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SAP Business Area

Within SAP Financial Accounting, data is organized first at the company and then company code level for legal business entities to meet external financial statement requirements. But in some cases, financial statements may be required for internal purposes that are viewed across company codes. This could be based on a need for reporting broken down by geographical area, line of business, area of responsibility, etc. To meet this requirement, SAP provides an organizational unit called SAP Business Area. Because they are used to report across company codes, SAP Business Area is an independent entity that is not linked to a company code within the configuration of the organizational structure. We will see how the use of SAP business area is activated for a company code, but this is not a link. SAP business area functionality may not be required for all organizations and thus is considered to be optional functionality.

In some cases, organizations opt for using profit centers for the type of reporting satisfied by Business Areas. However, profit center use is more for analyzing the profitability of specific products, whereas Business Areas are more intended to report on the type of Business.

SAP Business Area Configuration

Creation

Configuration of SAP Business area is straightforward and generally requires just two steps – creation of the SAP business area and activating it for use across financial statements.

To create a new business area, use transaction code OX03 or follow menu path:

SPRO > Reference IMG > Enterprise Structure > Definition > Financial Accounting > Define Business Area

You will be taken to a screen that appears as follows. Click on the New entries button on the menu.

Create New SAP Business Area Entry

Add a four-characters value for the name of your new business area entry and give it a meaningful description. An example may look as follows:

Add SAP Business Area and Save

Save your entry and create a new transport request if required by your system. SAP Business Area has now been created and is available in the list of values.

SAP Business Area Created

Activation of SAP Business Area

The next step is to activate the business area functionality within company codes you will using them. If you have several company codes that will be using business area functionality for financial statements, make the setting here so that the field is always ready for input when you post documents, regardless of other field controls.

To activate, use transaction code OB65, or follow menu path:

SPRO > SAP Reference IMG > Financial Accounting > Financial Accounting Global Settings > Business Area > Enable Business Area Balance Sheet

The screen will look as follows. Scroll to the company codes that will be using the business area functionality and select the Business Area FS check box for each.

Select Business Area FS

A business area has now been created and company codes that will be using it have been activated to ensure field input is always available.

Assignment in Master Data

SAP Business Areas are most often populated from master data records in which they are assigned. An example would be the assignment of SAP business area within a cost center master record. Let’s take a look at where on a cost center this would be done.

To create a cost center, use transaction KS01 or follow the menu path:

SAP Easy Access Menu > Accounting > Controlling > Cost Center Accounting > Master Data > Cost Center > Individual Processing > Create

Create a cost center with a unique ID, assign a validity date range, and hit the enter key. You will come to the basic data tab for the cost center creation. Enter all required fields as well as the business area. Note that the business area is time dependent and can be changed at each new fiscal year, if required.

The screen will appear as follows:

Assignment of Business Area on Cost Center Master Record

Enter any of the other required information on other tabs and save your master record. The cost center has now been created with the business area field populated.

Conclusion

This tutorial explained the concept of SAP Business Area within the FICO organizational structure. A brief explanation of the functionality was given, the configuration steps required were reviewed including creation and activation of SAP Business Area on a company code, and finally assignment to a master data record was completed.

Did you like this tutorial? Have any questions or comments? We would love to hear your feedback in the comments section below. It’d be a big help for us, and hopefully it’s something we can address for you in improvement of our free SAP CO tutorials.

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