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Enterprise Structure
It contains the following objects.
Company
Company code
Personnel area
Personnel sub area
Employee group
Employee sub group
Enterprise structure: Structure of company according to personnel
administrative, time management and payroll perspectives from the point of view
of your own company. The company structure describes elements of the company
and there dependencies
NOTE:Company and company code are defined by the Fi/co consultants in real
time scenario, but here for our practice purpose we i.e. hr consultants have to
create these two elements.

Company Code: Smallest organizational unit of external accounting for which a

complete, self-contained set of accounts can be created. This includes the entry of
all transactions that must be posted and the creation of all items for legal individual
financial statements, such as the balance sheet and the profit and loss
statement.
The definition of the company code organizational unit is obligatory.
Use: The company code is the central organizational unit of external
accounting within the SAP System. You must define at least one company code
before implementing the Financial Accounting component. The business
transactions relevant for Financial Accounting are entered, saved, and evaluated
at company code level.
You usually create a legally independent company in the SAP System with one
company code. However, you can also define a company code according to other
criteria. A company code could also be a separate, but not independent,
commercial place of work. This is necessary for example, if the place of work is
actually situated in a different country and evaluations therefore have to be carried
out in the appropriate national currency and in accordance with other tax and legal
specifications.

 If you want to manage the accounting for several independent companies

simultaneously, you can set up several company codes in one client. You must
set up at least one company code in each client.
Within a client, the company code represents the highest level of the enterprise
structure. In Customizing, the company code is defined by a four-character,
alpha-numeric code.

In Personnel Administration, the company code has the following control

functions:
The company code is used to generate default values for data entry, for
example, an employees payroll area.
The company code is a selection criterion for reporting.
The company code constitutes an authorization check unit.
At the company code level, the following control features are assigned which
are relevant for Personnel Administration:
the default country key for the employees personal data, address data, and
bank data.
a default value for the currency key for employees basic pay.
a language code for text output, for example, employee remuneration
information.
A company code should be depicted from a tax law, commercial or other
financial accounting standpoint. It usually corresponds to a legally independent
company.
A company code can also depict legally independent business premises located
abroad if there are specific reporting requirements for these premises, like for
example reports using the appropriate domestic currency.
A company code possesses specific information that is important for accounting
purposes. For example, each CC is assigned to exactly one country; this
determines the country-specific tax regulations used. For example, each CC is
assigned to exactly one country; this determines the country-specific tax
regulations used.
For each company code, you define exactly one operative chart of accounts,
which can be used for accounting within that company code. In addition, you
can define a country-specific chart of accounts, which is structured in
accordance with the legal requirements of the country in question. You can also
use a group chart of accounts for consolidation purposes.
Each company code has exactly one domestic currency, in which you create

the balance sheet. You can define up to two additional currency roles, for
example global company currency. This means that you can disclose
transaction figures for the company code not only in the transaction currency or
in the domestic currency for that company code, but also in up to two additional
currencies.
It is a legal entity. It is a legal independent firm with independent accounting.
Fi/co consultants will define chart of accounts in which they create G/L
accounts. These G/ L accounts should be assigned with Symbolic accounts.

Personnel Area: It is a geographical location where the company operates its

business. Personnel Area is defined with any four digit character.
The personnel area is an organizational unit; according to a personnel
administrative, time management and payroll organizational point of view, a
personnel area represents a delimited enterprise area. The personnel area is only
used in Personnel Administration and is unique within a client. Personnel areas
are sub-divided into personnel sub areas. Organizational data and guidelines as
how to assign it are stored on a personnel area and personnel sub area level. The
rules and guidelines could be of a legal, pay scale and collective agreement, or
internal nature. A personnel area is assigned to a company code which has the
financial accounting values that are relevant for the personnel area. A pay scale
area, a pay scale type and a public holiday calendar are precisely defined for a
personnel sub area. The personnel area in a software company can be subdivided
into development, training and administration personnel sub areas.
Personnel areas divide a company code into sub-units. The individual personnel
areas in a company code are defined in Customizing and have a four-digit alphanumeric identifier.

The personnel area has the following functions:

The personnel area is used to generate default values for data entry, for
example, an employees payroll area.
The personnel area is a selection criterion for reporting.
The personnel area constitutes an authorization check unit.

 Personnel Sub Area :It is a further sub division of Personnel area; it can be sub
location / name of the department in the company. Before we create personnel
sub area we have to specify under what personnel are we have to create this unit.
The personnel subarea is only used in Personnel Administration. The groupings
linked to the personnel subarea determine which entries from the subsequent
screen are allowed for an employee of a particular company code/personnel area.
Groupings are used for validation of master and time data. Groupings are also
used to check the plausibility of data that you enter.
Personnel subareas are a subdivision of the personnel area. Organizational
control of the main HR subareas, namely the pay scale and wage type structures
and work schedule planning, takes place at the personnel subarea level. In
Customizing, the personnel subarea is defined by a four-character, alpha-numeric
code. The respective country-specific control features are stored here.
The personnel subarea has the following organizational functions:
Specifying the country grouping; this controls the dialog for entering country8

specific personnel data and the setting up and processing of wage types and
pay
scale groups in Payroll; within a company code, the country grouping must be
unambiguous
Assigning a legal entity to differentiate between the individual companies from a
legal point of view
It specifies groupings for Time Management. This enables you, for example, to
set up work schedules, substitution types, absence types, and leave types on
the basis of a specific personnel subarea.
The personnel subarea is a selection criterion for evaluations.
The personnel subarea is used to generate default values for pay scale area
and pay scale type for an employees basic pay.
It specifies the public holiday calendar.
Defining personnel subarea-specific wage types per personnel area
It assigns a legal person for payroll.

 Employee group: It shows what relation is there between company and the
employee. It specifies what type of employees they are.
For example

Active
Permanent
Temporary
Probationary / Trainee

Note: employee group is defined with single digit character.

Employee groups represent a primary subdivision of personnel. An employee
group defines the extent to which its employees place their labor at the disposal of
the enterprise. The Personnel Administration component makes a significant
differentiation between active, pensioner and early retiree employee groups. In
customizing each employee group is defined with a one-digit identification.

 The employee group has the following organizational functions:

Employee groups allow you to generate data entry default values, for example,
for the payroll accounting area or an employees basic pay.
Employee groups serve as selection criteria for reporting.
Employee groups constitute an authorization check unit.
The standard system contains a few specimen employee groups. You can copy
the employee groups that are delivered or if necessary adjust them to your
company specific needs.

 Employee sub group : It is a further sub division of employee group which can be
defined any two digit character.
For example Top management
Middle management
Lower management
Salaried
Hourly wage earners
Based on many aspects we can create employee sub group.
Employee subgroups subdivide employee groups. Within the employee group for
active employees, for example, a distinction is made between the following
employee subgroups:
Hourly wage earners

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 Monthly wage earners

Pay scale employees
Non-pay scale employees
In Customizing, the employee subgroup is defined by a two-character, alphanumeric code.
All of the control features for the personnel structure are defined at the
employee subgroup level. The most important control features are as follows:
The employee subgroup grouping for a personnel calculation rule enables you
to standardize or differentiate how an employee is dealt with in Payroll. For
example, this grouping enables you to control whether an employees
remuneration is calculated on a monthly or hourly basis.
The employee subgroup grouping for the primary wage types enables you to
determine which wage types are permissible for which employee subgroups.
The employee subgroup grouping for collective agreement provision enables
you to restrict the eligibility of pay scale groups to specific employee subgroups.
The employee subgroup grouping for the work schedule enables you to
determine which work schedules are permissible for which employee
subgroups.
The employee subgroup grouping for time quotas enables you to specify which
attendance and absence quote types are eligible for which employee
subgroups.
The employee subgroup grouping for appraisals enables you to set up appraisal
criteria dependent on the employee subgroup.
The employee subgroup enables you to define data entry default values, for
example, for the payroll accounting area or an employees basic pay.
The employee subgroup is a selection criterion for evaluations.
Employee subgroups are an authorization check unit.
You set up your company-specific personnel structure at the employee subgroup
level. The standard system contains a few templates for employee subgroups.
You can copy the employee subgroups that are delivered or if necessary adjust
them to your company specific needs.

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