SAP • FICO • MM • SD • 2025
Understanding the Integration of SAP FICO with MM and SD Modules
See how MM (Procure-to-Pay), SD (Order-to-Cash), and FICO interact in S/4HANA. Learn key postings (GR/IR, inventory, revenue, AR/AP), account determination (OBYC/VKOA), CO-PA profitability flow, and reporting tips—end-to-end and practical.
Overview: Why Integration Matters
- Single source of truth: S/4HANA Universal Journal (ACDOCA) unifies FI & CO line items.
- Operational control: Inventory valuation (MM) and revenue recognition (SD) hit financials in real-time.
- Profitability: Characteristics flow to account-based CO-PA for margin analysis by product/customer/channel.
Designing account determination and master data defaults correctly reduces reconciliation and speeds close.
MM → FI
MM: Procure-to-Pay (P2P) Flow
| Step | MM Activity | FI/CO Impact | Key Accounts | Notes |
|---|---|---|---|---|
| 1 | Create PO | No FI posting | — | Price/conditions drive later postings |
| 2 | Goods Receipt (GR) | Dr Inventory / Cr GR/IR | Inventory, GR/IR | For consumables: Dr Expense / Cr GR/IR |
| 3 | Invoice Receipt (IR) | Dr GR/IR / Cr Vendor | GR/IR, Vendor Recon | Price diffs to price diff account |
| 4 | Vendor Payment | Dr Vendor / Cr Bank | Vendor Recon, Bank | Cash discounts to discount revenue |
- GR/IR bridges timing between receipt and invoice; reconcile regularly.
- Account assignment categories (e.g., K for cost center) drive expense vs inventory postings.
- Tax and withholding are controlled by country procedures and vendor master settings.
SD → FI/CO
SD: Order-to-Cash (O2C) Flow
| Step | SD Activity | FI/CO Impact | Key Accounts | Notes |
|---|---|---|---|---|
| 1 | Sales Order | No FI posting | — | Credit check possible |
| 2 | Delivery (PGI) | Dr COGS / Cr Inventory | COGS, Inventory | Cost component split to CO-PA (optional) |
| 3 | Billing | Dr Customer / Cr Revenue, Taxes | AR Recon, Revenue, Tax | CO-PA characteristics derived at billing |
| 4 | Incoming Payment | Dr Bank / Cr Customer | Bank, AR Recon | Discounts & deductions posted at clearing |
- Revenue accounts are derived via VKOA using condition types and access sequences.
- CO-PA receives segment attributes (product, customer, region) for margin analysis.
- Credit management blocks/release affect order fulfillment and cash risk.
Account Determination (OBYC & VKOA)
| Area | Where | What It Controls | Primary Keys | Examples |
|---|---|---|---|---|
| MM Inventory & GR/IR | OBYC | Inventory, GR/IR, price diffs, freight | Valuation class, Chart of Accounts | BSX (Inventory), WRX (GR/IR), PRD (Price Diff) |
| SD Revenue & Deductions | VKOA | Revenue, surcharges, discounts | Cust/Material/Acct Assign Group | ERL (Revenue), ERS (Returns), ERU (Unbilled) |
| Taxes | OBYZ / FTXP | Tax procedures & codes | Country, jurisdiction | Input/Output tax accounts |
Test account determination with representative materials/customers, valuation classes, and condition records before go-live.
Posting Map (Typical Journal Entries)
| Scenario | Debit | Credit | Touchpoints | Notes |
|---|---|---|---|---|
| GR for stock | Inventory | GR/IR | MM → FI | Valuation class drives Inventory account |
| IR for PO | GR/IR | Vendor Recon | MM(AP) → FI | Price differences to PRD if any |
| PGI (delivery) | COGS | Inventory | SD/MM → FI/CO | COGS split to CO-PA (optional) |
| Billing | Customer (AR) | Revenue, Output Tax | SD → FI/CO-PA | Revenue via VKOA; CO-PA characteristics captured |
| Customer payment | Bank | Customer (AR) | FI (TR) | Cash discounts & deductions cleared |
- For returns, revenue reversal and stock movements adjust COGS & inventory.
- Advance payments use special G/L indicators and are cleared at billing.
Reconciliation & Reporting
- GR/IR cleanup: Analyze open items (e.g., MB5S-like apps) and clear with differences if needed.
- Subledger vs G/L: Prevent direct postings to reconciliation accounts; reconcile with Fiori aging apps.
- Profitability: Use CO-PA drilldowns and Embedded Analytics (CDS) for margin by product/customer/region.
- Close orchestration: FX valuation, depreciation, allocations before financial statements.
With the Universal Journal, many reconciliations disappear—but master data quality and period controls still decide reporting accuracy.
Go-Live Tips & Common Issues
- Mismatch in valuation class or missing OBYC entries → posting failures at GR/IR.
- Incorrect VKOA mapping → revenue posted to wrong accounts; verify condition records.
- CO-PA characteristics not derived → review derivation rules and SD account assignment groups.
- “Posting date not in permitted range” → maintain OB52 windows and auth groups.
- Field status conflicts → align G/L field status with document types/posting keys.
FAQs
Does PGI always post COGS?
Yes for standard scenarios: delivery posts Dr COGS / Cr Inventory. Make sure costing and valuation are set up.
Where is revenue determined?
In SD pricing via condition types; accounting determination uses VKOA to map to revenue G/Ls.
How does CO-PA get characteristics?
From SD billing and FI postings via derivation rules; S/4HANA defaults to account-based CO-PA aligned with G/L.