FINANCIAL ACCOUNTING OVERVIEW
The Financial Accounting (FI) module is the core module within the financials application. Almost all functionality that resides in the other financial application modules relies on the implementation of at least parts of the FI module. Financial Accounting is designed to provide financial information from an external view. The main FI components offer functionality for the general ledger, accounts receivables and accounts payables, asset management, a special ledger used to meet user specific requirements, funds management, and legal consolidations. The general ledger (G/L) houses the chart of accounts as well as the account balances and line items. The G/L tracks all transactional postings, such as inventory updates, sales revenues, bank accounts, and expenses. Accounts Receivable (AR) and Accounts Payable (AP) are subledgers of the G/L that support the processes involved with the collection of revenues and payments of expenses. Combined AR and AP facilitate maintaining customer or vendor records, account balances and line items, payments, clearing, advice notices, dunning, interest calculations, check releases, and over/underpayment management. The AR/AP information systems support reporting for due date breakdown, payment history, days sales outstanding, overdue items, and currency risk. Asset management is another subledger to the G/L that focuses on the management of the fixed assets in an organization. Asset management maintains the master records for the assets, special valuations, country-specific requirements, and four types of depreciation calculations, one of which is for cost depreciation. The special ledger functionality supports the ability to create other ledgers or subledgers for specific user requirements. Special ledgers can pull information from other modules and can support simplistic allocations. In addition to the ledgers and subledgers, FI contains functionality supporting funds management and legal consolidations. Funds management provides the capabilities to define planned revenues and expenses for the management areas, monitor these transactions as compared to available funds, and prevent exceeding the budget. Once all transactions have been completed, consolidations can be performed. Legal consolidations functionality supports providing consolidated financial information for companies and business areas. Business areas are utilized primarily for external reporting of business segments across companies.
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