BA or Co Code?

[#1]

Dear All,

I seek some opinion from you , say my client want to create a new sales/purch org, new payroll area etc, is it more appropriate to create business area within the existing company code setup or create a new company code altogether ? Basically I am trying to evaluate the advantages of BA vis a vis Co Code.

best regds

Subha

[Marssel700]

Subha,

I don't think it is necessary create a new CoCd. This purpose only is applyed if you need generate a separate trial balance.

To attend Sales / Purchase organization you need only a new Business Place.

The payroll is an accounting/financials requisition then you must check if your P&L accounts must be created in antoher trial balance. If is the same of current company code you have to create Business Area instead CoCd.

In order to link Business Area (Sales/Purchase) to Business Place (Accounting) you can create a Substituition Rule or do that manualy during postings entry.

Let me know if you need more information.

Regards

[subhadeep_das]

Hello Marssel Vilaca,

just one doubt, business place function is only used in a select few countries if i am not wrong. what would be most suitable in european scenario ?

best regds

Subha

[Marssel700]

Subha,

I don't figure any problem for european scenario since it is a best practice implementation.

You only have problems if you can't define multiple Plants, because business place and Plant is 1:1 assignment. This means that each Branch needs 1 x BP and 1 x Plant and 1 x BA.

regards

[subhadeep_das]

Hi,

i need some more clarity on the below point you made.

"The payroll is an accounting/financials requisition then you must check if your P&L accounts must be created in antoher trial balance. If is the same of current company code you have to create Business Area instead CoCd."

best regds

Subha

[Former Member]

Business Areas in SAP are used to differentiate transactions originating from different points/lines/locations in business. Let me give some examples to elucidiate:- 

A company (say, ABC) is a huge company and has a variety of businesses under it. Let us say that it typically operates in 3 different domains like machinery manufacturing, trading and assembling of machine parts.  

There are 2 options here now -
1. Either create different company codes for the 3 business operations (which would be the easiest and require no creativity) 

or  

2.) Create each of these business lines into business areas (the better option). 
The advantages of using the second option is:
1. You can use these business areas if other company codes require the same areas
2. The configuration is simpler as in case of company code, you would require to go through the entire configuration of creating Chart of Accounts, Fiscal Year variants, posting periods variants and so on. In the business area option, you just need to attach it to the company code and the rest of the details in Business area is attached by default from the company code you are using it in.  

3. Using the options in controlling (EC-PCA, Enterprise Controlling, Profit Centre Accounting), you can even draw up Balance Sheets and PL statements for your business areas and hence this is used for management accounting in some companies (like HP, Dell, etc) when it wants to know the operating profits for different business areas/lines. 

The above was an example when the company wanted to separate entries according to the lines it operates in... the other case could be when it wants to find out profitability during its operations in cities and differentiates these cities into Business
Areas... 

Business Areas are not much relevant in FI but are much more relevant in CO.

Many Thanks

[subhadeep_das]

Thank You.