22 September, 2020
Define Company: The client is a commercial, organizational unit within the R/3 system, with its own data, master records, and set of tables.
From a business perspective, the client forms a corporate group.
Company: It is an Organizational Unit for which financial statements can be drawn up according to relevant commercial law.
Note: A Company can have one or more company codes.
Customization Step: SPRO -> Enterprise Structure -> Definition -> Financial Accounting ->Define company (SPRO)
Company code: The company code is the smallest organizational unit for which you can have an independent accounting department within external accounting
A company code represents an independent accounting unit, for example, a company within a corporate group(client).
• It is the smallest Organizational Unit
• Each company code has its own Balance sheet and P&L Account.
• Company Code is a subsidiary of Company or a member of a corporate Group
Customization Step: SPRO -> Enterprise Structure -> Definition ->Financial Accounting -> Edit, Copy, Delete, Check Company Code (EC01)
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• It is an Organizational Unit within a company.
• It represents a closed system for accounting purposes.
• Controlling area may be assigned to one or more company codes, but company code must use the same operative Chart of Account.
Customization Step: SPRO -> Enterprise Structure -> Definition ->Controlling -> Maintain Controlling Area(OX06)
A plant is an organizational logistics unit that structures the enterprise from the perspective of production, procurement, plant maintenance, and materials planning
A plant is a manufacturing facility or branch within a company
It is an Operational Unit within a company code.
It is a place where materials are produced or Goods/Services are provided.
A Plant can be having
Note: A Plant must always be assigned to a company code.
It is an organizational level at which material is valued.
Plant and company codes are two possible valuation areas in the R/3 System.
Important Note: Defining the valuation level in Customizing is a fundamental setting, and is very difficult to reverse.
1. Enterprise Structure? Definition? Logistic-General? Define the valuation level (OX14)
You define the valuation level by specifying the level at which material stocks are valuated You can valuate material stocks at the following levels:
Note: Valuation must be at this level in the following cases
If you want to use the application component Production Planning (PP) or Costing or If your system is an SAP Retail system
Company code level
Note: SAP recommends setting material valuation at the plant level.
2. Enterprise Structure ->Definition ->Logistic-General-> Define, copy, delete, check plant (EC02/OX10)
• It is an Organizational unit, which allows the differentiation of Material Stock within a Plant. It holds the Goods.
• Under the plant there may be different storage locations. However, the storage location of one plant cannot be used for the other plant.
• Storage locations are not assigned to the plants separately, because at the time of creation itself we create storage location with respect to plant.
Note: Physical inventory is carried out at the storage location level.
Customization Steps: SPRO->Enterprise Structure-> Definition ->Material Management-> Maintain storage location (OX09)
Purchasing organization types:
1. Centralized Purchasing
Corporate Group-wide purchasing
2. Distributed Purchasing
So a Purchasing Organization Can be assigned to
Note: - Purchasing organizations can also exist without assigning to a company code.
Each Purchase organization has its own
Info Record and Conditions for pricing.
Own Vendor master Data.
The vendor is assigned to only one purchase organization.
Each Purchasing Organization evaluates its own vendors using MM Vendor Evaluation.
Reference Purchase Organization: A purchase organization whose conditions and contracts other purchasing organizations linked to it may access and use.
Standard Purchase Organization: If several Purchase organizations procure for a plant, you can define one of them as a standard Purchase Organization. In Source determination for ‘Stock Transport’ and ‘Consignment’ and for the good issue of ‘Pipeline material’ system utilizes the standard purchase organization automatically.
Customization Steps: SPRO ->Enterprise Structure->Definition-> Material Management ->Maintain purchasing organization (SPRO)
SPRO -> Enterprise Structure ->Assignment -> Financial Accounting -> Assign company code to company (SPRO)
SPRO ->Enterprise Structure -> Assignment ->Controlling ->Assign company code to controlling area (OX19)
SPRO-> Enterprise Structure -> Assignment -> Logistic-General ->Assign plant to company code (OX18)
SPRO ->Enterprise Structure -> Assignment ->Material Management->Assign purchasing organization to co-code (SPRO)
SPRO-> Enterprise Structure -> Assignment -> Material Management -> Assign purchasing organization to plant (SPRO)
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