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business area clearing

Former Member
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hi gurus,

please clarify why are we doing business area clearing and which situation/

how are we doing that all?



Accepted Solutions (1)

Accepted Solutions (1)

Product and Topic Expert
Product and Topic Expert
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To answer your queries:

1. Business Area is an organization element, which at most of the times represents a line of Business and was/is used for segment wise reporting. For Eg, for a Bank, some of the Business Areas could be - Retail, Wholseale and Agri Banking. In some cases, Business Areas also mirror a Product Category or Brand in SAP. It all depends on how the organizational structure is exuisting and how the same is created in SAP. The Business Area may be spread across Company Codes .

2. If you are on Classical GL, in many cases, Business Area is not populated at line item level, for eg in Tax Accounts at the time of SD Billing or during Incoming Invoice verification in MM. Also, you may pass a Journal Entry with Debit in One Business Area and Credit in another Business Area. In both the cases mentioned, your Business Area Wise Trial Balance is not tallied as the debit and credit figures may not match. So you have a built in functionality, where in system passes a contra entry to balance the accounting requirements. In new GL with Document Splitting, the Business Area is populated at each and every transaction and hence it is not required to have the month end activity of Business Area Clearing (F.5D and F.5E). Further, journal entery in two business area is also balanced out by something called as zero balance entry. So the trial balance is tallied.

3. In GL Accounts, which are on Open Item Managed like GR/IR, Tax Accounts, it may be required to clear and knock off the debit and credit with equal amounts against each other. The Business may choose to do it at Business Area level to maintain the santity.


Sanil Bhandari

Answers (1)

Answers (1)

Active Contributor
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Business area is a subdivision of Balance Sheet/ profit loss. If you create a open item in some BA you have to clear in the same BA.