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What are the organisational elements in sap FI and describe ?

The Important organisational elements in SAP FI are

  • Company Code
  • Business Area
  • Chart of Account
  • Functional Area

Company code is a Smallest Organization unit for which independent financial statements can be carried out. Balance sheets and profit & loss statements, can be created at the company code level  as per  required by law. Business transactions are processed at each company code level

Business area is a separate area of operations or responsibilities of organizational units with in a company code and used for internal and external reporting . Different divisions of each business with in a legal entity are created as Business areas for reporting of each operational areas.

The chart of accounts ( COA ) is a list of GL accounts master record that are used by the organisation. A chart of accounts must be assigned to each company code

Functional Area is a organisational unit in accounting that classifies the expenses of an organisation by functions. The functional area is use to create P&L A/C in Financial Accounting using cost of sales accounting. e.g of functional areas are

  • Administration
  • sales and distribution
  • Manufacture
  • Production
  • Research and development