Enterprise Structure in sap S/4HANA

In this guide, you will learn how to portray the specific organizational structure of your business in the
s/4HANA System.

To help you portray your company structure, different Accounting, Logistics and Human Resources
organization units are provided.

First analyze the structures and procedures in your company, and then match them to the SAP
structures. There are various organization elements defined as examples in the standard version.
Normally these would not cover all your needs. Extend the elements as required.

During the clarification stage, work with the structures delivered by SAP. In order to obtain a high degree
of indentification and acceptance from project members and user departments from the start, you may
have to change some of SAP's terminology.

You should limit the number of persons authorized to maintain organization elements. Define the
authorization profiles accordingly. As soon as your organization units are ready, access should be locked
so that no other changes can be made.

Note

The definition of organization units is a fundamental step in your project. It is a critical factor in how the
project will be structured.

You should not use more organization units than necessary. Only use new organization units if this is
required by the existing data structures.

Once you have decided on an organizational structure it is not easy to change it.

1. Definition

Edit, Copy, Delete, Check Company Code

In this process step, you create your company codes. The company code is an organizational unit used
in accounting. It is used to structure the business from a financial accounting perspective.

We recommend that you copy a company code from an existing company code. This has the advantage
that you also copy the existing company code-specific parameters. If required, you can then change
certain data in the relevant application. This is much less time-consuming than creating a new company
code. For more details about copying a company code, see "Recommendations".

If you do not wish to copy an existing company code, you can create a new company code and make all
the settings yourself. You define your company codes by specifying the following information:

• Company Code Key

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 You can select a four-character alpha-numeric key as the company code key. This key identifies
the company code. It must be entered when posting business transactions or creating company
code-specific master data, for example.

• Company code name

• Address data

The address data is necessary for correspondence and is printed on reports, such as the advance
return for tax on sales/purchases.

• Country-/region currency

Your accounts must be managed in the currency of the country/region. This currency is also
known as the local currency or the company code currency. Amounts that are posted in foreign
currency are translated into local currency.

• Country-/region key

You use the country-/region key to specify which country/region is to be regarded as domestic.
All other countries/regions are interpreted by the system as abroad. This is significant for
business and payment transactions because different forms are used for foreign payment
transactions. This setting also enables you to use different address formatting for foreign
correspondence.

• Language key

The system uses the language key to determine texts in the language of the country/region
automatically. This is necessary when issuing checks, for example.

You do not specify the functional characteristic of the company code until configuring the relevant
application.

You can set up several company codes in a client to manage the accounts of independent organizations
simultaneously. At least one company code must be set up in each client.

To take full advantage of SAP system integration, you must link company codes to the organizational
units of other applications. For example, if you specify a Funds Management account assignment (such
as a cost center or internal order) when creating a document in Financial Accounting, the system must
determine a controlling area so that it can transfer the data to Controlling. You must specify how the
corresponding controlling area is to be determined.

The system derives the controlling area from the company code if you assign it directly to a company
code. You can also assign several company codes to one controlling area.

Standard settings

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Company code 0001 has already been created in clients 000 and 001 for the country DE (Germany). All
country-specific information ("parameters") is preset in this company code, such as the payment
methods, tax calculation procedures, and chart of accounts typical for this country.

If you want to create a company code for the USA and its legal requirements, you must first of all run
the country/region installation program in client 001. The country/region of company code 0001 is then
set to "US" and all country-/region-specific parameters related to it are set to the USA. For more
information, see the Set Up Clients activity under "Basic Functions" in the Customizing menu.

Recommendation

Keep the preset company code number 0001 if you only require one company code. This keeps the
number of tables you need to set up to a minimum.

You can copy a company code by using a special Customizing function. Company code-specific
specifications are copied to your new company code. The target company code does not need to be
defined. This occurs automatically when the company codes are created.

SAP recommends the following procedure when creating company codes:

1. Create the company code by using the "Copy Company Code” function.
2. Enter your special company code data by using the "Edit Company Code Data” function.

You can also use the "Edit Company Code Data" function to create a company code. However, in this
instance, the "global data" of the company code is not copied. If you create a company code by using
the "Copy" function, most of the "global data" is also copied.

Further notes

Create a company code according to tax law, commercial law, and other financial accounting criteria.
As a rule, a company code in the SAP system represents a legally independent company. The company
code can also represent a legally dependent operating unit based abroad if there are external reporting
requirements for this operating unit, which can also be in the relevant currency of the country/region.

For segment reporting according to Anglo-American accounting practices, you need to represent the
areas in which the company has significant dealings. This reporting data can be generated entirely on
the basis of company codes.

For processing company codes, there are extended functions that you can access with the function call
"administer" or "Copy, delete, check company code". The entry in the company code table is processed
in these functions as well as all dependent Customizing and system tables in which the plant is a key.

For more information about the extended functions, see Copy/Delete/Check/Process Project IMG.

In addition to these functions, there is also the "Replace" function. Use this function if you want to
change a company code key. This is only possible if no postings have been made in the company code
to be replaced. You should therefore only use this function for newly-created company codes.

Activities

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 1. Create your company codes. Create your company codes based on the reference (company
code 0001) delivered with the SAP standard system. SAP recommends you use the function
"Copy Company Code" to create your company codes.
2. Go to the activity "Edit Company Code Data" and change the name, description, address, and
currency. Maintain the company code data that is not to be copied.
3. Use the project IMG view to postprocess data that is changed automatically. You can also
carry out postprocessing at a later stage since the system retains the generated project view.

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Certain data was not copied (see long text)

Message no. FC125

Diagnosis

When you copy a company code, not all the settings are copied, for example there is some data that
must be unique for each company code. The fields that are not copied from reference company code
1210 are listed below. After copying the company code data, you must enter the appropriate data in
these fields in the target company code manually. The exact procedure is specified for each field.

Procedure
The following global data is deleted:

• Financial management area

In Customizing for Financial Accounting, maintain the global parameters of the target company code
( Financial Accounting Global Settings -> Company Code -> Check and Add Global Parameters).

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Define Business Area

Use

In this section you create business areas. A business area is an organizational unit within accounting that
represents a separate area of operations or responsibilities in a business organization.

When defining a business area, you enter a four-character alphanumeric key and the name of the business
area.

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In a client, you can set up several business areas to which the system can assign the postings made in
all company codes defined in this client. To ensure consistency in document entry, you should give
business areas the same name in all company codes.

You make all other specifications for your business areas in the Financial Accounting Implementation
Guide.

Activities

If necessary, create business areas.

Further notes

For more information about business areas, see the SAP Library under Financial Accounting -> General
Ledger Accounting -> Business Area.

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Enter Global Parameters

Short text

Check the global parameters for your company codes.

Use

In this activity, you can make various global specifications for the company code. In addition, you can look
at the most important specifications of the company code at any time in the overview. This includes, among
other things, the chart of accounts and the fiscal year variant.

Prerequisites

You have created the organizational unit "Company code" in the "Enterprise Structure" section of
Customizing. For further information, see "Create company code".

Standard settings

For the standard company code 0001, the global parameters for Germany have already been set, such as,
for example, the payment methods, the tax calculation procedures and the chart of accounts most
frequently used in Germany.

If you require a company code for another country/region and its legal requirements, you must first run the
country/region installation program in client 001. The country/region of company code 0001 is then set to
the country/region that you require and all country-/region-specific parameters related to it are set to this
country/region. Read the chapter "Set Up Client" within your Customizing project.

Activities

You can view and check the most important specifications. You make these specifications later on from
other activities.

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Controlling

In this step you define the organizational units for the following components:

• Cost Center Accounting

• Order Settlement

• Profitability Analysis

Organizational units relevant to only one component are defined only during the configuration of their
respective modules.

Maintain Controlling Area

In this IMG activity you

• create new controlling areas or

• Copy existing ones.

The controlling area is an organizational unit in Accounting used to subdivide the business
organization from a cost accounting standpoint.

The controlling area is embedded in the organizational structure as follows:

• A controlling area may be assigned one or more company codes.

o 1:1 relationship

You carry out cost accounting on a cross-company code basis.

The internal and external accounting viewpoints are identical.

o 1:n relationship

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 In cross-company-code cost accounting, all data relevant to cost accounting
appears in a common controlling area and is available for allocations and
evaluations. The internal and external accounting goals diverge. This method is
preferred when, for example, a corporation posesses several independent
subsidiaries and undertakes centralized cost accounting for all.

If you implement the CO (Controlling) component, you must maintain basic data and control indicators in
the for the controlling area. You make these settings in the Controlling IMG.

Recommendation

We recommend that you use the controlling area "0001" supplied by SAP "0001" or that you copy this
controlling area to your own controlling area and then making adjustments to suit your needs. Preliminary
settings such as the definition of number ranges are already maintained for this controlling area.

Activities

Copy Controlling Area "0001"

1. Adapt the default settings to your country.

a) To do this, choose Enterprise Structure -> Localize Sample Organizational Units in
Customizing.
b) Choose Country version.
2. Create your own controlling area with company code as a Copy of controlling area "0001"
with company code "0001".
3. Adjust this copy to your requirements.
a) To do so, in the dialog box, choose Maintain controlling area.
b) Select your controlling area and change the settings.

Create Controlling Area

1. Choose Maintain controlling area

2. Choose New entries and enter the basic data.
3. Enter a key and a name for your company code.
4. Specify the allocation of company codes and controlling area.
5. Make the currency settings.
6. Speciy a chart of accountsfor the controlling area.
7. Enter a fiscal year variant.

Delete controlling area

You can delete the controlling areas supplied by SAP if you:

• Create all organizational units afresh.

• Have created all organizational units using the SAP delivery data.

To do so, create your own controlling area with company code as a copy of the controlling
area "0001" with company code "0001".
Now delete the controlling areas you no longer require.

To delete a controlling area supplied by SAP, proceed as follows:

1. In the dialog box, choose Delete SAP Delivery Data.

2. From the list, select the controlling areas you want to delete.

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 3. Choose Delete.

Note on deleting SAP delivery data

Further Notes

In cross-company code cost accounting, where a controlling area includes several company codes with
differing currencies, assign the group currency as controlling area currency. The related company codes
must all use the same operative chart of accounts.

During number assignment for organizational units in the controlling area ( cost center, profit center, etc.),
keep the possible addition of other company codes in mind as you work.

All internal allocation transactions refer only to objects belonging to the same controlling area.

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Create Operating Concern

In this activity, you define your operating concerns. The operating concern is an organizational unit in
accounting which structures a enterprise from the Profitability Analysis point of view.

When you create an operating concern, you only define the organizational unit itself (that is, the name and
description). The master data and the functional characteristics for the operating concern are not defined
until you configure the system for the "Profitability Analysis" component. You do this by choosing Controlling
-> Profitability Analysis. If you create an operating concern under Structures -> Define Operating Concern,
the respective name and description is entered in automatically.

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Define valuation level

You define the valuation level by specifying the level at which material stocks are valuated. You can
valuate material stocks at the following levels:

• Plant level

Valuation must be at this level in the following cases:

o If you want to use the application component Production Planning (PP) or Costing

o If your system is a SAP Retail system

• Company code level

The decision you make is valid for the whole client. You are recommended setting material valuation at
plant level.

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Important

Once set, it is not possible to switch the valuation level from plant to company code, or vice versa. If
absolutely necessary to subsequently change the valuation level, contact your SAP consultant because
a data conversion is required.

Your choice of valuation level affects the following:

• Maintenance of material master records

Depending on the valuation level chosen, accounting data (in particular the valuation price) is
maintained for each plant or for each company code in the material master record.

• G/L accounts in which material stocks are managed

o If material stocks are valuated at company code level, all plant stocks of a material are
managed in a joint stock account for each company code.

o If material stocks are valuated at plant level, the material stocks for each plant can be
managed in different accounts. You can define a separate account determination for
each plant.

If several plants are to use account determination, you can group them together in
Customizing for Valuation and Account Assignment in the section Account
Determination .

• G/L accounts to which transactions are posted in Materials Management

(See under G/L accounts in which material stocks are managed.)

Activities

Define the valuation level as required.

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Define, copy, delete, check plant

The plant is an operating area or branch within a company.

The plant is embedded in the organizational structure as follows:

• The plant is assigned to a single company code. A company code can have several plants.

• Several storage locations in which material stocks are managed can belong to a plant.

• A single business area is assigned to a plant and to a division.

• A plant can be assigned to several combinations of sales organization and distribution channel.

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 • A plant can have several shipping points. A shipping point can be assigned to several plants.

• A plant can be defined as a maintenance planning plant.

A plant has the following attributes:

• A plant has an address.

• A plant has a language.

• A plant belongs to a country.

• A plant has its own material master data. You can maintain data at plant level for the following
views on a material master record in particular: MRP, Purchasing, Storage, Work scheduling,
Production resources/tools, Forecasting, Quality management, Sales, Costing.

The plant plays an important role in the following areas:

• material valuation

If the valuation level is the plant, the material stocks are valuated at plant level. If the valuation
level is the plant, you can define the material prices for each plant. Each plant can have its
own account determination.

• inventory management

The material stocks are managed within a plant.

• MRP

Material requirements are planned for each plant. Each plant has its own MRP data. Analyses
for materials planning can be made across plants.

• production

• costing

In costing, valuation prices are defined only within a plant.

• plant maintenance

If a plant performs plant maintenance planning tasks, it is defined as a maintenance planning

plant. A maintenance planning plant can also carry out planning tasks for other plants
(maintenance plants).

Further notes

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Choose "Administer" or "Copy, delete, check plant" to work on a plant. The system changes the plant
table and all dependent Customizing and system tables where the plant occurs as a key. For more,
see Copy/Delete/Check / Edit Project IMG.

Recommendation

Plant 0001 is already preset in all dependent tables. SAP recommends that you change only the
attributes and not this number. For further settings, this enables you to access the sample entries,
considerably reducing the time required for maintenance. To create new plants, use the Extended
Copyer to make copies of Plant 0001.

Activities

1. Create your plants and their respective local data, referring closely to the reference (plant
0001) provided by SAP.
2. You can also copy, delete or check environment data.
3. You the Project IMG view to work on the data the system has changed. The generated project
view is retained so you can do this work later.

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Define, copy, delete, check division

In this step, you define the divisions in your company

or you edit divisions that already exist.

The division is one of the organizational units in Sales & Distribution and is also required for business
area account assignment for logistics transactions in Financial Accounting. The business area for the
material is determined via the plant and the division defined in the material master record.

In order to adapt the functional scope of a division to the organization in your company, you should
process the following check list:

• Allocate a division to one or more sales organizations.

• Allocate a division to one or more distribution channels.

• Allocate a business area to a division from a plant. This way, business area account assignment
can be carried out for transactions in Materials Management. As of Release 3.0, the business
area is determined in Materials Management from the division and the valuation area.

• A material is always assigned to one division only. You specify the division on the first sales &
distribution screen in the material master record.

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 • You can define your own master data within a division for customers as well as your
own conditions and pricing.

• You can also create shared customer master data and conditions, which apply to several
divisions, using a common division.

• You can define sales offices for a division.

• You can define for each sales document type that all items of a sales document must belong to
the same division.

• The items of a delivery or a billing document can belong to different divisions.

• The division is used as a selection criterion for lists of sales documents and the work list for
deliveries.

• You can determine the printer destination for messages differently for every division on the
basis of the sales documents.

SAP Recommendation

• Please use the division "01" as a "general division" if you do not differentiate between divisions
in your company.

• If you enter the value 01 as a parameter in the user master record, the user does not need to
make further specifications.

• Define the master data for a representative division if you do not need to dinstinguish customer
master data and pricing elements by division. You can then use this data in several divisions.

Activities

1. Select the type of processing:

o To define a division specify a two-digit alphanumeric key and a description.

o Copy delete or check the settings for a division.

2. Use the project IMG view to edit data changed automatically.

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Maintain storage location

A storage location is the place where stock is physically kept within a plant.

A storage location has the following attributes:

• There may be one or more storage locations within a plant.

• A storage location has a description and at least one address.

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 • It is possible to store material data specific to a storage location.

• Stocks are managed only on a quantity basis and not on a value basis at storage location level.

• Physical inventories are carried out at storage location level.

• A storage location can be assigned to a warehouse number in the Warehouse Management

System. You can assign more than one storage location to the same warehouse number within
a plant.

• With the field Validity you can mark a record as Valid, No longer valid or Obsolete.

o An entry marked as Valid can be used to create a material in the material master.

o An entry marked as No longer valid cannot be used in the material master to create a
material.

o An entry marked as Obsolete can be used to create a material in the material master,
however, a warning is issued.

Storage locations are always created for a plant.

Activities

Maintain your storage locations.

If you have integrated the inventory management of your manufacturing execution system (MES) with
the system using the data replication framework (DRF) and message INVCON, assign the relevant
business system from the replication model to the production storage locations that are managed by
the MES. If relevant, choose the type of inventory management, in order to activate the respective
checks on goods movements to this storage location.

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Maintain purchasing organization

In this step, you set up your purchasing organizations.

From the Materials Management and Purchasing view, the purchasing organization is responsible for all
purchasing activities (including the processing of requests for quotations and purchase orders, for
example).

The purchasing organization is integrated within the organizational structure as follows:

• A purchasing organization can be assigned to several company codes.

(= Corporate-group-wide purchasing).

• A purchasing organization can be assigned to one company code.

(= Company-specific purchasing).

• A purchasing organization can also exist without being assigned to a company code.

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 o Since each plant must be assigned to a company code, the latter can be determined via
the plant at the time of each procurement transaction even if the procuring purchasing
organization has not been assigned to a company code.

• A purchasing organization must be assigned to one or more plants.

(= Plant-specific purchasing).

• A purchasing organization can be linked to one or more other purchasing organizations.

(= reference purchasing organization)
For more on this topic, refer to Assign Purchasing Organization to Reference Purchasing
Organization.

• A purchasing organization can be divided into several purchasing groups that are responsible
for different operational areas.

• Each purchasing organization has its own info records and conditions for pricing.

• Each purchasing organization has its own supplier master data.

• Each purchasing organization evaluates its own suppliers using MM Supplier Evaluation.

• Authorizations for processing purchasing transactions can be assigned to each purchasing

organization.

• All items of an external purchasing document, that is, request for quotation, purchase order,
contract, or scheduling agreement, belong to a purchasing organization.

• The purchasing organization is the highest level of aggregation (after the organizational unit
"client") for purchasing statistics.

• The purchasing organization serves as the selection criterion for lists of all purchasing
documents.

Possible organizational forms

You can organize your purchasing function in the following ways:

• Corporate-group-wide purchasing

• Company-specific purchasing

• Plant-specific purchasing

All of these forms can co-exist within a single client.

Corporate-group-wide purchasing:

A purchasing organization is responsible for the purchasing activities of different company codes.
In this case, you do not assign a company code to the purchasing organization, but specify the company

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code concerned for each individual purchasing transaction. You assign plants from different company
codes to the purchasing organization.

Company-specific purchasing:

A purchasing organization is responsible for the purchasing activities of just one company code.
In this case, you assign a company code to the purchasing organization. The purchasing organization
may procure only for this company code. You assign only plants of the company code concerned to the
purchasing organization.

Plant-specific purchasing:

A purchasing organization is responsible for the purchasing activities of one plant.

In this case, you assign the plant and the company code of the plant to the purchasing organization. The
purchasing organization may procure for this plant only.

Note

If you wish to work with a mixture of the above organizational forms, the reference purchasing
organization is of significance to you.
It is possible to allow one purchasing organization to access the contracts and conditions of another - a
so-called reference purchasing organization. This makes it possible for advantageous terms negotiated
by one purchasing organization to also be used by other purchasing organizations.

Recommendation

Purchasing organization 0001 is already preset in all dependent tables.

SAP recommends that you retain this number if you require only one purchasing organization.

You will then have to customize only a few tables.

Activities

Create your purchasing organizations.

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Define, copy, delete, check sales organization

In this step, you define the sales organizations in your company. In order to bring the functional scope
of a sales organization in line with your organization, you should edit the following check list:

• Legally, a sales organization is included in exactly one company code.

• You can assign one or more plants to one sales organization.

• The sales organization has an address.

• Within a sales organization, you can define your own master data. This allows a sales
organization to have its own customer and material master data as well as its own conditions
and pricing.

• You can define your own sales document types within a sales organization.

• You assign sales offices and your own employees to a sales organization.

• All items in a sales & distribution document, that is, all items of an order, delivery or a billing
document belong to a sales organization.

• A sales organization is the highest summation level (after the organizational unit Client) for sales
statistics with their own statistics currency.

• The sales organization is used as a selection criterion for the lists of sales documents and for
the delivery and billing due list.

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 • For each sales organization, you can determine the printer for output differently based on sales
and billing documents.

A sales organization cannot share any master data with other sales organizations. The master data must
be created separately. The data for a distribution channel or a division can, however, be created for
several distribution channels or divisions.

Note

If you do not distinguish different sales organizations in your company, use sales organization "0001" as
a "general sales organization". Specify the value in the user master record as a parameter. The user then
will not have to make further entries.

Actions

To define a sales organization, enter a four-character alphanumeric key and a description. Enter an
address as well.

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Define, copy, delete, check distribution channel

In this IMG activity you define distribution channels in your company or edit distribution channels that
already exist. In order to adapt the functional scope of a distribution channel to the organization in your
company, you should process the following check list:

• You allocate a distribution channel to one or more sales organizations.

• You allocate one or more plants to a distribution channel.

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 • Within a distribution channel, you can define your own master data for customers or materials
as well as your own conditions and pricing.

• You can create master data for a representative distribution channel which is then also used in
other distribution channels. To do this, you have to additionally create the allocation of the
representative distribution channel to the other distribution channels.

• For a distribution channel, you can determine your own sales document types.

• You can determine sales offices for a distribution channel.

• All items of a sales document belong to a distribution channel. The entire sales document is
therefore entered for a distribution channel.

• The items of a delivery can belong to different distribution channels.

• All items of a billing document belong to a distribution channel.

• The distribution channel can be used as a selection criterion in lists.

• You can determine the printer destination for messages differently for every distribution
channel on the basis of the sales and billing documents.

A distribution channel does not fulfill the following criteria:

• A distribution channel does not have its own address.

• You cannot allocate your own employees to a distribution channel.

You specify the representative distribution channels in the menu option "Define common distribution
channels ".

Recommendation

• Please use the sales division "01" as "general sales division" if you do not differentiate between
different sales divisions in your company.

• If you enter the value 01 as a parameter in the user master record, the user does not need to
make further specifications.

• Define the master data for a representative sales division if you do not need to differentiate
master data by sales division. The data can then be used in several sales divisions.

Activities

1. Select the type of processing:

o To define a distribution channel, specify a two character alphanumeric key and a

description.

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 o Copy, delete or check the settings for a distribution channel.

2. Use the project IMG view to process data that has been changed automatically.

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Define, copy, delete, check shipping point

Define the place or location that goods are shipped from.

Use

You can define or edit detailed settings for shipping points that already exist. To adapt the functional
scope of a shipping point to the organization in your company, you should ensure that:

• The shipping point is the top level in the organization for shipping.

• A shipping point can be allocated to several plants.

• A shipping point can be divided into several loading points.

• A delivery is always initiated from exactly one shipping point, meaning all items of a delivery
belong to one shipping point. Groups of deliveries also belong to exactly one shipping point.

• The shipping point can be proposed automatically during order processing depending on the
plant, loading group, and shipping condition.

• A shipping point has an address.

• The shipping point is used as a selection criterion for lists of deliveries and the delivery worklist.

• The shipping point is used as a selection criterion for processing deliveries like picking or goods
issue.

Activities

1. Select the type of processing:

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 o To define a shipping point, enter a four-character alphanumeric key and a description
and maintain the address.

o Copy, delete, or check the settings for a shipping point.

2. Use the project IMG view to edit data changed automatically.

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Maintain transportation planning point

In this step, you define a transportation planning point. The transportation planning point is responsible for
planning shipments with particular features. A shipment is assigned to one transportation planning point.

Example

A company has different groups of shipping personnel responsible for organizing shipments by train or ship.

Activities

Enter a four-character alphanumeric key with a description and an address.

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RESULT

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 2. Assignment
In this section you create references between the organization units you have defined.

Once you have linked the organizational units, you have built the framework for processing business
transactions.

Assign plant to company code

In the Customizing activity "Assignment Plant - Company Code" you assign each plant to a company
code.

A plant can only belong to one company code.

Note

Complete functionality of the system can only be ensured if the plants assigned to a company code are only
those situated in the same country/region as the company code.

It is therefore recommended that you also create a company code for each country/region in which a plant
is situated.

Examples

• Only then are tax postings created when transferring stock between plants in different
countries/regions.

• The taxation procedure and Intrastat declaration are supported only for the country/region
of the company code.

Requirements

Before you can assign plants to company codes, you must define the valuation control.

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You may change the valuation control in the production system only after contacting your SAP consultant.
Changes may cause inconsistencies in documents.

Actions

Assign your plants to company codes.

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Assign Business Area to Plant/Valuation Area and Division

In this step you assign the plant / valuation area and division combination to a business area to enable
automatic business area account assignment.

• Combination Plant - Division

The system uses the plant and the division to find the relevant business area for account
assignment for revenue postings (SD).

• Combination Valuation Area - Division

The system uses the valuation area and the division to find the relevant business area for

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 account assignment when material postings are made (e.g. goods movements in Inventory
Management, invoice receipts in Invoice Verification).

Requirements

The following objects must exist:

• Valuation area

• Plant

• Division

• Business area

Activities

Check whether the valuation level is the plant or the company code.

• Valuation level = company code

Maintain the business area assignments separately for each individual plant and valuation
area.

• Valuation level = plant

o You can maintain business area assignments for all plants and valuation areas
together. To do this, choose Plant/valuation area - Division.

o If you want to define different business area assignments for revenue postings and
material postings, maintain these objects separately.

If any assignments are missing for valuation areas, you can copy these
automatically from the plant assignments.

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Assign company code to controlling area

In this step you assign the company codes for which you want to carry out common cost controlling to
a controlling area.

You may carry out cross-company-code cost accounting only by explicitly assigning the company codes to
a controlling area.

Recommendation

Note

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Before you can make the assignments, you must maintain basic data in the controlling area:
the assignment control indicator, the chart of accounts, the fiscal year variant, and the currency
settings. The assignment control indicator affects the other indicator settings.

Note that this controlling area basic data sets the indicators so that the desired company codes can be
assigned.

When you use the CO module, you must maintain other basic data and control indicators for the
controlling area. These settings are made in the Implementation Guide (IMG) for Controlling.

Requirements

You must complete the steps Create company code and Create controlling area.

Activities

1. Choose the appropriate controlling area.

2. Use the pushbutton "Detail" and maintain the basic data for the controlling area.
3. Choose "Assign company code(s)" to make the appropriate settings.

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Assign controlling area to operating concern

In this activity, you allocate to an operating concern the controlling areas that you want to be able to
analyze together in Profitability Analysis.

Requirements

To do this, you must first have carried out the activity Maintain Controlling Area. You must also have
defined an operating concern and its resepective data structure in Customizing for Profitability Analysis.
You do this by choosing Structures -> Define Operating Concern.

Furthermore, the controlling areas and the operating concern must have identical fiscal year variants,
otherwise error messages or serious data inconsistencies could arise during cost center assessment,
settlement, and many other postings.

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Assign sales organization to company code

You can use this step to define the allocation of sales organizations to company codes. This establishes
a link between the SD and FI systems. A sales organization belongs to just one company code.

Activities

Allocate the sales organizations to the company codes.

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Assign distribution channel to sales organization

In this step, you allocate the distribution channels to a sales organization. In this case, as many
distribution channels as desired can belong to a sales organization. In addition, a distribution channel can
be valid for several sales organizations.

Actions

Assign the distribution channels to the sales organizations.

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Assign division to sales organization

In this step, you allocate as many divisions as desired to a sales organization. Any one division can
belong to several sales organizations.

Actions

Assign the divisions to the sales organizations.

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Set up sales area

In this step, you set up the sales areas. You can create a sales area for any combination of sales
organization, distribution channel and division.

Requirements

First you must make the following allocations for a sales organization:

• You have to allocate the distribution channels (see "Assign distribution channel - sales
organization).

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 • You have to allocate the divisions (see "Assign division - sales organization").

Actions

To set up sales areas, assign columns and distribution channels to sales organization.
The divisions and distribution channels that you have previously assigned to a sales organization are
proposed for selection.

Assign Sales Organization - Distribution Channel - Plant

Short text

Assign combination of Sales Organization and Distribution Channel to Plant.

Use

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Use this step to assign any number of Plants to a combination of Sales Organization and Distribution
Channel. A Plant can be assigned more than once

Requirements

You define the combination of sales organizations and distribution channels in Customizing activity "Assign
distribution channels - sales organizations". These combinations are then automatically proposed as
defaults for maintenance.

Actions

Assign the plants to the combination of sales organization/distribution channel.

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Assign purchasing organization to company code

In this Implementation Guide (IMG) activity, you assign purchasing organizations to company codes.

Note

For information on maintaining purchasing organizations, see the IMG activity Maintain purchasing
organizations.

You have the following options:

• You can assign a purchasing organization to one company code. This is company-specific
purchasing.

• You can assign a purchasing organization to no company code. This purchasing

organization can then procure for all plants assigned to it, irrespective of the company code
to which the plant belongs.

Since each plant must be assigned to a company code, the company code can be
determined via the plant in each procurement transaction, even if the procuring purchasing
organization is not assigned to a company code.

• A purchasing organization must be assigned to one or more plants. This is plant-specific

purchasing.

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 For more information, see the IMG activity Assign purchasing organization to plant.

Actions

Depending on the form you have chosen, assign your purchasing organization(s) to the respective company
code(s).

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Assign purchasing organization to plant

In this IMG activity, you assign purchasing organizations to the plants for which they are responsible.

You have the following options:

• One purchasing organization procures for one plant.

This is plant-specific purchasing.

• One purchasing organization procures for several plants.

• Several purchasing organizations procure for one plant.

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Actions

Depending on the form you have chosen, assign your purchasing organization(s) to the respective plant(s).

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Assign standard purchasing organization to plant

If several purchasing organizations procure for a certain plant, you can define one of them as the standard
purchasing organization for the transactions "pipeline procurement", "consignment" and "stock transfers".

In source determination for stock transfers and consignment, the system automatically utilizes this standard
purchasing organization. In the case of goods issues of pipeline materials, the purchasing info records of
the standard purchasing organization are read.

Define your standard purchasing organization

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Assign shipping point to plant

In this step, you can allocate as many shipping points as desired to the plants. Any one shipping point can
belong to several plants.

Actions

Assign the shipping points to the plants.

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Assign Shipping Points

Short text

Assign shipping points for each plant.

Use

For each plant, you can allocate shipping points to all combinations of shipping conditions and loading
groups.

Requirements

Before you can allocate the shipping points, you must define plants, shipping points, shipping conditions,
and loading groups.

For information on this subject, see the following menu options:

• Plants are defined as organizational units of Materials Management (module MM) in menu
option "Create plant".

• You define shipping points as organizational units of sales & distribution in menu
option "Create shipping points".

Actions

1. Check how the shipping points within a plant should be allocated to the shipping
conditions and loading groups.
2. Make the allocation for the individual plants.
Maintain the shipping point that should appear as the default value in sales document items
in column Proposed Shipping Point. Enter additional shipping points into the subsequent
columns (Manual Shipping Point) that are allowed as alternative values in sales document
items.

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Assign Picking Locations

Short text

Assign picking locations for each plant.

Use

For each plant, you can assign picking locations to all combinations of shipping points and storage
conditions.

Requirements

Before you can allocate picking locations, you must define the plants, shipping locations, and storage
conditions.

Information may be found in the following sections:

• Plants are defined as organizational units of Materials Management (module MM) in the
step "Create plant"

• You define shipping points as organizational units of Sales & Distribution in the step "Create
shipping points".

Action

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 1. Determine how the picking locations are to be allocated in your company.
2. Carry out this allocation for all plants by allocating a picking location to each combination
of shipping point and storage condition for each plant.

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Define Common Distribution Channels

Short text

Define common distribution channels.

Use

Define distribution channels that have common condition, customer, and material master data within a sales
organization.

Defining common distribution channels allows you to minimize the cost of creating and maintaining the
master data. It also allows you to run analytics per distribution channel without having to create master data
in the different organizational subareas.

Example

Create conditions, customer, and material master data for distribution channel "01" and specify that it is also
valid for distribution channels "02" and "03".

Activities

For each combination of a sales organization and distribution channel, specify from which other (reference)
distribution channel the master data should be copied.

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Define Common Divisions

Short text

Define common divisions.

Use

Define divisions that have common condition and customer master data within a sales organization.

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Defining common divisions allows you to minimize the cost of creating and maintaining the master data. It
also allows you to run analytics per division without having to create master data in the different
organizational subareas.

Example

Create conditions and customer master data for division "01" and specify that it is also valid for divisions
"05" and "06".

Activities

For each combination of a sales organization and division, specify from which other (reference) division the
master data should be copied.

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Material Ledger must be set productive for valuation area XXXX

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Assign Currency Types and Define Material Ledger Types

Use

In this step, you create material ledger types and assign currency types to them.

Activities

1. Choose New Entries and enter a 4-digit ID as the ML Type.

2. To assign currency types, choose Define individual characteristics. The currency type for
the company code currency is required. You can add additional currency types.
3. Go back to the main screen and save your changes.

Further notes

Before converting data for production startup, make sure that the currency settings in Financial Accounting
and in the Material Ledger are correct. You cannot change the currencies, currency types and material
ledger types after production startup.

In Customizing for Financial Accounting, you can display the currency types that belong to a certain
company code.
Define Settings for Ledgers and Currency Types.

In the currency and valuation profile, you can display the currency types that belong to a particular
controlling area.
Maintain Currency and Valuation Profile

Recommendation

To ensure that information is consistent across Materials Management, Financial Accounting and
Controlling, ensure that the group currency is used as the controlling area currency.

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Assign Material Ledger Types to Valuation Area

Use

In this step, you assign material ledger types to valuation areas.

Note: If you are migrating Material Ledger Customizing, you only need to check the assignments of material
ledger types to valuation areas and adapt them if necessary.

You can only assign one material ledger type to each valuation area. This must contain the currency type
10.

You can assign the same material ledger type to several valuation areas. If you have several valuation
areas within a single company code (that is, when the valuation area corresponds to a plant), you must
assign all valuation areas in this company code to the same material ledger type.

Requirements

• You have defined the relevant valuation areas.

• You have created the relevant material ledger types.

Assign Currency Types and Define Material Ledger Types

Further notes

Before you convert data for production startup, make sure that the currency settings in Financial Accounting
and in the Material Ledger are correct.

You cannot change the currencies, currency types, or material ledger types after production startup.

Activities

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 1. Choose New Entries.
2. Enter a valuation area.
3. Enter a material ledger type.
4. Save your entries.

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Activate Material Ledger for Valuation Areas

Use

In this step, you activate the material ledger for one or more valuation areas.

If the material ledger is active for a valuation area, all materials in that valuation area are valued using the
material ledger.

Standard settings

The material ledger is initially active for all valuation areas.

Note

If you create a new plant, the material ledger is not activated automatically for that plant. You need to:

1. Activate the material ledger for that plant (valuation area).

2. Set the valuation area as productive.

Recommendation

If you activate the material ledger for a valuation area which is a plant, you should also activate it for all
other plants in the company code. This ensures that the accounts in Financial Accounting are reconciled
with the accounts in Materials Management.

Note

You can only deactivate the material ledger for a valuation area if no material movement data exists in that
valuation area.

If you want to deactivate the material ledger for a valuation area that contains material movement data, see
SAP Note 425487.

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Activities

You can transfer settings between systems (for example, from a test client to a target client). If you wish to
do this, the system needs to check the data in the target system to determine whether the material ledger
can be activated. This check does not take place in Customizing, you have to trigger it in the application
menu when you convert data for the material ledger as part of production start-up.

To activate the material ledger:

1. Set the Material ledger active indicator for the valuation areas for which you want to
activate the material ledger.
2. Set the Material Price Determination: Control indicator and, if necessary, the Price
Determination is Binding in Valuation Area indicator.
3. Save your entries.
4. If you use the parallel currency valuation functions, check that the settings are consistent
in Customizing:
Check settings
5. Transport the settings to the target client.
6. Check the settings in the target client by choosing Accounting -> Controlling -> Actual
Costing/Material Ledger -> Environment -> Check Customizing Settings.
7. Convert the data in the target client for all active valuation areas by choosing Accounting
-> Controlling -> Actual Costing/Material Ledger -> Environment -> Production Startup -> Set
Valuation Areas as Productive.

Further notes

For further information on the material ledger and production startup, see Actual Costing/Material Ledger.

In Global Settings, check:

• Which currencies are defined

Check Currency Codes

• Which currencies are assigned to the respective company code as index based currencies
or as hard currencies for the individual countries, if currencies of this type have been
assigned.
Define Countries

In Financial Accounting, check:

• The currencies for the company code

Define Settings for Ledgers and Currency Types

• The exchange rates

Maintain Exchange Rates

In Controlling, check which currencies are used in the controlling area:

Maintain Controlling Area

In Logistics - General, check:

• Whether the current period was initially set for the company code for Materials
Management:
Maintain Company Codes for Materials Management

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 • Whether the settings for the material types specify that quantities and values should be
updated:
Define Attributes of Material Types

In Materials Management, check whether the method for dealing with exchange rate differences in invoices
is configured appropriately:

• Configure How Exchange Rate Differences Are Treated

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CKMSTART

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RESULT

Creating a Business Partner

Procedure

1. Choose Master Data Business Partner Create.

2. On the Create Business Partner: Initial Screen, you first select the grouping. If
numbers are assigned externally, you enter the business partner number in the
“Business Partner” field and then assign a role category. The role category field is
optional.

Note
The business partner grouping is used to determine the number ranges in business
partner administration for various groups of business partners. In addition, the
account group of the customer accounts is assigned to the customer business
partners in Financial Accounting.

You can assign roles to each business partner. To conclude a particular transaction
with a business partner, you must have created the business partner in the
corresponding role. The role category describes the business partner’s function in a
transaction and specifies the rights and obligations of the business partner. You can

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 use the role category to call up different screens (views) when you maintain the
business partner. You assign the role-view in Customizing for the business partner by
choosing Define Role-View Assignment.

In Customizing for the business partner, you determine the number ranges for the
business partners by choosing Create Number Ranges and Define Business Partner
Groupings. You can set up the number assignment to be internal or external.

The business partner number is a key that uniquely identifies the business partner.
Once you have created the business partner, you can no longer change the business
partner number.

3. Select the classification:

a. Organization

b. Natural person

c. Collective partner (not supported at present)

4. Confirm your entries by choosing Enter.

5. The Create Business Partner:Name screen appears.

6. Here, you enter the name and address data.

7. Each business partner needs at least one address whose address ID is entered as
the Default Address. You also have the option of defining a role-dependent address
ID in the role data.

8. By choosing Goto, you can switch to the screens for the following:

Central data - screens containing general, role-independent data

General data - screens specifically related to the role category

Company code data - screens for the role category and company code-dependent data

Note
If you have still not assigned a role to the business partner, you can only enter the Central
Data and branch to the Role Overview from the General Data.

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Standing Instructions for the business partner: You can enter the following standing
instructions for a business partner:

▪ Transaction Authorization

▪ Payment Details

▪ Standing Instructions for Correspondence

▪ Derived Flows

1. To create the business partner, choose Business Partner Save.

2. Automatically Create a Customer When Creating a Business Partner

In Customizing for the business partner, you assign views to role categories by
choosing Define Role-View Assignment. These views appear on the General
Data and Company Code Data screens, and you access them in the application by
choosing Goto. For each role category, you specify which views you want to be
shown or hidden.

Customer views contain fields that are relevant for the customer. Role categories
that are assigned a customer view are customer roles.

As soon as you fill a field in a customer view of the general data for a business
partner, a customer with the corresponding company code-independent data is
automatically created. If you fill a field of a company code-dependent view, a
customer with company code-dependent data is created.

Customer Views Related Screens

Company code: Account management Company-code data: Account management

Company code: Account interest Company-code data: Account interest

calculation calculation

Company code: Automatic payment Company-code data: Automatic payment

transaction transaction

Company code: Payment data Company-code data: Payment data

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 Company code: Dunning data Company-code data: Dunning data

General: Fiscal data General data: Fiscal data

General: Control - payment control General data: Control data

General: Control - general control

General: Control - account control

Additionally, a customer is created if you enter Bank Details for a business partner in
the central data.

If you did not call a customer view and enter data there when you created the
business partner, or if the business partner has no customer role, there is also no
customer for the business partner.

You can see if a partner already has a customer by choosing Extras → Administrative
Data when you display the partner data.

3. When you actively release the business partner, the business partner still has to be
released by one or several users according to the release parameters defined. You do
this using the Release Workflow for Business Partner.

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Creating a Material Master Record
There are two ways of creating a material master record:

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 ▪ A new material master record is created with or without reference. It is mainly the
responsibility of materials management to create new material master records in
the system.

▪ An existing material master record is extended by creating new segments for other
company areas. Thus, a view which has not yet been maintained is added to the
material master record.

This documentation describes the material master record exclusively from the sales view.
Therefore, the following description refers to adding new views to already existing material
master records.

Steps:

Using the example of trading goods (HAWA), the section below describes how to extend a
material master record. You proceed in the same way for other material types.

1. In the SD Master Data Screen select, Products Material Trading goods Create .

2. The Create Material: Initial Screen .

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 3. Enter the number of the material whose sales and distribution screens you want to
maintain.

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 4. Press ENTER.

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 5. A dialog box appears from which you can select the views which you want to work
with.

6. Select the sales views you want to maintain.

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 7. By selecting views you define an individual screen sequence. If you do not select
any new views you receive a system error message:

Material already maintained for this transaction/event.

8. Press ENTER.

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 9. Another dialog box appears in which you specify the organizational level at which
you want to carry out the change.

10. Enter a valid combination of plant, sales organization and distribution channel to
define the organizational level.

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 11. Press ENTER to reach step by step the data screen you want to edit.

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 12. Edit these data screens. You must at least enter data in the required fields.

After you have edited the last data screen, a dialog box appears in which you see
the system message that the editing process will end. Select Yes to save your
material data.

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 13. You return to the screen Create Trading Goods: Initial Screen, where the following
system message is displayed:

Material <Material number> created.

This concludes the processing. You have extended the material master record by adding new
sales views.

Note

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Sales prices are determined by conditions. You will find a detailed description of how material
prices and sales prices are calculated in the SD Guide to Pricing and Conditions . In the
material master record you can access the price condition screen by selecting Extras Sales
Details Price in the menu and maintain the material price.

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