Organizational Units - Company and Company Code

Organization Unit - Company & Company Code

Organization Unit - Company:

The smallest organizational unit for which individual financial statements are created according to the relevant legal requirements. A company can include one or more company codes.

Note: All of the company codes within a company must use the same chart of accounts and fiscal year. However, each company code can have a different local currency. Also, you must assign your companies to your company codes.

To define a company, choose the following in Customizing path in SPRO.

( Enterprise Structure -> Definition -> Financial Accounting ->  Define Company ) or short transaction code - OX15 ( last four characters of the text under 'Additional information' column in SPRO as shown below ).

The definition of the Company organizational unit is optional.

For example, the text for 'Define Company' in SPRO is 'SIMG_CFMENUSAPCOX15'. So last four characters are OX15 - this would be the transaction code for 'Define Company'.

Organization Unit - Company Code:
Smallest organizational unit of external accounting for which a complete, self-contained set of accounts can be created. This includes the entry of all transactions that must be posted and the creation of all items for legal individual financial statements, such as the balance sheet and the profit and loss statement.

The company code is the central organizational unit of external accounting within the SAP System. The business transactions relevant for Financial Accounting are entered, saved and evaluated at company code level.

To define a company code, choose the following in Customizing path in SPRO.
( Enterprise Structure -> Definition -> Financial Accounting ->  Define, Copy, Delete, Check Company Code ) or short transaction code - OX02.

The definition of the Company Code organizational unit is obligaory.

Difference between Company and Company Code:
Let us consider company name 'XYZ Pvt. Ltd.' with operations in many countries. Each subsidiary is a legal unit and hence each has to generate the Balance Sheet and Profit & Loss statement as per country's legal and accounting principle.

The XYZ company operating in India has to generate the legal and financial documents for Indian Government. Similarly, subsidiary operating in Germany has to generate the legal and financial documents for German Government.

Also, all these documents and reports in consolidated format are needed at group level for preparation for financial reports at company 'XYZ' level.

Hence SAP should be able to provide the financial reports at individual level and group level.
The legal units are created as Company Code in SAP and group company is created as Company in SAP. Company codes are assigned to Company.


Table T880: Global Company Data
Table T880 gets updated when we define the company in customizing.

Table T001: Company Codes
Table T001 gets updated when we define the company code in customizing.