1. 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.

2. 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.

3. 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.

4. 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

5. 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.

6. 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.

7. Dunning Area Client 001 Company code Company code 0001 0002
Dunning area Dunning area Dunning area
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.

8. 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
Customer Customer Customer Customer Customer
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.

9. 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.

10. Organizational Elements in CO

11. 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.

12. 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

13. 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.

14. 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.