September 2004 • www.FICOExpertOnline.com
FI-CA or FI-AR: Which Module Best Fits Your Needs?
by Martin Ullmann, Manager, Ariston Consulting
Although both Accounts Receivable (FI-AR) and Contract Accounts Receivable and Payable (FICA) track accounts receivable transactions, there are important differences between the two modules. The author compares your options and presents the benefitsand drawbacks of each.
A business partner is a customer within FI-CA. The business partner contains central data such as name, address, and bank details. All invoices and payments are posted to a contract account, which is assigned to a business partner. The contract account contains control information like payment methods, payment conditions, or dunning procedures. A contractobject is an optional master data object that can be assigned to a contract account and business partner. The contract object allows for the segregation of receivables below the contract account. the capability to deal with customers and payments over the Internet by using SAP Biller Direct, which allows your company to use electronic bill presentment and payment (EBPP).
SAP Financial Accounting(FI) delivers the standard Accounts Receivable (FIAR) module to track accounts receivable transactions. This module is tightly integrated with the Sales and Distribution (SD) module to enter and process customer master data, shipping, billing, and receivables.
SAP delivers FI-CA in a couple of different flavors to deal with industry-specific requirements. FI-CA is the preferred A/Rsolution in following industry solutions
As requirements became more complex and the data volume increased substantially over the last couple of years, SAP developed a module in FI for tracking A/R data. This application component is known as Contract Accounts Receivable and Payable (FI-CA). SAP promotes FICA as a subledger application alternative for the FI-AR module and Accounts Payables module(FI-AP). I will focus on the FI-AR capabilities of contract accounting, since SAP developed more new functionality related to A/R than A/P. I will show you the strengths of both functionalities so that you can determine which one best matches your needs. FI-CA was developed to deal with a large number of different customers and different types of receivables. FI-CA is mainly used in industry-specificSAP components, which by nature have many customers and many different receivable types. Examples industries are the public sector, utilities, insurance, and telecommunications. Even if you do not fall into one of these industry groups, you can still use contract accounting. The industry solutions for FI-CA have been available since 1999. An industry-neutral version was introduced in 2002. FI-CAis not only tightly integrated with the core SAP components like FI, Controlling (CO), Customer Relationship Management (CRM), and SD, it also has
• IS-T: Industry Solution for Telecommunications • IS-U: Industry Solution for the Utilities Industry • IS-M: Industry Solution for Media • FS-CD: Industry Solution for Insurance • IS-PS-CA: Industry Solution for the Public Sector. This component isalso known as PSCD (Public Sector Collections and Disbursement).
Tracking Multiple Receivables Types
Assume that following business scenario exists in your company: You are required to track the receivables by customer/ service in different receivable balance sheet accounts. In the FI-AR module, a customer can only be linked to one single receivable account (reconciliation account). Althoughyou could use the workaround of the special G/L indicators
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to track receivables in different reconciliation accounts, SAP intended the special G/L indictor to be used for special transactions like bad debt or security deposits rather than as a tool to track receivables for different services. This design...
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