BUSINESS AREA OR COMPANY CODE

[Former Member]

dear friends,

i am working for a company which is into implementation of mysap. i am core team member for fico. my company

is a group having 20 comapnies under it i.e legal entities which include partnership firms and pvt ltd companies in india. our sap consultants say that they would like to map this organization with group as one company code and 20 companies as business areas.

i am not convinced of the structure and asked to clarify the treatment of intercompany transactions, whether they are sales or transfers. they don't have a clue. and they say it is not justification for going about 20 company codes and also say as long as reports can be generated as per statutory requirements what is the problem they ask me? i am not convinced can you please give some clues as the restrictions in sap itself which prevent this kind of setting. like document number ranges will be not in sequence. but they might come with an answer like external numbering. please give some clues or justifications which supports my decision of 20 company codes rather than 20 business areas.

[Former Member]

As defined by SAP, a <b>Company Code </b>is the Smallest organizational unit of external accounting for which a complete, self-contained set of accounts can be created. This includes the entry of all transactions that must be posted and the creation of all items for legal individual financial statements, such as the balance sheet and the profit and loss statement.

This itself gives you reaason enough to have different Company Codes

[Former Member]

Hi Kilari Pattabhi,

We can maintain 20 company codes if you wish, but normally company codes are maintained when they are in different geographical locations, as different countries has different industrial regulations and different tax jusdistriction. But definitely this is benefited, in all aspects like financial reporting's, definitely helps in intercompany transactions.

By this sales and transfers both can happen, in order to do only sales then you need to maintain distribution channel by a C.code 11, DCh,1101, Div 00.. which only handles sales. background process may requires stock transfers also.

You can even maintain different Billing document no. ranges for each company code.. ex..if you have C.code 10.. then your billing doc starts with 610XXXXXXX., 619XXXXXXX, Here 10 and 19 resembles your companycodes. Such a way you can maintain your billing documents for different company codes.

This is purely Business Decision to be taken.

Regards,

Harish