Organizational structure
The organizational structure in SAP is the framework of organizational units, company code, plant, storage location, sales organization and more, that models your business inside the system. It is configured first, because every process and posting is assigned to these units.
These units are assigned to each other, plants to company codes, sales organizations to company codes, so that logistics events flow to the correct legal entity for accounting.
- Before you can post an invoice or raise an order, SAP needs to know the legal, logistical and reporting entities involved.
- Company code: the legal entity for financial reporting (FI).
- Plant: a location where goods are produced or stored (logistics).
- Watch out: Designing the structure carelessly, it is very hard to change later.
Why it comes first
Before you can post an invoice or raise an order, SAP needs to know the legal, logistical and reporting entities involved. The organizational structure defines these units and their relationships, and it is one of the earliest and most consequential configuration decisions in any implementation.
Key organizational units
- Company code: the legal entity for financial reporting (FI).
- Plant: a location where goods are produced or stored (logistics).
- Storage location: a stock area within a plant.
- Sales organization / distribution channel: for selling (SD).
- Purchasing organization: for buying (MM).
- Controlling area: for cost accounting (CO).
They interlock across modules
These units are assigned to each other, plants to company codes, sales organizations to company codes, so that logistics events flow to the correct legal entity for accounting. Designing this structure correctly is essential; changing it later is painful.
Common pitfalls
- Designing the structure carelessly, it is very hard to change later.
- Confusing legal (company code) and logistical (plant) units.
- Missing the cross-module assignments that make integration work.