The enterprise structure consists of the following elements:

R/3 System clients have an independent status both in legal and organizational terms. The clients within the system can be distinguished by a three-character, alpha-numeric code and are defined in Customizing.

When your R/3 System is installed, it is set up with two clients:

• Client 000

• Client 001

Clients are a technical structural feature of an R/3 system. The system makes a distinction between client-independent and client-dependent elements. Client-independent elements are objects that are used in all clients. Client-specific elements are objects that are only used in a specific client.

The following objects are defined as client-independent:

• data structures, such as field definitions, table structures, and file set-ups
• client-independent tables
• transactions
• programs
• Standard reporting
• Authorization objects
• SAP Library

The following objects are defined as client-dependent:

• client-specific tables that must be copied from the original client, that is, client 000
• HR master records
• user master records
• Authorization profiles
• customer-specific programs

The following factors must be taken into consideration when you decide whether or not to create a client:

• You have to adapt the system client-specifically to the enterprise structure.
• You cannot access personnel data in other clients. Each client’s personnel data is protected from unauthorized access.
• You cannot perform reporting across all clients, and you cannot receive or assign client-independent access authorizations.
• You cannot exchange data between clients.
• If an employee moves between two clients, you must assign him or her a new personnel number.

Within a client, the company code represents the highest level of the enterprise structure. In Customizing, the company code is defined by a four-character, alpha-numeric code.

If the Controlling, Financial Accounting, Materials Management or Sales and Distribution application components are set up in addition to the Personnel Administration component, you must set up the company code so that it also meets their requirements. This is not tantamount to a restriction: You define all of the HR System’s most important control data at the level of the personnel subareas, and these levels belong to Personnel Administration.

In Personnel Administration, the company code has the following control functions:

• The company code is used to generate default values for data entry, for example, an employee’s payroll area.
• The company code is a selection criterion for reporting.
• The company code constitutes an authorization check unit.

At the company code level, the following control features are assigned which are relevant for Personnel Administration:

• the default country key for the employee’s personal data, address data, and bank data.
• a default value for the currency key for employee’s basic pay.
• a language code for text output, for example, employee remuneration information.

Personnel areas divide a company code into sub-units. The individual personnel areas in a company code are defined in Customizing and have a four-digit alpha-numeric identifier.

The personnel area has the following functions:

• The personnel area is used to generate default values for data entry, for example, an employee’s payroll area.
• The personnel area is a selection criterion for reporting.
• The personnel area constitutes an authorization check unit.

Personnel subareas are a subdivision of the personnel area. Organizational control of the main HR subareas, namely the pay scale and wage type structures and work schedule planning, takes place at the personnel subarea level. In Customizing, the personnel subarea is defined by a four-character, alpha-numeric code. The respective country-specific control features are stored here.

The personnel subarea has the following organizational functions:

• Specifying the country grouping; this controls the dialog for entering country-specific personnel data and the setting up and processing of wage types and pay scale groups in Payroll; within a company code, the country grouping must be unambiguous
• Assigning a legal entity to differentiate between the individual companies from a legal point of view
• It specifies groupings for Time Management. This enables you, for example, to set up work schedules, substitution types, absence types, and leave types on the basis of a specific personnel subarea.
• The personnel subarea is a selection criterion for evaluations.
• The personnel subarea is used to generate default values for pay scale area and pay scale type for an employee’s basic pay.
• It specifies the public holiday calendar.
• Defining personnel subarea-specific wage types per personnel area
• It assigns a legal person for payroll.