SAP R/3 Controlling Overiew

Organizational unit in an organization that represents a closed system used for cost accounting purposes. A controlling area may contain one or more company codes, which can operate in different currencies, if required. The company codes within a controlling area must all use the same operational chart of accounts. All internal allocation transactions refer only to objects from the same controlling area.

Internal business transactions are portrayed in the controlling area. Primary costs are transferred from external accounting and classified according to managerial accounting perspectives. If the primary costs are direct costs, then they are assigned to cost objects. If they are overhead costs, then they are assigned to cost centers or overhead cost orders. The system then allocates them using internal allocation techniques, according to their source.
When you create master data, the system always assigns the Controlling objects to a controlling area and a company code.
The level of detail provided by the Controlling component enables you to track specific information for cost monitoring, business decisions and sales control. For example, the Controlling component contains subdivisions such as cost centers and internal orders in addition to accounts.

You make the settings for the controlling area to show the structure of your organization from the Controlling aspect. Before creating a controlling area, you need to create the company codes and business areas (in FI) that are to be assigned. When you call up the first business transaction in SAP Controlling, you will always need to select a controlling area. It is not possible to execute a transaction for more than one controlling area at the same time.
If you are working with multiple sessions, note that changing the controlling area setting in one session affects all other sessions. It is not possible to work with different controlling areas in different sessions.

Assigning Controlling Areas and Company Codes
The company code assignment to the controlling area must be made according to the processes your company has in logistics and accounting. The organizational environment is also very important. It is difficult or at best, time-consuming to change the 1:1 or 1:n relationsip between the controlling area and company code after the decision and the assignment have already been made.
The company code and controlling area organizational units can be combined in a number of ways. Using these combinations you can represent organizations with different structures. One Controlling Area is always assigned to one company code.

If you want to assign more than one company code to one controlling area, then you need to note the following: you will need to use a consistent chart of accounts and you need to treat each cost element (in all company codes) in the same way (for example, as a primary cost element, or as an accrual cost element).
You should execute period-end closing in Controlling for all company codes at the same time. Separate period-end closing for each company code would be too time-consuming. You can only execute period-end closing for a shared controlling area once closing is complete in Financial Accounting. If you wish to calculate plan prices automatically, you need to wait until planning is complete. The system only posts reconciliation postings across company codes without tax, which means that it cannot automatically create invoices.
For tax reasons, cost flows (that are cross-company code) in Controlling can only be passed onto Financial Accounting if the company codes form an integrated company with sales tax. If you wish to prevent cross-company code postings in Controlling, then you need to create a detailed authorization concept. Retrospectively excluding a company code in another SAP system or client, requires more time and effort than in cost accounting by company code. If you only use one controlling area, you can only use one operating concern. You can only display profit center allocations in a controlling area. You can only use transfer prices within a controlling area. You need to take the following into consideration when deciding on the controlling area – company code assignment: It is currently not possible to make CO allocations across controlling areas.

However, if you then create a controlling area with more than one assigned company code so that you can use all the functions in Controlling, you may be causing a significant amount of extra work. The company code(s) must be fully maintained before you can assign them to a controlling area.

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