SAP FICO is a popular SAP ERP module used for external and internal financial reporting. SAP FI and SAPCO are critical modules in SAP. Both modules are tightly integrated and aid the business organization in maintaining and generating financial statements for effective decision-making and reporting. With the SAP FICO module, you can carry out all financial transactions, accounting, and reporting activities smoothly.
These top SAP FICO Interview Questions have been designed specifically to familiarize you with the nature of questions you may encounter during your SAP FICO interview. We will cover the top 50 SAP FICO Interview questions and their detailed answers. We will cover SAP FICO scenario-based interview questions, SAP FICO interview questions for freshers, and SAP FICO interview questions and answers for experienced candidates.
Q1. What is SAP FICO?
SAP FICO is an acronym that stands for FI (Financial Accounting) and CO (Controlling Operations) (controlling). SAP FI is in charge of accounting, financial statement preparation, tax computations, and so on in SAP FICO. In contrast, SAP CO is in charge of inter orders, cost sheets, inventory sheets, cost allocations, etc. It is software that stores data, computes it, and returns the result based on the current marketing scenario. SAP FICO prevents data loss while also verifying and reporting data.
Q2. What are the other modules into which Financial Accounting is integrated?
Financial Accounting is integrated with the following modules:
- Sales and Distribution
- Material Management
- Human Resource
- Production Planning
- Controlling financial transaction
Q3. What is the core usage of SAP FICO?
The SAP FICO modules are primarily used within a company to manage financial tasks across multiple languages and currencies. The FI component of SAP FICO is concerned mainly with financial accounting, including fixed assets, accrual, cash journal, tax accounting, general ledger, and other financial tasks. The CO section of SAP FICO, on the other hand, deals with purchasing orders, stock sheets, cost sheets, cost assignments, and other tasks in this category.
Q4. What are the most critical organizational elements in SAP FI?
The following are the most important organizational elements in SAP FI:
- Company Code
- Business Area
- Chart of Account
- Functional Area
Q5. What is the ‘year shift ‘in the SAP calendar?
The Sap system does not allow access to the broken fiscal year. It only recognizes the calendar year. The particular calendar year does not have to be the fiscal year for all organizations. Changing months is usually necessary. It may be required to add or remove it. This procedure is known as Year Shift in SAP and can be completed quickly.
Q6. How are taxes taken care of in the SAP FICO?
One of the major issues is that tax slabs differ across countries. There are also additional taxes that apply there. SAP FICO already has tax procedures defined for various countries, and users can obtain information about them. The tax amounts can be sent to stocks by default, or users can make challenges based on their needs and convincing. As a result, taxes are not an issue for the SAP FICO.
Q7. What is the Credit Control Area in SAP?
SAP’s ‘Credit Control section’ assists in administering consumer credit management, and this organizational unit is used in both SD and the FI AR Module. The Client can have multiple control zones, but each Corporate Code can only be associated with one credit control zone. You can, however, assign numerous company codes to the credit area.
Q8. What do You understand by Opening/Closing Posting Periods?
SAP postings can be controlled by “opening” or “closing” posting times in SAP. While the rest of the times are closed, the post-period for posting documents is usually in full swing. This post-processing period closes for the month at the end of the time (month), and the next one is open for postings. This gives you more control.
Q9. How do you Carry-Forward Account Balances?
If you have already transferred funds to the new fiscal year, it is not necessary to manually carry-forward funds. You can, however, use SAP’s various carry-forward programs for this purpose.
Q10. What is General Ledger in Finance accounting?
A General Ledger records all of a company’s transactions. It serves as the primary record for all accounting information. Customer transactions, vendor purchases, and internal company transactions are common general ledger entries.
Q11. What are validations and substitutions in SAP FICO?
Validations are used in SAP FICO’s FI and CO modules to ensure data integrity when entering actual transactions online or in batch. On the other hand, Substitutions are used in the FI / CO / EC modules to derive, or correct values passed through integration or entered into the FI / CO modules.
Validation and substitution are defined at the following levels for each functional area:
- Document Level
- Line item Level
Q12. What are the major application areas in SAP that use validation and substitutions?
The following SAP application areas make use of validation and substitutions:
- FI- Financial accounting
- CO- Cost accounting
- AM- Asset accounting
- GL- Special purpose ledger
- CS- Consolidation
- PS- Project system
- RE- Real estate
- PC- Profit center accounting
Q13. What are the different steps incorporated in the G/L posting?
After finishing the payroll run, you must add the results to the GL accounts, including cost centers. The following steps are involved in GL posting.
- Organizes posting-relevant information from payroll results.
- Documents are summarized.
- Performs the necessary postings to the appropriate general ledger accounts and cost centers.
Q14. How can you make vendor payments?
There are two options for making vendor payments:
Manual Payment: This payment method is made without the use of a medium such as cheques.
Automatic Payment: DME (Data Medium Exchange) methods such as wire transfer or cheque are used for automatic payment.
Q15. What is FSV (Financial Statement Version) in SAP FICO?
In SAP FICO, the Financial Statement Version is a reporting tool. It can be used to extract SAP final accounts such as profit and loss statements and balance sheets. Multiple FSVs can generate the output of various external agencies such as banks and other statutory authorities.
Q16. What are validations and substitutions in SAP?
When values are entered into the SAP system, we can use the validation function to analyze them and the range of values. Standard validation rules are automatically checked when values are entered into the SAP system. The substitution function validates the values entered into the SAP system following the prerequisite. Each functional area in SAP Validation or Substitution is defined at the document and line-item levels.
Q17. What is the use of the Financial Statement version in SAP?
It is a tool for reporting purposes. It can extract final accounts from SAP, such as profit and loss statements. When it is necessary to generate the output of multiple external agencies, we can use various FSVs.
Q18. What is the role of Financial General Ledger Accounting?
General Ledger Accounting is used to overview external accounting and accounts. It records all business transactions and ensures that accounting data is authentic and complete.
Q19. Describe the short-end fiscal year?
The short-fiscal year results from the process when the user switches from fiscal to non-fiscal year or vice versa. When an organization joins the co-corporation group, significant changes occur.
Q20. Describe the concepts of one-time vendors in SAP FICO?
It is impractical for businesses that deal with large amounts of cash to create a transaction code for each trading vendor. As a result, the one-time vendor provides a one-time code for a vendor that can be used to conduct transactions and store data.
Q21. Define the relationship between the controlling area and company code?
A controlling area can contain one or more company codes, all of which must use the same operative chart of accounts as the controlling area. A Controlling Area can have multiple company code assignments, but only one controlling area can have a single company code.
Q22. What are posting periods?
The Posting period variant determines which normal and special posting periods are available for each company code. Each company code in the organization can have a different posting period variant. The posting period is not affected by the fiscal year variation.
Q23. What is the main usage of Account Receivables in SAP FI?
Accounts Receivable components in SAP FI are used to record and manage all customer accounting data, and they are also an important part of sales management. All postings in Accounts Receivable are also directly recorded in General Ledger. Depending on the transaction, different G/L accounts are updated.
Q24. What are the advantages of implementing Business areas in a company?
If other company codes need the same areas, business areas in a company can be used. The following are the advantages of using Business areas:
- The business area is simple to configure because you only need to attach the company code and other details in the business area, and it will be linked automatically.
- Using Business areas in controlling, you can generate profit and loss statements, balance sheets, and other financial reports for business areas used for management accounting in a few companies.
Q25. What is the company and company code in SAP FICO?
A company in SAP FICO is an organizational unit used in the legal consolidation module to roll up multiple company codes. In contrast, the company code is the smallest organizational unit for which a fully self-contained set of accounts can be created for external reporting purposes.
Q26. What is parallel and the local currency in SAP FICO?
The local currency is the currency entered during the company code creation process. The other two currencies are known as parallel currencies. Parallel currencies can be utilized in foreign business transactions and international transactions. GROUP CURRENCY and HARD CURRENCY are two examples of parallel currencies.
Q27. What do you understand about FI-GL Accounting? Why is it used?
The acronym FI-GL stands for Financial-General Ledger Accounting. It is used to get an understanding of external accounting and accounts. It incorporates all business transactions into a software system and ensures that accounting data is always complete and accurate.
Q28. Is it possible to calculate the depreciation for the day? How can you do that?
Yes, you can calculate depreciation to the day. When an asset has a corresponding depreciation key and is capitalized, the depreciation to the daily function becomes active (posted to). Once this occurs, you will be unable to disable this function for the asset, even if you change the depreciation key.
Q29. What do you understand about the internal orders in SAP FICO? Where can you use this?
Internal orders are typically used to plan, collect, and settle the costs associated with interior jobs and tasks. Internal orders can also track expenses intended to be incurred in the short term.
Q30. What is blocking a customer in SAP FI?
This is blocking a customer account in AR so that no postings are made to that Account. We must first block a customer account before deleting a customer master record. We should also block a customer who is only used as an alternate dunning recipient so that no one posts to that customer by mistake. In the Sales and Distribution application component, we can configure the following blocks for a customer:
- Posting block
- Order block
- Delivery block
- Invoicing block
Q31. What is the problem area encountered when the business area is configured?
The moment a business area is configured, the problem is splitting the account balance, which is especially important in the case of tax accounts.
Q32. What are the organizational assignments in Asset Accounting?
The highest node on the asset accounting chart of depreciation is rated. This chart stores the depreciation calculations.
Q33. What is the APP term in SAP FICO?
The abbreviation for ‘Automatic Payment Program’ is APP. SAP provides this tool to businesses to pay their vendors and customers. This is a beneficial tool for avoiding mistakes when performing tasks manually.
Q34. What is dunning in SAP?
Customers are issued payment chasing letters using the dunning method. It is possible to determine which customers should receive the letter and how long they have been overdue using SAP. Thus, a different letter with a reminder can be printed in SAP depending on the due payment date. We can determine which letter has been issued to the customer by using the dunning level on the custom master.
Q35. Customer and Vendor codes are stored at what level in SAP?
Both codes are kept at the client level. It denotes that the customer and vendor codes can be used by extending the company code view in SAP.
Q36. What is Valuation Class?
The primary link between Material Master and Finance is the Valuation Class in Accounting 1 View in Material Master. The GL account used during posting is determined by this Valuation Class and the combination of keys for transactions. Different materials with similar properties can be grouped.
Q37. Is it possible to modify the reconciliation account on the vendor master?
Yes. If the authorization to change has been established, the reconciliation account in the vendor master can be modified. We don’t change your reconciliation accounts as a rule.
Q38. What is the best method to create a specific GL indicator for Customers?
You can either use an existing specific GL indicator ID or create a new one. You must change your chart of accounts and your Reconciliation account after creating a new special GL indicator ID. Finally, the unique GL code must be changed, and the unique GL code must be identified as a reconciliation account. On the record master, enable the appropriate commitment and credit limits.
Q39. What do you understand about the chart of depreciation in Asset Accounting?
The chart of depreciation is counted as the highest node in Asset Accounting, and it is assigned to the company node. All of the depreciation calculations are saved in the depreciation chart.
Q40. What are posting period variants?
The posting period variants in SAP FI are responsible for controlling which Accounting period is open for posting and ensuring that the closed periods remain balanced. The posting period is the time during the fiscal year when the transaction figures are updated.
Q41. What is an account group, and what is the use?
Account groups define GL accounts, Customer Master, and Vendors. It is primarily used to control the data that must be entered while creating a master record.
Q42. In which application areas the validation and substitutions are used?
Validation and substitution are used in the following fields:
- AM-Asset accounting
- CO-Cost accounting
- FI- Financial accounting
- PC-Profit center accounting
- PS-Project system
- GL-Special purpose ledger
- RE-Real estate
Q43. What do you understand about one-time vendors in SAP FICO?
It is impractical in such businesses, particularly those dealing with large amounts of cash, to create new master records for each vendor trading partner. In these cases, one-time vendors are created, allowing a dummy vendor code to be used on invoice entry and the information to be saved in the vendor master.
Q44. What is the number of Chart of Accounts a company code has?
There can only be one Chart of Accounts for each assigned company code.
Q45. How are input and output taxes handled in SAP FICO?
Every country has a tax procedure within which tax codes are defined. It allows you to choose whether to expense the tax amounts or capitalize them to stocks.
Q46. What are the field status variants and groups?
Field status groups contain the field status variants. On the other hand, field status groups are kept in the General Ledger account. It is used to define the fields when posting to the general ledger.
Q47. What is the default exchange rate type chosen for all SAP transactions?
The default exchange rate type for all SAP transactions is M.
Q48. What is the main usage of Accounts payable in SAP FI? How is it related to G/L?
Accounts payable is used in SAP FI to manage and record accounting data for all vendors. In the following ways, it is related to G/L:
- All invoices and deliveries are managed in accordance with vendor requests.
- Payables are managed following the payment program, and all payments can be made via check, transfer, electronic transfer, etc.
- All Account payable postings are simultaneously updated in General Ledger, and the system also keeps forecasts and standard reports that can be used to keep track of all open items.
Q49. What are the different blocks applied to a vendor account in SAP FI?
In SAP FI, we can implement the following blocks to a vendor account:
- Block posting for specific company codes or all company codes.
- Purchase blocks can be set up for specific purchasing organizations or all purchasing organizations. This block is only displayed if the purchasing application component has been purchased and installed.
Q50. How do you create a Credit Control Area in SAP FI?
Using transaction code OB45 or path, we can create a Credit Control Area in SAP FI. To get this, follow the steps outlined below:
Go to SPRO> enterprise structure >maintain structure>definition>financial accounting>maintain credit control area>enter the following description:
- Name of the credit-control area in SAP
- Credit Limit
- Risk Category
- Fiscal Variant
- Rep group
We recommend reviewing these questions before attending your SAP interview. Our SAP experts handpick these at Tekskilled, who have extensive industry experience. Teksilled provides SAP FICO training with access to advanced lab tools and quality course material. Begin your SAP journey by learning from our experts.