Top SAP Interview Questions and Answers

These SAP interview questions and answers cover fundamental concepts for both freshers and experienced professionals. Understanding these topics will help you crack SAP-related interviews in functional (FI, MM, SD) or technical (ABAP, Basis, HANA) roles.

1. What is SAP?

Answer:
SAP (Systems, Applications, and Products in Data Processing) is a leading Enterprise Resource Planning (ERP) software used by businesses to manage operations, streamline processes, and improve efficiency. SAP integrates various business functions like finance, HR, supply chain, sales, and manufacturing into a unified system.

🔹 Key Features:
✔ Modular structure (e.g., SAP FI, SAP MM, SAP SD)
✔ Real-time data processing
✔ Customizable for different industries

2. What are the Main SAP Modules?

Answer:
SAP has two main categories of modules:

A. Technical Modules

SAP ABAP (Advanced Business Application Programming) – SAP’s programming language.
SAP Basis – System administration, installation, and maintenance.
SAP HANA – In-memory database for high-speed analytics.

B. Functional Modules

SAP FI (Financial Accounting) – Manages financial transactions.
SAP CO (Controlling) – Cost accounting and profitability analysis.
SAP MM (Materials Management) – Procurement and inventory management.
SAP SD (Sales and Distribution) – Sales, shipping, and billing.
SAP PP (Production Planning) – Manufacturing and production processes.
SAP HR/HCM (Human Capital Management) – Payroll, recruitment, and employee management.

3. What is SAP FICO?

Answer:
SAP FICO (Finance and Controlling) is a core module that handles financial accounting and cost management.

🔹 Key Components:
✔ FI (Financial Accounting): General Ledger (GL), Accounts Payable (AP), Accounts Receivable (AR).
✔ CO (Controlling): Cost Center Accounting, Profitability Analysis (CO-PA), Internal Orders.

Example: A company uses SAP FICO to track expenses, generate financial reports, and analyze profitability.

4. What is SAP HANA?

Answer:
SAP HANA (High-Performance Analytic Appliance) is an in-memory database that processes large data volumes in real time.

🔹 Key Benefits:
✔ Faster data processing (compared to traditional databases).
✔ Supports advanced analytics, AI, and machine learning.
✔ Used for SAP S/4HANA (next-gen ERP).

5. What is the Difference Between SAP ECC and SAP S/4HANA?

Feature	SAP ECC	SAP S/4HANA
Database	Runs on Oracle, SQL Server	Runs only on SAP HANA
User Experience	SAP GUI (old interface)	SAP Fiori (modern, web-based UI)
Speed	Slower batch processing	Real-time analytics
Deployment	On-premise or cloud	Cloud, hybrid, or on-premise

Why Upgrade? S/4HANA offers better performance, AI integration, and simplified data models.

6. What is an SAP Transaction Code (T-Code)?

Answer:
A T-Code (Transaction Code) is a shortcut to access SAP functions quickly.

🔹 Examples:
✔ MM01 – Create Material Master
✔ FB60 – Enter Vendor Invoice
✔ VA01 – Create Sales Order

7. What is an SAP Client?

Answer:
An SAP Client is an independent workspace within an SAP system with its own data and users.

🔹 Types of Clients:
✔ 000 – Default client (used for configuration).
✔ 001 – Demo client.
✔ Custom clients – For business operations (e.g., 100 for production).

8. Explain SAP Workflow.

Answer:
SAP Workflow automates business processes by routing tasks to the right users.

🔹 Example:
✔ An employee submits a leave request → Manager approves → HR updates records.

9. What is an IDoc in SAP?

Answer:
An IDoc (Intermediate Document) is a data format used for exchanging information between SAP and external systems.

🔹 Common Uses:
✔ EDI (Electronic Data Interchange)
✔ Integration with third-party software

10. What is SAP Fiori?

Answer:
SAP Fiori is a modern, user-friendly interface for SAP applications (replacing SAP GUI).

🔹 Key Features:
✔ Responsive design (works on mobile & desktop).
✔ Role-based apps for different users.

Advanced SAP Interview Questions and Answers

Here are more in-depth SAP interview questions categorised by modules for both functional and technical roles. These advanced SAP interview questions cover real-world scenarios for functional (FI, MM, SD, PP) and technical (ABAP, HANA, Basis) roles.

Functional SAP Interview Questions

1. What is the difference between Company Code and Plant in SAP?

Answer:

Company Code (CC): The smallest legal entity in SAP (e.g., a registered company). Used for financial reporting (FI module).
Plant: A physical location (factory, warehouse) where business operations occur (MM, PP modules).
✔ Example: A company (Company Code: 1000) has multiple Plants (Plant 1001: Mumbai Factory, Plant 1002: Delhi Warehouse).

2. What is a Purchase Order (PO) in SAP MM?

Answer:
A Purchase Order (PO) is a formal document sent to a vendor to request goods/services.

🔹 Key T-Codes:
✔ ME21N – Create Purchase Order
✔ ME22N – Change Purchase Order
✔ ME23N – Display Purchase Order

Process Flow:

Purchase Requisition (PR) → 2. Request for Quotation (RFQ) → 3. PO Creation → 4. Goods Receipt (GR) → 5. Invoice Verification (MIRO)

3. What is the difference between MRP and MTO in SAP PP?

Answer:

MRP (Material Requirements Planning)	MTO (Make-to-Order)
Production based on demand forecasts.	Production starts only after customer order.
Used for standard products (e.g., smartphones).	Used for customized products (e.g., industrial machinery).
Stock is maintained in advance.	No stock maintained; production is order-specific.

4. What is the significance of Document Flow in SAP SD?

Answer:
Document Flow tracks the lifecycle of a sales order, showing related documents like:
✔ Quotation → Sales Order → Delivery → Billing → Payment

🔹 T-Code: VA23 (Display Document Flow)

5. What is a Cost Center in SAP FICO?

Answer:
A Cost Center is a department or unit where costs are tracked (e.g., Marketing, HR, IT).

🔹 Example:

Cost Center 1000 = Marketing Department
Cost Center 2000 = Production Department

🔹 T-Code: KS01 (Create Cost Center)

Technical SAP Interview Questions

6. What is an ABAP Data Dictionary?

Answer:
The ABAP Data Dictionary defines and manages metadata (data about data) in SAP.

🔹 Key Components:
✔ Tables (e.g., MARA – Material Master)
✔ Views (combine data from multiple tables)
✔ Data Elements (define field properties)
✔ Domains (define data type and length)

🔹 T-Code: SE11 (ABAP Dictionary)

7. What is BAPI in SAP?

Answer:
BAPI (Business Application Programming Interface) is a standardized method for external systems to interact with SAP.

🔹 Common Uses:
✔ Integrating SAP with CRM, e-commerce, or third-party apps.
✔ Automating data exchange (e.g., creating a Sales Order via BAPI).

🔹 Example: BAPI_SALESORDER_CREATEFROMDAT2

8. What is an RFC in SAP?

Answer:
RFC (Remote Function Call) allows communication between SAP systems or between SAP and non-SAP systems.

🔹 Types of RFC:
✔ Synchronous RFC (sRFC) – Waits for response.
✔ Asynchronous RFC (aRFC) – Runs in the background.
✔ Transactional RFC (tRFC) – Ensures data consistency.

🔹 T-Code: SM59 (RFC Destinations)

9. What is an Enhancement Framework in SAP?

Answer:
The Enhancement Framework allows customizing SAP standard programs without modifying original code.

🔹 Types of Enhancements:
✔ User Exits (Pre-defined hooks in SAP programs)
✔ BADIs (Business Add-Ins) (Object-oriented enhancements)
✔ Implicit & Explicit Enhancements (Code insertions using ENHANCEMENT keyword)

🔹 T-Code: SE18 (BADI Builder)

10. What is SAP OData?

Answer:
OData (Open Data Protocol) is a REST-based API used to expose SAP data to external apps (e.g., mobile apps, Fiori).

🔹 Key Uses:
✔ Fetching SAP data in JSON/XML format.
✔ Enabling real-time integration with web apps.

🔹 T-Code: SEGW (Gateway Service Builder)

SAP HANA Interview Questions

11. What is Columnar Storage in SAP HANA?

Answer:
Unlike traditional row-based databases, SAP HANA stores data in columns, improving:
✔ Compression (reduces storage)
✔ Query speed (faster analytics)

🔹 Example:

Row Storage: Best for transactional systems (OLTP).
Column Storage: Best for analytics (OLAP).

12. What is an SAP HANA Calculation View?

Answer:
A Calculation View combines data from multiple tables/views for complex reporting.

🔹 Types:
✔ Graphical Calculation View (Drag-and-drop modeling)
✔ SQL Script Calculation View (Custom logic using SQL)

🔹 T-Code: HANA Studio / SAP Web IDE

SAP FICO (Finance & Controlling) Interview Questions & Answers

SAP FICO interview questions cover real-world scenarios for financial accounting (FI) and controlling (CO) roles.

1. What is the difference between SAP FI and SAP CO?

Answer:

SAP FI (Financial Accounting)	SAP CO (Controlling)
Deals with external reporting (tax, balance sheets, P&L).	Focuses on internal cost management.
Follows legal accounting standards (GAAP, IFRS).	Used for profitability analysis & decision-making.
Key components: GL, AP, AR, Asset Accounting.	Key components: Cost Centers, Profit Centers, Internal Orders.

🔹 Example:

FI records an invoice payment (external compliance).
CO analyzes which department overspent (internal optimization).

2. What is a Chart of Accounts (CoA) in SAP FI?

Answer:
A Chart of Accounts (CoA) defines the structure of General Ledger (GL) accounts used in financial reporting.

🔹 Types of CoA:
✔ Operational CoA – Used for daily postings.
✔ Country-specific CoA – Follows local accounting standards.
✔ Group CoA – For consolidated financial statements.

🔹 T-Code: OB13 (Maintain Chart of Accounts)

3. Explain the Document Principle in SAP FI.

Answer:
Every financial transaction in SAP generates a document with:
✔ Document Number (Unique ID)
✔ Posting Date
✔ Amount & Currency
✔ Posting Key (Debit/Credit indicator)

🔹 Example:

Document Type “SA” – Vendor Invoice
Posting Key “40” – Debit to Expense Account

🔹 T-Code: FB03 (Display Document)

4. What is an Asset Class in SAP FI-AA?

Answer:
An Asset Class categorizes fixed assets (e.g., Machinery, Buildings, Vehicles) for depreciation calculation.

🔹 Key Features:
✔ Determines depreciation rules (straight-line, declining balance).
✔ Assigns GL accounts for asset acquisition & depreciation.

🔹 T-Code: OAOA (Define Asset Classes)

5. What is a Credit Control Area (CCA) in SAP FI?

Answer:
A Credit Control Area (CCA) manages customer credit limits to prevent financial risk.

🔹 Example:

A company sets a credit limit of $50,000 for Customer X.
If the customer exceeds this limit, SAP blocks new sales orders.

🔹 T-Code: OB45 (Define Credit Control Areas)

6. What is the purpose of a Dunning Area in SAP FI?

Answer:
A Dunning Area groups overdue customer invoices for reminder letters (dunning notices).

🔹 Process Flow:

Invoice becomes overdue → 2. SAP triggers dunning → 3. Customer receives payment reminder.

🔹 T-Code: FBMP (Dunning Run)

7. What is the difference between Primary and Secondary Cost Elements?

Answer:

Primary Cost Elements	Secondary Cost Elements
Linked to GL accounts (real expenses).	Used for internal cost allocations.
Example: Salary, Rent.	Example: Overhead cost distribution.

🔹 T-Code: KA06 (Create Secondary Cost Element)

8. What is a Profit Center in SAP CO?

Answer:
A Profit Center tracks revenue & costs for a specific business segment (e.g., Product Line, Region).

🔹 Example:

Profit Center 1000 = North America Sales
Profit Center 2000 = Europe Sales

🔹 T-Code: KE51 (Create Profit Center)

9. What is the purpose of Internal Orders in SAP CO?

Answer:
Internal Orders track costs for short-term projects or events (e.g., Marketing Campaigns, Maintenance).

🔹 Types:
✔ Overhead Orders – For indirect costs.
✔ Investment Orders – For capital expenditures.

🔹 T-Code: KO01 (Create Internal Order)

10. What is Cost Center Accounting in SAP CO?

Answer:
Cost Center Accounting monitors expenses by department (e.g., HR, IT, Production).

🔹 Key Reports:
✔ S_ALR_87013611 – Cost Center Hierarchy
✔ S_P99_41000062 – Actual vs. Planned Costs

🔹 T-Code: KS01 (Create Cost Center)

11. What is Activity-Based Costing (ABC) in SAP CO?

Answer:
ABC assigns costs to products/services based on actual resource usage (e.g., labor hours, machine time).

🔹 Example:

Product A uses 10 machine hours → Higher cost allocation.
Product B uses 5 machine hours → Lower cost allocation.

🔹 T-Code: KSPI (ABC Planning)

12. What is the difference between Statutory and Parallel Valuation in SAP FI?

Answer:

Statutory Valuation	Parallel Valuation
Follows local GAAP/IFRS.	Maintains multiple accounting standards (e.g., US GAAP + IFRS).
Single set of books.	Multiple ledgers for different reporting needs.

🔹 Example: A multinational company uses Parallel Valuation to comply with both US GAAP and IFRS.

SAP MM (Materials Management) Interview Questions & Answers

SAP MM interview questions cover procurement, inventory, and material master concepts.

1. What is SAP MM and its key functions?

Answer:
SAP MM (Materials Management) handles procurement, inventory, and material master data.

🔹 Key Functions:
✔ Procurement (Purchase Requisition → PO → Goods Receipt → Invoice Verification)
✔ Inventory Management (Stock transfers, reservations, physical inventory)
✔ Vendor Master & Material Master management
✔ Invoice Verification (MIRO)

🔹 T-Codes:

ME21N (Create PO)
MIGO (Goods Movement)
MIRO (Invoice Verification)

2. What is a Material Master in SAP MM?

Answer:
A Material Master stores all data related to materials (raw, semi-finished, finished goods).

🔹 Key Views:
✔ Basic Data (Material number, description, unit of measure)
✔ Purchasing Data (Vendor info, lead time)
✔ MRP Data (Reorder point, planning strategy)
✔ Accounting Data (Valuation class, price control)

🔹 T-Code: MM01 (Create Material Master)

3. What is the difference between a Purchase Requisition (PR) and a Purchase Order (PO)?

Purchase Requisition (PR)	Purchase Order (PO)
Internal request for procurement	Formal document sent to vendor
No legal binding	Legally binding contract
Created via ME51N	Created via ME21N

🔹 Process Flow:
PR (ME51N) → RFQ → PO (ME21N) → GR (MIGO) → Invoice (MIRO)

4. What is MRP (Material Requirements Planning)?

Answer:
MRP ensures materials are available for production/sales by calculating:
✔ Net requirements (Demand – Stock)
✔ Procurement proposals (Purchase requisitions, production orders)

🔹 MRP Types:

PD (Reorder Point Planning) – When stock falls below a threshold.
VB (Forecast-Based Planning) – Uses historical demand.

🔹 T-Code: MD03 (Run MRP)

5. What are Movement Types in SAP MM?

Answer:
Movement Types classify goods movements (receipts, issues, transfers).

🔹 Common Movement Types:
✔ 101 – Goods receipt for PO
✔ 201 – Goods issue for production
✔ 309 – Stock transfer between plants

🔹 T-Code: MIGO (Execute goods movement)

6. What is a Storage Location vs. a Plant?

Storage Location	Plant
Physical storage area (warehouse)	Organizational unit (factory, office)
Subset of a plant	Can have multiple storage locations

🔹 Example:

Plant: 1000 (Mumbai Factory)
- Storage Location: 0001 (Finished Goods Warehouse)
- Storage Location: 0002 (Raw Materials Warehouse)

7. What is Automatic Account Determination in SAP MM?

Answer:
SAP automatically posts accounting entries for MM transactions based on:
✔ Transaction Key (e.g., BSX for inventory)
✔ Valuation Class (Material type)
✔ Chart of Accounts

🔹 T-Code: OBYC (Configure account determination)

8. What is the difference between a Stock Transfer Order (STO) and a Direct Stock Transfer?

Stock Transfer Order (STO)	Direct Stock Transfer
Requires a PO (inter-company)	No PO needed (intra-company)
Uses movement type 303	Uses movement type 311

🔹 T-Code: ME21N (Create STO) / MIGO (Direct transfer)

9. What is Physical Inventory in SAP MM?

Answer:
A Physical Inventory reconciles system stock with actual stock.

🔹 Steps:

MI01 – Create inventory document
MI04 – Enter counts
MI07 – Post differences

🔹 Difference Postings:
✔ 701 – Stock increase
✔ 702 – Stock decrease

10. What is a Batch in SAP MM?

Answer:
A Batch groups materials with similar characteristics (expiry date, production lot).

🔹 Batch Management is used for:
✔ Pharmaceuticals (expiry tracking)
✔ Food & Beverage (batch recalls)

🔹 T-Code: MSC1N (Create Batch)

11. What is a Reservation in SAP MM?

Answer:
A Reservation earmarks stock for a specific purpose (production, maintenance).

🔹 T-Code: MB21 (Create reservation)

12. What is a Source List in SAP MM?

Answer:
A Source List defines approved vendors for a material.

🔹 T-Code: ME01 (Maintain source list)