One of the first steps when carring out an SAP implementation for an organization is to understand how that organization is structured.
Let’s go through the following elements of the enterprise structure, to gain an understanding of how the organization could be properly divided in SAP.
Also consider this additional org.units: functional area, business area. (105)
Organization Elements #
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The client level corresponds to a corporate group or a group of affiliated companies.
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The company code is the most important organizational unit of FI. It’s a legal and independent accounting unit that usually represents an independent company within the organization.
With just “company” we mean a global company ID that can be defined to represent company codes across the group. It is optional and used for consolidation.
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Controlling areas are used to divide the entire organization from a cost accounting standpoint. Each controlling area represents a separate unit for which you can manage, allocate and calculate cost and revenue.
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A segment is a division of the company that generates revenues and expenses, whose results are regularly inspected to make decissions. It’s optional.
Read segment documentation for more detail.
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A profit center is an organizational unit created for internal control. It’s created to evaluate the success of an independent area that is responsible for costs & revenues within a company, It can be cross-company too.
See profit center documentation for more detail.
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The cost centers represent a division of the organization where costs are incurred. This division is usually based on areas of responsibility or geographical location. Read cost center documentation for further information.
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A functional area represents an origin of costs by its function within the company. Funcional areas are needed when the company chooses an approach for the creation of the income statement (P&L) called “cost-of-sales accounting”. In this case, overhead costs are reported according to the funcional areas.
Read more about functional areas.
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An organizational unit within logistics that subdivides the organization from the perspective of production, procurement, maintenance, and materials planning.
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A business area represents an area of operation in the organization and it’s cross company-code.
You can create financial statements for specific business areas.
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