What Is a Company/Trading partner in SAP?

Define Company

O It represents a Business Organization for which individual financial statements can be created according to the relevant commercial law

O A company consists of one or more company codes

O It is also considered for consolidation reporting

O It is necessary to maintain for internal trading or intercompany transactions

O It is a 6 digit code

O Transaction code: OX15

O Menu path: Display IMG -> Enterprise Structure -> Definition -> Financial Accounting --Define company

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 “Can two company codes belong to different companies and still have intercompany transactions?”

Answer

Technically, company codes from different companies can transact with each other, but SAP’s standard intercompany functionality works when company codes belong to the same company. If they belong to different companies, the transactions are treated as normal cross-company postings and require manual handling.




A Company is an organizational unit used for group-level accounting and consolidation purposes.

It represents the corporate group under which one or more company codes are grouped.

Although financial postings happen at the Company Code level, defining a Company is important for:

  • Group reporting

  • Consolidation

  • Corporate structure representation

Key points:

  • A Company groups one or more Company Codes

  • Used mainly for consolidation and group reporting

  • Does not directly generate statutory financial statements

  • Company Codes are assigned to a Company

It is mandatory to define at least one Company in the Enterprise Structure before assigning company codes.

2. Relationship Between Company and Company Code

  • Company = Corporate / Group level entity

  • Company Code = Legal entity for which financial statements are prepared

Every Company Code must be assigned to a Company.

Example:

ABC Telecommunications Ltd (Company)
 └── ABC Telecom North Ltd. (Company Code AT01)

 └── ABC Telecom South Ltd. (Company Code AT02)
 └── ABC Telecom East Ltd. (Company Code AT03)
 └── ABC Telecom West Ltd. (Company Code AT04)

3. Navigation Path to Define a Company in SAP S/4HANA

You can define a Company using either:

Menu Path

SPRO  
→ Enterprise Structure  
→ Definition  
→ Financial Accounting  
→ Define Company

Transaction Code

  • OX15

Both options take you to the Change View: Internal Trading Partners screen, where Companies are maintained.

4. Understanding the Initial Screen

When you open the Define Company screen:

  • You will see a list of existing Companies / Company Codes



  • This is normal in shared or training systems

  • You only need to create your own new entry

To create a new Company:

  • Click New Entries

5. Case Study: Defining a Company for Spoxio Inc.

You are working as an SAP FI Functional Consultant.
Your client is ABC Telecommunications Ltd., a Telecommunications company.

You are required to define:

Legal Entity NameCompany Code
ABC Telecom North Ltd.AT01
ABC Telecom South Ltd.AT02
ABC Telecom East Ltd.AT03
ABC Telecom West Ltd.AT04

After clicking New Entries, you are taken to the screen:

New Entries: Details of Added Entries


This screen is divided into two sections.

6. Section 1: Basic Company Information

In the first section, enter:

6.1 Company

  • Field: Company Code

  • Length: Up to 6 characters

  • Example:

    • ABCT

This code uniquely identifies your company in the system.

6.2 Company Name

  • Field: Company Name

  • Maximum length: 25 characters

  • Example:

    • ABC Telecommunications Ltd.

This is the legal or corporate name of your company.

7. Section 2: Detailed Company Information

This section is used for:

  • Correspondence address

  • Language settings

  • Local currency definition

These details are used in:

  • Financial statements

  • Official correspondence

  • Reports and forms

You must maintain the following fields.

7.1 Address Details

Enter:

  • Street: Plot 45, Tech Park Road

  • Postal Code: 110001

  • City: New Delhi

7.2 Country Key

This identifies the country where the company operates.

Examples:

CountryCountry Key
United StatesUS
Great BritainGB
GermanyDE

  • Country: IN

Use the search help (F4) if you are unsure.

7.3 Language Key

This defines the company’s language for correspondence.

Examples:

CountryLanguage Key
USAEN
Great BritainEN
GermanyDE

Language: EN

7.4 Currency Key (Local Currency)

This defines the company’s local currency.

Examples:

CountryCurrency Key
USAUSD
Great BritainGBP
GermanyEUR

Currency: INR

This currency is used as the company code local currency for financial statements.

8. Saving the Company

After entering all details:

  • Click Save

  • Then click Exit

Your Company is now successfully created in the system.


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