SAP R/3 Finance Overiew

The Financial Accounting (FI) application component fulfills all the international requirements that must be met by the financial accounting department of an organization. It provides the following features:
Management and representation of all accounting data
All business transactions are recorded according to the document principle, which provides an unbroken audit trail from the financial statements to the individual documents.
Open and integrated data flow
Data flow between Financial Accounting and the other components of the SAP System is ensured by automatic updates. Data is available in real time within Financial Accounting. Postings made in the subledgers always generate a corresponding posting in the general ledger.
Preparation of operational information to assist strategic decision-making within the organization

Integration
Integration of Financial Accounting with other components: All accounting-relevant transactions made in Logistics (LO) or Human Resources (HR) components are posted real-time to Financial Accounting by means of automatic account determination. This data can also be passed on to Controlling (CO).
This ensures that logistical goods movements (such as goods receipts and goods issues) are exactly reflected in the value-based updates in accounting. Every posting that is made in the subledgers generates a corresponding posting to the assigned G/L accounts. This ensures that the subledgers are always reconciled with the general ledger.

The Financial Accounting application component comprises the following sub-components:
General Ledger (FI-GL)
Accounts Payable (FI-AP)
Accounts Receivable (FI-AR)
Bank Accounting (FI-BL)
Asset Accounting (FI-AA)
Funds Management (FI-FM)
Travel Management (FI-TV)
Special Purpose Ledger (FI-SL)

Organizational Units and Basic Settings
Elements of the SAP System logical structure, important for Financial Accounting. Organizational units are used to structure business functions and for reporting. The organizational units of Financial Accounting are used for external reporting purposes, that is, they fulfil requirements that your business is subject to from external parties, for example, legal regulations. The financial statements for example, are created based on the organizational units of Financial Accounting. Basic settings in Financial Accounting are Customizing settings that you have to make in order to be able to carry out processes in Financial Accounting.

You create your company-specific organizational structure in the SAP System by defining the organizational units and making the basic settings. Defining organizational units for Financial Accounting is obligatory, that is, you have to define these units in order to be able to implement the Financial Accounting component.

In the SAP System, you define the relevant organizational units for each component that you are implementing. For example, for Sales and Distribution, you define sales organizations, distribution channels, and divisions (product groups). Similarly, for Purchasing, you define purchasing organizations, evaluation levels, plants, and storage locations. The organizational units are independent of one another at this stage.

To transfer data between the individual components, you have to assign the organizational units to each other. You only need to make these assignments once in the system. Whenever you enter data subsequently, it is automatically transferred.

The result of a posting in Financial Accounting
There are two types of documents: Original documents and processing documents. Examples of original documents are receipts, invoices, checks or bank statements. Examples of processing documents are accounting documents, sample documents or recurring entry documents.
The accounting document represents the original document in the system. The other processing documents can be used to simplify document entry. The document remains as a connecting unit in the system until it is archived.

You can only check whether postings are correct in the compact journal and general ledger by means of documents. Every posting must therefore have a document. Documents are the link between the business transaction and the posting in accounting.

Only complete documents can be posted. A document is complete when its debit and credit items balance to zero. You must enter the minimum account assignments designated by the system: For example, document date, posting date, document type, posting key, account number, and amount. Data must also be entered in all other fields that were defined as required fields when making system settings.
All documents consists of a document header and at least two line items . As well as the accounting document described above, there are also special documents such as sample documents and recurring entry documents. These are documents that simplify the document entry transaction. For more information, see Posting with Sample Documents and Recurring Entries.
You can transfer large volumes of document data from an external system into the SAP System. There are various methods for doing this.

Popular Modules: SAP Controlling, SAP HR, SAP MM, SAP SD