Company Code in SAP is the smallest Organizational unit of external accounting for which you can create a completely self-contained set of accounts for transaction posting, besides the statutory financial statements.
You can also use a company code to represent a legally dependent operating unit abroad (commercial place of work) if there are external reporting requirements including segment reporting for that unit in the local currency of that country.
All the SAP Finance (FI) related business transactions and evaluations are represented at the company code level. Because company codes are the central organizational units of an external accounting system. You must define at least one company code (per client) to implement the FI component in SAP ERP Financials for your organization. If you want to manage the accounting for several independent companies simultaneously, you can set up several company codes for the same client.
Use a four-character alphanumeric key to denote your company code.
Table T001 stores all company Code Data in the SAP system.
Tcode for company code creation is – OX02.
It is the first step of organization structure in the SAP framework. And thus, it is an inseparable part of SAP Financial Accounting. The whole organization’s structure is connected with Company Code in SAP. So it is mandatory for SAP FICO consultants to learn how to create a company code in SAP FI.
Also Read: List of Imp. Tcodes in SAP FI
For a better learning experience, we will learn it with the help of a scenario.
When you implement other components of SAP along with FI, you need to create assignments between the company codes and other organizational units to ensure data transfer between them. For example, you need to assign one or more company codes to a company, credit control area, controlling area and so on.
You can assign a business area to one or more company codes. Likewise, you can assign one or more to a company code through a purchasing organization and so on.
As per the above diagram, the Company AB 1000 is made up of two independent legal units, each with its own company code. BS Sanitary Items (AB 11), BS Lighting System & (AB12). While company Codes AB11 is in the United States, the company code involved in the lighting system (AB12) is in Singapore.
The second company, AB 2000 consists of two company codes. Company code AB21 is in the United States and manufactures elevators and escalators. Company Code AB22 incorporated in the UK is manufacturing and selling Diesel-engines.
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When completed => save the details.
The system prompts you with a pop-up screen to maintain the address details.
We have now successfully created the Company Code AB11 in the system without copying from an existing Company Code. At any time, you can click on the address button to edit the address information.
So this is the concept and creation process of the Company Code. I hope the topic is clear to you now.
Must Read: A Comprehensive Guide to SAP S/4HANA Finance Certification
As mentioned above it is the first step of creating a company structure in the SAP application. Moreover, we assign all configurations and all business processes to a company code. Furthermore, all Financial Statutory Reports are generated at the company code level itself.
Interestingly, the company codes are created by SAP Finance consultants but used by both, End-users and consultants.
Likewise, We use the Company codes in the Development as well as Post Development also.
Finally, many interviewers include company code in sap in their SAP FI Interview Questions list. So do read, learn and understand it conceptually and practically both.
Get Details:- SAP S/4HANA Simple Finance Training by Pradeep Hota
Watch Video: Company Code in Organization Structure of SAP
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