Business Area Consolidation 

In the SAP system, business areas portray an externally oriented dimension of a group's areas of operation. They can be the centerpoint of business reporting and, therefore, be an important medium for the group’s public relations. The level of detail for portraying business areas will vary from group to group. When examining business reports you infrequently find more than 5 to 10 fields of operation. Though, for purposes of internal observation it may be very useful to classify the areas even further.

The following overview shows a matrix organization of business area consolidation:

 

In addition to this dimension of the corporation’s areas of operation, which are primarily portrayed as business areas, there are other internal dimensions more oriented towards responsibilities. The profit center structure can be used for this.

The consolidation of business areas described here offers the following functions:

  • Group-wide, cross-company code and cross-system consolidation
  • Data input from external, non-SAP systems
  • All types of currency translation methods
  • Elimination of intercompany ‘sales of merchandise’ and ‘payables/receivables’
  • Reclassifications from heterogeneous charts of accounts and key structures
  • Company-level cross-validations of the consolidated financial statement

The following sections will first discuss the organizational units "business area" and "consolidation business area", then financial statement presentation in Reporting, and finally the use of business areas and ‘trading partner business areas’ in various business transactions.

In particular, please read:

Organizational Units ‘Business Area’ and ‘Consolidation Business Area’

Financial Statement Presentation in Reporting

Business Area and Partner Business Area Assignments