Further to add on this we can further segregate the SAP FI enterprise structure and SAP CO enterprise structure.
FI Organization Structure:
Client -> Chart of Account -> Company -> Company code -> Business area -> Functional area -> Credit control area
CO Organization Structure:
Operating concern -> controlling area -> Company Code -> Cost centers -> Internal orders
Client: A client in R/3 is a technical entity containing configuration, master data and transactions for an organization.
Chart of Accounts
The chart of accounts is a variant which contains the structure and the basic information about general ledger accounts.
Company: A Company in SAP is represented by 5-character alphanumeric code and usually represents the enterprise or the Group company.
Company Code: A Company Code in SAP is the smallest organizational unit for which you can draw individual financial statements (B/S and Profit & Loss Account) for your external statutory reporting. It is denoted by a 4-character alphanumeric code.
Business Area: Business Areas correspond to specific business segments of a company, and may cut across different Company Code. They can also represent different responsibility areas.
Functional Area: The Functional Area is an organizational unit in Accounting that classifies the expenditures of an organization by functional unit.
Credit Control Area: It helps in administering the credit management functions relating to the customers.
Controlling Area: It is the organizational unit within an institution, used to represent a closed system for cost accounting purposes. A controlling area may include one or more company codes which must use the same operative chart of accounts as the controlling area.
Sales and Distribution
SD related enterprise structure defined under the company code are
Sales organization:-> This is the highest level of the hierarchy and is, therefore, set up first. The company example used here has just one sales organization. Once this sales organization is defined, it can then be assigned to the company code.
Distribution Channel:-> The process of distribution of the goods and services is called Distribution channel which can be assigned to one or more sales organization.
Division:-> Division in SAP SD is a method of dividing products and services into different categories. Its method of grouping the products of similar characteristics together.
Sales office:-> Sales office is organizational unit which is used as Branch.
Sales group:-> Group of salespersons working for various purposes.
Plant– Plant describes the place where the production activities are performed, or goods and services are provided.
Storage locations – It represents the physical area within a plant where the materials are stored.
Purchase organizations – It is responsible for procuring material and services, negotiation of price with the vendor. It can be assigned to company code to make it company specific or assigned to plant to make it plant specific
Purchasing group – Represents a buyer or group of buyers responsible for certain purchasing activities.