What are the differences between the SAP FICO, SD and MM modules?

SAP FICO MM SD Online Training in Hyderabad

Certainly, let’s delve into the functions and differences of the SAP FICO (Finance and Controlling), SD (Sales and Distribution), and MM (Materials Management) modules in more detail:

SAP FICO (Finance and Controlling):


  1. Financial Accounting (FI):


  • Manages financial transactions and accounting processes.
  • Records and tracks financial data such as accounts payable and accounts receivable.
  • Generates financial statements and reports for analysis.


General Ledger (GL): Records all financial transactions of the company.

Accounts Payable (AP): Manages payments to vendors and tracks outstanding invoices.

Accounts Receivable (AR): Manages customer invoices and tracks incoming payments.

Asset Accounting (AA): Manages the company’s assets and depreciation.

  • Controlling (CO):


  • Supports internal reporting and management decision-making.
  • Controls and tracks costs within the organization.
  • Provides tools for budgeting and variance analysis.


Cost Center Accounting (CCA): Tracks costs related to specific cost centers.

        Profit Center Accounting (PCA): Analyzes profits and losses for different segments of the organization.

        Internal Orders (IO): Manages costs associated with specific projects or activities.

Product Cost Controlling (CO-PC): Determines the cost of producing goods or services.


  • Integrates with other SAP modules, such as SD and MM, ensuring a seamless flow of financial data across the organization.
  • Financial transactions from sales and procurement processes are reflected in the financial accounting component.

SAP SD (Sales and Distribution):


  1. Sales Order Processing:


  • Manages the creation, modification, and tracking of sales orders.
  • Determines pricing and availability of products.
  • Supports order fulfillment and delivery processes.


Sales Order Management: Handles the creation and processing of sales orders.

Pricing and Conditions: Determines product prices and conditions.

Delivery Processing: Manages the shipment and delivery of products.

  • Shipping and Delivery:


  • Manages the shipment and delivery of products to customers.
  • Tracks the status of deliveries and updates inventory.
  • Generates shipping documents.
  • Billing and Invoicing:


  • Generates invoices based on sales orders and deliveries.
  • Manages billing processes and accounts for revenue.
  • Supports credit management and billing documents.


  • Integrates with FICO for financial accounting and controlling of sales-related transactions.
  • Links with MM for availability and procurement of materials needed for sales orders.

SAP MM (Materials Management):


  1. Procurement:


  • Manages the procurement process, including purchase requisitions and purchase orders.
  • Evaluates and selects vendors.
  • Tracks procurement-related documents and activities.


Procurement (PUR): Manages procurement processes.

Vendor Evaluation (VE): Evaluates and manages vendor performance.

Purchase Information System (PIS): Provides information for purchasing decisions.

  • Inventory Management:


  • Tracks and controls the movement of materials within the organization.
  • Manages stock levels and inventory valuation.
  • Supports physical inventory and cycle counting.


Inventory Management (IM): Manages inventory processes.

Physical Inventory (PI): Manages the physical counting of inventory.

  • Material Valuation:


  • Determines the value of materials using various valuation methods.
  • Manages material prices and valuation areas.
  • Supports inventory accounting and reporting.


        Material Valuation (MV): Manages the valuation of materials.


  • Integrates with SD for sales and distribution processes, ensuring that materials are available for sales orders.
  • Establishes a connection with FICO to handle accounting and financial matters concerning the acquisition and usage of materials.

Common Points:

Integration across Modules:

A comprehensive solution for managing an organization’s assets and operational processes is provided by the three modules, which combine flawlessly.

For instance, upon creation of a sales order in SAP SD, actions are triggered in SAP MM (which manages material availability and delivery) as well as SAP FICO (which handles billing and accounting).


In the places where these modules meet, there may be some overlap. For example, there might be relationships between SD and FICO when it comes to revenue recognition and financial impact when dealing with sales.

To sum up, SAP FICO is mostly concerned with financial concerns, while SD oversees sales processes and MM handles materials and inventory. Within the SAP ecosystem, an organization’s resources and business processes are managed holistically thanks to the integration of these components.