There are several configuration steps that must be considered when implementing the CO (Controlling) Module. Creating the Controlling area is one of the first steps in the CO (Controlling) configuration process. SAP has provided standard controlling areas and company codes which can be utilized as a basis for creating your companys Controlling Area. The SAP Standard for Controlling Area is 0001 and for company code is 0001.
It is recommended that these be used as a basis to create the Controlling Area or Company Code that you would like to define . Certain defaults setting such as number ranges have already been set-up in the standard SAP settings, thereby eliminating the need to redo this configuration requirement. Through the SAP Configuration process, you can create a copy of the Standard Controlling Area and Company Code, then update the other fields as needed including the four character alpha numeric field which identifies these areas. (You may want to change the controlling area from 0001 to A001 and the Company Code from 0001 to AA01 as an example.)
Keep in mind that Company Codes are assigned to Controlling Areas and affect the COA (Chart of Accounts), the Fiscal Year Variants, and Currency set-ups. Cost Center hierarchy and Reconciliation ledger settings are also include in the Controlling Area set-up.
The Control Indicator activates and deactivates certain functions in the Controlling Area. The Controlling Area can also be used for cross-company code business transactions. To enable this function the Controlling Area must be assigned to all company codes used for cross-company code accounting.