Business Area in SAP FI module
Business area in sap is defined as an organizational area within the financial accounting module. Business area in SAP is used for internal and external reporting.
Business area in SAP is resulting through projects to different master data in SAP like assignment to cost center master. The function is to create balance sheet and income statement below the company code level.
An alternative to business area balance sheet and PL Account is to go for profit center accounting. Profit center account is used in companies to consolidate performance related to different responsibility area of different company codes.
Business area configuration in SAP is not easy compare to profit center accounting. At the end of the year you will have lots of problem in reconciliation of data as business area in SAP is not directly related to any company code. Instead profit center accounting will give you better result and is more stable than business area.
Steps to create Business Area in SAP FI
Enter the transaction code SPRO as shown below in picture
select the SAP reference IMG
After select the SAP Reference IMG folllow the steps below
Enterprise Structure as mentioned in the previous topic → Definition → Financial Accounting → Define Business Area → Execute → Go to New Entries
Select new entries
Update the lsit