What is Company and company code in SAP FICO?

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In the SAP (Systems, Applications & Products in Data Processing) system, “company” and “company code” are distinct organizational units with specific roles in financial accounting.

About Company:

  • Definition:
  • A company is nothing but six-digit alphanumeric key created at the highest level of organizational unit in financial accounting for consolidation purposes.
  • It represents a consolidated entity for legal reporting.
  • Think of it as a parent company that can encompass multiple subsidiaries.
  • Purpose:
  • Primarily used for consolidated financial statements.
  • It facilitates group-level reporting.
  • Represents the overall legal business organization.
  • To create Company is an optional activity.

In Conclusion: Company is used for Consolidated financial reporting comprises of multiples legal entities.

Create Company in SAP:

Path SPRO / SIMG –> Enterprise Structure –> Definition –> Financial Accounting –> Define company
T code OX15

 

About Company Code:

  • Definition:
  • A company code is nothing but 4-digit alphanumeric key which is the smallest organizational unit for which a complete, self-contained set of accounts can be created.
  • It’s a legally independent entity within a company define as per the Companies act to generate external reporting.
  • Purpose:
  • Used for individual financial statements (balance sheets, profit and loss statements).
  • Transactions are recorded at the company code level.
  • It is the legal entity that deals with posting of day to day business transactions.
  • In Conclusion: Company code is defined as a separate legal entity to generate financial statements for external reporting.

Create Company code in SAP:

Path SPRO / SIMG –>Enterprise Structure –> Definition –> Financial Accounting –> Edit, Copy, Delete, Check Company code –> Double click on Edit company code data
T code OX02

 

Many People confuse between the term Company and company code and use it interchangeably, here is the Key Highlights:

  • A company can be assigned to multiple company codes.
  • A company code is contained within a company.
  • The company provides a consolidated view of the financial data from its company codes.
  • Company codes perform the day-to-day transaction processing, while the company focuses on overall financial reporting.
posting in SAP

What is posting keys in SAP?

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Posting key is nothing but Two-character numerical key that together with the GL account number controls the posting at line item level of documents. The posting key determines:

  • Account type
  • Debit/credit posting
  • Layout of entry screens (Which is nothing but Field status)

When you do document posting, enter a posting key for each line item. This key determines       how the item is posted. Posting keys are defined at client level and therefore It can be used by all company codes.

The posting key determines:

  • The data you can enter in the line item
  • How data you post is processed
  • How the system updates the data you input in system

Posting keys are differentiated by customer, vendor and posting key for G/L accounts. Apart from the General Ledger Accounting (FI-GL) and Accounts Receivable and Payable (FI-AR/AP) components, there are also posting keys for assets and material accounts.

Some Example of Posting Key:

SAP delivers predefined posting keys with the standard system. The following table lists some of the posting keys available in the standard system:

Posting keys for Account type customer:

Posting Key Description Account Type Debit/Credit
01 Invoice Customer Debit
02 Reverse credit memo Customer Debit
03 Bank charges Customer Debit
04 Other receivables Customer Debit
05 Outgoing payment Customer Debit
06 Payment difference Customer Debit
07 Other clearing Customer Debit
08 Payment clearing Customer Debit
09 Special G/L debit Customer Debit
11 Credit memo Customer Credit
12 Reverse invoice Customer Credit
13 Reverse charges Customer Credit
14 Other payables Customer Credit
15 Incoming payment Customer Credit
16 Payment difference Customer Credit
17 Other clearing Customer Credit
18 Payment clearing Customer Credit

Posting key for Account type general Ledger:

Posting Key Description Account Type Debit/Credit
40 Debit entry G/L Debit
50 Credit entry G/L Credit
80 Stock initial entry G/L Debit
81 Costs G/L Debit
83 Price difference G/L Debit
84 Consumption G/L Debit
85 Change in stock G/L Debit
86 GR/IR debit G/L Debit
90 Stock initial entry G/L Credit
91 Costs G/L Credit
93 Price difference G/L Credit
94 Consumption G/L Credit
95 Change in stock G/L Credit
96 GR/IR credit G/L Credit

Posting keys for Account Type Assets:

Posting Key Description Debit/Credit
70 Debit Asset Debit
75 Credit Asset Credit

Posting keys for Account Type Material for Stock Inward / Outward Movement:

Posting Key Description Account Type Debit/Credit
89 Material Debit  
99 Material Credit  

Posting keys for Account Type Vendor:

Posting Key Description Account Type Debit/Credit
21 Credit memo Vendor Debit
22 Reverse invoice Vendor Debit
24 Other receivables Vendor Debit
25 Outgoing payment Vendor Debit
26 Payment difference Vendor Debit
27 Clearing Vendor Debit
28 Payment clearing Vendor Debit
29 Special G/L debit Vendor Debit
31 Invoice Vendor Credit
32 Reverse credit memo Vendor Credit
34 Other payables Vendor Credit
35 Incoming payment Vendor Credit
36 Payment difference Vendor Credit
37 Other clearing Vendor Credit
38 Payment clearing Vendor Credit
39 Special G/L credit Vendor Credit

Posting key Configuration:

Path: SPRO/ SIMG à Financial Accounting à Financial Accounting Global Settings à Document types à Define Posting keys

Transaction code – OB41

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