SAP Enterprise Structure – A Case Study (part 5): Assign Company Code to Company and Define Business Area

This is the part 5 of the series of articles about SAP Enterprise Structure – A Case Study. Read part 1 here.

Enterprise Structure concept in Financial Accounting

Assign Company Code to Company

After creating company and company codes, we need to assign the company codes to the company.
For our business scenario, we need to assign ABCD and EFGH company codes to ABCD company.
We can do it from the following menu path of “SPRO” t-code: IMG – Enterprise Structure – Assignment – Financial Accounting – Assign Company Code to Company.

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SAP Enterprise Structure – A Case Study (part 4): Define Company Code

This is the part 4 of the series of articles about SAP Enterprise Structure – A Case Study. Read part 1 here.

Enterprise Structure concept in Financial Accounting

Define Company Code
There are two options to create company code:

  • Copy from other company code (or from SAP standard company code)
  • Create from the scratch
SAP recommends that we copy a company code from an existing company code. The advantage is SAP will also copy the existing company code-specific parameters. Then we can change certain data in the relevant application if necessary. This is much less time-consuming than creating a new company code.
But in this book we will create company code from the scratch so we have to define other parameters need in other relevant configuration process manually.
For our business scenario, we need to define two company codes:
  • ABCD for ABCD Telecommunication company
  • EFGH for EFGH Telecommunication company
The information that we need to maintain the company are:
  • Company code
  • Name
  • Address, including country
  • Language key
  • Local currency

SAP Enterprise Structure – A Case Study (Part 3): Define Company

This is the part 3 of the series of articles about SAP Enterprise Structure – A Case Study. Read part 1 here.

Enterprise Structure concept in Financial Accounting

Define Company

All company codes for a company must work with the same operational chart of accounts and fiscal year. The currencies used can be different.
The information that we need to maintain the company are:
  • Company ID
  • Name
  • Address, including country
  • Language key
  • Local currency
For our scenario, we will create one company (ABCD). We can create company from the following menu path of SPRO t-code:
IMG – Enterprise Structure – Definition – Financial Accounting – Define Company Continue reading

E-Book: SAP Enterprise Structure Concept and Configuration Guide

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E-book: SAP Enterprise Structure (MM and related modules such as FI, Logistics, and SD) Concept and Configuration Guide

SAP enterprise structure is organizational structure that represents an enterprise in SAP R/3 system. It consists of some organizational units which, for legal reasons or for other specific business-related reasons or purposes, are grouped together. Organizational units include legal company entities, sales offices, profit centers, etc. Organizational units handle specific business functions.
Organizational units may be assigned to a single module (such as a sales organization assigned to Sales and Distribution (SD) module, or to several modules (such as a plant assigned to Materials Management (MM) and Production Planning (PP) module).
SAP ERP system can represent a complex enterprise structure. Its flexibility can integrate the structure of an enterprise by linking its organizational unit. Enterprise structure design is a fundamental process in a SAP implementation project. The design is mainly determined by the business scenarios performed in an enterprise. Once the design is determined, it will affect many things such as how to perform a transaction and generate reports on SAP system. Although it’s possible, it requires great effort to change the enterprise structure. So , we must ensure that the enterprise structure designed in the SAP implementation project can accommodate all business scenarios and enterprise’s requirements for current and future situation.

SAP Enterprise Structure – A Case Study (Part 2): Enterprise Structure Concept in FICO

This is the part 2 of the series of articles about SAP Enterprise Structure – A Case Study. Read part 1 here.

Enterprise Structure concept in Financial Accounting

Company Code

A Company Code is an organizational unit that represents an independent and legal accounting entity, for example, a company within a corporate group. Financial reports such as Balance sheets and Profit and Loss statements, required by law, are created at company code level.
In SAP, a company code is represented by a unique 4-digit alpha-numeric for a specific client. It is the central organizational element of Financial Accounting. At least there is one company code in a client. We can set up several company codes in one client in order to manage various separate legal entities simultaneously, each with their own balanced set of financial books.
With SAP FI module, we can generate the financial reports of a company code. A company code’s financial reports can be used for external purpose, such as for external auditors, shareholders/stock exchange commission, tax office, etc.

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