Company Codes Questions and Answers

Creating Accounts In Another Company Code

We are using the chart of accounts INT in one company code, how can I create these GL accounts automatically in another company code?

First, sm38;

Second, run program RFBISA10 ,"Copy G/L account Master Data from source comany code:send"

Generally, to keep your CoA consistent in DEV, QA and PRD clients, it makes sense to create accounts in DEV and then transport them in other clients in all c. codes. For G/L accounts use Tr. Codes FS15/FS16. For business-partners FD15/FD16 and FK15/FK16 correspondently.

Why do we use company and company code (i.e. differnce between company and company code)?

A Company is the unit to which your financial statements are created and can have one to many company codes assigned to it. A company is equivalent to your legal business organization. Consolidated financial statements are based on the companys financial statements. Companies are defined in configuration and assigned to company codes. Each company code must use the same COA (Chart of Accounts) and Fiscal Year. Also note that local currency for the company can be different.

Company Codes are the smallest unit within your organizational structure and is used for internal and external reporting purposes. Company Codes are not optional within SAP and are required to be defined. Financial transactions are viewed at the company code level. Company Codes can be created for any business organization whether national or international. It is recommended that once a Company Code has been defined in Configuration with all the required settings then other company codes later created should be copied from the existing company code. You can then make changes as needed. This reduces repetitive input of information that does not change from company code to company code as well as eliminate the possibility of missed data input.

What are cross company transactions?

In cross company transactions several company codes are involved . In a cross-company code transaction, the system posts a separate document with its own document number in each of the company codes. Individual documents are linked by a common cross-company code number. The system generates line items automatically (receivables and payables arising
between company codes) in order to balance the debits and credits in each document.

For e.g: One comapny is paying its affiliate company;

Paying company entry: Dr: Payable to Affiliate
Cr: Bank Accoount

Receving Company entry: Dr : Bank Account
Cr: A/R from Affiliate.

Both companies accounts are updated with the single entry.

Subject: Substitution of business area

Question : Subject: Substitution of business area

Hi,

I m trying to make BSEG-GSBER (business area) as substitutable. However, it is excluded in GB01.

Can this field be made substitutable ?

Reply : Subject: Substitution of business area

you have to change GB01 and you cannot do this directly. You have to write an ABAP to do a direct table update. If you search OSS on GB01 it will give you the details.

Reply : Subject: Substitution of business area

.. just change the table in debug in SE16.

Reply : Subject: Substitution of business area

thanks a lot for all the replies!

I wanted to know, if it is safe enough to make changes in exclusion field in GB01 for business area.

Also can it be possible to give the sap oss note no for this?

thanks in advance.

Reply : Subject: Substitution of business area

see note 42615. actually it says that you must not change the netry for GSBER, so read carefully!

Configure the SAP Business Area

The functions of business area is to create balance sheets and profit and loss statement below the company code level. It functionality can be duplicated using Profit center accouting.

OX03 - Creation of new Business Area

New Business Areas can be created anytime in the Enterprise structure in the IMG. However, in the year of creation, no comparison can be done with the previous year data as the Business Area did not exist in the previous year and there are no postings in the previous year.

After create the new Business Areas, new G/L accounts should be created for :-

Sales
Cost of Sales
External Process Cost
Consumption
Material Change
Purchase
Cost of Difference for Production
Factory Output for Production Order

Next create a default account assignment to maintained the link for cost center and business area.

Transaction OKB9

Enter the Company Code and Cost Element
Cocd Cost elem. Acct assignment detail

Enter the details as per business area/valuation area
BA Cost ctr

Changing the Company Code in SAP

Transaction OX02 changes the name.

It is not easy to change your company code to a new one.

You would need to copy your existing company code to the new one and go through the IMG and verify all settings. Then reconfig all the modules that are using the old company code like purchaisng, sales, etc. to point to the new code. Finally, you would need to transfer all the legacy data. Therefore it is far easier to keep the existing company code but give it a new text
name.

Adding a new company code to the existing SAP system

Use EC01 to copy an existing company code. This will ensure that you will not missed out any customizing settings.

OKKP - Assign company code to the controlling area
OBY6 - Define company code golbal parameters
OB62 - Assign company code to chart of accounts

Then check the following if needed, there may be other areas depending on your needs:

OBA4 - FI Tolerance Group for Users
FBZP - Maintain Payment program
OBYA - Inter Company code clearing if being used

What is Valuation Area and Valuation Class in sap fico

What is Valuation Area? How is it linked with Valuation Class? What is the significance of Valuation Area?

Valuation areas are nothing but the level at which you want to valuate your materials. SAP provides two levels of valuation Plant level and company code level.

For example:

Valuation at plant level: Suppose you have two plants one in Hissar and one in Andhra Pradesh, Then of course you would like to valuate the rawmaterials at plant level as because you have got transportation cost and taxes etc to account for.

Valuation at company code level:Here you valuate all your material in same way.

In One client valuation areas can either be set to plant level or company code level. Once you have made this setting this cant be changed

Valuation classes are linked to valuation class in Tcode OBYC

If your valuation area is at plant level then in OBYC you will find a coloumn for Valuation modifier you can provide your plant there.

For example:

Valuation Mod Valuation class Account
plant 1 3000 200130

Explain The Difference In Currency in sap fico

Explain the difference between group currency, parellel currency, hard currency and index based currency. Explain the context in which we use these.

Definition for different currencies:

Object currency - CO - A currency defined in the master record of a Controlling object (cost center, internal order, and
so on). When you create a Controlling object, the controlling area currency is defaulted as the object currency. You can change this.

Transaction Currency - the currency in which a business transaction is processed and booked. The business transaction can be posted in the transaction currency as well as in the local currency. This can occur when the trading partners use different local currencies. The transaction currency can differ from the controlling area currency and the object currency. The SAP system can perform currency translations using a predefined average exchange rate.

Hard currency - Hard Currencies are used in countries with high inflation to improve the value of transaction. When a
hard currency is selected, the document is automatically updated in the local currency and the hard currency. The config for hard currency is done at the country level

Group Currency - Group currencies are defined at the client level in table T000. Group currencies are used to enable
cross-company postings in controlling for company codes that use different company code currencies.

Index –Based Currency - Index based currencies are used for statutory reporting purposes for subsidiaries in some countries
that have an extreme amount of inflation.

Parallel currency - For company code, we may have one local currency and up to two parallel currencies in the system. All
documents are posted in both the local and parallel currencies. A hard currency is one type of parallel currency.

how to Change in Company Code Currency

You are a live site in China using company code currency as "RMB". The client would like to change the same to "JPY". How to achieve the same and the impact of the same?

This will be a big task for you.

We did the same project before.

What's your strategy?

You`ll use the same client for the new currency, or you`ll have a brand new one.

What we`ve done before was creating a brand new environtment.

These were our strategies :
1. copied all the customization in a new client, no transactions and no master datas. so you`ll have the same settings
with your live system.

2. created a new company code with the new currency, and copy all the customization. this step was to minimize our
step in recustomization.

3. uploaded all the master datas...and started to do a new transaction. thats what we did. and fortunately our client
was satisfied w our job:D

The suggestion is don't do that in a live system or else you`ll have a big problem then.

what is the Fastest way to create a SAP Company Code

SAP recommends that you used EC01 to copy an existing company code to a new one.

This has the advantage that you also copy the existing company code-specific parameters.

If necessary, you can then change certain data in the relevant application.

This is much less time-consuming than creating a new company code.

---------------

Meaning and Creation of Company codes

Which is the best method to create a company code.
- copy an existing company code or copying from country templates.

What is the process involved in copying from a country template.

For configuring SAP, generally three steps are required

1) create company name and address
2) creation of company code
3) currency and country setting
4) Assign company code to company

In same organisation i.e. in one company more than two company codes are maintaing, then its better to copy from other company code from ec01, later on you can customised/change specific settings according to client requirements.

If your want seperate setting in your own company code, that time its better to configure by creation rather than copy

In above that is your choice and need for reqirement.

Otherwise you can upload certain data by creating company code.

Rama Krishna

Now my doubt is What is the Difference between Company and Company Code?

Company is the smallest organizational unit for which individual financial statement can be drawn according to the relevant commercial law.

Company code is the smallest organizational unit for which complete, self-contained set of accounts can be drawn up for external reporting purposes

Shyam

Company - A company is a legal entity or a organisation which is to carry out a business and under a company you have lot of sub companies.

For Example
Tata is a company
TCS,Tata Power,Tata Steel, is a company code under a company TATA
Under Company code you have business area associated with it where the business areas may be scattered in different parts of the world where you can have reporting done for different business area or you can also call it as Profit Centre.

Sakote Sanjay

A company is the Group of company and company code is the all the companies for which u want seperate books of accounts. Company codes are assigned to company for consolidation purpose.

example :- reliance is the company

and RIL,Reliance infocomm,Reliance Petrochem etc are the company codes.

All these co.codes are assigned to reliance company for consolidation purpose.

Gagan

Along with that technical difference is COMPANY cosists of 6 digit alphanumeric key where as COMPANY CODE cosists of 4 digit alphanumeric key.

Mahesh

Company means group company for example : Tata Group

Company code means one of the company of its group ex:
Tata Chemicals, TCS, Tata Steels etc.

Why and When to use Business Area in sap fico

Can any body tell me why we want to use business area and where it is going to be used, as I know it helps in consolidation and still more?

CG.Gopinath

Business Areas in SAP are used to differentiate transactions originating from different points/lines/locations in business. Let me give some examples to elucidiate:-

A company (say, ABC) is a huge company and has a variety of businesses under it. Let us say that it typically operates in 3 different domains like machinery manufacturing, trading and assembling of machine parts.

There are 2 options here now -
1. Either create different company codes for the 3 business operations (which would be the easiest and require no creativity)

or

2.) Create each of these business lines into business areas (the better option).
The advantages of using the second option is:
1. You can use these business areas if other company codes require the same areas
2. The configuration is simpler as in case of company code, you would require to go through the entire configuration of creating Chart of Accounts, Fiscal Year variants, posting periods variants and so on. In the business area option, you just need to attach it to the company code and the rest of the details in Business area is attached by default from the company code you are using it in.

3. Using the options in controlling (EC-PCA, Enterprise Controlling, Profit Centre Accounting), you can even draw up Balance Sheets and PL statements for your business areas and hence this is used for management accounting in some companies (like HP, Dell, etc) when it wants to know the operating profits for different business areas/lines.

The above was an example when the company wanted to separate entries according to the lines it operates in... the other case could be when it wants to find out profitability during its operations in cities and differentiates these cities into Business
Areas...

Business Areas are not much relevant in FI but are much more relevant in CO.

Hope this clears.

Jacob Joseph

You have given a very good example for Business Area. I have questions.

If I want the B/s and P&L Account for Business Area wise, I can take it. But, How about those transactions which are not assigned any business area during the document entry.

Kotni

Let me first be sure of what you are asking. Is it:

1) You want the B/S and P/L statements of transactions carried out in areas other than the business areas defined by you? or

2) You only want to view the transactions that were not carried out in any business area?

Whatever were your doubts, let me clarify.

If your doubt was the first one, then, in that case, the financial statements will not be available. There are reasons for the same. All transactions in FI pass through G/L accounts. The data in FI is then passed to CO through primary cost elements.
According to the settings that you have configured for your controlling area and operating concern, the costs are distributed to the various cost centers (Cost Center Accounting & CO-PA). The costs are then apportioned to the various cost centers (which may or may not be a part of your business areas or may be independent cost centers). Now, with this data, financial statements of the business area are drawn up. For transactions not part of business area, they are transferred to independent cost centers (e.g. like Head Office Salaries, HR, etc) and hence, cannot be drawn up as a financial statement but just as line item displays in your reconciliation ledger (if you have activated it in the CO-OM-CEL {Cost Element Accounting})

[The answer to your second doubt, I hope].

Financial statements of Business areas are unbalanced because not always does the debit and credit entries of a transaction lie in the same business area/cost center; but for cost accounting purposes, they are reasonably sufficient.

I hope this clears.

Jacob Joseph

Thank you for the reply. I understand I need to give more clearly about my doubt.

I want to configure FI and other modules and there is no CO or operating concern. But I want Balance sheet and Profit and Loss Account for each of the business area.

As you aware, the business area can be defined above or below company code level.

Is it possible to get what I want.

Kotni Ravi Kumar

In order to generate BS and P&L at business area level you should carry out the following:

1. You should have activated " Enable BA balance sheet" under enter global parametets in FA global settings.

2. You should do configuration under the transaction code "OBXM"

3. You also have run the transaction codes f.50 for P&L and 5.d & 5.e for Balance sheet readjustment.

System automatically posts the taxes and reconciliation accounts of NIL BA transactions to BA and tally the trial balance of all B. areas

Yerra Rao

Your explanations were excellent and precise, but I have a quick question why would one use business area against a profit center as business area data is never precise and getting a balance sheet report via business area is not recommended. Profit center would be better just a doubt please clarify

Sabarinathan Swaminathan

Why would I use business area against a profit center?" is a very pertinent one and conceptually necessary. Let me explain to you what a profit center exactly means, both in SAP terminology and in management accounting.

In management accounting, a profit center is an area or department from where the management wants to find out the return on investment or ROI, as the accountants know it. The concept in SAP is similar as it is used by management to find out the ROI. On the other hand, business areas are just segregation of business transaction origins. So, a certain business area can have more than one profit center within it. Both have their unique uses and both have their unique features.

Using the above understanding, you can easily work out where you would use business centers and where you would use profit centers.

Hope this clears,

Jacob Joseph

Thanks for the explanation its good thanks

Sabarinathan Swaminathan

Creating and Maintain SAP Business Area

You can set up several business areas for each client so that the system can assign the postings made in all company codes defined in this client.

To ensure consistency in document entry, you should give business areas the same name in all company codes.

Goto transaction SM30 and specify the view V_TGSB

To maintain to business area click the Maintain button.