Business Area&Functional Area

Business Area

The function of business areas is to create balance sheets and Profit and Loss statements below the company code level.  Some common uses of business areas are to produce divisional financial statements or SEC segment-level reporting.  It is important to note that business area functionality can be duplicated using Profit Center Accounting.  The decision to use or not to use business areas should be made early on in the design phase of your project.  Many new projects are leaning away from business areas and toward profit centers, but ultimately, the decision is an individual project decision based on what fits in to the overall system design of the project implementation.  Some of the deciding factors are the need to report on business lines across company codes, the need for full balance sheets at the divisional or business line level, as well as the cost and benefits of business areas versus profit centers.

Business Areas in SAP are used to differentiate transactions originating from different points/lines/locations in business. Let me give some examples to elucidate:

 

 

 

A company (say, ABC) is a huge company and has a variety of businesses under it. Let us say that it typically operates in 3 different domains like machinery manufacturing, trading and assembling of machine parts. 

There are 2 options here now –

 

1. Either creates different company codes for the 3 business operations (which would be the easiest and require no creativity)

 

or 

2.) Create each of these business lines into business areas (the better option). 

 

The advantages of using the second option is:

1. You can use these business areas if other company codes require the same areas

2. The configuration is simpler as in case of company code, you would require to go through the entire configuration of creating Chart of Accounts, Fiscal Year variants, posting periods variants and so on. In the business area option, you just need to attach it to the company code and the rest of the details in Business area is attached by default from the company code you are using it in. 

 

 

 

3. Using the options in controlling (EC-PCA, Enterprise Controlling, Profit Centre Accounting), you can even draw up Balance Sheets and PL statements for your business areas and hence this is used for management accounting in some companies (like HP, Dell, etc) when it wants to know the operating profits for different business areas/lines.

 

 

 

The above was an example when the company wanted to separate entries according to the lines it operates in... the other case could be when it wants to find out profitability during its operations in cities and differentiates these cities into Business
Areas...

 

 

 

Business Areas are not much relevant in FI but are much more relevant in CO.

 

Functional Area

 

 

 

The functional area is an organizational unit in accounting that classifies the expenses of an organization by function.

It organize your business for cost of sales accounting.  It allow you to segregate and classify different types of costs within one expense account.  For e.g. a single labour account to determine what amount of labour is spent directly on production as compare to sales or hr.

 

销售成本会计：就是生产成本会计；因为销售成本按中方的意识就是由生产成本而来；即成品入库时：DR：产成品-xxx CR：生产成本-XXX;产品销售出去时，产品出库，即有一个价格计算方式。标准、加权、个别等计算出销售成本。销售时确认收入后，还要接转销售成本；二者的差额收入-成本=毛利

 

期间会计：即针对财务的三大期间费用：制造费用 财务费用 销售费用的会计核算，基本等于SAP中overheand