What is Business Area in SAP

Business Area in SAP Hana is an internal organizational unit that represents separate area of operations for internal financial statements (Balance Sheet & Profit and Loss) are produced as per company operational areas product lines, subsidiary, products, geographical areas, etc.

Business Area in SAP Hana – Scenarios

  1. Business Area is an optional organizational unit
  2. You can use business areas across company codes, even if company codes uses different chart of accounts.
  3. You can generate Balance Sheets, Profit and Loss reports as per business areas
  4. If the business area balance sheet indicator enables for company code, then the field option of business area for FI-AA enables required.
  5. You can create more than one business area as per business requirements.

Note: In SAP S4 Hana, the profit center is now using for reporting instead of business area.  All the organizations are now using profit center concept instead of business area in SAP S4 Hana system.

For knowledge purpose, we are creating business area in SAP S4 Hana and we don’t use this business area further in our implementation.

How to define Business Area in SAP S/4Hana

Business areas in SAP S/4Hana can be created by using the following configuration steps:

  • IMG Path: SPRO {Transaction Code} -> SAP Reference IMG -> Enterprise Structure -> Definition -> Financial Accounting -> Define Business Area
  • Transaction Code: OX03

Step 1: From SAP Easy Access S/4Hana screen, enter tcode “OX03” and enter to continue

OX03 - Business area tcode in SAP S4HANA

Step 2: In next S/4Hana change view business area overview screen, it displays lit of business areas that are defined in SAP S/4 Hana System.

To define the new business area in SAP S/4 Hana system, click on new entries option

Business Areas in SAP Hana new entries

Step 3: On entries of Business Area creation screen, update the following details

  • Business Area: Enter the four characters alphanumerical key that identifies as Business Area in SAP S/4Hana system
  • Description: Enter the description for newly defined business areas.

Define Business Area in SAP Hana

After maintaining all the required details of business areas, click and save icon and save the business areas in SAP S/4Hana system.