https://blogs.sap.

com/2015/06/09/financial-enterprise-structure/

Purpose

 Provide an overview of SAP Enterprise Structure and some of the specific finance related
organizations

SAP Enterprise Structure Overview

 Enterprise Structure is the system representation of your business structure
 SAP has a number of organizational unit elements that help you portray the Accounting, Logistics, Sales,
and Human Resources structure of your company
 The structure of your company, business processes, and implementation scope will guide the SAP
organizational units that will be required
 Example Org Units are: Company Code, Sales Organization, Purchasing Organization, Plant, Segment,
Profit Center, Cost Center, etc

Key Considerations/Notes For Enterprise Structure

 SAP Enterprise Structure is a fundamental and key step in your implementation
 The process should start by analyzing the business structure and processes in your company and then
mapping them to the SAP structures
 Enterprise Structure is made up of a combination of configuration settings and master data. Example –
Company Code is Configuration and Profit Center is Master Data
 Four Keys:

Simplicity – do not use more organization units than necessary

Acceptance – all levels of the project team should have input and acceptance

Ownership – limit the group that has ownership of the org structure and implement governance early in the project

Importance – once the enterprise structure is set it is not easy to change and will impact future setup decisions

Main Areas Where Enterprise Structure Elements Exist

  SAP traditionally divides Enterprise Structure into 8 Areas
 Financial Accounting – Structure for G/L Accounting, AP, and AR
 Controlling – Structure for Cost Center Accounting, Cost Controlling, and
Profitability Analysis
 Material Management – Structure for Material Valuation, Material Planning,
Purchasing, Inventory Management, Invoice Verification, and Warehouse
management
 Sales and Distribution – Structure for Sales, Shipping, and Billing
 Human Resources – Structure for all HR related activities
 Logistics – General – Structure for general logistics activities including those relating
to purchasing
 Logistics Execution – Structure for the execution of logistics i.e. loading points,
transportation points, and warehouses
 Plant Maintenance – Structure for facilities maintenance

Example Enterprise Structure

       Taken from SAP Best Practice Baseline Template for ECC 6.0
Enterprise Structure – SPRO Path

 SAP has grouped Enterprise Structure activities together in SPRO

 This is not 100% complete some objects are found elsewhere in SPRO or in master data transactions
Finance and Controlling Enterprise Structure

 Let’s take a closer look at the Financial Accounting and Controlling Enterprise Structure Elements
 Note – A single implementation will not use all of these elements only the ones that best fit the business
model
SAP Enterprise Structure – Financial Accounting – Company

 SAP Definition – The smallest organizational unit for which individual financial statements
are created according to the relevant legal requirements. A company can include one or
more company codes.
 Think of it more as a Hierarchy of Company Codes
 This is an optional organizational unit that tends not to be used in new installations
 Was used in previous SAP versions when GL consolidation functionality was less developed
 Function now typically done with other objects like segments or profit centers

SAP Enterprise Structure – Financial Accounting – Company Code

 SAP Definition – Smallest organizational unit of external accounting for which a complete,
self-contained set of accounts can be created. This includes the entry of all transactions that
must be posted and the creation of all items for legal individual financial statements, such as
the balance sheet and the profit and loss statement.
 Best Practice – 1 Financial Legal Entity =  1 Company Code
 This is the core organizational unit for SAP FI it is required on all financial postings

SAP Enterprise Structure – Financial Accounting –

Company/Company Code Example
SAP Enterprise Structure – Financial Accounting – Business Area
 SAP Definition – Organizational unit of external accounting that corresponds to a specific
business segment or area of responsibility in a company.
 Movements in value entered in Financial Accounting are assigned to business areas.
 Used primarily for reporting purposes, cannot assign responsibility like some other objects
(i.e. Profit Center)
 Business Area is independent of Company Code
 Role has diminished with the introduction of the New GL as the distinction between the
objects used for internal and external reporting has diminished
 Optional and not as commonly used as previously – Role is taken more by profit center or
segment

SAP Enterprise Structure – Financial Accounting –

Company/Company Code Example

SAP Enterprise Structure – Financial Accounting – Profit Center

  SAP Definition – an organizational unit that reflects a management-oriented structure of the
company and for which an individual period result can be determined
 The division of a company into profit centers makes it possible for management responsibility
to be delegated to these local organizational units
 Profit center acts like a company within the company
 Traditionally had a stand alone ledger in SAP, now can be activated directly in the New GL
 Business Area and Profit Center are not typically used together
 SAP focus for future developments in profit center vs. business area

SAP Enterprise Structure – Financial Accounting – Segment

 SAP Definition – Division of a company for which you can create financial statements for
external
 Used to satisfy GAAP or IFRS requirements for some companies to disclose segment
reporting
 Profit Centers can be used to replace or in conjunction with Segment to satisfy this
requirement
 Profit Centers are assigned to a segment

SAP Enterprise Structure – Financial Accounting – Profit

Center/Segment Example

SAP Enterprise Structure – Financial Accounting – Credit Control

Area
  SAP Definition – An organizational unit that represents the area where customer credit is
awarded and monitored.
 This organizational unit contains either a single or several company codes, if credit control is
performed across several company codes.
 One credit control area contains credit control information for each customer.
 Customers can be created in different company codes – the credit control area responsible
for a given customer depends on which credit control area the company code is assigned.
Customers that are created in company codes with a common credit control area are
controlled by this one control area for all company codes.
 Basic Decision – If the same customer needs a different credit limit if they are assigned to
multiple company codes then multiple credit control areas are required.

SAP Enterprise Structure – Financial Accounting – Credit Control

Area Example

SAP Enterprise Structure – Financial Accounting – Functional Area

 SAP Definition – Account assignment characteristic that sorts operating expenses according
to functions, for example:
 Production
 Administration
 Sales
 Research and development
 Used to produce what SAP calls Cost of Sales Accounting
 Assigned based on the other objects involved in the transaction or through rules.
 For example – $10 posted to an office supplies GL with a R&D cost center is tagged with the
Research and Development functional area

SAP Enterprise Structure – Controlling – Controlling Area

  SAP Definition – organizational unit in an organization that represents a closed system used
for cost accounting purposes
 A controlling area may contain one or more company codes, which can operate in different
currencies, if required
 The company codes within a controlling area must all use the same operational chart of
accounts and fiscal year variant
 Cost Centers and other controlling master data objects are assigned to a controlling area
 All internal allocation transactions refer only to objects from the same controlling area

SAP Enterprise Structure – Controlling – Operating Concern

 SAP Definition – An operating concern represents an organizational unit in your company for
which the sales market has a uniform structure.
 It is the valuation level for Profitability Analysis (CO-PA).
 Profitability Analysis has a flexible structure based on characteristics derived from the
various Sales, MM, and financial postings
 Controlling Areas are assigned to one Operating concern
 Fiscal year variant must match

SAP Enterprise Structure – Segment Assignment Example

RFBNUM00

Billing skip
Former Member
Jul 31, 2008 at 05:56 AM

Subcontracting Challan
214 Views
Follow
RSS Feed

Hi Gurus,

What is the difference between 57F4, Returnable, & Non Returnable Challan?

How to map all above in SAP system?

Thanks

Akshay

 Add a Comment

 Alert moderator

 Actions

 I Have a Similar Question

Assigned Tags

 MM (Materials Management)

Similar Questions

 Subcontracting

Former MemberNov 23, 2019

 Subcontracting challan not accept at time MIGO GR but accepted in J1IFQ

Former MemberNov 23, 2019

3 Answers
 Sort by:

Votes

Newest

Oldest

Kiran. V
Jul 31, 2008 at 06:05 AM

HI,

http://help.sap.com/saphelp_47x200/helpdata/en/95/3ca425110511d4b5ae006094b9ec
21/frameset.htm

Hi the Subcontracting process of 57F$4 is followed in in idia when ever you r sending
the material for subcontracting from your factory. As per the Excise department it should
accompany a challan saying that it not for sale for work and you to declare the value of
the gods you r sending out.

This challan has a valid of 180days

once u recve the material and challan you have to close this challan if not u have to pay
a penalty to the department.

Regards,

Kiran

 Add a Comment

 Alert moderator

 Share
0

Pankaj Singh
Jul 31, 2008 at 06:33 AM

Hi,

Subcontracting Challan: - A document that you use to issue and track subcontracting
work. It allows you to make sure that all the materials you have sent to the
subcontractor for processing are returned. The challan is also widely known as the 57F4
challan, after the law under which it was defined up until the 2000 budget. This law has
now been superceded by a new one, 57AC.

Use: - You create challans from transfer orders to accompany any materials that you
send to subcontractors under rule 57AC. In this respect, they are an extended form of
delivery note, with additional information about the excise duty on each material that
you have supplied. Materials that are not liable to excise duty do not have to be
included in the challan.

As the subcontractors return the finished goods to you, you record the returns in the
challan, to make sure that all are returned within the allotted time limit.

If the finished goods returned to you by the subcontractor are of substandard quality,
you can also create a subcontracting challan from the returns order.

Returnable Gate Pass: - A document that you use to issue and track the repair work of
a material, which will come back to your plant after repair. For e.g. Repairing of Motors
and machineries

Non-Returnable Gate Pass: - A document that you use to issue and track the
materials, which are send ut of factory on permanent basis and not going to come back.
For e.g. Sending Motors and machineries for scrapping to the Scrap Vendor.
  Add a Comment

 Alert moderator

 Share

6 comments

Deivakaniraja Rajaram

Jul 31, 2008 at 09:03 AM

For Returnable Material

How the material be non valuated if i'm purchasing the same material and maintaining the inventory( ex pump)

And i'm sending the pump to vendor for impeller change.

1. Create a service master record.

2.Create a Service purchase order.

3.Create a dummy material code with text as a pump.

4.Do MB1C with 511 mvt type.

5.While receiving do MB1C with 512 Mvt type. This is just for tracking purpose ( both 4 & 5 th step ).

6. Create a service entry sheet.

6.Do LIV for Service PO.

For Non Returnable Material

How to issue the material, you are suggesting 501 mov type.

1. you can use 331 ( sampling )

2. 551 ( scraping )

3. 601 ( GI for sales ).