FI-CO OVERVIEW

	SAP R/3 Organizational elements for Financials
	Reporting and Analysis

OBJECTIVES

Define the SAP R/3 organizational elements for Financial reporting and control
Identify financial integration points with the logistics chain
Execute financial and management reports in the SAP R/3 system

Financial Accounting is broken down into the following submodules:

General Ledger accounting
Accounts Receivable
Accounts Payable
Legal Consolidations
Special Purpose ledger
Asset Accounting

Controlling is broken down into the following submodules:

Overhead Cost Controlling
Product Cost Controlling
Sales and Profitability Analysis
Activity Based Costing

Views of the the company's financial situation and performance
Enterprise controlling (EC)	an enterprise-wide view of financial reporting
Treasury (TR)	control of cash, banking, securities, and funds management
Financial Accounting (FI)	core financial accounting integrated with subledgers
Controlling (CO)	management accounting for tracking overhead and profitability as well as production process control
Investment Management (IM)	capital investment management such as construction projects or capitalization of assets

Summary of Organizational Units in SAP
Financial Accounting
Chart of accounts	Contains all account numbers
Group Company	Consolidation of company codes
Company Code	Independent balancing unit used for legal reporting
Business Area	Used to create internal balance sheets
Controlling
Controlling area	Organizational unit for cost accounting
Cost center	Organizational unit for cost control
Profit center	Organizational unit for internal profit analysis

	SAP R/3 Organizational elements for Financials
	Reporting and Analysis

External accounting is directed "outwards" and is regulated strictly by tradition and law to ensure comparability.
- Principles of double entry bookkeeping
- Profit and loss system
- Period based accounting
Internal accounting is purely for internal use and serves to control and manage the organization. It is constructed along the lines set by management and must be flexible.

The Audit Trail

Every transaction in the system is represented by a document
A document records a business transaction
Documents are accessible in real time and are stored centrally
Data resulting from transactions posted to the system can be viewed at every level of detail from the original document to the final report.
The system provides an audit trail of the reporting information through the drill down capabilities.

General Ledger and its Subledgers

Transactions that affect financials update the General Ledger via subledgers that are directly integrated.
Subledgers reduce the number of General Ledger accounts shown on the Financial Statement.
The balances of subledger accounts are automatically updated in the General Ledger through a Reconciliation Account.