Enterprise structure in SAP is an organizational diagram that shows how the whole group is mapped in SAP. It consists of some organizational units of different modules created for a specific business-related reasons and are grouped together. Organizational units include legal company entities, sales offices, profit centers, etc. It handle specific business functions.
Determining enterprise structure design in SAP is a fundamental process of any implementation project. The design is mainly determined by the business scenarios performed in an industry. Once the enterprise structure in SAP is determined by the process owner, it will affect many things such as how to perform a transaction and generate reports within SAP.
It requires great effort to change the enterprise structure in SAP. So, we must ensure that the enterprise structure in SAP is designed in the implementation project can accommodate all business scenarios and enterprise’s requirements for current and future situation. In simple terms, enterprise structure in sap is represents the organizational hierarchy of a business.
Enterprise structure In SAP FICO Modules
Operating concern is the main organizational unit of profitability analysis module or known as COPA. COPA acts as a management tool to analyze specific markets and business segments. The operating concern configuration is client independent. Once it is created in one client will automatically have an impact on all clients. COPA holds the highest rank in SAP’s enterprise structure.
Controlling area in SAP’s enterprise structure is the central organizational unit within CO Module and assigned to operating concern. It’s an environment where internal reporting to the management is done by managing cost and revenue.
This Organizational unit in SAP’s enterprise structure represents a closed system used for cost accounting purposes. A Controlling area may contain one or more company codes, which can operate in different currencies, if required. The company codes within a controlling area must use the same operational chart of accounts and fiscal year variant.
Under one operating concern you can assign more than one controlling area based on your business requirements while defining enterprise structure.
Company is the highest organizational structure in FI Module. A company is an organizational unit which can be used to roll up financial statements of several company codes. Company can consist of one or more company codes.
All company codes within a company must use the same transaction chart of accounts and the same fiscal year breakdown. Company code currencies, on the other hand, can be different. A company code has one local currency in which its transaction figures are recorded.
Company is used in the legal consolidation for all the company codes assigned to it. In enterprise structure, companies are assigned to company code and company codes are assigned to controlling area so that all can be linked together.
Company Code is the smallest organizational unit in Financial Accounting module for which a complete self-contained set of accounts can be drawn up for the purposes of external reporting.Its the most important part of enterprise structure as assigned to most of the other modules for integration.
The process of external reporting involves recording all relevant transactions and generating all supporting documents required for financial statements (balance sheets, profit and loss statements and so on.
Chart of Accounts Chart of accounts is a variant created at the client level in FI which contains the structure and the basic information about general ledger accounts. After its creation we assign chart of accounts to company codes in SAP enterprise structure.
By looking at the enterprise structure in SAP, you can find out the number of chart of accounts that are created to which company codes those are assigned. Information to be given in Chart of Accounts: Maintenance Language, Length of GL Account Number, Manual or automatic creation of cost elements, Group chart of accounts etc. Three type of chart of accounts are maintained:
Cost center is an organizational unit in a controlling area representing a clearly delimited location where costs occur. One type of hierarchy needs to be created for Cost Center Accounting where cost centers should be assigned and also to be grouped for reporting purposes.
Cost centers are company code specific and assigned to company codes in an enterprise structure.
Profit centers are generally defined by the organization on the basis of responsibility. It will let you determine profits and losses by profit center using their period accounting or the cost-of-sales approach. Profit Center is a management oriented organizational unit used Balance Sheet and Profit and loss accounts can be obtained by using this profit center accounting.
Chart of Depreciation
A Charts of Depreciation is the highest level organization structure in SAP Asset Accounting which holds the entire asset accounting relevant settings such as Depreciation Areas and the depreciation methods that are specific to a country. Since different companies in the same country are subject to the same legal regulation of fix assets depreciation, Chart of Depreciation is usually country specific and more than one Company Codes could be assigned to a single Chart of Depreciation.
Each chart of depreciation also includes the tax book. Chart of Depreciation is a 3-character code that supports alpha-numeric format. As it is generally country specific, normally the coding of the Chart of Depreciation will include the country codes.
A Depreciation Area represents an independent depreciation book in which different values can be calculated in parallel for each fixed asset for different purposes. The depreciation terms and values of expected life necessary for calculating a fixed asset book value and depreciation are all managed in depreciation area level.\
One single Chart of Depreciation could have more than one Depreciation Area Example of Depreciation Area: Area 01 – Book Depreciation Area 15 – Tax Depreciation
Some of the organization units defined in other modules
- Plant: Defined in PP module Purchasing
- Organization: Defined in MM Module
- Purchasing Group: Defined in MM Module
- Storage location: Defined in MM Module
- Work center: Defined in PP Module
- Sales Organization: Defined in SD Module
- Distribution Channel: Defined in SD Module Division: Defined in SD Module