SAP FICO is an SAP-based software where FICO stands for Financial Accounting and Controlling. In the case of SAP FICO, the SAP FI takes care of the accounting aspects of the company, while SAP CO takes care of elements like the cost sheet, inventory, etc. The software is used across companies to store and compute data. Once the data is computed, it gives a result based on the current market scenario.

As the global ERP applications market obtained a 9.4% growth to reach $104.1 billion worldwide, SAP constituted 6.5% of the market’s share, implying its significance among organisations. As organisations continue to leverage SAP FICO in their financial framework, the demand for skilled professionals is readily growing.

SAP FICO interview questions can help you enhance your chances of getting selected. We have curated a list of important SAP FICO interview questions and answers to help you sail through your interview rounds!

SAP FICO Interview Questions and Answers

Let’s have a look at some SAP FICO interview questions and answers to get a better understanding of the kind of questions that will be asked in your interview.

Q1. What are some of the different kinds of modules where Financial Accounting is integrated and used across the company?

There are several modules where financial accounting plays a very important role. Some of these modules include the following:

• General ledger accounting
• Regulation across financial transactions
• Material management
• Production schedule and management
• Human resource

Note: You can also try to explain how financial accounting is used in these modules. In a few FICO interview questions, you might be asked to explain the application of financial accounting in a particular module.

Q2. What do you understand by ‘posting key,’ and what does it determine?

A posting key is a two-digit number mapped to a particular line item and used to determine the type of transaction. You can also ascertain the type of account, field status of a transaction, or if the type of posting is debit or credit.

Q3. What are some of the different types of organisational elements of SAP FI?

The SAP FI contains different elements, including the company code, business area, functional area, and chart of accounts. These elements define the nature of any transactions recorded in the software.

Q4. What are some of the use cases of internal orders?

Internal orders are used for a variety of purposes. Some of the important use cases of internal orders are as follows:

• It is used to manage overhead orders related to different internal jobs that are accounted to different cost centres.
• It also monitors the internal jobs settled to fixed assets and handles investment orders.
• The internal orders are used to display the cost that governs the sales and distribution function of the company that is not directly linked to the core business of the company.
• Internal orders are used for accrual orders that settle the accrued costs.

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Q5. What are the places where a company code is used?

A company code is used to generate different kinds of financial statements that are a part of the organisation. Some of these financial statements include the Profit and Loss statement and the balance sheets.

Q6. Explain the concept of recurring entries and where they are used.

Several accounting documents are used by the company every month. With recurring entries, you can repeatedly eliminate the manual posting process of documents. For example, a company can choose to generate an expense report usually brought to use at the end of every month.

In most cases, the recurring entries are drafted and passed through the system in bulk and processed as a batch.

Q7. What is the number of currencies that can be mapped to a single company code?

Three currencies can be mapped to a single company code, of which one is a local currency and the others are parallel currencies.

Q8. What purpose does the accounting type field serve in the General Ledger master record?

At the end of the financial year, the surplus from the profit and loss account gets transferred to the retained earnings account, which is a part of the balance sheet. The account type field that comprises an indicator is linked to the general ledger account, which helps clear the balance from the profit and loss account to the retained earnings account.

Q9. What kind of fiscal years can be used in SAP?

SAP is a flexible tool where fiscal year refers to how the system stores the company’s financial data. With SAP, you have access to 12 periods and four special periods. These periods are then stored in any of the two fiscal variants:

• Calendar year or financial year
• Year-dependent fiscal year

Q10. Explain the concept of ‘dunning.’

Dunning refers to the process through which payment reminder letters are issued to the company’s customers. SAP can evaluate and choose the companies that will receive these letters based on overdue items. SAP can be used to print different letters based on the date of the overdue payment. With dunning, you get a snapshot of what letters the customers from your customer master have received.

Note: Dunning is one of the most popular FICO interview questions for companies. Hence, you must try to get a hands-on experience with the dunning process to get clarity of the process.

Q11. What does ‘year shift’ in SAP mean?

SAP follows the calendar year and fails to understand the difference between calendar and financial errors. Hence, if your business does not have its fiscal year as a calendar year, you must adjust the same on SAP. You must declare one of the calendar years as the fiscal year for the SAP. After that, the month that falls in another year must be adjusted into the fiscal year using sign -1 or +1.

Q12. How does ‘Residual Payment’ differ from ‘Part Payment’ in the case of accounts receivable

The two techniques for collecting partial payments from clients are “Residual payment” and “Part payment.” For instance, an Rs.100 invoice is generated, but the consumer only paid Rs.70. Now that this Rs.70 has been offset, Rs.30 will be left over. The entire Rs.100 of the invoice is paid with residual payment, and a new invoice for the remaining Rs.30 is created.

Q13. How does SAP manage the input and output taxes?

Every country follows a standard tax procedure, and the entire process must be pre-defined in SAP and the tax codes. SAP allows you to expense or capitalise the tax amount on the stocks.

Q14. State the different stages of the SAP payment run.

The payment run process is executed at different stages. Some of the stages that are a part of the process are:

• Making multiple parameter entities like vendor codes, payment modes, etc.
• Schedules the proposal with the help of the software. The software then showcases the list of invoices paid.
• In the next stage, the payments are booked in the ledger of the company
• Post the booking of the expense, the process of printing different forms associated with payments takes place.

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Q15. Explain the usage of the Financial Statement Version in SAP.

FSV is a reporting tool that helps extract different final accounts from SAP. The several FSVs can be utilised to produce the output of numerous outside organisations, including banks and other statutory authorities.

Q16. Who are one-time vendors?

It is impossible to create fresh master records for each vendor trading partner in some businesses, especially those dealing with heavy cash transactions. One-time vendors let the use of a fake vendor code and the data typically kept in the vendor master when entering invoices.

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Q17. What is the utility of Financial-General Ledger Accounting?

G L (General Ledger) Accounting is utilised to acquire a broad picture of external accounting and accounts. It keeps the accounting data consistently complete and accurate while also capturing all company transactions integrated with all other operational areas in a software system.

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Q18. What does APP stand for in SAP FICO?

APP, or “Automatic Payment Program,” is a technology that SAP offers businesses to pay their suppliers and clients. APP tools assist in preventing any errors that may occur when posting manually. Also, when a company has more employees, using an APP for payment is more practical.

Q19. Explore the types of currencies that are used in SAP.

The two primary types of currencies include local and parallel currencies. The local currency is mapped to the company code, and the other two currencies in which the company can transact are parallel currencies. Foreign business transactions can be conducted using parallel currencies. Parallel currency may be used for cross-border transactions.

Q20. What are the different components of a Chart of Accounts?

Different components of a chart of accounts are as follows:

• Chart of account key
• Block indicator
• Name
• Group chart of accounts
• Maintain language
• Controlling integration
• Maintain language

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Conclusion

Before you sit for an SAP FICO interview, you must be aware of the type of questions usually asked during the interview. If you’re seeking a better understanding of SAP FiCO, apply for upGrad’s Masters of Business Administration course at Golden-Gate University and add depth to your understanding of the software.

The course is specially designed for working professionals currently working on SAP FICO or interested in getting into the same. You will have access to a carefully crafted course during the 15-month program to help you land interesting employment prospects.