What is Company Code & How to Define Company Code in SAP HANA

What is Company Code in SAP

Company code in SAP is an organizational element for which complete financial statements can be drawn for external and internal reporting purposes. The financial statements like Balance Sheets (B/S), Profit & Loss (P&L) statements are generated at the company code level for external reporting.

A company in SAP can have one or more company codes, by assignment of multiple company codes under one company helps for cross company code transactions.

Company Code in SAP Hana – Scenarios

1. All the financial transactions are posted at the company code level
2. At least one company code should be created to implement SAP Financial Accounting in SAP Hana System.
3. No SAP FI in Hana exists without company code
4. All the transactions – from procurement of goods to sales of products are posted at the company code level.
5. Company code is used in all SAP S4Hana modules.
6. Company code can be created using new entries or copying from existing company code in the SAP S4 Hana system.

Business Scenario

• Adarsh Technology is medium enterprise and doing the business in the country India & USA.
• As per the country legal requirement, the financial statement must be generated as per the country wise.
• So to meet this requirement, we need to create two company codes i.e. one company code for India and another company code for USA.

• The currency that was assigned at the company code level is called as company code currency or local currency or home currency
• When the business transaction is processed with the other than company code currency, then this transaction will be treated as foreign currency transaction. For example: The company code AD01 currency is INR, and the vendor invoice was posted with the EUR currency, this transaction is called as a foreign currency.

How to Define company code in SAP HANA

A company in the SAP S4 HANA system can be created using the following configuration steps:

• Menu Path: Enterprise Structure -> Definition -> Financial Accounting -> Edit, Copy, Delete, Check Company Code
• Transaction Code: OX02

Step 1: From SAP Easy Access Screen, enter SAP transaction code “OX02” in the SAP command field and press enter to continue.

Step 2: On the change view “Company Code”: Overview screen, display a list of existing company codes that were defined in the SAP Hana system. From this SAP Hana screen, you can maintain the following activities –

• You can create new company code by using the option new entries or copy as an option
• You can modify the existing company code
• You can delete the company code

To create new company code in SAP Hana System, click on the new entries button as shown below

Step 3: The new entries: details of the added screen, update the following details.

• Company Code: Enter the 4 alphanumerical keys that define as company code in SAP Hana System. This company code will serve as the company identifies in the business environment where multiple company codes exist in the SAP Hana system.
• Company Name: Enter the name of the company

Additional Data

• City: Update the city name, in which city that company code is located
• Country: Update the country key from the dropdown list,
• Currency: Enter the company code currency
• Language: Enter the default language key for company code.

Step 4: A pop of window Edit Address: AD01 displays on the screen. The company code address screen is divided into five sections. Update the required details with your company code information.

Name.

• Title: choose the title of the company
• Name: Enter the name of the company

Search terms: Search terms enable to the search of the company code very quickly if multiple company codes are defined in the S/4 Hana system. Enter the relevant search term keywords.

Street Address

• Street/House Number: Update street no, house number, etc
• Postal Code/City: Update the postcode pin and city of the company
• Country: Update the country key, you can choose the country key from the dropdown list
• Region:  Update the region key, you can choose the region key from the drop-down list

PO Box Address

• PO Box: Update the PO Box number, where the company is located
• Postal Code: Update the postal code
• Company Postal code: Update the details of the company postcode.

Communication

• Language: Update the language key for the company code
• Telephone: Update the contact telephone number
• Mobile Phone: Update the mobile number of the company code
• Fax: Update the fax number for fax communication
• E-Mail: Update the valid email id of the company code.

For a print preview of address details, click on the print preview icon and preview the address details.

After maintaining all the required details for the company code, press enters key to continue.

Now click on the save icon to save the configured company code in SAP S/4Hana System.

The prompt for customizing request pop-up screen displays, choose the customizing request number and save the details.

Successfully we have defined new company code in the SAP S4Hana system.

Project Work – Practice Space

Now create the 2 different company codes with different countries. In this scenario, we have extended our business to locations in different countries. So we are going to define new company codes.

For e.g.

Scenario 1: If you are implementing the project for the first time, you will be created a company code as per customer requirements at the time of the realization project.

Real-Time Interview Questions

1. What is a local currency?

Ans: Company code currency is called local currency. Accounts are managed in company code currency. The transactions that are posted in Foreign currency are translated into company code currency.

2. What is the difference between company code currency and document currency?

• The currency which was assigned to a company code is called as a company code currency
• The document currency refers to a transaction currency. The document currency can be a company code currency or a foreign currency.