FI Organizational Model Financial Management Area System Groupl Company System Credit Control Area System Company Code System Business Area System Accounting Clerk System Dunning Area System The most important assignments in FI are the Company Code and the Business Area. These not only determine the statutory accounting reporting, but also have a profound effect upon the rest of the organizational structure.

FI Organizational Definitions 1 Client - is the highest data hierarchy level in the SAP system. What ever you specify for a client applies to all company codes Company Code - basic legal accounting unit of the R/3 system. Used to create balance sheet and P&L information. Is linked to a chart of accounts Group Company - consolidation level company, built up from the results of several underlying Company Codes. Business Area - cross Company Code posting element, can be used to construct sub company code level balance sheets. These balance sheets can run across Company Code boundaries. Typically used for pan-national divisional reporting.

FI Organizational Definitions 2 Financial Management Area - Specific to Cash Flow and Forecasting. Credit Control Area - used to have a cross organizational credit control area for A/R and Sales Orders. Accounting Clerk - FI specific user ID extension.

Chart of Accounts Client 001 Chart of acct AAAA Chart of acct BBBB Company code 0001 Company code 0002 Company code 0003 Business Area 001 Area 002 Area 003 Business Area 001 Area 002 Business Area 001 You define G/L accounts on a chart of accounts level and not on a client level You assign every company code to a chart of accounts Several (all) company codes can have the same chart of accounts

Client - Chart of Accounts - Company Code 001 Chart of acct AAAA Chart of acct BBBB Company code 0001 Company code 0002 Company code 0003 Business Area 001 Area 002 Area 003 Business Area 001 Area 002 Business Area 001 Several (all) company codes can have the same chart of accounts. Every company code represents an independent accounting unit. As required by law, a balance sheet and P+L statement is produced for each company code. You can divide a company code into different business areas (e.g. divisions). For internal controlling purposes, you can constitute a balance sheet and P&L statement for each business area. The business area can run across many company codes. Unless explicitly configured otherwise, all company codes can post in all business areas.

Organization in Accounting Client Company code 1 Company code 2 Company code 3 Business area 1 area 2 area 3 area 4 Business area 1 Business area 2 All organizational units in a client are subject to a common control procedure. For this reason, a client is often synonymous with a group. For example, the chart of accounts is defined at client level. From an accounting point of view, a group can be represented by the terms company code and business area. Each company code represents an independent accounting unit. Several company codes can use the same standard chart of accounts. A business area is a separate business unit for which an internal balance sheet and profit and loss statement can be created. Business areas can be defined for more than one company code. You define for each company code whether business area processing is required. Creating the Business Area Balance Sheets is a system intensive process.

Dunning Area Client 001 Company code Company code 0001 0002 Dunning area Dunning area Dunning area 1 2 3 In the SAP System, you can subdivide company codes into dunning areas (for example, sales organization). The system prints a separate dunning notice for each dunning area.

Credit Control Area Control area Control area Control area Control area Region 1 Region 2 Region 1 Region 2 Company Company Company Company Company Company code code code code code code 0001 0002 0003 0001 0002 0003 Customer Customer Customer Customer Customer 4711 4711 4711 4712 4712 A credit control area is an organizational unit that you can use to specify and control credit limits for customers. A credit control area can include one or more company codes. You cannot divide a company code into several credit control areas. If you create a customer account in several company codes, this account can be assigned to several control areas.

Organizational Structures in Treasury Financial mgt area USD Cash Budget Management Company code 1 Company code 2 DEM GBP Bal. sheet P + L Bal. sheet P + L You can group together several company codes under one financial management area, so that you can carry out inter-company cash budget management. This cash budget management is a treasury module function.

Organizational Elements in CO

CO Organizational Model Operating Concern System Cost Centre Group System Controlling Area System Cost Centre System Company Code System Profit Centre System Business Area System The important organizational elements for the cost controlling are:- Controlling area: the highest level of management accounting for costs and profits. Cost Center: basic unit of cost collection over time. Profit Center: basic unit of revenue collection. Can be used for used for subsequent profit calculation by the assignment of related cost centres. Company codes belong to the controlling area Business areas can be related to cost centers if required. Operating Concern - high level statistical accounting unit only used in CO-PA (Profitability Analysis). Controlling Area - highest level unit of the management accounting. Can have multiple cost centers and profit centers assigned to it. May have multiple company codes assigned to it.

SAP Enterprise Data Model Controlling Area: Organization 2001 Chart of accounts 2002 Chart of accounts item 1001 Client 4017 Controlling area time 9031 Currency 4160 More than one CO area or company code 3006 Chart of depreciation 4162 Controlling area/ company code assignment 2037 COMPANY CODE

Organization Structures in FI and CO Client Chart of Accounts Chart of Accounts Controlling Area Controlling Area Company Code Company Code Company Code Business Area Business Area Business Area Business Area These organisational units cannot be treated in isolation, but have to be combined as appropriate when the system is installed. You can combine the organisational units in the form of a hierarchy or a network.

FI and CO Organizational Entities Client Chart of Accounts Statutory Accounts Management Accounts (Example: CO-CCA) Controlling Area Cost Centre Hierarchy Company Business Area Cost Centre Cost Centre Cost Centre Cost Centre The Client is the highest level of organisation within the SAP System. The Chart of Accounts is held above the company code level. There can be multiple charts of accounts in one client. The Company Code is the legal accounting entity in the SAP system. There can be multiple company codes to one chart of accounts. There can be Business Areas which are financial accounting areas that run across companies. They can be used for creating balance sheets than run across the organisation at less than the company level. Example: Companies France, UK and Germany have three divisions Paint, Chemicals and Explosives. It is possible to have balance sheets at each of the company levels. By running a specific program, it is possible to get balance sheets by Division, even though these run across company codes. It is possible to run any combination of these three companies and business areas to create a balance sheet and PNL. This is a very system intensive process, as contra entries are created to balance the business areas. The Controlling Area is the highest management accounting level. It can run across multiple company codes if required. There can be many controlling areas to a chart of accounts. All CO information is related to this highest level. The example shown is a cost centre hierarchy.