The enterprise structure of a company is mapped to SAP applications using organizational units.

Organizational units represent the enterprise structure in terms of legal or business-related purposes.

Organizational units include legal company entities, plants, storage locations, sales offices, and profit centers.

The following are examples of organizational levels:

• Client is the highest-level unit of all organizational elements. It represents the enterprise or headquarters group.
• Company code is a unit used in the balance sheet of a legally independent enterprise. It is the central organizational element of Financial Accounting (FI).
• Sales organization is the central organizational element of Sales and Distribution that controls the terms of sale to the customer. A division is usually used to represent a product line.
• Plant is the central organizational unit in the context of production planning. A plant can manufacture product, distribute product, or provide a service.

Material stocks can be differentiated within one plant according to the storage location in the context of inventory management.

Organizational units may be assigned to a single application or to several applications. For example, a sales organization is assigned to Sales and Distribution, while a plant is assigned to materials management, production planning, and sales.

Master data is created and assigned to organizational structures at various levels.

Enterprise Structure – Financials and Logistics

A controlling (CO) area is the basic organizational unit in Management Accounting. It is a closed entity that is used for cost accounting. You can allocate costs only within a CO area. These allocations do not affect objects in other CO areas.

An operating concern is the central organizational unit in Profitability Analysis (CO-PA). It represents the structure of external market segments for the enterprise. You can assign several CO areas to each operating concern so you can analyze them together.

A company code is an independent accounting unit. You prepare financial and profit and loss (P&L) statements at the company code level to meet legal reporting requirements. You can use business areas (BAs) to group strategic business units for reporting financial and P&L statements. BAs are not suitable for auditing; they are only suitable for reporting purposes. BAs can also group business units that are associated with different company codes.

In logistics, a plant is an organizational unit for categorizing an enterprise according to production, procurement, maintenance, and materials planning. A plant is a place where materials are produced, or goods and services are provided. A plant is assigned to a company code.

A purchasing organization is an organizational unit used in MM – purchasing.

A sales organization is an organizational unit that is used in sales order management.