Understanding Accounting Segments

Overview of Accounting Segments and how each is connected.

Organizational Segments

Navigate to the left panel and locate Master Data → Organization.

Company Code

A company code is a 3-4 letter/ number code that defines a business entity or location.

• Company Codes are associated with a Company and/or Billing address. 
• At least one Company Code must be created.

Purchasing Organization

Represents the procuring unit in a legal sense. The way in which you assign purchasing organizations to company codes and plants determines the procurement method.

• Purchasing Organizations are associated with a Company Code.

Plant 

A subdivision of a Company Code. Often a location, office or building capable of manufacturing goods of all sizes in large quantities to be sold by a business. Through this feature the Admin can see the different plants and the corresponding number code to the plant. 

• Plant Codes are associated with a Company Code.

Accounting Segments

Navigate to the left panel and locate Master Data → Accounting.

At least one Company Code must be created before the accounting segments listed below can be set up. Each accounting segment can be individually toggled as Active or Inactive. 

Cost Center

A cost center is part of an organization that does not produce direct profit and adds to the cost of running a company.

Example: Accounting, Marketing, Shipping etc. 

• Sub-Cost Centers can be created. If a parent cost center associated with a sub-cost center is deleted, both classes will be removed from the system. 
• Start and end dates can be set for each Cost Center

Profit Centers

A business unit that generates revenue and may also incur costs. 

Example: Sales department, Online sales

• Start and end dates can be set.

Classes

Cost Reporting for a specific division, department or other organizational unit. 

• Classes can be associated with a specific Company Code or All Company Codes. 
• Start and end dates can be set for each Class.
• Sub classes may be created. If a parent class associated with a subclass is deleted, both classes will be removed from the system. 

Locations

Locations where financial transactions occur. Locations can be defaulted to each user. 

• Locations can be applied to a specific Company Code or All Company Codes.  If All is selected, Location type will become a required field. 
  • Plants & Classes association to a specific location is optional.

WBS Elements

A WBS Element is a hierarchical and incremental decomposition of a project into phases, deliverables and work packages. It is a tree structure, which shows a subdivision of effort required to achieve an objective

Example: a program, project, or contract.

GL Accounts

A General Ledger (GL) Account is a unique record summarizing each type of an asset, liability, equity, revenue and expense. This information is needed to prepare financial statements. 

Example:  Cash, Accounts Receivable, Inventory, Investments, Land, and Equipment.

Projects

Indicates projects such as work orders, contracts, grants, or other entities to track specific transactions.

• Sub Projects can be created. 
• Start and end dates can be set for each Project.
• Association to a Class is optional.

Internal Orders

Internal orders are used to monitor overhead costs incurred for a specific event, project or activity. 

• Internal Orders may also be associated with a Profit Center.

Customers

The Customer classification allows you to associate projects to a customer. 

• Customer Code can be associated with a Cost Center, GL Account WBS Element or Project. 

Location Types

A specific space whether it be Physical, Partner or Virtual. 

Associated with Company Code and Location.