Top 50+ SAP FICO Interview Questions with their Answers

1. What do you understand by the term SAP FICO?

SAP is the abbreviation for Systems, Applications & Products in Data Processing. The FI in FICO stands for (Financial Accounting), and CO is for (Controlling). Thus, SAP FICO is a combination of SAP FI and SAP CO. While SAP FI deals with accounting, tax computation, and preparation of financial statements, SAP CO is for inner orders, inventory sheets, cost sheets, cost allocations, and more. 

2. What is the posting key? What purpose does it serve? 

A two-digit numerical for controlling and determining the transaction type documented in the line item is referred to as a posting key. It helps determine the following:

• Account types
• Types of posting: debit or credit
• Field status of a transaction

3. What is the main usage of SAP FICO?

SAP FICO is the software used for storing and computing data. It helps retrieve the result according to the latest marketing scenario. It prevents data loss and is responsible for the reporting and verification of data. Its modules allow companies to manage financial tasks within an international framework of currencies and languages.

4. What are the other modules into which ‘Financial Accounting’ of SAP FICO is integrated?

The other modules to which ‘Financial Accounting’ of SAP FICO is integrated are:

• Sales and Distribution
• Production Planning
• Material Management
• Human Resource
• Controlling financial transaction

5. State the most important organizational elements in SAP FI.

The important organizational elements in SAP FI are as follows:

• Functional Area
• Business Area
• Company Code
• Chart of Account

6. What is the best way to manage transactions from different business lines within a company?

The best way is to create Business Areas. You can also create different company codes for each business line to manage transactions from different business lines within a company. 

7. What are the options for fiscal years in SAP FICO?

A fiscal year is a way to hold the financial data in the system. In SAP FICO, there are twelve posting periods and four special periods. You must specify the fiscal year variant for every company code. Also, when creating a controlling area, you will have to specify the fiscal year variant.

8. What is the role of credit control? 

Credit control helps guard a business against overstretching its financial assets. Usually, a credit limit is set for the customers using SAP when a payment is made post the product’s sale. This method allows you to restrict the customer’s amount to clear before starting a fresh purchase.

It is suitable for credit management in application components: 

• Account Receivable (AR)
• Sales and Distribution

9. What is the function of the company code in SAP FICO?

The company code is responsible for generating financial statements like Profit and Loss Statements, Balance sheets, and others. 

10. How many Chart of Accounts can a company code have?

There can be only one Chart of Accounts for an assigned company code. 

11. How many currencies can you configure for a Company Code?

You can configure three currencies for a Company Code, including

• One local currency
• Two parallel currencies

12. What is the role of the Chart of Accounts in SAP FICO?

The Chart of Accounts is used to meet the company’s daily needs and the country’s legal requirements. Its two types are as follows: 

• Operating Chart of Accounts (COA): A record with all the general ledger accounts assigned to the company code. 
• Country Chart of Accounts (COA): The list of general ledger accounts needed to meet the country’s legal requirements.

13. What do you understand about the field status group and field status variant?

The field status groups contain the field status variants. The General Ledger account has field status groups. These status groups allow you to define the fields when posting to the general ledger.

14. What is the year shift in the SAP calendar?

The SAP system only understands the calendar year. It fails to acknowledge a broken fiscal year. Suppose for a business a fiscal year is not a calendar year but a combination of the different months of two different calendar years. Then, one of the calendar years needs to be classified as a fiscal year, and the months that fall in another year should be adjusted into the fiscal year by shifting the year by using the sign -1 or +1. This shift is termed a year shift.

15. State the types of modules into which FI is integrated.

The different types of modules are: 

• Production Planning
• Material Management
• Human Resource
• Sales and Distribution

16. How are output and input taxes managed in SAP FICO?

SAP FICO has tax codes within tax procedures for every country. You get the facility to expense out the tax amounts or capitalize them to stocks.

17. What are validations and substitutions in SAP FICO?

Validations in the FI and CO modules help ensure data integrity when entering actual transactions online or in a batch. The substitutions in the FI / CO / EC modules help derive or correct values that are passed via integration or submitted to the FI / CO modules.

18. Which application areas use validation and substitutions?

Validation and substitution are used by the following application areas in SAP: 

• FI- Financial Accounting
• CO- Cost accounting
• GL- Special purpose ledger
• AM- Asset accounting
• PS- Project system
• PC- Profit center accounting
• CS- Consolidation
• RE- Real estate

19. What is a year-dependent fiscal year variant?

When the number of days in a month does not correspond to the calendar month, it is a year-dependent fiscal year variant. For instance, when January ends on the 30th and February on the 27th. 

20. What steps are involved in G/L posting?

On completion of the payroll run, the results are to be added to the G/L accounts. GL posting involves the following steps:

• Grouping relevant information from the payroll results.
• Creating summarized documents.
• Performing the necessary postings to appropriate cost centers and G/L accounts. 

21. What are the different methods for making vendor payments?

The two methods are:

• Manual Payment: Done without a medium such as cheques.
• Automatic Payment: Done through DME (Data Medium Exchange) like wire transfer or cheque.

22. What is the use of FSV (Financial Statement Version) in SAP FICO?

FSV is a reporting tool. It helps extract final accounts from SAP like Balance Sheets and Profit and Loss Accounts. Using multiple FSVs, you can generate the output of various external agencies like banks and other statutory authorities.

23. At what level the Customer and Vendor codes are stored in SAP?

The Customer and Vendor codes are stored at the client level. A company code can use the vendor and customer code by extending the company code view.

24. What is the significance of financial statements within a business in SAP FICO?

A financial statement helps manage the company’s financial assets. Creating and managing financial statements and records allows you to create data that you can use later to plan further or decide on investments for the company.

25. State the common G/L reports in SAP FI.

The most common G/L reports in SAP FI are as follows: 

• G/L Chart of Accounts List
• G/L Account List
• G/L Account Balances
• G/L Account Totals and Balances

26. What is the purpose of “Document type” in SAP FICO?

The main purposes of “Document type” are as follows:

• It helps define the documents’ number range.
• It enables controlling the types of accounts posted, like Vendor, Assets, Customer, Normal GL account, and more.
• It is used for entry reversals.

27. What is meant by company and company code in SAP FICO?

A company is an organizational unit. It is used in the legal consolidation module for rolling up financial statements of different company codes. Contrastingly, the company code is the smallest organizational unit. You can draw up a completely self-contained set of accounts for external reporting purposes of company code.

28. What are accounting period variants and posting period variants in SAP FICO?

• Accounting period variants: They help manage the accounting periods open for validation and all closed periods to be deleted. They are suitable for opening and closing periods of the financial year for reservation purposes. 
• Posting period variants: A posting period in a fiscal year is a period for which the transactions figures are updated. The posting period variants are accountable for controlling which Accounting period is open for posting. It ensures balanced closed periods. 

29. What is the use of Account Receivables?

Accounts Receivable components allow you to record and manage all customers’ accounting data. All postings in Accounts Receivable are directly recorded in General Ledger. 

30. What are the perks of using Business areas in a company?

In a company, business areas can be used when other company codes need the same areas. They are used more in Controlling than Finance Accounting. The benefits of using business areas are as follows:

• It is easy to configure. You will have to attach it to the company code, and the other details will get attached by themselves.
• Using Business areas in controlling, it gets easier to create Balance sheets, Profit and loss statements, and more.

31. What problems might occur when we configure the business area?

The splitting of the account balance is the main problem faced when a business area is configured. It is more pertinent for taxable accounts.

32. Explain the relationship between company code and the controlling area in SAP FICO.

A controlling area in SAP can contain one or more company codes. These company codes use the same operative Chart of Accounts as the controlling area. A single company code can be assigned to a controlling area, while a controlling area can contain multiple company code assignments.

33. What is FI-GL Accounting? Why is it used?

The FI-GL is the abbreviation for Financial-General Ledger. It helps get an overview of external Accounting and accounts. It holds all business transactions included with all other operational areas in a software system, ensuring that the accounting data is always accurate and complete. 

34. What is parallel and the local currency in SAP FICO?

Local Currency: The currency entered in the company code creation. 

Parallel Currencies: The other two additional currencies that can be used in foreign business transactions or international transactions. GROUP CURRENCY and HARD CURRENCY are two examples of parallel currencies. 

35. What are the customizing prerequisites for document clearing?

The customizing prerequisites include checking the cleared and uncleared items via open item management. The open item management process helps manage the account payable and accounts receivable. I.e., the outstanding accounts. For instance, an unpaid invoice item is taken as an open account until paid.

36. What are the one-time vendors in SAP FICO?

For companies dealing with high cash transactions, it gets impractical to create new master records for every vendor trading partner. So, one-time vendors solve the problem as they allow a dummy vendor code to be used on invoice entry while the information is usually stored in the vendor master.

37. What is the significance of the GR/IR clearing account in SAP FICO?

GR/IR is the abbreviation for Good Received/ Invoice Received. A GR/IR clearing account is an interim account. The provision is made if the goods are received in the legacy system, but the invoice isn’t. It goes through the Accounting entry debiting the Inventory and crediting the GR/IR account. 

Similarly, when an invoice is received, the vendor account gets credited, and the GR/IR account is debited. Thus, the GR/IR is an uncleared item till the invoice isn’t received.

38. What is the default exchange rate type picked up for all SAP transactions?

The default exchange rate type is M or Average Rate for all SAP transactions.

39. What are the different accounting groups that can be created in Account Receivable in SAP FI?

The following accounting groups can be created in Account Receivable:

• X001- Domestic Customers
• X002- Export Customers
• X003- One-Time Customers

40. Is it possible to calculate depreciation to the day? How can you do that?

Yes, it is possible. The depreciation to the day function gets active for an asset as soon as it has a corresponding depreciation key and is capitalized (posted to). Consequently, you can’t switch off this function for the asset, even when you change the depreciation key.

41. What are the internal orders in SAP FICO? Where can you use them?

Internal orders are used for planning, collecting, and settling the costs of internal tasks and jobs. They can also be used to track the cost. They are incurred over a short-term basis.

42. What is the use of Account payable? How is it related to G/L?

Accounts payable is used for managing and recording the accounting data for all the vendors. It relates to G/L as follows:

• All invoices are managed as per vendor requests.
• Payables are managed as per the payment program. Payments can be via cheques or electronic transfers.
• All the postings in Account payable are simultaneously updated in General Ledger. 

43. What ‘blocks’ can be applied to a vendor account in SAP FI?

The following blocks can be applied to a vendor account:

• Posting block for all company codes and certain company codes.
• Purchasing block for all or certain purchasing organizations. It is only used when you have purchased/installed the purchasing application component.

44. What is blocking a customer in SAP FI?

Blocking is when postings are no longer made to an account. You have to block a customer account before marking a customer master record for deletion.

For instance, you would block a customer that you use as an alternative dunning recipient. Thus, nobody can mistakenly post to that customer. The following blocks can be set for a customer in the Sales and Distribution (SD) application component:

• Posting block
• Delivery block
• Order block
• Invoicing block

45.  What is the chart of depreciation in Asset Accounting?

The chart of depreciation is the highest node assigned to the company node. It stores all the depreciation calculations.  

46. How can you manage the relationship between two currencies in SAP FI?

Using exchange rates, you can define and manage the relationship between two currencies or translate an amount into another currency. Exchange rates are defined for the following purposes:

• Posting and Clearing
• Exchange Rate Differences
• Foreign Currency Valuation

47. What is the field status group used to control?

The field status group is configured in FSV to maintain field status for General Ledger accounts.

48. How would you create a Credit Control Area in SAP FI?

You can use the transaction code OB45 or path to create a Credit Control Area. The steps to create a credit control area are as follows: 

SPRO > enterprise structure > maintain structure > definition > financial accounting > maintain credit control area 

Next, you will have to enter the following description:   

• Update
• Name of the credit-control area in SAP
• Currency
• Description
• Credit Limit
• Risk Category
• Fiscal Variant
• Rep Group

49. What are some most important tables in SAP FICO?

Tables in SAP FICO help store the data on a screen. Some important tables of SAP FICO are as follows:

Enterprise structure SAP Tables

• T001: SAP Company-Code
• TCURC: SAP Currency-codes
• T005: Countries in SAP
• TCURT: Currency name in SAP
• TCURR: Exch-rate in SAP
• T009: Fiscal year variants in SAP
• T077S: G/L Account-group
• T880: Global-company-data in SAP
• T004: SAP Chart of accounts (COA)
• T014: Credit-control-area SAP
• T012: House banks in SAP
• T010O: SAP Posting-period-variant (PPV)
• T001B: Permitted posting periods in SAP
• T010P: Posting period variant names in SAP
• T003: Document types in SAP

SAP FI G/L Tables

• BNKA: Bank master record SAP
• SKA1: Chart of accounts segment GL master data
• BNKA: Bank master record in SAP
• SKB1: Company code segment G/l master data
• BKPF: SAP Accounting documents header
• BKPF: Accounting documents header in SAP

Accounts Receivable Table

• KNBK: Bank details
• KNVH: Customer hierarchy
• KNVK: Contact persons
• KNVI: Customer master tax indicator
• KNA1: Customer master-General data
• KNB1: Customer master-Company code data
• KNVV: Customer master-Sales data
• KNVS: Shipment data for customer
• KNVP: Customer partners

SAP FI Accounts payable tables

• LFA1: Vendor master-General data
• LFBK: Bank details
• LFM1: Purchasing organization data
• LFM2: Purchasing data
• LFB5: Vendor dunning data
• LFB1: Vendor master-Company code data

Assets Accounting Tables

• ANEK: Document header asset posting
• ANKB: Asset classes: Depreciation area
• ANKA: Asset classes: General data
• ANKT: Asset classes: Description
• ANEP: Asset line items
• ANLU: Asset master record user fields
• ANLZ: Time-dependent asset allocation

SAP CO Tables

• CSKS: Cost center master data
• CRCO: Assignment of work center to cost center
• CSKT: Cost center texts
• COSP: Cost totals for external postings
• COBK: Document header
• COEP: Line items (by period)
• COST: Price totals

Profit center Accounting tables

• CEPC: Profit center master data table
• GLPCA: Actual line items – Profit center
• GLPCP: Plan line items – Profit center
• GLPCO: Object table for the account – Profit center
• GLPCC: Transaction attributes – Profit center
• CEPCT: Texts for profit center master data

50. What is the use of an account group?

Account group defines GL account and Vendor and Customer Master. It is used to control the data that has to be entered while creating a master record.

51. How would you define the tolerances for invoice verification?

Tolerance in SAP specifies whether the payable places match or tax hold on the invoice. Following instances of tolerance can be defined for logistics invoice verification:

• Small differences
• Quantity variances
• Moving average price variances
• Price variances

52. What is meant by the short-end fiscal year?

A short-end fiscal year is when you change from a normal fiscal year to a non-calendar fiscal year or vice versa. It usually happens when an enterprise becomes part of a new co-corporate group.

53. What is APP in SAP FICO?

APP is the abbreviation for Automatic Payment Program. It is a tool provided to companies for paying their customers and vendors. It facilitates avoiding mistakes while posting manually. Payments via APP are more feasible when there are more employees in the company.

54. What are cost and profit centers in Controlling?

Cost Center: A component in an organization added to the cost and indirectly added to the organization’s profit, such as marketing and customer service. A business unit of a company can either be classified as a profit center or a cost center, or an investment center. 

Profit Center: For managing internal control. Dividing a company into profit centers enables delegating responsibility to decentralized units. It also allows you to treat the units as separate companies within a company.

55. Is the business area at the company code level?

No, the business area is not at the company code level. Rather is at the client level, which means that other company codes can be posted to the same business area.

These SAP FICO interview questions will definitely help you in cracking the job interview. Have we missed any questions? Let us know in the comments and we will answer it for you.