”.
By using “Create Session” icon on the Standard Tool bar, we can create additional sessions.
We can use Command “/o” (Alphabet “o”) to create a new session.
IDES Companies
IDES – Internet Demo and Evaluation System
IDES Companies are model companies delivered with the System. These Companies are used by
Students / Developers and Executives in Marketing Department to understand / demonstrate
SAP functionality in prospective Client companies.
We use Non-IDES SAP System in Client Company.
SAP Server Architecture

There are 3 types of Servers in SAP Architecture. They are:

1. Application Servers
2. Database Servers
3. Presentation Servers (also known as “Client system”)
Application Server: Component containing the SAP Software is known as Application Server.
Database Server: Component containing the database (Master data as well as transaction data)
is known as Database Server.
Presentation Server: Component containing the Front end tool / Graphical User Interface which
facilitates the user in interacting with the Application Server, is called Presentation Server or
Client.
Client Environment in SAP:
There are 3 types of Client systems in a typical SAP Architecture. They are Development Client,
Testing Client and Production Client.
Development Client is used by all Developers i.e., Functional and Technical Consultants. Testing
Client is used by Testers and Production Client is used by employees of Client’s Company.
System uses Client number to understand whether the user is a Developer, Tester or an end
user. Same physical machine can play all the three roles. For example, if we use Client Number 800
while logging into the system, it becomes a Development Client, the same machine becomes a Testing
client if Client number 850 is used.
Transportation
All Consultants create configuration / customization steps in Development System. All these
steps are transported to Testing system for testing by the QA Engineers. Finally, after testing
they are again transported to Production System. Transportation means copying data in this
context. SAP is a real time system. Whenever we create a new configuration / customization
step, system automatically creates a transportation request.
Every transportation request will carry a Serial number. We can create a new request or assign
it to an already existing “own request” number. We can enter short description also, while
transporting for the understanding of people at other end.

Basic Settings
Enterprise Structure in SAP
As FI/CO Consultant, first we need to understand the Organizational Structure of the Client’s
Company.
To represent every “registered Company” in Client’s business, we create a “Company Code” in

SAP.
Fiscal Year: A period of 12 months, for which the company produces financial statements and
takes inventory.
Variant: An independent and reusable Configuration / Customization object.
Example: Let us say, we have 10 Company Codes in our Project with names A1, A2, A3, A4 etc.
Let us assume that we need one Tax Code in these Company Codes. If we create that Tax Code
under Company Code “A1”, then we will be able to use that Tax Code only under Company
Code “A1”. It cannot be used in Company Code “A2”.
If it is created as an independent object instead of creating it under Company Code “A1”, then
we will be able to use it in any Company Code in our system.
Creating any object as independent object in SAP is called as creating a “Variant”.
Fiscal Year Variants: SAP delivers standard Fiscal Year variants so that we can readily use them
in the Project.
Available Fiscal Year Variants in SAP standard system are:
V3 April – March Year
K4 Jan – Dec Year
V6 July – June Year
V9 Oct – Sept Year Etc.
Any Fiscal Year can be used for our Company Code. If the Fiscal Year Variant required is not
available, only then, a new Variant is to be created by us.
In Step No.2.1, we just have to identify a suitable Fiscal Year Variant for which we want to
maintain books, i.e., whether on the basis of Calendar Year, Financial Year etc.

In Step No.2.2, we need to assign that Fiscal Year Variant to our Company Code.
Assignment of Fiscal Year Variant to Company Code: By assigning Fiscal Year variant to
Company Code, we are telling the system about the accounting year (the period of 12 months)
for which the books are to be maintained.
A Fiscal Year contains 12 Months. A month is treated as a posting period in SAP. So, in the
Current Financial Year…
April 2021 is called as 1st Posting period of 2021
May 2021 is called as 2nd Posting period of 2021
June 2021 is called as 3rd Posting period of 2021
--------
Dec 2021 is called as 9th Posting period of 2021
Jan 2022 is called as 10th Posting period of 2021
Mar 2022 is called as 12th Posting period of 2021
Posting period
A calendar month is treated as a “posting period” in SAP. So, in a typical Fiscal Year, we have 12
posting periods.
Closing of a posting period:
Apart from treating a calendar month as a posting period, we practice this principle of “closing
a posting period” on the last business day of a calendar month.
Effect of closing a posting period in SAP
When a posting period is closed, we will not be able to post transactions of that calendar
month. When we close our current posting period, we open next posting period so that we can
start posting transactions of next calendar month.
Objective of closing a posting period in SAP: Objective of “closing a posting period” is to ensure
that all transactions are posted in that month without keeping pending transactions as on the
last day of the month. We can get the correct picture of business only when all business
transactions are posted in that month.

Example to understand the importance of “closing a posting period”
Scenario A – Where we don’t close our books every month:
Profit target set for the FY 2022 is Rs.48 Crores.
Profit target for the month of Apr, 2022 – Rs. 4 Cr.
If the books are not closed for the month of April, 2022, we will set ourselves a target of Rs.4
Crores only as per the annual target.
Profit target for the month of May, 2022 – Rs. 4 Cr.
Scenario B: Where we close our books every month
Whereas, if we close books for the month of April, 2022 and realize that we incurred loss of
Rs.7 Crores in that month, our profit target for the month of May 2022 would be arrived at like
this:
Annual profit target : Rs. 48 Crores
Loss in April 2022 : Rs. 7 Crores
Total profit to be achieved in remaining 11 months : Rs. 55 Crores
Revised target for the month of May 2022 : Rs. 5 Crores
Results always depend on the quality of decisions we take, quality of results we take depends
on the quality of information we have with us.
So, it is important for us to provide correct financial position to our employees so that they can
take correct decisions in business. We can achieve maximum possible results only when our
employees take correct business decisions.
So, it becomes important to close every posting period (i.e., calendar month) and arrive at the
correct financial position.
Reopening a posting period
The normal practice is to close a posting period on the last business day of a calendar month. In
some cases, it may not be possible to create accounting entries for all business transactions
that take place in that month, for practical reasons.
SAP system allows us to reopen a posting period and post a transaction back in the previous
calendar month. But, the right to reopen a posting period is given to a select group of

responsible managers at senior positions. So, if there is a good reason behind not being able to
post the entry, it can be reopened by those Managers. If the entries are pending without an
adequate reason, then employees responsible for keeping those transactions pending will be taken up
for disciplinary action. This mechanism ensures that business transactions are recorded as and when
they take place, and in any case, at least, by the end of the month.
Special periods in SAP:
While a posting period can be reopened any number of times, this principle has certain
restrictions. Once 12th posting period is closed (i.e. on 31st March in our case), we are not
supposed to reopen any of the 12 normal posting periods.
During the month of April 2021, along with 1st posting period of 2021, we open 13th period of
Fiscal Year 2020 also. While transactions of Fiscal Year 2021 can be posted in respective posting
periods of FY 2021, entries pertaining to year end procedures of FY 2020 are posted in the
special period 13. Note that special period is an artificial period and does not represent any
calendar month. As it is not a posting period, it need not be closed on the last day of a calendar
month. It can be kept open for any number of days, till all the business transactions of year end
procedure of FY 2020 are posted.
After 13th period is closed, we can open 14th period to post transactions as per findings of Audit.
A separate special period is used for posting Audit transactions to distinguish these entries from
the rest of the transactions.
After closing 14th period, we can use 15th period to post entries for transactions that take place
during the Audit and Management needs to post any transaction.
We can open 16th period to post transactions related to any Court of law or a judicial / semi-
judicial authority.
The practice is to use the following special periods:
13th period (1st Special period) - For Employees
14th period (2nd Special period) - For Auditors
15th period (3rd Special period) - For Management
16th period (4th Special period) - For Legal transactions
But, it is not mandatory that they should be used like this.

Fiscal Years – Year shift mechanism
SAP system uses ‘year shift’ mechanism to translate a calendar month in to a posting period.
Year shift mechanism is not required in case of Calendar year based Fiscal years like K4 Fiscal
year variant, because, January (1st calendar month) is treated as 1st posting period.
In all other cases, system uses ‘year shift’ value to convert the calendar month in to a posting
period.
Example:
1. In case of V3, system uses year shift value “-1” from Jan to Mar
2. In case of V6, system uses year shift value “-1” from Jan to June
Chart of Accounts
The list of GL Accounts is called Chart of Accounts.
In Step 3.1, we create a Chart of Accounts. We use a name for this Chart of Accounts. One Chart
of Accounts can be assigned to any number of Company Codes if all of them want to use same
set of GL Accounts.
Length of GL Account Number: We create GL Accounts with Serial Numbers. In this field, we
have to mention the number of digits we want to use in the GL Account Number.
For Example, if we say Length = 6, we can create GL Accounts with Numbers 100000, 100001,
100002 etc. Maximum Length allowed is “10”.
Account Groups
We need to classify our GL Accounts in to various Groups depending on the nature of GL
Accounts, like, Fixed Assets, Current Assets, Manufacturing Expenses, Administration Expenses
Etc.
We can create GL Accounts under Account Groups only. So, there should be at least one
Account Group in a Chart of Accounts. We can create as many GL Account Groups as we want.
There is no upper limit.

Procedure for copying Account Groups from an existing Chart of Accounts:
Step 1: Identify an existing Chart of Accounts with similar classification of Accounts
Step 2: Select all the Account Groups by clicking in the first column of every row.
Step 3: Click on “Copy as” button
Step 4: Change the name of Chart of Accounts in all the rows
Step 5: Click on Enter and Save.
Retained Earnings Account

Retained Earnings Account is similar to “Surplus in P&L Account”. At the end of a fiscal year, the
system carries forward the balance of the P&L account to the retained earnings account.
In normal book keeping systems (i.e., when we use to maintain books manually), we create and
use “Surplus in P & L A/c” only at the end of the year. When we use Computerized Book
keeping systems like Tally etc., or ERP systems like SAP etc., we need to create “Surplus in P & L
A/c (i.e., Retained Earnings Account in SAP terminology)” before we start posting Entries in our
Company. We create it before we start posting Entries to facilitate preparation of Account
Statements like Profit and Loss Statements, Balance Sheets etc. on first day of business. User
might want to see his reports right on the first day of his business. That is why, it is mandatory
to create this Account before we start posting Entries.
We need to assign a retained earnings account to each P&L account by specifying a “P&L
statement account type”.
In step No. 3.4, we just have to declare Account Number of our “Retained Earnings Account”.
We have to declare it now as part of our Configuration because it is a mandatory Account.
Without creating this Account, we cannot start posting transactions in our Company Code.
Note that, we are not creating this Account here; we are just declaring our Account Number of
Retained Earnings Account.
Posting period Variant

We maintain current posting period (posting period that is available for posting transactions)
information in Posting Period Variant.
We maintain this information in a “Variant” so that management (opening and closing of

posting periods) becomes easy, if we have several company codes to be managed in our

Project. Normal practice is to open one posting period at a time. In our Project, we open all 12
posting periods so that we can post transactions across all 12 calendar months.
Account types in SAP
Technical name Account type
A Assets
D Customers
K Vendors
M Materials
S GL Accounts
V Contract Accounts
+ All Accounts
Number ranges for Document types

Document Types and their predefined Serial Numbers
Document Name of the Number range

Document
type interval
GL Document SA 01
Vendor Invoice KR 19
Vendor payment KZ 15
Customer invoice DR 18
Customer
DZ 14
payment
Asset postings AA 01
Accounting Doc AB 01

Number range intervals
Name of Number range Interval Number range intervals
01 1-100000
02 100001-200000
03 200001-300000
--- ---
14 1300001 – 1400000
15 1400001 – 1500000
16 1500001 – 1600000
17 1600001 – 1700000
--- ---
Document types
Document type is a two character indicator (like SA, KR, KZ, DR, DZ etc.) which is to be used
while posting documents (Entries) in SAP. Document type helps the system to understand the
nature of the document.

Along with other objects, Document type determines
1. Document Number to be assigned to a Document

2. The Account type to be used in the Document (i.e. Vendor, Customer, Asset etc) and
3. Nature of the Document (i.e. whether the document is an Invoice or payment etc)
System assigns a number to every Document posted by the user. Document Number helps us to
uniquely identify the document while searching for required document. SAP delivers 51
standard document types. For every document type, we have to create a number range interval
from which, System assigns a number to every document posted in the system.
Number ranges for Document types
While creating a number range interval, we need to use a predefined Serial number. Serial
number is like the name of the interval. We can assign one number range interval to any
number of document types. Number range interval size can be determined by the user. It
depends upon the expected number of transactions of that Document type in that year.
Field Status
Field Status
Field name
Suppressed Required Optional
Text
O O O
(Narration)
Business Area O O O
Cost Center O O O
Tax Code Etc. O O O

Field Status Variant

Accounting entries are called as Documents in SAP system. In a document, we can have
minimum of 2 line items and maximum of 999 line items. For every line item, we have
approximately 85 fields. So, for simplest possible entry also, we will have 170 fields (85 x 2 line
items) in addition to document header fields.
User finds it very difficult to navigate in the screen with so many fields. That is why, Consultant
is expected to decide as to how many of the fields are to be displayed on the screen, how many
of them as mandatory fields and how many of them are as optional.
In this step, as FI/CO Consultant we need to customize the screen layout as per the nature of
the business of the Client’s Company.
Using Field Status Variant, we can customize our document entry screens. By selecting
appropriate option against a field, we can decide whether that field should appear on our
screen or not, If it should appear, whether as a mandatory field or as an optional field.
Field Status Variant contains several field status groups. Every Field Status Group contains a set
of fields. Every field has 3 options, they are,
 Suppressed
 Required and
 Optional
If “Suppressed” option is selected against a field, that field will not be displayed at all on the
screen. If “Required” option is selected, that field becomes a mandatory field for end users. If
“Optional” option is selected, then it becomes an optional field for the end users.
SAP Standard Field Status Variant contains 41 Field Status Groups. As we cannot have same
field status for a particular field in every Account, we maintain several Field Status Groups.
For example:
G001 FSG is used for General Accounts
G003 for Material Consumption Accounts
G004 for Cost Accounts
G005 for Bank Accounts Etc.
We use appropriate Field Status Group while creating a particular Account and thus control
fields of a data entry (Document posting) screen.

In the same way, we can control the field status of Master records while creating GL Account
Groups, Customer Groups and Vendor Groups.
Summary: We need to assign a Field Status Variant to a Company Code. Field Status Variant
contains Field Status Groups and each Field Status Group contains several field status rules.
While creating a GL Account, we need to identify suitable FSG and assign it.
Value Date – Example
Our Books Bank Books

Rs. Rs.
Balance on 24.12.21 15,00,000 15,00,000
Issued Cheque on 24.12.21 14,00,000 -
-------------- ---------------
1,00,000 15,00,000
Clearing takes place
on 28.12.21 - 14,00,000
---------------- -----------------
Balances on 28.02.21 1,00,000 1,00,000
---------------- ------------------
Tolerance Groups
Let us say, we posted one Sales invoice for Rs.10,00,000 last week. But, for some business
reason, we wanted to accept only Rs.9,00,000 towards the transaction in full settlement (not as
a partial payment).
We use a mechanism called “Open Item Management” to process purchase / sales invoice and
payments (both outgoing and incoming). As per the principles of Open Item Management,
every invoice will be shown as an open item until the total payment in question has been
processed.
In our case, since only Rs.9,00,000 is received, system continues to show the status of the sales
invoice as open item (i.e., pending transaction). But, from our perspective, it is a completed
transaction.
To show the status of the sales invoice as cleared item, we need to give proper treatment for
the balance amount of Rs.1,00,000. The entire differential amount cannot be treated as
discount, because there will be a limit on discount also. Let us say, in our case, we can give
maximum of 4% discount. So, we can treat Rs. 40,000 as discount. Rest of the amount Rs.
60,000 is transferred to an Account called “Permitted Payment Difference” Account in SAP
System.

This practice can be misused by Employees. That is why, we impose a limit on amount that can
be transferred to this “Permitted Payment Difference” Account. The limit is called as “tolerance
limit”.
“Tolerance” in general, means “permitted deviation”. In our context, it means “permitted

payment difference”.
At every level, we maintain business rules in SAP system. For practical reasons, it may not be
possible to transact business exactly as per Rules maintained in the system. As Functional
Consultants, we maintain permitted deviations also in the system, with in which users can
deviate from Rules when they post business transactions.
As FI/CO Consultants we need to maintain business rules and permitted deviations from
monetary aspect. Other Functional Consultants take care of business rules and deviations from
other aspects like dates, quantities, quality etc.
Monetary deviations above discounts are transferred to an Account called “Payment

Differences A/c” in SAP. To prevent manipulations, we impose a limit called “Tolerance limit”.
The limit can be maintained in absolute amounts / percentages.
The tolerance limits are to be maintained both from GL Accounts point of view as well as Users
(i.e., employees posting accounting entries in the system) point of view.
When an accounting entry is being created in the system, it verifies whether limits from both
the points of view are complied with. It allows the user to create entry only when limits from
both the points of view are complied with.
Creation of at least one tolerance group is mandatory. We can create as many Tolerance
Groups as we want in our Company Code. We need to assign a suitable tolerance group in every
GL Account.
Tolerance Group with blank limits: If a Tolerance Group is created with a “blank limit”, that
means deviations are not allowed for transactions posted in that particular Account or for
transactions posted by that particular user.
Default tolerance group: We can create as many Tolerance groups as we want in our Project as
per our requirement. We can create one Tolerance group without a name, so that we can use
that Tolerance group as “Default tolerance group”. If no other specific tolerance group is
assigned to a particular Account or user, this Default tolerance group becomes applicable in
that Account or to that user.

Assignment of tolerance groups
We need to identify and assign a suitable tolerance group to every Account and every User.
Creation of at least one tolerance group from each point of view is mandatory.
Summary: Tolerance group created for GL Accounts needs to be assigned in GL Account

Master. Tolerance group created for Employees needs to be assigned to the user Id of the
employee.
Global parameters
 Parameters: Rules, properties, conditions, limits, features, boundaries etc.
 Propose Fiscal Year: If this Option is selected, System maintains Fiscal Year information
also along with Document number. It helps us to search documents faster.
 Define Default Value date: System proposes default date in value date field, if this
option is selected. This feature saves time of the end user.
 Negative postings permitted: System allows negative postings in our Company Code if
this option is selected in this screen.
Troubleshooting – Dealing with Lock Entries
Note: When objects are being created in the system, we may get message “Data is locked…..”.
To deal with this issue, we need to follow this procedure:
 Create a new session using “Create session” icon on the application tool bar.
 Go to T. Code “SM12”
 Remove user ID in “Username” field
 Go to Menu, use “Lock Entry” and “Delete All” option
 Click on “Yes” option when it prompts whether it should delete all the lock entries
 Go to the screen again and create a new object

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SAP FI/CO Material Faculty: N.

Creation of new objects in SAP system is referred to as “Configuration” whereas making

 ERP stands for Enterprise Resources Planning

 The objective of an Enterprise is to get maximum profit from their investments.

Important Functional modules

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Important Technical Modules

ABAP / 4 – Advanced Business Application Programming (4th Generation)

Components in SAP Financial Accounting Module

Components in SAP Controlling Module

1. Integration of FI/CO with MM Module

SAP Name and Architecture

SAP stands for Systems, Applications and Products in Data Processing

and R/3 – Real time – 3 Tier Architecture

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ECC stands for “Enterprise Central Component”.

Data processing Methods

There are two methods of processing data. They are

Consultant: Consultant in SAP context is a person who understands client company’s

End user: Employee working in a Client’s company is referred to as“End user”or“User.

1. In Networking context: A machine in a Network which depends on a Server for

2. In Business context: An entity getting services from a professional is known as Client.

Brief Notes on Components in SAP FI Module

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We have 4 Components in FI Module. They are

Accounts Receivable component is just a replica of Accounts Payable in terms of the

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Procedure Log in to SAP System

SAP Easy Access Screen

Title bar: It contains the title of the Page.

Application Tool bar: It contains screen specific / application specific tools.

Accessing a Screen in SAP

1. Menu path: We can use menu path to go to the screen.

Example: Accounting – Financial Accounting – General Ledger – Posting – Enter GL Document

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For Example: Enter “F-02” to go to “Enter GL Document” screen directly

Eg: From “F-02”, to go to “F-43”, the command is “/nF-43”

Two important Screens in SAP:

We can use Command “/o” (Alphabet “o”) to create a new session.

IDES – Internet Demo and Evaluation System

We use Non-IDES SAP System in Client Company.

SAP Server Architecture

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3. Presentation Servers (also known as “Client system”)

Client Environment in SAP:

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To represent every “registered Company” in Client’s business, we create a “Company Code” in

Variant: An independent and reusable Configuration / Customization object.

Creating any object as independent object in SAP is called as creating a “Variant”.

Available Fiscal Year Variants in SAP standard system are:

V3 April – March Year

K4 Jan – Dec Year

V6 July – June Year

V9 Oct – Sept Year Etc.

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April 2021 is called as 1st Posting period of 2021

May 2021 is called as 2nd Posting period of 2021

June 2021 is called as 3rd Posting period of 2021

Dec 2021 is called as 9th Posting period of 2021

Jan 2022 is called as 10th Posting period of 2021

Mar 2022 is called as 12th Posting period of 2021

Closing of a posting period:

Effect of closing a posting period in SAP