Company code or Business Area?

[ch2000vn]

Dear all,
Pls kindly help me to advise about our company organization in SAP.
Currently, we have 1 company with 2 branches, 3 plants (one plant belongs headquarter, 2 plant belongs each branches), 2 sales offices (one sales office belong HQ, one belong the branch), and 3 purchasing departments.
The purchasing department in HQ often buy Material and internal transfer to plants in branches.
HQ and 2 branches need to send their own Tax report (VAT) to government. They also need BS, P&L in each branches. Then the consolidate report send for HQ.

We have 2 options to setup organization:
1) HQ and 2 branches will be 3 Business Area

2) HQ and 2 branches will be 3 Company code

Could you pls advise us the Advantages/Disadvantages of these 2 options?

If option 2), will we have to do more internal transactions(material, Finish goods internal transferring) from each company codes?

Thank you very much for your help!
CH

[bill_sd]

It's my understanding that Business areas are not really used much anymore (SAP trying to move away from them or smoething)

[Bear]

"New G/L" provides this functionality (using Profit Centers), to allow separate reporting beneath a single Company Code.

The big advantage of a single Company Code is in Sales Order entry. As a Sales Area must be for a single Company Code and a Sales Order can't have more than one Sales Area, with different Company Codes when a customer orders products produced across different areas you'd have to either create separate Sales Orders or do an intercompany sales transaction. By being one Company Code, all products can go on a single sales order and maintain "one face to the customer".