Company is the smallest organizational unit. The individual financial statements are created according to the relevant legal requirements for the company. A company can include either one or more company codes. The company (organizational unit) definition is optional.
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Company Code is a smallest organizational unit used to represent the company for external accounting. A company can include either one or more company codes. The company business transactions for Financial Accounting are entered, saved and evaluated at company code level.
The process of assigning company code to company creates a link between the company code and company. The only requirement for the assignment is the company and company code must be predefined.
Business area is an organizational unit of external accounting. It corresponds to a specific business segment or area of responsibility in a company. Movements value entered in Financial Accounting are assigned to business areas.
Consolidation business areas are organizational units. Consolidation business areas are formed for a fixed area of activity or responsibility within a company. In other words, consolidated business area is the business segments within a company.
If the consolidated business area is defined in the company, then its mandatory to assign business areas to consolidation business areas.
Functional areas are used to analyse Cost of Sales Accounting. It’s used to report results under the cost-of-sales accounting approach. Functional areas defined for manufacturing, sales, distribution, administration, R&D, etc.
The financial management area is an organizational unit within accounting. The financial management area structures the business organization from the perspective of Cash Budget Management and Funds Management.
After configuration of Financial Management Area, it needs to be assigned to company code. The link between the Financial Management Area and Company code is established through Assignment.
A credit control area is an organizational unit used for specifying and controlling customer credit limits. A credit control area can include either one or more company codes.