Top 20 SAP FICO Interview Questions and Answers

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Do you want to crack the SAP FICO interview? Practice with some SAP FICO interview questions and get ready for the interview.

Today, there is tough competition in the job market. Many industries highly value SAP FICO skills because it is essential for financial management and business decision-making. There is a rapidly increasing demand for SAP FICO professionals across industries. So, excelling in an interview can significantly change your perspective on your career. Moreover, if you are a beginner or an expert, answering the SAP FICO interview questions requires both theoretical and practical knowledge with experience.

Top SAP FICO Interview Questions and Answers

Here are some basic interview questions for SAP FICO consultants to prepare for their interview. Thus, it will help you to build confidence and clarity. These SAP FICO interview questions provide you most commonly asked questions to deal with fundamental and complex topics. 

Q1. Could you explain the term SAP FICO?

Ans- SAP FICO stands for Financial Accounting and Controlling. In SAP FICO, FI handles accounting, tax computations, financial statement preparation, and other related tasks. While CO handles internal orders, cost sheets, inventory sheets, cost allocations, and other related tasks.

Q2. In SAP FI what are the organizational elements?

Ans- The organizational elements in SAP FI are:

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

Q3. Please explain what the Posting Key is and what it controls.

Ans- The posting key uses a two-digit number to determine the transaction type entered in the item line. It classifies accounting documents, such as expenses, outgoing payments, or invoices. It also determines how the system posts an item, processes the data, and updates the data.

Posting key determines:-

• Account Types
• Types of posting: Debit or Credit
• Field status of translation 

Q4. What is the role of parallel and local currency in SAP?

Ans- Each company code can have two extra currencies besides the primary currency entered in the company code data. The system enters local currency when creating the company code.

You can use parallel currency in foreign business transactions. For international transactions, you can also use parallel currency. Group Currency and Hard Currency are the two parallel currencies.

Q5. Can you name a few modules for the users to integrate financial accounting?

Ans- Some major SAP modules that interface with financial accounting include:

• Material Management for purchase orders and inventory evaluation
• Sales and Distribution for customer invoices and revenue recognition
• Production Planning for manufacturing cost and working process reporting
• Human Resource Management for employee expense recording and payroll posting.
• Financial Transaction Management for cash management payments and bank account reconciliation. 

Q6. What is the function of FSV (Financial Statement Version) in SAP?

Ans- FSV is a reporting tool. You can use it to extract final accounts from SAP, such as Profit and Loss Accounts and Balance Sheets. Multiple FSVs allow you to generate outputs for various external agencies like Banks and other statutory authorities. 

Q7. What is FI-GL (Financial-General Ledger) Accounting do?

Ans- GL (General Ledger) accounting is used to get an overview of external accounting and the accounts. It records all business transactions incorporated with all other operational areas in a software system. Also, it always ensures the completeness and accuracy of accounting data.

Q8. What is a field status group?

Ans- ‘Field status group’ controls the fields that come up when the user does the transactions. The system stores the field status group in the FIGL (Financial General Ledger) master.

Q9. What methods can you use to make vendor invoice payments?

Ans- There are two methods:

• Manual payment without the use of any output medium like cheques etc.
• Automatic payments like DME (Data Medium Exchange), cheques, and Wire transfers.

Q10. For document clearing what are the customizing prerequisites?

Ans- You can answer this SAP FICO interview question by stating that the customizing pre-requisite for document clearing requires you to check the cleared and uncleared items. Open item management handles this process. Open item management manages your outstanding account, that is accounts payable and accounts receivable. For instance, you record an unpaid invoice item as an open account until you pay it. 

Q11. In Asset Accounting what are the organizational assignments?

Ans- In Asset Accounting, we rate the chart of depreciation as the highest node and assign it to the company node. The chart of depreciation will store all the depreciation calculations. 

Q12. What is the function of the credit control area in SAP?

Ans- By using a credit control area, you can set a credit limit for your customer to avoid the risk of bad debts and multiple outstanding receivables. Similarly, you can block the deliveries to your customer based on the accounts receivable and the credit limit in their account with the help of SAP.

Q13. How do you handle foreign currency transactions and currency translation in SAP FICO?

Ans- In SAP FICO, we can manage foreign currency transactions using foreign currency valuation (FCV) and exchange rate types. Therefore, we can perform currency translation using the average rate, historical rate, or closing rate, depending on the requirement. 

Q14. Explain the concept of document splitting in SAP New General Ledger Accounting (New G/L).

Ans- Document splitting in SAP New G/L allows for the creation of multiple line items in the same document for different dimensions like profit centers or segments. Thus, organizations use it to meet legal and management reporting requirements, ensuring accurate financial reporting. 

Q15. What is the purpose of Cost Center accounting and how does it differ from profit center accounting?

Ans- Cost center accounting helps track and control costs aroused by various departments in SAP CO.

While profit center accounting analyzes profit and loss at the level of individual profit centers. Cost centers serve as cost objects, while profit centers function as revenue and cost objects. 

Q16. What are posting period variants?

Ans- The posting period serves as the timeframe for updating the transaction figures in the fiscal year. Therefore, the posting period variants in SAP are accountable for controlling which accounting period is open for posting. It ensures that the closed periods remain balanced. 

Q17. What are the major components of the Chart of Accounts?

Ans- The major components of Chart of Accounts are:

• Chart of account key
• Name
• Maintain Language 
• Length GL account number
• Controlling Integration 
• Consolidation-Group chart of accounts
• Block indicators

Q18. What is APP in SAP FICO?

Ans- APP stands for ‘Automatic Payment Program’. A tool provided by SAP FICO to companies to pay its vendors and customers. APP tools assist in avoiding errors that take place in manual posting. Also, as the number of employees in the company grows, processing payments through APP becomes more feasible. 

Q19. What is “dunning” in SAP FICO?

Ans- ‘Dunning’ is the process of sending payment reminder letters to customers. SAP identifies which customers should receive these letters and for which overdue items. Thus, you can print different letters in SAP based on the overdue payment date, starting with a simple reminder. Moreover, the dunning level on the customer master lets us track which letter we have issued to the customer.

Q20. Explain what recurring entries are and why you use them.

Ans- Recurring entries can remove the need for manually posting accounting documents which do not change from month to month. For instance, you can set up an expense document to generate at the of each month or your preferred interval. Usually, you create multiple recurring entries simultaneously and process them all together in a batch at month-end using a specific transaction.

SAP FICO Course by Henry Harvin

As a leading global edtech company, Henry Hervin provides high-quality skill development programs, training and certification across various domains. However, the SAP FICO Power User Program by Henry Harvin combines theoretical understanding with practical applications. This approach helps learners build real-world skills that the job market highly values and prepares candidates for SAP certification exams, boosting their credibility and job readiness. 

Key Highlights

• Ranked amongst the top 3 courses
• Live online instructor-led certified SAP FICO training & certification
• 100% practical training method
• 8 hours of live master sessions by industry experts
• Job-ready portfolio of 4 capstone projects
• Get a guaranteed internship with Henry Harvin
• Get 3 in 1 placement support through personalized job consulting

Whether you’re a fresher or an expert aiming to advance your career, the Henry Harvin SAP FICO course offers a strong foundation to support you succeed in the finance and accounting sectors.

Conclusion

Mastering SAP FICO is crucial for anyone looking to build a successful career within SAP-driven industries. So, with proper analysis and preparing the SAP FICO interview questions and answers, you can showcase your knowledge and skills on the interview board. Let’s dive in and achieve your goal of cracking the interview. 

Recommended Reads

1. SAP Course: Details, Eligibility, Syllabus, Career, Fees, Scope and More
2. Top 13 SAP FICO Training in the USA: 2024 [Updated]
3. What is SAP Certification? Eligibility, Advantages, and Cost
4. TOP 14 SAP FICO Training in New Jersey 2024

Frequently Asked Questions

Q1. How can I face scenario-based questions in SAP FICO interview?

Ans. You can express your thought process clearly and how you would solve the problem, and if is it possible, you can share any experience or example from the past projects. 

Q2. Does the interviewer ask certificate-based questions?

Ans. If you have SAP FICO certification, some interviewers may ask certification-based questions. But prominently focus on the practical application and real-world scenario. 

Q3. What soft skills are interviewers looking for in SAP FICO candidates?

Ans. Interviewers value skills like communication, teamwork, problem-solving, responsibility, and adaptability in addition to technical expertise.

Q4. Will practicing interview questions guarantee a job in SAP FICO?

Ans. It cannot guarantee a job, but preparation with key interview questions can boost your confidence and improve your understanding. 

Q5. Does an interview require SAP FICO certification to succeed?

Ans. Certification is an additional qualification which helps you to enhance your credibility. Even though, having hands-on practice and understanding the key concepts are crucial for interview success. 

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