The company code is the smallest unit for which the financial statements are created according to the requirements of the legal provisions. A company may include one or more codes. A company’s financial statements also form the basis consolidated financial statements. All codes of the company within a company must use the same chart of accounts and exercise. However, each company code may have a different local currency.
The smallest organizational unit of external accounting for which a complete, autonomous, accounts can be created. This includes the entry of all transactions that must be posted and the creation of all the legal individual financial statements such as balance sheet and profit and loss account.
Business Areas correspond to specific business segments of a company and may cut across different Company Codes (for example, product lines). They can also represent different responsibility areas (for example, branch units). The Business Areas are optional in SAP. The financial statements drawn per business area are for internal reporting purposes. You need to put a check in the checkbox in the configuration for the company for which you want to enable business area financial statements.
When transactions are posted in FI, you have the option of assigning the same to a Business Area so that the values are properly captured for internal financial statements. The Business Area can also be derived from other account assignments, for example, cost center. But to do this, you need to define the Business Area in the master record of that particular cost center.
How to Configure Company Code
This document describes how a new company code is added to an existing SAP R/3 environment. Here the company code is not created from scratch, but as a copy of an existing company code. This document wants to point out what information is transferred in the copy and at which points you must interfere.
The new company code is created in development system and is transferred from there to test and finally to production. The system settings are done in Customizing (IMG).
Download the document on Configuring new company code.
Assign Plants to Company Code
From the IMG screen, drill down as follows:
Enterprise structure –> Assignment –> Logistics – General –> Assign plant to company code
Select company code and double click or click the Assign button, select plant to assign, click Enter.
Now scroll up and review the assignment, then click Save.
Assign Purchasing Organization to Company Code
From the IMG screen: Enterprise Structure –> Assignment –> Materials management –> Assign purchasing organization to company code
Select your company code and click the assign button:
Select the purchasing organization to be assigned, click enter, and then save on the following screen.
Assign Variant to Company Code
At the IMG screen: Financial accounting –> Financial accounting global settings –> Document –> Posting periods –> Assign variant to company code
Locate your company code and enter the variant you just created into the variant column. Click save.
Assign Number Ranges to Company Code
From the IMG screen: Financial accounting –> Financial accounting global settings –> Document –> Document number ranges –> Define document number ranges
Triple-click on Define document number ranges and when this screen appears to enter your company code, then click on the interval button with the pencil. Enter 01 in the number column, the year in the year field and a range of 1 to 0099999999 in the appropriate form and to fields. SAP will use these number ranges as areas to store accounting actions. For example, to post a payment, a number range 15 must exist. Any posting action will be assigned a number within the number range you designate for range 15. It is recommended that the following number ranges are created: 01, 02, 03, 04, 05, 12, 13, 15, 16, 18, 19, 20, 47, 48, 49, 50, 51, X1, and X2. Keep in mind that the actual range of numbers can not overlap. For example, you may want to set range number one at 0000000001 to 0099999999. Number range two can then be 0100000000 to 0199999999. Range three would be 0200000000 to 0299999999 and so on. Different ranges can be used, but make sure they do not overlap and give sufficient space for a year’s worth of transactions.
After creating the first number range, click save. To enter another number range, click the insert interval button, and enter the information for the new range. Repeat this process until all necessary ranges have been created. If you discover that you need additional ranges in the future, you can return to the create ranges area and insert the new ranges.