Paloma sees in the system that an entity called Company is assigned to each company code in the system. She looks into what this is used for in the context of SAP S/4HANA.
Companies (and consolidation transaction types) are used for preparation for consolidation. Consolidation functions in financial accounting are based on companies (legal consolidation). The actual consolidation takes place in another solution (the Bike Company uses SAP S/4HANA Finance for group reporting).
For example, consider the following case:
- a group of companies has 50 subsidiaries but only 30 of these are defined as company codes in SAP S/4HANA .
Thus, 30 company codes and 50 companies must be created in the system. Each company ID is consistent across the group in all systems. Every company code gets their own company ID.
The company ID of participating or affiliated companies (called partner companies) are assigned to the corresponding business partners for the companies that are set up as sub-ledger accounts (customers and suppliers). Alternatively, these companies can also be managed on a G/L account basis by assigning a company ID directly to a G/L account.
Paloma makes a sketch with a posting example of a cross company transaction: For company code GR10, the transaction is posted as an outgoing invoice to the customer - business partner that represents company code GR20. For company code GR20, the same transaction is an incoming invoice posted to the supplier - business partner that represents company code GR10:
