Company Code in the SAP System

A company code in the SAP system represents a legally independent company. It is the smallest organizational unit of external accounting and represents the highest level of financial reporting within an enterprise. It encompasses the recording of all business transactions subject to posting and the preparation of all supporting documents for statutory standalone financial statements, such as balance sheets and profit and loss statements. All types of financial transactions – such as posting an invoice or a payment – are recorded, stored, and evaluated at the company code level. Multiple company codes can be set up within one client, but at least one company code is required. It is essential that all company codes within a company use the same chart of accounts and fiscal year variant. However, each company code can have a different local currency.