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Differences between Co.Code and Company , Business Area and PCA

Hi,

Anyone can help me regarding the above issues(Differences between Co.Code and Company , Business Area and PCA)

Thanks & Regards

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    Former Member
    Aug 21, 2007 at 01:30 PM

    Hi,

    This terminology is all related to Organization Structure in SAP - FICO Module.

    Company Code is a legal entity for which a separate set of books of accounts are required. A Balance Sheet and a Profit and Loss Account is prepared at this level. Setting up of Company Code(s) is a mandatory activcity in SAP.

    Company: Company is an Organizational Unit in Accounting. Company Codes are assigned to Company. This is helpful in consolidation in SAP. However creation of a Company is not a mandatory activity.

    A Company code / Company are for external reporting like statutory authorities. However for internal analysis / Management a different approach is required. For this purpose many organizations divide their activities into Business Area / Profit Centers.

    We can use either Business Areas / Profit Centers. However, now the trend is to move to PCA from Business as suggested by SAP. For example a business in Electronics industry can divide the activities into different products. This way they can analyze the profitability of different business lines.

    Thanks

    Murali.

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    Former Member
    Aug 21, 2007 at 01:26 PM

    CO. code is legal entity of an enterpise. A company is either a one to one relationship of a company code or one to many codes. A group company codes can make up a company. Business area is an organizational unit within accounting that represents a separate area of operations. Profit center is eithe a division or a product line.

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    Former Member
    Aug 21, 2007 at 01:29 PM

    Hi,

    Company Code : Smallest organisational unit of external account for which a complete, self-contained bookkeeping system can be replicated. eg, company within a corporate group.

    Company: company is an organizational unit in Accounting which represents a business organization according to the requirements of commercial law in a particular country.

    Business area is where the total business is valuated as a whole

    Whereas Profit centre is an area where the company/work place allows the outside agency to use its machinery for external profits (eq: A CNC machiine which can run 24 hrs a day is utilised in our company for 15 hrs and the balance 9 hrs is let out for addition to the company's profit) is known as Profit Centre.

    Business area is related term to FI module and Profit centre is related to CO module. One business area can have one or more profit centres. Business area is gared on external accounting where as profit centers are used for internal accounting purposes

    Assign points If useful

    Regards

    Genie

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  • Aug 21, 2007 at 01:50 PM

    Dear Rajani,

    Please, see below the definitions:

    The company code is an organizational unit within financial accounting.

    A company is an organizational unit in Accounting which represents a business organization according to the requirements of commercial law in a particular country.

    Business area:

    A business area is an organizational unit within accounting that represents a separate area of operations or responsibilities in a business organization.

    In a client, you can set up several business areas to which the system can assign the postings made in all company codes defined in your client. To ensure consistency in document entry, you should give business areas the same name in all company codes.

    PCA - Profit center accounting:

    The documentation regarding the PCA is very extensive. Basicaly, the PCA is

    the account-based period account and cost-of-sales accounting methods.

    In order to understand all the process company code/Business area/PCA, please check the HELP online that has all informations regarding the functionalities.

    Regards,

    Paulo

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