What is Company and Company Code in SAP

Conceptual Learning of Client, Company & Company’s Code in SAP


Client is a highest hierarchy in SAP. Client is set of some tables and fields, which stored some specific configuration and other data. Many times we get confused with word client when we talk in SAP term, so let’s clear.

Client in General Term

Generally for us client meaning is our customer for which we are working. Suppose we are working for ABC Group, So ABC is our client, but in SAP client have some different meaning.

Client in SAP Term

When we work on any application or SAP then we have different environment for different purpose like Development, Quality & Production so we differentiate these on the basis of client.

Dev >> Quality >> Production First we need to understand the use of different environment

Development  System

Development system where we do the configuration

Quality System

After Dev. We do testing in quality system whether application is working fine or not as per the client requirement

Production System

Production system, which available for final use. For Example, many times you have visited Banks and other places they work on some application for managing their Business data, those server called Production system, but before that they have developed and tested application in different environment then only now it is ready for use. So simply we can say, in SAP we do configuration in Dev & Test in Quality then use for Production system.

What is the use of different environment

In any application first we do development or Configuration and after that we test in quality system whether configuration is working fine or not once we will insure every things is working fine then we move these changes in Production Environment?

Company in SAP

Company is an Organizational Unit in SAP. Company creation step is optional not mandatory in SAP. Company is Inter Trading Partner in SAP we required ITP when we post any Inter Company Transactions. There is one to many relations in Company and Company’s Code. We can assign many company code to one Company.

Company also present as a Group Company, Parent Company and Client

Example: – Suppose there is ABC Group and have 3 Companies then we can create ABC as Company

Company’s code in SAP

Company code is Organization Unit in SAP. Company code creation is mandatory step in SAP. Company code is a Legal entity for which Business need to Prepare, Publish & Report their Financial Statements. Business operations happens at Company code level.

Assignment: – Now we have to assign Company with Company Code

Best way to design point of view, create no of company as per the company’s code. Let’s try to understand with and example

 Suppose we have 3 Company’s Code under ABC Group, so we should create 3 Company or Inter trading partner and 3 Company’s code and we can do one to one mapping.

Note: – This design will be useful for process the inter company transactions, as we need trading partner to process the inter company transactions

Company Company’s Code

Thank You

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