SAP FI - Define Business Area

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Business Areas are used to differentiate transactions that come from different lines of business in a company.

Example

There is a big company XYZ which runs multiple businesses. Let us assume it has three different domains like manufacturing, marketing, and sales.

Now you have two options −

• First is to create different company codes.
• And the other better option is to create each of these business lines into the business areas.

The benefits of using Business Areas in this case are as follows −

• You can use these business areas if other company codes require the same areas.
• It is easy to configure if you use a Business Area, as you just need to attach to the company code and the other details in that business area will get attached automatically.
• By using Business Areas in controlling, you can create Profit and Loss statement, Balance Sheet, etc. for business areas. Hence it is used for management accounting in a few companies.

Note − Business areas are used more in Controlling as compared to Finance Accounting.

How to create a new Business Area in SAP FI?

Expand Enterprise Structure as mentioned in the previous topic → Definition → Financial Accounting → Define Business Area → Execute → Go to New Entries.

Enter the 4 digit Business Area code and save the configuration.