Company Code in SAP FICO

In SAP FICO, the company code is the smallest organizational unit for which a complete set of financial statements, including profit and loss and balance sheet, can be created. It represents a legal entity within an organization and is critical for financial accounting processes. This article provides a step-by-step guide to creating and configuring a company code in SAP FICO with examples.

Steps to Create a Company Code

Step 1: Access the Company Code Creation Screen

To create a company code, follow these steps:

  • Navigate to the SAP Easy Access menu.
  • Enter the transaction code SPRO to open the SAP Reference IMG.
  • In the IMG screen, go to Enterprise Structure > Definition > Financial Accounting > Edit, Copy, Delete, Check Company Code.
  • Select the "Copy, Delete, Check Company Code" option to create a new company code by copying an existing one or from scratch.

Step 2: Define a New Company Code

To create a company code from scratch:

  • Select the "New Entries" button.
  • Enter a unique Company Code, for example, 1001.
  • Enter a Company Code Name, such as ABC Manufacturing.
  • Provide details like City, Country, Currency, and Language.

Save your entries to create the new company code.

Step 3: Assign the Company Code to a Company

Once the company code is created, assign it to a company:

  • Navigate to Enterprise Structure > Assignment > Financial Accounting > Assign Company Code to Company.
  • Select the newly created company code and assign it to an existing company.
  • Save your changes.

Step 4: Configure the Company Code Settings

After assigning the company code, configure its settings:

  • Define the fiscal year variant for the company code.
  • Set the chart of accounts to use for the company code.
  • Specify posting period variants to control the financial posting periods.
  • Define tax codes and rules applicable to the company code.

Step 5: Verify the Configuration

Verify the configuration by checking the company code details:

  • Use transaction code OBY6 to review and edit company code settings.
  • Ensure that all fields, such as currency and fiscal year variant, are correctly configured.

Examples of Company Code Creation

Example 1: Manufacturing Company

Details:

  • Company Code: 2001
  • Company Code Name: XYZ Manufacturing
  • City: Berlin
  • Country: DE
  • Currency: EUR
  • Language: DE

This configuration represents a manufacturing entity based in Germany, using the Euro as its currency.

Example 2: Retail Business

Details:

  • Company Code: 3001
  • Company Code Name: Urban Retail Co.
  • City: New York
  • Country: US
  • Currency: USD
  • Language: EN

This setup is for a retail company in the United States using the US Dollar as its default currency.

Importance of Company Code

The company code is a fundamental element in SAP FICO for the following reasons:

  • Financial Statements: It enables the preparation of legally compliant financial reports.
  • Data Segregation: Ensures that financial data is segregated for each legal entity.
  • Global Operations: Supports multiple currencies and country-specific accounting standards.
  • Integration: Works seamlessly with other SAP modules, such as Materials Management and Sales and Distribution.

Conclusion

The company code is a crucial organizational unit in SAP FICO. Setting it up accurately ensures effective financial management, reporting, and compliance with regulatory requirements. By following the steps and examples outlined above, you can create and configure company codes tailored to your organization's needs.




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