A business area is an organizational unit that represents a specific business segment in SAP that defines a functional area of operation, a plant, or an area of responsibility. For example, business areas can be a product the company sells, a geographical location, and so on. Business area is optional and is intended purely for internal financial reporting. They can be used across company codes for reporting. They are also viewed as balancing entities that can produce their own set of financial statements.
You define a business area in SAP ERP using four characters. A business area can be assigned to a company code or several company codes. Likewise, it is also possible to assign a company code to a business area or several business areas. The advantage of using a business area is that it allows management to generate internal financial reports on a business function or a combination of business functions. These reports aid management in decision-making, because they make it easy to tell how well a business area is performing.
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