Creating Company Codes in SAP
In SAP S/4HANA, the process of setting up company codes for sales activities involves collaboration between the finance and sales departments. Initially, the finance team identifies relevant legal entities within the company, assigning each a company code used for key financial tasks, often tied to regulatory and country-specific requirements. These company codes in SAP are crucial for subsidiaries managing customer relationships or shipping goods and services, known as “sales-relevant company codes.”
These sales-relevant codes may not always be profitable, but they are essential for managing revenue-generating activities like customer service operations.
- These entities handle customer interactions, including orders, returns, and billing. Additionally, entities transferring inventory to other subsidiaries are also considered sales-relevant.
In larger corporations, the global blueprint phase of SAP implementation must be thorough, as it often involves multiple sales-relevant company codes integral to core business processes. Both finance and sales teams need to collaborate closely during the project preparation phase to ensure a comprehensive and consistent design.
- Company codes are assigned as four-digit alphanumeric characters, with SAP allowing any combination.
- It’s recommended to start these codes with Z or Y to avoid conflicts with future SAP updates, though this is less critical than with transactional codes.
- Global corporations often use the first one or two characters to represent the country, followed by a code for the legal entity.
Creating Company Code in S/4 Hana
In SAP, you have two option to define a company code either through a navigation method or by utilizing a specific transaction code.
- For the navigation method, follow these steps: Start by accessing SPRO, then proceed to IMG. From there, navigate to Enterprise Structure, and choose Definition. Next, select Financial Accounting, and finally, click on Edit Copy, Delete, Check company code.
- Alternatively, you can use the transaction code OX02 for a more direct approach.
- The relevant database table for this process is T880.
It is recommended always copy from the standard in SAP and then rename ss per your requirements. Here we are copying company code form Standard 1010 to ZSAH.
- Enter company :ZSAHT
- Enter Company Name
- Enter detailed information like Postal code, city, Country/Region, Language Key and Currency.
The above information plays an important Role in SAP.
When you set up a company code in SAP, entering specifics like the Postal Code, City, Country/Region, Language, and Currency is key to making sure the system runs smoothly and meets business needs. Here’s why they matter in everyday business:
- Postal Code and City : These help with getting goods to the right place, figuring out taxes, planning deliveries, and sorting out reports by location.
- Country/Region : This data helps follow the trading laws of each place, affecting how you handle taxes, comply with rules, and create correct reports.
- Language Key : This lets SAP show information in the language the user understands best, which is important for clear communication in international companies.
- Currency : This is all about money tracking it, reporting it, and converting it for businesses that work in more than one country.
Adding these details to a company code in SAP makes sure that a company’s system is set up right for its specific needs and legal requirements.
- Click on Save Button to Save the Company in SAP System.
Creating Company code in SAP
Creating a company code in the Enterprise Structure of SAP Sales and Distribution (SD) is fundamental for representing an independent accounting unit within your organization.
This Company code serves as the central organizational element for financial reporting and is necessary for processing and recording transactions. To establish a company code
- Transaction code ‘OX02‘ or follow the
- IMG path: SPRO → IMG → Enterprise Structure → Definition → Financial Accounting → Edit, Copy, Delete, Check Company Code.
Here, you define essential details like the company’s name, address, currency, and country, which are crucial for legal reporting and financial statements.
- Select Copy, Delete, Check Company code as shown.
Now we are copying from the standard to ZSAH our company code.
Accept all the permissions to copy G/L accounts, Control Area and Credit control Area.
Change the Currency to INR as shown below.
- Save the Customizing Request
- Successfully we have copied company code from 1010 to ZSAH
After creating Company code in SAP, we have to edit the Company code (ZSAH) additional details. Enter all the required details like City, Country /Region, Currency and Language.
Save the settings.
To view Enterprise Structure in SAP, go to EC01 transaction code => Structure => Navigation and select your Company code to View.
As shown below, Controlling Area and Credit Control Area has been created successfully.
Edit the Company code Data like Address details
Save all the settings.
