SAP CO Organizational Structure

SAP CO  Organizational Structure

One of many essential business functions in an organization that are often divided to maximize efficiency. The division of labor creates separate units for marketing, sales, accounting, information technology, and so on. The method for dividing tasks up within a company may be distributed between project teams, groups, or departments.

These organizational units are associated with each other to form the foundation of the SAP CO organizational structure. Let’s see how each of these units contribute to the optimization of internal reporting and managerial accounting:

Client: 

A client is a self-contained instance which comprises its own set of programs, tables, master data and transaction records.

Operating Concern:

 The operating concern is the highest organizational unit eligible for profitability analysis (COPA). The prime aim of COPA is to provide profit and loss information to support decision making, planning and controlling operations within an organization. The segments are usually made up of a combination of characteristics regarding the customer, product or sales channels of the organization which can be analyzed in a multi-dimensional information cube. The operating concern is required to facilitate additional reporting dimensions including customer group, product and country.

Controlling Area: 

The controlling area refers to the highest level of an organization at which costs and revenues are recorded. Each controlling area can have one or more company codes assigned to it.

Company Code:

 A company code represents a legal entity in SAP. A company code is set up for every legal entity which records transactions and maintains its financial books (i.e. sub-ledgers and GL) in SAP. These financial books enable the generation a complete set of financial statements, including profit and loss, balance sheet and cash flow.

Plant: 

This is one of the indispensable units in the organizational structure for a company. It represents a facility where goods and services are produced according to production, maintenance, procurement and material planning areas of the business. A company code can posses the assignment of one or more plant. Generally, plants are defined within the enterprise structure in the Materials Management module.

Purchase Organization: 

This organizational unit coordinates the purchasing process for the business. Each company code can have one or more purchase organizations assigned.

Sales Organization:

A sales organization is defined within the Sales & Distribution module. Multiple sales organizations can be assigned to one company code depending on the business requirement.   

                                                                                                                                                              For SAP ERP Training or SAP CO  Organizational Structure  Module Training please visit the links.