Client and company code

Before SAP can record a single sale, it needs to know how the company is built: which legal entities exist, where goods are made and stored, who sells and who buys. SAP models this with organizational units (often called org units or the enterprise structure). They are set up during implementation and rarely change, but almost every document you create carries several of them. Get them wrong in a test and the test proves nothing.

This course builds the full structure of Contoso Motor Co., the fictional company used throughout the Academy. By the end you will be able to read a Contoso sales order or purchase order and name every org unit on it.

The client

The client is the highest level in an SAP system. It is a self-contained unit with its own business data, its own master data and its own users, identified by a three-digit number. A single system can contain several clients that cannot see each other’s business data. Companies typically use separate clients for purposes such as configuration, testing and training, and production runs in one client.

Most configuration is client-specific, but some settings and all programs are cross-client: they apply to every client in the system. That is why a change made "only in the test client" can sometimes affect others in the same system, and why project teams control changes carefully.

The company code

The company code is the central unit of financial accounting. It represents an independent legal entity: the smallest unit for which a complete, self-contained set of accounts can be drawn up, including a balance sheet and an income statement for external reporting. Each company code has a four-character key, a country, a local currency, a chart of accounts and a fiscal year definition.

Two settings behind the company code shape every posting. The chart of accounts is the list of G/L accounts the company code uses; several company codes can share one, which makes group reporting easier. The fiscal year variant defines how the year is split into posting periods. When a test posting fails because "the period is not open," it is the company code’s posting periods that are closed, not the plant’s or the user’s.

A group with legal entities in several countries needs one company code per entity. If Contoso opened a Canadian subsidiary, that subsidiary would get its own company code with Canada as its country and Canadian dollars as its local currency. Sales between the two would be intercompany transactions, with each side posting in its own books.

Who sets this up

Org units are defined by the implementation team in configuration, usually early in a project, and changed only through controlled projects later. Business users do not create them, but they must know them: the right org units are the first thing to check on any document. In Public Edition the same concepts apply, but the structure is set up through SAP’s guided configuration tools rather than the classic Customizing menu, and SAP’s preconfigured content suggests a starting structure.

If you are new to a company, ask for its enterprise structure overview: a one-page picture of company codes, plants, sales organizations and purchasing organizations, with their keys. It is the single most useful reference a tester can pin above the desk.