Business Area – Defines lines of businesses which can be clubbed together. It helps in differentiating between transactions belonging to different lines of businesses. Example – Marketing can be identified as a business area. It can help a company understand all transactions pertaining to Marketing Business Area and make managerial decisions based on the same. Multiple Company Codes within the organization can share the same Business Area.

Functional Area – Defines lines of business functions which can be clubbed together. It helps in differentiating between transactions belonging to different functions of businesses. Example – Manufacturing can be identified as a functional area. FAs are useful in creating Profit and Loss Statements and hence, guide the management accordingly.

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