Every posting object may not have assigned to the profit center and it may happen that some objects system are unintentionally left without an assignment to a profit center. In this case, postings to accounts are assigned to the dummy profit center of the controlling area.
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Profit center is used for handling internal controlling and part of Enterprise Controlling module and is integrated with new General Ledger Accounting. Profit center allows to handle the responsibilities of respective units when the company divided into units (profit centers) and treats the units as separate companies within the company.
Below are the steps to make postings to profit center.
Assigning cost centers to profit center in an organization to reflect all the primary costs from Financial Accounting and all secondary allocations to profit centers in Cost Center Accounting. Assigning a cost center to profit center, it assigns all the cost center assets to the profit center.
A business unit in any company can be classified as profit center, cost center or an investment center. Cost center is a simple and straightforward division in an organization.
Cost center hierarchy consists groups of cost centers in a tree structure within a controlling area. Cost center hierarchy plays vey import role in SAP Controlling Area.
Below process is to discuss the cost center posting –
The Cost Center category is an indicator in the cost center master data which specifies the category for the cost center. Cost Center categories provide the ability to safe guard the postings to cost centers.
Cost Element Group is an organizational unit storing a group of cost elements. Any number of cost element groups can be defined as part of master data maintenance for valuation, planning and allocation purposes in Cost Element Accounting or Cost Center Accounting.
Primary Cost elements are cost carriers from Financial Accounting (FI) to Controlling (CO) module and created to compare the G/L accounts of profit loss statements. A Primary Cost element is used to transfer cost from Financial Accounting (FI) to Controlling (CO) Module.