What is a company code in SAP?

Answer 1

A company code in SAP is the smallest organizational unit for which complete, independent financial statements can be created—such as a balance sheet and profit & loss statement.

In simple terms:

A company code represents one legal entity (for example, a company or a subsidiary) within an SAP system.

Key points:

Each company code has its own books of accounts

It is used for external financial reporting

All FI transactions (GL, AP, AR, Assets) are posted within a company code

A company code is identified by a 4-character alphanumeric code (e.g., 1000, US01)

Example:

If a business has operations in different countries:

Company Code 1000 – India operations

Company Code 2000 – USA operations

Each company code will have its own financial statements, even though they are in the same SAP system.

Mandatory assignments:

A company code must be assigned to:

Chart of Accounts

Fiscal Year Variant

Posting Period Variant

👉 Summary:

Company Code = Legal entity + independent accounting + financial reporting unit in SAP FI