SAP Profit center accounting provides the information of an organization’s profit and loss. The method which can be utilized for profit center accounting is period accounting. Profit centers can be set-up to identify product lines, divisions, geographical regions, offices, production sites or by functions. Profit centers are used for internal control purposes enabling management the ability to review areas of responsibility within their organization. The difference between a cost center and profit center is that the cost center represents individual costs incurred during a given period.

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The SAP profit center accounting allows an organization to route all profitability and balance sheet related information to a profit center. It helps to meet profitability reporting requirements that do not align with your company code structure. As you activate profit center accounting for each of your controlling areas, all assigned company codes are automatically associated with the ledger. Thus, there is no necessity of manual maintenance.

There are some key fields:

  • Dummy profit center: The dummy profit center is the default profit center for entire controlling are. All SAP cost objects are routed through the dummy profit center. There can be only one dummy profit center per controlling area.
  • Standard Hierarchy: The standard hierarchy can plays major role in SAP controlling area. Once you have created profit centers that should be assigned to standard hierarchy. Once you assigned profit center to standard hierarchy, the name cannot be changed.
  • Store transaction currency: If you want to maintain separate transaction currency in SAP profit center accounting, you have to select this field. It can be important for reporting.

 

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By  Yashpal Mote (on behalf of SAP Consulting Team)


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