SAP Business Areas – Providing Another Dimension To Business Analysis
Concept Of An SAP Business Area
Basic financial statements are created in SAP on the basis of the company code. For traditional statements, all the transactions are grouped according to the company code and financial statements like balance sheet and Profit & Loss statements are drawn separately for every company code. But at times there is a need to carry out analysis across company codes according to some criteria other than the company code.
As an example, if there is a need to generate a financial report on the basis of a product line, geographical location or divisional sales, then this can be done using Business Areas. The purpose of business areas is to report on similar activities that occur across company multiple codes resulting is cross company reporting.
However the financial statements generated on the basis of business areas cannot be used for legal reporting purposes. For this reason, it is not possible to create the legally required financial statements and tax reports at business area level. Financial statements at business area level are therefore only suitable for internal reporting.
Concept Of A Business Area: Cross Company Code Analysis
Consider a situation where there are four companies in all, ABC Apparel, ABC Sports, ABC Shoes and ABC Services.