Don’t Wait Until After Go-Live to Set Up Cross-Company Code Controlling

  • by Marco Jordy, Vice President of SAP Finance Consulting, ORBIS America, Inc.
  • September 15, 2006
A wrong decision during the setup of your organizational structure can lead to a loss of functionality in logistics and controlling. You can avoid a costly reorganization of your database with cross-company code controlling. Hear about the pros and cons and learn the prerequisites for its configuration.
Key Concept

Organizational structure design is one of the first steps in the concept phase of every SAP implementation project. It is very common for some processes that have to be implemented to be completely unknown at this point in time. The two most important organizational elements in FI/CO are the company code and the controlling area. The decision about whether to have separate controlling areas per company code, or whether to integrate multiple company codes under a single controlling area, has consequences for the available functionality in logistics as well as finance. A wrong decision might lead to a costly reorganization of the FI and CO database after go-live.

In today’s world, companies tend to split their organization into small legal entities. One reason is globalization, which requires separate companies for each country in which you operate. Another reason is that the group can better manage multiple, small entities. Many of my customers separate their sales organization from their production. It is also very common to set up a separate company for each production plant.

SAP manages separate legal entities through company codes, the leading organizational element in FI. In the Controlling (CO) module, the main organization element is the controlling area. A controlling area, as defined by SAP, represents a closed system for cost accounting purposes. This means that you only can carry out all transactions available in CO — for example, reposting of costs — within the boundaries of one controlling area.

Marco Jordy

Marco Jordy is the vice president of SAP Finance Consulting at ORBIS America, Inc. ORBIS is an internationally active business consulting company with core competencies in consulting for customer-oriented management processes (CRM), internal management processes (ERP/PLM), and supplier-oriented management processes (SCM). Marco has more than 11 years of experience in SAP implementations in the US and Europe. He is a graduate of the University of Applied Sciences in Saarbruecken, Germany, with a major in finance and a specialization in informatics. Marco specializes in the integration between the finance and logistics modules as well as international rollout projects in multi-cultural environments.

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