SAP Financial Accounting is an integral module of the SAP ERP system, which enables organizations to efficiently manage financial transactions, reporting, and analysis.
The organization structure is the basis for SAP FI implementation. In this blog series, we are going to discuss the SAP FI organizational structure. This part focuses on the enterprise structure.
Enterprise Structure Overview
Enterprise structure in SAP FI is the organizational structure of an organization. It basically consists of the relations that may exist between companies, segments, functional areas, and their departments. The enterprise structure is the highest level of the organizational hierarchy; it serves as a foundation for financial reporting and accounting.
Key Components of Enterprise Structure
Company: A company is an organizational unit in SAP created as per commercial law in a country.
Company Code: A company code is an alphanumeric identifier assigned to an entity company. It is used as the reporting framework in financial reporting and for accounting purposes.
Business Area: This is the consolidation of business segments or divisions of a company.
Credit Control Area: Credit Control Area manages the credit limit to customers and monitors credit exposure to assign credit limits. This helps an organization to control the risks associated with credit.
Financial Management (FM) Area: The financial management area is a financial management structure applied by organizations in the budgeting process, forecasting, and financial planning. FM area gives or assigns financial responsibilities, which help organizations keep track of and manage financial performance.
Segment: A segment is the business unit or an operating segment. Management uses this for reporting and analysis to have an insight into the financial performance across the various segments.
Configuring Enterprise Structure
Best Practices
Make sure that the enterprise structure is consistent across all SAP modules.
Use meaningful alphanumerical company code and controlling area.
Review and update enterprise structure to reflect organizational changes regularly.
Conclusion
The enterprise structure is the basic structure of SAP FI organization structure. Proper configuration ensures that the financial reporting, accounting, and analysis are done correctly. In Part 2 of this series, we will look at the next level of organization structure of SAP FI.
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