The SAP Certification exam is based on Enterprise Resource Planning solutions, typically SAP software solutions. Enterprise Resource Planning (ERP) that allows an enterprise to manage databases for different processes from a single unified system. ERP system was developed initially for inventory control; however, over the years; different software was developed for different processes in an enterprise for better data management and workflow. In today’s world, there are many leading market providers of ERP system, and SAP is one of the market and technology leaders in building business software towards structured work and data management in organizations. SAP AG is originally German multinational software which deals in software development for business management and improved customer relations in enterprises.

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Systems Analysis and Program Development (SAP) was founded on June 1972 and since then, many SAP ERP operations modules have emerged that are designed focusing on various different processes including SAP ERP sales and service, sales and distribution, customer relationship, financial management, business intelligence and more.

SAP Financial Accounting (FI)

SAP FI module as the term suggests deals in managing financial transactions within enterprises. This financial accounting module helps employees to manage data involved in any financial and business transactions in a unified system. This module functions very well for reporting requirements. The SAP FI module is very flexible and functions well in any type of economic situation. Be it a smaller organization or a larger organization; SAP implementation helps in consolidating data for diverse business transactions and legal requirements. Financial Accounting module helps one to get the real-time financial position of an enterprise in the market. SAP FI incorporates with other SAP modules such as SAP SD, SAP MM, SAP PP, Payroll, and more for better work results.

Related Reading: Efficient Approach to Progress with SAP Certification

Components of SAP Financials and Accounting Module

  • SAP General Ledger: The major aim of SAP general ledger accounting is to provide a system for managing all external accounts of an organization. Recording all the business transactions of an enterprise along with various other operation areas are managed by this SAP accounting module. It provides real-time assessment of cost accounting areas.
  • SAP Accounts Payable and Receivable: While SAP accounts payable records all the components and data for vendors, SAP account receivable records all the components and data for customers. Balance sheets and account statements can be created using these modules.
  • SAP Bank Accounting: This module is used to handle all bank accounting transactions. From managing bank master data, cash balance management to processing incoming and outgoing payments; everything can be managed using this module.
  • SAP Asset Accounting: This module is designed to manage fixed assets of organizations. The SAP financials system enables to manage and supervise fixed assets along with providing detailed information and reporting data.
  • SAP Funds Management: This SAP accounting module supports all the related tasks in creating and managing budgets. Calculating revenues, expenditures and funds are included in the task lists of SAP funds management.
  • SAP Travel Management: This SAP module accounts all the transactions related to corporate trips organized within and by the organization. Approvals, bookings, settlement and diverse travel expenditures are recorded and managed using the SAP travel management module.

SAP Controlling (CO)

SAP CO module is another important SAP modules offered to enterprises. The controlling module supports the process works of planning, reporting, and monitoring operations of businesses. It involves methods to view and organize costs that are required for financial reporting. The controlling module enables one to plan, track, perform, and report about costs. Controlling includes managing and configuring master data that covers cost elements, cost centers, profit centers, internal orders, and functional area, and so on.

Finance and Controlling (FICO)

FICO is an SAP module used for external and internal financial reporting, intending to record all financial transactions posted by an organization and produce correct statements at the closure of the training period. It is further divided into several sub-modules as follows.

General ledger accounting

It is concerned with managing all the general ledger accounts used for reporting. A set of general ledger accounts used by a company or a group of companies is called a chart of accounts in SAP. These accounts are utilized for preparing financial statements. 

Accounts receivables

This FICO SAP module is concerned with managing customer accounts and capturing all transactions with the customers. Separate accounts are maintained for every customer, and once a transaction is posted in a customer account, it is updated in the reconciliation accounts in the general ledger. Transactions in this module include posting invoices, credit memos, down payments, and invoice payments.

Accounts payables

This SAP module manages vendor accounts and captures all transactions with vendors. Separate accounts are maintained for vendors. When a transaction is posted in a customer account, the reconciliation account in the general ledger is updated with the details in real-time. Transactions in this module include posting invoices, credit memos, invoice payments, automatic payment programs, and producing vendor reports.

Asset accounting

All transactions related to assets for an entity are managed through this FICO SAP module. Reconciliation accounts in the general ledger are adjusted accordingly every time a transaction is posted in asset accounts. Transactions in this module include asset acquisition, retirement, sale, transfer, revaluation, and depreciation. 

Bank accounting

It is concerned with capturing all transactions made with banks. All transactions recorded on bank statements are reconciled through bank reconciliation. 

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Activities Involved in SAP SD

SAP Sales and Distribution (SD) is a functional SAP module in SAP ERP Central Component (ECC) that helps companies and organizations store and manage data related to customers and products. Organizations use this data to manage sales orders, shipping, billing, and producing invoices of the sold goods and services. 

The activities in SAP SD involve the activities related to the sales process, which can be divided into pre-sales activities, sales, and post-sales activities.

Pre-sales activities

These include the pre-sales documents and support. The goal is to update the salesperson with all the details required to negotiate and complete the potential sale. Pre-sales documents help determine sales probability and recognize sales-related activities. Pre-sales support involves tracking the customer through sales visit contacts, telephonic calls, letters, and mailing.

Sales

It is concerned with selling the product to the customer at a pre-negotiated price.

Post-sales activities

It involves post-sales support, which is provided to the customer after the purchase of the product by the salesperson or the company. It includes product warranty, managing relationships, and other support activities delivered to the customer.

Logistic Execution (LE)

Logistic Execution (LE) is one of the core activities of a company used to map all of its logistic processes. It deals with the complete supply chain process comprising vendors, warehouse, production and distribution of products, and the customers. It consists of the following components:

  • An inbound process that involves the collection of goods from the vendor and storing them in a warehouse
  • An outbound process involves the removal of gods from the storage and delivering them to an end customer
  • The warehouse process involves change posting, stock transfers, and WM inventory.
  • The transportation process is concerned with calculating the inbound and outbound shipments, and settlement of shipment costs. 

Supplier Relationship Management (SRM)

Supplier relationship management is the systematic approach to analyzing the supply of goods and materials by vendors to determine each supplier's contribution toward success and develop strategies to improve their performance. SRM helps evaluate the performance of vendors to determine which ones are most valuable to the business and its success. It also helps managers develop better relationships with the suppliers based on their importance.

Customer Relationship Management (CRM)

Customer relationship management is the blend of practices, technologies, and strategies that organizations use to manage and evaluate customer interactions and data throughout the dealing with the customer. 

The objective of CRM is to improve customer service relationships and maintain customer retention with an aim to enhance sales growth. CRM systems collect customer details from different channels or points of contact between the customer and the company, analyze those, and use that information to increase sales. 

The CRM software consolidates the customer information and documents into a single database at the most fundamental level to provide easy access to business information. Over time, many different functions like recording customer interactions over phone or email and automating workflow processes have been added to the CRM systems to make them more useful.

Human Resource (HR)

Human resource is the department of a company or a business concerned with detecting, recruiting, and instructing job applicants and managing employee-welfare programs. HR plays a key role in enabling companies to deal with the highly-evolving business environment and increased demand for efficient employees in the present era. 

The key people-related responsibilities of the HR team that add value to a company include looking for efficient employees, linking key performance indicators of the employees to compensation, developing competencies that improve individual performance and performance of the company as a whole, and ensuring the implementation and integration of technology through upgraded staffing, training, and decreasing the communication gap with employees.

SAP Sales and Distribution (SD)

SAP SD modules deal in managing all transactions ranging from inquiries, proposals, quotations, pricing, and more. The sales and distribution module helps greatly in inventory control and management. SAP SD module consists of master data, system configuration, and transactions.  Some of the sub-components of the SAP SD module are master data, sales support, sales, shipping and transportation, billing, credit management, sales information system, and so on.

SAP Production Planning (PP)

SAP PP module is another important module that includes software designed specifically for production planning and management. This module also consists of master data, system configuration, and transactions in order to accomplish the plan procedure for production. SAP PP module collaborate with master data, sales, and operations planning, distribution resource planning, material requirements planning, Kanban, product cost planning, and so on while working towards production management in enterprises.

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SAP Materials Management (MM)

SAP MM module as the term suggests manages materials required, processed, and produced in enterprises. Different types of procurement processes are managed with this system. Some of the popular sub-components in SAP MM module are vendor master data, consumption-based planning, purchasing, inventory management, invoice verification, and so on.

SAP Quality Management (QM)

SAP QM module helps in the management of quality in productions across processes in an organization. This quality management module helps an organization to accelerate their business by adopting a structured and functional way of managing quality in different processes. SAP QM module collaborates in procurement and sales, production, planning, inspection, notification, control, audit management, and so on.

SAP Human Capital Management (HCM)

SAP HCM module enhances the work process and data management within the HR department of enterprises. Right from hiring a person to evaluating one’s performance, managing promotions, compensations, handling payroll, and other related activities of an HR is processed using this module. The task of managing the details and task flow of the most important resource, i.e., human resource is managed using this SAP ERP HCM module.

These are some of the most important SAP deployment modules that develop software for efficient work in enterprises.

About the Author

Eshna VermaEshna Verma

Eshna writes on PMP, PRINCE2, ITIL, ITSM, & Ethical Hacking. She has done her Masters in Journalism and Mass Communication and is a Gold Medalist in the same. A voracious reader, she has penned several articles in leading national newspapers like TOI, HT, and The Telegraph. She loves travelling and photography.

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  • *According to Simplilearn survey conducted and subject to terms & conditions with Ernst & Young LLP (EY) as Process Advisors