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 Business Area

Definition

The

business area is an organizational unit within financial accounting. It corresponds to a defined business segment or area of responsibility, to which you can assign value movements recorded in Financial Accounting.

Use

In fully featured systems (including Accounting and Logistics) the business area is usually derived automatically. Using automatic business area determination, the business area is linked to other organizational units – for example:

  • Plant
  • Division
  • Distribution channel
  • Cost center

The definition of business areas can influence the definition of these organizational units.

The business area is defined using:

  • Assignments, for example of cost centers to the business area
  • Combinations of information, like plant and division determination

You do not assign business areas directly to company codes. In a company code, you can assign transactions to one or more business areas. You can post a business area to several company codes. Each cost center is assigned to exactly one business area.

You can use R/3 business areas:

  • To generate reports on external fields of activity (for example, product lines) for your enterprise. Each field of activity that can be isolated is characterized as a field of activity.
  • To create internal financial statements or profit and loss statements

You can attribute all the main balance sheet items – for example fixed assets or inventory – directly to the business area.

  • To create internal reports:
    • Cross-company code reports,
      for example on the main fields of activity for the enterprise
    • Company code-specific reports,
      for example reports on fields of activity that pertain to one legal entity only
  • To portray strategic business areas or product lines

as an alternative to, or in addition to profit centers

You enter the business area when you carry out postings manually. You must reconcile the definition of your business areas between Accounting and Logistics.

For more information, see:

Business Area: Notes

Integration

Business Area: Integration (Organizational Units)