What is SAP FI module ?

What is the SAP FI module?

Before we go further we have understood what is ERP?

  • ERP stands for Enterprise resource planning.
  • Its main objective to plan the resource of the enterprise.
  • ERP automates the task involves performing a business process.
  • ERP enables the planning and maximum utilization of all resources (Men, Material machinery and money ) in an organization.

ERP Products are available in the market.

  • SAP is widely used in ERP products.
  • Oracle applications
  • BAAN
  • People soft etc.

Introduction of SAP

  • SAP is a leading ERP package.
  • SAP enables enterprises to undertakes its day to day and long term activities in an effective and efficient way.
  • The use of this package makes it is possible to track and manage in real-time sales, production, finance accounting and human resource activities in the enterprises.
  • To track real-time sales, management, financial accounting, and human resource activities in enterprises..
  • Using this package makes decisions making more effective because of the kind of information we get by using this package in advance and in real-time.
  • SAP is the name of the company as well as products.
  • SAP comprises fully integrated modules that cover virtually every aspect of the business.


History about SAP

  • It stands for System applications and products in data processing.
  • Founded in the year 1972 by Wellenreuther, Hopp, Hector, Plattner, and Tschira
  • Renamed in 1977
  • Before 1977 System Analysis and Program Development.


Introduction to SAP

introduction to SAP

Example  :

Normal scenario when ERP like SAP in not used

A person is recording transaction of purchasing raw material in purchase department its gets recorded in the purchase side and now other individuals in finance department record the same transaction in the Finance department here on a single activity two people are working for the same transactions.one from the purchase side and other forms the finance side. Lets the case if the organization is big then for single activity same transaction will be recorded in different departments.

Now the organization needs the solutions for it because recording the same activity in different departments may cause data mismatch in different departments. Now SAP is providing the solution for all these problems.iF we go with SAP we don’t need different products for different departments one product SAP will solve the problems of all these department s.

    What is S.A.P / R/2-R/3 ARCHITECTURE ?


is the first version and its one tier architecture in three layers presentation, Application and database are installed in one system /server.

Server one — presentation + Application + database


It is mainframe version of software and its is two Tyre architecture in which three layers Presentation ,Application and database are installed in two separate server.

Server One presentation and application server two Database


SAP R3 is the client server version of the software and it is 3 tier architecture in which three layers application ,Database and server are installed in three servers or systems.

Sever one Application  server two database server three presentation

Major areas of SAP


It is divided into three major areas

  • Application area
  • Basis Area
  • Development area

sap conceptual area

SAP Application modules

  • Financial accounting (FI)
  • Controlling(CO)
  • Material Management(MM)
  • Sales And Distributions (SD)
  • Production Planning (PP)
  • Quality Management (QM)
  • Plant maintenance (PM)
  • Customer service(CS)
  • Project system(PS)
  • Human Resource(HR)

Introduction to FI modules

Fi modules are needed to generate the P & L and Balance sheet of the firms.


Key elements of FI modules

  • General ledger
  • Accounts Payable –Sub ledger
  • Accounts receivable – Sub ledger.
  • Asset Management – Sub ledger


General ledger in SAP FI modules

  • In order to generate the financial statement, the transaction is recorded in the General ledger.
  • An example of posting a salary DR salary and credit Bank entries, therefore, we need to create a chart of accounts
  • All activities needed to post a transaction being undertaken.
  • Prepare the chart of accounts. Means of list or group of General ledger
  • Creation of General Ledger Accounts
  • Posting of Transition
  • Generation of reports.


Accounts payable in SAP Fi

  • It is related to purchasing activities on credits or raw material and other items.
  • Accounts payable in SAP FI is treated as a Sub-ledger.
  • A GL accounts sundry creditor is maintained at the GL level.
  • At the sub-ledger level records “Vendors Master” is created.
  • All transactions are posted as a sub-ledger.
  • The transaction posted to the Sub ledger is maintained at two levels one in the sub-ledger and the same data gets transferred.

accounts payable

Accounts receivable  in SAP Fi

  • Activities related to the sale of finished goods or the sale of other items on credit are recorded.
  • Accounts receivable in SAP are treated as sub-ledger.
  • A G/L accounts sundry debtors are maintained at the G/L level.
  • At sub-ledger maintain a record “ customer master “is created.
  • All transactions are recorded in Sub ledger.
  • Transaction are posted to the sub-ledger and is maintained at two levels one in the sub-ledger and the same data gets transferred to General ledger.

Assets Accounting

  • Activities related to purchasing, sale, transferring or scraping of fixed assets are undertaken in these modules.
  • The life cycle of fixed assets becomes a part of Asset accounting.
  • Asset accounting is treated as a sub-ledger in SAP.
  • At the sub-ledger Assets, the master is created to record every asset separately.
  • An asset class is created to know the total value of the assets.
  • Asset master is linked to the Asset Class.
  • All transaction is posted to the Asset master.

asset accounting sap

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