Disadvantages of Using Business Area

Dear All
We have to define Plant Level Financial Statements. We intend to use the Business Area for generating Plant Level Financial Statements. What are the disadvantages of using Business Area for generating plant wise Financial Statements
Regards
Samir Bhansali

Hi,
Business Area functionality has its own advantages as against PCA. Yet, it has reconciliation problems because business areas are not linked to company codes in standard configuration. In double entry book keeping, there are chances, the debit of a single transaction goes to one business area and credit of the same transaction goes to another business area. This means your double entry is not complete in both Business Areas to reconcile with Company Code Financial Reports.
If you donu2019t have an effective PCA reporting, then Business Area is the tool. But many new projects implement PCA instead of Business Area configuration. But ultimately, this is a business process decision.
Ashok

Similar Messages

Using Business Area and Profit Center Accounting with New GL functionality

Hello,
We are Public Sector and using ECC 6.0, we have been using Business Area with Fund Management. We also use Special Purpose Ledger with Document splitting. Before migrating to New GL functionality, we want to understand
-     The possibility of using both Business Area and Profit Center Accounting, and the impact on the system
-     If we activate Profit Center Accounting before migration, how will it work with the splitting process?
-     If we migrate without Profit Center Accounting, will this cause the activation of Profit center accounting later to be more complicated, even if we migrate again?
Thanking you

Hi Sachin,
Thank you for the reply, we want to know that
-     The possibility of using both Business Area and Profit Center Accounting, and the impact on the system
If we decide using Profit Center Accounting with Business Area with New GL functionality how we should do it
-     should we activate classical Profit Center Accounting before migrating to New GL functionality, if we do this how will it work with the splitting process?
-     If we migrate to New GL functionality without Profit Center Accounting, will this cause the activation of Profit center accounting later to be more complicated, even if we migrate again?
Thanking you
Tipu Khan

Any problem if we use Business area concept other than Profit Centr

Hi,
what are the problems and difficulties if we use Business area concept other than Profit Center.
Kindly give me brief deatils,,,will assign points
thanks
Sap Guru
kischowdary*gmail.com

Hi:
Business area will not be supported by SAP in the future
The problem of splitting of account balance is more pertinent in case of tax accounts.
In month end procedures, there are big problem in reconciliation.
Not Efficient in Reporting.
SAP Recommends Profit Center Accounting instead of Business area
Please let me know if you need more information.
Assign points if useful.
Regards
MSReddy

Using Business area for External Reporting-Pros & Cons?

Dear Freinds,
We are a Retail Business Group half way through SAP IS Retail implementation. We have 8 legal entities, currently their complete Annual Financials are being made & audited separately. In SAP the structure is that there is Single Co. Code & transactions will be seggregated by Business Area (made manadatory for data entry) and Annual Accounts will be drawn up using Business Area.
This to me does not seem to be the right structure. I have joined the group recently, I will be much thankful to you all if you please help me list the Pros & Cons of using Business Area for external reporting.
Rajesh Agarwal
[email protected]
Edited by: Rajesh Agarwal on Jan 27, 2008 6:54 PM

Dan: <i>For management reporting you may not want to post eliminations between companies where the business areas are the same.</i>
If the Business wants to see the eliminations between companies, within the same business area, as part of BEx reports, what should I do? They do not want to execute consolidation functions in UCMON but just want to see how the eliminations have taken place between companies with in the same business area.
Dan: <i>As long as the partner company and partner business area are consistently included for the intercompany transactions, the eliminations between Legal and Management will agree at the top-level of each hierarchy.</i>
Have I to introduce one more InfoObject Partner Business Area in the data basis and assign the role Sub-assignment once again?
Thanks in advance.

Business Area for Vendor Line Items during Payroll Posting

Dear All
We are in ECC 6 version of SAP. We are using Business Area for Internal Financial Statement. We are facing a problem with regard to Business area in Payroll posting. Business area does not appear in vendor line items when we make posting of payroll for multiple business area. We have setting technical accounts for HR. We read SAP note 203276 and it seems that it is possible. Can someone tell us what is the reason that business area not coming in vendor line item while payroll posting.

Hi
That part we have already done. The problem only come when we run payroll and there are vendors belonging to several business area in that case system keep the business area field blank. In case if we set field status required system give error. That is why we run payroll by each business area we also have maintained technical account for 1001.
Regards

Business Area and Profit Center In Document Splitting

Hi,
We are using Business area and Profit Center characteristics for document splitting.
In one transaction, the Business area and profit centers are defaulted through the cost center.
The document is successfully split in respect of the business area, but the profit center is not filled, thereby giving error while posting.
Please suggest.

Hi,
Actually, we have all three scenarios, profit center, segment and business area..
As suggested, we have checked all field status relevant.. profit center is optional in all cases..
Now, Pls consider the scenario without business area in document splitting characteristics..
If I post an expense, profit center is picked thru cost center and segment thru profit ctr. The vendor or bank line item inherits the characteristic values from the previous line item.
Now, in addition we have business areas in doc splitting characteristics.
Business area, again is populated thru cost centers, along with profit ctr and segment.
The business area gets correctly populated in the vendor line item.. but the profit center doesnt.
Please let us know the reason..
Edited by: Swapvik on Mar 23, 2009 4:07 PM

Business Area control

We are using Business area control for the reporting of Balance sheet items per business area. Usually we will use the field status group code to assign to the GL Acct master (FSS0) to control that the account has to fill up the Business Area code as a required field. This controls works fine for all our transactions except for the bank account. We have only one bank account used by multiple division which is recognised by different business area codes. So when we perform payment using F110 the business area is left blank and when posted will be blank as well. The question is there anyway that we can default the business area at trx level during F110 for better reporting options.
Other alternatives that we had looked at was the balance sheet reclassifications F.5xxx series but its more work and it cant capture data at source trx level , therefore cant have a good reporting option as well.

Hello,
Based on the given information, it seems that such problems arise due to poor definition of business area / application of concept of business area. The concept of business area is best applied and utilised (with least amount of errors / problems), if it is used for Branch Accounting, which is well known accounting technique in the world of conventional financial accounting.
Ambadas

Automatic Business Area Derivation Rule for Vendor Line Item in MIRO

Hello Experts,
We trying to use Business Area concept for our client.
I have completed all configuration setting for the business are derivation like
1. Creation of Business Area
2. Assign Business area to Plant / Division (OMJ7)
3. Business area determination from sales area (TVTA)
4. Business Area by Sales Area
5. Checked Field Status Group for Customer and Vendor Reconciliation Account
It is working for for compelete sales process and in Procurement cylce it is picking business for MIGO transaction both the line items.
But
In MIRO (Purchase invoice posting) it is automatically taking Business area to the GR/IR line item and it not taking Business area for the vendor line item (automatically)
I comes know that there is a business area derivation rule for this to happen automatically.
Can you please propose the soulution for the automatic derivation of business in MIRO for vendor line item.
Regards,
Chalapathi

Hi,
I do mot think there is a BA derivation rule for MIRO.
The best you can do is:
1. Use a user exit or enhancement point for deriving the BA from the GR/IR line and populate that in the vendor line
or
2. You make BA as a mandatory field in the field status group for the vendor reconciliation account. This will then force the user update the BA. We use this option. This is so because at times, the vendor item may need a different business area than the GR/IR line.
Cheers.

Business area not defaulted for tax line item

Hello Friends,
I am posting Customer invoice, when I simulate the invoice that time Output tax is automatically calculating the tax. My problem is, in the Output tax line item business area is required field which is appearing in display mode.
T code - OBXM. Here we will configure this and at the month end we will run the following transactions.
F.5D, F.5E.
I want to know step by step cinformation for this. If you have any documentation send it to [email protected]
Rams.N
Points will be assigned for the right answer

hi,
If you are using business area method then you want to create all sales tax GL with business area optional. And You create one GL like Tax clearing account(business area optional)and assign the same in OBXM against all the sales tax GLs.
Then you want to run F.5d and F.5e on everymonth.
govind.

Business area Not coming for CST /VAT account

Hi,
I am using Business area wise financial statements.System fetches business area for gl accounts except CST /VAT accounts as per the configuration.
Can this be solved through by running the program SAPF180?
i do not know how to do this .
GURU

Before using substitution, refer Note 199886. Think about all possibilities and then you decide.
BSEG-GSBER field for call point 9 (Line item) is not available for substitution. However substitution is possible but tricky.
Good luck.
PP

Cost center assinment to business area very urgent

Dear all
i am doing business area wise balance sheet and profit and loss account assign ment for company code (which is already having existing data ) for this co code
so for company code is not using busineess ares now they are going to introduse new business areas.
when i new business area in cost center it is throwing this error
Field change Business area is not possible (transaction data already exists)
Message no. KS 134
Diagnosis
To ensure the consistency of existing data, you can only change object Business area if no transaction data exists in the change period; that is, neither plan data nor actual data has been posted.
As transaction data already exists, it is not possible to change objects in this time period.
Procedure
If you still want to change the object, select a suitable change interval by choosing "Edit -> Analysis period...".
arroding to procedure if i go to Edit /Analysis period the error is
field change business area is not possible (transaction data already exists )
please guide me
regards
sadiq

hi karl,
u are corrct about the KS 134 and RKACOR06 pogramm. i am not talking about this situation .
hear the author posted the docu ment thread wher till now ther company is not using business areas . now they created new business area (eventhough till now they are not created thats why TGSB error is coming). for that only i said we can creat new anlysis period with assiging of business area in cost cenetr master screen .only for new analysis period only
not for existing transaction data posted period.
i think my communication may confused u . sorry for that.
any how
thank you very much for ur input.
kaindly inform the author in this way for new analysis period with business area.

Difference of balance in balance sheet report & Business area wise report

Dear Group Members!!
In my company user wants to generate Business are wise Report
Difference of balance in balance sheet report & Business area wise report from same t code
Balances are different if enter business area, & if I execute the report with out entering any business area. Transaction code S_ALR_87012284 - Balance Sheet / Profit and Loss Statement.
The difference amount to be considered as data entry made with out using business area?
How do I rectify this?
Your comment will be helpful for me
Shamulheq

Hi Shamulheq
While working with business area you must first recognize that they are not company code dependent and can be used cross-company. Also depending on the SAP release you are working with postings to Business Area may not 100% guarantee, since there are cases where rules or standard SAP is not available and line items posted will be carried out without BA. For SAP releases not using the NEW GL, the setting up of adjustments accounts and monthly execution of adjustment programs would provide the vehicle to relate and adjust any missing BA at B/S and P/L level. If you are using NEW GL the document splitting would help to set the rules where every single line item would get a business area.
I assume that you are using the classic GL. The execution of T code S_ALR_87012284 - Balance Sheet / Profit and Loss Statement without business area retrieves all posting entered for any given company code regardless the account was posted with or without business area, this can be clearly displayed when you select the radio button for Classic Navigation. If you filter by Business Area, then the report will isolate the output data accordingly (The balances should be smaller). When using the classic GL you have to make sure that the financial statement version you use to execute the report, includes that the technical (Adjustment accout) account(s) that is used for the adjustment programs, so the correction to buisness areas is also included.
In conlcusion I think you have to make all this considerations, in order to better understand where the differences come from.
Hope this helps.
GG

Business Area wise Balance sheet and P&L display

Hello SAP Gurus
Can anybody tell me how to configure to view, balance sheet and Profit & Loss as per business area?
Regards,
Abhijit Walke

It is a misconception that Business Areas are not recommended by SAP.
Business Areas and Profit Centres serve two different purposes and Profit Centres are NOT a replacement for BAs nor vice-versa.
We have just implemented ECC 6.0 using Business Areas and there was no indication at any stage neither from SAP nor its consultants that BAs will not be supported. There is no SAP written document that these will not be supported and if there is, I would be interested to look at it.
As for config, you may want to follow this link for details:
http://help.sap.com/saphelp_erp60_sp/helpdata/en/5f/1fb0274aee11d189740000e8322d00/frameset.htm
Cheers.

Business Area vs. Profit Center Accounting

Hi all,
I have a doubt regarding this issue.
Our customer is a holding composed by 3 legal entities, each one with its own Balance Sheet. The company produces in such a way that they need to plan production and purchases globally (for the 3 legal entities).
I searched how to deal with this, and if a create 3 different company codes it is really difficult to plan production and purchases for the 3 company codes globally. The most suitable solution would be to use STO process (stock transfer orders), but the purchases would be done by only one company code and this is not what the customer wants because only this company code would have tax credits.
I am now thinking about having one company code divided into 3 different business areas or profit centers, but I am not sure which solution will be better, taking into account that each legal entity must submit a separate Balance Sheet. In Sap Help, I found that it is better to have different business areas if each organizational unit must submit external presentatios. But I was told that Profit Center Accounting came to replace Business Area. Is that right? May I use Business Area to do so or Profit Centers ? Which one is the most reccomendable?
Thanks in advance.
Regards,
Florencia.

hi,
if u r setting as a business area,still u need to follow the reporting procedures to the local authorities, such as banks,tax,etc. but,if u do it as a profit center,it will come under ur internal entity (controlling), and for the local authorities,ur holding entity will take care of reporting,etc.
thanks..

Business Area vs Profit Center comparison document

Friends,
I have 8 company codes, 6 comapny codes are running with Business area ....
Now business wants bring those 2 company codes into Business area using.. is there any imapct for running company codes to use Business area ??
I would like to suggest Profit center accounting instead of Business area.... if you have any presentation or documentation on Business area vs Profit center please share me .....
Thanks alot for your help..
what might be necessary in each of the active company codes, to turn on business areas again, since they used to be active and what process, configuration changes necessary for each (BA and PC)
FICO

Hi,
It is recommended to enable BA to a running company only at the end of the year. The main impacts are in the Fixed Assets and Cost Centers. I have performed this task in the middle of the year and had to upload this key on all Assets, and I had used a report to assign to all cost centers. It may be necessary to create validation rules for the financial Accouting.
Regards

Disadvantages of Using Business Area

Similar Messages

Maybe you are looking for