Company codes generally represent the various legal entities within an organization. The Company Code is the lowest level for which you can produce a complete set of financial reports (balance sheet and P&L) for the SEC and other external filing agencies.
Organizations that have subsidiaries and multiple legal entities usually represent those with company codes.
The Basics for Creating a New Company Code
- Create a “Company”. This is not the same as Company Code. It would be the umbrella company to which company codes are assigned. It may already exist, if so you can skip. Path: SPRO -> Enterprise Structure -> Financial Accounting -> Define Company
- Create (T-code: OX02) or Copy (T-code: EC01) company code. It is generally recommended that you copy the Company Code if you have one that is similar (same chart of accounts [not the same books, but same account structure], same currency, etc). Copying brings over the settings of the original to the new one.
- Set City, Country, Currency, and Language for Company Code. Path: SPRO -> Enterprise Structure -> Financial Accounting -> Define, copy, delete, check company code…select Edit company code data…double-click on the company code in the table to take you to the details screen
- Assign company code to a chart of accounts (T-code: OB62). You can assign multiple company codes to the same chart of accounts. This does not interfere with each company code being able to produce its own complete set of financial statements. Mutliple charts of accounts may be necessary if dealing with foreign countries like France and Italy that have specific laws around the chart. Here is a related article discussing Company Codes and the Chart of Accounts.
- Once ready for production, Set Company Code to Productive. This prevents the deletion of certain transactions and data that can be deleted while in development. Path: SPRO -> Financial Accounting -> Financial Accounting Global Settings -> Set Company Code to Productive
Here is a view of SPRO and a couple of the paths to company code config.