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Is it a best practice to assign plant to business area in sap

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Is it a best practice to assign plant to business area in sap


business area is at client level, u can use business areas to "n" company codes and "n" controlling areas also.

plant is at company code level and acts as a valuation area.

business area is mainly used for management reporting purpose, u can post transactions of different company codes into same business area

Plant & Business area are 2 different kind of entities managed by FI & MM

Business area is different lines of operations of a Company. We can create business areas product wise, geographical divisions etc for which we would like to have internal reporting in Finance.

Plants are created in the Logistics (General) module & are assigned to the company code. The R/3 System uses a combination of plant and division to assign the relevant business area.

Arvind Leo Pereira

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Best practice is to use components and customizing that serves your business needs, and this may vary between bigger and smaller companies, or even between 2 big companies with a different structure. We had no such need and hence do not use Business areas.

For what it is needed is explained in the docu: