SAP01 System-Wide concepts




The slide depicts a typical enterprise structure in the SAP system. The enterprise structure is created through the allocation of organizational levels to each other. These organizational levels are the structures that represent legal or organizational views of a company. Let us now discuss some of the terms that denote the organizational structures within SAP system.

Client is the highest hierarchical level within SAP. From a business viewpoint, the client represents a corporate group.

Controlling area is an accounting unit, which subdivides the business organization from the cost accounting standpoint.

Company code is the smallest organizational unit of external accounting. It represents an independent unit producing its own balance sheet such as a company within a corporate group. Company code is necessary from a legal perspective because of tax needs, salary payment purpose, currency exchange, and so on.

Organizational unit is a functional unit in an enterprise such as marketing department.

Positions are the individual employee assignment in an organization such as vice president, director, and so on. Persons occupy these positions.

Sales organization is an organizational unit which groups the enterprise according to the requirements of sales and distribution. It represents the sales facility or sales subsidiary.

Division is used to group materials and services, and it can represent a certain product group or product line.

Plant represents the location from which materials and services are distributed. It corresponds to a distribution center.

Storage location is a place where materials are stored. It has to be unique from a specific plant.



Internet Demonstration and Evaluation System or IDES is a demonstration system developed and used by SAP and its customers. SAP AG’s IDES is an international manufacturing company and has several business branches and branch-specific subsidiaries worldwide. Business processes are fully set up and include all core areas, such as purchasing, sales, marketing, and manufacturing. IDES AG produces number of products at different locations, but the deliveries are made from the nearest center.

MASTER DATA - Customer record




Master data records are central repositories of basic information that can be accessed in different contexts.



The customer master data contains all information necessary for processing orders, deliveries, invoices, and customer payments.

This can be categorized into three levels: Client Data, Sales area data, and Company code data.


The Client or General data such as the name and address of the client is necessary for sales and distribution as well as for accounting. It is valid for all organizational units within a client.


The Company code data include the general ledger account number, payment parameters, dunning information, and insurance. This information is relevant for accounting and is valid for the particular company code.


The Sales area data include information on the sales organization, distribution channel, and division. This is necessary for sales and distribution. Some Sales area data include Sales, Shipping, Billing parameter, and Partner functions.








MASTER DATA – Material record


The material master record stores all key information pertaining to the materials managed by your company. Material master data include basic data regarding the material, sales and distribution data, storage location of the material, purchasing data, accounting, costing, warehouse management data, and so on.

As you can see from the slide, a majority of the components of the material master are similar to that of the customer master record, though there is a difference in the function.

The Client or Basic data are relevant for all sales areas and are valid for all organizational units within a client. The material number, base unit of measure, and division are some of the client data in the material master.

The Sales Organization data, such as the plant, material group, sales unit, tax classifications, and product hierarchy, are necessary for sales and distribution. This information is valid for the respective sales organization and distribution channels. The distribution channel is the way in which you reach the material to the end customer, for example, via a whole-seller, retailer, and distributor.

The Plant data contain information about stock valuation, prognosis, planning & purchasing parameters, availability check, transport group, loading group, and so on. This information is also relevant for sales and distribution and is valid for respective delivering plant.

A Storage Location is a place where you physically store the materials. In the material master, this grouping includes data for the physical inventory of materials, inventory management, requirement planning, and so on.




MASTER DATA – Personnel record

The Personnel Record in an organization contains basic employee information. This record is structured to classify employee information in terms of the organizational unit assigned to the employee; the employee’s position, group, and status in the organization, personnel area, and so on; and personal details of the employee such as name and number, address, basic pay, and bank details.

The Personnel Record is maintained for any employee in an organization irrespective of their status. In other words, it does not matter whether the employee is a trainee, an active employee, or retired; the Personnel Record is maintained regardless of this. These personal files are the master data record used primarily by SAP ERP Human Capital Management and is the most important document of an employee in any organization.



MASTER DATA - Transactions


Transactions are application programs in the SAP system. These programs execute different business processes. To create a business transaction, for example, a sales order, you need data from the customer and material master records. Several sources of data can be used for copying information into a sales order or into another sales and distribution document. Such information would include the company code, the sales organization, distribution channel, and the company division involved in the sales process. You create and maintain these master data in the sales and distribution master data for automatic replication.