SAP: What is FICO

SAP FICOIn SAP, the Finance and Controlling (FI-CO) module encompasses two very large worlds of information. This blog post is an overview of FICO, hopefully providing a basis for understanding the distinction between FI and CO and their purposes and uses.

The Distinction Between Finance (FI) and Controlling (CO)

SAP MenuA good place to start in drawing the difference between FI and CO is the SAP Easy Access menu (if you’re using your User Menu, toggle to the SAP menu by the key combination “Ctrl-F11” – the User Menu is broken down by roles, not necessarily by modules, so not helpful for this exercise). Clicking the image to the right will show you the full size menu if you’re not connected to SAP.

Looking at the SAP menu, the Accounting folder contains most of the FICO transactions (T-codes). Inside Accounting, you will find Financial Accounting. This represents the FI part of FICO. Inside Financial Accounting, you will see:

  • General Ledger
  • Accounts Receivable
  • Accounts Payable
  • Banks
  • Fixed Assets, etc.

Compare these to the items in the Controlling (CO) folder:

  • Cost Element Accounting
  • Cost Center Accounting
  • Internal Orders
  • Activity-Based Costing
  • Product Cost Controlling
  • Profitiability Analysis
  • Profit Center Accounting, etc.

The difference may be painfully obvious by now. FI transactions and data are relevant to external stake holders, while the CO transactions and data are of keen interest to your internal management.

GL allows you to produce financial statements for external reporting to the SEC, shareholders, IRS, banks, lenders, etc.

AR and AP allow you to track you customer and vendor accounts.

Fixed Assets are of interest to taxing authorities.

Your shareholders, customers, vendors, lenders, the SEC and IRS are usually not concerned with how much money was spent on office supplies at your Little Rock profit center – data usually captured in CO. While, they are very interested in your company’s income and cash flow, or how much you owe them.

There is one external group that might be keenly interested in your CO data to be able to tell how you run your business, where you spend your money, and what your strategy is, most external business partners are not concerned with the expenses or revenue of a particular profit center.

Organizational Units Relevant to FI & CO

The distinction between FI and CO is also reflected in the organizational units that are relevant to each of them.

Primary Org Units for FI

  • Company Code: the primary org unit that is used in FI is the company code. For an overview of company codes, read here…and here.
  • Business Area: an organizational unit used within FI to assist in External Segment Reporting. Can go across company codes. The SEC and International Accounting Standards (IAS) require that significant areas of operation within a company be reported separately. (Read more on segment reporting in IAS 14.) Note that a complete Balance Sheet is usually not available within a business area.
  • Business Organization: can be made up of one or more company codes

Primary Org Units for CO

  • Controlling Area: can be made up of one or more company codes. When company codes and controlling areas are in a one to one relationship, the internal and external reporting views at this level are the same.
  • Profit Center: captures revenue, cost, and certain balance sheet information. Transactions that are posted to a cost element require a cost object (cost center, internal order, profitability segment, etc) to be included on the transaction. These usually roll into a profit center by the profit center that is assigned in the master data of the cost object.
  • Cost Center: used to capture cost information, particularly expense. Not necessarily used to capture Cost-of-Goods-Sold which frequently uses a profitability segment as the cost object. Each Cost Center must be assigned to a single Profit Center. Posting made to a cost center roll into its assigned profit center.

23 Responses to SAP: What is FICO

  1. Frank Koehntopp June 26, 2007 at 3:18 am #

    Hey Byron,
    excellent web site, love the SAP stuff, very helpful.
    Subscribed 😉

  2. byron June 26, 2007 at 7:35 am #

    Thanks Frank,
    I appreciate you dropping by and the kind words. I’m working on it. And it does need some work!

  3. Reddy July 20, 2007 at 2:46 pm #

    Hi Bryon,

    Is there a diagram which illustrates how the cost flows from CO to FI & vice versa.


  4. byron July 21, 2007 at 4:54 pm #

    Hi Reddy,

    I don’t have a diagram that illustrates this, but that is a great idea. I’ll look around for one and if I can’t find one, I might put one together. In general, though, most transactions originate outside of FI/GL. Say through sales orders, etc. All of these transactions funnel through the Accounting Interface which busts up the information and routes it to the appropriate ledgers at that point. The Accounting Interface would be responsible for populating the GL, PCA, and CCA. I think it does CO-PA as well, but I’m not 100% sure on that. You can do substitutions, et al, at the point of the Accounting Interface.

    I’ll look for more info. This is a big topic and I haven’t done it justice in this post or this comment.

    If you have any specific questions, let me know. Also, you might check out the They have a lot of q&a over there.


  5. siva August 1, 2007 at 5:43 am #

    dear sir this is siva from hyd sir i want to learn sap(fi-co)
    so i want deatiales of the cories please answer this questions
    1.organaigational units
    2.what is bussines areas
    3.what is custmisation
    4.range creationand
    replay my id as early as possible thankeyou

  6. byron August 1, 2007 at 12:36 pm #

    Hi, siva,

    Learing FI-CO can be a lifelong endeavor. Especially since it changes on an annual (if not monthly) basis. The good news is that you can get the basics fairly easily. A great place to start is:

    This if you navigate in, you can get to your release of SAP and get fairly detailed info on most FICO functions.

    As for your answers:
    1. For additional reading on Organizational units, check out: SAP Help

    2. Business Area is described above. For additional reading, you can try this PDF document:

    3. Customization is the Configuration area of SAP, this is almost exclusively done in development environments. You can access customization through the IMG (Implementation Guide) using t-code: SPRO

    4. Range creation is usually creation of document number ranges. You will need to configure number ranges for the various document types you will be using in your system.

    5. Dunning is the art of telling your customers they are late in paying their bills.

    The way most people learn FI-CO is by working for a company that is either implementing SAP or is already using it. This way you will probably attend SAP training at the company’s expense.

  7. JohnnyPhoenix August 3, 2007 at 9:30 am #


    What is the password for your latest post? It does not take my password.


  8. byron August 3, 2007 at 9:58 am #

    Hi, Johnny,

    Sorry about that. I shouldn’t have put that post out there. Unfortunately, I am not at liberty to share the contents of that as it was an “internal document”. I’m pulling it off the site until I can massage it into something less proprietary.

    Sorry for the inconvenience.


  9. JohnnyPhoenix August 16, 2007 at 4:48 pm #


    I am trying to customize my first FI/CO module. Demo mind you. I keep on getting an error message everytime I do a table. For instance the TC OBA1 or OB58, the message is account not created for CoA. How can I fix this?

  10. byron August 16, 2007 at 6:07 pm #

    Hi Johnny,

    I’m not at my work PC right now, so I can’t really dig into the question, but here are a few things to check out in your troubleshooting.

    1. Check that you’ve created the account in both the Chart of Accounts and in Company Code. You can create the account centrally (FS00) catching both of these at the same time.

    2. If you’re trying to add the account to something that is related to Profitability Analysis (CO-PA) or Cost Center Accounting, you’ll need to have created a Cost Element as well. I forget the t-code for doing that directly, but assuming the account will also be a GL Account in your Chart of Accounts, you can create a Cost Element from the FS00 screen by clicking the Cost Element button.

    Since it’s saying ‘not created in CoA’, I assume that is in Chart of Accounts, so you may fix it by creating in the Chart in FS00.

    Let me know if that doesn’t get you started.


  11. JohnnyPhoenix August 17, 2007 at 11:15 am #

    I’ll go back and give it a try. I’m currently not in the CO-PA or Cost center yet. I just starting from scratch.

  12. JohnnyPhoenix August 17, 2007 at 12:11 pm #

    Disregard last message. I GOT IT!!!!! Now I know why LSMW is good for this sort of thing. Now I have to figure how to use LSMW to do the G/L. If I don’t then I’ve got a lot of typing to do.


  13. byron August 17, 2007 at 2:04 pm #

    I didn’t use LSMW when we did our conversion in FICO. We may have used it in SD or MM. I think we did CATTs and wrote some custom ABAP to get our GL data into the system.

    I’d like to hear how LSMW works out and what you use on it.

    Best regards,

  14. JohnnyPhoenix August 17, 2007 at 3:40 pm #


    I don’t suppose you don’t mind sharing that ABAP program for GL data transfer? Or where can I get info on that? I’m new to LSMW so I can’t tell you much until after I play with it this weekend. I’ll let you know how it went. I have all my GL data on Excel. After that I will need to do the same thing for cost centers.

    Getting wet in Houston,

  15. byron August 18, 2007 at 9:58 pm #


    If you want to write an upload program, the one we used did the uploading through BAPI: BAPI_ACC_DOCUMENT_POST

    I discuss it a bit in this post: and it wasn’t real great as it didn’t properly create profitability segments (for CO-PA use).

    Our conversion/upload program also accessed several Z-tables (custom tables) and did look ups for mapping and exceptions, so they really wouldn’t be of much use to you.
    If I were doing it over again, I would probably do my conversions/mapping outside of SAP (in Access or Excel) and then use a product like ZOption’s GLSU (GL Spreadsheet Uploader) to upload my journal entries. We were trying to fix our upload program when we finally gave up and bought ZOption. It was well worth the price…many times over! Here’s my write-up on them:

    Hope the weather doesn’t get too bad down there in Houston.


  16. Lakshmi Narayana N September 10, 2007 at 1:20 am #

    Hai Sir its amaging to me becaz i found lot of information from your vision. thanks for giving the information. Kindly be in touch sir for more information on SAP. Once again thanks for your hard working with regards By>>>>>

  17. PRAVIN AGARWAL November 5, 2008 at 6:14 am #

    I also want member of this forum , because i am also in the field of SAP Fico .

    So please add my mail id : –

  18. Byron Bennett November 5, 2008 at 8:27 am #

    Hi Pravin,
    I’m glad you’ve dropped by and are interested in the FICO content here. We are going through an ECC6 upgrade, so hopefully I’ll have more soon.

    To get on the mailing list, please subscribe to my site’s feed at:

    or you can get comments feed for just this one post at:

    Thanks again, and Cheers!

  19. Veena February 3, 2009 at 10:36 am #


    As always thoroughly enjoy your site – excellent stuff.

    Could you post something that clarifies the different dates at play for vendor payment. Like Document date, posting date, value date, due date, system date, etc.

    here is my issue
    We have a requirement where payment terms need to kick in, based on some arbitrary date ( I am wondering if I can use value date or due date, to capture this).

    a little background
    We are tier1 automotive supplier. We buy tools from vendors that are used to manufacture automotive parts. We don’t pay the vendor until customer approves the part that we manufactured using the tool that the vendor supplied.

    Since the customer approval happens sometimes year or more after goods/services were received – I don’t see a easy way to configure payment terms for this.

    Plus this date is a moving target. Approval seldom happens on the date we forecast.

    How would you configure this scenario in SAP & still have visibility to open commitment & cash flow planning?

  20. Byron Bennett February 3, 2009 at 11:34 am #

    Thanks for your kind comment!

    That’s a tricky scenario that you have, and not one that I can answer off the top of my head. I’m glad you asked, though, because it will give me the opportunity to learn a little more about an area that I haven’t spent much time in. I’ll check around with our Vendor experts here to see how they might address it.

    In the mean time, here is my fairly basic understanding of the dates:

    • Document date – this is the date that the document is created…the Invoice would have a document date, as would the vendor payment posting
    • Posting date – this is the date that puts the transaction into the proper posting period. You might be enterring an invoice on February 4 for a January expense, so you’d make the posting date the same as the Invoice date which might be something like 1/25/2009. That gets the expense back into January. The document date, would be 2/4/2009.
    • Value date (this one might help in your situation) – this date is used to indicate either when a revenue was earned, or when an expense or service was received/consumed. I’m not real familiar with this one, but it probably has to do with revenue recognition and tax issues. In your situation, the value date might be related to customer approval, or when the tool was actually used to perform the work. I don’t know if it would have any tax ramifications if you did use it for those purposes, so you’d want to be sure it didn’t before using it.
    • Due date – I’m pretty sure this is the expected payment date for both AR and AP
    • System date – not sure what this is other than a timestamp from the computer processing the transaction. Might be used in logging

    I’m sure you’d like to develop an automated process to accomplish your goal there, but that might require some code. If it is possible to change payment terms and due dates after an invoice is posted (I would suppose it is), it might be feasible to have a manual process where those are changed when payment for the tools are approved subsequent to customer acceptance.

    As I said, I’ll ask around to see if anyone has any ideas.


  21. Byron Bennett February 5, 2009 at 3:38 pm #


    I had a chance to talk with our vendor guy, and without coding a solution, he thought it would probably be a manual process. Here’s a rough outline of a manual process you might consider:

    1. Place the supplier invoice on payment block. If all of the suppliers invoices will be like this, you could do that on the supplier header.
    2. When your customer approves the product and you’re ready to pay. Remove the payment block.
    3. Change your baseline date to that day.
    4. Set your terms to what you want them to be if they do not default to the right thing.

    The key points would be that you can block payment at an invoice level, you can change the baseline date, and you can change the terms as needed…so if you set terms to 1% net 30 and changed the baseline date to today, you get a payment 30 days from now.

    Beyond that, you’re probably getting into a coded solution.

    I’d love to hear if you figure something out that automatic.


  22. Tammy August 18, 2009 at 10:00 pm #

    The SAP stuff, this article in particular, is super helpful even for me (a college student still trying to grasp basic accounting while taking an SAP ERP certification course). Thanks Byron!

  23. zia July 24, 2010 at 5:22 pm #

    Dear friends
    I need data flow diagram for sap fico,mm & HCM.
    If any body has, pl mail me the said data flow diagram on my email.

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