A transaction code is a four-character command that is used to access functions or running programs in a SAP application more rapidly. Each SAP screen (forms & reports) has a unique transaction code. A transaction code may contain only letters such as CJI3, CJ32, FB03, FB60, XD01 etc
For example, instead of following the navigation path like:
SAP Menu->Logistics->Project System->Project->Special Maintenance Functions->Work Breakdown Structure (WBS)->Display
User can type CJ03 in the command field of any screen. It is much like Windows shell, AutoCAD, Lotus 123 or DOS command.
The alternative to using and having to know the transaction codes is to set up a favorites menu which is a customized menu established by the user. The favorites menu can be structured by the user to coincide with procedural usage of the SAP software. For example, if the user is an Accounts Payable officer a customized menu of accounts payable functions could be created to enhance SAP usage.
SAP also provides functionality to create your own transaction codes.