The controlling area is the central organizational unit of the Controlling (CO) component. You use the controlling area to carry out cost accounting.

If you implement the Controlling component, postings are forwarded from Financial Accounting to Controlling. During posting, you can specify any additional account assignments relevant for cost accounting (for example, cost center or internal order). You must assign a controlling area to your company code to ensure that this data is forwarded to Controlling for further processing for cost accounting.

The company code and controlling area do not have to exist in a one-to-one relationship. You have the following options for this assignment:

• The company code can correspond to exactly one controlling area (see the following figure, 1).

For more information, see Assignment of Company Codes and Controlling Areas.