SAP Fico Interview Question

1. What is SAP FICO?

SAP FICO (Financial Accounting and Controlling) is a core module in SAP ERP that helps manage financial transactions, reporting, and analysis.

2. What are the key components of SAP FICO?

The key components include:

• Financial Accounting (FI)
• Controlling (CO)

3. What is the role of Financial Accounting (FI) in SAP?

FI helps manage external financial reporting, such as balance sheets, profit and loss statements, and financial records.

4. What is the purpose of the Controlling (CO) module?

CO focuses on internal reporting for management, helping in cost tracking, budget planning, and profitability analysis.

5. Explain the organizational structure in SAP FICO.

The structure includes:

• Client
• Company Code
• Chart of Accounts
• Business Area

6. What is a Company Code in SAP FICO?

A Company Code is a legal entity for which financial statements like balance sheets and profit & loss statements are created.

7. What is a Chart of Accounts (COA)?

COA is a list of all General Ledger accounts used by one or more company codes.

8. What is a Business Area?

A Business Area represents a distinct area of operations within an organization for financial reporting.

9. What is the importance of General Ledger (G/L) in SAP FICO?

The G/L acts as a central repository for recording all financial transactions of a company.

10. What is an Account Group?

An Account Group is used to classify and control the creation of GL accounts.

11. What are Special GL Transactions?

Special GL Transactions are non-standard transactions like down payments, bills of exchange, and guarantees.

12. What is a Posting Key?

A Posting Key is a two-digit code that determines transaction type and account type for a posting.

13. Explain the term ‘Fiscal Year Variant’.

A Fiscal Year Variant defines the financial year structure, including periods and their start/end dates.

14. What is the difference between a Cost Center and a Profit Center?

• Cost Center: Tracks costs for a specific department or activity.
• Profit Center: Tracks profitability of a specific business unit.

15. What is the purpose of a Reconciliation Account?

It automatically updates General Ledger when transactions occur in sub-ledgers like Accounts Receivable and Accounts Payable.

16. What is an Asset Class in SAP FICO?

An Asset Class groups similar types of assets for tracking and reporting.

17. Explain the term ‘Document Type’ in SAP FICO.

A Document Type categorizes financial documents, such as invoices or credit memos, and controls number ranges.

18. What is Field Status Group?

It controls the fields displayed during document entry.

19. What is Parallel Accounting?

Parallel Accounting allows financial reporting based on multiple accounting principles.

20. What is the purpose of Automatic Payment Program (APP)?

APP automates vendor payment processing, including payment selection and execution.

21. What is the purpose of a Payment Term in SAP FICO?

Payment Terms define the payment due dates, cash discounts, and payment conditions for invoices.

22. What is the difference between Profitability Analysis (CO-PA) and Cost Center Accounting?

• Profitability Analysis (CO-PA): Focuses on external market segments for revenue and cost analysis.
• Cost Center Accounting: Focuses on internal departments or units for cost management.

23. What are the types of CO-PA in SAP FICO?

• Account-based CO-PA: Uses General Ledger accounts.
• Costing-based CO-PA: Uses value fields for flexible reporting.

24. What is the use of Dunning in SAP?

Dunning automates reminders and follow-ups for overdue customer payments.

25. What is the purpose of a Credit Control Area?

It manages and monitors customer credit limits across company codes.

26. What is the difference between One-Time Vendor and Regular Vendor?

• One-Time Vendor: Used for infrequent transactions with unique data for each purchase.
• Regular Vendor: Used for recurring transactions with stored master data.

27. What is a House Bank in SAP FICO?

A House Bank represents a company’s bank account and is used for payment and receipt transactions.

28. What is the role of Depreciation Keys in Asset Accounting?

Depreciation Keys determine how asset depreciation is calculated, including methods and rates.

29. What is the importance of Internal Orders in SAP CO?

Internal Orders track costs for specific projects, tasks, or events within an organization.

30. What is the purpose of the Open Item Management feature?

It ensures that items requiring clearing, such as invoices and payments, are tracked until settled.

31. What is the difference between Cost Element and Cost Object?

• Cost Element: Represents the type of cost incurred (e.g., material, labor).
• Cost Object: Tracks where the cost is incurred (e.g., projects, products).

32. What is a Functional Area in SAP FICO?

A Functional Area categorizes expenses for reporting purposes, like administration or production.

33. What is the significance of the Document Splitting feature?

Document Splitting allows detailed financial reporting by splitting documents across dimensions like segments or profit centers.

34. What is a Parallel Ledger in SAP?

A Parallel Ledger supports multiple accounting standards (e.g., IFRS, GAAP) for reporting.

35. What is the purpose of a Validation and Substitution in SAP FICO?

• Validation: Ensures data accuracy by enforcing rules during data entry.
• Substitution: Automatically replaces or supplements data during entry.

36. What is the use of the Special Purpose Ledger?

It customizes financial reporting by creating additional ledgers for specific requirements.

37. What is the importance of SAP FICO Integration with MM and SD?

• Integration with MM: Ensures seamless financial postings for procurement and inventory processes.
• Integration with SD: Ensures revenue and receivables postings for sales processes.

38. What is the difference between Manual and Automatic Payment Posting?

• Manual Payment Posting: Requires user input for posting.
• Automatic Payment Posting: Uses predefined rules for automated processing.

39. What is the use of an Interest Calculation Indicator in SAP?

It calculates interest on overdue invoices or credit balances.

40. What is the role of Workflow in SAP FICO?

Workflow automates financial processes like invoice approvals or payment releases.

41. What is a Cost Center Hierarchy?

It organizes cost centers into a structure for easier reporting and management.

42. What are Accruals and Deferrals in SAP FICO?

Accruals and Deferrals ensure revenue and expenses are recognized in the correct accounting period.

43. What is the use of Transfer Pricing in SAP CO?

Transfer Pricing evaluates inter-company transactions at market prices for profitability analysis.

44. What is the Period-End Closing process in SAP FICO?

It involves activities like reconciliation, depreciation, and financial reporting at the end of a period.

45. What are the main tables used in SAP FICO?

Some key tables include:

• BKPF: Document Header
• BSEG: Document Line Items
• COEP: Controlling Document Items

46. What is the role of Key Performance Indicators (KPIs) in SAP FICO?

KPIs provide insights into financial and operational performance for informed decision-making.

47. What is the purpose of Lockbox Processing in SAP?

It automates customer payment processing through electronic bank files.

48. What is the significance of Data Migration in SAP FICO?

Data Migration ensures accurate transfer of legacy system data to SAP during implementation.

49. What are SAP FICO Reporting Tools?

Key tools include:

• SAP Query
• Report Painter
• Drill-Down Reporting

50. How can you optimize SAP FICO processes for better performance?

Optimizing involves:

• Regular system updates
• Efficient data archiving
• Process automation

This comprehensive list equips you with insights into SAP FICO, empowering you to tackle interview questions with confidence. Prepare thoroughly and ace your SAP FICO interview!