Multi-Company Organizational Structure

[leonidas_theodorides]

Hi Experts,

I am looking for advice regarding the setup of the organizational structure. I have a multi-company structure with subsidiaries, that is, companies that fall below companies. For instance,

Company 1000

Below: Company 1100

Company 1200

My question is, whether the subsidiaries should fall under the Company Unit (i.e. 1000) or below the Business Residence Unit of Company 1000. Does it make a difference? How will this affect the Group's operations and/or results in Bydesign. SAP suggests that there should be a Business Residence below each company, so i think it makes sense to ask this question. Furthermore, I can't find any similar examples with Subsidiaries. I would appreciate any links with similar examples or discussions, if any.

Additionally, we have two (group) structures that are not connected to each other. The Customer says that they are not planning to consolidate accounts/results between the two groups. Could this setup generate any difficulties in processing or operations (currently or in the future), that is, having two different group structures in Org Management?

Thank you in advance.

Regards

Leonidas Theodorides

[HarshalVakil]

Hello Leonidas,

As SAP Suggest, there should be Business Residence below company or at company level itself.

this means you can create company 1000 which also acts as your Business Residence and below which you may have company 1100 and related units of company 1100 (One or more can be Business Residence).

Question here is does company 1000 has its own operations or company 1000 acts as group company for 1100 and 1200 and so on?

when you have two group structures which are not consolidating results, I don't see any challenge here in terms of operations.

I hope this helps.

Regards,

Harshal

[leonidas_theodorides]

Hi Harshal,

Thanks for replying.

Assigning company 1000 as both Company and Business Residence sounds like a good option, however, SAP's note, that we should model the business residence below the company, is keeping me at bay at the moment. To answer your question, which is another consideration, Company 1000 has its own operations and departments and acts as group company for a number of companies (some of these companies have their own subsidiaries as well) and so, I am being sceptical about how this structure should be created. My initial design has a business residence below each company and I am currently dwelling on whether I should create the subsidiaries below the business residence. If there is Business Residence then it seems that subsidiaries should fall under the Business Residence. There are no logistics to this implementation.

I appreciate the reply. Thanks again.

Leonidas

[Olivier_R]

Hi Leonidas,

ByD is not managing statutory consolidation so the way you link your legal companies has no impact on figures. It has on reporting line but you should have another structure on the side for that.

But for your particular question, we did link our subsidiaries directly to the mother and not the mother's business residence. The business residence is representing the physical location of a legal entity. In fact you may have several ones (several offices) for the same legal entity. And it may change (that's why SAP recommends to always separate the legal entity and the business residence). So it is logical to link a legal subsidiary to the mother legal entity.

Hope it helps.

Best regards,

Olivier

[Olivier_R]

You can also have a look at Open SAP. It's free and you have specific courses on SAP ByD. I remember one of them explains how to use the org structure. It should be the Finance one.

Regards,

Olivier

[leonidas_theodorides]

Hi Olivier

Thanks for your reply.

Its helpful to hear that others have used it this way. I will review the structure and perhaps define subsidiaries under the mother company and departments below the business residence of each company. I think that should be fine.

With regards to Open SAP, I've been through all videos in the past and it does talk about the structure but i have the impression that it doesnt discuss the different cases that may arise.

Thanks again.

Leonidas