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.

The definition of the company code organizational unit is obligatory.

The company code is the central organizational unit of external accounting within the SAP System. You must define at least one company code before implementing the Financial Accounting component. The business transactions relevant for Financial Accounting are entered, saved, and evaluated at company code level.

You usually create a legally independent company in the SAP System with one company code. However, you can also define a company code according to other criteria. A company code could also be a separate, but not independent, commercial place of work. This is necessary for example, if the place of work is actually situated in a different country and evaluations therefore have to be carried out in the appropriate national currency and in accordance with other tax and legal specifications.

If you want to manage the accounting for several independent companies simultaneously, you can set up several company codes in one client. You must set up at least one company code in each client.

If you use other components of the SAP System, you have to make assignments between the company code as the central organizational unit of Financial Accounting, and the organizational units of the other components. This is necessary to ensure that data can be transferred between the components.