Top 10 SAP FICO Interview Questions You Must Prepare For in 2024

Securing a job as a SAP FICO (Financial Accounting and Controlling) professional after SAP Fico course is a significant step toward a rewarding career in the SAP ecosystem. Given the critical nature of finance and accounting in businesses, SAP FICO experts are in high demand across various industries. Companies like Deloitte, Accenture, Capgemini, and IBM are always on the lookout for skilled professionals who can optimize their financial processes using SAP FICO. To help you succeed in your interviews, we’ve compiled a list of the top 10 interview questions that are commonly asked by leading organizations, along with comprehensive answers and insights into which companies emphasize these skills.

1. What is SAP FICO and how does it integrate with other SAP modules?

Answer:
SAP FICO stands for Financial Accounting (FI) and Controlling (CO). It is a core module in SAP ERP, allowing organizations to track and manage their financial conditions. SAP FI handles external reporting (Balance Sheet, Profit & Loss statements), while SAP CO focuses on internal reporting (Cost Center Accounting, Profit Center Accounting).

Integration with Other Modules:

SAP MM (Materials Management): FI integrates with MM for vendor payments and inventory valuation.
SAP SD (Sales and Distribution): FI connects with SD for customer invoicing and revenue tracking.
SAP HR (Human Resources): Integration here is crucial for payroll processing.

Companies Asking This Question:
Consulting firms like Deloitte and Accenture often emphasize this question to assess how well you understand the interconnected nature of SAP modules, as it’s crucial for providing holistic business solutions.

2. Explain the difference between ‘Financial Accounting Global Settings’ and ‘Controlling Area’ in SAP.

Answer:
Financial Accounting Global Settings are configurations that apply to all company codes within an organization, ensuring consistency in financial reporting. These settings include Fiscal Year Variants, Currencies, and Document Types.

On the other hand, a Controlling Area is an organizational unit within SAP CO that represents a closed system for cost accounting purposes. A single controlling area can be assigned to multiple company codes, but they must share the same fiscal year variant and chart of accounts.

Companies Asking This Question:
This question is frequently posed by companies like Capgemini and TCS as they often handle complex global clients with multiple entities, making it vital to understand these settings.

3. What are the different types of Special G/L transactions in SAP FICO?

Answer:
Special G/L transactions in SAP FICO are alternative reconciliation account postings that don’t directly impact the standard customer or vendor account. The most common types are:

Down Payment Request: A request for payment before the actual invoice is generated.
Bill of Exchange: Used in countries where payment by draft is common.
Guarantee: A form of security provided by the customer or vendor.

These transactions are handled through special G/L indicators which direct postings to specific accounts other than the usual reconciliation accounts.

Companies Asking This Question:
Firms like EY (Ernst & Young) and KPMG value candidates who understand these transactions, particularly for roles involving international clients where such transactions are frequent.

4. How do you handle Error Correction in SAP FICO?

Answer:
Error correction in SAP FICO involves identifying and rectifying discrepancies in financial postings. The most common methods include:

Reversal Postings: Used when an incorrect document needs to be reversed.
Substitution and Validation Rules: Pre-defined rules that automatically correct postings based on specific criteria.
Manual Adjustments: Direct changes in the G/L accounts when automated options are not feasible.

Companies Asking This Question:
IBM and Wipro often ask about error correction methods to gauge how a candidate handles real-time financial discrepancies.

5. Describe the steps to perform a year-end closing in SAP FICO.

Answer:
Year-end closing in SAP FICO is a critical process that involves several steps:

Reconciliation of Sub-ledgers and General Ledger: Ensure that all sub-ledgers (AP, AR, Asset Accounting) are reconciled with the general ledger.
Accruals and Deferrals: Post necessary accruals and deferrals for expenses and revenues that span the fiscal year-end.
Asset Accounting Closing: Close the fiscal year in asset accounting by calculating depreciation.
Run Financial Statements: Generate and analyze the balance sheet and profit & loss statements.
Carry Forward Balances: Close the fiscal year and carry forward balances to the next year.

Companies Asking This Question:
Infosys and HCL Technologies frequently ask this question to assess a candidate’s practical experience with financial closing processes.

6. How does SAP FICO handle Foreign Currency Revaluation?

Answer:
Foreign Currency Revaluation in SAP FICO is used to adjust the value of foreign currency balances to reflect the current exchange rate. The key steps include:

Configuring Exchange Rates: Set up and maintain exchange rates in the system.
Running the Revaluation Program: SAP automatically adjusts the foreign currency balances based on the current rate.
Posting Differences: The differences are posted to a special G/L account, which is then reflected in the financial statements.

Companies Asking This Question:
This question is common in interviews at multinational corporations like HP and Unilever that deal with multiple currencies regularly.

7. What are the key components of a Cost Center in SAP CO?

Answer:
A Cost Center in SAP CO represents a department or function within an organization where costs are incurred. Key components include:

Cost Center Category: Defines the nature of the cost center (e.g., production, administration).
Hierarchy Area: Organizes cost centers in a hierarchy for reporting purposes.
Control Indicators: Set up to determine which activities and cost elements can be posted to the cost center.

Companies Asking This Question:
PwC (PricewaterhouseCoopers) and Bosch often emphasize this question to evaluate a candidate’s understanding of internal cost management.

8. Explain the concept of Internal Orders in SAP CO.

Answer:
Internal Orders are used to track costs associated with a specific task or event within a company. Unlike cost centers, internal orders are temporary and are typically used for projects or events. Key aspects include:

Order Types: Define the nature of the order (e.g., investment, maintenance).
Settlement Rules: Determine how costs associated with the order are settled (e.g., to a cost center or asset).
Budgeting and Monitoring: Internal orders allow for detailed budgeting and real-time monitoring of costs.

Companies Asking This Question:
Companies like Siemens and ABB use internal orders extensively for project-based work, making this question common in their interviews.

9. How is a Cost Element different from a Cost Center in SAP CO?

Answer:
A Cost Element represents the classification of costs and revenues in SAP CO. It acts as a bridge between FI and CO. There are two main types:

Primary Cost Elements: Directly associated with general ledger accounts in FI.
Secondary Cost Elements: Used only in CO for internal allocations (e.g., assessments, distributions).

A Cost Center, on the other hand, is where costs are allocated within the organization. It represents the location where costs are incurred.

Companies Asking This Question:
Oracle and SAP Labs frequently ask this question to ensure candidates understand the cost structure within SAP.

10. What are the steps involved in configuring a New G/L Account in SAP FICO?

Answer:
Configuring a new G/L account involves several steps:

Defining the Account Group: Assign the new G/L account to an appropriate account group.
Number Range Assignment: Assign a unique number range for the new G/L account.
Field Status Group: Define which fields are mandatory, optional, or hidden during postings.
Currency and Tax Settings: Configure the currency and tax settings based on the account’s nature.

Companies Asking This Question:
Large enterprises like Microsoft and Amazon require detailed knowledge of G/L account configuration for their complex financial systems.

Conclusion:

In conclusion, mastering the SAP FICO module is essential for professionals aiming to excel in finance and controlling roles within organizations. The top interview questions covered above provide a comprehensive foundation to prepare for job interviews at leading companies such as Deloitte, IBM, and Capgemini. By understanding these key concepts, you can confidently demonstrate your expertise and secure a promising position in the dynamic field of SAP FICO.