Maintain Controlling Area

The controlling area is the highest organizational level within CO. It must exist before Cost Center Accounting (CCA) can be used. A controlling area will be created on a one-to-one basis with the company code created in FI. This does not facilitate cross-company code accounting in CO. In order to facilitate cross-company code accounting, more than one company code is usually assigned to the controlling area.

Note the difference between cross-company code accounting and inter company accounting.

Cross-company code accounting involves the allocation of costs across cost centers (or responsibility centers) existing in different company codes within CO. Inter company accounting involves the recording of inter company receivables and payables in FI.

There are several factors considered when determining whether one or more controlling areas will be used. The major factors considered are whether cross-company code accounting is desired, and whether more than one chart of accounts is needed at the controlling area level. In addition, currency issues may also be considered.

 

Thanks

Jayanth Maydipalle

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