Define Business Area in SAP

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The definition of business area is an independent organizational unit that has its own area of responsibility within the organization. Which can prepare financial statements for internal & external reporting. The classification of the business areas is either geographical or product-wise as per the requirement of the company. We can define any number of business areas. If the organization is following the consolidated business area approach, we have to define the consolidated business area approach otherwise we can skip the option. If you define the consolidated business area we have to assign the business areas to the consolidated business area without fail. Hence the consolidated business area functionality is optional for customization.

Different divisions of each business within a legal entity are created as business areas for reporting each operational area. So financial statements can be created for each business area. 

Business areas are not assigned to any company code 

For example, this can help you to serve a report as required by the segmental reporting as required by the international accounting standard- 14

Path: IMG -> Enterprise Structure -> Definition -> Financial Accounting  -> Define Business Area. 
 
TC:- OX03 

Click on New Entries
Click on Save or CTRL+S
Field Name Description
Business Area Unique alphanumeric code for identifying the Business area. The maximum length of the character length is 4.
DescriptionDescription of the business areas.

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