Differences between Co.Code and Company , Business Area and PCA
Anyone can help me regarding the above issues(Differences between Co.Code and Company , Business Area and PCA)
Thanks & Regards
This terminology is all related to Organization Structure in SAP - FICO Module.
Company Code is a legal entity for which a separate set of books of accounts are required. A Balance Sheet and a Profit and Loss Account is prepared at this level. Setting up of Company Code(s) is a mandatory activcity in SAP.
Company: Company is an Organizational Unit in Accounting. Company Codes are assigned to Company. This is helpful in consolidation in SAP. However creation of a Company is not a mandatory activity.
A Company code / Company are for external reporting like statutory authorities. However for internal analysis / Management a different approach is required. For this purpose many organizations divide their activities into Business Area / Profit Centers.
We can use either Business Areas / Profit Centers. However, now the trend is to move to PCA from Business as suggested by SAP. For example a business in Electronics industry can divide the activities into different products. This way they can analyze the profitability of different business lines.